The supplementary budget delivered by Deputy Prime Minister Heng Swee Keat in Parliament yesterday is an extraordinary and timely effort to shore up Singapore's defences against the medical, economic and social onslaught of the coronavirus pandemic. The $48.4 billion announced to support businesses, workers and families, on top of the $6.4 billion offered just weeks ago, signifies the gravity of the economic crisis precipitated by the pandemic. Cumulatively, Singapore is allocating nearly $55 billion, or about 11 per cent of its gross domestic product, to deal with challenges that have come in the wake of Covid-19. Its global spread has led to drastic social lockdowns elsewhere which have had an immediate effect on national economies.
Contraction of domestic output and disruption of international supply chains will have long-lasting implications for the global economy. Given Singapore's inextricable place on global markets, it is not surprising that the far-reaching impact of the outbreak is likely to cause the worst economic contraction here since independence. Few Singaporeans can hope to be spared the direct or indirect consequences of the crisis. In the midst of this unsettling economic storm, the so-called Resilience Budget extends a steadying hand to the affected population by focusing on three key areas. The first is to save jobs, support workers and protect livelihoods. The second is to help businesses overcome immediate challenges. The third is to strengthen economic and social resilience so the country can emerge stronger from an inevitable downturn. From workers fearful of losing jobs to national icon Singapore Airlines, large swathes of society will welcome the supplementary budget's explicit reassurance that Singapore is more than capable of overcoming this existential threat. The nature of the threat underlines President Halimah Yacob's in-principle support for the Government to draw up to $17 billion from past reserves. Only once earlier, during the 2008-2009 global financial crisis, did Singapore do so to fund support measures, and the amount then was $4.9 billion.
In the years since the economy took off after independence, the Government stuck to the stringent principle of not treating the reserves as an easy source of finance for populist measures or to tide over short-term problems that come with changing business cycles. In remaining strict, prudent and principled, a depletion of the reserves has been avoided. This has accounted for a significant reservoir available for use when it becomes necessary to meet only the gravest of challenges. Such a move is clearly justified in these present times. Indeed, the Government is prepared to propose to the President further draws on the savings of past governments if necessary. Singaporeans should take heart from the ingrained prudence which has made it possible for funds to be available at critical moments such as now.