SINGAPORE - Five Budgets, nearly $100 billion committed in Covid-19 support measures, and up to $52 billion drawn from past reserves. A deficit to the tune of $74.2 billion - Singapore's biggest since independence in 1965.
This represents the unprecedented fiscal firepower the Government unleashed last year to save jobs, support workers and protect livelihoods.
As Covid-19 raged and jobs were felled, households and individuals leaned on cash payouts from the Solidarity Payment and Care and Support Package. There were utilities offsets, loan and insurance premium deferments, and the Self-Employed Person Income Relief Scheme.
As at December last year, 75,000 local job seekers had been placed in work and training opportunities under the SGUnited Jobs and Skills Package.
Businesses were propped up with the Jobs Support Scheme (JSS) of wage subsidies. They had help with rental relief and loans, and grants to adopt digital solutions, among other things.
More targeted support
Hopes are high that policymakers will not turn off the spigots too soon in Budget 2021 on Feb 16.
While the 5.8 per cent contraction in gross domestic product (GDP) last year was an improvement on earlier forecasts, hiring remains cautious. The timeline for global recovery is uncertain, given virus mutations and uneven vaccine uptake.
DBS Bank senior economist Irvin Seah thinks Budget 2021 ought to be expansionary, as there is still a strong need to support recovery and avoid a cliff effect.
But as the Government runs a balanced budget over each term of office, it may want to keep some powder dry and be more fiscally conservative at the start, he said.
This means a highly targeted Budget with resources directed at vulnerable segments of society and the worst-hit sectors, and schemes that will "bring about the most bang for the buck".
There could be cash grants to help those still unemployed; and enhancements to the Jobs Growth Incentive (JGI), with wage support for lower wage workers bumped up to 75 per cent to speed up hiring, he said. "There is also a need to extend the SGUnited traineeship scheme to render help to the upcoming cohort of fresh graduates."
Associate Professor Lawrence Loh from the National University of Singapore Business School said temporary aid such as rental and foreign worker levy waivers may not be extended. "But there is merit to continuing the JGI in some form, especially for advancing specific policy objectives like caring for older workers."
The hardest-hit sectors such as aviation and tourism could still need an extension of support such as the JSS, said Deloitte Singapore tax partner Liew Li Mei, as they are key sectors with a multiplier effect on Singapore's overall economy.
Future-readying workers, companies
Helping workers and firms adapt, innovate and grow will be a key priority for Budget 2021, said Deputy Prime Minister Heng Swee Keat on Friday (Feb 5).
"Covid-19 has accelerated innovation, put a premium on resilience, and greater priority on sustainability. There is no turning back the clock. While we deal with the present, we must also prepare our workers and businesses for a different world post-Covid."
There will be stronger emphasis on capability development, investing in new technologies, scaling up and venturing overseas, said DBS' Mr Seah.
Maybank Kim Eng senior economist Chua Hak Bin expects an extension - or similar versions - of digital initiatives launched last year such as the Digital Resilience Bonus, a cash grant for food and beverage and retail firms to adopt digital payments and e-commerce solutions.
Pivot to the new normal
Education, traditionally a big-ticket item, will remain a key beneficiary as the Government supports the shift towards home-based learning, said Mr Chua.
With such learning slated to account for 10 per cent to 20 per cent of curriculum time by next year, the Government will allocate funds to provide all secondary school students with their own personal learning devices by the end of this year, he said.
Food security - including funding for the agri-tech industry - is expected to feature too, as lockdowns in neighbouring countries last year underscored the importance of food supply resilience.
Earlier announced measures to tackle climate change will extend into the new fiscal year. Mr Chua noted that incentives to switch to more environmentally friendly vehicles, such as the new Commercial Vehicle Emissions Scheme and enhanced Early Turnover Scheme, are slated to take effect from April.
On Monday, Minister for Sustainability and the Environment Grace Fu announced that a Singapore Green Plan 2030 will set ambitious green goals for each sector.
DBS' Mr Seah said that while this is encouraging, the key focus should be to ensure that small and medium-sized enterprises and Singaporeans benefit.
Should there be tax deductions for work-from-home expenses? Deloitte Singapore global employer services tax leader Sabrina Sia suggested a fixed amount multiplied by the number of work-from-home days. This will reduce the administrative burden of justifying claims for additional utility bills, she said.
A few challenges remain.
First, the number of Singaporeans who re-entered employment within six months of being retrenched declined over the first three quarters of last year.
Of the nearly 60,000 job seekers placed in openings under the SGUnited Jobs and Skills Package as at end-October last year, fewer than half were in long-term jobs. Once their short-term stints end, they will have to compete with the new batch of graduates.
Second, while this year's projected deficit of between 2 per cent and 4 per cent of GDP by analysts is within tolerable limits, in the long run, policymakers could be forced to reckon with whether revenue from the goods and services tax hike is enough to meet rising healthcare and social spending needs.
Some, like Institute of Policy Studies head of governance and economy Christopher Gee, further suggest a debt issuance framework to finance development expenditure, which can generate positive social returns for future generations.
Third, the crisis has sharpened inequality. While this is often measured in income terms, wealth inequality, too, bears watching as property and stock markets hit record highs last year, said Mr Gee.
He added that some global elites will see Singapore as a good place to park their assets and see how they can contribute. Can they play a bigger part in shouldering society's needs, such as by paying more property and capital gains taxes?
"What kind of society do we want to be - one where the rich get richer, and everybody else stagnates? We have to be strong enough to say: 'This is Singapore's value proposition and if you want to base yourselves here, you need to contribute.'"
Read more Singapore Budget 2021 stories here.