Firms will receive wage subsidies of between 25 per cent and 75 per cent for all local workers as the Government makes "bolder and more aggressive moves" to save jobs and keep locals employed amid the coronavirus outbreak.
This is up from the 8 per cent wage subsidy in the Jobs Support Scheme announced in the Budget statement last month. The help will also last for nine months, instead of three, up to the end of this year.
Deputy Prime Minister Heng Swee Keat said yesterday that a total of $15.1 billion will now be allocated to the enhanced Jobs Support Scheme, up from the original $1.3 billion package.
This is more than twice the level of support provided during the global financial crisis in 2009, he told Parliament.
"We cannot prevent an economic recession, as the external health and economic situation will evolve beyond our control. But it will help us mitigate the extent of the downturn and, more importantly, help save jobs, and protect livelihoods," said DPM Heng in announcing the supplementary budget.
"With this support from the Government, I urge employers to do your part to hold on to your workers."
The Ministry of Trade and Industry earlier yesterday cut its 2020 growth forecast to between minus 4 per cent and minus 1 per cent, from an earlier estimate of minus 0.5 per cent to 1.5 per cent. The last time Singapore posted a full-year recession was in 2001 during the dot.com crash.
Mr Heng, who is also Finance Minister, announced a slew of measures to support the immediate priority of saving jobs, supporting workers and protecting livelihoods - measures that account for over one-third of the $48 billion supplementary budget.
While his Budget statement last month introduced the Jobs Support Scheme and enhanced the Wage Credit Scheme, "the situation now calls for bolder and more aggressive moves to save jobs and keep workers in employment", he said.
The basic cash grant of 25 per cent of wages under the Jobs Support Scheme applies to all Singaporean and permanent resident employees, who number more than 1.9 million.
Firms in the food service sector, including hawker stalls, will receive higher support, at 50 per cent of wages.
Firms in the aviation and tourism sectors - which are the worst hit by the Covid-19 outbreak - will receive 75 per cent of wages. These include airlines, hotels and operators of meetings, incentives, conferences and exhibitions venues.
The support will apply to the first $4,600 of gross monthly wages per local employee, which is the median wage in Singapore. Gross monthly wages include employee contributions to the Central Provident Fund (CPF).
Business owners will not receive subsidies for their own wages.
The qualifying salary was raised from the original $3,600 level to provide greater support for middle-income workers.
Employers will receive payouts in three tranches, in May, July and October.
They do not need to apply for the scheme, as it will be computed based on their CPF contribution data. Those eligible for higher tiers of support will be informed closer to the date of the first payout.
Mr Oo Gin Lee, managing director of public relations firm Gloo, said the higher wage subsidy over nine months will make a big difference by reducing his wage costs.
His revenue has already fallen with clients cutting back on publicity expenses. Mr Oo said that before the subsidy, he had considered reducing headcount or asking his four employees to work for half the time on half their salaries.
Retaining everyone on full pay allows him to be ready for when business returns, he said.
"Also, if I can keep everyone's job it's better for morale. They know the boss is going through tough times but is willing to fight with them."
Read Mr Heng's full speech here.
Correction note: The article has been edited to accurately reflect when employers will receive the Jobs Support Scheme payouts. We are sorry for the error.
