Fortitude Budget Extensive, Timely and Progressive for Businesses
Tuesday, 26 May 2020 [Singapore] – With the number of new community cases in the single digits and the number of unlinked cases in the community small, Singapore will be exiting the circuit-breaker phase when it ends on 1 June 2020. However, the impact of COVID-19 continues to put a heavy strain on businesses large and small.
The Singapore Business Federation (SBF) is heartened that the Government will commit a further $33 billion in financial support to our businesses and the community at large through its Fortitude Budget. This is the fourth, following the earlier Unity, Resilience and Solidarity Budgets.
The support measures announced by Deputy Prime Minister and Minister for Finance Mr Heng Swee Keat addressed the pain points of our businesses – cash, cost and credit – and aim to not just lighten the financial burden of businesses but also prepare and equip them for the future.
The enhanced Jobs Support Scheme (JSS) has already been helping many employers retain as much of their existing workforce. The extension of the wage offset of 75 per cent for businesses that are unable to resume operations is welcomed. Even more encouraging, seriously affected sectors such as retail, marine and offshore, and aerospace will enjoy increased support of 50 per cent or 75 per cent. The one-month increase in duration for the Scheme till August 2020 will also provide all businesses with some reprieve. We are heartened that the Government will be refining the classification of firms in the different JSS tiers.
The extended waiver of the foreign worker levy and rebate till July 2020, especially in light of increased COVID-19 cases amongst our foreign worker population, will alleviate companies’ cost pressures. This is needful as many of these businesses are faced with increased costs managing the health and safety of their workers and a delayed start of work.
The one-year deferment of the increase in CPF contribution rates for senior workers to 2022 will also enable businesses to concentrate more on recovery post-COVID-19.
The Government is disbursing cash grants of about $2 billion to offset rental costs of SME tenants. Moreover, a new bill mandating that landlords contribute by granting rental waivers to their SME tenants which have suffered significant revenue loss sends a strong signal to landlords to adopt fair tenancy practices.
Build Resilient Businesses
This pandemic has exposed the vulnerabilities of many businesses, especially those who have been lagging in digital transformation. The newly-introduced Digital Resilience Bonus will further incentivise businesses to jump onto the digital bandwagon, starting with the F&B and retail sectors. There are further payouts under this scheme and initiatives to get businesses to adopt digital solutions for their operations. A set of National Innovation Challenges introduced will also provide the impetus for the development of industry-led solutions to address the varied issues businesses are grappling with.
Create Jobs & Training Opportunities for Local Workers
As noted by DPM Heng, in tough times ahead, we must be prepared for some job losses. Hence, the new SGUnited Jobs and Skills Package is timely and necessary to retain as many jobs as possible as it aims to create close to 100,000 jobs, traineeships and skills training opportunities, which will also expand the capacity in career conversion programmes.
In addition, employers will enjoy hiring incentives – in the form of wage subsidies – to hire local workers who have completed their traineeship or training programmes. This is being expanded to cover workers of all ages. All these measures in support of our local workforce will hopefully bring down the unemployment rate across the board.
Mr S.S. Teo, Chairman of SBF, said, “The latest round of measures announced by DPM Heng Swee Keat highlights the Government’s understanding of the plight of Singapore’s businesses, especially SMEs. It is timely, extensive and progressive in helping companies post-circuit breaker, while creating jobs for the future and helping businesses to transform. This will ensure that our businesses can safely transit to a new normal in the coming months.
“SBF is glad that the Government has taken our inputs into consideration in formulating this Budget, which include support for affected tenants, waiver of foreign worker levy and rebate, and the extended JSS. SBF will continue to work closely with the Government and the various trade associations and chambers to flatten the unemployment curve, while fostering deeper collaboration with one another.”
Mr Ho Meng Kit, CEO of SBF, said, “The COVID-19 pandemic is disrupting lives and livelihoods globally. The Fortitude Budget has addressed critical issues like jobs support, unemployment and training needs. The added focus on digital adoption ensures that SMEs are included in the country’s transformation framework. However, there is only so much the Government can do. Both businesses and workers must transform in order to thrive beyond COVID-19. All businesses must now put in place safe management measures quickly so that we can restart work soon.
“We are committed to helping our companies and have introduced various programmes to meet their immediate needs. One of which is to help companies to connect retrenched workers, mid-career professionals and fresh graduates to employment opportunities as part of the new SGUnited Jobs and Skills Package. SBF is also conducting a series of webinars under the Business Resilience Advisory Programme, which aims to equip and enable companies to recover from the crisis more quickly.”