The Singapore government will allocate S$4 billion (US$2.87bn) to help stabilise Singapore's economy and help workers and businesses tide over a looming slowdown, Deputy Prime Minister and Finance Minister Heng Swee Keat announced on Tuesday (Feb 18) during his 2020 Budget speech.
The novel coronavirus (COVID-19) outbreak comes after a difficult 2019 where the Singapore economy posted its weakest growth since the 2008 financial crisis. Referring to an earlier downgrade in growth forecast by the Ministry of Trade and Industry, Heng said: “While MTI’s baseline is for GDP growth to come in at 0.5 per cent for the full year, we must be prepared that the economic impact may be worse than we projected.”
The special Stabilisation and Support Package, intended to alleviate the outbreak’s impact on businesses, will provide job and cash-flow support to help firms retain and retrain workers and serve as a “considerable fiscal boost” to the economy to address near-term concerns.
Additional measures will be rolled out for the tourism, aviation, retail, food services and point-to-point transport services sectors, and includes property tax rebates and rental waivers, on top of what will be available to all enterprises:
- To help the tourism sector with operating costs and cash flow, there will be a property tax rebate of 30% for calendar year 2020, for the accommodation and function room components of licensed hotels and serviced apartments, as well as prescribed MICE venues.
- Property tax rebates will be 15% for international cruise and regional ferry terminals, and 10% for the two integrated resorts.
- Tourism enterprises will be able to obtain loans of up to S$1 million (US$ 718,504) each with the interest rate capped at 5%. These will come under a one-year temporary bridging loan programme to be introduced by the government and participating financial institutions, specifically for the tourism sector. The government will take on 80% of the risk of the loans.
FOOD SERVICES AND RETAIL SECTOR
- For private commercial properties, the government will grant a 15% property tax rebate to those that qualify, to support food services and retail establishments operating there. “I strongly urge landlords to pass this on to their tenants by reducing rentals,” said Heng.
- In the food services and retail business, the National Environment Agency will provide a full month of rental waivers to stallholders in NEA-managed hawker centres and markets.
- Other government agencies, such as the Housing and Development Board, will provide half-a-month of rental waivers to its commercial tenants.
- As for the aviation sector, there will be a suite of measures comprising rebates on aircraft landing and parking charges, assistance to ground handling agents, and rental rebates for Changi Airport’s shops and cargo agents.
- The Civil Aviation Authority of Singapore (CAAS) will provide a 50% rebate on its regulatory fees for new and renewed certificates of airworthiness. Changi Airport will also receive a 15% property tax rebate.
"We will continue to monitor the situation closely. If needed, we can and are prepared to do more," said Heng.
Most significantly, the planned goods and services tax (GST) hike – from 7% to 9% – will not kick in next year, while S$6 billion (US$4.3bn) has been set aside this year to help cushion the impact when the increase does take effect.
Heng said that the GST would remain unchanged next year after reviewing revenue and expenditure projections and considering the state of the economy but "we will not be able to put off the increase indefinitely".
The city-state has been aggressive in its efforts to combat the negative economic impact of the outbreak: The Singapore Tourism Board announced a public-private sector Tourism Recovery Action Task Force (TRAC) to lay out the plans for recovery and future growth while CapitaLand, a real estate company that operates more than 3,500 stores nationwide, has unveiled a S$10m marketing assistance programme to support its retail partners.
Sourced from Straits Times, Channel News Asia, Business Times