SG gov’t rolls out Solidarity Budget to tide businesses, employees through month-long shutdown

Singapore Merlion devoid of both tourists and locals as Covid-19 brings the economy to a standstill

The Singapore government will extend more financial support to help businesses and employees ride out the city-state’s month-long closure of non-essential workplaces – a “circuit breaker” measure which takes effect from April 7 until May 4, 2020.

The S$5.1 billion (US$3.6 billion) Solidarity Budget was announced by deputy prime minister and finance minister Heng Swee Keat in a parliament session today.

Singapore Merlion devoid of both tourists and locals as Covid-19 brings the economy to a standstill

In an unprecedented step, this marks the third round of measures the government has rolled out in under two months, following the S$6.4 billion Unity Budget in February, and the S$48.4 billion Resilience Budget last month.

The three stimulus packages comprise a stream of waivers and subsidies for businesses and employees to cushion the impact of Covid-19.

The Solidarity Budget includes increased wage subsidy for all companies in all sectors to 75 per cent of gross monthly wages, for the first S$4,600 of wages paid in April, for each employee. This overwrites the range of 25-75 per cent in the previously announced Resilience Budget, under which the aviation and tourism sectors were provided the highest tier of wage subsidies.

“I expect firms to make use of this Jobs Support Scheme to continue paying your workers and refrain from putting workers on no-pay leave during this period, or worse, retrenching them,” urged Heng.

Companies that hire foreign workers on work permits and S-passes will also have their monthly foreign worker levy due in April waived. Employers will soon also receive a foreign worker levy rebate of S$750 for each work permit or S-pass holder.

Singapore’s Ministry of Law will introduce a Bill on April 7 to allow businesses and individuals to temporarily defer certain contractual obligations such as paying rent, repaying loans or completing work. The Bill will also ensure property owners pass on the property tax rebate in full to tenants.

In addition, the government will bring forward the S$300 Care and Support Cash package announced earlier, and provide an additional S$300, bringing the total to S$600 for every Singaporean adult above the age of 21. Singaporeans can expect a payout from as early as April 14.

Heng wrote in a Facebook post on Sunday: “The Covid-19 situation has taken a very sharp turn, both globally and locally. Strong measures have to be taken to protect lives, but the economy has taken a hit as a result.”

Singapore’s overall GDP growth will dive further amid stricter restrictions to fight the pandemic, projected Heng. He shared that the government’s response to Covid-19 will ring up to S$59.9 billion, or about 12 per cent of Singapore’s GDP. The overall budget deficit for FY2020 will increase to S$44.3 billion, or 8.9 per cent of the GDP.

As of April 5, the number of infection cases in Singapore stood at 1,309, including 116 new local cases and four new imported cases.

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