Singapore announced its Fortitude Budget on 26 May, as the country approaches two months in full lockdown and with more than a month of the “Circuit Breaker” still ahead of us.
This fourth Covid-related budget injects another SGD33 billion into the country’s economy, with in total close to SGD100 billion (around 20% of GDP) pledged to date. An additional SGD13 billion “contingency” has also been set aside to respond to any new developments.
The Deputy Prime Minister stated that as before, the “central focus of this Budget is jobs” which would be supported through the “3Cs: cashflow, costs, and credit”.
We summarise the key points of the Fortitude Budget below.
Cashflow: Jobs Support and Related Schemes
- The JSS will be extended for all businesses until August (from July)
- based on each company’s “normal rate” in other months
- JSS for August to be included in October’s payout
- For businesses which can’t reopen immediately
- defined quite tightly: the examples given were retailers, gyms and cinemas – not just “unable to go back to the office”
- extend increased 75% support until August (or earlier when allowed to reopen)
- Additional sector-specific support, some to be paid retrospectively for previous months of JSS since October
- retail, arts & entertainment, land transport, marine: 50% – retrospective
- aviation & aerospace (expanded definition): 75% – retrospective for “new” sectors
- building & construction: 75% – for wages in June-August only
- where applicable, backdated “top-up” payments will be made by July
FWL rebate extended by 2 months
- 100% rebate in June, 50% in July
- Now includes all construction, marine and process sectors
CPF contributions for senior workers: increase in contributions deferred by 1 year to January 2021
Costs: Rent Relief
Rent offset for SME tenants (turnover <SGD100 million)
- Adding a cash grant to the Property Tax rebate previously provided
- Total relief for commercial property will be around 2 months’ rent, for industrial/office 1 month
- Grant to be paid to landlords, who are legally required to pass it on to tenants
Additional rent waivers – new legislation next week
- For SMEs “who have suffered a significant revenue drop”
- up to 4 months’ rent waiver for commercial properties (appears including the 2 months above)
- details for industrial/office to follow
- costs to be shared equally between Government and landlords
- Temporary relief from “onerous contractual terms”
- including “excessive late payment interest or charges”
- also to allow rent arrears to be repaid in instalments
- Details on all of this to be clarified next week
Credit: Investment and Grants
- SGD285 million to be provided in matching funds, to catalyse at least the same amount in private investments
- concentrating on eg. deep tech
- appears “Government equity” scheme – details to follow
- Further support to be rolled out for specific sectors – essentially those getting increased support in JSS
- Grants specifically for digital transformation, eg. cashless payments, e-invoicing
- mostly for the smallest SMEs such as hawkers and coffee shops – maximum SGD5,000
- Hiring support grants, particularly for older workers
We hope this is helpful. Please see here for the full speech and downloads on each piece.
As always, your account manager or any of the team at Stepping Stone will be pleased to run through these in more depth.
Hoping that you and yours are safe & well, and that your businesses continue to weather this storm.