DPM Heng unveils $48 billion package to cope with coronavirus fallout
It aims to support businesses, workers and families during virus fallout as Heng Swee Keat sketches out grim global economic outlook
Singapore will roll out a landmark $48.4 billion package to support businesses, workers and families as the country grapples with an unprecedented crisis fuelled by the coronavirus outbreak.
This is in addition to the $6.4 billion worth of measures it announced just over a month ago to cushion the fallout from Covid-19.
In all, Singapore has marshalled nearly $55 billion - 11 per cent of its gross domestic product - to respond to what Deputy Prime Minister Heng Swee Keat called as "the most serious crisis we have faced in a generation".
Unveiling the Supplementary Budget in Parliament yesterday, he said: "This is a landmark package, and a necessary response to a unique situation."
In economic terms alone, "this will likely be the worst economic contraction since independence", Mr Heng noted, as he sketched out the grim global economic outlook.
The Ministry of Trade and Industry yesterday slashed its 2020 growth forecast to a range of -4 per cent to -1 per cent, from an earlier estimate of -0.5 per cent to 1.5 per cent. Singapore last registered a full-year recession in 2001, when the economy contracted 1 per cent.
The Covid-19 pandemic - which has now infected more than 410,000 people across more than 190 countries - is likely to take at least a year to be resolved, and the economic repercussions would last even longer, Mr Heng said.
"This extraordinary situation calls for extraordinary measures."
He said President Halimah Yacob has given her in-principle support to draw up to $17 billion from the country's past reserves to fund part of this "Resilience Budget".
The $48.4 billion Resilience Budget amounts to nearly half of the Government's $106 billion Budget for 2020. It focuses on three areas, the first of which is to save jobs and protect livelihoods by taking "bolder and more aggressive moves".
In total, $15.1 billion will go to an enhanced Jobs Support Scheme to support 1.9 million local employees.
Mr Heng, who is also Finance Minister, said the Government will co-fund 25 per cent of wages of every employed local worker under the scheme, up from 8 per cent.
The monthly wage cap will be raised from $3,600 to $4,600, while the payouts will cover nine months instead of the initial three.
Companies in sectors worst hit by Covid-19 - aviation and tourism - will get 75 per cent wage offsets for every employed local worker.
The $1.6 billion Care and Support Package will be boosted to $4.6 billion, with cash payouts for all adult Singaporeans tripled from a range of $100 to $300 to $300 to $900, depending on income.
Mr Heng also announced measures to help businesses overcome immediate challenges, from deferring income tax payments for companies and self-employed persons to enhancing property tax rebates and rental waivers.
Another $1.9 billion has been set aside to build resilience in the economy and society.
The $48.4 billion package will raise Singapore's overall Budget deficit for the 2020 financial year to a record $39.2 billion.
"Our prudence and discipline in saving and growing our reserves give us the wherewithal to respond decisively when our nation faces extraordinary circumstances," he said, calling the Covid-19 outbreak a "black swan event that comes only once every few decades".
The Government will continue to monitor the situation closely, Mr Heng said, adding he is prepared to propose a further draw on past reserves if needed.