How the Govt is helping Singaporeans to weather the coronavirus crisis

This is the second of 12 primers on current affairs issues that are part of the outreach programme for The Straits Times-Ministry of Education National Current Affairs Quiz.

If Budget 2019 was a buoyant celebration of Singapore's bicentennial year, this year's edition has been a sombre stocktaking of life amid the worsening coronavirus situation.

Deputy Prime Minister Heng Swee Keat announced in Budget 2020 last month that $6.4 billion will be set aside to help Singapore tackle the economic fallout from the disease.

At the time, cases had just begun to emerge in Europe and the United States. Now, with the world reeling from the pandemic nearly six weeks later, the Government has rolled out a second stimulus package to the tune of $48.4 billion.

The eye-popping sum signifies the gravity of the crisis, as Singapore is setting aside nearly $55 billion - or 11 per cent of its gross domestic product - to weather the storm.

The financial year of the Budget begins on April 1 of every calendar year, and ends on March 31 the following year.

The Government has obtained the President's in-principle support to draw up to $17 billion from Singapore's past reserves to fund measures to contain, if not crush, the scourge.

As Mr Heng, who is also the Finance Minister, put it at a dialogue earlier this month: "Our reserves have been set aside to meet the needs of a rainy day, and it looks like this rain is not a light one."

President Halimah Yacob shared his sentiments in a message to Parliament last Thursday, when a supplementary budget, with a sharp rise in coronavirus aid, was announced.

"The situation we are heading into looks more like a thunderstorm than a drizzle," she said.


The Government's first priority is to save jobs and keep businesses afloat, with extra money for the worst-hit sectors.

These are tourism, aviation, retail, food service and point-to-point transport operators like taxi drivers.

The Singapore Government announced last Thursday a further $48.4 billion supplementary budget to support businesses, workers and families during the coronavirus pandemic. This will draw on national reserves for the first time since the global financi
The Singapore Government announced last Thursday a further $48.4 billion supplementary budget to support businesses, workers and families during the coronavirus pandemic. This will draw on national reserves for the first time since the global financial crisis and push up the total amount of virus-related relief to nearly $55 billion or 11 per cent of its gross domestic product. PHOTO: EPA-EFE

Initially, it pledged to offset 8 per cent of the wages for every local employee in Singapore, up to a monthly cap of $3,600, for three months. This was expected to cost $1.3 billion.

But in the supplementary budget, the Government will subsidise 25 per cent of wages for all local employees. Companies in the worst-hit aviation and tourism sectors will get a 75 per cent subsidy and those in the food services sector, 50 per cent.

The wage cap will also be raised from $3,600 to $4,600, with the scheme extended for another six months so that employers will get payouts in May, July and October, Mr Heng said. The changes mean a total of $15.1 billion is being set aside to help over 1.9 million local employees keep their jobs.

The supplementary budget - called the Resilience Budget by DPM Heng - also has targeted help for the self-employed and those who lost their jobs because of the coronavirus crisis.

The self-employed includes cabbies and private-hire car drivers, real estate agents, sports coaches, and media and art freelancers. Those eligible will get $1,000 a month, for nine months, from a new Self-Employed Person Income Relief Scheme.

The Government is also increasing the hourly training allowance under the Self-Employed Person Training Support Scheme from $7.50 to $10, so that the group can "make full use of any downtime... to train and upskill".

For those who need immediate help while waiting for the new measures to kick in, a temporary relief fund will be set up next month.

A separate Covid-19 Support Grant will be introduced from May to September to help low-and middle-income workers whose jobs fell victim to the virus. They will get $800 a month for three months.

Measures announced initially in Budget 2020 to help companies stay afloat - by improving cash flow, lowering costs and enhancing access to credit - have also been expanded.

Mr Heng said the Government is doing its best to quickly pay out money from programmes like the Wage Credit Scheme, which co-funds wage increases for Singaporean employees.

It is also introducing a three-month deferment of income tax payments for companies and the self-employed, and enhancing property tax rebates, with the worst-hit commercial properties like hotels paying no property tax at all for this year.

Several other schemes have been expanded as well to further help businesses continue to have access to credit. For instance, the Temporary Bridging Loan Programme, introduced in Budget 2020 last month for the hard-hit tourism sector, will be extended to enterprises across all sectors from next month.

But even as he announced measures to relieve the strain on businesses, Mr Heng reminded them to pay it forward.

Landlords who have received rental rebates were strongly urged to do their part by reducing rentals.

He also appealed to companies to do the right thing and give people relief from legal obligations that have arisen because of the virus outbreak.

"For example, people may have paid deposits for a big gathering that now cannot go ahead. It is not their fault that the gathering cannot go ahead," he said. "Should the deposits be simply forfeited? That won't be right."


Global growth forecasts have plunged in just one month. In Singapore, the Ministry of Trade and Industry downgraded its 2020 economic growth forecast once last month and again last Thursday.

It now expects growth to be between -4.0 per cent and -1.0 per cent, a drop from its earlier estimate of -0.5 per cent to 1.5 per cent.

With global demand and international trade weakening, domestic concerns over job security and the cost of living have intensified.

In response, the Government has bumped up cash payouts for households, with every adult Singaporean to be given $300, $600 or $900 depending on income size.

The additional money for parents with at least one Singaporean child aged 20 and younger this year will also go up from $100 to $300.

Needy Singaporeans, slated to get $100 a year in grocery vouchers for this year and the next, will get $400 in such vouchers altogether, for this year and the next.

In addition, the Workfare Special Payment for low-wage workers will be increased to $3,000 in cash.

Workfare helps those whose earnings are in the bottom 20 per cent, and gives some support to those slightly above. Those on Workfare were to have received an additional 20 per cent of the total annual Workfare Income Supplement payout they received last year, with the highest payout being $720.

In his Budget 2020 speech last month, Mr Heng also said Singaporeans aged 50 and older will get a $100 PAssion Card top-up which can be used to pay for groceries, among other things. This will now be directly deposited into their bank accounts, to avoid queues at top-up stations.

One hot-button issue is the upcoming goods and services tax (GST) hike and its impact on living costs, especially for the lower income.

Originally, the GST rate was set to go up from 7 per cent to 9 per cent between next year and 2025. But Mr Heng made it clear last month that the rise will not take place next year.

But the GST hike will still be needed by 2025, he added, as Singapore requires recurrent sources of revenue to fund its recurrent spending needs in the medium term.

As a result, Budget 2020 had a $6 billion Assurance Package to cushion the blow when the time comes. With the package, all adult Singaporeans will get cash payments of $700 to $1,600 over five years.

For most people, this will effectively delay the impact of the tax hike by five years. For the lower-income - those living in one-to three-room Housing Board flats - the payouts will offset 10 years' worth of additional GST expenses.


Beyond the immediate crisis, money also has to be set aside for long-term change, so that Singapore's economy can keep pace with developments in the world.

This is the role of the $8.3 billion Transformation and Growth package in Budget 2020 whose goal is to help businesses and workers make the most of the downtime.

The money, to be spread out over the next three years, aims to grow Singapore's economic presence in the world, nurture local businesses and help Singaporeans acquire the skills needed to navigate a changing job market.

For students, the objective is to achieve a "70-70" goal: Have 70 per cent of local students from institutes of higher learning go abroad, and with 70 per cent of this group getting exposure to Asean, China or India.

SkillsFuture, the national movement to change how people think about skills, jobs and learning, will get a boost this year.

First, all Singaporeans aged 25 and older will receive a one-off $500 top-up to their SkillsFuture credit balance.

Next, employers can use the new SkillsFuture Enterprise Credit to offset the costs of training workers and redesigning jobs. More than 35,000 companies will benefit from the $10,000 grant, most of which will be small and medium-sized enterprises.

Lastly, the Government will focus on reskilling workers in their 40s and 50s who may have been in the same job all their lives but are under pressure to learn new skills or make a career switch.

Singaporeans aged 40 to 60 this year will get an extra $500 in SkillsFuture credits, which can be used for selected programmes to help them gain new skills.

On top of that, the capacity of reskilling programmes will be increased, and employers given incentives if they hire locals aged 40 and older through such programmes.

Money has also been set aside to make it cheaper - and therefore more attractive - for companies to hire senior workers. This will go towards offsetting wages and the employer's portion of Central Provident Fund contributions, among other things.

Wrapping up his speech last Thursday, Mr Heng noted that it is in times of crisis that a nation's true character can be seen.

"We are all in this together," he said. "And we must all look after one another in these trying times."

About The Big Quiz

On Mondays, for 12 weeks until July 27 in the Opinion section, this paper's journalists will address burning questions, offering unique Singaporean perspectives on complex issues.

The primers are part of the outreach of The Straits Times-Ministry of Education National Current Affairs Quiz, or The Big Quiz, which aims to promote an understanding of local and global issues among pre-university students.

The primers will broach contemporary issues such as the arts in the digital age, and journalism in the age of disinformation.

Other issues include the rise and future of e-sports and an examination of how user-centric design and data-driven decision-making are changing the way non-profit organisations reach out to the public.

Each primer topic will give a local perspective to help students draw links back to the issues' implications for Singaporeans.

For the third year, The Big Quiz will be online, allowing all pre-university students to take part in the current affairs competition, this time over six online quiz rounds - on March 30, April 13 and 27, May 11 and July 13 and 27.

The online quizzes are based on the primer topics and will be available for two weeks from the start date of each quiz.

This nationwide event is jointly organised by The Straits Times and the Ministry of Education.

Students can take The Big Quiz at from today.

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A version of this article appeared in the print edition of The Straits Times on March 30, 2020, with the headline How the Govt is helping Singaporeans to weather the coronavirus crisis. Subscribe