Last year, Budget 2020 made history by incurring Singapore’s biggest deficit since independence.
The 5 budgets combined disbursed almost $100 billion in Covid-19 support measures, and we had to draw up to $52 billion from our reserves.
Thus, all eyes were on the Budget 2021 speech to see how the Government would continue the support for those hit by the ongoing pandemic.
On Tuesday (16 Feb), Deputy Prime Minister Heng Swee Keat said $11 billion will be set aside for a “Covid-19 Resilience Package”.
Of that, $4.8 billion will be set aside for public health and safe reopening measures, like vaccination and isolation facilities.
The package will also provide more support for sectors worst-hit by the pandemic.
The Covid-19 Resilience Package aims to:
Some of the worst-hit sectors included under point 3 are the aviation, land transport, arts and sports sectors.
As Covid-19 rages across the world, global air travel will be hard-hit for quite some time.
Singapore’s aviation sector will bear the brunt of it, especially since we have no domestic air travel sector.
According to Mr Heng, as of the end of Jan, total passenger movement in Changi was only 2% of that before Covid-19.
Thus, the Covid-19 Resilience Package will provide targeted support and extend cost relief for the sector. This will cost $870 million.
This will preserve core capabilities and Singapore’s strong position that has been built up over the years, he added.
The sector also has plans to upgrade its capabilities and prepare for recovery.
Taxi and private-hire car drivers have also seen their income plunge due to Covid-19, especially during the ‘Circuit Breaker’ period.
Thus, as part of the Covid-19 Resilience Package, the existing Covid-19 Driver Relief Fund will be boosted by $133 million.
It will help drivers defray their business costs.
Businesses and self-employed persons that make their living in arts and culture, as well as sports, are currently being helped by 2 packages: the Arts and Culture Resilience Package and Sports Resilience Package.
The Covid-19 Resilience Package will extend and enhance these 2 packages to support these sectors, Mr Heng said.
To do that, about $45 million will be set aside.
Mr Heng said the enhanced packages will support capability development and sector transformation.
They will also encourage the community to deepen their skills, move towards digital modes and transform their business models.
The Ministry of Culture, Community and Youth (MCCY) will announce more details later.
Here’s a summary of the measures from the Ministry of Finance (MOF):
With such big sums being thrown around, some Singaporeans may wonder how we’ll be funding this package.
Like last time. the funds will come from our reserves.
Mr Heng explained that we’ll draw a further $1.7 billion from our seemingly limitless reserves.
That, combined with $9.3 billion leftover from last time, will total $11 billion. All of the sum will be used for the Covid-19 Resilience Package.
It’ll bring the combined draw over 2 years to $53.7 billion.
This will be the 2nd-consecutive year that Singapore will draw from its reserves, and President Halimah Yacob has given in-principle support for it, Mr Heng said.
In a Facebook post on Monday (15 Feb), a day before his speech, he revealed that the name for Budget 2021 would be “Emerging Stronger Together”.
That highlights how from 2021, the Government’s focus will on being united and emerging from the pandemic stronger.
In contrast, last year’s Budgets and the Covid-19 Resilience Package are about “preservation and adaptation”, Mr Heng said.
This new focus is because the Covid-19 pandemic has triggered global shifts economically, socially and politically.
It has also accelerated technological advances and set off new domains for competition and cooperation.
One way to emerge stronger for the crisis is to build new capabilities and find new ways to work together effectively, he added.
Unsurprisingly, like last year’s Budget, the Covid-19 crisis has heavily influenced Budget 2021.
However, the measures taken are deemed to be necessary as Singapore tries not only to survive the pandemic, but come out stronger.
How will Budget 2021 affect you, and what do you think about the support measures? Do comment below.
Have news you must share? Get in touch with us via email at hello@mustsharenews.com.
Featured image adapted from Ministry of Finance and Facebook.
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