Budget 2021 has been presented amidst the ongoing, global battle against COVID-19.
With recovery expected to be uncertain and uneven across countries and industries, the Government’s focus will be on helping Singaporeans emerge stronger, together.
Deputy Prime Minister Heng Swee Keat delivered the Government’s Budget Statement for the financial year of 2021 on 16 February 2021
“Budget 2021 deploys our fiscal resources and energies of our people, to realise our collective aspirations and build our future together,” said Mr Heng.
Setting aside $11 billion for a COVID-19 Resilience Package, the Government will take a three-pronged approach towards helping the economy recover.
Namely, safeguarding public health so that the economy can re-open safely; supporting workers and businesses; providing targeted support for specific sectors still under stress.
Public Health and Safe Re-Opening
To safeguard the health of Singaporeans, a total of $4.8 billion will be dedicated to public health and safe reopening measures.
Mr Heng said that vaccination is key in the fight against COVID-19, and announced that to date, close to 250,000 people have received their first dose of the vaccine, of which some 55,000 have already received their second.
“I strongly encourage Singaporeans and residents who are medically eligible to take the vaccine when your turn comes,” he urged.
Meanwhile, precautionary measures such as contact tracing, testing and safe distancing will continue to contain the spread of the virus.
Support of Workers and Businesses
Mr Heng said that customised support will be given to workers and businesses to maintain resilience and support growing areas.
For one, the Jobs Support Scheme (JSS) will be extended for sectors that continue to be hard-hit. The extension will cost $700 million – and a total of $2.9 billion in 2021, including earlier committed amounts.
To date, over $25 billion has been dedicated to the JSS, supporting over 150,000 employers for the past 17 months.
The current tranche will continue to cover wages up to March 2021 for most sectors.
For hard-hit sectors such as aviation, aerospace, and tourism, JSS will be extended for another six months.
Firms in these sectors will receive 30 per cent support for wages paid from April to June 2021, and 10 per cent for wages paid from July to September 2021.
For the next tier of sectors that were not as severely impacted by the pandemic – such as retail, arts and culture, and tourism – the JSS will be extended for another three months, with 10 per cent wage support till June 2021.
Secondly, to facilitate workers moving to jobs in growth areas, the Government will allocate $5.4 billion to a second tranche of the SGUnited Jobs and Skills Package. This will be on top of the $3 billion allocated in 2020.
These will include the Jobs Growth Incentive (JGI), as well as specific traineeship, attachment and training opportunities.
Of the allocated amount, $5.2 billion will be dedicated to the JGI.
Support for Specific Sectors
The final prong of the COVID-19 Resilience Package is to provide more targeted support for sectors still adversely affected by the pandemic.
Starting with the aviation sector, the Government will allocate $870 million towards the preservation of Singapore’s well-established air hub.
“I expect the aviation sector to use this lull to sustain and upgrade its capabilities, and to prepare for recovery,” said Mr Heng.
For the land transport sector, taxi and private hire car drivers will be further supported by the previously announced COVID-19 Driver Relief Fund. A total of $133 million will be set aside for this fund.
And lastly, $45 million will be allocated towards the extension of the Arts and Culture Resilience Package and Sports Resilience Package.
This will go towards supporting businesses and self-employed persons in the arts and culture as well as the sports sectors.
On hiring local versus foreign manpower, Mr Heng elaborated: “The way forward is neither to have a few or no foreign workers nor to have a big inflow … To strike a balance, we must focus on enhancing the complementarity of local and foreign manpower and step up on industry transformation.”
With that said, Mr Heng said the Government will support the employment of Singaporeans as they deepen their capabilities, and that the nation needed to moderate its reliance on foreign manpower.
Wage Credit Scheme
To help companies retain or attract locals, the Government will be extending the Wage Credit Scheme for a year, helping co-fund 15 per cent of wage increments.
S Pass Sub-Dependency Ratio Ceiling
During his Budget speech in February 2020, Mr Heng said that the S Pass Sub-Dependency Ratio Ceiling (sub-DRC) will be lowered when conditions allow.
“To achieve our vision of being a global advanced manufacturing hub, our local workforce needs to develop deep skills and our industry has to reduce reliance on foreign workers,” he said.
As such, the Government will reduce the sub-DRC for the manufacturing sector to 18 per cent from 1 January 2021, and to 15 per cent from January 2023.
To help businesses adjust to the increase in the Retirement Age and Re-Employment Age to 63 and 68 respectively, the Government introduced the Senior Worker Support Package during the Unity Budget in February 2020.
“I am happy that the take-up rate for the Senior Worker Early Adopter Grant and Part-Time Re-employment Grant, two key components of the Senior Worker Support Package, have exceeded expectations,” noted Mr Heng.
To support more companies to move earlier to raise their retirement and re-employment ages, Mr Heng said that he will increase the budget allocation for the Senior Worker Early Adopter Grant and the Part-Time Re-employment Grant by over $200 million
Expressing his appreciation towards workers in the healthcare sector, Mr Heng said that healthcare workers have been working hard to provide the nation with the highest quality of care.
“Since COVID-19 hit, their exemplary commitment has shone through,” he praised.
Beyond the pandemic, Mr Heng said that the sector is set to grow and that the Government will be enhancing the salaries of nurses and other healthcare workers such as support care staff.
Healthcare Services Employees Union (HSEU) President K. Thanaletchimi said she welcomed the announcement by Mr Heng on increasing healthcare workers’ salaries and hope that it would spur more locals to join the sector.
She said: “The challenge that many healthcare institutions are currently faced with is hiring Singaporean workers. We hope that with the enhancement of salaries, coupled with our workforce transformation efforts, more locals will be inspired to consider a career in healthcare.
“The Government’s recognition of our public healthcare workers’ effort and contributions implies that our workers are much appreciated, and their job is indeed invaluable to our ageing society and against the backdrop of the pandemic.”
The Ministry of Health will provide more details during the Committee of Supply.
