SINGAPORE, April 17 (UPI) -- Singapore unveiled Thursday a $160 million relief package targeted at helping its tourism and transport-related industries most affected by the outbreak of severe acute respiratory syndrome, SARS.
Deputy Prime Minister Lee Hsien Loong said the package will help offset the impact of the deadly virus on the tourism industry and help save some jobs.
Toruism in Singapore dropped by 15 percent in March and 61 percent in the first 13 days of April. Hotels are now reporting a room occupancy rate of only 20-30 percent, compared with the usual 70-75 percent, while retail sales have declined by as much as 50 percent.
"SARS has significantly impacted our economy. Our previous estimate of 2 to 5 percent GDP growth for 2003 was no longer realistic," Lee told a press conference.
Lee noted that even this new forecast was dependent on whether Singapore succeeded in bringing the SARS outbreak under control and the projected economic impact of SARS throughout the region. But he acknowledged the budget deficit was likely to widen given the size of the relief package, as well as the lower GDP growth, which will impact revenues.
Among the various measures announced for tourism are additional property tax rebates for commercial properties; higher property tax rebates for selected tourist hotels (about 100 hotels declared under the Singapore Tourism Act) and a 100 percent rebate of TV license fees for some tourist hotels.
To help retain jobs, the government will halve the Foreign Worker Levy for unskilled workers employed by selected tourist hotels and enhanced training grants, making it more attractive for employers in the sector to hold on and train their critical staff during this period.
But Minister of Manpower Lee Boon Yang warned that "retrenchment cannot be ruled out," pointing out that preliminary indication for March already showed the unemployment rate was likely to be higher than the 4.2 percent seen at the end of December, while the full impact of SARS will only be felt in the second quarter.
"We better be prepared, there could be more retrenchments this year than last year," he said.
For the transport sector, the government will introduce diesel tax rebates for taxis and road tax rebates for buses and waive until next year taxi operator license fees.
To help the aviation industry, an additional 30 percent rebate on aircraft landing fees will be introduced from May until the end of the year, while cruise ships will get a 50 percent reduction in port dues. All of the measures announced will be valid until the end of the year.
The government is also closely working with the Singapore Tourism Board to map out a strategy to lure back tourists in the wake of the SARS outbreak. It said the Chinese government has recently banned groups to travel to Singapore, Malaysia and Thailand, partly in response to measures taken by Malaysia and Thailand toward Chinese tourists.
Trade Minister George Yeo indicated Wednesday that the government was in close contact with Chinese authorities, lobbying for a reversal of the decision. "Just this morning, the STB representative in China met officials from CSTO and they've agreed to reconsider their position," Yeo said.
But Lee also said pouring more government money into the economy was not the solution to help it go back on a normal path. "I don't think this is a situation where more government money will solve the situation. The tourists have disappeared...so nothing we do can make up for this," he said.
The government stressed this was an "immediate response" package and was not intended as a general stimulus package for the whole economy, as manufacturing has not been affected so far.
"If there is a need to do more later, we are able to do so," Lee said.
"What is most important for us, is that we mount a strong and collective response to this challenge. The way out of this is to tackle the SARS issue and bring it under control in Singapore and keep it as low as possible so that we have a safe environment, where life can go on as usual," Lee said.