The COVID-19 pandemic has affected economies all around the world, including Singapore. On 6th April, the government introduced a third stimulus package to minimize the impact of the coronavirus crisis on the financial health of the country. The package will expand an already massive list of tax incentives in Singapore. It costs around US$3.6 billion to the national reserves and is one of the most extensive economic rehabilitation plans since the global economic crisis of 2009.
Small and medium enterprises (SMEs) are at the very centre of this plan. The newly allocated budgets aim to prevent local and small businesses from closing down and support them via tax incentives, loan schemes and by providing massive subsidiaries to low-income workers and self-employed people throughout the country.
The previous stimulus package, Resilience Budget, was of US$34 billion, much higher than the latest package. The new budget is being named the Solidarity package. According to Singapore’s Finance Ministers, Heng Swee Keat, the new budget will increase the budget deficit to 8.9% of the GDP. As well as supporting small businesses, the budget provides financial help to people through cash handouts and is highly flexible in terms of fees, interest rates and loans. The primary aim of the Solidarity Budget is to save jobs and preserve the livelihoods of workers who are dependent on their daily wages.
The budget is proof of the fact that the country is preparing to mitigate the intense economic crisis due to the COVID-19 pandemic. In the Unity Budget introduced in February, the government had already allocated US$4.4 billion to fight the coronavirus pandemic. However, the incentives given in that budget were only short-term. The crisis worsened after February, which has led to the introduction of Resilience and Solidarity Budgets.