Desperate times call for desperate measures. With the unprecedented health and economic havoc being wrecked by COVID-19, the Singapore government has launched a record-breaking relief package in response.
The $53.1 billion (yes, with a ‘b’) Resilience and Solidarity Budget aims to do three things: support workers, stabilise business and build resilience. But what does it mean for the average Singaporean and how will the measures benefit you?
Read on as we try to answer that pertinent question.
What’s in the $53.1 billion Resilience and Solidarity Budget?
The Resilience ($48 billion) and Solidarity ($5.1 billion) Budget offers relief and assistance to three broad segments of society — workers, households and businesses. Let’s zoom into each of these and analyse them one by one.
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Resilience And Solidarity Budget For Employees
Job Support Scheme
Wage offset on first $4,600 per worker for 9 months (till end 2020)
Short-term/One-time Relief Schemes
Wage Credit Scheme
Help for Self-employed Persons (SEPs)
Extended to SEPs who also earn from employment.
Land Transport Sector
Taxis and Private Hire Cars
Arts & Culture Sector
$55m support package to:
Creating Job Opportunities
SGUnited Jobs Initiative
Employees: Measures to save jobs and relief for jobseekers
The foremost goal of the Resilience and Solidarity Budget is to help companies retain workers, making it easier for employees to hold on to their jobs and livelihoods.
The government aims to do this with direct offsets on the first $4,600 of your salary, and will continue until the end of 2020. Although arguably all sectors are affected by COVID-19, some are hit harder than others. For April, the government will cover 75% of wages for all industries. Thereafter, the Resilience Budget will provide coverage until the end of 2020:
75% of your salary if you’re employed in aviation or tourism, two of the worst-hit sectors
50% of your salary if you’re employed in food and beverage services
25% of your salary if you’re employed in all other sectors
$90m for tourism recovery measures
With such massive wage relief, employees now have a much higher chance to keep their jobs and ride out the storm, especially when coupled with cost-cutting measures such as reduced work hours. This has definitely improved the outlook for the vast majority of Singaporeans.
However, even with such a high degree of support, some Singaporeans may still face retrenchment. In fact, job cuts had already begun since the beginning of the year.
The Solidarity Budget addresses this with several one-time and short-term grants put in place to help tide retrenched workers over until they can land suitable jobs. These schemes are more granularly targeted, making more resources available to low and middle income.
Now, if you’ve been retrenched and are feeling left out, here’s something that might cheer you up. With the government sponsoring up to 75% of your salary, your next employer is likely that much more eager to meet and hire you.
The present situation is serious, but the government is also keeping one eye on the horizon. It pledges to create as many as 10,000 new jobs by next year, which bumps up everyone’s prospects.
Freelancers and self-employed: Direct help and continued development
Freelancers, taxi drivers, private hire drivers, hawkers and other self-employed Singaporeans can look forward to direct assistance under the Resilience Budget. If eligible, you may apply for a cash grant totalling $9,000 until end-2020.
Under the Solidarity Budget update, the scheme has been expanded to automatically include Self Employed Persons (SEPs) who also have an income from employment. The qualifying criteria now includes a property Annual Value threshold cap of $21,000, up from $13,000. With these changes, up to 100,000 SEPs (up form 88,000) are expected to benefit from it.
While not a particularly spectacular amount, this grant provides some much-needed stability for Singaporeans whose chosen professions come with incomes that vary more often than not.
For performers and artists, it can mean the difference between keeping your craft alive, or giving up and joining the workforce. For hawkers and taxi drivers, it can ensure bills continue to be paid. For writers, photographers, designers and other freelancers, it can help make up for the loss of clients.
In addition to this, taxi drivers and private hire car drivers will receive $300 per vehicle per month to offset rental fees. This scheme is extended till end-September 2020. Drivers of private buses, too, will enjoy some support in the form of a 1-year road tax rebate, and 6 months of free parking.
It is also heartening to see that the continued development of the arts has not been neglected. A $55 million fund has been put aside to support major companies and arts groups; deepen skills and support professional development via the National Arts Council; and increase digitalisation efforts.
Lastly, self-employed Singaporeans, seeking to enlarge their skillsets during the slowdown, will also find enhanced support — training allowances have been increased to $10 per hour. From April 1, you may also apply for advance use of SkillsFuture credit top-ups for selected courses.
Resilience And Solidarity Budget For Households
Enhanced Care & Support Package
– Triple the current payout for all Singaporeans aged 21 and above to $300, $600 and $900
Enhanced Community Help
– Self-help groups to receive $20m in grants over 2 years
Greater Flexibility in Government Fees and Loans
– Freeze all Government fees and charges for 1 year — from 1 Apr 2020 to 30 Mar 2021
Households and families: Help to weather the storm
With income security threatened, households and families are feeling the heat. It’s a good thing then that the Solidarity Budget is providing increased cash payouts to help ward off difficulties.
Again, don’t expect the payout to make you rich. But, when pooled together, the cash grants that families receive could be used to ensure food on the table, to meet minor emergencies, or even to clear off an outstanding credit card balance, so as to save on future interest fees.
Previously, it was announced that all SIngaporeans aged 21 and above will receive a one-off payout of $300, $600 or $900, depending on income level and/or property value. The Solidarity Budget has added an extra $300 to this payout, which is now brought forward to as early as 14 April 2020.
Those with lower income will also receive additional grocery vouchers in 2020, further increasing their food security. Self-help groups and CDCs will also be strengthened in their capacity to assist the vulnerable.
Finally, fees and charges on government services as well as loan repayments, interest charges and late fees for selected services and loans have been suspended, so you might find some municipal services more affordable.
Resilience And Solidarity Budget For Businesses And Business Owners
Tax Breaks, Rent and Fee Waivers
Income tax payment for businesses and SEPs will be deferred for 3 months
Credit and Financing Help
Enterprise Financing Scheme
Businesses and business owners: Keeping the wheels turning
Having alleviated the issue of how to keep paying salaries (see above), the Resilience and Solidarity Budget now turns to tackling two other business concerns — cash flow and credit.
Basically, businesses can look forward to cash flow help in the form of property tax rebates and income tax payment deferments; rent waivers for hawkers and non-residential government tenants; as well as a 1-year freeze in all Government fees and charges.
Additionally, Foreign Worker Tax Levy will be waived for the month of April. On top of that, the government will provide Foreign Worker Tax Levy rebate of $750 per work permit or S-Pass holder, based on previous levies paid in 2020.
On the credit front, various loans and credit schemes have had their quantum increased (up to double), and their coverage extended.
Businesses can now borrow up to $10m — with the government taking on 90% risk-share — under the EFS-Trade Loan Scheme. Meanwhile, SMEs can avail themselves of lifelines up to $1m via the EFS-SME Working Capital Loan.
The Temporary Bridging Loan programme is now extended to all sectors with the maximum loan cap raised to $5m. In addition, subsidies for business loan insurance premiums have now been increased to 80%.
SMEs struggling to make their loan payments will also find some relief. They now have the option to defer their principal loan payments on secured term loans until end-2020.
All these measures will improve business cash flow, increase working capital and provide credit lifelines to help businesses continue to soldier on as the world continues to battle COVID-19.
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By Alevin Chan
An ex-Financial Planner with a curiosity about what makes people tick, Alevin’s mission is to help readers understand the psychology of money. He’s also on an ongoing quest to optimise happiness and enjoyment in his life.
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