Supplemental Budget 2020
With the exacerbation of Covid-19 affecting global economic activities at an unprecedented level, the Singapore government acted swiftly to roll out a second resilience budget to buffer the economy from slipping further into a deep recession. As the 2020 growth has been significantly downgraded due to the challenging outlook, the stimulus measures are likely to provide the much needed lifeline to sectors which are most affected by the Covid-19. This is indeed a much bolder and more massive stimulus package to mitigate the downside shock to the economy.
Enhancement of Property Tax Rebate
The property tax rebate for qualifying commercial properties is now 100% for this year, a significant increase from the 15% or 30% announced in the February 18 Budget. The total savings could now amount to about 1.2 months of rental for building owners. This is up from 18% or 36% of one month's rental. The rebates are certainly able to soften the economic impact of the pandemic and provide some short-term relief to both landlords and tenants during this trying period.
Even for office and industrial properties which were not given any property tax rebates during the February 18 Budget announcement now enjoy a 30% property tax rebate due to the severity of the pandemic on the occupiers. This works out to be 36% of a month’s rental. This will help to relieve the burden on industries which are indirectly impacted by the slowdown in the business and services sector due to the global supply chain disruption as well as the multiple lockdowns in various countries.
The current situation should now push retailers to start thinking seriously about an omni-channel strategy to mitigate the impact of sudden unexpected disruptions to business and future proof retail in the long run.
Extension of Jobs Support Scheme
The Jobs Support Scheme will be extended until the end of 2020, with enhanced co-funding of wages by the government from 8% to 25%. The more badly affected food services sector will receive higher support at 50% of wages, while the worst hit aviation and tourism sectors will receive 75% of wages. This will enable firms to retain local employees, preventing a spike in the unemployment rate.
Introduction of Aviation Support Package
The government will also introduce a S$350 million Aviation Support Package to provide additional relief in the form of rebates on landing and parking charges, and rental relief for airlines, ground handlers, and cargo agents. This will keep our air hub resilient and supply lines for essential goods open.
Disbursement of Helicopter Money
Cash payouts for adult Singaporeans will be tripled to range from S$300-S$900, with each parent with at least one child receiving an additional S$300. In addition, eligible self-employed persons will receive S$1,000 a month for nine months.
With the labour market likely to stay soft given the COVID-19 pandemic, over a third of the Resilience Budget is dedicated to save jobs and protect the livelihoods of Singaporeans. Together with the other measures to preserve local employment, the disbursement of helicopter money will sustain consumer spending. This will provide a boost to retailers and cushion the decline in GDP.
