Singapore Budget 2021 Commentary
Last year, Singapore’s economy got impacted by the worst recession on record, and in response; the minister for finance delivered an unprecedented 5 budgets of S$ 100 billion to help combat the Covid-19 pandemic. This year, the economy is forecast to grow at between 4% to 6% as much as the recovery is expected to be uneven as some of the sectors are likely to progress well with others still remaining under stress.
The measures taken with budget 2021 are designed to help keep Singaporean workers afloat and also enable them to think of new opportunities on how to thrive during these challenging times.
Here is a snapshot of the budget 2021 alongside a commentary of the changes;
Green Plan 2030
The minister for finance while announcing the budget touched on Singapore Green Plan 2030. This entails a plan to tackle climate crisis and the efforts to increase solar capacity while also engaging in research into other sources of renewable energy. The green infrastructure projects and the incentives are intended to help encourage wider adoption of low emission vehicles and all these are geared towards building a more sustainable future for the generations to come.
The title of the budget 2021 was Emerging Stronger Together and while budget 2021 provides an array of support that’s more targeted towards the hardest hit business sectors and workers as they continue with the struggle amid the pandemic. This focus is coupled with attention towards the future with regard to digital transformation and business innovation alongside strengthening efforts to tackle climate crisis and invest in the renewable energy sources.
Household Support Package
For the families that are still coping with uncertainties that came along as a result Covid-19; the minister of finance announced that S$900 million has been set aside for household support package. The amount also includes one-off cash payments for the lower to middle income earners. The minister also spoke of the measures that have been taken to help strengthen social safety.
The minister talked of the proposed GST rate that’s to be increased from 7% to 9% during the period 2022 – 2025 and this is likely to influence the economic outlook. The ministered confirmed that the S$6 billion assurance package that was announced last year would help many Singaporean households to be cushioned against the impact of GST increase when the time comes.
Covid Resilience Package
The minister of finance also announced an S$11 billion COVID-19 resilience package to help support the recovery process. This amount will primarily help with safeguarding public health, vaccinations, and continued support for the workers and the business sectors that are hardest hit. The temporary wage support is another key highlight of the budget as it helps many workers who are hardest hit to prevent bankruptcy which is likely to affect households deeply.
Keeping the current workers employed also has short-term and long-term benefits with the most immediate being prevention of further financial hardship as a result of the pandemic. A targeted measure such as the jobs support scheme that was announced through SGUnited Skills with an additional S$5.4 billion was allocated to help minimize the long-term effects for those who get displaced.