S'pore unveils S$11.3b economic relief package<\/p>\n
Agence France-Presse, Singapore<\/p>\n
The Singapore government on Friday announced an S$11.3 billion
\n(US$6.3 billion) off-budget package to help the city-state cope
\nwith its deepest recession in more than 30 years.<\/p>\n
Announcing the wide-ranging package in parliament, Deputy
\nPrime Minister Lee Hsien Loong said the relief measures were
\nequivalent to seven percent of gross domestic product and would
\nresult in a government budget deficit of four billion dollars in
\nthe current fiscal year to March.<\/p>\n
\"The Singapore economy is in a severe slowdown. The sustained
\ncontraction over the last three quarters is the steepest that
\nSingapore has experienced,\" said Lee, who is also chairman of the
\nMonetary Authority of Singapore.<\/p>\n
It was the second relief package on top of measures worth $2.2
\nbillion announced in July after Southeast Asia's most advanced
\neconomy fell into recession.<\/p>\n
\"Since that interim package, conditions have indeed worsened.
\nThis was happening even before the terrorist attacks of Sept. 11
\n(in the United States),\" he said.<\/p>\n
Singapore's gross domestic product (GDP) contracted a record
\n5.6 percent year-on-year in the third quarter and the government
\nforecast a fall of 3.0 percent for the full year.<\/p>\n
Hopes of an early recovery evaporated with last month's
\nterrorist attacks against the United States and the economy is
\nlikely to continue shrinking into the first half of next year.<\/p>\n
The biggest chunk of the relief package, which analysts said
\nwas the biggest in the island's history, would see $3.5 billion
\nused to jumpstart infrastructure projects, said Lee.<\/p>\n
More than 100 public infrastructure projects would be
\nimplemented within the next 18 months, he said.<\/p>\n
Corporate and personal income tax and fee rebates worth $3.0
\nbillion was the second biggest item in the package, followed by a
\nnovel national share scheme valued at $2.7 billion aimed at
\nredistributing wealth.<\/p>\n
Financial assistance for local companies and lower income
\nSingaporeans along with funds to retrain workers make up the
\nremainder of the package.<\/p>\n
At the same time, ministerial salaries and those of senior
\npublic sector officials would be cut to \"send a signal that this
\nis a grave situation,\" Lee said.<\/p>\n
He said the mandatory employers' contribution to the state-
\nmanaged pension scheme would remain at 16 percent of a worker's
\nwage.<\/p>\n
But this could be reduced should the economic situation
\nworsen, Lee said.<\/p>\n
The employers' contribution, normally at 20 percent, was cut
\nto 10 percent at the height of the 1997-98 financial crisis and
\ngradually restored to the current rate.<\/p>\n
Lee told Singaporeans to \"expect low growth, more
\nretrenchments and higher unemployment\" over the next 12 to 18
\nmonths.<\/p>",
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