Budget 2021 Highlights

Covid-19 has changed the world like never before. Global economies have been left in tatters while countries have to choose between a healthy economy and the lives of its citizens. Businesses in Singapore are struggling during these hard times. Since it will be years since Covid-19 could be eliminated, many businesses are uncertain about the future. Thus, they seek sound policies from the government in the form of The Budget to tide them through these hard times. However, the question in everybody’s minds is how beneficial is the budget? Below are the key points in the Budget 2021 that will affect business owners in Singapore.

How does it affect Business?

High-Growth Enterprises: Increase cap on loan quantum from $5M to $8M and estimated $45M of venture debt would be catalysed over the next year.

Mature Enterprises: Micro, SMEs And Large Enterprises:

1. Emerging Technology Programme- co-fund adoption of new technologies;
2. CTO-as-a-service- provide access to IT professionals;
3. Digital Leaders Programme- Assist in hiring digital teams and implement a digital transformation roadmap;
4. Increase enhanced support levels up to 80% for Scale-Up SG, Productivity Solution Grants, Market Readiness Assistance, Enterprise Development Grant from End-Sep 2021 to End March 2022.

Large Local Enterprise:

1. Co-invest $500M with Temasek in a $1B Local Enterprise Platform;
2. Growth and Transformation Scheme for the Built Environment Sector.

Supporting Business: 

1. Corporate Venture Launchpad (CVL) provides co-funding for ventures;
2. Open Innovation Platform (OIP) provides solution providers to problems face by companies with co-funding of prototype and execution of said solution from solution providers;
3. Global Innovation Alliance (GIA) improves collaboration between Singapore and global innovation hubs- expand from 15 to 25 cities link over the next 5 years;
4. Singapore Intellectual Property Strategy will equip companies with tools and train skilled professionals to value and commercialise their IP (Intellectual Property) and IA (Intangible Assets).

How does it affect workers and job seekers?

Job Support Schemes (JSS): 

1. 30% for wages paid from April to Jun 2021 and 10% for wages paid from Jul to Sep 2021 (Tier 1 sectors- Aviation, Aerospace and Tourism);
2. 10% wages from April to Jun 2021 (Tier 2 sectors- Retail, Arts and Culture, Food Services, and Built Environment);
3. Continue support for firms in other sectors till Mar 2021, as previously announced.

Aviation: $870M to preserve core capabilities and extend cost relief.

Land Transport: $600 per vehicle per month from Jan to Mar 2021, and $450 per month from Apr to Jun 2021 for taxi and private hire car.

Arts and Culture and Sports: $45M for Arts and Culture and Sports Resilience Package for businesses.

Jobs and Skills Package:

1. $5.2B for a second tranche of SGunited Jobs and Skills Package: On top of $3B allocated last year; Of which $5.2B to extend Jobs Growth Incentive (JGI) qualifying window to end-sep 2021;
2. Extend SGunited Skills, SGunited Traineeships, and the Mid-career Pathways Programmes;
3. Budget set aside to support hiring of 200000 locals this year, 35000 traineeship and training opportunities.

Senior Workers: Increase budget for the Senior Worker Early Adopter Grant and the Part-Time Re-employment by over $200M.

Charity and volunteerism: 

1. Extend 250% tax deduction for donations to IPC for another two years until end-2023;
2. Extend Business and IPC Partnerships Scheme for two years until end of 2023;
3. CDC’s $50 million Care and Innovation Fund to support initiatives that help the need of community.

Sustainability: 

1. $60M Agri-Food Cluster Transformation Fund to support technology initiatives in Agri-food sector;
2. $30M for Electric Vehicle (EV) related initiatives;
3. Narrow cost differential between electric cars and internal combustion cars, including Lower additional registration fees; and Adjust Road Tax;
4. Government issues green bonds on selected public infrastructure projects;
5. Initiate flow of capital to sustainable development;
6. Identify $19B public sector green projects as a start.

Sources from: https://www.mof.gov.sg/singaporebudget/resources/budget-summary