Heng Swee Keat, Singapore’s Deputy Prime Minister, has stated that the key message for the Singapore Budget 2021 is to:
- provide relief in the immediate term;
- invest growth strategically and push forward with the economic transformation of Singapore in the medium term; and
- position Singapore for the long term.
In 2021, the Singapore Budget is expected to deliver a deficit of $11 billion, or 2% of Singapore’s total GDP. Although this deficit is lower than the one that was set up back in 2020 (it stood at $64 billion), there is no doubt that it is still one of the biggest deficits that Singapore has ever had.
Here are the 10 things that business owners need to know about the Singapore Budget 2021.
1. The Jobs Support Scheme Has Been Extended
The Jobs Support Scheme was introduced in 2020, and its goal was to provide wage support for businesses in Singapore. This move kept jobs protected and helped companies kept their employees. The final tranche of the Jobs Support Scheme was set to end in March 2021.
Mr. Heng has stated that $700 million will be set aside to extend the Jobs Support Scheme to support businesses in the hardest-hit sectors. The Aerospace, Tourism, and Aviation sectors will receive another 6 months of support from the Jobs Support Scheme. With this in mind, these sectors will get 30% of support from April to June 2021, and 10% of support from July to September 2021. The Arts & Culture sector, the Food Services sector, the Retail sector, and the Built Environment sector will also receive another 3 months of support from the Jobs Support Scheme.
2. The Jobs Growth Incentive Has Been Extended
The Jobs Growth Incentive is a 12-month support salary scheme for new employees. Its goal is to help employers retain their employees and push their hiring needs forward. The Jobs Growth Incentive was set to end in February 2021. Mr. Heng has stated that $5.2 million will be used to extend the Jobs Growth Incentive hiring window by another 7 months.
The result of this will be 12-month salary support for new employees who are less than 40 years old. For employees who are ex-offenders, who are disabled, or who are more than 40 years old, the 12-month salary support will be transformed into 18-month salary support. The salary cap for these employees will also be raised to $6,000. The same support can also be applied for employees who were previously hired.
For new employees who are less than 40 years old, the salary cap remains the same ($5,000).
3. Extension of Specific Schemes Under the SGUnited Jobs and Skills Package
Since specific schemes under the SGUnited Jobs and Skills Package are expected to be extended, Singapore businesses will get to enjoy some good benefits when it comes to hiring and training their new potential employees. The government will fund a considerable portion of the scheme. The SGUnited Traineeships program, the SGUnited Skills program, and the SGUnited Mid-Career Pathways program will all be extended until March 31, 2022.
4. $870 Million Has Been Donated to the Aviation Sector
Mr. Heng has stated that more targeted support to maintain capabilities in the Aviation sector is required since it will take some time for this sector to fully recover. That being said, $870 million has been donated to the Aviation sector.
5. $45 Million Has Been Donated to Both the Sports Resilience Program and the Arts & Culture Resilience Program
Some other hard-hit sectors will be supported by the Singapore Budget 2021. This includes both the Sports Resilience program and the Arts & Culture Resilience program within those hard-hit sectors. Both businesses and self-employed persons that belong to the sectors will be supported.
6. The COVID-19 Driver Relief Grant Has Been Implemented
The COVID-19 Driver Relief Grant was introduced in January 2021. Its goal was to help both taxi drivers and private drivers defray their daily costs. $133 million is expected to be spent on the scheme.
7. The COVID-19 Recovery Grant Has Been Implemented
The COVID-19 Recovery Grant was implemented in January 2021, and the main purpose of the grant was to provide eligible self-employed individuals with $500 for 3 months. Eligible self-employed individuals will have the opportunity to apply for this grant from January 2021 to December 31, 2021.
8. Helping Businesses Invest in New Emerging Technologies and Upskill Employees
The Singapore government will raise its risk share to 70% and raise it to $8 million. The Budget 2021 will help businesses in digital transformation and new emerging technologies – the Productivity Solutions Grant, the Scale-Up SG Program, the Enterprise Development Grant, and the Marketing Readiness Assistance will all be extended to March 2022.
Mature businesses will go through some sort of a co-funding transformation. The following is a list of the initiatives of this strategy:
- Chief Technology Officer-as-a-Service
- Digital Leaders Programme
- Enhance Productivity Solutions Grant – Job Redesign
- Emerging Technology Program
The Capability Transfer Program has been extended to September 2024. Also, the S Pass quota of the Manufacturing sector is expected to drop from 20% to 18% in 2022, and then to 15% in 2023. This quota is also being decreased in the Marine Shipyard, Process, and Construction sectors.
9. The Wage Credit Scheme Has Been Extended to 2022
The goal of the Wage Credit Scheme is to support wage raises sustainably. This scheme was set to end back in 2020 and the last payout was expected to take place in 2021, but in the meantime, it has been extended to 2022, with its co-funding level being 15%.
10. GST Will Be Extended to Low-Value Imported Goods in 2023
Due to the rise of e-commerce, the world of online shopping has become much more active over the past few years. That being said, to level the playing field for local retail businesses, GST will be extended to low-value imported goods in 2023.
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