Singapore extends coronavirus Jobs Support Scheme to March

Singapore, which has unleashed some S$93 billion (US$68 billion) of stimulus measures this year, said on Monday it would spend a further S$8 billion (US$5.8 billion) to extend a wage subsidy programme to next March, as most sectors continue to struggle amid the coronavirus pandemic.

The Deputy Prime Minister and Finance Minister Heng Swee Keat said the government hoped extending the scheme by up to seven months would help companies retain as many workers as possible.

Unemployment in the republic stands at 2.9 per cent, up from 2.4 per cent in the January-March period and not far off the 3.4 per cent peak during the Global Financial Crisis.

A shop closes during Singapore's 'circuit breaker' partial lockdown to curb the spread of the coronavirus. Photo: EPA alt=A shop closes during Singapore's 'circuit breaker' partial lockdown to curb the spread of the coronavirus. Photo: EPA

Heng said the S$8 billion plan - on top of the four sets of stimulus announced between February and May - would be financed through the reallocation of funds from "other areas such as development expenditures that were delayed by Covid-19".

Some S$52 billion of the S$93 billion stimulus unveiled thus far was funded by using the country's fiscal reserves, which are estimated to be over S$1 trillion.

Still, Heng said the government was unable to maintain the so-called Jobs Support Scheme at current levels.

"[The scheme] draws heavily on our reserves and risks trapping our workers in unviable businesses," Heng said in a televised address.

A woman in an empty coffee shop in Singapore. Photo: EPA alt=A woman in an empty coffee shop in Singapore. Photo: EPA

While previous stimulus boosts were announced in parliament, Heng, who is Prime Minister Lee Hsien Loong's designated successor, deviated from this practice this time around as the legislature is not set to open until next week, having been dissolved before the July 10 general election.

"Some sectors are also recovering faster than others. I will therefore adjust support based on the projected recovery of the different sectors," he said.

The finance tsar said the aerospace, aviation and tourism sectors would be provided with a government offset of 50 per cent of the first S$4,600 of workers' monthly wages until next March.

Firms in these sectors previously enjoyed a 75 per cent subsidy for a 10-month period.

In the built environment, which includes the construction industry, the government will provide 50 per cent wage support for a further two months beyond the August expiration of the current scheme, with the offset tapering off to 30 per cent until next March.

Companies in the sector received 75 per cent wage support in the June-August period. The baseline wage subsidy for most companies will now be 10 per cent, down from the current 25 per cent.

With the scheme's extension, Heng said most businesses in the republic would have received wage support for a 17-month period.

Apart from the wage subsidy boost, other measures unveiled by Heng on Monday included "SingapoRediscovers" vouchers worth S$320 million that citizens can spend in the local tourism sector.

"Local consumption will not fully make up for tourist spending, but I hope Singaporeans will take the opportunity to explore our local culture and heritage, nature, art, and architecture," Heng said.

Last week, the government downgraded its GDP forecast to between -7 and -5 per cent from between -4 and -7 per cent after the trade-reliant economy shrank 13.2 per cent in the second quarter - more than the 12.6 per cent drop expected.

This article originally appeared on the South China Morning Post (SCMP).

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