As Singapore works to further re-open safely, Minister for Finance, Coordinating Minister for Economic Policies, and Deputy Prime Minister Heng Swee Keat delivered a ministerial statement yesterday, highlighting how Singapore will approach the next six months, as well as shared plans for longer-term economic recovery to emerge stronger.
In the statement, DPM Heng also provided the context for the Supplementary Supply Bill which provides the resources to implement the measures announced in August.
Excerpts of the statement below.
In Singapore, the fight against COVID-19 on the healthcare front consists of four key prongs:
- Safe management
While taking care of the healthcare front, the Government has not forgotten the economic and social fronts, where businesses, workers, and households have been hit with disruptions and uncertainties due to COVID-19.
Over the four Budgets, support for firms and workers has been focused on providing immediate relief and minimise the scarring effects of COVID-19 on the economy, by preparing businesses and workers to emerge stronger.
3 key support measures for firms: retaining skills, financial support for growing firms, and extending loan schemes
#1 Preserving core capabilities and retain specialised skills for the hardest-hit sectors
Apart from the earlier announced Enhanced Aviation Support Package, and the SingapoRediscovers Vouchers, the Enhanced Training Support Package (ETSP) will be extended for another six months up till 30 June 2021.
The ETSP will also be extended to the Marine and Offshore sector from 5 October, on top of the existing sectors such as Air Transport, Retail, and Tourism.
The Government will also be lowering the absentee payroll rates to 80% from January 2021, capped at S$7.50 per hour.
#2 Providing strong support to firms that are growing
To help workers move to growth areas, stay employed, and build new skills, the Government has enhanced support for startups, via the Startup SG Founder programme.
At the same time, through the Jobs Growth Incentive (JGI), firms that increase their total local headcount are provided with wage support of between 25% and 50% for each new local hire. The support will be provided for the first S$5,000 of gross monthly wages for up to 12 months.
A higher tier of wage support of 50% under the JGI will be provided to all Persons with Disabilities. This applies to new hires of Persons with Disabilities from September 2020 to February 2021.
Further, to help businesses seeking to internationalise, transform, and digitalise, capability-building grants will be extended or enhanced.
The grants involved are the Market Readiness Assistance Grant, the Productivity Solutions Grant, the Enterprise Development Grant, and the PACT programme. Details will be announced by the Ministry of Trade and Industry (MTI) in the coming weeks.
#3 Extending loan schemes to ensure support does not taper off too sharply as the economy recovers
Earlier, loan schemes were enhanced to provide working capital support for viable businesses.
The Government will now extend the Temporary Bridging Loan Programme for six months, until September 2021, at reduced levels.
At the same time the Monetary Authority of Singapore (MAS) will also extend the MAS Singapore Dollar Facility for Enterprise Singapore Loans, until September 2021.
Support available under the Enterprise Financing Scheme to help Singapore enterprises access financing in areas such as trade and project needs will also be adjusted.
More details will be announced by MTI and MAS on a later date.
Yesterday, MAS also announced extended support measures to give individuals and businesses currently under loan repayment deferrals more time to resume repayments. The support measures will also be available to borrowers previously not under any payment deferral, but who are now facing cashflow challenges.
In particular, MAS will be helping SMEs with loan commitments and restructuring options in the following two ways:
1. Partial deferment of principal payments on secured SME loans and loans under Enterprise Singapore
SMEs in need of further relief should first consider the Extended Support Scheme - Standardised (ESS-S). Under this scheme, SMEs in Tier 1 and 2 sectors may opt to defer 80% of principal payments on their secured loans granted by banks or finance companies, as well as loans granted under Enterprise Singapore’s (ESG) Enhanced Working Capital Loan Scheme and Temporary Bridging Loan Programme till 30 June 2021.
SMEs in other sectors may opt to do the same up to 31 March 2021. The extension of the loan repayment deferral to also cover the ESG loan schemes will provide support to a larger number of SME borrowers.
This relief will be available to all SMEs that are in good standing with their banks and finance companies, that is, not more than 30 days past due on all their loan payments. SMEs whose loans have been granted principal moratorium should also not have overdue interest payments for these loans.
2. Customised restructuring programmes
To help SME borrowers for whom the ESS-S is not suitable, banks and finance companies are also developing an Extended Support Scheme - Customised (ESS-C) to facilitate the restructuring of a borrower’s loans across multiple financial institutions. Most SME borrowers have only one lender, but for those with more than one lender, the ESS-C programme will help to bring together the various lenders to allow for better restructuring outcomes.
The ESS-C complements other restructuring assistance schemes under the Ministry of Law’s (MinLaw) proposed Simplified Insolvency Programme (SIP) for micro and small companies and CCS’ scheme for sole proprietors and partnerships (SPP scheme).
The scheme will be available for SMEs with more than one lender for whom the CCS’ SPP scheme and MinLaw’s SIP may not be suitable. Such SMEs should approach one of their lenders to assess if they would benefit from a multi-lender restructuring under the ESS-C.
More details on the ESS-C will be provided in the coming weeks. Borrowers can apply for both the ESS-S and ESS-C from 2 November 2020 onwards.
Support for workers: Reskilling and matching displaced workers to new opportunities
All the support for firms will ultimately benefit workers by helping them retain their job as well as providing them better jobs and prospects.
The government will also continue providing support to workers who have lost their jobs to help them reskill and move into firms that are hiring.
This will be done through the National Jobs Council, and the SGUnited Jobs and Skills Package that was announced during the Fortitude Budget in May.
The Council has curated 117,500 opportunities under the SGUnited Jobs and Skills Package as of end-August. It is also working closely with companies to hire mid-career jobseekers looking for a switch in their careers and redeploy workers in affected sectors. At the same time, it is engaging companies to offer traineeships, company attachments, and training opportunities, which can later lead to good jobs.
To ensure workers know of, and are successfully matched to these opportunities, the Government is reaching out to them via the following channels:
- Setting up SGUnited Jobs and Skills Centres in every HDB town and have Career Ambassadors to reach out to residents.
- The Singapore Business Federation, or SBF, is working closely with other TACs and NTUC’s e2i to do business-to-business job matching across sectors, through the SBF SGUnited Jobs Initiative.
- MOM and WSG will also be appointing employment agencies as Placement Partners, to assist in placements.
To help those who have lost their jobs, the Ministry of Social and Family Development (MSF) has recently extended the COVID-19 Support Grant, and applications are open till the end of the year.
Beyond 2020, the Government is studying the support for self-employed people and vulnerable workers. While the continuation and form of support will depend on the labour market situation and economic outlook, a key consideration will be to make a stronger link to helping individuals find a new job or acquire new skills.
Support for households: GST Voucher, Workfare Special Payment, and more
DPM Heng also highlighted the continued support for households in Singapore. “In October alone, eligible households will receive the GST Voucher – U-Save, the first tranche of Grocery Vouchers, and Service and Conservancy Charges, or S&CC, rebates. Eligible lower-income workers will also receive the October tranche of the Workfare Special Payment.”
Further, an additional one-off support for newborns will be introduced to help new parents with expenses during this period. This will be on top of the Baby Bonus Cash Gift, which provides eligible parents up to $10,000 in benefits. Minister Indranee will share more details on the additional support soon.
Roadmap for the future: Building a dynamic and growing economy, with good jobs for Singaporeans
Beyond the immediate crisis, the Singapore Government is prioritising the following:
- Emerging from COVID-19 stronger as a society, and more united as a people.
- Having better jobs for workers, and stronger support to enable them to bounce back if they fall.
- Building an endearing home for future generations, and a fair and caring society based on what Singapore stands for as a people.
To deliver on the above priorities, a dynamic and growing economy, with good jobs for Singaporeans is necessary.
In his statement, DPM Heng sketched out the broad strokes of Singapore’s strategy in preparing fro the next lap of economic growth, as summarised below.
COVID-19 has accelerated many structural shifts, including:
- A weakening support for globalisation as some countries turn inwards.
- A renewed impetus for adopting digital technology, with digital technology and its many applications being the new capital of the innovation-driven future economy.
- Asia’s rise in global economic weight, as the region’s recovery accelerates.
- A gain in momentum for ensuring sustainability and care for the environment.
Thankfully, Singapore is in a good position due to the implementation of the Industry Transformation Maps (ITMs), SkillsFuture movement, as well as Research, Innovation, and Enterprise (RIE) 2020 plan.
To build on this position and keep up the pace, the Government set up the Emerging Stronger Taskforce in May to update Singapore’s economic roadmap to respond to the new realities and emerge with a new competitive edge.
Significant progress has already been made through the Alliances for Action - a rapid-action Taskforce that rallies key industry players around common challenges to develop prototypes for new business ideas, models, and solutions.
Beyond the first wave of Alliances, the Taskforce is looking to launch new Alliances to build momentum for change and explore opportunities in new areas of growth.
All these moves build on Singapore’s ITM framework to deliver a refreshed economic strategy for a post-COVID world, with emphasis on three priority areas.
#1 Remaking Singapore as a Global-Asia node of technology, innovation, and enterprise
Moving forward, the Government aims to secure Singapore’s external economic linkages as a vital global node in Asia, and transform the country into a vibrant centre of technology and innovation. This will be done in two ways:
- Rebuilding and growing the country’s physical connectivity (in travel and trade) by reviving Singapore’s air hub and restoring air connectivity and, in the area of maritime trade, improving transhipment capabilities, inking trade facilitation agreements, and anchoring key shipping routes through Singapore. The Government also plans to strengthen Singapore’s value proposition through greater regional cooperation, as well as significantly strengthening the country’s trade and logistics ecosystem.
- Enhancing and expanding the country’s digital connectivity by accelerating the build-up of digital capabilities, digital payments, and data facilitate physical trade. As part of the Government’s ITM work, it is also helping firms to make full use of digital technology and use digitalisation as a strategic capability to unlock growth, evolve their models to harness digital possibilities, and integrate processes such as logistics, payment, and marketing. The Government is also looking to build on this momentum to bring digitalisation to Singapore’s heartlands.
Beyond being an effective and trusted broker for trade and digital flows, Singapore aims to be a key node where new ideas are born and nurtured into globally-competitive enterprises.
To reach that goal, the Government will be unveiling a new five-year RIE plan in December, which will build on earlier investments.
The Government also is looking to position Singapore as a global intellectual property (IP) centre in Asia.
At the same time, a major effort will be made to integrate the work of the Future Economy Council and the RIE plan to accelerate Singapore’s transformation into an innovation-led economy, powered by technology.
#2 Redoubling efforts to foster inclusive growth
As Singapore emerges from COVID-19, the Government not only aims to grow a vibrant, innovative economy, but also an inclusive one where growth uplifts all Singaporeans.
Two key things are needed to achieve inclusive growth:
1. Workers need to have skills to stay relevant
As such, extensive upskilling and continual reskilling of the workforce is necessary.
To this end, the Government has set aside about S$3bn for the SGUnited Jobs and Skills package to provide immediate employment and training support for our workers.
Firms and training providers also have a major part to play and are urged to make full use of schemes to develop their people.
As part of this whole-of-society movement to build skills, companies too, need better skills! Skills to develop their workers, and redesign skills-based jobs to move beyond paper-based qualifications.
2. Holistic support needs to be provided to uplift vulnerable workers
While designing support schemes, the Government has been deliberate in channelling additional support to vulnerable groups to help them access and stay in good jobs.
For instance, mature and older workers are eligible for higher wage support in the career conversion programmes, as well as higher course fee subsidies. While lower-income workers get additional support for skills upgrading via the Workfare Skills Support scheme.
Additionally, the Progressive Wage Model (PWM) - a 4-in-1 framework comprising a Job Ladder, Skills Ladder, Productivity Ladder and Wage Ladder - helps provide advancement pathways for lower-income workers.
While Singapore is still battling the downturn, the Government is actively looking to identify the next few sectors where the 4-in-1 PWM framework can be used to redesign jobs and raise skills levels. The PWM will be expanded to benefit more groups of lower-wage workers as soon as conditions allow.
It is a continuing journey to improve the job market for more vulnerable workers. Beyond incentives, the Government is looking to shift culture and employer mindsets. In the meantime, it will continue focusing on the strengths of workers and adopt flexibility in job redesign to make customised creative solutions for different groups of workers.
#3 Investing in economic resilience and sustainability as a source of competitive advantage
Economic resilience is not a new idea for Singapore. Due to Singapore’s diversified economic structure with multiple engines of growth, the country entered the COVID-19 pandemic on a relatively strong footing.
That said, the pandemic has exposed vulnerabilities across the world, highlighting the need to act now to improve Singapore’s economic resilience.
To this end, the Government is looking to creatively combine the efficiency of having things ready “just in time” with the resilience of building buffers “just in case”.
DPM Heng emphasises that resilience does not come at the expense of growth and efficiency. He pointed out: “Firms that embrace technology raise not only productivity, but also resilience.”
One way to enhance Singapore’s resilience and to grow is to produce essential supplies locally to be used for both local consumption and export. Two key examples are:
- Medical supplies such as masks and test kits
- Food, where the Government has set a “30 by 30” goal to produce 30% of Singapore’s nutritional needs locally by 2030, up from less than 10% today. This will help enhance the country’s resilience to food supply disruptions.
When it comes to sustainability, environmental sustainability is an important aspect of Singapore’s economic resilience for a low-carbon and resource-constrained future. With this comes the opportunity for the green sector to be a growth industry in its own right and power the economy.
Sustainability will be achieved in two key ways:
- Transforming existing industries to build a sustainable economy. This will be done through:
- Researching into energy and resource efficient technologies, and encouraging its adoption
- Promoting the decarbonisation of the economy via the Zero Waste Masterplan, deploying renewable energy sources, and investing in new capabilities and solutions.
- Seeking new business opportunities in the green economy, given the region’s growing needs for sustainable development. This will be done by establishing Singapore as a carbon services hub in Asia, as well as developing financing solutions and markets in Singapore to help firms finance the adoption of more sustainable practices under MAS’ Green Finance Action Plan.
Taken together, Singapore’s move to strengthen our economic resilience and sustainability serve a dual purpose.
They strengthen the economy so that Singapore can bounce back quickly and better from shocks, while adding to the country’s value proposition as a vital global node in Asia. In turn, all these initiatives will create many new opportunities and valuable jobs for people in Singapore.