SINGAPORE, suffering its deepest recession since independence, will spend S$20.5 billion to help businesses and workers, Finance Minister Tharman Shanmugaratnam said in Budget statement on Thursday.
The government will cut taxes and increase expenditure on infrastructure, education and healthcare, he said.
The spending will result in a deficit equivalent to 6 per cent of gross domestic product, he said.
'The package aims to help save jobs to the maximum extent possible in the recession and to help viable companies stay afloat,' the minister said.
A quarter or $5.1 billion would go towards saving jobs, while $5.8 billion is set aside to stimulate bank lending.
A further $2.6 billion would be spent on enhancing business cashflow and competitiveness, another $2.6 billion is earmarked to help support families and the remaining $4.4 billion will go towards building homes for the future.
Mr Shanmugaratnam stressed that the key risks to the Singapore economy are the severity of the global economic crisis and the loss of jobs, rather than inflation.
Mr Shanmugaratnam also announced a $4.5 billion Jobs Credit plan to lower the cost of retaining workers amid a global recession.
The programme will 'encourage our businesses to preserve jobs as much as is possible in the downturn,' he said.
Singapore's economy may contract as much as 5 percent this year, after growing 1.2 per cent in 2008, the trade ministry said on Wednesday, the second reduction in its 2009 GDP forecast in less than three weeks.
The government said the nation may experience deflation this year, with consumer prices falling as much as 1 per cent or staying unchanged.
More Budget reports to come.
The government will cut taxes and increase expenditure on infrastructure, education and healthcare, he said.
The spending will result in a deficit equivalent to 6 per cent of gross domestic product, he said.
'The package aims to help save jobs to the maximum extent possible in the recession and to help viable companies stay afloat,' the minister said.
A quarter or $5.1 billion would go towards saving jobs, while $5.8 billion is set aside to stimulate bank lending.
A further $2.6 billion would be spent on enhancing business cashflow and competitiveness, another $2.6 billion is earmarked to help support families and the remaining $4.4 billion will go towards building homes for the future.
Mr Shanmugaratnam stressed that the key risks to the Singapore economy are the severity of the global economic crisis and the loss of jobs, rather than inflation.
Mr Shanmugaratnam also announced a $4.5 billion Jobs Credit plan to lower the cost of retaining workers amid a global recession.
The programme will 'encourage our businesses to preserve jobs as much as is possible in the downturn,' he said.
Singapore's economy may contract as much as 5 percent this year, after growing 1.2 per cent in 2008, the trade ministry said on Wednesday, the second reduction in its 2009 GDP forecast in less than three weeks.
The government said the nation may experience deflation this year, with consumer prices falling as much as 1 per cent or staying unchanged.
More Budget reports to come.
