The Singapore government has announced a new support package as the country grapples with three major issues that are affecting local businesses – the Covid pandemic, a global economic slowdown and continuing inflation.
Deputy Prime Minister Lawrence Wong committed that the government will be putting aside S$1.5 billion as a form of inflation relief for local businesses.
Here is a breakdown of the support schemes for qualified businesses:
1. Enterprise Financing Scheme – Trade Loans
The maximum quantum for trade loans will be raised to S$10 million, with the government taking a 70% risk share, from 1 July 2022 to 31 March 2023.
2. Enterprise Financing Scheme – SME Working Capital Loan
The maximum loan quantum for the SME Working Capital Loan will also be raised to S$500,000, from 1 October 2022 to 31 March 2023. This will take place after the Temporary Bridging Loan Programme expires on 30 September 2022.
The above 2 financing schemes will be able to provide local businesses with their cash flow.
3. Progressive Wage Credit Scheme
In order to encourage employers to raise the salaries for lower wage workers, the government will increase its co-funding support from 50% to 70% of wage increases for locals earning up to S$2,500.
For locals earning between S$2,500 to S$3,000, the government’s co-funding support for wage increases will also be raised from 30% to 45%.
4. Energy Efficient Grant
This is a new grant which will offer 70% support for qualifying costs from local SMEs in food services, food manufacturing and retail industries, which adopt energy efficient equipment in their operations. The grant is capped at S$30,000. More details will be released at a later date.
5. Jobs Growth Incentive
To continue encouraging employers to recruit locals, the Jobs Growth Incentive will be extended for another 6 months until March 2023.
For new hires who are younger than 40 years old, the wage support payout will be 15% of the first S$5,000 for up to 6 months, capped at S$4,500.
Meanwhile, for new hires who are 40 years and older, the payout will be 50% of the first S$6,000 for up to 12 months, capped at S$36,000.
“We cannot afford to slow down.”
These were the Deputy Prime Minister’s words as Singapore businesses face concerns about the rising operation and labour costs. The government has promised to step in and provide assistance while encouraging businesses to press on with workforce and enterprise transformation efforts.
Senior Minister of State for Finance and Transport Chee Hong Tat further emphasised the need for businesses to restructure and transform, especially in areas of efficiency and labour productivity. He also added that this will be the best way to deal with cost increases over a longer term.