Singapore will invest heavily in business transformation this year, according to the Budget speech delivered on February 16 by Deputy Prime Minister and Minister for Finance Heng Swee Keat.
“The purpose of economic transformation is to create opportunities for our people to realize their aspirations and expectations,” he said. “We must move from just counter-cyclical fiscal monetary stabilization policies to structural economic policies, to equip our businesses and workers with deep and future ready capabilities.”
Funding for upskilling, training, and development
The Singapore government is allocating S$24 billion over the next three years to business transformation, a move that actually began in 2016 but that has gained urgency since the pandemic. Much of the amount will go to funding innovation in various forms, whether within corporates, in the form of startup ventures, or in global collaborations. Heng said, however, that support would also go to developing local workers.
“A digital innovation driven economy means that businesses will need highly skilled workers and deep talents,” he said. “Our people need to have both broader and deeper skills.”
He warned that Singapore workers will have to adapt to global trends such as flexible work, remote work and new forms of collaboration that open up the local job market to stiff competition from overseas. At the same time, the work itself will change.
“In the coming years, a critical part of business transformation will be in job redesign,” he said. “With technological advances, many tasks that are fiscally demanding or repetitive can be better done by machines. With an ageing workforce, we must leverage technology to develop senior friendly workplaces.”
To enable people to take on the new jobs, S$5.4 billion will go to extending the Jobs and Skills Package, which was launched last year to help local workers access immediate short-term as well as longer term job opportunities, or pick up job-related skills and capabilities. On top of this, an additiona S$5.2 billion will be pumped into the Jobs Growth Incentive introduced last August to incentivize the hiring of local workers. With the additional funding, the government aim to support firms in hiring 200,000 local workers this year, as well as providing up to 35,000 traineeships and training opportunities.
Continued support for jobs, but winding down
In the short term, the Singapore government is setting aside S$11 billion to continue supporting public health and local jobs. S$700 million of this money will go into extending the Jobs Support Scheme, introduced last year to encourage firms to retain local workers and initially intended to expire in March. Sectors still under stress, including the aviation, aerospace, and tourism sectors, will receive more support: the scheme will be extended six months for these sectors, with the government subsidizing 30 percent of wages from April to June and 10 percent from July to September.
Other sectors that are still seeing a slow recovery, including retail, arts and culture, and food service—but excluding supermarkets, which did so well during the pandemic that some even paid their workers massive bonuses—will receive a smaller extension of 10 percent wage subsidies until June.
In addition to this, extra support is going to the worst-hit sectors. For instance, the government will set up a S$133 million Driver Relief Fund for taxi and hired car drivers, whose income has still not returned to pre-2020 levels.
The aviation sector in particular will receive S$870 million to “preserve core capabilities”, including retaining and upgrading workers. Heng said in his speech: “I expect the aviation sector to use this money to sustain and upgrade its capabilities and prepare for the recovery.”