Singapore yesterday announced S$5.1 billion (US$3.55 billion) in additional economic spending, such as wage support, waiver of levies and one-off payments, to combat a downturn during the COVID-19 pandemic.
“This is an unprecedented budget for extraordinary times,” Singaporean Minister of Finance Heng Swee Keat (王瑞傑) told parliament just over a week after the city-state unveiled more than US$30 billion in new support measures as it braces for its worst recession.
On Friday, Singapore said it would close schools and most workplaces for a month as part of stricter measures to curb a recent jump in infections. Singapore has reported a total of 1,309 infections and six deaths from the novel coronavirus.
Photo: Reuters
The new measures unveiled in the third budget would increase the total spending on coronavirus relief to S$59.9 billion, or 12 percent of GDP, Heng said.
Singapore would draw an additional S$4 billion from its past reserves to fund the new measures, he said.
“The situation remains highly fluid and uncertain. The government stands ready to provide further support should it become necessary,” Heng said.
Singapore’s overall budget deficit for financial year 2020 is expected to increase to S$44.3 billion, or 8.9 percent of GDP, he said.
Separately, Japanese Prime Minister Shinzo Abe’s government is to pledge to take “all steps” encompassing fiscal, monetary and tax policies to battle the deepening fallout from the pandemic in a stimulus package to be approved today, a draft document showed.
Abe has pledged to craft an “unprecedented” stimulus package to respond to the global downturn inflicted by the pandemic, which would exceed the size of one compiled in the wake of the 2009 financial crisis totaling ￥56 trillion (US$514 billion) in size, with fiscal spending of ￥15 trillion.
Neither the size of the package nor the amount of fiscal measures has yet been determined, according to the draft prepared by the government, but in a measure of how seriously the government views the situation, the document refers to the pandemic as the “biggest crisis” the global economy has faced since World War II.
The draft package features direct payments to households and financial backstops to companies, highlighting extensive damage from the virus, which has fueled fears of a recession, while the government looks set to declare a state of emergency.
The spending plan includes subsidies for households with children, cash payouts to small and medium-sized firms to help them continue business operations, and arrangements to allow them to borrow at 0 percent interest and without collateral from private financial institutions.
To fund the package, the government would issue deficit-covering bonds, adding further strain to the industrial world’s heaviest public debt at more than twice the size of its US$5 trillion economy.
Sources told reporters last week that Japan would boost government bond issuance by ￥16 trillion to about ￥145 trillion to be sold in the market this fiscal year, which would mark the first rise in annual bond issuance in four years.
The package draft also aims to boost production of Fujifilm Holding Corp’s Avigan anti-flu drug during this fiscal year so it can be used to treat 2 million people.
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