SINGAPORE — The S$48 billion Resilience Budget unveiled in Parliament on Thursday (March 26)  — which means the Government requires the President’s approval to draw down S$17 billion of Singapore’s past reserves  — is unprecedented but “absolutely necessary” given the grave challenges of the Covid-19 outbreak, Prime Minister Lee Hsien Loong said.

Speaking on Friday at a media interview at the Istana on the Resilience Budget and the Covid-19 situation, Mr Lee added that it is “quite possible” that the Government might have to do more further down the road if the challenges persist.

A transcript of the interview, which Mr Lee gave to CNA, Channel 8, The Straits Times and Lianhe Zaobao, was given to other media outlets.

“It is absolutely crucial for us to hold together, to respond effectively to the immediate challenge, and also to give people confidence that we can cope with this  — we have the resources, we know what we are doing, we are ready for what lies ahead,” he said.

“And what lies ahead is very uncertain. Many possibilities, which are very worrying. We have to be prepared for them, and we must be ready if it comes, we are able to respond to them.”

It was therefore imperative that the Government make it clear that it is doing its best to respond, Mr Lee said.

“People must be quite clear that we are doing all we can to help them to stabilise the economy, to preserve jobs, to help companies stay in business  — reduce their costs, to help the key industries which are drastically hit like aviation, to stay (and be) able to continue in semi-suspended animation, but able to come back to life when the opportunities come,” he said.

“Whatever it takes to do that, we will do it. That is how we came up with the package yesterday  — a very drastic wage support scheme, help for the self-employed, the gig economy, help for the companies, help for the households. In fact, we tripled the household support and assistance package. We want to see people through this.”

The Resilience Budget, which was delivered by Deputy Prime Minister Heng Swee Keat, who is also Finance Minister, will include a S$17 billion draw on Singapore’s past reserves, a measure which, under Singapore’s Constitution, requires the President's approval. President Halimah Yacob has already given in-principle support.

“It is unprecedented, but in this situation, it is absolutely necessary,” Mr Lee said.

He added that in February when the Government unveiled the annual Budget, “we knew it would not be the last word”.

“But we thought that it would buy us a few months, and then we will have some time to assess the situation and down the road, we will do more and put together the next package and then see us through the next stage,” he said.

“But we did not expect within one month, the picture was totally changed, the health picture was totally changed, the economic picture was totally changed. Therefore, the policy response, the action from the Singapore Government had to be totally changed.”

More will be done further down the road if needed, Mr Lee added.

The components of the Resilience Budget are designed to be lasting for the next three quarters and the payouts to households and businesses are meant to stretch out until the end of the year, he noted.

“So at the very least, as we approach the end of the year, we will have to think whether we need to extend that package, and if so, whether you want to modify it, increase or decrease it, or whatever,” he said.

“That we have prepared for, but we must also be psychologically prepared that if things actually get worse during the next few months before the end of the year, we may need to do something even before that. If it comes to that, we will go to the reserves.”

Mr Lee said that the total amount of past reserves is not public information, but that it contains “much more” than the S$17 billion that the Government is seeking to draw down for the Resilience Budget.

“It will see us through for quite a long time,” he said.

“It is just as well that we have not gone and listened to the people who said to us: ‘You do not need so much, why are you saving all this money, just touch it and we will be all right.’ But, we kept it aside. I think this is not just a rainy day, it is a mighty storm as DPM said, and we will do what we need to do.”

Mr Lee said that the Government will be able to continue with measures such as wage support, rental rebates and property tax cuts to help Singaporeans even if the crisis stretches out for a year or two.

But he added: “What is difficult for us to do is to bring back the business when there is no business. If I have to lock down the public entertainment, then it is very difficult for the discos to operate.

“It is very difficult if you are a DJ, where do you get your gig? If there are no international flights, because other countries have locked down their borders, then it is very difficult to keep Singapore Airlines pilots and crew flying. If they are not flying, they do not get their flying allowances, and that is 60 per cent of their pay. It is a very substantial hurt to them.”

There will be other impacts which will be very difficult for the Government to completely neutralise, Mr Lee added.

“I think that we have to work hard to find ways to redeploy the people who are inevitably going to be at the very least under-employed during this period. You are talking about tens of thousands, maybe hundreds of thousands.”