Accelerating digital transformation and skills: key takeaways from Singapore's Budget 2021
The Singapore government announced its Budget 2021 aimed at helping families, workers and businesses weather the Covid-19 pandemic.
The government plans to hire more than 200,000 locals and provide up to 35,000 traineeship and training opportunities
There was a big focus in the budget on digital transformation and upskilling workers to prepare for the shift to digital, which has been accelerated by the pandemic.
“As a small, open economy, Singapore’s economic recovery is contingent on how the global situation plays out. Not everything is within our control. We need to adapt nimbly to the wide range of possible outcomes,” said Singapore’s deputy prime minister and finance minister Heng Swee Keat.
“I am confident that we, as Singaporeans, can once again summon our resolve to tackle the challenges and emerge stronger from this unprecedented crisis.”
Here is what you need to know:
Digital skills enablement
- The government plans to hire more than 200,000 locals and provide up to 35,000 traineeship and training opportunities through the SGUnited Jobs and Skills Package and the launch of the Enterprise Fellowship Program.
- It believes this will help organizations continue to develop their internal talent and resources they need to accelerate their offline-to-online transformation.
- More than 76,000 individuals have been placed into jobs, traineeships, attachments and skills training since the SGUnited Jobs and Skills Package was launched in 2020 at the height of the Covid-19 pandemic.
- An additional SGD$5.4bn will be allocated to a second tranche of the Jobs and Skills Package on top of the SGD$3bn allocated last year.
Accelerating digital transformation
- A total of $1 billion will be offered to local companies by the government through the Emerging Technology Program, to co-fund costs and trials of the adoption of emerging technologies like 5G, artificial intelligence and mixed reality.
- These programs include the new Digital Leaders Program; and the enhancement of the Productivity Solutions Grant - Job Redesign will are designed to help businesses innovate faster.
- The Digital Leaders Programme will support companies in hiring a core digital team and developing and implementing a digital transformation road map.
- The Productivity Solutions Grant will receive more government co-funding, an increase from 7% to 80% till end-March 2022.
- For large local enterprises (LLE) looking to expand overseas, the government will complement existing grants and loans, and support them through equity investments, tapping market players to ensure commercial discipline.
- A sum of SGD$500 million will be set aside to be co-invested with state-owned investment firm Temasek in a Local Enterprises Funding Platform, which will be managed commercially.
- Temasek will match the Government's funds on a one-for-one basis, so the platform will have $1 billion to invest in non-control equity and mezzanine debt of selected LLEs, which will work with the fund manager to pursue their next phase of growth.
New goods and services tax (GST) on e-commerce goods
- E-commerce goods worth $400 or less will be subject to the goods and services tax (GST) from Jan 1, 2023.
- GST will also be extended to imported non-digital services for consumers, such as those involving live interactions with overseas providers of fitness training, counseling and telemedicine.
- The government believes this will help to level the playing field for local businesses to compete effectively.
- This will be done through the Overseas Vendor Registration regime, which requires overseas suppliers and electronic marketplace operators that make significant sales of digital services to local consumers to register for GST.
- These registered suppliers and operators will then charge GST on their sales of low-value goods that are delivered over air or post to local consumers. Shoppers will have to pay the GST when they buy from these overseas suppliers, just as they will be charged when they buy such items from local businesses.