Budget 2021 offers help to SMEs and badly hit sectors. Photo credit: Pexels
On 16th February 2021, Deputy Prime Minister Heng Swee Keat delivered the details of the Budget 2021 in Parliament.
Called Emerging Stronger Together, the $107 billion plan offers respite to SMEs that are struggling to survive after the fallout caused by the COVID-19 pandemic.
Here are some key takeaways.
The Goods and Services Tax (GST) increase from 7% to 9% will be deferred to sometime between 2022 to 2025 instead of 2021. A $6 billion Assurance Package will help cushion the impact of the increase.
The $11 billion COVID-19 Resilience Package will give out:
$45 million: For arts, entertainment and sports sectors
The Arts and Culture Resilience Package and Sports Resilience Package will be enhanced and extended to help the businesses and self-employed in these sectors.
$870 million: For the aviation sector
This will offer cost relief measures and support.
Subsidies will be given off the first $4,600 of the salaries of Singaporeans or permanent residents in the JSS.
Aviation, aerospace and tourism sectors
30% of workers’ wages for April to June will be paid in September. 10% of the wages paid out from July to September will be given out in December.
For the aviation sector, the Ministry of Transport announced that the $330 million Aviation Workforce Retention Grant will help pay 50% of Singaporeans’ and permanent residents’ wages from April to September. This was announced on 17th February 2021.
Food services, retail, marine and offshore, arts and entertainment sectors
Firms will receive 10% of wages paid for April to June in September. The government will pay $700 million worth of workers’ wages in these sectors.
The following initiatives will enable businesses to innovate and collaborate on a global scale to stay competitive.
Corporate Venture Launchpad: This will drive new innovative ventures through collaboration.
Global Innovation Alliance (GIA): This aims to foster the spirit of cross-collaboration between Singapore and global hubs. It will be expanded to more than 25 cities worldwide in the next five years, with the Co-innovation Programme supporting up to 70% of costs borne out of such collaborations.
Open Innovation Platform (OIP): It offers solutions to problems commonly faced by companies and agencies.
The government will establish risk-sharing arrangements with capital providers and offer grants to businesses.
High-growth outfits such as start-ups will receive government assistance through the enterprise financing scheme debt enhancing programme.
$1 billion will be set aside for these initiatives.
CTO-as-a-Service: This helps companies identify solutions through professional IT consultancies.
Digital Leaders Programme: A core digital team will help companies in their digital transformation journeys.
Emerging Technology Programme: This will be used to pay for the adoption of frontier technologies.
Local Enterprises Funding Platform: For this, the government will invest $500 million along with Temasek, which will match the government’s fund one to one. This means large local enterprises can expand overseas using the $1 billion provided by the platform.
Productivity Solutions Grant: Up to 80% (up from 70%) of government support will be given for this and other existing enterprise schemes such as Scale-up SG programme till end-March 2022.
Venture Debt Programme: The cap on loan quantum will be increased from $5 million to $8 million.
Another $5.4 billion will be pumped into the second tranche of the SGUnited Jobs and Skills Package , on top of the $3 billion given out last year.
From this amount, $5.2 billion will be reserved for the Jobs Growth Incentive. The hiring window will be extended by up to 7 months to end-September 2022.
This means companies hiring eligible locals will be given up to 12 months of wage support from the month of hire. Mature workers, ex-offenders and people with disabilities will receive up to 18 months of wage support.
This aims to help 200,000 locals get hired, and create up to 35,000 traineeship and training positions.
To transform and upskill Singapore’s workforce, the following changes will be made:
Capability Transfer Programme (CTP): The initiative that supports the transfer of skills from foreign specialists will be extended to end-September 2024. Find out more here.
Manufacturing S Pass sub-Dependency Ratio Ceiling (DRC): This will be reduced from 20% to 18% from 1st Jan 2022, and to 15% from 1st Jan 2023.
Wage Credit Scheme: It will be extended for a year at a co-funding level of 15%.
Belinda loves thinking about random stuff, and collecting useless bits of facts and trivia. She often roots for the underdog, and believes the world needs more happy endings.