Ministerial Statement On Singapore's Solidarity Budget06 Apr 2020
A1. Mr Speaker, Sir, we are sailing in uncharted waters.
A2. Since I delivered my Ministerial Statement on 26 March, eleven days ago, the pandemic has exploded.
a. As of 5th April 2020, COVID-19 has spread to more than 200 countries and territories, infecting over 1 million people, and taken more than 60,000 lives.
b. Today, to control the spread of the virus, more than 3.9 billion people, or half of humanity, are on lockdown.
a. To minimise the risk of import of cases, we have severely restricted incoming flights, and Singapore Airlines mounted dedicated flights to bring back Singaporeans who were overseas.
b. To limit local transmission, we have implemented comprehensive and complementary measures – safe-distancing, early identification and isolation of cases, and quarantine of close contacts.
a. Local transmission has increased, and continues to grow. As of yesterday, we have a total of 1,309 infection cases. Six have succumbed to the virus.
b. These individuals mostly became infected when they were in close contact with infected persons at the social, workplace and family settings. Some clusters have emerged in our foreign worker dormitories.
A6. PM addressed the nation last Friday. The Multi-Ministry Taskforce announced an elevated set of safe distancing measures immediately after that. These circuit breaker measures begin tomorrow, and will last for four weeks.
A7. The circuit breaker is essential, but we are acutely aware that it will be painful. It will disrupt businesses and impact workers severely. We will miss face-to-face interactions with our friends and family. Familiar routines will be put on hold. Many will be anxious about their jobs, and families.
A8. As the pandemic sweeps through the world, restrictions put in place in our trading partners will reduce demand for our exports even more. We must expect our overall GDP growth to take a further hit.
A9. But we must take these hard decisions, make the difficult adjustments, and do all that we can in the next few months, to protect the lives of our people. Otherwise, if the outbreak escalates, the impact on lives and livelihoods will be even worse. We must take short-term pains, to avoid even sharper pain later. Let us bear these immediate pains with fortitude, and stay strong.
A10. In the Resilience Budget, the Government committed $48 billion to support workers, protect livelihoods, and help enterprises overcome immediate challenges. We obtained the President’s in-principle support for a draw of up to $17 billion from our Past Reserves towards this.
A11. To further support our people and businesses during these extraordinary four weeks, when the circuit breaker measures are in place, I will bolster the Resilience Budget with a supplementary Solidarity Budget. The Unity, Resilience and Solidarity Budgets all build upon and reinforce each other. Together, they represent our strong and decisive response to the economic and social consequences of the COVID-19 crisis.
A12. I thank the Labour Movement, the Singapore Business Federation, as well as citizens from all walks of life for your valuable feedback. Your inputs matter. They have helped us to better understand the situation, and quickly shape the support we now need.
B. SOLIDARITY BUDGET
B1. The primary aim of this Solidarity Budget is to take further steps to save jobs and protect the livelihoods of our people during this temporary period of heightened measures. We will also help businesses preserve their capacity and capabilities, to resume activities when the circuit breaker is lifted.
B2. I will also provide direct cash in hand for households, to help tide families through this difficult period.
B3. All of us will be affected by these necessary circuit breaker measures – some more than others. To reach as many as we can, as fast as possible, the enhanced measures in the Solidarity Budget are broad-based.
Support for Firms and Workers
B4. First, we will support our businesses to retain their workers, and to stay viable. In my Ministerial Statement on 26 March in this House, I mentioned the 3 Cs of support for firms’ immediate needs – cash, cost and credit. I will increase support in all three areas.
Enhanced Jobs Support Scheme
B5. Many firms cannot operate at all, or can only operate at a much reduced level in the coming weeks. But they should still retain and pay their workers. I will enhance the Jobs Support Scheme to support them in doing so. This will help our workers keep their jobs, and enable businesses to resume operations quickly when the circuit breaker is lifted.
a. I announced earlier in the Resilience Budget that the Jobs Support Scheme will subsidise 25% of the first $4,600 of gross monthly wages for all local employees. I provided higher levels of wage subsidy for sectors that are more directly hit by the outbreak - 50% for firms in the food services sector, and 75% for the aviation and tourism sectors.
b. With the latest development, almost every business and every worker will be directly affected in the coming weeks.
B7. Let me take this opportunity to clarify that for this, and for the earlier Resilience Budget, the wage cap of $4,600 does not mean that workers earning more than $4,600 do not qualify.
a. Rather, it means that this wage subsidy applies to every one of our over 1.9 million local employees.
b. But regardless of how much they earn, the maximum subsidy to the firms will be 75% of $4,600 per person, which is $3,450.
c. The salary limit of $4,600 is based on our median wage level of full-time employed residents.
a. The enhanced payout for April wages will be paid in this tranche.
b. Firms on GIRO and PayNow will start receiving the first Jobs Support Scheme payout next week.
c. Firms which are not on GIRO or PayNow will receive their payouts by cheque, starting about a week later.
Further Measures to Ease Labour Costs
B10. Many employers also hire foreign workers on work permits and S-passes. In the same spirit, employers should take care of these workers who will also face difficulties during this circuit breaker period. By taking care of their workers, our firms can resume operations quickly once the heightened measures are lifted.
B11. To ease the labour costs of such firms during these four weeks:
a. I will waive the monthly Foreign Worker Levy due in April. This will reduce their cost, and relieve the pressures on their cash flow.
b. To help them preserve their business structure and quickly resume operations, we will also provide employers with a Foreign Worker Levy Rebate of $750 for each work permit or S pass holder, based on previous levies paid in 2020.
i. This will help employers pay and take care of the upkeep of their workers, and prepare their workforce to restart when the circuit breaker is lifted.
ii. Employers will receive the rebate as early as 21 April 2020.
B13. The Minister for Manpower will share more details.
Further Support for Rental Costs
B14. To further support businesses with costs, we are taking additional steps to make sure that our measures flow down to businesses.
B15. I earlier announced a Property Tax Rebate of up to 100% for non-residential properties, for the tax payable in 2020. This rebate is to help businesses deal with the impact of COVID-19. For most properties, the 100% Property Tax Rebate works out to slightly more than one month of rent.
a. The Minister for Law will introduce a Bill tomorrow to let businesses and individuals defer certain contractual obligations, such as paying rent, repaying loans, or completing work, for a period.
b. This Bill will also ensure that property owners pass on the Property Tax Rebate in full, to tenants, as PM mentioned in his address.
a. Stallholders in hawker centres managed by NEA or NEA-appointed operators will continue to enjoy three months of rental waivers, while commercial tenants will continue to receive two months of rental waivers.Enhanced Financing Support
B17. I have touched on the first 2 Cs – cost and cash flow. The third C is credit. To provide additional support on credit, I will further enhance financing support for enterprises so that viable businesses can continue to have access to credit despite the uncertainty.
a. I will increase Government’s risk share of loans made under the Temporary Bridging Loan Programme; the Enterprise Financing Scheme – SME Working Capital Loan; and Enterprise Financing Scheme – Trade Loan from 80% to 90% for loans initiated from 8 April 2020 until 31 March 2021.B18. Last week, MAS, together with the financial institutions, also introduced a package of measures to help SMEs with temporary cash flow difficulties. For example:
a. SMEs can now opt to defer principal payments on their secured term loans till the end of the year. More than $40 billion of SMEs’ existing loans are likely to qualify for this relief.
b. Banks and finance companies may also apply for low-cost funding through a new MAS Singapore Dollar facility, for new loans granted under the Enterprise Financing Scheme SME Working Capital Loan and Temporary Bridging Loan Programme. If they do so, they must commit to pass on the savings to their borrowers.
Enhanced Self-Employed Person Income Relief Scheme (SIRS)
B20. The enhancements I have just announced are to help workers who are employed by businesses to stay employed.
B21. For self-employed persons, we have put in place the Self-Employed Person Income Relief Scheme, or SIRS, to provide direct cash assistance.
B22. This is the first time that we are providing direct cash support to self-employed persons on such a large scale. They are a very diverse group, with different working hours and work arrangements. Some do this as full-time jobs, while others do this as part-time, to supplement their income. Some have been contributing CPF, while others have not.
B23. Since the announcement on 26 March, the Minister for Manpower, NTUC Secretary-General and I, as well as our Government agencies, have received feedback from various self-employed persons whose livelihoods have been affected. During this circuit breaker period, more will see a further drop in income.
a. For instance, there are self-employed persons who are engaged in some employment work to supplement their incomes.
b. Another group of self-employed persons bought an Executive Condominium some years ago. Their income is now severely affected by the pandemic, and they still have to support multiple family members’ daily needs or medical bills.
a. First, I will extend SIRS to automatically include self-employed persons who also earn a small income from employment work.
b. Second, I will raise the current Annual Value threshold up from $13,000 to up to $21,000, to include those who live in some condominiums and other private properties.
c. The other criteria remain unchanged.
d. With these enhancements, a total of about 100,000 self-employed persons will automatically be eligible for the scheme, and will receive three payments of $3,000 each, starting from May 2020.
a. As I explained earlier, self-employed persons are a very diverse group. Some are own account workers, like taxi drivers, who engage in a trade or business but do not employ any paid workers. Others are sole proprietors, who own small businesses that have employees and a network of business relations.
b. In these extraordinary times, many such self-employed persons are hard-hit. I hope that by our helping them, they too can help others in their networks, and their workers, and we keep the spirit of enterprise alive.
c. In the spirit of tripartism, NTUC Secretary-General Ng Chee Meng has also agreed to step up and help administer the application and appeals for SIRS, and support self-employed persons in need.
a. Let me reiterate that those who do not need this and do not qualify, should not come forward to appeal for and abuse the support – otherwise, you undermine public confidence and take up unnecessary resources.B27. But done right, together, we can help many self-employed persons who are hard hit. MOM will work closely with NTUC, to start processing appeals for SIRS as soon as possible.
Enhanced Support for Households
B28. I have spoken about our support for firms and workers. I will also provide timely support for households, to ensure that no household stands alone during this difficult period.
B29. All adult Singaporeans will receive a one-off Solidarity Payment of $600 in cash.
a. I will bring forward $300 from the Care and Support – Cash payout that I announced earlier. On top of this, I will provide an additional $300, bringing the total to $600 for every adult Singaporean, aged 21 and above.
b. For the majority of Singaporeans who have provided their bank account details to the Government, the Solidarity Payment will be credited directly into their bank accounts by 14 Apr 2020. The rest will receive the payment by cheque, to be issued in stages later, starting from 30 Apr 2020.
a. The remaining $300 or $600 from the higher tiers of the Care and Support –Cash payout,
b. The additional $300 payout for each parent with at least one child aged 20 and below, and
c. The $100 PAssion Card top-up, which will be given in cash, for Singaporeans aged 50 and above. Details are in the annex. [See Annex B-2.]
B32. I urge those who can, to donate to charities on the Giving.sg website or the Community Chest’s Courage Fund, or to directly share it with others.
B33. For those who still need more support, please approach our Social Service Offices and Community Centres, to apply for new schemes such as the Temporary Relief Fund and the upcoming COVID-19 Support Grant, which is available from May 2020, as well as existing ComCare assistance.
B34. Some Singaporeans will also be emotionally affected or distressed in this period. So besides financial support, let us provide emotional and mental health support to our people.
a. Our community mental health support services will continue to provide care and support for clients through phone consultations, or home visits for those who may need more support.
b. Over the weekend, MSF announced that we will set up a 24/7 National Care Hotline. In this time of need, I am glad that mental health professionals and trained volunteers have stepped forward to offer their help in setting up the new hotline. Thank You!
C1. These additional measures will cost $5.1 billion, with
a. $4 billion for the additional support for businesses and workers, and
b. $1.1 billion for the Solidarity Payment.
C3. I also told Members then that I was prepared to propose to the President further draws on Past Reserves should it be necessary.
C4. With the significantly stricter pre-emptive measures needed to protect Singaporeans and our families, it is now necessary for us to propose a further draw on Past Reserves. These measures will impact our workers and businesses severely; additional support will be required to save jobs, preserve capabilities, and provide immediate direct assistance to Singaporeans to help them tide through this exceptional and difficult period.
a. Therefore, I have sought and obtained the President’s in-principle support to draw on an additional $4 billion from Past Reserves.
b. Specifically, this will be used to fund the enhanced Job Support Scheme, the enhanced Temporary Bridging Loan Programme and Enterprise Financing Scheme, and the Solidarity Payment to Singaporeans. Details are in the annex. [See Annex C-1.]
c. The remaining $1.1 billion will be funded from the fiscal space of this term of Government.
C6. Taken together, the Government’s response to COVID-19 will total $59.9 billion, or about 12% of GDP. The Overall Budget Deficit for FY2020 will increase to $44.3 billion or 8.9% of GDP. Details are in the annex. [See Annex C-2.]
C7. This is an unprecedented budget, for extraordinary times. The situation remains highly fluid and uncertain. The Government stands ready to provide further support, should it become necessary.
D1. Mr Speaker, Sir, before I conclude, allow me to say a few words in Mandarin.
c. 因此, 为了大家的安全和健康，国人一定要遵守防疫措施。
D8. Mr Speaker, Sir, I will now conclude in English.
D9. This is a generational crisis with no precedent. We have brought all our resources and administrative capacity to bear, to mount a national effort for our workers, businesses, and families – to protect both lives and livelihoods.
D10. We have the plans, and the financial resources to carry out these plans without burdening future generations with the bill. We are grateful to our founding generation for their foresight and discipline. The key now is how we pull together, in solidarity, as a nation to implement these plans, and make adjustment as the situation continues to evolve.
a. COVID-19 is testing nations worldwide, and revealing more about governments, more about each society, our identity, and the values that hold each of us together.
b. Though the pandemic is global, the impact on each country depends greatly on the different actions and responses of each government and their people.
c. Trust and confidence of our people in the government are critical. Our people must understand what we are facing and support what we are doing.
i. This is why we have been forthcoming and transparent with Singaporeans.
ii. We are honest about the uncertainties and challenges ahead, and honest about the price we need to pay for what we need to do.
d. We have been able to take bold and swift actions because we have the trust of Singaporeans, painstakingly built up over the years by delivering for Singaporeans.D11. With the circuit breaker in place for the next one month, everyone will have to adjust and adapt not just our physical routines, but our mindsets and habits.
a. As Minister Lawrence Wong said, every person is, in fact, on the frontline. Every Singaporean can make a difference in slowing down the spread of the virus today.
b. To keep out the virus, every one of us must play our part. Be socially responsible – by staying home, staying safe, and staying healthy. Each and every one of us must do our best to stem the escalating infections, to prevent our healthcare system from being overwhelmed.
c. As we do so, we must keep our spirits up, and look out for each other, especially our seniors and the more vulnerable. Our government agencies, as well as many volunteers, are contributing their best to care for our vulnerable groups. We may not be able to physically visit our extended families and close friends, but we can stay in touch, and connect through phone or video.
D13. Let us unite, demonstrate our Resilience, stay United and press on in Solidarity. Together, we will emerge stronger from this!
- Opening Remarks by Deputy Prime Minister and Minister for Finance Heng Swee Keat at the Young NTUC LIT DISCOVery Virtual Symposium, Wednesday, 10 June 2020
- Budget 2020 Care and Support – Cash to be paid from 18 June 2020
- Ascertaining Commercial Property Landlords’ Compliance with Requirement to Pass on Full Amount of Rebates to Tenants under COVID-19 Support Measures
- POFMA Correction Directions on the Compensation Paid to CEO of Temasek Holdings
- Second Reading Speech by Second Minister for Finance Lawrence Wong on COVID-19 (Temporary Measures) Bill, at The Parliament, 7 April 2020