Singapore Budget 2020: $4b to help businesses hit by coronavirus outbreak
Written by www.straitstimes.com
SINGAPORE - Help is on the way for workers and businesses impacted by the global coronavirus outbreak, with additional relief to be provided to the hard-hit tourism and transport sectors.
The Government will dedicate $4 billion this year to help stabilise Singapore's economy and help workers and businesses tide over a looming slowdown, Finance Minister Heng Swee Keat announced on Tuesday (Feb 18).
The Stabilisation and Support Package will provide job and cash flow support to help firms retain and retrain workers. Additional measures will be rolled out for the tourism, aviation, retail, food services and point-to-point transport services sectors, which have been directly affected by the coronavirus disease, officially named Covid-19.
JOBS SUPPORT
Mr Heng, who is also Deputy Prime Minister, said in his Budget speech that retaining jobs is the Government's foremost concern.
"To help our workers stay employed, I will support enterprises by defraying their wage cost through two schemes," he said.
A new Jobs Support Scheme will help businesses retain their local workers by offsetting 8 per cent of wages for every local worker in employment, for three months. This will have a monthly cap of $3,600 and payment will be given to employers by the end of July this year.
"With over 1.9 million local employees in Singapore, this will cost the Government $1.3 billion and benefit all enterprises and their local employees," said Mr Heng.
The existing Wage Credit Scheme, which co-funds wage increases for Singaporean employees earning a gross monthly wage of up to $4,000, will also be enhanced.
The monthly wage ceiling will be raised from $4,000 to $5,000 for qualifying wage increases given in 2019 and 2020, "so that more Singaporean employees will benefit", he said.
Government co-funding levels for 2019 and 2020 qualifying wage increases will be raised by five percentage points to 20 per cent and 15 per cent respectively.
"With these enhancements, another $1.1 billion will go to about 90,000 enterprises, to benefit more than 700,000 Singaporean employees," said Mr Heng.
CASH FLOW SUPPORT FOR BUSINESSES
The package will also provide economy-wide support to help enterprises with cash flow, Mr Heng said.
A corporate income tax rebate will be given to all tax-paying companies, at a rate of 25 per cent of tax payable, for the year of assessment 2020. The rebates will be capped at $15,000 a company and cost an estimated $400 million in total.
"I will also enhance several tax treatments under the corporate tax system for one year," he said.
For instance, businesses will be allowed a faster write-down of their investments in plant and machinery, as well as renovation and refurbishment, incurred for the year of assessment 2021.
"This will put more cash in the hands of our enterprises."
To help enterprises access working capital more easily, the Enterprise Financing Scheme's Working Capital Loan component will also be enhanced for one year. The maximum loan quantum will be doubled to $600,000, while the Government's risk-share on the loans will be raised to 80 per cent, from the current 50 per cent to 70 per cent.
Tenants and lessees of government-managed properties, such as from the Housing Board and Singapore Land Authority, can also approach agencies to discuss options for more flexible rental payments such as instalment plans.
ADDITIONAL SUPPORT FOR SOME SECTORS
The tourism, aviation, retail, food services and point-to-point transport services sectors will receive additional support as they have been directly affected by the coronavirus outbreak, Mr Heng said.
Redeployment programmes will help employers in these sectors retain and reskill workers, while the funding period for reskilling will be extended from three to a maximum of six months.
More than 330,000 local workers are expected to be retained and retrained through this and the Jobs Support Scheme.
TOURISM SECTOR
A property tax rebate of 30 per cent will be granted for the year 2020 for the accommodation and function room components of licensed hotels and serviced apartments, as well as prescribed Mice (meetings, incentives, conferences and exhibitions) venues.
International cruise and regional ferry terminals will receive a 15 per cent property tax rebate, while Singapore's two integrated resorts will receive a rebate of 10 per cent.
A temporary bridging loan programme will be introduced for a year to help businesses in the tourism sector with their operating costs and cash flow.
The loan limit per company will be $1 million, while the interest rate will be capped at 5 per cent. The Government will take on 80 per cent of the risk of the loan.
AVIATION SECTOR
Rebates on aircraft landing and parking charges will be rolled out to the aviation sector, along with rental rebates for shops and cargo agents at Changi Airport.
Changi Airport will receive a 15 per cent property tax rebate.
RETAIL AND FOOD SERVICES SECTOR
Stallholders in hawker centres and markets managed by the National Environment Agency will be given a month's rental waiver, while other government agencies will provide a half-month rental waiver to their commercial tenants.
A 15 per cent property tax rebate will also be granted for qualifying commercial properties.
"I strongly urge landlords to pass this on to their tenants by reducing rentals," said Mr Heng.
More details of the various measures will be announced in due course, he added.
"We will continue to monitor the situation closely. If needed, we can and are prepared to do more," he said.