SINGAPORE - More than $2 billion will be set aside to support workers and businesses grappling with the impact of tighter Covid-19 restrictions since May, Finance Minister Lawrence Wong announced on Monday (July 26) as he said the latest period of heightened alert is not expected to derail Singapore's economic recovery.
He acknowledged that the domestic, consumer-facing sectors, such as retail and food and beverage (F&B), will continue to face challenges, but said Singapore remains on track to achieve growth of 4 per cent to 6 per cent this year.
Mr Wong was giving a statement in Parliament shortly before he introduced the Supplementary Supply Bill to effect the reallocation of funds for the measures.
The latest round of support measures for the current phase two (heightened alert) period was announced by the Ministry of Finance last Friday. This includes rental relief for hawkers and eligible businesses as well as enhanced wage support under the Jobs Support Scheme, which are expected to cost up to $1.1 billion.
This will be financed by the reallocation of funds in keeping with Singapore's principles of fiscal responsibility and prudence, said Mr Wong.
The bulk of the amount, about $900 million, will come from operating and development expenditures that will not be used due to delays caused by the pandemic. These are one-off expenditures slated for activities in schools and for construction projects that have been cancelled or postponed.
The remaining amount will be covered by the buffer of $200 million already provided for as part of the supplementary estimates presented in early July. This buffer had been set aside in anticipation of enhancements or extension of support measures.
Said Mr Wong: "I had said previously that given the stronger position we are in today compared with last year, and the fact that most of the economy remains open, we should not be drawing on past reserves. This remains the case."
He added that since the support package will be funded via reallocation of funds, Singapore's overall fiscal position for financial year 2021 is expected to remain unchanged, with an overall deficit of $11 billion, or 2.2 per cent of gross domestic product.
In his speech, Mr Wong said he recognised that businesses in the affected sectors had been working very hard to adapt to the changing regulations, and are deeply disappointed by the recent turn of events in the Covid-19 situation.
But business leaders he spoke to understood the need for the restrictions, and have continued to show resilience and the resolve to ride out the storm.
Mr Wong noted that Trade and Industry Minister Gan Kim Yong and himself had last week met representatives from the Singapore Business Federation and several trade associations from the retail and F&B sectors. He said many businesses were facing more strain this time.
"It's not just having to enter into another heightened alert. But it's the broader challenge of having to endure more than 1½ years' worth of restrictions, as well as continued disruptions to their business," he said, adding that their feedback was taken in for the latest round of measures.
JSS support will be raised to 60 per cent for sectors that have to close or suspend most activities. These sectors include F&B, sports, performing arts and arts education.
Support will be up to 40 per cent for sectors significantly affected by restrictions, such as the retail and tourism sectors, cinema operators and family entertainment centres.
From Aug 19 to 31, the wage support will taper to 10 per cent as businesses reopen.
The Covid-19 Driver Relief Fund will be enhanced for taxi and private-hire car drivers, while a new Market and Hawker Centre Relief Fund will give a one-off $500 cash payout to all individual stallholders of cooked-food and market stalls in centres managed by the National Environment Agency (NEA) or NEA-appointed operators.
To help other workers affected by the tightened measures, the Government will also make the temporary Covid-19 Recovery Grant available until Aug 31.
These measures come on top of an earlier package announced weeks earlier to cover tighter measures imposed since May. The earlier measures will also be funded by reallocation of funds, some of which will come from capitalisation of development expenditure under the recently passed Significant Infrastructure Government Loan Act.
With about 70 per cent of Singapore's economic activities in outward-oriented sectors, the earlier projected growth of 4 per cent to 6 per cent this year remains on track, as long as external demand remains healthy, said Mr Wong.
He added that the bigger uncertainty to recovery is the impact that the Delta variant of the coronavirus may have on the major economies in Europe and the United States, which will affect external demand.
He noted that on the whole, most economists are still projecting a robust global economic recovery this year.
But he said there are growing fears that as countries open up and the Delta variant spreads, the resurgence in cases could lead to higher hospitalisations and fatalities, which could force a return to lockdowns, and impinge on global economic growth.
"We must continue to stay agile and nimble, and keep on updating our Covid-19 and economic strategies based on the latest developments around us," he said.
"Ultimately, the best way to support our businesses and workers is to bring the infection under control, push up our vaccine coverage, and reopen our economy. These continue to be our key priorities."
MPs will debate the statement on Tuesday.
Additional support measures from May to August
1. Rental relief for hawkers and eligible SMEs & non-profit organisations*
- Four weeks of rental waiver for tenants of government-owned commercial properties
- Two weeks of rental relief cash payout for tenants and occupiers of privately owned commercial properties
- Landlords will now be required to match government relief and offer two weeks of rental support to tenants
*Similar rental support was offered in May and June
2. Enhanced Jobs Support Scheme for affected sectors
- 60 per cent wage support for F&B, sports, performing arts and arts education from July 22 to Aug 18
- 40 per cent for retail, affected personal care services, tourism and family attractions from July 22 to Aug 18
- These sectors get 50 per cent and 30 per cent support from May 16 to July 11, and 10 per cent from July 12 to 21 and Aug 19 to 31
3. Covid-19 Driver Relief Fund for eligible taxi and private-hire car drivers
- $10 per vehicle per day for 60 days from July, and $5 per vehicle per day for the next 30 days
- Additional top-up of $10 per vehicle each day from July 22 to Aug 31
- Additional top-up of $5 per vehicle each day in September
4. Support for hawkers
- One-time $500 payout under Market and Hawker Centre Relief Fund
- More than $9 million worth of rental waivers and subsidies for table-cleaning and dishwashing service fees
5. Covid-19 Recovery Grant — Temporary
- Up to $700 for workers who were placed on involuntary no-pay leave
- Up to $500 for those who lost at least 50 per cent of their income for at least one month due to tightened safe management measures
- Application period extended till Aug 31
- Current recipients can apply for a second payout