Fortitude Budget

Firms that qualify for higher wage subsidies relieved, but worry about long recovery

Retail, arts and entertainment and construction are among the sectors that will qualify for higher levels of support when they reopen.
Retail, arts and entertainment and construction are among the sectors that will qualify for higher levels of support when they reopen.ST PHOTO: KELVIN CHNG

Firms that have been hard hit by safe distancing measures and travel restrictions say they are relieved to qualify for higher wage subsidies after the circuit breaker ends.

Retail, arts and entertainment and construction are among the sectors that will qualify for higher levels of support when they reopen, while the list of eligible firms in the aviation and tourism sectors has also been expanded. Newly qualified firms will also receive a top-up on previous payouts. The cash grants that cover 75 per cent of the first $4,600 of gross monthly wages for all local employees during the two months when most businesses have been forced to shut have been a lifeline, said firms.

As restrictions begin to ease next month, most businesses will receive a lower level of wage support when they are allowed to reopen.

But hard-hit sectors such as tourism and food services will continue to receive higher subsidies of 75 and 50 per cent respectively, until August. Except for those in the expanded list, all other businesses will receive subsidies of 25 per cent under the Jobs Support Scheme, first announced in February to help firms retain their local employees.

Mr Edward Liu, group managing director of Conference & Exhibition Management Services, said he was surprised that business and tourism event organisers had not originally qualified for the higher subsidies under the tourism sector.

"A lot of hotels and travel agencies depend on the business we bring in. But we are thankful that the Government has listened to our appeals and most of us have also heeded their calls to keep our staff," he said. With most events for the year cancelled or postponed and costs spent planning them last year now sunk, cash reserves have dried up, said Mr Liu. His firm, which organises 10 to 12 exhibitions a year, anticipates losing $5 million in turnover this year.

Another concern is how strict limits will be on events when they are allowed to return. "If instead of 250 exhibitors, they say you can only have 50, the amount we collect can't even pay for the hall rental," he noted. The firm will be organising a virtual trade show next month, which will help to support its 18 staff as they plan next year's events.

Ms Jamie Lim, chief executive of furniture retailer Scanteak Singapore, said the news that shops would have to remain closed for another month was painful, particularly as May and June are typically peak periods for sales.

But the 50 per cent wage subsidies for retailers announced yesterday along with additional rental relief has provided some comfort. The firm has been sending staff for training during the downtime, and beefing up its online capabilities. "A lot of SMEs think it's difficult to get good manpower, but I feel this is a good opportunity for everyone to upskill their workforce," she said.

Cinema operators, film distributors and arts and culture organisations were also added to the list of businesses that will qualify for 50 per cent wage subsidies when they reopen.

Ms Melissa Lim, general manager of local theatre company The Necessary Stage, noted that while the additional wage support provides some relief, the pandemic will have long-lasting effects on the arts and cultural sector. "Even when we can return to work, safe distancing measures need to be adhered to, which makes creating, rehearsing and presenting work near impossible," said Ms Lim, who added that audience members may not return for some time.

As the arts industry is powered by freelancers who do not benefit from the Jobs Support Scheme, "any supplementary support needs to take into consideration their plight for an extended period", she said.

The Singapore Business Federation said in a statement yesterday that the scheme has helped many employers to retain much of their existing workforce, and the extension of higher subsidies to seriously affected sectors is encouraging.

A version of this article appeared in the print edition of The Straits Times on May 27, 2020, with the headline 'Firms that qualify for higher wage subsidies relieved, but worry about long recovery'. Subscribe