Singapore Budget 2024: Support for Workers and Businesses

Singapore Budget 2024 unveils the Enterprise Support Package (ESP) to support businesses. The SkillsFuture scheme has also been expanded to benefit Singaporean workers aged 40 and above, and a retrenchment scheme is underway.

Businesses face tough times. Costs are up for wages, rent, utilities, and raw materials, leading business operating costs to skyrocket to levels not seen in more than a decade.

Workers also face the challenge of keeping up with the evolving technological landscape as digitisation and artificial intelligence (AI) become mainstream and integral parts of businesses. New jobs will be created, and existing job profiles will be augmented.

The Singapore government recognises these challenges. The latest Budget 2024 introduced the Enterprise Support Package and enhanced the SkillsFuture scheme. Plus, a ‘Retrenchment Scheme’ is underway for the first time.

In this post, we will take a deeper look at these initiatives.

Table of contents:

Enterprise Support Package (ESP)
SkillsFuture Level-Up Programme
Retrenchment Support Scheme
Conclusion

Enterprise Support Package (ESP)

The Enterprise Support Package, worth S$1.3 billion, is a comprehensive effort to help businesses manage the increasing cost of business. The package consists of three main components:

1. Corporate Income Tax Rebate

Singapore companies will receive a 50% corporate income tax rebate, capped at S$40,000, for the year of assessment 2024. This rebate aims to provide immediate financial relief to businesses struggling with rising wage bills, rental, and utility expenses.

This re-introduced corporate income tax rebate, which has been on a hiatus for three years, is the highest in percentage and capped amount to date. Previous rebates ranged from 20% to 50%, with capped amounts of S$10,000 to S$30,000.

However, not all companies make a profit every year. For the companies who might be left out of the scheme, the government will provide a minimum cash payout of S$2,000 to companies that employ at least one local employee in 2023.

2. Enhanced Enterprise Financing Scheme (EFS)

The EFS has been enhanced to support Singapore companies' financing needs. The maximum working capital loan quantum will be permanently raised to S$500,000 to help small and medium-sized enterprises (SMEs) meet their increased working capital and operational cashflow requirements.

Additionally, the enhanced maximum trade loan quantum of S$10 million under the Enterprise Financing Scheme - Trade Loan (EFS-TL) will be extended until 31 March 2025 to support businesses' internationalization efforts amid global supply chain disruptions. The government's risk-sharing of project loans to support domestic construction projects will also be extended until 31 March 2025, with a maximum loan quantum of S$15 million.

3. Extension of SkillsFuture Enterprise Credit (SFEC)

The SkillsFuture Enterprise Credit (SFEC) is a S$10,000 credit the Singapore government provides to encourage businesses to transform their operations and workforce.

SFEC aims to provide eligible Singapore companies with additional financial support to cover up to 90% of their out-of-pocket expenses when they participate in initiatives to transform their business or upskill their employees.

In Budget 2024, the Singapore government announced an extension of the deadline to claim the SFEC by one year to 30 June 2025. This extension gives companies more time to utilise their unused credit for eligible schemes, allowing those still needing to take advantage of the SFEC to continue accessing the financial support it provides for their transformation efforts.

SkillsFuture Level-Up Programme

Singaporean workers aged 40 and above will benefit from the significant enhancements to the SkillsFuture scheme announced in this year’s Budget 2024.

The enhancements mentioned below aim to encourage mid-career workers to upskill and improve their employability. These new measures will provide a much-needed boost to workers aged 40 and above, helping them to stay relevant and competitive in the ever-changing job market.

1. SkillsFuture Top-Up of S$4,000

One of the key announcements in Budget 2024 is a top-up of S$4,000 in SkillsFuture credits for Singaporeans aged 40 and above. This top-up will be credited to eligible individuals in May 2024, and younger Singaporeans will receive the same amount when they turn 40.

The credits can be used for selected training courses, including part-time and full-time diploma, post-diploma, undergraduate programs, and courses in the Progressive Wage Model sectors such as retail, security, and cleaning.

2. Subsidies for Full-Time Diplomas

Singaporeans aged 40 and above will also receive subsidies to pursue full-time diplomas at polytechnics, the Institute of Technical Education (ITE), and arts institutions starting from the 2025 academic year. This move aims to encourage mid-career workers to explore new opportunities and acquire relevant skills through formal education.

3. Training Allowance for Full-Time Courses

The government has introduced a training allowance to support further mid-career workers pursuing full-time courses.

Those enrolling in selected full-time courses will receive monthly training allowances equivalent to 50% of their average income, capped at S$3,000 monthly.

Each Singaporean can receive up to 24 months of training allowance throughout their lifetime, which can cover the full duration of a SkillsFuture career transition program and more than half the duration of most qualifications issued by institutes of higher learning.

Retrenchment Support Scheme

The Singapore government has always been cautious about providing unemployment benefits. They believe such schemes can lead to negative outcomes in the country, where people find it more attractive to remain unemployed instead of returning to work.

However, the government is now taking a refreshed approach to this issue. They have observed the faster pace of economic change due to technological advancements. These changes will bring about more frequent job turnover in the economy.

The rise in retrenchments in the past years, particularly in the tech industry, has highlighted the need for an unemployment support scheme. In 2023 alone, the number of retrenchments more than doubled from the previous year, reaching 14,320.

In all stages of the economic cycle, there might be some businesses or even some industries suffering. In fact, having a dynamic and growing economy without failures and losses is impossible. Companies in some sectors will have to let people go, while new and better jobs will be created in other sectors.

To help Singaporeans who are laid off, the government wants to introduce a temporary financial support scheme for the "involuntarily unemployed." It will allow these workers to consider upgrading their skills and finding a job that fits their aptitude and talent instead of rushing into the first available job, which may not always be a good fit.

The new temporary financial support scheme will help retrenched workers while they undergo training or look for another job. The details of this scheme will be provided later this year as part of a revamp and expansion of the country's SkillsFuture program.

Conclusion

Singapore's Budget 2024 demonstrates the government's commitment to supporting Singapore businesses and Singaporeans facing economic challenges.

The Enterprise Support Package provides immediate relief to companies grappling with rising costs. The SkillsFuture Level-Up Programme and Retrenchment Support Scheme aim to improve Singapore workers’ employability in the new digital landscape and assist displaced workers in transitioning to new employment opportunities.

By fostering workforce transformation, enhancing financing schemes, and offering financial support to retrenched workers, the government is taking a comprehensive approach to building a resilient and inclusive economy.

Singapore Budget 2024: Support for Workers and Businesses

Ferlin Mok