80% of Covid-19 war chest to help businesses, workers

Rest of $92.9b to fight pandemic's impact to fund public health, social support measures

All in, the Government has allocated $92.9 billion to tackle the economic impact of the pandemic. ST PHOTO: JASON QUAH

About 80 per cent of the nearly $100 billion set aside to tackle the coronavirus pandemic will be used to support businesses and help workers keep their jobs.

The rest of the money will fund public health and social support measures, Deputy Prime Minister and Finance Minister Heng Swee Keat said in Parliament.

Speaking at the end of the Fortitude Budget debate yesterday, he said: "The fortunes of workers and businesses are intertwined.

"By keeping the economy stable, we strengthen social resilience.

"By investing in upgrading the skills of our people and transforming our businesses, the economy can recover more strongly."

The $33 billion Fortitude Budget, which Mr Heng announced last month, is Singapore's fourth Budget in less than four months.

In February, the Government rolled out the $6.4 billion Unity Budget, followed by the $48.4 billion Resilience Budget in March.

In April, the $5.1 billion Solidarity Budget was approved.

All in, the Government has allocated $92.9 billion, or nearly 20 per cent of the country's gross domestic product, to tackle the economic impact of the pandemic. Of that, $72 billion will go to saving jobs and keeping businesses going.

In his speech, Mr Heng said that such government intervention has become the cornerstone of the Covid-19 response.

Administrations worldwide - regardless of where they stand on the political spectrum or their stance on government intervention - have rolled out substantial support packages for citizens. There has been a "flight to administration", he said, with people looking towards the government - the "one institution that can organise and mobilise".

He noted that while governments elsewhere grapple with the tensions between saving lives and livelihoods, Singapore has managed to avert some of the harsher outcomes from Covid-19.

"We were able to act boldly, as Singaporeans stood in unity, trusted the Government, and worked together to save lives and livelihoods."

Mr Heng said the Covid-19 pandemic has shocked both the demand and supply sides of the global economy, and will continue to disrupt lives until a suitable vaccine or treatment is found.

On the demand side, reduced social interactions and weakened consumer confidence have significantly reduced consumption, which have in turn reduced income and investment levels.

On the supply side, lockdowns have disrupted deeply integrated supply chains across borders, and slowed global trade and investment.

Mr Heng said the International Monetary Fund has projected that the global economy will shrink by 3 per cent, even as growing geostrategic competition between the United States and China threatens to destabilise the global order.

After the Great Depression in the early 1930s, unemployment levels around the world took eight to 10 years to rebound, Mr Heng said. Singaporeans, he added, should not be surprised if it takes as long or longer to bounce back from Covid-19.

He said: "There is now talk of a global 'Lockdown Generation', and fears that the youth of our time could have their skills, employability and incomes permanently affected, even after the world recovers from the pandemic.

"We must work to prevent a 'Covid Generation' of workers and students in Singapore."

Mr Heng said that is why the Government has channelled an enormous amount of resources to fighting the pandemic.

After adding the country's usual spending to the amount set aside for the Covid-19 response, the total size of Singapore's four Budgets this year stands at $193 billion.

He said: "We are looking to spend in one year what we would have done in two years or more in normal times. This is a very big commitment."

Touching on the importance of ensuring resources are directed to the right areas, Mr Heng said that "design and implementation are critical", as it will enable people and the economy to rebound "faster and stronger".

At the same time, Singaporeans must learn to adapt to the new reality. This includes adjusting to new norms, such as higher standards of personal and public hygiene, and reduced social contact.

"We are thus not reopening and going back to our familiar routines, but into a new, uncertain reality," he said. "We will need to adjust to new ways of working, such as telecommuting, and acquire new skills relevant in the new economy. Changing habits is difficult, but we must all do our best."

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A version of this article appeared in the print edition of The Straits Times on June 06, 2020, with the headline 80% of Covid-19 war chest to help businesses, workers. Subscribe