Third support package will require further draw of $4b from reserves

The third package comes ahead of a government-mandated shutdown of most workplaces and all schools to stem the spread of the coronavirus. ST PHOTO: MARK CHEONG

The third set of support measures announced by Deputy Prime Minister Heng Swee Keat yesterday will cost $5.1 billion, and necessitate a further draw of $4 billion from the national reserves.

President Halimah Yacob has given in-principle support for this additional draw, DPM Heng said in Parliament, as he unveiled another support package to help tide Singaporeans through the Covid-19 crisis.

She had earlier given in-principle support for a draw of $17 billion to fund the Government's second support package to help businesses and workers battered by economic fallout from the coronavirus pandemic.

Shortly after Mr Heng's statement in Parliament, the President said in a Facebook post that Prime Minister Lee Hsien Loong and Mr Heng had discussed the severity and urgency of the Covid-19 situation with her last week.

"I agreed with them that we need to provide additional support quickly and decisively," Madam Halimah said.

"We have to help businesses retain their capacity so that they can resume activities when the safe distancing measures are lifted. We should protect jobs for our workers, and give additional support to vulnerable groups."

The third package announced by Mr Heng comes ahead of a government-mandated shutdown of most workplaces and all schools to stem the spread of the coronavirus. Dubbed a "circuit breaker", it is meant to cut down movement and social interactions outside of homes to break the chain of transmission of the virus.

While these "significantly stricter pre-emptive measures" are needed to protect Singaporeans and their families, both Mr Heng and Madam Halimah acknowledged that workers and businesses will be severely impacted.

Said Mr Heng, who is also Finance Minister: "Additional support will be required to save jobs, preserve capabilities, and provide immediate direct assistance to Singaporeans to help them tide through this exceptional and difficult period."

The additional drawdown of $4 billion will fund enhanced wage support for businesses and cash payouts for all Singaporeans, among other support measures.

The Solidarity Budget follows two initial tranches of support - the Unity Budget (announced during the Budget in February) and the Resilience Budget (a supplementary budget unveiled last month).

Altogether, the Government's response to the Covid-19 pandemic will cost $59.9 billion in total, or 12 per cent of Singapore's gross domestic product (GDP), said the Deputy Prime Minister.

The country's overall Budget deficit for the 2020 financial year will increase to $44.3 billion, or 8.9 per cent of GDP, Mr Heng added.

"This is an unprecedented Budget, for extraordinary times. The situation remains highly fluid and uncertain. The Government stands ready to provide further support, should it become necessary," he said.

Madam Halimah said Singapore was entering a critical phase in its fight against Covid-19, and urged people to adhere to the circuit breaker measures to avert an exponential rise in the number of cases.

"Let us all do our part, and support one another during this difficult period," she added.

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A version of this article appeared in the print edition of The Straits Times on April 07, 2020, with the headline Third support package will require further draw of $4b from reserves. Subscribe