A S$700mn extension to the Jobs Support Scheme, deeper investments in businesses, and more - these are some of the things HR, employers and employees can look forward to in the next few years, as part of Singapore's Budget 2021 initiatives.
Deputy Prime Minister, Coordinating Minister for Economic Policies and Minister for Finance Heng Swee Keat delivered his #SGBudget2021 speech in Parliament on Tuesday (16 February), putting forth a slew of measures to be undertaken to help Singapore build resilience and "emerge stronger" post-pandemic.
Measures announced in the Emerging Stronger Together Budget 2021 include a six-month extension on the Jobs Support Scheme, enhanced salaries for healthcare workers, additional funding for the Jobs Growth Incentive to encourage local hires, and more.
Key highlights for HR and employers to note are summarised below.
Extended Jobs Support Scheme, relief for worst-hit sectors, support for developing skilled human capital
In his statement, Minister Heng said the Government's immediate tasks to build a stronger Singapore will be to safeguard public health, enable safe re-opening, and support workers and businesses in sectors that had been hard-hit by the pandemic.
To address this, S$11bn will be set aside for the COVID-19 Resilience Package, of which the first prong, costing S$4.8bn, will go towards public health and safe re-opening measures.
Extended Jobs Support Scheme
In the second prong of the package, the Jobs Support Scheme (JSS) will be extended by six months to support businesses, targeted at hard-hit sectors such as aviation, aerospace and tourism (Tier 1 sectors), and retail, arts & culture, food services and the built environment (Tier 2 sectors).
- For firms in Tier 1 sectors, the JSS will be extended by six months. Firms in these sectors will receive 30% support for wages paid from April to June 2021, and 10% support for wages paid from July to September 2021.
- For firms in Tier 2 sectors, the JSS will be extended at 10% for three months, covering wages paid up to June 2021. This excludes segments like supermarkets which are classified as Tier 3B.
- For firms in Tier 3A sectors, JSS will continue covering wages up to March 2021, as these sectors are considered to be "generally recovering."
- Nightlife establishments such as pubs, and karaoke outlets, are not yet permitted to re-open. They can apply for grants from the Ministry of Trade and Industry and Enterprise Singapore to pivot to other permissible activities or wind down.
Overall, this extension will cost the Government S$700mn.
Additional S$5.4bn funding on SGUnited Jobs and Skills Package
Next, the Government will extend specific schemes under the SGUnited Jobs and Skills Package, to facilitate workers moving to jobs in growth areas.
- S$5.4bn will be allocated to a second tranche of the Package, in addition to the S$3bn which was allocated in 2020.
- Of this, S$5.2bn will be allocated to the Jobs Growth Incentive to subsides wages for local hires. With this, the hiring window under the the Incentive will be extended by seven months, up till end-September 2021.
- Companies hiring eligible locals will be given up to 12 months of wage support from the month of hire.
- However, those hiring mature workers, persons with disabilities, and ex-offenders will be given more support – up to 18 months of enhanced wage support.
- The Government will also extend support for the SGUnited Skills, SGUnited Traineeship, and the SGUnited Mid-Career Pathways Programmes, for workers who require additional support before landing a job.
Through this next phase, the Government targets to support the hiring of 200,000 locals over this year and provide up to 35,000 traineeship and training opportunities.
The COVID-19 Resilience Package will also fund the COVID-19 Recovery Grant, which supports workers who lost their jobs or experienced significant income loss.
Apart from the above, the Package will further pay close attention to the worst-hit sectors, providing bridging support for aviation companies, taxi and private hire car drivers, arts & culture, and the sports sector.
- S$870mn will be dedicated to extend cost relief for the aviation sector to preserve core capabilities.
- S$133mn will be allocated to the COVID-19 Driver Relief Fund, to support taxi and private-hire car drivers.
- S$45mn will go to extending and enhancing the Arts & Culture Package and the Sports Resilience Package, to support capability development and sector transformation.
500 Fellowships under new programme for selected areas
Minister Heng shared that over the next five year, the National Research Foundation will be supporting about 500 Fellowships under the new Innovation and Enterprise Fellowship Programme, to meet needs in areas such as cybersecurity, AI and health tech.
It will work with a range of partners, including accelerators, venture capital firms and deep tech startups.
Enhanced salaries for healthcare workers
Apart from the above, the Government will be enhancing the salaries of nurses and other healthcare workers, who have been at the frontline of fighting the COVID-19 pandemic. This will apply to workers across the various healthcare institutions, including public healthcare institutions, publicly-funded community hospitals, and long-term care service providers.
Balancing the local-foreign worker mix
On the topic of manpower issues, Minister Heng said: "Some Singaporeans are concerned about our reliance on, and competition from, foreign manpower. At the same time, many businesses and trade associations have said that it is difficult to hire locals, and asked for us not to tighten foreign worker quotas further, to remain globally competitive.
"The way forward is neither to have few or no foreign workers, nor to have a big inflow. We have to accept what this little island can accommodate. To strike a balance, we must focus on enhancing the complementarity of local and foreign manpower, and step up on industry transformation."
In line with this, he added, the Government will support the employment of Singaporeans while deepening their "capabilities and promote capability transfer, while moderating our reliance on foreign labour where we must."
First, there will be a one-year extension to the Wage Credit Scheme, which supports wage increments for firms to retain or hire locals, at a co-funding level of 15%.
Next, the Manufacturing S Pass Sub-Dependency Ration Ceiling will also reduced to 18% from 1 January 2022, and subsequently to 15% from 1 January 2023. This will be in line with the tightening already underway in other sectors such as the services, construction, and marine shipyard and process sectors.
Minister Heng noted: "The move has been carefully calibrated, so that firms have one year to adjust, before changes are implemented."
Lastly, for sectors in new growth areas, the Capability Transfer Programme will be extended to support foreign-to-local skills transfer, up till end-September 2024.
Extended support for Venture Debt programme, co-funding efforts for mature enterprises, and more
Over the next three years, the Government will be allocating S$24mn to enabling firms and workers to "emerge stronger".
"The efforts will span several years, but it is crucial that we start today. This builds on the momentum of the transformation push started five years ago, when we launched our Industry Transformation Maps."
This would cover the following:
Increased cap on loan quantum for Venture Debt Programme
In ensuring high-growth enterprises, including start-ups, continue to have access to financial capital, the Government will extend and enhance the Enterprise Financing Scheme - Venture Debt programme.
Minister Heng noted: "From 2016 to 2019, we have seen an annualised growth rate of 44% in the amount of early-stage funds raised for promising enterprises. Our ecosystem of budding entrepreneurs and venture funds is growing. As part of the Venture Debt programme, the Government shares up to 70% of the risk on eligible loans with Participating Financial Institutions."
In line with this, the Government will continue to support this programme, and increase the cap on loan quantum supported, from S$5mn to S$8mn. With this, the Government expects about S$45mn of venture debt to be catalysed over the next year.
Co-funding for transformation of mature enterprises
Minister Heng noted that mature enterprises should invest in new and emerging technologies to sharpen their competitiveness. A new Emerging Technology Programme will co-fund the costs of trials and adoption of frontier technologies like 5G, AI and trust technologies.
This will support the commercialisation of innovations and diffusion of technology downstream.
To help firms to identify and adopt digital solutions, the Chief Technology Officer, or CTO-as-a-Service initiative will provide access to professional IT consultancies. The new Digital Leaders Programme will also support promising firms in hiring a core digital team and in developing and implementing digital transformation roadmaps.
Beyond these new initiatives, the Government will also extend the enhanced support levels of up to 80% for existing enterprise schemes such as the Scale-up SG programme, Productivity Solutions Grant, Market Readiness Assistance Grant, and Enterprise Development Grant, to end-March 2022.
Including these enhancements, the Government is setting aside S$1bn for these schemes.
80% co-funding ration for Productivity Solutions Grant
To support businesses in redesigning jobs, the Government co-funding ratio for the Productivity Solutions Grant – Job Redesign will be raised from 70% to 80% till end-March 2022.
S$1bn to be made available for investments in Large Local Enterprises
To ensure growth capital is available for Large Local Enterprises (LLEs) that are ready to transform or expand overseas on a larger scale, the Government will complement existing grants and loans, and support them through equity investments, tapping on market players to ensure commercial discipline.
- It will set aside S$500mn to be co-invested with Temasek in a Local Enterprises Funding Platform, to be managed commercially. Through this, Temasek will match the Government’s funds on a one-for-one basis, so the platform will have S$1bn available for its investments. The platform will invest in non-control equity and mezzanine debt of selected LLEs, which are willing to work with the fund manager to pursue their next phases of growth.
Support for low-wage workers and older workers
The Government has thus far undertaken a multi-pronged approach to support lower-wage workers, including the enhanced Workfare Income Supplement, Workfare Skills Support, the Progressive Wage Model, and Workcare.
In this vein, the Ministry of Manpower will be providing more details on how the Tripartite Workgroup on Lower-Wage Workers will facilitate the expansion of Progressive Wages.
Apart from this, in further enabling Singapore's older workers to continue working for as long as they'd want, the budget for the Senior Worker Early Adopter Grant and the Part-Time Re-employment Grant will be increased by over S$200mn to support more companies to move earlier to raise their retirement and re-employment ages.
Support for lower-income families
A key initiative of Singapore's Ministry of Social and Family Affairs (MSF) is Community Link (ComLink), which seeks to provide holistic support for low-income families. By mobilising community assets and galvanising local volunteering efforts, ComLink provides families with the tools and support to do better, Minister Heng noted.
In strengthening these efforts, the Government will dedicated resources for MSF to "expand ComLink significantly", into a nationwide programme that will eventually cover 14,000 families with children, over the next two years. More details on this will be provided at the Committee of Supply debate.
Support for students with Special Needs
Besides vulnerable workers and low-income families, the third group the Government will be paying special attention to is children with special needs.
Minister Heng shared: "Over the years, we have enhanced our support for students with special needs, within MOE schools and in Government-funded special education schools. Children under seven with developmental needs can benefit from a differentiated approach to help them learn better."
Building on these, the Government will look into piloting an Inclusive Support Programme. "This pilot integrates the provision of early intervention and early childhood services for children who require up to medium levels of early intervention support.
"Many of these children are already attending preschools, and this programme will allow them to be more meaningfully engaged alongside other children. We believe this will benefit all children and help them develop social skills and social inclusion."
View a summary of the Singapore Budget 2021 initiatives here, and Minister Heng's full speech here.
Lead image / Screenshot of Budget 2021 reading in Parliament, taken from live broadcast on Minister Heng Swee Keat's Facebook page
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