Deputy Prime Minister (DPM) Heng Swee Keat’s key message for Budget 2021 is to 1) provide relief in the immediate term; 2) invest strategically growth and press on with economic transformation in the medium term; and 3) position Singapore for the long-term.
Budget 2021 is expected to deliver a deficit of $11 billion in 2021, or 2% of Singapore’s GDP. While this is a lower deficit than in 2020, where the budget deficit was $64 billion, it is still one of the biggest budget deficits for Singapore.
In this article we summarise 10 things that business owners need to know from Budget 2021.
#1 Extension Of The Jobs Support Scheme (JSS)
The Jobs Support Scheme (JSS) was introduced last year to provide wage support for businesses. This helped to protect jobs and help firms keep their employees. The final tranche of the JSS was set to end in March 2021.
During Budget 2021, DPM Heng said that $700 million will be set aside to extend the JSS scheme to support businesses in the hardest-hit sectors.
The Aviation, Aerospace and Tourism sectors will receive a further 6 months of JSS support. They will get 30% support from April to June 2021 and 10% support from July to September 2021.
The Retail, Arts & Culture, Food Services and Built Environment sectors will receive a further 3 months of JSS support.
#2 Extension Of The Jobs Growth Incentive (JGI)
The Jobs Growth Incentive (JGI), a 12-month salary support scheme for new employees was introduced to support employers to keep employees and bring forward their hiring needs.
The JGI was set to end in February 2021. During Budget 2021, DPM Heng said that $5.2 billion will be allocated to extend the JGI hiring window by 7 months to end-September 2021.
This will provide 12-month salary support for new employees under 40 hired till then. For employees above 40, who are disabled, or who are ex-offenders, the salary support will also be enhanced to 18 months, their salary cap will also be increased to $6,000. This also applies to employees who were already hired previously.
For new hires below 40, the salary cap remains at $5,000.
#3 Extension Of Specific Schemes Under the SGUnited Jobs and Skills Package
Specific schemes under the SGUnited Jobs and Skills Package will be extended. This will benefit businesses to hire and train potential employees, while the government funds a significant portion of the scheme.
The SGUnited Skills, SGUnited Traineeships, and SGUnited Mid-Career Pathways programmes will be extended until March 31 2022.
#4 $870 Million To The Aviation Sector
DPM Heng mentioned that more targeted support to maintain capabilities in the aviation sector is required as it will take some time for recovery. He also said that restoring Changi Airport’s connectivity will be a priority.
As such $870 million has been allocated to aid the industry, to sustain and to upgrade capabilities.
#5 $45 Million For The Arts & Culture Resilience Programme And Sports Resilience Programme
Other hard-hit sectors will also be supported. They include the Arts & Culture Resilience Programme and the Sports Resilience Programme for businesses within these sectors.
Businesses and self-employed persons in these sectors will be supported.
#6 Implemented COVID-19 Driver Relief Grant (CDRF) (Since January 2021)
Since January 2021, the COVID-19 Driver Relief Grant (CDRF) was open for taxi drivers and private hire car drivers to defray daily costs. $133 million is expected to be spent on the scheme.
#7 COVID-19 Recovery Grant (Since 18 January 2021)
The COVID-19 Recovery Grant (CRG) was also implemented since January 2021. This grant will provide eligible self-employed persons (SEPs) with $500 for three months.
Eligible self-employed individuals can start applying for it from January 2021 and until 31 December 2021.
#8 Help Businesses Invest In New Emerging Technologies And Upskill Employees
Apart from the schemes mentioned above, DPM Heng also mentioned that the government will ensure that firms continue to have access to capital. It will extend and enhance the Venture Debt Programme. It will also raise its risk share to 70% and raise it up to $8 million.
Budget 2021 will also continue to help businesses invest in digital transformation and onboard new technologies. The Scale-up SG Programme, Productivity Solutions Grant (PSG), Market Readiness Assistance (MRA), and Enterprise Development Grant (EDG) will be extended to end-March 2022.
DPM Heng also mentioned co-funding transformation for mature businesses (whether they are SMEs or large local enterprises). Initiatives within this strategy include:
- Emerging Technology Programme
- Chief Technology Officer-as-a-Service
- Digital Leaders Programme
- Enhance Productivity Solutions Grant – Job Redesign
DPM Heng touched on the point of calibrating the type of foreigners in Singapore to boost the economy. He reiterated that Singapore welcomes expats to boost our economy, but should moderate our reliance on them where necessary.
The Capability Transfer Programme (CTP) has also been extended to end-September 2024, supporting local-foreign skills transfer.
At the same time, DPM Heng also spoke about the Manufacturing sector, which will see its S Pass quota drop to 18% in 2022 and 15% in 2023, from 20% currently. The S Pass quota is also in the midst of being lowered in the construction, marine shipyard and process sectors.
#9 The Wage Credit Scheme (WCS) Will Also Be Extended Till 2022
The Wage Credit Scheme (WCS) co-funds employee salary hikes in previous years. This is meant to support wage raise, which will be done in a sustainable way.
Set to end in 2020, with the last payout in 2021, the Wage Credit Scheme has been extended to 2022 at a co-funding level of 15%. This will help companies retain local workers and for companies who are able, reward employees with a wage increment.
#10 GST Extended To Low Value Imported Goods From 2023
The rise of e-commerce has translated into purchases being increasingly made online and from other countries.
To level the playing field for local retail businesses, DPM Heng mentioned that GST will be extended to low-value imported goods from 2023.
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