What to Know About the Singapore Budget for HR Department
The Singapore budget for HR department was announced to the public in February 2019. It is considering the elections that happened in early 2020. Most of the initiatives are in favour of enabling a business continuity despite the epidemic and recession.
Singapore has enhanced its wage credit scheme that helps to retain local workers and a support package for mid-career professionals. These considerations are important to HR, employees, and employers. Therefore, they can look forward to this as part of the 2020 Singapore budget initiatives.
The focus on security shows that Singapore’s government is taking an approach to improving digital skills. This also refreshing these skills so they would have less dependency on foreign workers.
If you are interested in the Singapore budget for the HR department, you will know more about it here:
Main Points of the Budget 2019
- Provide better support to small and medium scale enterprises by planning financial schemes through government investment and faster access to bank financing. Some initiatives include working together with experienced industry experts that expand the Industry Digital Plans (IDPS) in helping high-growth firms to innovate, internationalize, and grow.
- Have more job opportunities for Singaporeans in the form of wage support to companies that hire Singaporeans and an extension of three years in Enterprise Development grant and Productivity Solutions grant. They will also tighten the rules for foreign workers by decreasing the dependency ratio from 40% to 38% by January 2020 and to 35% by January 2021.
- $6.1 billion for the Medeka generation package and $1.1 billion for the Bicentennial Bonus package that will be beneficial to many Singaporeans, from the lower-income population to parents with kids in school to those in their senior years. This is also in terms of higher healthcare assurance and more opportunities.
Stabilization and Support Package
The purpose of this is to stabilize the economy and give support to enterprises and workers by helping employees retain their jobs and enterprises with cash flow. Indeed, the government provides more help to sectors that are more directly impacted by the outbreak.
This package amounts to S$4 billion and when it comes to supporting enterprises, they will have defrayed wage costs divided into two schemes:
Job Support Scheme
This scheme is temporary for 2020 and its purpose is to help enterprises keep local employees in times of uncertainty. The active employers, except for government organizations and office representatives are qualified for this.
Employers will receive an 8% cash grant on the monthly gross wages of all local employees for October 2019 to December 2019, which is subject to a cap of S$3,600 for each employee. Employers will give this payment at the end of July 2020, and it is for three months. Thus, the total of this scheme is S$1.3 billion, and it is beneficial to all enterprises and 1.9 million Singapore employees.
Wage Credit Scheme
The government enhances the wage credit scheme that supports wage increase meant for Singaporean workers. As well, this scheme co-funds the wage increases for Singaporean employees that earn up to S$4,000 gross monthly wage. Afterward, the ceiling of the monthly wage will increase and it is given in 2019 to 2020. This is more beneficial to Singaporean employees.
The levels of government co-funding for 2019 to 2020 qualifying wage increase will also be increasing by five percentage points, respectively to 20% and 15%.
Due to these enhancements, S$1.1 billion will be received by approximately 90,000 enterprises that will benefit more than 700,000.
The government outlined its plan to maintain its support for developing a startup, and one of them is customer assistance.
The budget focuses on two programs that help you identify and beat business challenges. These are the Scale-up SG Program and Innovation Agents Program.
Scale-up SG Program
This is an initiative by enterprise Singapore that gives you a partnership with companies in public and private sectors to give you advice on how to increase the scale of your business.
Innovation Agents Program
This program allows you to find the expertise of experienced professionals in the industry by matching the innovation experts to your business. These experts are expected to provide you with advice on innovation and opportunities for commercialization.
Enterprise Growth Package
Launching the GoBusiness Platform
This is a new initiative that focuses on streamlining business transactions made with the government. In fact, some of its features of this platform that businesses can begin to utilize include applying for licenses and streamlined access to government assistance for the different schemes.
SMEs Go Digital Program
The plan to expand this is done by creating Industry Digital Plans for more upcoming industries.
Market Readiness Assistance Grant Enhancement
They plan to do this by expanding supportable activities. They can include Free Trade Agreement (FTA) consultancy services so they can support companies to better leverage FTAs, as well as in-market business development.
Income Tax Rebate
This is for the Year of Assessment 2020 with a rate of 25% tax payable, which is capped at S$15,000 for each company. Of course, the rebate is beneficial to tax-paying companies, and its cost is approximately S$400 million.
Enhance of Tax Treatments
The enhancement of tax treatments for a year under the corporate tax system. They will be allowing the enterprises on a faster write-down on investments on the renovation and refurbishment, and plant and machinery industries for the assessment year 2021. Accordingly, this puts more cash in enterprises.
Better Working Capital Loan Component
The highest loan quantum will be increasing to S$600.000 from S$300,000. The risk-share applied to these loans will become 80%, which is currently 50% to 70%. The government will also provide support to tenants and lessees of the government-managed properties. Specifically, including the ones under HDB, JTC, SLA, SDC, and STB. They can go to government agencies to talk about options for flexible rental payments like instalment plans. Each request will then undergo an assessment, considering the circumstances of the enterprise.
30% Property Tax Rebate
For 2020, the service apartments, licensed hotels, and venues for meetings, conventions, incentives, and exhibitions will have a 30% property tax rebate on their accommodation and function rooms.
15% and 10% Tax Rebate
The international cruise and ferry terminals in the region will entitle to a 15% property tax rebate. Also the 10% property tax rebate for integrated resorts.
Temporary Bridging Loan Program
For the tourism sector enterprises, the government works with financial institutions to give a temporary bridging loan program that lasts for a year. The loan quantum is up to S$1 million and the interest rate is not more than 5%. The government covers a risk loan of 80%. Thus, this provides an increased cash flow aside from a better working capital loan.
Cyber Security Improvement
The defence security issues are focusing on the budget of 2020. Even safety and security make people confident to have an independent course. This is because the threats of terrorism and malicious cyber activities are always high.
Particularly foreign actions want to influence domestic affairs and politics. This is not something new because technologies make it simpler for others to plan attacks easily with greater intensity using more sophisticated tactics.
In order to combat these threats, a Home Team Science and Technology Agency will be set up by the Ministry of Home Affairs when the year ends. It develops the capabilities of Science and Technology to support the operational needs of the Home Team. In fact, these capabilities strengthen the ability of the Home Team in carrying out the mission of protecting Singapore against cyberattacks.
To recognize the significance of protecting against cyber threats, the sixth digital defence pillar became the framework of Singapore’s Total Defense. This includes civil, military, social, economic, and psychological defence.
Enterprise Leadership for Transformation Program
This new enterprise leadership for transformation program is a three-year pilot. Further, this program is supporting business leaders that belong to SMEs in getting the next bound of growth. The program offers:
- Structured modular training when it comes to training the growth capabilities of business while focusing on the use of framework and case studies in addressing the right business problems.
- Coaching provided by industry practitioners and advisors will provide guidance to business leaders in developing the growth plan of a business.
- Providing access to alumni engagement and networking that enables peer learning and collaboration.
- Supporting the implementation of growth plans for the business, which depends on the needs of individual businesses.
Support for Persons with Disabilities and Retirees
To help seniors who have less CPF savings to have more savings, there is a Matched Retirement Savings Scheme. Of course, that will be starting 2021 to 2025. The government matches each dollar of cash top-up deposited to their CPF retirement account, which is capped at S$6,000 every year. This also applies to approximately 435,000 Singaporeans. Hence, the lower to middle-income Singaporeans that are at the age of 55 to 70 who are unable to set aside a Basic Retirement Sum will be qualified.
These are the takeaways from the 2019 Singapore budget for the HR department. If you need assistance with Singapore Human Resource Services, you can contact 3E Accounting.