SINGAPORE – The four Budgets assembled to date serve as the Government’s strong response to preventing a “lost generation” of workers and students caused by Covid-19, which has turned out to be the global crisis of this generation, Deputy Prime Minister Heng Swee Keat said on Friday (June 5).
It is a response that seeks to stabilise economic activity during this difficult period and position Singapore for recovery, he added, noting that a recent study estimates that the support packages will help the economy avert an average output loss of 5 percentage points, or $23.4 billion a year, over this year and the next.
Singapore is tackling these headwinds from a position of strength, he added. It is in a strong fiscal position, with sizeable reserves left by the founding generation that need to be built on. It also has deep social reserves, supported by mutual trust, close partnerships, strong values, and a sense of mutual responsibility and support, he said.
These have enabled Singapore to marshal close to $100 billion to fight the coronavirus and the huge impact it has had on the global economy – and weather the expected lengthy road to recovery – with a focus on people and jobs, Mr Heng said in his speech to round up debate on the Fortitude Budget.
While the world took close to a decade following the Great Depression and global financial crisis to recover to pre-crisis unemployment levels, Mr Heng said it will not be surprising if it takes even longer to bounce back from the effects of Covid-19.
In the same way that World War I led to a “lost generation” of youngsters in the West, there is now talk of a global “lockdown generation” and fears that the young people of this generation “could have their skills, employability and incomes permanently affected, even after the world recovers from the pandemic”, said Mr Heng, who is also Finance Minister.
“We must work to prevent a ‘Covid Generation’ of workers and students in Singapore,” he said. This is why the Government has committed a large war chest in this fight, with most of the money aimed at helping workers stay in their jobs through measures like the Jobs Support Scheme.
Taken together, the Fortitude Budget and the three preceding Budgets this year add up to $193 billion, more than double the size of Singapore’s annual Budget in the preceding years.
Close to 80 per cent of the $93 billion set aside for Covid-19 response – or $72 billion – has been allocated to preserving jobs and businesses, as this in turn supports social resilience, said Mr Heng.
“As our labour movement firmly believes, a job is the best welfare,” he said.
The support for jobs is crucial, as Covid-19 is likely to cause global unemployment levels to reach levels unseen even during the global financial crisis in 2009, he noted.
Singapore will not be spared, as the pandemic is likely to cause the number of unemployed residents to exceed 100,000 this year, more than the 91,000 registered during the 2003 severe acute respiratory syndrome (Sars) epidemic.
“Even those who keep their jobs may suffer under-employment and significant income loss,” said Mr Heng. “This could lead to a vicious cycle where income loss reduces consumption, and affected businesses further reduce labour demand.”
But beyond the immediate priority of helping workers stay in their jobs, measures outlined include creating a multitude of new opportunities and providing additional help to harder-hit groups such as graduating students, mid-career workers, and self-employed people.
Singapore is fortunate, as the Republic had started structural transformation of its economy before Covid-19 struck and accelerated deep changes in the global economy, said Mr Heng, noting that companies who made changes early are adapting better to the new conditions.
“The post-Covid-19 world will be different from today,” he said. “We may not know the exact contours of how this world will look like, but we know the forces that are shaping it.”
The Emerging Stronger Task Force, for instance, is studying key shifts and developing recommendations in the areas of technology and innovation, digitalisation, and disruption to global supply chains, said Mr Heng.
The task force will consult multiple stakeholders, said Mr Heng, in acknowledgement of several MPs’ calls in the two days of debate that the Government include more diverse voices in its decision-making process.
While Singapore has been able to mount a strong fiscal response because of its national reserves, Mr Heng also called on Singaporeans to have strong social reserves both as individuals and across different levels of society, “working together and holding one another up with trust and in solidarity”.
He likened Covid-19 to a mighty storm that has damaged sails and forced ships around the world to go into harbour.
“While waiting for the storm to subside, we must make the best use of this downtime to build new strengths and capabilities.
“Let us take this rare chance to repair, upgrade our ship and install new instruments, re-orientate our mental compass, and strengthen our sailors, so that when the fair wind comes, we will sail out faster and further than ever before,” he said. “This is what our four Budgets enable us to do – let us make the best use of them!”
To survive and emerge stronger, Singapore had to get three things right, added Mr Heng.
These are good governance and strong, adaptive leadership; strong social reserves across all levels; and being crystal clear and unwavering about its values and mission.
The fundamentals are all the more crucial at a time of uncertainty, he added, saying that while the country’s circumstances have changed over the years, the Government’s aspirations for Singapore have not: To be a place where its people, regardless of race, language or religion, can build a better life.