Opening Remarks by Mr Edwin Tong SC, Minister for Culture, Community And Youth & Second Minister For Law, At the Singapore Management University Webinar on "Covid-19 - Challenges for Individuals, Families and Businesses”

2 Sep 2020 Posted in [Speeches]

1. Good afternoon to all of you, my fellow panellists as well. I think it’s going to be an interesting discussion today.

2. The topic of the day, of course, has been COVID-19. I think we’ve all seen, been very much a part of the experience, not that we could be anywhere else in the last couple of months anyway. We saw the pandemic hit our shores around late January, early February, and we’ve seen the rise and fall of numbers. I think we all have our own stories to tell.

3. What’s important from the Government’s perspective has been to balance two competing interests: the economy, and of course, the state of health. We’ve had to look at the two very closely because lives and livelihoods are affected, whichever way we swing.

4. Like the rest of the world, we started with little knowledge about the way in which the disease would spread, the transmissibility, and how to manage it. So we started off being fairly defensive. We had to make sure that the numbers were controlled and we closed many of the businesses, especially those that have a propensity for large crowds. We found from experience elsewhere in the world that if you had a small congregation in churches, most religious settings, that tended to have a greater risk profile. Likewise, the night spots where there is drinking or singing in some cases. That sparked the numbers. So we learnt some lessons, put in place some measures. Many of our public health considerations centred around that.

5. We also looked at balancing the economy. Shortly after we opened up, after the circuit breaker, we looked at whether we could establish green lanes with other countries. Travel has been very much a centrepiece of the way we do business. That has been affected. The way in which we allow for meetings to take place, of course, people have reinvented themselves as you know. I’m sure all of you are now experts on Zoom and Skype. That has minimised the inconvenience.

6. I think reopening businesses, making sure that you’re back on track, ensuring that the softer side of the community is also back on track in the arts and culture scene, the music scene, sports as well, is particularly important.

7. So we’ve had to balance them. Against that backdrop, we’ve also had to look at some of the legal ramifications of COVID-19.

8. We started, as you might know, in April, by putting in place some moratorium to help parties affected by COVID-19, where the bargain was very different from what they entered into. If you made a deal, you made a contract pre-COVID-19, the world was a very different place. The risk profile, cash flow, and the expected footfall in some cases for the malls, was very different.

9. We had to look, very quickly, at some measures to try and staunch the problem immediately. You’ve seen DPM Heng speak in four or five budgets now – four initially, most recently he’s made an announcement – that really is to support businesses, put in cash flow, ensure that employees will not lose their jobs overnight. But from a legal perspective, and from MinLaw’s perspective, we’ve had to ensure that parties don’t end up getting into conflicts, legal disputes arising from COVID-19. We all as lawyers know about the concept of Force Majeure. Whether that applies or doesn’t apply could be the subject of arguments. So we decided, in the first instance, to put in something that allows parties to cite COVID-19 as a reason and then say, can we have more time? So in the context of landlords and tenants, how do we stop the repayment of rental for a period of time; in the case of hire-purchase agreements, in the case of some construction contracts as well. That was in April, but we had very little visibility as to how long this would last and where it was going to take us.

10. With the experience of some further data, a bit of hindsight on where we felt this was going, we then started to look at a second set of measures. That was introduced in June, a few months ago. That was more targeted, trying to look at the landlord-tenant ecosystem. What we tried to do was to do a bit of rebalancing, to see whether the Government could assist in some ways, landlords to take a share of it as well. Overall, the intention was to ensure that there was survivability of the entire ecosystem: landlords, tenants, businesses.

11. We are now looking at a couple of other measures, seeing that we are not going to get out of the woods from the pandemic anytime soon. Minister Shanmugam has mentioned this in the course of his earlier speeches in Parliament.

12. The first is to look at the relative position of the businesses. I think COVID-19 has meant that not all businesses would have suffered to the same degree. We see a sharp drop in the MTI projections for the economy. That’s just an aggregate number. But when you drill down and you look at the actual performance on the ground, businesses suffer in different ways.

13. We felt that what’s useful is to help businesses who might otherwise be viable, but perhaps for the short and medium term, they’re not going to be sustainable because either they’re in the travel business, MICE business, or perhaps they’re located in a location where they are dependent on tourist travel, and it’s going to be difficult. How do we help these businesses pivot into something else, restructure? And in some cases when the business entity is no longer viable, to liquidate it without much adverse consequences to the individuals behind it, and allow them a chance to restart?

14. We are looking at a system where we can have a simplified form of restructuring and also simplified liquidation. The intention behind this really is to ensure that individuals, the people behind the businesses, they are not damaged for the long term. Your business might have failed because there’s a transient stop in travel, and it’ll recover at some stage; but for now, it’s not possible. We don’t want these individuals to suffer a longer- and larger-than-intended consequence.

15. Take for example an individual who has set up a business. If you allow the company to fail and the usual consequences of bankruptcy and all that follow, it’s going to be very difficult for that individual to resurrect the business even when the economy picks up. So we’re looking at simplifying the process, making sure that those who can restructure or maybe find new investors, can do so easily.

16. The second thing we’re looking at is how we can relook the bargain between parties, the bargain that they struck pre-COVID-19. Now that this has happened, where literally all bets are off, and we no longer have the same paradigm factors that caused you to enter into the transaction – where does that leave us? Can we find a managed way of resolving the conflict between the parties? There’s inevitably tension because one side has entered into a contract, expecting some payment; another side says, I’ll pay you this rental, for example, but I rely on the cash flow. The paradigm parameters are no longer there. How do we find a way in which we can manage the process for the parties without leaving either or both sides without proper remedy?

17. These are things that we’re thinking about, to make sure that we keep the problem as far as possible away from the court system, because that would add a layer of stress and cost to the individuals. These will work together with the Government assistance, which you’ve heard DPM announce recently will be extended for a period of time, including, in my view, importantly, the Jobs Support Scheme, which helps businesses to keep their employees. When you keep employees, you keep the potential for enjoying the upside when the economy comes back on stream.

18. That’s a broad swathe of the measures that we have been looking at and the kind of thinking that we have in Government in terms of the legal remedies.

19. I just want to end by making a couple of quick points about the business sector. The thinking really is that we have to ensure longer-term survivability. The measures in COVID-1, COVID-2, they were designed to look at the economy as a whole. There will be some unevenness on the ground. I think that to some extent is inevitable. You’re dealing with a very unique situation. What we’re trying to achieve in Government is to look at where we want to be or where we hope we will be when this pandemic is over and the economy goes back on stream. We want to make sure that our people and our businesses are best placed to take advantage of any upturn after this is over.

20. I’ll leave my remarks there for now, happy to take questions later.

Last updated on 2 Sep 2020