Preparing for a post COVID-19 era
As COVID-19 continues to spread across the world at an unrelenting pace, the economic impact is undoubtedly severe. And while the situation in Singapore is under control, many Singaporean workers are growing anxious about job security and loss of income. At the same time, businesses are also worried about retaining and retraining their workers.
In view of this, Deputy Prime Minister and Finance Minister Heng Swee Keat delivered additional support schemes for both businesses and workers on 17 August 2020, especially to preserve core capabilities and transform the economy for the post COVID-19 era.
Imperative for all sectors to innovate and transform
The Jobs Growth Incentive (JGI) is a S$1 billion programme launched to increase the hiring of local workers, especially the mature ones, over the next six months. DPM Heng noted that there are growing sectors such as biomedical sciences, financial services, infocomm technology (ICT), public healthcare, long-term care, as well as some firms in F&B and manufacturing which are still hiring. Businesses in these sectors are thriving in these unprecedented times as they continue to innovate and transform themselves.
However, many companies in other non-growing sectors are currently struggling with transformation and preparing themselves for the new world. It is imperative that the Government also look at supporting them in hiring talents specifically for driving innovation and transformation. This will enable these companies to sustain and evolve with new innovation and growth opportunities from both in and outside of Singapore, as well as assist with job creation.
Reskilling and retraining are key to retaining and creating jobs
The Jobs Support Scheme (JSS) which was launched at the start of COVID-19 to protect jobs will be extended by seven months, covering wages paid up to March 2021. This extension is welcomed as it means that most businesses will have received wage support for 17 months to help protect the jobs of their workers. While this extension demonstrates the Government’s commitment to retaining jobs, it also ensures that workers’ CPF contributions can continue to be built up during this crisis.
Beyond the extension, businesses would now need to quickly assess the new post COVID-19 economy given that things will not return to pre COVID-19 levels. So while the JSS extension is effective and helpful for the survival of businesses, it is not sufficient for transformation in the post COVID-19 economy. There is urgency to identify new business trends and opportunities, and to develop the right strategies. Additionally, a supplementary top up of SkillsFuture credits would have been a great complement to the JSS extension in reskilling and retraining employees as this will not only retain jobs, but create new ones. Workers will also be empowered to reskill and upskill themselves without having to rely on the businesses they work for.
Standing together as one united Singapore
With this new set of support schemes amounting up to S$8 billion, which is in addition to the earlier four Budgets, the Singapore Government is standing together with businesses and the people to ensure that we can evolve and be ready to emerge from this pandemic stronger as one united Singapore.
Preparing for a transformed economy
Deputy Prime Minister Heng Swee Keat delivered the S$33 billion Fortitude Budget on 26 May 2020, bringing the total COVID-19 support to over S$90 billion after the Unity, Resilience and Solidarity budgets.
During the current circuit breaker, many businesses have found themselves operating at a reduced level or even ceasing operations entirely.
Building on the earlier budgets, the Fortitude Budget delivers further help in the 3 Cs – Cash, Costs and Credit – to support these firms’ immediate needs and help them preserve their capacity and capabilities so they can hit the ground running once the circuit breaker is lifted. We review the key business-related measures below:
Cash flow: The Jobs Support Scheme will be enhanced. All firms will receive an additional month of support, extending the scheme to offset wages of local employees till August 2020 (previously the scheme was available for wages up to July). Firms that cannot resume on-site operations after the circuit breaker will continue to receive wage support at 75% until August 2020, or when they are allowed to reopen (whichever is earlier). Higher wage support at 50-75% will be given to aerospace, retail, built environment, marine and offshore sectors.
Labor costs: The Foreign Worker Levy waiver and rebate will be extended by 2 months (i.e. June and July 2020) for businesses that cannot resume on-site operations. The Government will also defer higher CPF contribution rates for senior workers by one year to 1 January 2022, to help businesses manage costs in these challenging times.
Rental costs: Many businesses are also facing difficulty with rental costs, particularly SMEs. Therefore, an additional S$2 billion cash grant has been set aside to help SMEs with up to two months of rental costs. Additional rental waivers of one to two months will be provided for commercial tenants, hawkers, industrial, office and agricultural tenants of Government properties.
Additional credit support: Some promising start-ups are finding it difficult to develop their business in this situation as investors are scaling back, and will need additional support. Therefore, an additional S$285 million has been set aside to finance these start-ups, thereby helping them sustain their innovation and commercialization activities.
Additional support packages will be rolled out for the built environment sector and sectors facing longer-term challenges, such as aviation and tourism.
Transformation – the key to preserving and protecting jobs
However, even as the Government continues to help support businesses, inevitably, COVID-19 will displace some jobs and businesses, some of which may not return even after the crisis is over. What else can be done to better fortify our businesses and our jobs for a post-COVID-19 future? Businesses will need to transform to a new way of working in the new environment.
Will these measures help to digitally transform our economy?
As markets and businesses all over the world grapple with a future with COVID-19, digital transformation will be a key driver in supporting businesses to recover and recalibrate in this new reality. Businesses are likely to need more help in the digital transformation space in order to truly fortify their business, protect and even create jobs. S$250 million has been set aside to help businesses digitalize but time is of the essence. The earlier we can support businesses to transform digitally, the better placed they will be to recover and hopefully even thrive in the new post-COVID-19 world.
It’s time to transform
The Singapore Government has dug deep into its reserves in order to bring about the four different Budget measures to address and tackle the crisis. COVID-19 will likely be a long-term challenge, and we must continue to look for long-term solutions especially in the area of digital transformation, to protect and preserve businesses and jobs.
Test your business’s resilience and learn more from the KPMG in Singapore guide to maintaining enterprise resilience, covering financial, operational and commercial resilience. Visit COVID-19: Embedding Enterprise Resilience
Preparing for a post-crisis future
With three Budget support packages announced within the last two months delivering close to S$60 billion of support, the Singapore Government is doing all it can to cushion the impact of COVID-19 on businesses and the workforce and prepare us for a post-crisis future. Download KPMG’s insights on the Solidarity Budget 2020 to find out more now.
An extraordinary stimulus for unprecedented times
As we face together a thunderstorm of unprecedented proportions with the ongoing COVID-19 situation, we are heartened by the extraordinary stimulus package that the Singapore Government has prepared to help both businesses and the workforce. Download KPMG’s insights on the Resilience Budget 2020 to find out more now.
Singapore Budget 2020 is here.
Now is the time to use its initiatives to move your business forward.
KPMG presents insights on how Budget 2020 will take our nation’s journey of transformation forward. And how businesses across Singapore can leverage it to move ahead stronger, faster and more resilient.
Start moving forward with us – Download the KPMG Singapore Budget 2020 Report now.
Find out about the latest tax changes with KPMG Singapore Budget 2020 Tax Fact Sheets here.
Business leaders — Get insights on how Budget 2020 can transform your business.
We are pleased to present KPMG’s insights on Budget 2020, and to share our ideas on how you can make the most of its initiatives to protect and grow your business, as discussed at the KPMG Singapore Budget 2020 Business Leaders Forum.
Conducted via a LIVE webinar on 21 February 2020, this exclusive forum offered insights from business leaders and senior KPMG in Singapore partners on how Budget 2020 will take our nation’s journey of transformation forward, how it will mobilize key sectors across Singapore to help our economy become smarter, stronger and more resilient, and the implications of the latest tax developments and changes.
Accounting & tax professionals — Make the most of Budget 2020 to protect and grow your business.
Beyond the insights to drive businesses forward presented at the Business Leaders Forum, we are pleased to present the expert analyses from the KPMG Singapore Budget 2020 Webinar held on 26 February 2020.
Tailored for tax directors and managers, financial controllers, finance managers and accountants, this session offers deep insights into the key highlights and opportunities of Budget 2020, as well as clarity on developments in areas such as BEPS, tax treaties and tax governance.
NOTE: 1.5 CPE hours will be awarded to eligible first-time attendees who register and complete this session. If this applies to you, click here to register so that you can earn CPE hours by watching the KPMG Singapore Budget 2020 Webinar.