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Transcript of Senior Minister of State for Finance and Transport Chee Hong Tat's Remarks at the Support Package Press Conference on 21 June 2022

21 Jun 2022

Support for Businesses

1. We recognise that our businesses are facing higher operating costs and heightened cashflow concerns during this period. In addition, some businesses have only just started to recover from the effects of Covid-19. The Government understands your concerns and we will step in to cushion these near-term energy and labour cost increases.

2. At the same time, we have to press on with enterprise and workforce transformation efforts, especially in the areas of energy efficiency and labour productivity. These are key to enhancing Singapore’s economic competitiveness, which will in turn allow our workers to have better jobs and earn higher wages over time. This is the best way to deal with the cost increases over the long term.

3. We will therefore introduce a new Energy Efficiency Grant for local SMEs in the Food Services, Food Manufacturing and Retail sectors. These SMEs have been more significantly affected by higher electricity prices. The new grant complements other energy efficiency initiatives such as NEA’s Energy Efficiency Fund, which supports businesses in the manufacturing sector, and BCA’s Green Mark Incentive Scheme for Existing Buildings 2.0. The Energy Efficiency Grant will provide local SMEs with up to 70% support to adopt energy-efficient equipment in pre-approved categories with a funding cap of $30,000 per company. This way, firms can improve their energy efficiency levels, reduce energy consumption and reduce their cost of doing business

4. Next, we will enhance our financing schemes to support local enterprises facing cashflow constraints. We will enhance the Enterprise Financing Scheme-Trade Loan by increasing the maximum loan quantum from $5 million to $10 million from 1 July 2022 to 31 March 2023 and we will also maintain the enhanced government risk- share of 70%. From now till 30 September 2022, firms can tap on the Temporary Bridging Loan Programme, or TBLP, for their working capital needs. When the TBLP expires, we will enhance the Enterprise Financing Scheme-SME Working Capital Loan by increasing the maximum loan quantum from $300,000 to $500,000 from 1 October 2022 to 31 March 2023.

5. We will also enhance the Progressive Wage Credit Scheme by increasing the Government’s co-funding share of eligible wage increases in 2022 from 50% to 75% for workers earning up to $2,500 per month, and from 30% to 45% for workers earning between $2,500 and $3,000 per month. This will reduce the cost impact on employers, when they hire and pay lower-wage workers higher salaries. That is the outcome that we want to see, to uplift our lower-wage workers. We want to help businesses to cushion some of the labour cost increases, while continuing with our tripartite efforts to improve labour productivity and skills upgrading.

Support for SEPs affected by higher fuel costs

6. Many self-employed persons in our transport sector have been affected by the increase in fuel price. Pump prices have gone up 30% to 40% over the past 6 months. Taxi and private hire car operators have introduced temporary fare adjustments to supplement the incomes of our drivers in the point-to-point sector. Many operators offer further support, such as rental rebates and discounted fuel. The Government will also do our part to help. We will provide a one-off relief of $150 to each eligible taxi main hirer and private hire car driver.

7. For our self-employed combi-bus and limousine drivers as well as delivery drivers and riders, we have worked with the Labour Movement to extend further assistance to them through NTUC. We are able to do this because of the close partnership we have built over the years with NTUC under the leadership of Secretary- General Brother Ng Chee Meng and his team. On behalf of the Government, I would like to thank our sisters and brothers from NTUC for their strong support and care for our workers. NTUC will share more details on the assistance package when ready.

8. Let me conclude by reinforcing what DPM mentioned earlier that while we provide targeted and immediate relief to help households, workers and businesses cope with the near-term cost increases, we must not lose momentum on our enterprise and workforce transformation efforts. These are important to Singapore’s longer-term economic competitiveness, to overcome our constraints on land, labour and carbon, and to give our people and our workers better jobs, higher wages and a brighter future. Thank you.