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COVID-19 isn’t just a health problem, it’s an economic problem too

By April 1, 2020Current

TL;DR – The best way to support Singaporeans is by helping us stay employed. So what is the Government doing about it?

COVID-19 has evolved from a problem that was mainly affecting China into one that has gripped the entire world. It has gotten so bad, caused so much fear, that many countries have “locked down” in an attempt to stop its spread. While locking down may save lives by slowing the spread of COVID-19, it threatens livelihoods. Especially people with low income.

India is an example of the worst that could happen.

India’s lockdown is quickly becoming a humanitarian catastrophe. The huge number of Indians living in abject poverty who live on less than USD2 a day find themselves quarantined with no access to food and no income. They could no longer go to their workplaces as these got locked up, and many were cast out of their meagre accommodation, sometimes along with their families, by landlords who feared rent defaults.

Can you imagine what it would be like for the young children of those families living in abject poverty in India at such a time? I have a young child. I can’t imagine the heartache and pain I would feel to see her crying in hunger because I can’t get food due to a lockdown.

Of course, that is one extreme. But if countries continue to locked down for longer, more problems will arise. One that will have a direct impact on Singapore is the possibility that our food supply may be disrupted. As countries lock down, there will be farm workers who cannot tend to the crops. Even if they can tend to the crops, can then arrange the logistics to transport the crops? And would exporting still be possible?

As I’m typing this, Thailand has just announced that its ban of the export of eggs will be extended from the previous one week to one month. Cambodia and Vietnam have also banned the export of rice.

When countries lock down, they may also start to restrict exports. As a result of all of these, the Food and Agriculture Organisation of UN has warned that COVID-19 could lead to a global shortage of food.

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And once there is a global shortage of food, cost of food, and hence cost of living, in Singapore will go up.

This would be worse if Singaporeans start panic buying. Because if we Singaporeans start to panic, then our purchasers trying to secure food supplies from all over the world would have a harder job trying to secure a good bargain. That’s when prices and cost of living will really shoot up.

Which would be a double whammy for the low income families in Singapore. Many of such families already have to deal with family members having even lower income, or worse, losing their jobs. If prices of essential goods go up, then they will be even more hard pressed to make ends meet.

The government is trying to help. In fact, seeing how it has delivered a supplementary budget just a month after the Unity Budget in February, not only can we surmise the gravity of the COVID-19 situation, the Government has also demonstrated that it is trying to reach as many people as possible, as quickly as possible to do these: Save jobs, support the workers and protect Singaporeans’ livelihoods.

The latest Resilience Budget has a whole slew of initiatives. Some $48.4 billion worth of slew of initiatives, on top of the $6.4 billion Unity Budget delivered in February. There is strong support for the different segments and groups in our midst – businesses, freelancers, SEPs, low income workers and in fact, any Singaporean workers who have been affected by the virus outbreak.

To help all Singaporean families, all Singaporeans will receive a one-off cash payout of between $300 to $900 depending on income. Families with young children will get an additional $300. For needy Singaporeans, they will receive triple of the grocery vouchers given to them, from $100 to $300 for this year. Together with the $100 that will be given next year, needy Singaporeans will get a total of $400 in Grocery Vouchers over 2020 and 2021. There will also be a one-year freeze on all government fees and charges, from 1 April 2020 to 31 March 2021. This will apply to all fees for government services.

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The government has also worked with the financial sector to roll out a package to allow individuals to defer repayment of property loans, as well as premium payments for life and health insurance plans, as part of a package of measures to ease their financial strain arising from the Covid-19 outbreak.

The government’s Resilience Budget also aims to protect Singaporeans’ livelihoods.

The Jobs Support Scheme will be extended. The Government will co-fund 25% of local workers’ wages until December 2020. In heavily impacted industries like air transport, tourism and food services, firms will receive higher co-funding at 50% to 75% of wages. This aims to help employers keep employees on their payroll. Indeed, the best form of welfare is a job.

A new Self-Employed Person Income Relief Scheme (SIRS) will help provide direct cash assistance to the self-employed. Eligible self-employed persons will receive $1,000 cash every month for 9 months.

Incomes of low wage workers will be supplemented through the Workfare Income Supplement (WIS) Scheme. These refer to Singaporeans who are 35 and above and earn not more than $2,300 a month. Workfare recipients will receive an enhanced Workfare Special Payment, a one-off cash payment of $3,000 under the Resilience Budget,

A COVID-19 Support Grant will provide lower and middle-income workers who lost their jobs with $800 every month for 3 months.

When delivering the Resilience Budget last Thursday, DPM Heng had said “the best way to support our people is by helping them stay employed”.

So the Government also planned two #SGUnited initiatives to help people with employment. SGUnited Traineeship is about offering 8,000 opportunities for 8,000 young people, and SGUnited Jobs is about creating 10,000 jobs for jobseekers over the next year.

Check out the SGUnited Jobs portal for the first three virtual career fairs offering over 2,200 short-term temporary jobs.

The Government has been able to act so swiftly and come up with such a comprehensive budget is, in no small part, due to proactive sensing and listening on the ground.

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Not only did it rely on MCI’s Reach channels, PA’s network and whatever else network they have, there was also significant feedback from NTUC. The labour MPs, including labour chief Ng Chee Meng, had gathered workers’ feedback, sector by sector, and provided valuable input about how businesses, work operations and workers’ income have been impacted.

We have the wherewithal to do all of these because our government has scrimped and saved for generations. We are only able to draw on our reserves because of prudent governance, discipline and also political stability over the past decades.

And we might need to draw more from our past reserves should we need to be locked down so that we can save lives while still protect livelihoods.

PM Lee Hsien Loong has said in a media interview just a few days ago that the Government will do “whatever it takes” to stabilise the economy, to protect Singaporeans’ jobs and to help companies stay in business.

Although the situation is extremely worrying, it is heartening to hear him say, “We have the dry powder. If we need to do more, when we need to do more, we will do that down the road.”

Let’s hope we don’t get to that situation. Or even if we do, let’s hope that it will be more orderly and bearable, even for low income families, than what has happened in other countries.

Luckily we saved for a rainy day

 

(Featured image via LA Times)

 

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Jake Koh

Author Jake Koh

Recovering sushi addict, I'm a man of mystery and power, whose power is exceeded only by his mystery.

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