Budget 2021 Updates 1

Budget 2021 Updates 1

Deputy Prime Minister and Finance Minister Heng Swee Keat delivered the Budget 2021 statement in Parliament yesterday. DPM outlined our focus and strategy to innovate, capture new opportunities, and invest in the future to emerge stronger from this crisis together.

The following booklet and infographics prepared by the Ministry of Finance (MOF) give businesses an overview of the various initiatives and schemes. You may also wish to read DPM’s full speech on the MOF website.

  1. Budget Booklet
  2. Summary Infographic 1
  3. Summary Infographic 2
  4. COVID-19 Resilience Package
  5. Jobs Growth Incentive (JGI)
  6. Singapore Green Plan 2030
  7. Towards Cleaner and Greener Transport

 

Budget 2021: Emerging Stronger Together sets out the Government’s plans to continue to tackle our immediate challenges, and build a stronger Singapore that is economically vibrant, socially cohesive, and a sustainable home for all in the new normal. The Government will commit a total of $107 billion in Financial Year 2021 to support these plans.

Relief for Recovery

An $11 billion COVID-19 Resilience Package (CRP) will address Singapore’s immediate needs to safeguard the health of Singaporeans, continue support for workers and businesses where needed, and provide more targeted support for worst-hit sectors.

The Jobs Support Scheme will be extended for sectors that continue to be hard-hit for a total cost of $2.9 billion in FY2021, including earlier committed amounts. The CRP will also meet commitments under the first tranche of the SGUnited Jobs and Skills Package, which includes the Jobs Growth Incentive and financing schemes for enterprises.  It also funds the COVID-19 Recovery Grant, which provides support to workers and self-employed persons who lost jobs or experienced significant income loss.

Emerging Stronger with Skilled Workers and Innovative Businesses

Over the next three years, $24 billion will be allocated to enable our firms and workers to emerge stronger. The Government will:

  • Build a vibrant business sector and an ecosystem for innovation.
  • Facilitate access to capital to enable businesses to innovate, transform and scale.
  • For the next phase of industry transformation, the Government will move beyond support for individual companies to focus on the transformation of entire value chains, starting with the Built Environment sector through the new Growth and Transformation Scheme.
  • Allocate an additional $5.4 billion to a second tranche of the SGUnited Jobs and Skills Package, including an extension of the Jobs Growth Incentive. The SGUnited Skills, SGUnited Traineeships, and SGUnited Mid-Career Pathways programmes will also be extended to support workers who require additional support before landing a job.
  • Moderate Singapore’s reliance on foreign labour, as well as complement local workforce with foreign specialist skills and expertise. The Capability Transfer Programme will also be extended to support foreign-to-local skills transfer.

 

Building a Sustainable Home for All

Budget 2021 introduced several measures under the Singapore Green Plan 2030 to harness technology, promote green finance and for the public sector to lead by example.

  • This includes, setting aside $60 million for a new Agri-Food Cluster Transformation Fund to support technology adoption in the agri-food sector.
  • A car-lite society will continue to be the main goal for domestic transport. Along with investments in public transportation, the Government will introduce various measures to encourage the adoption of electric vehicles (EVs) and discourage the use of internal combustion engine vehicles.
  • The Government will take the lead by issuing green bonds on select public infrastructure projects.
  • The public sector will commit to more ambitious sustainability goals under the new GreenGov.SG initiative.

 

Our Fiscal Strategy

As DPM Heng said in his Budget 2021 statement, the Government’s fiscal approach must strike a careful balance between addressing Singapore’s immediate needs and meeting our longer-term structural needs in a responsible manner. The Government proposes to fund the COVID-19 Resilience Package through a draw on Past Reserves, given the extraordinary and temporary nature of the measures. President Halimah Yacob has given her in-principle support.

The Government intends to issue new bonds under a proposed Significant Infrastructure Government Loan Act (SINGA), to finance major, long-term infrastructure that benefit current and future generations.

In the coming years, Singapore’s fiscal situation is expected to tighten as its needs continue to grow. To finance recurrent spending needs, the Government announced in Budget 2018 that we would need to raise the GST rate sometime from 2021 to 2025. This will not take effect in 2021, as announced at the Unity Budget in February 2020, but the move will be needed some time during 2022 to 2025, and sooner rather than later, subject to the economic outlook.