Easing Financial Support for Sectors Affected by COVID-19 Pandemic

Assoc Prof Jamus Jerome Lim asked the Minister for Finance in light of the recent upgrade to GDP growth forecasts for 2021 (a) whether there are plans to cease provision of financial support for sectors hardest hit by the pandemic; and (b) whether additional support may help or hinder the reallocation of workers across sectors over time, if provided.

The Government has been monitoring global and local economic developments closely. MTI’s recent upgrade of Singapore’s GDP growth forecast is largely supported by outward-oriented sectors, as we see a rebound in our main final demand markets.

But the headline growth figure does not paint the full picture. We continue to see uneven recovery across the sectors. While outward-oriented sectors remain strong and consumer-facing sectors are starting to recover with the easing of restrictions, aviation- and tourism-related sectors are recovering much more slowly, as global border restrictions are likely to be lifted only cautiously and unevenly.

At the same time, the crisis has accelerated changes in business models and introduced new ways of working. We must continue our efforts to restructure our economy and help our workers to adapt and seize opportunities in new growth areas.

Against these different considerations, the Government has taken a balanced approach towards providing relief on the one hand and supporting restructuring and reskilling on the other. We explained these considerations and shifted our support from a focus on job retention to a greater emphasis on job creation in October last year.

In line with this balanced approach, we have tapered the Jobs Support Scheme (JSS) and introduced the Jobs Growth Incentive (JGI) to encourage growing firms to hire more. The Government also set aside $24 billion over the next three years to support our firms and workers to emerge stronger from the crisis during Budget 2021.

We have adopted two key strategies to support our workers to find better employment prospects in growth areas.

First, we are partnering the industry, unions and trade associations to identify new drivers of growth. We have also been updating all of our Industry Transformation Maps so that we can channel more resources towards areas with high growth potential.

Second, we extended and enhanced the SGUnited Jobs and Skills Package (SGU JS) to equip workers with the skills and agility to move as new growth areas emerge.

Even as we press on with sector transformation and job creation, the Government is mindful that some sectors, such as aviation- and tourism-related industries, will take more time to recover. For these sectors, we will continue to take a more customised approach in order to preserve core capabilities and talent.

The Government stands ready to support all Singaporeans to tide through this crisis and emerge stronger. As our economy recovers, we will continually recalibrate our support based on each sector’s specific needs and recovery trajectory, to ensure that our measures are targeted and achieve good value for money outcomes.