Just yesterday, Singapore's Deputy Prime Minister and Finance Minister Heng Swee Keat delivered the Budget 2020 speech amidst the COVID-19 outbreak.
The outbreak has resulted in the Ministry of Trade and Industry downgrading the GDP forecast from between 0.5% to 2.5%, to between -0.5% and 1.5%. The four main areas of this year's budget were growing the economy and transforming enterprises; caring for and nurturing Singaporeans at every stage of their lives; building and securing the nation; as well as working together with Singaporeans.
Among the list of aspects discussed included a one-off SkillsFuture Credit top-up of SG$500, committing about SG$1 billion for research in urban solutions and sustainability, as well as a one-off cash payout of SG$300, SG$300 or SG$100 for Singaporeans aged 21 and above, depending on their income. The government has also allocated SG$8.3 billion over the next three years to enable transformation and growth.
GST was also one of the aspects that DPM Heng covered in his speech saying that the GST rate will remain at 7% in 2021, but will still need to be increased by 2025. He explained that the COVID-19 outbreak has reinforced the importance of continued investment in Singapore's healthcare system, including the capability to deal with outbreaks. Moreover, the country will still require recurrent sources of revenue to fund her recurrent spending needs in the medium term. When the GST rate is raised, DPM Heng said the government will provide a SG$6 billion assurance package to cushion the increase for all Singaporeans.
He also elaborated on the relief measures put in place for the COVID-19 outbreak, announcing that an additional SG$800 million will be set aside to support the efforts to fight and contain the outbreak. The bulk of the amount will go to the Ministry of Health, on top of the substantial resources already committed each year to public health. Two special packages with a total budget of SG$5.6 billion were also introduced during Budget 2020 - the stablisation and support package (SG$4 billion) to help workers and enterprises weather near-term economic uncertainties, and the care and support package for households (SG$1.6 billion).
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Sectors directly affected by COVID-19 - tourism, aviation, retail, food services, and point-to-point transport services - will also receive additional support. For the tourism sector in particular, a property tax rebate of 30% will be granted this year for the accommodation and function room components of licensed hotels and serviced apartments, and prescribed Meetings, Incentives, Conventions, and Exhibitions venues. International cruise and regional ferry terminals will receive a 15% property tax rebate, and the integrated resorts will receive a 10% property tax rebate. Meanwhile, a 15% property tax rebate has also been granted for Changi Airport.
That said, here are a list of key takeaways about Budget 2020 concerning the marketing and digital industry:
1. Boosting data security
The Singapore government is setting aside SG$1 billion over the next three years to build up its cyber and data security capabilities, to safeguard citizens' data and its critical information infrastructure systems. This comes a few years after the Personal Data Protection Act was enacted in 2012, and the public service has adopted comprehensive measures to secure and protect citizens' data, DPM Heng said. He added that the country must continue to enhance its cyber capabilities as it embarks on initiatives to realise its Smart Nation ambitions.
2. Giving start-ups an added push
An additional SG$300 million under the Startup SG Equity, a government and private co-investment scheme, will be set aside to catalyse investment into deep-tech start-ups. Deep-tech start-ups are those in emerging technology areas such as pharmbio and medtech, advanced manufacturing, and agri-food tech. According to DPM Heng, they have high potential to be competitive and stimulate innovation in their sectors. however, these start-ups require larger investments, longer gestation periods, and face higher risks. Hence, investors are less prepared to invest in them.
The Singapore government expects the additional SG$300 million to draw in more than SG$800 million of private funding over the next 10 years. This will give deep-tech start-ups better access to capital, expertise and industry networks, DPM Heng said.
3. Supporting the growth of enterprises
Beyond start-ups, the Singapore government is also enhancing support for enterprises through an enterprise grow package. The package aims to help enterprises identify business needs, adopt pre-approved digital technologies, and take the first steps to enter new markets. A GoBusiness platform will be launched to offer a single touch-point for enterprises to transact with the government digitally. Additionally, to drive greater adoption of digital technology, the Singapore government will expand the SMEs Go Digital programme, and have industry digital plans or equivalents, and enable enterprises to access pre-approved digital solutions. To aid more enterprises in entering new markets, DPM Heng said the government will enhance the market readiness assistance grant by expanding the funding support and coverage, to include, for example, free trade agreement consultancy.
As part of Budget 2020, the government is also introducing the enterprise transform package, with a focus on leadership. Enterprise Singapore will roll out the enterprise leadership for transformation programme, to support business leaders of promising small and medium enterprises in achieving the next bound of growth. Currently, the enterprise development grant (EDG), Enterprise Singapore offers integrated support for enterprises to innovate and internationalise. Over the next three years, the government aims to support business leaders of 900 enterprises in business transformation, with training and mentorship.
4. Strengthening partnerships within Singapore and globally
Under the Research, Innovation and Enterprise 2020 Plan, DPM Heng said the government is sustaining investment into promising ideas. These include AI, industrial robotics, urban solutions and sustainability, and the biomedical sciences, among others. Through partnerships among the government, industry and the research community, DPM Heng said the government is turning these ideas into new businesses with global potential.
The government is also enhancing support for trade associations and chambers (TACs) to scale up and raise the capabilities of their industries. Enterprise Singapore will launch a pilot executive-in-residence programme, to fund more than 10 TACs covering all sectors of the economy, to hire experienced executives and offer expert advice to enterprises in their industries. Enterprise Singapore will also roll out a new heartland enterprise upgrading programme to support merchants' associations to drive transformation of heartland enterprises.
Globally, DPM Heng said Singapore must continue to strengthen partnerships and enhance digital connectivity to create new value. Currently, Singapore has an extensive network of economic linkages, including free trade agreements, international investment agreements, and avoidance of double taxation agreements. To enhance digital connectivity, the Singapore Customs is connecting the country's networked trade platform with the customs portals of Singapore's trading partners. Meanwhile, DPM Heng said the digitalisation of finance will open up new ways of doing business, especially with players from various industries bidding for Monetary Authority of Singapore's digital banking licences.
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