Fortitude Budget & The Start of the New Normal in The Isolation Economy: What does the end of the Circuit Breaker means for SMEs in Singapore ...
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Fortitude Budget & The Start of the New Normal in The Isolation Economy: What does the end of the Circuit Breaker means for SMEs in Singapore LIVE WEBINAR by IVAN CHANG 28 MAY 2020 | THURSDAY | 12.30PM - 1.30PM
Safe Harbour Statements
• The information provided in this webinar is meant only for the intention of education and
learning. You should seek independent legal and accounting advice before conducting any
business or investment decision.
• All efforts have been taken to ensure the information provided in this webinar is accurate as of
publication date.
• The author(s) reserve all rights in the material provided.
https://isolation.sg/ 2
Ivan Chang
Co-Opted Councilor
SGTech
E: ivan@isolation.sg
S: @ivanchangwl
3
SGTech is a premier trade association for the tech
industry in Singapore. Within a rapidly evolving
technology landscape, SGTech strives to create an
ecosystem that anticipates trends and develops
sustainable initiatives to strengthen the
community and help the industry grow.
SGTech’s over 900 members range from
innovative start-ups, vibrant small and medium-
sized enterprises to top multinational corporations
that leverage technology as a core driver of their
business.
https://isolation.sg/ 4
A SGTech Community Effort to Support
SMEs & Startups in Singapore
Toolbox Webinar
https://isolation.sg/
https://isolation.sg/ 5
https://isolation.sg/ 6
https://isolation.sg/ 7
Post Webinar Industry Survey
• Please help us help SMEs in Singapore by filling up the
post webinar industry survey
• Results will be shared with the relevant Government
agencies and for future policies suggestion
• We are stronger together
• Post Webinar Industry Survey will automatically open once
you end the webinar
https://isolation.sg/ 8
Webinar Recording, Slides and Q&A
Slides Recording Q&A
Webinar slides will be A recording of this webinar Live Q&A will be conducted
available for download and will be available 2 hours via Zoom’s Q&A
circulation on after the live session for functionality
https://isolation.sg/ playback and viewing
Kindly add your questions
Link will be emailed out to Link will be emailed out to and a selection will be
all participants all participants answered
https://isolation.sg/
https://isolation.sg/ 9
Agenda for Webinar
1 Case Study: A look into Global Reopening
2 Overview of the Singapore Economy & Budget
3 Details of the Fortitude Budget
4 Realities of The New Normal
https://isolation.sg/ 101
Case Study: A look into Global Reopening
https://isolation.sg/ 11Global: Online Usage has increased tremendously
Source: McKinsey Insights
https://isolation.sg/ 12Global: Consumer Confidence all over the place
Source: McKinsey Insights
https://isolation.sg/ 13Europe: Household & Entertainment Spending Up
Source: McKinsey Insights
https://isolation.sg/ 14China: Domestic Tourism is slowly recovering
Source: McKinsey Insights
https://isolation.sg/ 15China: New Digital Service Adoption
Source: McKinsey Insights
https://isolation.sg/ 16Prediction
Big Companies with Liquidity to Invest
Will Take Market Share from SMEs
https://isolation.sg/ 172
Overview of the Singapore Economy & Budget
https://isolation.sg/ 18Singapore GDP Forecast
2020 Q1: -2.2% YoY 2020 Est: -4% to -7%
• The economy will shrink for the year 2020
• Q1 contraction is the worst drop since the 2008
Global Financial Crisis
• 2020 will be the worst contraction since
independence
• Last recession: 2001
Source: MTI, Straits Times
https://isolation.sg/ 19Current Term of Government (January 2020)
Singapore Government net income (in S$bn)
12.00
10.86
9.00
6.12 Estimated Size of Surplus Left
6.00 from this term of Government
3.45
3.00 2.2
1.91
0.00
-0.6
-3.00
-1.7
S$7-11bn
-3.5
-6.00
-9.00
-10.9
2016 2017 2018 2019 2020
Estimate Actual
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 20Current Term of Government (May 2020)
Singapore Government net income (in S$bn)
20.00
10.86
6.12
3.45 1.91 2.2
0.00
-0.6
Total Budget Committed for
-1.7
-3.5 COVID-19
-20.00
S$92.9bn
-40.00
-60.00
19.2% of the Singapore Annual GDP
-74.3
2016 2017 2018 2019 2020
Estimate Actual
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 21What is the measures for COVID-19
Unity Budget Resilience Budget Solidarity Budget Fortitude Budget
February 2020 March 2020 April 2020 May 2020
$5.6bn $48bn $5.1bn $33bn
$4bn for Businesses $28bn for Businesses/ $4.2bn for Businesses $20bn for Direct Support
$1.6bn for Household Household $0.9bn Household $13bn Contigency
$20bn loan backing
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 22Using our reserves
We did not dip into the reserve during the 2003 SARS crisis
2008 (Oct) Bank Gurantee Backed all bank deposit in Singapore
2009 (Jan) S$4.9bn Global Financial Crisis
2011 (Feb) -S$4.0bn Returned to the reserve
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 23Using our reserves
2020 (Mar) S$17bn COVID-19 (Resilience)
2020 (Apr) S$4bn COVID-19 (Solidarity)
2020 (May) S$31bn COVID-19 (Fortitude)
Contingency + Committed
S$13bn S$18bn Contingency: ~ 4 months of JSS
S$52bn
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 24What is the Singapore Government Reserve?
Foreign Currency Reserve
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 25Government Policies: Monetary Policy
Reducing interest rate for banks to borrow
Objectives:
• Cheaper capital, increase investment
• Investment leads to a rebound in spending
Source: World Economic Forum
https://isolation.sg/ 26Government Policies: Fiscal Policy
Direct cash injection into the market
Objectives:
• Provide cash for spending
• Create multiplier effect in the market
What the Singapore Government is doing
Source: IMF
https://isolation.sg/ 27Government Policies: Testing to limits of Government Globally
Monetary Policy
• Negative Interest Rate Issue
• Not all countries can practice this
• Not borrowers
Fiscal Policy
• Limitation of debt funded fiscal policy
• Free market is not at work (Cash hoarding)
Source: IMF
https://isolation.sg/ 283
Details of the Fortitude Budget
https://isolation.sg/ 29(A) Job Support Scheme (JSS)
• Helps enterprises retain their local employees
25% cash grant on gross monthly wages of each local employee (Singapore Citizens / PRs)
- Wage cap of $4,600.00 (i.e. $1,150.00 per employee per month)
- Based on 3 qualifying period (T1 Oct-Dec 2019 / T2 Feb-Apr 2020 / T3 May-Jul 2020)
- i.e. maximum payout per employee is $10,350.00
• Solidarity Budget
75% cash grant on gross monthly wages of each local employee (Singapore Citizens / PRs)
- Wage cap of $4,600.00 (i.e. $3,450.00 per employee for April 2020)
- i.e. maximum payout per employee is $12,650.00
• Fortitude Budget
Extension of JSS by 1 month to August 2020 (total 10 months)
Employers allowed to re-open on 2 June 2020: 25% JSS support for June - August 2020 (3 months)
Employers not allowed to re-open on June 2020: 75% JSS support until reopening / August 2020
(whichever is earlier)
https://isolation.sg/ 30(A) Job Support Scheme (JSS)
• How to qualify?
Administer by IRAS
- No need to apply
- Auto calculation based on CPF records
• Payout Date
Trench 1: April 2020 (For Oct to Dec 2019 + April 2020)
Trench 2: May 2020 (For May 2020)
Trench 3: July 2020 (For Feb to Apr 2020)
Trench 4: Oct 2020 (For May to Aug 202)
https://isolation.sg/ 31(A) Job Support Scheme (JSS)
Aviation & Aerospace
Tier 1
(75%)
Tourism, Hospitality, Conventions & Exhibitons
Tier 1
Built Environment
(75% for Jun - Aug 2020)
Food Services
Retail
Tier 2
Arts & Entertainment
(50%)
Land Transport
Marine and Offshore
Tier 3
All Others
(25%)
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 32(A) Job Support Scheme (JSS)
Oct 19 Nov 19 Dec 19 Feb 20 Mar 20 Apr 20 May 20 Jun 20 Jul 20 Aug 20
IT /
25% 25% 25% 25% 25% 75% 75% 25% 25% 25%
Office
F&B 50% 50% 50% 50% 50% 75% 75% 50% 50% 50%
Source: Singapore Government: MTI, MOF
https://isolation.sg/ 33(A) Job Support Scheme (JSS)
• Who DO NOT qualify for JSS
Business Owners as defined by:
> Sole proprietor
> Partners of a partnership
> Employees who are BOTH shareholder and director of a company and has Income >$100k
> Self Employed for certain sectors (e.g. Taxi Drivers, Property Agents)
https://isolation.sg/ 34(B) Rental Waivers on Government Properties
• Rental on Government Properties for Non Residential
For Food Services
Hawker (NEA/NEA Operators): 1 month waiver to 3 months to 5 months
• Others
HDB and Applicable Agencies: 1/2 month waiver to 2 months to 4 months
Other Agencies: 1/2 month waiver to 1 month to 2 months
https://isolation.sg/ 35(B) Rental Relief for Private Non Residential Properties
• Qualifying Commercial Properties
Hotels, Tourist Attractions, Shops and Restaurants
15% to now 100% Property Tax Rebate
• Other Non Residential Properties
Offices and Commercial Sites
0% to now 30% Property Tax Rebate
https://isolation.sg/ 36(B) Rental Relief for Private Non Residential Properties
• For SME Tenant (i.e. revenue not more than $100m)
Government to provide a new grant to landlord and mandated to pass to tenant
• Qualifying Commercial Properties (including retail shops)
Government Grant worth about 0.8 months of the rent calculated based on Annual Value of Property
• Other Non Residential Properties
Government Grant worth about 0.64 months of the rent calculated based on Annual Value of Property
https://isolation.sg/ 37(B) Rental Relief for Private Non Residential Properties
• For SME Tenant (i.e. revenue not more than $100m)
• Qualifying Commercial Properties (including retail shops)
~ 2 months of rental rebate
• Other Non Residential Properties
~ 1 month of rental rebate
https://isolation.sg/ 38(B) Rental Relief for Private Non Residential Properties
• To be paid out by IRAS to Landlord
Details will be announced end-June 2020
• Action
> Speak with your landlord about the additional period of rental relief
> When it will be passed over
https://isolation.sg/ 39(C) Ministry of Law Bill for Additional Rental Relief
• For SME Tenants of Commercial and Industrial/Office Properties
If your revenue experienced a significant drop
• Additional 2 months or 3 months of rental relief (up to 4 months)
Bill to be tabled in June 2020
Additional cost will be equally borne by the Government and Landlord
https://isolation.sg/ 40(D) Digital Transformation: e-payment adoption for Hawkers
• For stallholders in hawker centre
$1,500 bonus to adopt e-payment ($300 per month over 5 months)
Transaction fees to be borne by Government until 31 December 2023
https://isolation.sg/ 41(D) Digital Transformation: Digital Resilience Bonus
• Pilot: Food Services & Retail Only
Base Requirement: Adopt PayNow Corporate and e-invoicing
Above and beyond the PSG Grant / EDG Grant
One time bonus
https://isolation.sg/ 42(D) Digital Transformation: Digital Resilience Bonus
Category Solutions
Category 1 Accounting, HR Payroll and
Business Process Solutions
($2,500) Digital Ordering
Category 2 Online Food Delivery OR e-
Digital Presence
($2,500) procurement
Category 3
Data Driven Ops Data Analytics
($5,000)
https://isolation.sg/ 43(E) Hiring Incentives under SGUnited Jobs
https://isolation.sg/ 44(F) Foreign Worker Levy
• 1. Waiver of Foreign Worker Levy
For April 2020 & May 2020
> No action needed
Extension
100% in June, 50% in July
• 2. Rebate
$750 cash back for each Work Permit or S Pass holder
For April & May 2020
Extension
$750 in June, $375 in July
https://isolation.sg/ 454
Realities of The New Normal
https://isolation.sg/ 461. Effective Remote Working
• Remote working is The New Normal
• A: Organise your workforce in a distributed
structure
• B: Adopt best practices around collaboration,
flexibility and accountability
• C: Stop assuming the old ways will return
Source: McKinsey Insights
https://isolation.sg/ 472. Just in Time to Just in Case
• Excess Capacity is The New Normal
• A: Re-design your supply sources for just in case
• B: Adopt technology for efficiency
• C: Value-Loss optimisation versus Cost
optimisation
Source: McKinsey Insights
https://isolation.sg/ 483. Online Commerce to Contactless Commerce
• Delivering Goods & Services without Contact is
The New Normal
• A: Plan for future Circuit Breakers
• B: Accelerate digital transformation
• C: Find ways to delivery without contact
Source: McKinsey Insights
https://isolation.sg/ 49Returning to the Old Normal is NOT the Destination
Re-Imagination is now The New Normal
https://isolation.sg/ 50Post Webinar Industry Survey
• Please help us help SMEs in Singapore by filling up the
post webinar industry survey
• Results will be shared with the relevant Government
agencies and for future policies suggestion
• We are stronger together
• Post Webinar Industry Survey will automatically open once
you end the webinar
https://isolation.sg/ 51Fortitude Budget & The Start of the New Normal in The Isolation Economy: What does the end of the Circuit Breaker means for SMEs in Singapore LIVE WEBINAR by IVAN CHANG 28 MAY 2020 | THURSDAY | 12.30PM - 1.30PM
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