Singapore has not yet felt the full economic fallout from Covid-19, and there will be more business closures and retrenchments in the coming months, said Prime Minister Lee Hsien Loong.
Addressing the nation in a televised broadcast yesterday, he said the virus has taken a heavy toll on livelihoods. Around the world, lockdowns and public health measures have caused a deep economic crisis.
Singapore, he said, has mitigated this with "massive fiscal action", pointing to how Parliament has passed four Budgets totalling almost $100 billion in Covid-19 support measures.
"We are drawing from our reserves to support workers, businesses and households. These decisive emergency actions have kept retrenchments and company closures low. They have helped Singaporeans take care of their families and see through the immediate crisis," he said.
This is the second time the Government has drawn on past reserves. Totalling $52 billion this year and the largest amount to date, this sum eclipses the $4.9 billion that then President S R Nathan approved during the 2009 global financial crisis.
Key support measures include the Jobs Support Scheme and its extensions, which cover up to 75 per cent of the first $4,600 of gross monthly wages of each local employee to help firms retain workers.
But Singaporeans must still brace themselves for a very tough period ahead, PM Lee cautioned.
Despite all the measures taken, unemployment will go up.
"But we are determined to save as many jobs as we can, and create new jobs too. And we will do our utmost to help businesses and industries survive and restructure themselves," he pledged. "That is how we can keep our capabilities and livelihoods intact through the storm, and pick up again when the sun shines once more."
Singapore's economy is expected to shrink by 4 per cent to 7 per cent this year, making this the worst recession since independence in 1965.
According to the Manpower Ministry's labour market report earlier this month, total employment here registered its sharpest-ever quarterly decline in the first quarter of this year.
The overall unemployment rate rose slightly from 2.3 per cent in the previous quarter to 2.4 per cent. Manpower Minister Josephine Teo had cautioned that the full effects of Covid-19 were not yet felt in the first quarter.
In his address, PM Lee added that governance will continue during the election period, with the new National Jobs Council creating jobs and training places, and businesses, workers and families receiving help.
Chaired by Senior Minister Tharman Shanmugaratnam, the high-level council has 17 members, including eight ministers and representatives from the labour movement and business associations.
It will oversee the design and implementation of the SGUnited Jobs and Skills Package announced by Deputy Prime Minister Heng Swee Keat in his Fortitude Budget speech last month.
The package aims to support close to 100,000 job seekers over the next 12 months by creating new vacancies, traineeships and skills training places.
PM Lee also set out why he has decided to call a general election now, and said he had to be certain of two things before deciding to proceed with the polls amid the Covid-19 pandemic.
The first is that voters can vote safely, and second, that political parties can campaign effectively.
"With our arrangements and precautions in place, I am confident we can hold a proper and safe election," he said.
He made the point that Singapore is not the first to hold an election during the pandemic, citing South Korea, Taiwan and several European countries that have done so.
In a Facebook post yesterday, DPM Heng said the decision to hold an election in the middle of a pandemic is not an easy one to make.
"But given the profound uncertainty ahead, and the challenges that we must tackle as a nation, it is important that we do so now, when the situation is relatively stable," he said. This is to give the new government a fresh, five-year mandate to bring Singaporeans together to overcome the coronavirus crisis.
More than ever, Singapore will need a government with a strong mandate and a long runway to lead the country out of crisis, he added.
Said Mr Heng: "We will face the challenges ahead together, working in partnership with you. We can and we will overcome this crisis of our generation, and emerge stronger as an economy, as a society and as one people.
"There is a lot at stake. I trust that fellow Singaporeans will consider very carefully who you choose to form the next government and take Singapore forward."