Jobs and Business Support Package
To help businesses and workers in specified sectors that are significantly impacted by the pandemic, the Minister introduced a $500 million Jobs and Business Support Package comprising:
Small Business Recovery Grant
A one-off cash payout of $1,000 for each local employee with mandatory Central Provident Fund contributions in the period from 1 November 2021 to 31 December 2021 and subject to other conditions, capped at $10,000 per firm. These conditions include that the firm must be a “live” business entity physically present and registered in Singapore no later than 31 December 2021 and must have annual operating revenue that is less than $100 million or employ fewer than 200 employees.
Sole proprietorships and partnerships that are run by at least one local business owner but do not hire any local employees will also receive a cash payout of $1,000, if the local business owner is earning a net trade income of no more than $100,000 as filed with the Inland Revenue Authority of Singapore in the Year of Assessment 2021.
Extension of Jobs Growth Incentive
The Jobs Growth Incentive (JGI) provides salary support for employers to expand local hiring. The extension of the JGI will be for another six months to September 2022 at stepped down salary support rates and is only applicable to firms employing mature workers aged 40 and above who have been out of a job for six months or more and other specified persons.
Given that eligible businesses are already struggling with lower business income, and are already saddled with increased employment costs and rising operating costs due to inflation, the package may not be sufficient to encourage them to expand local headcount so as to tap on these short-term support measures which may not be renewed.
Enhanced financing support for enterprises
To support local enterprises with temporary cash flow concerns from rising inflation or in their overseas expansion, the Government has extended the following support schemes:
Temporary Bridging Loan Programme
The Temporary Bridging Loan Programme was introduced to provide enterprises with access to working capital during the pandemic. It will be extended for six months to 30 September 2022 with a reduction in maximum loan quantum from $3 million to $1 million per borrower, capped at $20 million per borrower group. The maximum interest rate has also been revised upward from 5% to 5.5%.
Enterprise Financing Scheme – Trade Loan
The Enterprise Financing Scheme – Trade Loan (EFS-TL) supports local enterprises in their trade financing needs. The EFS-TL will be extended for a further six months to 30 September 2022 with a reduction in the maximum loan quantum from $10 million to $5 million per borrower, capped at $20 million per borrower group. The Government will continue to provide enhanced risk-sharing of 70% up to 30 September 2022. The risk sharing from the Government will change from 1 October 2022 to between 50% and 70% depending on the type of the enterprise.
Enterprise Financing Scheme – Project Loan
Among other projects, the Enterprise Financing Scheme – Project Loan (EFS-PL) supports domestic construction projects that faced significant challenges when the pandemic hit. The Government has decided to extend the EFS-PL for another year to 31 March 2023 to continue supporting the construction enterprises in fulfilling their domestic projects given the rising costs and tightened cash flows.
Enterprise Financing Scheme – Merger and Acquisition Loan
The Government continues to encourage inorganic growth by Singapore-based companies to acquire market share and capabilities. The Enterprise Financing Scheme – Merger and Acquisition Loan (EFS-M&A) will be enhanced for four years from 1 April 2022 to 31 March 2026 to include domestic M&A activities.
The maximum loan is $50 million per borrower or borrower group. This eligible business entity must be registered and physically present in Singapore with at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore permanent resident(s), determined by the ultimate individual ownership. The business entity’s or group’s annual sales should not exceed $500 million.
This enhancement encourages local businesses to consolidate and grow larger with combined capabilities so as to be able to seize the business opportunities.
With the Government only extending the Temporary Bridging Loan Programme and Enterprise Financing Scheme by six months to a year, the financing support may be inadequate to tide SMEs over the cash flow problems, especially in sectors still adversely impacted by the pandemic.
Accelerating digital transformation and strengthening ICT sector’s local core
The race to digitalise has accelerated with the pandemic and the current manpower crunch acting as catalysts. To further boost the country’s digital transformation journey, Budget 2022 announced an additional $200 million investment towards building digital capabilities in Singapore’s businesses and workers.
SMEs are set to benefit from funding support with expansion of the SMEs Go Digital programme where:
- Advanced Digital Solutions initiative includes Artificial Intelligence and Cloud technologies to support qualifying SMEs to leverage such technologies as they transform
- Grow Digital scheme includes more pre-approved Business-to-Business and Business-to-Consumer e-commerce platforms from 1 April 2022 to enable SMEs to internationalise without in-market presence
A human-led, technology enabled future involves continued upskilling of our workforce. The TechSkills Accelerator, a tripartite initiative by the Government, industry and the National Trades Union Congress, is further expanded to strengthen the Singaporean core of Information and Communications Technology (ICT) talent through:
- partnerships with industry leaders to grow product development teams in Singapore
- expansion to SMEs and startups to provide opportunities for mid-career workers
- upskilling of our digital workforce
While SMEs and local ICT professionals are the primary beneficiaries, the continued push to improve efficiency and remove manual processes through automation will be an important avenue to enable businesses to stay relevant amidst increasing competition.
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