If you haven’t been able to catch the live updates of the Singapore Budget 2021 on 16 February 2021, fret not! We’ve sieved out key updates that we think business owners like yourself will find useful and put them together into an easy-to-digest infographic. This year’s Budget, named “Emerging Stronger Together”, aptly showcases our country’s determination to stay united and overcome the repercussions that COVID-19 brought into our lives.
Recap: Singapore Budget 2020
As you may recall, there were a total of five Budgets last year, amounting to approximately SGD$100 billion. These Budgets apparently helped avert 12.4% shrinkage in GDP. For a quick recap, you may refer to some of these bite-sized articles we’ve written here and here.
About Singapore Budget 2021
This year, there should only be one main Budget. Having said that, it’s chock-full of information, entailing well-thought-out strategies for Singapore’s long-term growth. For this article, we will focus on two main areas: 1) Supporting Businesses, and 2) Supporting Employees/Employment.
Check out the infographic for an overview of this year’s Singapore Budget. You can also jump straight into the article to read the details that further explain the infographic; simply click into the relevant section of interest in ‘Contents’ to navigate the article.
Infographic: Singapore Budget 2021
1. Supporting Businesses
For High-Growth Businesses
Enterprise Financing Scheme – Venture Debt Programme
The Venture Debt Programme will extend so that firms continue to have access to financial capital. In addition, the maximum loan will increase from $5 million to $8 million. The Government will also be sharing up to 70% risk of eligible loans with participating financial institutions.
For Mature or Growing Businesses
Emerging Technology Programme
The new Emerging Technology Programme will co-fund the cost of adopting frontier technologies, such as 5G, artificial intelligence and trust technologies.
CTO-as-a-Service (CTOaaS) will provide businesses access to professional IT consultancies to receive end-to-end digital advice, from digital consultancy tailored to business needs, to downstream project implementation.
Digital Leaders Programme
The Digital Leaders Programme (DLP) seeks to enable promising, high-potential local companies to become digital leaders. It will support companies in building technological leadership and expertise from top-down, which includes hiring digital talent. In addition, it will help businesses develop and implement Digital Transformation Roadmaps, inclusive of consultancy and implementation costs.
Enhanced Support Schemes
For Enterprise Schemes, the The Government will also extend support up to 80% to end March 2022. These schemes include Scale-up SG, Productivity Solutions Grant (PSG), Market Readiness Assistance (MRA), and Enterprise Development Grant (EDG).
Local Enterprises Funding Platform
The Government will co-invest $500 million with Temasek into the Local Enterprises Funding Platform, to help large local enterprises (LLEs) enter their next phase of growth. Temasek will match the Government’s funds on a 1-to-1 basis, giving the platform $1 billion growth capital to LLEs to transform or expand overseas.
For Innovating Businesses
Corporate Venture Launchpad
The Corporate Venture Launchpad (CVL) will be piloted this year, to provide co-funding for corporates to build new ventures through pre-qualified venture studios. This is especially useful for larger businesses that want to rekindle a startup mindset within their organisations.
Open Innovation Platform
The Open Innovation Platform (OIP) will be enhanced. This time, it will match problems faced by businesses and public agencies with solution providers. Co-funding will be provided for the prototyping and deployment of solutions. In addition, there will be new features such as a Discovery Engine that facilitates the search and matching of technology solutions to challenges through automated recommendations, and a Digital Bench for accelerated virtual prototyping and testing.
Global Innovation Alliance
The Global Innovation Alliance’s purpose is to catalyse cross-border partnerships between Singapore and other major innovation hubs globally. Over the next five years, the Government aims to expand the number of city links in its network from 15 to 25.
Singapore Intellectual Property Strategy 2030
The Singapore Intellectual Property Strategy 2030 will equip businesses with tools to value and commercialise their intellectual property (IP) and intangible assets (IA). The strategic initiatives include training professionals in these fields.
For Specific Sectors: Built Environment
Growth and Transformation Scheme
The Government will help form an ecosystem of developers, consultants, contractors, and suppliers to transform the sector as it recovers.
2. Supporting Employees/Employment
Job Support Scheme
Extensions for Hard-Hit Sectors
Introduced last year to provide wage support and retain local employees, the Job Support Scheme was initially set to end in March 2021. It will now extend to September 2021. To help businesses retain local employees, the government will extend the JSS by up to six months for certain sectors until September 2021. This will come with a price tag of $700 million.
Tier 1 Sectors: Aviation, Aerospace and Tourism
- JSS extended by 6 months (till September 2021)
- Obtain 30% support for wages paid from April to June 2021
- Obtain 10% support for wages paid from July to September 2021
Tier 2 Sectors: Retail, Arts & Culture, Food Services and Build Environment
- JSS extended by 3 months (till June 2021)
- Obtain 10% support for wages paid from April to June 2021, and 10% support from July to September 2021
All Other Sectors
- This will discontinue after March 2021.
- Obtain 10% support for wages paid from September 2020 to March 2021.
COVID-19 Recovery Grant
Extension for Affected Workers
Introduced last year as part of the COVID-19 Resilience Package, the COVID-19 Recovery Grant (CRG) provides temporary financial support for workers who have lost their jobs or experienced significant income loss. The grant will extend this year.
- Up to $700 per month for 3 months, for employees who have lost their jobs or are placed on involuntary no-pay leave for at least 3 consecutive months.
- Up to $500 per month for 3 months for employees and self-employed persons who are facing average income loss of at least 50% for at least 3 consecutive months.
SGUnited Jobs and Skills Package
Enhancements and Extensions
The SGUnited Jobs and Skills Package was launched in 2020, to tackle the anticipated labour market fallout from COVID-19. On top of the $3 billion already allocated in 2020, there will be an additional $5.4 billion for a second tranche of SGUnited Jobs and Skills Package (total $8.4 billion). Here are some other initiatives under the SGUnited Jobs and Skills Package:
- The Jobs Growth Incentive (JGI) qualifying window will be extended to September 2021, to encourage employers to accelerate their hiring. The Government aims to support the hiring of 200,000 locals this year
- Extension of the SGUnited Skills, SGUnited Traineeships, and SGUnited Mid-Career Pathways Programmes till 31 March 2022
- Provision of up to 35,000 traineeships and training opportunities
Supporting Local Talent
Wage Credit Scheme
The Wage Credit Scheme (WCS) will be extended to 2022 at a co-funding level of 15%. This will encourage the retainment of local workers, and cushion wage increments in rewarding high-performing talent.
Capability Transfer Programme
The Capability Transfer Programme (CTP) that supports foreign worker skills transfer will be extended up to end-September 2024.
Reduction in S Pass sub-DRC
Businesses in Manufacturing, Construction, Process, and Marine Shipyard will need to take note of the reduction in S Pass sub-dependency ratio ceilings (sub-DRC). Although this shows that the Government has announced its intention to reduce reliance on foreign workers, there are many incentives that help alleviate the costs of hiring local ones.
- 1 Jan 2022: Decrease from 20% to 18%
- 1 Jan 2023: Decrease from 18% to 15%
Construction, Process, Marine Shipyard
- 1 Jan 2023: Decrease from 18% to 15%
Sector Support: Aviation, Land Transport, Arts & Culture and Sports
Targeted Support for Hard-hit Sectors
More targeted support will be provided for the worst-hit sectors, including aviation, land transport, as well as arts, culture and sports sectors. This investment is crucial to preserve Singapore’s core capabilities and the strong position the country has built over the years.
- $870 million as targeted support and cost relief for the aviation sector.
For Land Transport
- $133 million dollars have been set aside for the COVID-19 Driver Relief Fund, specifically for taxi and private hire car drivers.
- $600 per vehicle per month from January to March 2021
- $450 per vehicle per month from April to June 2021
For Arts & Culture and Sports
- $45 million dollars for the Arts and Culture Resilience Package and Sports Resilience Package, supporting businesses and self-employed persons in these sectors
Sector Support: Healthcare
Targeted Support for Healthcare
The Government will enhance the salaries of nurses and other healthcare workers, such as support care staff. This will apply to workers across public healthcare institutions, and publicly-funded community hospitals and long-term care service providers.
From 2021, our focus will be on Emerging Stronger, Together. The COVID-19 pandemic has triggered global shifts, on the economic, social and political fronts, on a scale arguably greater than the 1929 Great Depression… To secure our future, we must build new capabilities in our people and businesses and find new ways to work together effectively.DPM Heng Swee Keat during his Budget Statement on 16 February 2021
For more details on the Singapore Budget 2021, you may refer to the official speech here.