Delivered in Parliament on 7 April 2020
Mr Speaker, sir, the Covid-19 Pandemic, with the effects of lockdown or stay at home orders has brought a stand-still to businesses all over the world and Singapore has not been spared too. Beyond aviation, tourism and F&B, most industries and sectors in Singapore have been affected, some earlier than others. The effect on economies worldwide will be an unprecedented one, possibly worse than any global economic downturn we have ever seen since the Great Depression and the economic fallouts may go on for quite a while after the Covid-19 Pandemic has been tamed.
SME businesses being affected by Covid-19
I declare my interest as a SME owner. As the businesses of our SMEs are affected, many Singaporeans they employ are in turn affected. Under the Resilience Budget, the Jobs Support Scheme extended greatest assistance to specified sectors such as aviation and tourism and F&B sectors, giving 75% and 50% support for wages up to the first $4600 of each of their staff wages for these respective sectors for 9 months. The remaining businesses only received a flat 25% of their staff wages up to the first $4600.
While the aviation, tourism and F&B sectors may be badly affected, the vast majority of our SMEs outside of the aviation, tourism and F&B sectors lament that they will get much less than the 75% and 50% wage support received by the priority sectors. Who is to say that businesses in other sectors are not as badly affected or will not be as badly affected?
While the wage support for the Jobs Support Scheme under the Solidarity Budget has been boosted to 75% for all businesses for the solitary month of April and will be welcomed by all, for many businesses, it may only mitigate part of the losses expected from the enforced month-long closure of workplaces starting today.
Since the Resilience Budget has been proposed on 26 March, has any study been done to assess the grave effect the Pandemic has or is about to have on all business sectors? Let me share one example of a troubled sector here.
On 24 March 2020, the Government announced that all centre based tuition and enrichment centres will be suspended. The reason given is the need to reduce the intermingling of students from different schools and enhance the safety of our students. This brings to a stop the daily bustling activities that take place in our tuition and enrichment centres during both weekdays and weekends.
While some of the tuition centres may have resorted to online learning, yet online learning has not been able to completely replace many of pre-existing programmes in tuition centres and enrichment centres. Some programmes may not be suitable for online learning. Some tutors are, for various reasons, not able to convert their face-to-face programmes to online modules.
Some parents are also, for various reasons, not keen to convert existing programmes to online learning or even via Zoom, when offered. Many parents prefer traditional method of personal teaching. Habits and mindset will always take time to change but is scant comfort to businesses suffering the sudden shock to their businesses brought about by the abrupt ban.
For centres who may not have locked in their students’ subscriptions for a longer time, having chosen to collect fees on a monthly basis, they faced abrupt loss of revenue as some parents have not continued to pay for the fees.
Learning service providers to MOE schools and to preschools are another group of SMEs in the education industry which have been affected from an even earlier time, with all outdoor programmes and all large attendance programmes being cancelled in early February and CCAs in March. Given the requirements in preschools that trainers cannot teach in other schools concurrently and students of different classes cannot share the same enrichment classes, many enrichment classes, had to be cancelled from February onwards, with many left without any revenue.
Besides significant loss of revenue, these SME businesses still face the pressures of premise rental and staff salary. The Government’s offer to pay 25% of the salary of their staff up to the first $4600 under the Jobs Support Scheme (JSS), which is just a few percentage points above the amount of employers’ CPF contributions that employers have to pay for each staff per month, may assist to a certain extent but it may not be significant enough to save jobs, the reason stated by DPM Heng for the Resilience Budget. How will the Government provide greater assistance to these businesses?
At this point, let me touch on one further aspect of Jobs Support Scheme again. The JSS is not applicable to one category of employees: employees who are shareholders, partners or sole proprietors of businesses, even though they may take a salary as an employee of the business.
I understand that in the private education business, there are many people in such a position: sole proprietors, partners or company shareholders of their businesses who are at the same time registered employees of the business. Though such persons can be regarded as self-employed in some ways, the Self-Employed Person Income Relief Scheme is not applicable to them as the scheme stipulates that there should not be any employee income.
I believe that this situation is not unique to the private education business. There are many in our micro SMEs in other industries or sectors who are in the same situation. On Sunday, I met one of our Hougang residents who runs a phone repair business who is in this exact position. How will the Government help these affected Singaporeans?
Yesterday it was announced that all pre-school operators are to provide 50% refund off net school fees for non-attendance during the circuit breaker period. Parents will no doubt welcome this announcement.
For parents who send their children to MOE kindergartens and pre-schools run by anchor and partner operators, including those run by PCF and NTUC, they are already entitled to various subsidies.
But for other SME operators where Singaporean parents only get the standard subsidies or for faith based kindergartens where there are zero subsidies, the net refund that these operators must cough up is relatively much higher as the net fees payable are higher compared to MOE Kindergartens, and those run by anchor and partner operators.
In some cases, the total refunds will likely be higher than the 75% wage support received by way of the JSS. Furthermore, many operators had to incur extra costs recently to have additional manpower to cover for those on LOA, SHN or on 5-day medical leave, and for extra cleaning works.
I have dealt with some detail on the private education industry. However, it is but one example out of many businesses which have been affected by the Covid-19 crisis. With the circuit breaker announcement, things will get worse for many businesses in the coming month or longer especially the many businesses that do not thrive on working remotely.
The Property Tax rebate together with the savings by way of rental rebate will be helpful in some ways to alleviate the sharp pain and so will the Jobs Support Scheme but will it be enough to ensure the survival of the business and to save jobs?
Retrenchment has already started in different industries. Just last week, one of our Hougang residents who is a Chartered Accountant in his 30s, shared with me that he has just been retrenched from a mid-sized accounting firm and is struggling to find employment in his industry.
Indeed, if business is down, businesses will struggle to pay all their business expenses until a certain level of business has resumed, especially many SMEs who may have precious little to sustain the business expenses including rent and income beyond a few months. This economic crisis is likely to hang over the world for quite some time. Beyond the Resilience and Solidarity Budgets, how will the Government assist businesses and Singaporeans to stay afloat in the coming months and beyond?
Before I move away from businesses, I would also like to seek some clarifications regarding arts businesses.
With the cancellation of entertainment, our flourishing arts professionals have to cancel their plays, musicals, concerts and other performances and shows which may go on till the end of this year. When performances are cancelled, there are no tickets sales and corporate sponsorships are often cancelled, not to mention that in these difficult times, it is challenging to expect support from many corporate sponsors. Many of these arts businesses are registered charities or even IPCs.
May I clarify whether such arts businesses (ie those registered as charities) will be entitled to the same wage support under the Jobs Support Scheme as available to other businesses? If not, what is the corresponding assistance being given to this group of arts business?
Self-Employed Person Income Relief Scheme (Sirs)
Mr Speaker sir, I move on to certain aspects of the Self-Employed Person Income Relief Scheme (Sirs).
May I ask how did the Government arrive at this figure of 100,000 self-employed persons? In MOM’s paper entitled ‘Labour Force in Singapore 2019’, it was mentioned that in the year ending June 2019 (and I quote from paragraph 1.19) “211,000 residents were engaged in own account work as some form of employment” and own account workers were defined in the same paper as (and I quote from paragraph 1.17) “individuals who operate their own business or trade without employing any paid employees”.
The Jobs Support Scheme will be open to those who earn a net trade income of no more than $100,000, live in a property with an annual value of no more than $13,000 originally, and do not own two or more properties.
While it is good that the $13,000 annual value limit has since been raised to $21,000 yesterday, in principle, the concern with setting a figure or limit at all on this is that we are talking about a special economic crisis situation caused by the Global Covid-19 crisis which has developed suddenly and these self-employed people see their livelihood being adversely affected in a short time and require quick and immediate assistance from the Government, regardless of the nature of their residences.
The property that they live in or own or co-own may not be relevant to their current income earning capacity as well as most relevantly, their present position of suffering from sudden financial problems due to the current Covid-19 crisis. If they own such property, is the Government expecting such self-employed people to sell their property quickly? If so, is it really fair or realistic to expect such persons to sell their homes immediately in such a market condition? This is different from the usual situation of people applying for financial assistance due to longer term unemployment etc.
May I also clarify whether this relief is opened to those who live in such property but do not own such property?
Help for our taxi and private hire drivers
Next, it is already a well-known fact that our taxi drivers and private hire drivers are suffering from a huge drop in business.
I would like to seek some clarifications regarding the Point to Point Support Package for taxi drivers and private car hire drivers.
I would like to know whether it is true that the Special Relief Fund under Point to Point Support Package is only available to taxi drivers who work under the auspices of a taxi company or for private hire car drivers who work with Grab and Gojek?
A Hougang resident who has a private car hire licence and serves his own source of customers had checked and was told he did not qualify. If it is true, may I know the rationale behind it?
A private hire car driver also shared with us at our Meet-The-People Session in Hougang last week that the incentives that come together with the Special Relief Fund may come with conditions imposed by his company that are impossible to fulfil in this economic climate. He asked whether the Special Relief Fund can be paid directly to all registered private hire drivers instead. I urge the Government to look into this.
Rental rebate for sub-tenants
On the issue of landlords passing on savings from the Property Tax Rebate and rental waivers granted under the Unity and the Resilience Budgets, I am glad that measures are being taken to ensure landlords’ co-operation.
However, I would like to ask what measures are being taken to ensure that tenants will share any property tax rebates or rental waivers savings they obtain from landlords with sub-tenants including the newly announced increase in rental waivers for Government-owned properties, be they tenants or sub-tenants of Government-owned, private, commercial, industrial or office properties.
What can sub-tenants do to ensure they get to enjoy any rental rebate passed on to the tenants by the landlords? Are coffee shop stall-holders in this position as well?
Greater protection for our elderly who work in hawker centres and coffeeshops or as cleaners
Finally, I would like to ask the Government to look at how we can extend better protection against the Covid-19 virus for the many elderly Singaporeans working in hawker centres and coffeeshops or as cleaners. Our elderly are more vulnerable to the virus. Can the Government look into ensuring that our elderly workers and hawkers have better protective equipment and safer environment?
Conclusion
Mr Speaker, sir, in closing, the Covid-19 Pandemic and the economic fallout resulting from it is likely to be here for quite some time. I look forward to the Government rendering more assistance to more of our affected Singaporeans and SMEs.