This article was first published on 18 August 2020 and has been updated with additional reporting.
Deputy Prime Minister and Finance Minister Heng Swee Keat delivered a Ministerial Statement on 17 August 2020 to outline a fifth set of support measures for companies and workers.
Deputy Prime Minister and Finance Minister Heng Swee Keat delivered a Ministerial Statement on 17 August 2020 to outline a fifth set of support measures for companies and workers.
In his speech, he emphasised that continued reliance on heavy government subsidies is unsustainable, and that companies need to make use of this support to retain core competencies, build new capabilities, and position themselves to seize opportunities of the future.
Here are 4 key announcements companies need to know about.
#1 Extension Of Jobs Support Scheme (JSS) By Up To 7 Months
Since April, the Jobs Support Scheme (JSS) has provided $16 billion in wage subsidies for more than 150,000 companies and 2 million local employees. The amount of JSS subsidy was between 25% to 75% of the first $4,600 of gross monthly wages and was due to expire in August 2020 (with payout coming in October).
DPM Heng shared that this has helped salve off mass retrenchments and company closures thus far, and companies and workers alike appreciate this enormous amount of support given. However, DPM Heng also cautioned that continued subsidies at the same levels would be unsustainable and place an immense burden on Singapore’s reserves.
Thus, the JSS will be extended for another 7 months in a targeted manner, with a tapering of support based on projected recovery of the various sectors. Here is the revised JSS support tiers and quantum:
Source: Singapore Budget Website
Tier 1: Encompasses to sectors that have been receiving 75% in JSS support – namely Aviation, Aerospace, and Tourism. They will receive 50% in JSS support for wages paid from September 2020 to March 2021.
* The Built Environment sector was receiving 75% in JSS support, and will receive Tier 1 support (50%) for wages paid until October 2020, before receiving Tier 2 (30%) support for wages paid from November 2020 to March 2021. This is in view of the phased resumption of construction activities.
Tier 2: Encompasses sectors that have been receiving 50% in JSS support – such as Food Services, Retail, Maine & Offshore, and Arts & Entertainment. They will receive 30% in JSS support for wages paid from September 2020 to March 2021.
Tier 3: Encompasses to the remaining sectors that have been receiving 25% in JSS support. They will receive 10% in JSS support for wages paid from September 2020 to March 2021.
* Selected sectors like Financial Services, Information and Communications Technology and Media, Biomedical Sciences, Precision Engineering, Electronics and Online Retail and Supermarkets will receive Tier 3 support (10%) for wages paid up to December 2020. In view of these sectors’ recovery, JSS support will cease thereafter).
Companies can refer to IRAS’ JSS website for more details of the payout schedule and criteria.
Read Also: Here’s Everything You Need To Know About The Jobs Support Scheme
#2 $1 Billion Jobs Growth Initiative (JGI) Launched To Support Companies’ Hiring Efforts
Even though COVID-19 has negatively impacted a large portion of the economy, the negative impact isn’t uniform across all sectors. In fact, there are companies that are enjoying an uplift due to changes in the global economy, new consumer behaviours, and increased need for health and safety services.
Firms in the biomedical sciences, financial services, ICT, public healthcare, manufacturing and even some in the food & beverage sectors have an increased need for skilled talent. To support hiring in these growing sectors, as well as encourage companies to bring forward their hiring plans, the government has launched a $1 billion Jobs Growth Initiative (JGI).
Companies that wish to increase their headcount of local workers between September 2020 and February 2021 will receive 25% salary support for new local hires for one year, subject to a cap of $5,000. This salary support is increased to 50% for new local hires who are 40 and above.
Read Also: Guide To Understanding The Jobs Growth Incentive (JGI) For Companies Hiring Local Workers
#3 Continued Industry Transformation Efforts From National To Company Level
The post-COVID-19 business landscape is an uncertain, but exciting one. The only thing we know is that it will not be the same as before. Adding to the volatility soup are strategic US-China competition that have reoriented global supply chains, and acceleration of trends in digital transformation, artificial intelligence, sustainability and healthcare.
In the first Unity Budget 2020, DPM Heng had announced an $8.3 billion Transformation and Growth strategy which will be carried out over three years. The strategy consists of three thrusts:
1) Enabling strong partnerships (within Singapore and with the world)
2) Deepening enterprise capabilities (at all stages, from starting up, to growing, to transforming further)
3) Developing our people (to enable they have access to good jobs that pay well, and help them remain employable).
As part of efforts to reimagine Singapore’s economy of tomorrow, the Emerging Stronger Taskforce – made up of representatives from government and the private sector – is in the midst of a three-month sprint to come up with proofs-of-concept innovations for transforming various industries.
Companies can look forward to the results of the taskforce’s work in time to come, and share in the fruits of their imagination, consultation and experimentation.
DPM Heng has assured companies that the government is committed to working with companies to capture new opportunities and create better jobs, enabling Singapore’s people and firms to emerge stronger from COVID-19.
Read Also: Singapore Budget 2020: 10 Announcements That Will Affect Business Owners And Companies
#4 $150 Million Allocated To Enhance Startup SG Founder Programme To Spur Innovative Entrepreneurship
Startup SG was established in 2017 to champion and showcase Singapore’s struggling startup scene. Mentorship, funding, infrastructure, talent, are just some of the areas fledging Singapore startups can get support for. DPM Heng announced that a further $150 million will be sunk into the Startup SG Founder programme to spur entrepreneurship in Singapore.
In particular, the Startup SG Founder programme provides startup capital grant of up to $50,000 to first-time entrepreneurs with innovative business ideas as well as access to mentorship and networking support. On the part of startups, they need to raise and commit $10,000 to the venture. This will be part of the “Start” track of the programme.
A new track to “Train” will enable aspiring entrepreneurs who have the desire to start companies but lack entrepreneurial skills or viable business plans/ ideas. They will receive a stipend of $1,500 under a three-month programme with Accredited Mentor Partners Venture Builders (‘AMP-VB’).
Seize The Opportunities Of Tomorrow, As We Grapple With The Challenges Of Today
While critical for survival, what is clear from DPM Heng’s speech is that companies cannot merely contend with the issues of today. Doing so will only postpone the inevitable.
Instead, companies need to leverage on the national effort to retain and enhance their enterprise’s capabilities, set bold plans for the future, and utilise training initiatives and innovation programmes to make them a reality.
Another initiative the government is championing is for companies to digitalise their operations. The Start Digital Pack, especially relevant for startups, helps new companies start off with the right foundational tools in accounting, HR management system, payroll, cybersecurity and digital marketing and transactions.
For new startups, you can also refer to OCBC Business Starter Kit. To help you get started, there is information on business registration, business bank account and understanding government requirements. To run your business smoothly, you can refer to guides on billing customers, receiving payments and paying suppliers. And to grow your business, you can read more about going online, digital marketing and getting your books in order.
Read Also: Fortitude Budget 2020: 6 Announcements To Help Businesses In Singapore Survive COVID-19
(Additional reporting by Dinesh Dayani)
Subscribe To The DollarsAndSense Business Pass
Enjoy what you are reading and want more? Join The DollarsAndSense Business Pass and unlock access to valuable tools, exclusive networking opportunities, and tap into the wisdom of industry experts to fuel your business expansion!
