Budget 2020 for SMEs: Everything you need to know
What can employers look out for in Budget 2020? What measures are there to help SMEs automate and grow? You asked the questions, we did the homework.
Every year, the Singapore Budget introduces a comprehensive suite of measures to care for and support all Singaporeans at every stage of their lives.
Budget 2020 should have been no different from previous years.
Except, it was.
Budget 2020 was unprecedented. This was the first time that the Singapore Government released three Budgets in less than two months, introducing new measures and initiatives to help businesses tide through the storms and lay the groundwork for long-term growth.
We understand it can get daunting and even overwhelming to process the influx of information within such a short span of time.
So here’s a summary of the key updates from all four budgets — Unity, Resilience, Solidarity and Fortitude.
It’s everything you need to know, in one place.
You can thank me later.
Unprecedented budgets, for extraordinary times.
Unity Budget: On 18 February 2020, Deputy Prime Minister and Minister for Finance Heng Swee Keat announced the “Unity” Budget, which included a series of measures amounting to $6.4 billion.
Resilience Budget: On 26 Mar 2020, a supplementary “Resilience” Budget 2020 was announced, introducing new measures and enhancements to previously-announced ones, which will cost $48.4 billion.
Solidarity Budget: On 6 April 2020, a third support package dubbed “Solidarity” Budget was announced to help weather out the storms, costing another $5.1 billion.
Fortitude Budget: On 26 May 2020, a fourth support package, the “Fortitude” Budget, was announced. Amounting to $33 billion, it aims to help businesses, workers and households adapt to the changing environment.
In total, our government has set aside nearly $100 billion to support, transform, care for and secure Singapore.
So what does budget 2020 mean for employers?
As an employer, you’re already busy keeping your business running like clockwork, and staying updated with the latest MOM guidelines.
Besides dealing with the current and impending challenges, you’re also wondering how to approach your digitalisation and expansion plans.
That’s why in Budget 2020, employers can look forward to a series of loans, rebates and waivers that can help them tackle challenges in the short-term, as well as transformation and automation grants to help keep their focus on long-term growth.
Here’s what small and medium businesses in Singapore can take advantage of.
What can I do to keep my business running smoothly?
The bread and butter of the business is what keeps it going everyday. For your business to stay alive and roaring, our government has extended financial help to employers in order to manage cash flow, cost and credit:
• The Enterprise Financing Scheme - Working Capital Loan has been enhanced to help SMEs with their working capital needs by raising the maximum loan quantum and increasing the risk-share by the government.
• The Enterprise Financing Scheme - Trade Loan has also been enhanced to help enterprises with their trade financing needs by raising the maximum loan quantum and increasing the risk-share by the government.
• The enhanced Temporary Bridging Loan (TBLP) provides access to working capital for business needs by allowing eligible enterprises to borrow at capped interest rates from participating financial institutions.
• Enhanced Loan Insurance Scheme helps enterprises secure short-term trade financing loans from participating financial institutions.
• Enhanced Property Tax Rebates will be granted to non-residential properties for Property Tax payable for the period 1 January 2020 to 31 December 2020.
• Corporate Tax Rebates will be granted to companies to help ease cash flow. It will be granted at 25% of tax payable for the year of assessment 2020, capped at S$15,000 per company.
• Enhanced Rental Waivers will be given to tenants located in Government-owned or managed non-residential facilities.
• Freezing of government fees means that charges for government-provided services will not be increased for one year, from 1 April 2020 to 31 March 2021.
• Deferred corporate income tax payments for 3 months to ease cash flow for companies and self-employed persons.
How can I keep staff costs low and develop talent?
Employers play a key role in supporting their employees’ career transitions. Our government has rolled out hiring incentives that aim to encourage more employers to step up efforts to recruit, retrain, and retain workers, especially mature ones.
• The Jobs Support Scheme will help enterprises retain their employees during this period of economic uncertainty by co-funding a portion of the gross monthly wages of each local employee (Singapore Citizens and Permanent Residents).
• The Wage Credit Scheme will help employers by increasing co-funding ratios for wage increases. The qualifying gross wage ceiling will also be raised.
Incentives and Grants
• Hiring Incentives will be given to employers who hire new local workers through select reskilling programmes. Incentives vary for the hiring of workers aged 40 and above and those below 40.
• Senior Employment Credit will provide wage offsets to employers hiring senior Singaporean workers aged 55 and above, and earning up to $4,000 a month.
• CPF Transition Offset will provide wage offsets to employers hiring Singaporean and PR workers aged above 55 to 70.
• Senior Worker Early Adopter Grant will provide funding support to companies that increase their own retirement and re-employment ages ahead of the legislated changes.
• Part-time Re-employment Grant will provide funding support to companies that voluntarily commit to providing part-time re-employment to all eligible seniors who request for it.
Jobs & Skills Package
• SGUnited Jobs & Skills Package will create close to 100,000 jobs, traineeships, and training opportunities. This $2 billion dollar package is in the form of SGUnited Jobs, SGUnited Traineeships, SGUnited Mid-Career Traineeships and SGUnited Skills
How can I prepare for automation and growth?
As the saying goes, ‘Change is the only constant’. Despite being preoccupied with short-term challenges, you should never forget about your longer term business goals. Often, this includes digital solutions and automating processes.
Our government has put in place a series of initiatives to help businesses grow and transform through deepening their enterprise capabilities and leadership.
Training and Support
• The SMEs Go Digital programme aims to help SMEs use digital technologies and build stronger digital capabilities to seize growth opportunities in the digital economy.
• The Enterprise Leadership for Transformation is a one-year programme that supports business leaders of promising SMEs to develop business growth capabilities.
• SG Together Enhancing Enterprise Resilience (STEER) Programme aims to help businesses tide over challenges and to push on with transformation efforts in preparation for the economic recovery.
Grants and Credits
• The Enterprise Development Grant helps Singapore companies upgrade their business, innovate or venture overseas through Core Capabilities, Innovation and Productivity and Market Access.
• The Productivity Solutions Grant supports companies keen on adopting IT solutions and equipment to enhance business processes.
• The Market Readiness Assistance Grant gives SMEs an international boost and helps take their business overseas through funding support.
• The E-Invoicing Registration Grant assists businesses to enable e-invoicing features, allowing finance staff to work remotely and creating a network effect of improved efficiency and reduced cost.
• The Enhanced Training Support offers additional support for SMEs by providing Higher Course Fee Grant Enhanced and Absentee Payroll Funding.
• The SkillsFuture Enterprise Credit encourages employers to invest in enterprise transformation and capabilities of their employees.