THIS is a laudable initiative launched by Minister Heng Swee Keat in these troubled times.
At a glance, the Resilience Budget offers several sweeteners for various sectors of the economy.
It does make one wonder if this is to pave the way for the general elections.
Usually, governments would engage in infrastructure projects if they feel the economy is about to dive. In this case I don’t see any infrastructure projects mentioned.
What I like are the schemes for supporting the affected sectors.
The Minister must have known that a number of taxi drivers had to send their cabs back to their companies because they couldn’t cover the daily rental under the present circumstances, when passenger numbers are down. He has offered a sweetener by way of the Special Relief Fund Payment of $300.00 per vehicle per month for taxi hirers. This would probably cushion the impact of having to pay the rentals.
I am also impressed by the generous $55 million allocated towards the arts and culture sector which has been a draw for tourists.
The cash flow support and support for capability development for SMES is, I feel, not far reaching enough. That is because SMEs might be affected by supply chain disruptions caused by this coronavirus outbreak, particularly for industries reliant on certain mechanical parts being produced.
if the factories have been locked down in the country of manufacture the SMEs might be left high and dry, trying frantically to find alternative sources of supply which might not be so readily available.
Furthermore, it might cost more to get the goods delivered from coronavirus affected countries as shipping companies might charge a higher rate in view of the risks involved.
Granted, everyone is now in unchartered territory, but it would have been nice to see if the government could have come up with some creative solutions.
The Resilience Budget did not address:
• How the self-employed who are operating the likes of beauty and fitness centres can cushion their losses and draw back their customers after the outbreak has been overcome;
• Whether lawyers or accountants who are sole proprietors can apply for the loan up to $1 million for Enterprise Financing Scheme – SME Working Capital Loan — especially those in the past year who had difficulties getting paid by their clients in an already challenged business environment, and who face more challenges now;
• What are the criteria for being able to apply for the loan?
• Foreign investments might be stalled during this time. Are there contingency plans in place to limit the damage caused?
Patricia Chew is a Lawyer at Goodwins Law.
Here are the links to all the Friday Focus articles on The Resilience Budget:
- Impressive…But Wait For The Details
- Unexpected Support
- Time To Prioritise
- Keep The Money Flowing
- A Generous Helping Hand
- Some Questions Unanswered
- What About The Hardworking Foreigners?
- Cash Is King
- Living Day To Day
- Mind The Gaps!