Inflation prompts gov’t to provide $1.5b support package for vulnerable groups, businesses

Individuals and households will get a goods and services tax voucher (GSTV) of up to $300 cash.

To alleviate the impact of high inflation and geopolitical tensions, lower-income households, vulnerable groups, as well as businesses, may avail of a support package totalling $1.5b.

“The inflation situation will eventually stabilise both globally and within Singapore but for now we must expect price increases to continue in the coming months. In particular, energy prices are likely to remain elevated for the rest of the year. This is why I’ve decided to introduce a new $1.5b support package to provide immediate and targeted relief for Singaporeans,” said Finance Minister Lawrence Wong, in a press conference.

READ MORE: Inflation to increase ‘by a bigger magnitude’ in coming months

Wong added that over 1.5 million lower-income workers, middle-income workers, and retirees without income will receive aid from their package.

He also disclosed that funding for the financial support will be from the fiscal outturn in 2021, arising from higher revenues and stronger economic recovery.

Aside from vulnerable groups, households and businesses will also receive support under the package.

According to the Ministry of Finance, individuals and households will get a goods and services tax voucher (GSTV) of up to $300 cash which is on top of the regular GSTV-cash to be given in 2022. Taken together, Wong explained, the GSTV cash recipients are entitled to up to $700 in August this year.

There will also be a $100 Household Utilities Credit for every Singaporean household to help offset utility bills.

Wong said the government will introduce permanent enhancements to ComCare Short- to Medium-Term Assistance (SMTA) and Long-Term Assistance (LTA) as well as revisions of allowance and monthly pension ceiling to support pensioners who draw lower pensions.

Self-employed persons, businesses

For self-employed persons, there will be one-off relief of $150 for eligible taxi main hirers and private hire car drivers in August 2022.

Combi drivers, limousine drivers, delivery drivers, and motorcycle riders who are association members will receive up to $300 under the National Trade Union Congress Freelancers and Self-Employed Unit Relief Scheme. However, an application is needed to be eligible for this cash aid.

For businesses, the co-funding share for “2022 Progressive Wage Credit Scheme support will be up from 50% to 75% for wages up to $2,500 (first tier) and from 30% to 45% for wages above $2,500 up to $3,000 (second tier).”

READ MORE: Consumers expect inflation to continue for another full year

They can also benefit from the Jobs Growth Incentive (JGI) until September 2022 once they hire mature job hunters who have been unemployed for six months as well as persons with disabilities or ex-offenders.

In relation to this, the government extended the JGI for another six months to March 2023.

Chicken export ban

Financial relief will also be given to firms hit by the chicken export ban through the one-month foreign worker levy waiver for 11 chicken slaughterhouses.

An energy efficiency grant will be provided for local small and medium-sized enterprises (SMEs) in food services, food manufacturing, and retail sectors “with up to 70% support to adopt energy-efficient equipment in pre-approved categories.”

Under the enterprise financing scheme trade loan, the maximum loan quantum grew to $10m from 1 July 2022 to 31 March 2023. There is also an extended 70% risk share during this period.

Also, the Enterprise Financing Scheme – SME Working Capital Loan’s maximum loan quantum went up to $500,000 from 1 October 2022 to 31 March 2023, after the Temporary Bridging Loan Programme expires on 30 September 2022.