Just as the global economy was beginning to recover, the Coronavirus Disease 2019 (COVID-19) outbreak hit us. With several industries such as tourism and aviation being directly affected, the outbreak has also disrupted supply chains and created ripple effects onto other sectors. The Ministry of Trade and Industry has downgraded the GDP forecast from between 0.5% to 2.5%, to between -0.5% and 1.5%. While it is no surprise, it is still an alarming realisation to many of our businesses and jobs that we hold dearly on to.
To soften the impact on businesses and jobs by the recent outbreak, a Stabilisation and Support package amounting to $4 billion was introduced.
However, Budget 2020 is not just about mitigating the impacts of COVID-19, there are also new and enhanced measures announced in the budget to enable Transformation and Growth for our local businesses to tackle immediate issues and also to achieve business sustainability in the long run. Here are some of the key takeaways of Budget 2020.
Productivity Growth
ENHANCED
Productivity Solutions Grant (PSG)
- Greater support for businesses beyond IT solutions and equipment
- Expanded scope to include job redesign consultancy services
UNCHANGED
Enterprise Development Grant (EDG)
- Defray up to 70% of project costs under core capabilities
NEW
SME Growth Enhancement – Partners for Business Growth
- Initiative for enterprises that are keen to transform in areas such as digitalisation, talent development and internationalisation
- SME Centres to partner to develop business plans and support implementation efforts
Executive-in-Residence
- Support for trade associations and business chambers to engage experience PMETs who have the expertise to assist companies in their transformation
Financial Support
ENHANCED
SME Working Capital Loan
- 1 Year only from March 2020
- Maximum loan quantum raised from $300k to $600k
- Govt’s risk-share increased to 80%
NEW
Temporary Bridging Loans for Tourism Sector Enterprises
- 1 Year only from March 2020
- Borrow up to $1M, interest rates capped at 5%
- Govt’s risk-share increased to 80%
SkillsFuture Enterprise Credit
- A one-off $10,000 credit to help eligible employers defray up 90% of out-of-pocket expenses for eligible schemes.
Corporate Income Tax Rebate (YA 2020)
- 25% of Tax Payable, capped at $15,000 per company
- Enhancement of several tax treatments under the corporate tax system for 1 year to ease cash flow for enterprises
Property Tax Rebate (YA 2020)
- 30% on accommodation and function rooms (MICE)
- 15% on international cruise and regional ferry terminals
- 10% on Integrated Resorts
- 15% for Changi Airport
- 1 Full month rental waiver for NEA-managed hawker centres and markets
- Half a month rental waiver for other Governmental agencies such as HDB
- 15% on businesses conducted in commercial properties/private properties
Employability
ENHANCED
Wage Credit Scheme
- Monthly wage ceiling to increase from $4,000 to $5,000
- Govt co-funding levels to increase from 20% and 15% respectively for 2019 and 2020 respectively
Adapt and Grow (Directly affected sectors only)
- Extend funding period for reskilling from 3 months to 6 months
Internationalisation
ENHANCED
Market Readiness Assistance (MRA) Grant
- Existing grant cap to be increased from $20k to $100k per new market over three years
- 70% support level to be extended to 31 March 2023
To summarise, Singapore businesses must press on with transformation in order to ride the wave of change evolved by technological developments and demographic shifts. As mentioned in the Budget, the government is widening their support for more projects under the Enterprise Development Grant (EDG) programme, hoping to achieve near 3,000 projects for FY 20/21.
At Etereo, we have certified consultants (TUV-SUD & RMC) to assist you in the undertaking of branding/rebranding exercise through the EDG programme. Given that such an exercise will help you to achieve your business desired outcomes in the coming years, you might wish to take charge of this scaling up of your company internal capability now to meet the future challenges of an upturn economy. Should you require more information and details on BRANDING, do feel free to reach us via email or the contact form below.
You can also read here for more information on how Enterprise Singapore supports the local business in their transformation efforts.
