The Singapore Budget 2021, announced on 16 February 2021, covers a range of new support measures for enterprises and individuals alike. With the theme ‘Emerging Stronger Together’, this includes fresh and continued initiatives to help enterprises and workers persevere as the Singaporean economy recovers from the global recession brought about by the COVID-19 pandemic.
Enablers for Emerging Stronger
Deputy Prime Minister Heng Swee Kiat has emphasized that the enablers of emerging stronger lies within a vibrant business community, financial capital and developing the workforce. Since last year, the competitive and employment landscape of Singapore has undergone fundamental changes, which has undoubtedly been accelerated by COVID-19. The workplace is fundamentally changing, as COVID-19 has forced many people to work from home, and businesses need to adopt new ways to collaborate with others. A survey by Mercer last year, has shown that over 90% of employers globally saw an increase in productivity despite having their employers work remotely.
According to research by Bloomberg analysts, Singapore is now ranked the 2nd most innovative economy in the world in 2021. This means that doing business in Singapore is more competitive than ever and all businesses will need to adopt the latest technologies and source for highly-skilled and talented workforce in order to thrive in such an innovative landscape as the Singapore economy is projected to recover 4% to 6% this year.
Here are some of the key announcements made by DPM Heng to help businesses during this recovery period:
- Jobs Support Scheme and Jobs Growth Incentive to continue
- More direct support for taxi drivers, private hires and the aviation sector
- Extension of Arts and Culture Resilience Package & Sports Resilience Package
Continued COVID-19 Response
- $11 billion COVID-19 Resilience package
- $4.8 billion dedicated to public health and re-opening measures
- $700 million for extending the Jobs Support Scheme
- Around $1.05 billion for aviation, land transport and arts, culture and sport sectors
- $24 billion over the next 3 years to help firms and workers
- $5.4 billion channeled into the 2nd tranche of the SG United Jobs and Skills Package
Petrol Rates Increase
- Petrol duty rates to be raised by up to 15 cents beginning Feb 16, 2021
Green Plan 2030
- $60 million given to a new Agri-Food Cluster Transformation Fund to support technology adoption
- $30 million over 5 years for electric vehicle adoption
- 60,000 charging points at public carparks and private premises by 2030
GST will be raised sooner than later
- GST (Government Service Tax) will not be raised in 2021, but will come by 2025
- An expected overall budget deficit of $11 billion (2.2% of GDP), compared to the drop in FY2020 ($64.9 billion)
What does HR need to know?
Out of the measures announced, a number of them concern manpower policies with a recurring theme of retaining and reskilling workers. This ranges from specific support to specific sectors still affected by the COVID-19 outbreak to help them keep their workers employed, to extension of enterprise schemes. The key policies related to Human Resources and manpower are summarised below:
- Extended Jobs Support Scheme for Targeted Industries
- Additional $5.4B Funding for SGUnited Jobs and Skills Package
- Enhanced Jobs Growth Incentive
- Enhanced SGUnited Traineeships Programme
- Enhanced SGUnited Mid-career Pathways Programme
- Local-Foreign Workforce Complementarity
- Extension of Wage Credit Scheme
- Extension of Capability Transfer Programme (CTP)
- Change in S-Pass Sub-Dependency Ratio Ceiling
- More Support for Enterprises
- Digital Leaders Programme
- Extension of Enhanced Support Levels for Enterprise Schemes
- Enhanced Support for Productivity Solutions Grant – Job Redesign
1. Extended Jobs Support Scheme for Targeted Industries
The Job Support Scheme (JSS) will be extended for targeted industries that are hard-hit by COVID-19.
- For Aerospace, Aviation, Tourism: JSS will be extended by six months, with 30% wage support from Apr to Jun 2021 and 10% wage support from Jul to Sep 2021.
- Retail, Food Services, Arts & Culture, Built Environment: JSS will be extended by three months, with 10% wage support from Apr to Jun 2021.
2. Additional $5.4B Funding for SGUnited Jobs and Skills Package
Over the past year, more than 76,000 individuals have benefitted from the SGUnited Jobs and Skills Package and have been placed into jobs, traineeships, attachments as well as skills training. As such, the government will be providing continued support for the package, with aims of hiring more than 200,000 locals and providing up to 35,000 traineeship and training opportunities.
Jobs Growth Incentive
The Jobs Growth Incentive (JGI) is getting a big boost – out of the $5.4B funding, $5.2B will be allocated to the JGI to subsidise wages for new local hires. The hiring window for JGI will be extended by seven months till end-Sep 2021.
Employers that increase their overall local workforce between September 2020 and September 2021 (inclusive) will receive Government support.
Under JGI, companies hiring eligible locals will be given up to 12 months of 25% wage support (for the first $5,000 gross monthly wages) from the month of hire. While those hiring mature workers (aged 40 and above), persons with disabilities, and ex-offenders will be given more support – up to 18 months of 50% wage support (for the first $5,000 gross monthly wages – increased to $6,000 from Mar 21).
Eligible employers will automatically receive their JGI payouts, which will be computed on a monthly basis based on the employer’s mandatory CPF contributions. For more details about JGI, please visit the dedicated JGI landing page on IRAS website here.
SGUnited Traineeships Programme
The SGUnited Traineeships Programme will be extended to 31 Mar 2022 and continues to provide employers support for 80% of qualifying training allowance when they provide traineeships to fresh graduates entering the workforce.
From 1 Apr 2021, there will be an increase in stipend for ITE and Diploma holders. The stipend for ITE positions will be increased from $1,100-$1,500 to $1,600-$1,800, while the stipend for Diploma positions will be increased from $1,300-$1,800 to $1,700-$2,100. The maximum duration of each traineeship will also be reduced from nine to six months from Apr 1.
To learn how you can be a host company, find out more here.
SGUnited Mid-career Pathways Programme
The SGUnited Mid-career Pathways Programme will be extended to 31 Mar 2022 and continues to fund up to 90% of training allowance for mid-career hires.
For attachments commencing before Apr 2021, the government will fund up to 80% of training allowance which should range from $1,400-$3,000 per month.
For attachments commencing from Apr 2021 onwards, there will be difference in training allowance and support for non-mature vs mature hires aged 40 and above.
- For non-mature hires: The government will fund up to 80% of training allowance which should range from $1,600-$3,000 per month.
- For mature hires: The government will fund up to 90% of training allowance which should range from $1,800-$3,800 per month.
The maximum duration of each traineeship will also be reduced from nine to six months from Apr 1st.
To learn how you can be a host company, find out more here.
3. Local-Foreign Workforce Complementarity
The government has also pledged to promote and maintain job security and strike a balance between both local and foreign manpower while stepping up industry transformation.
Extension of Wage Credit Scheme
The Wage Credit Scheme will be extended for a year, at a co-funding level of 15 per cent, to support wage increments to retain or draw in locals. The scheme subsidises wage raises of at least S$50 given to Singaporean employees, with a qualifying gross monthly wage ceiling of S$5,000.
Extension of Capability Transfer Programme (CTP)
CTP has been extended to the end of September 2024, and aims to support enterprises and organisations in speeding up the transfer of capabilities from foreign specialists to locals. Support levels will only be determined upon consultation with Workforce Singapore (WSG) and relevant sector agencies. Find out more about CTP here.
Change in S-Pass Sub-Dependency Ratio Ceiling
The government will make changes to the existing sub-DRC for Manufacturing in two steps – to 18% from 1 Jan 2022, and 15% from 1 Jan 2023. Other sectors such as Services, Construction and Marine Shipyard and Process sectors are already experiencing tighter regulations in their sub-DRC.
4. More Enterprise Support
Digital Leaders Programme
As part of the push for digitalisation, the Digital Leaders Programme (DLP) was announced. The DLP aims to help promising local firms to develop digital capabilities to revamp their business models and capture new growth opportunities. Support will be provided to build internal technological expertise and hire digital talents as well as to develop and implement Digital Transformation Roadmaps. More details will be announced at MCI’s COS.
Extension of Enhanced Support Levels for Enterprise Schemes
The Government has prepared various enterprise schemes to support businesses in successfully adopting new solutions including Scale-up SG, Productivity Solutions Grant (PSG), Market Readiness Assistance and the Enterprise Development Grant. The Government will extend the enhanced support levels of up to 80% for these schemes to end Mar 2022.
Enhanced Support for PSG – Job Redesign (JR)
Companies can also apply for PSG-JR, which is a scheme under Workforce Singapore. PSG-JR aims to provide enterprises with JR consultancy support to complement, as well as drive business and workforce transformation.
As announced during the Budget, PSG-JR now has an increased funding from 70% to 80% for consultancy services that will last for a limited period up to the end of Mar 2022. For more information, find out more here.
2021 kicks off where 2020 has left us – on the road to recovery. The Government’s advice is clear – leverage on the lull business period to look into improving your business – train and upskill your workers, digitise and automate your work systems, relook at your business strategy and diversify your risks so you will not be put in the same position of being over-reliant on certain markets, customers or suppliers. Beyond that, the Government has continued its stance of strengthening the Singaporean core and helping Singaporeans gain employment through upskilling and career conversion programmes, hiring incentives for employers and tightening of foreign worker policies.
In a nutshell, there is no doubt that COVID-19 has fundamentally changed the way businesses should operate, as well as bolstered by strong support from the Singaporean government, any prudent business owner should not hesitate to adopt and enhance their businesses with the latest technologies in order to maintain their competitive advantage.
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