Covid-19 Budget measures saved jobs and lives: MOF

Budget measures amounting to nearly $100 billion, which were rolled out over the last two years to cushion the impact of Covid-19, and Singapore's public health response have saved lives and jobs.

Longer-term economic scarring was also largely avoided as businesses continued to operate, while corporate debt did not rise too quickly and job prospects for fresh graduates were maintained, the Ministry of Finance (MOF) said yesterday.

The ministry pointed, in particular, to Singapore's vaccination drive. It highlighted Health Ministry estimates that the high take-up rates for the vaccines prevented around 8,000 Covid-19 deaths here during the peak of last year's Delta wave.

Singapore's public health response has kept death rates low throughout the past two years.

Had vaccines not been available, Singapore would likely have seen eight times the actual hospitalisation rate, nearly 12 times the number of severe cases and 11 times the number of total deaths during the peak of the Delta wave last year, the ministry said.

The MOF's findings, made public yesterday, formed part of a new 58-page report assessing the impact of key Budget measures to tackle the Covid-19 pandemic.

The report builds on an earlier interim report published in February last year. The intervening time allowed for "deeper analysis of the fuller effects of the economic measures, as well as the opportunity for causal inference studies of the impact of specific schemes", the MOF said.

Fiscal measures in the Budget, along with an accommodative monetary policy, saw Singapore's real domestic product shrink 4.1 per cent in 2020 - less than the 10.7 per cent expected without such support.

These measures also saw real GDP grow by 7.6 per cent last year, compared with an estimated 6.8 per cent if no support had been in place.

The impact on unemployment was also significant. Resident unemployment was projected to hit 6.1 per cent in 2020 and 7.5 per cent last year without support measures. Instead, Singapore saw annual resident unemployment rates of 4.1 per cent and 3.5 per cent, respectively.

Measures such as the Jobs Support Scheme (JSS) to subsidise salaries as well as the Jobs Growth Incentive to encourage companies to expand contributed to lower unemployment rates.

JSS payouts between April 2020 and December last year saved 165,000 local jobs in the first 10 months of the pandemic, and were a buffer against wage cuts.

The SGUnited Jobs and Skills package - a suite of schemes offering traineeship opportunities and job placements, among other things - was found to have helped fresh graduates enter a weak labour market.

By the end of October last year, it had filled more than 166,300 jobs and skills opportunities, including 122,300 job placements.

But employment figures across the various schemes were mixed. After six months, more than 80 per cent of those on traineeships and mid-career company attachment programmes had been employed.

But mid-career individuals on the company training programme did less well, with nearly half remaining unemployed six months after the scheme ended.

More than a third of the Covid-19 Recovery Grant funds went to those with a per capita monthly household income of $1,200 or less in 2019.

The report also noted that the crisis is not over yet.

Economist Terence Ho, an associate professor at the Lee Kuan Yew School of Public Policy, added that today's Budget will likely see support measures focused on sectors that have yet to recover from the pandemic.

"Much of the broad-based support has to taper, and indeed already has," he said.

"Support will be much more targeted going forward, even as the broader workforce and economy are on a much firmer footing than before."