SINGAPORE — Given the unprecedented impact of the Covid-19 outbreak, the Government needs to do its utmost to help businesses and people quickly, President Halimah Yacob said on Thursday (March 26).

In a message to Parliament read by Speaker of Parliament Tan Chuan-Jin, she said that this is why she has granted her “in-principle” support for the Government’s proposal to draw from past reserves. She called the move “a matter of survival”.

“With the unprecedented and rapidly worsening of the global situation, the Government has assessed that we need to implement a substantial second support package swiftly to stabilise our economy, keep as many workers as possible employed and help viable enterprises to survive,” Madam Halimah said in her first message to Parliament as custodian of the past reserves.

She added that the supplementary Budget to provide more support measures to help workers, businesses and households cope with the economic fallout of the outbreak will be a “substantial one”, going beyond the current reserves accumulated in this term of government.

The Budget was presented in Parliament on Thursday by Deputy Prime Minister and Finance Minister Heng Swee Keat.

NOT A DRIZZLE BUT A THUNDERSTORM

Mdm Halimah said that Singapore’s reserves were built up over the years through prudent spending and were set aside precisely to cater for rainy days, adding that the situation that the country is heading into “looks more like a thunderstorm and not just a drizzle”.

Noting that the crisis now is unparalleled in modern history, Mdm Halimah said that Singapore is facing the “double whammy” of a worldwide public health emergency and a deepening economic crisis. 

“The latest downturn is likely to be deeper, and last longer than the severe acute respiratory syndrome (Sars in 2003) and the 2009 global financial crisis,” she warned.

The global financial crisis of 2009 was the only time that the Government has drawn on past reserves since it established its reserves protection framework in 1991. At that time, former President SR Nathan had approved a draw of S$4.9 billion to fund part of the Resilience Package that helped to support companies through the economic downturn.

Mdm Halimah said it was clear that companies and workers here are suffering badly, with hotel occupancy rates only at 20 per cent and many airlines, including Singapore Airlines, grounding most of their planes due to massive flight cancellations.

DISCUSSIONS BEGAN A MONTH AGO

Mdm Halimah said that in coming to her decision, she reviewed the Government’s proposal to draw on past reserves with her Council of Presidential Advisers.

“We agreed that we need to help companies with their costs and cash-flow, to keep them afloat in the meantime. This is especially so for aviation, travel and tourism, and related industries, which are especially badly hit.” 

She said that both Mr Heng and Mr Lee had discussed with her the possibility of drawing from past reserves a month ago. 

Two weeks ago, Mr Lee once again sounded her out on the need for the latest assistance package, which may require drawing on past and current reserves. 

Following a brief by various government agencies, the council unanimously recommended for her to give her in-principle support for the draw.

“I have independently come to the same conclusion,” Mdm Halimah said, adding that if the Bill for the support package passes vote in the House, she will scrutinise it further before giving her assent. 

ECONOMIC CURE NOT ENOUGH

Calling on Singaporeans to work together and support each other, Mdm Halimah said that the current crisis cannot be solved through an “economic cure” alone, but will also need medical, psychological and social solutions.

“Understandably, we are uncertain about what lies ahead of us. But we should not be fearful,” she said, noting that Singapore’s response to the Covid-19 pandemic has been viewed internationally as being systematic and effective.

“I am confident that we will be able to get through this crisis together. It is not anybody’s wish for a crisis to befall us, but from time to time, it is inevitable.

“When it happens, how we respond will define us as a nation. So let us work together as one people and support one another on this journey.” 

For more on the Resilience Budget, visit: tdy.sg/resiliencebudget