SINGAPORE, March 26 — With Singapore facing an unprecedented crisis caused by the Covid-19 outbreak, which is set to put the largest dent in its economy since independence, the government today unveiled a landmark S$48 billion (RM144 billion) package to help workers, businesses and households.
This Resilience Budget comes on top of the S$6.4 billion support package unveiled during the Budget last month, to support businesses, workers, households and frontline agencies, Deputy Prime Minister Heng Swee Keat announced in Parliament.
To fund this Resilience Budget, the government has sought and received President Halimah Yacob’s in-principle support to draw up to S$17 billion from the city-state’s reserves that were amassed during previous terms of government, Heng said.
This is the second time that the government is dipping into the country’s past reserves. It first did so during the 2009 global financial crisis, during which the government drew S$4.9 billion to fund schemes to protect jobs for Singaporeans and ensure that companies continue to have access to credit to sustain their operations and keep jobs.
Heng said the latest package to deal with the effects of the Covid-19 outbreak would not only save jobs, support workers and protect livelihoods, but help businesses overcome immediate challenges and make the society and the economy more resilient.
“This is a landmark package and a necessary response to a unique situation,” he added.
‘Defining challenge’ for Singapore
Heng noted that since he delivered the Budget statement last month, the Covid-19 outbreak has escalated quickly.
The World Health Organisation has declared the disease a pandemic and it estimates that more than 410,000 people have been infected in more than 190 countries.
Yesterday, Singapore recorded the largest single-day spike of 73 infections, taking its total number of cases to 631. The city-state has registered two deaths from the disease so far.
Echoing comments from other government leaders, Heng said the outbreak — which he described as Singapore’s “defining challenge” — was likely to take at least a year to be resolved, with the economic fallout set to last even longer.
He noted that public health measures to contain the virus, both here and internationally, have caused severe economic disruptions and uncertainties.
“As more countries implement their measures, the economic disruptions will be wider, deeper and more prolonged,” he added.
Saying the global economy was staring down a “supply-and-demand” shock, Heng said supply chains have been disrupted as workers in places on lockdown are unable to work.
This will have knock-on effects worldwide, given highly integrated supply chains.
Aggregate demand has also fallen as people stay home and curtail spending, with consumer and business confidence plunging in the face of rising uncertainties, Heng said.
With stock markets diving and global financial markets taking a beating, Heng said that these shocks would have a deep impact on Singapore’s economy, which is highly integrated with the global economy.
In the first quarter of this year, Singapore’s economy contracted by 2.2 per cent from the same period a year ago, advance estimates showed. The government expects the economy to shrink by between one and four per cent in 2020, down from its earlier forecast, which ranged from a contraction of -0.5 per cent to an expansion of 1.5 per cent.
The hardest-hit sectors are aviation and tourism, with international visitor arrivals having nearly ground to a stop, Heng said.
Sectors like food services, retail and land transport have been significantly affected. Industries such as manufacturing and the wholesale trade have also been hit amid falling external demand and disrupted supply chains.
Heng said how Singapore manages the crisis, and whether the country emerges stronger from it, would “define us as a people and nation”.
“Come what may, no matter how daunting the challenge at hand, we will bounce back stronger and more united than ever, as we weather this storm together.” — TODAY