As prices creep higher across various goods and services, the effect of rising inflation is taking its toll on Singaporean households and businesses.
While the Government had anticipated inflation and implemented measures in Budget 2022 to address it, the ongoing war in Ukraine and global supply chain disruptions have led to higher food and energy prices, driving up overall inflation. To address this, some of the Budget 2022 measures have been brought forward such as the earlier disbursement of the Small Business Recovery Grant.
On top of the existing measures, the Government announced a $1.5 billion support package to provide targeted and immediate relief on 21 June 2022.
Here’s what Singapore businesses need to know about this $1.5 billion support package.
Read Also: 5 Ways Businesses Need To Think About Hiring In 2022 (After Budget 2022 Statement)
#1 $150 Relief For Taxi Drivers And Private Hire Car Drivers
Rising fuel prices (both petrol and diesel) have increased costs for many self-employed persons who depend on their vehicles for work and income.
To help this group of self-employed persons, eligible taxi main hirers and active PHC drivers will receive a $150 relief in August 2022. No application is required to receive the relief.
Additionally, drivers of combi buses and limousines who are members of the National Private Hire Vehicles Association, as well as delivery drivers and delivery motorcycle riders who are members of the National Delivery Champions Association will be also eligible to apply for the NTUC U FSE Relief Scheme 2022 in August 2022. This one-time relief will be up to $300 for combi-buses, limousines and delivery drivers and up to $150 for delivery motorcycle riders. More details will be released in August 2022.
#2 Government Co-Funding Of Eligible Wage Increases In 2022 Under The Progressive Wage Credit Scheme (PWCS) Will Increase
To help lower wage workers and their employers, the government will be increasing its share of co-funding under the Progressive Wage Credit Scheme (PWCS) for eligible wage increases in 2022.
This will increase from 50% to 75% for resident employees with gross monthly wages of up to $2,500 (first tier) and from 30% to 45% for employees with gross monthly wages of above $2,500 and up to $3,000 (second tier). This will help lower wage workers and their employers to uplift the pay of lower wage workers.
To qualify, there should be an average gross monthly wage increase of at least $100 in 2022 compared to 2021 for employers hiring resident lower-wage employees with gross monthly wages of up to $2,500 (first tier), and employees with gross monthly wages of above $2,500 and up to $3,000 (second tier).
Eligible employers can expect to receive the 2022 PWCS payout from the Inland Revenue Authority of Singapore (IRAS) by the first quarter of 2023.
Read Also: Progressive Wage Credit Scheme (PWCS): What Businesses Need To Know
#3 Jobs Growth Incentive (JGI) Will Be Extended For Another 6 Months
Under the current Jobs Growth Incentive till September 2022, businesses will receive government support when they hire mature jobseekers who have not been working for at least six months, as well as persons with disabilities or ex-offenders.
The support is 40% of the first $6,000 of gross monthly wages for the first six months, and 20% of the first $6,000 of gross monthly wages for the subsequent six months for mature local hires aged 40 and above who have not been in work for at least six months, persons with disabilities or ex-offenders.
This will be extended for another six months to March 2023 and help support employers to hire these vulnerable groups of workers. MOM will provide more details of the JGI extension closer to its expiry.
Read Also: Guide To Understanding The Jobs Growth Incentive (JGI) For Companies Hiring Local Workers
#4 One Month Of Foreign Worker Levy Waiver For Singapore’s Slaughterhouses
The export ban on live chicken from Malaysia severely affected the livelihoods of chicken slaughterhouses.
To help preserve industry capabilities amid the export ban, the government will provide one month of Foreign Worker Levy waiver for Singapore’s 11 chicken slaughterhouses, whose employees’ livelihoods depend on the supply of live chickens.
#5 New Energy Efficiency Grant With Up To 70% Support For SMEs In Targeted Sectors To Adopt Energy-Efficient Equipment
To help businesses in sectors that are significantly affected by higher electricity prices, in terms of the impact on their overall business costs, local SMEs in the Food Services, Food Manufacturing, and Retail sectors may apply for the new Energy Efficiency Grant.
This grant will support businesses to improve their energy efficiency and alleviate increasing business costs due to increased energy prices. Recipients of other energy efficiency initiatives such as NEA’s Energy Efficiency Fund, which supports businesses in the manufacturing sector, as well as BCA’s Green Mark Incentive Scheme for Existing Buildings 2.0, may also apply as this grant complements other energy efficiency initiatives.
The grant support will provide for up to 70% of qualifying costs, capped at S$30,000 per company. This includes energy-efficient equipment in the following categories: LED lighting, air conditioners, cooking hobs, refrigerators, water heaters, and dryers. The equipment must be used in Singapore and other sector-specific requirements may apply. The grant application window is from 1 September 2022 to 31 March 2023 and the applications and claims are made through the Business Grants Portal (BGP).
Companies will have up to 1 year from the time that an application is submitted to purchase equipment and submit claims for reimbursement. Once an application has been submitted, companies may choose to proceed to purchase the equipment before the application outcome. However, companies will not be able to claim subsequently if the application is unsuccessful. The window for claims will run until 31 March 2024.
#6 Maximum Loan Quantum For Enterprise Financing Scheme – Trade Loan Will Increase To $10 Million
Trade loans help businesses finance short-term import, export and guarantee requirements. This helps businesses with their inventory management, factoring and overseas working capital requirements.
To help businesses with their cashflow, the Enterprise Financing Scheme – Trade Loan will be enhanced, with the maximum loan quantum increased from $5 million to $10 million from 1 July 2022 to 31 March 2023. During this period, the Government will continue to provide 70% risk-share for the scheme. The maximum repayment period is set at one year.
The eligibility criteria remain unchanged:
- Be a business entity that is registered and physically present in Singapore,
- At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership,
- Have Group Annual Sales Turnover of not more than S$500 million
Eligible businesses may approach any of the Participating Financial Institutions listed on Enterprise Singapore to apply for the loan (subject to banks’ credit approval).
Read Also: Singapore Budget 2020: How Enterprise Financing Scheme (EFS) Can Help SMEs
#7 Maximum Loan Quantum For Enterprise Financing Scheme – SME Working Capital Loan Will Increase To $500,000
The SME Working Capital Loan helps businesses finance daily operational cash flow.
To help businesses with their cashflow, the Enterprise Financing Scheme – SME Working Capital Loanwill be enhanced, with the maximum loan quantum increased from $300,000 to $500,000 from 1 October 2022 to 31 March 2023. During this period, the Government will continue to provide 70% risk-share for the scheme. The maximum repayment period is set at 5 years.
The eligibility criteria remain unchanged:
- Be a business entity that is registered and physically present in Singapore
- At least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore PR(s), determined by the ultimate individual ownership
- Have Group Annual Sales Turnover of not more than S$500 million
- For “SME Working Capital”, the SME definition refers to Group revenue of up to S$100 million or maximum employment of 200 employees
Eligible businesses may approach any of the Participating Financial Institutions listed on Enterprise Singapore to apply for the loan (subject to banks’ credit approval).
Read Also: Using The Government-Assisted SME Working Capital Loan To Grow Your Business
#8 No Draw On Past Reserves To Fund The $1.5 Support Package
Continuing the government’s fiscal prudence, the $1.5 billion support package will not draw down from Past Reserves. Instead, it is funded through the better-than-expected fiscal outturn for FY2021, arising from higher revenues due to the stronger economic recovery in 2021, and lower-than-budgeted spending on COVID-19 response measures as the Omicron variant turned out less severe than anticipated.
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