Two months ago, a typical weekday evening would see throngs of travellers in the bustling departure hall of Changi Airport Terminal 3.
But yesterday, at 4pm, a near-empty place greeted Deputy Prime Minister Heng Swee Keat when he arrived. There were relatively few airport staff.
However, Mr Heng, who is also Finance Minister, said he was glad to hear from employers that the Jobs Support Scheme has helped them retain staff and look into restructuring their operations to be more efficient and cater to more customers when the economy recovers.
He was speaking to reporters after a two-hour visit to see how businesses and workers were coping as the Covid-19 pandemic brings activity in the aviation sector to a halt.
He noted that many staff have been redeployed to other roles in the sector, with some doing voluntary work like being ambassadors for the SG Clean programme, and praised them for their resilience.
“I am glad to see that the morale of the staff remains high. They are taking this challenge in their stride and thinking about how they can make the best use of this downtime, to learn new skills to upgrade themselves to support others,” he said.
“I hope that when the recovery takes place, when we are able to fly again, that our staff will be even better than before.”
Mr Heng’s visit comes days after he announced the $48.4 billion supplementary budget, dubbed the Resilience Budget, to address the economic fallout from the coronavirus pandemic, which has hit the aviation and tourism sectors hard.
For aviation, more than $400 million has been set aside for an enhanced Jobs Support Scheme to offset 75 per cent of the first $4,600 of wages for local workers, and $350 million will go to various rebates and reliefs to help reduce business costs.
Mr Heng said both workers and employers suggested various ideas to help improve the situation on the visit, and the Government will look into them.
Asked whether Singapore Airlines – which has cut 96 per cent of its scheduled capacity up till the end of next month – could see retrenchments, like during the severe acute respiratory syndrome (Sars) outbreak in 2003, Mr Heng said: “At the moment, the various industries, and certainly the aviation industry, are seeking to retain their workers as much as possible, and indeed, that is the Government’s hope as well.
“I am confident that Singapore Airlines is continuing to look into this very carefully and that they will take very careful decisions on this.”
He also warned that the Covid-19 pandemic is expected to continue for some time. He said it will likely take a few months before the world gets a clearer picture of how the outbreak would develop in the long term, which would in turn let Singapore decide on how to better address the issue going forward.
Mr Heng outlined three possible scenarios.
One, a quick recovery, which experts think is unlikely.
Two, where the situation is contained in parts of the world, and some activities can continue.
Three, a much broader pandemic that overwhelms healthcare systems, and global recovery becomes very difficult.
Mr Heng said: “We will hope for the best, but we need to prepare for the worst.”
Mr Heng, who was managing director of the Monetary Authority of Singapore (MAS) from 2005 to 2011, was also asked about the MAS move yesterday to ease its policy stance. It set the Singapore dollar’s rate of appreciation at zero per cent at the prevailing lower level of its exchange rate policy band.
He described it as the right approach at this time.
“Our exchange rate must be centred at a level that supports economic activity, and at the same time keeps our inflation low,” he said.
“At this point, MAS estimates our core inflation will be low, and that we can afford to keep the exchange rate at zero appreciation with no change to the width of the band.”
Mr Heng added: “At this stage, monetary policy by itself cannot reflate the economy. Our aim is not to improve our growth at this point, our aim… is very focused on limiting the damage to the economy and, in particular, not affecting our long-term capability.”
This includes keeping workers in jobs and retraining them, as well as restructuring business operations.
Mr Heng also said that the major work and heavy lifting have to be done by fiscal policy. This was why he was glad that Singapore had accumulated enough past reserves to deal with a situation like today’s – the supplementary budget is expected to tap $17 billion from past reserves, the bulk of which will fund the enhanced Jobs Support Scheme across the economy.
In an interview with CNBC in the morning, Mr Heng said the post-Covid-19 world will be a “very different” one, and hence it is important to put in place structural policies and look towards the future. He said sectors like pharmaceuticals, artificial intelligence and information and communications technology will become more important, and the Future Economy Council, which he chairs, is tapping government and industry leaders on how the country can emerge stronger.
Asked at Changi whether the Government will tap the reserves for a further package, Mr Heng said it would do so if the situation continues to deteriorate.
“I would like to assure Singaporeans that we have the resources to do that, if we need to,” he said.
“For now, let’s concentrate on making the best use of what we already have in the Resilience Package. It is a very substantial package.”
• Additional reporting by Grace Ho
Note: This article has been edited for clarity.