By ANNA TEO

Exceptional measures for these extraordinary times. Singapore has pulled out all the stops - including novel initiatives and a first foray into the reserves - in a $20.5 billion big-bang response to the economic tsunami it's engulfed in.

Widely hailed as bold and responsive, the 2009 Budget - or what the government calls a 'resilience package' - is aimed squarely at saving jobs 'to the maximum extent possible' and at helping viable companies stay afloat.

To that end, Finance Minister Tharman Shanmugaratnam introduced - in lieu of a cut to the employer's Central Provident Fund (CPF) rate - a cash-grant 'Jobs Credit' scheme that basically subsidises the cost of hiring Singaporean staff during the crisis.

And, to unlock a serious credit crunch and spur bank lending, the government will now bear 80 per cent of the risks of business loans of up to $5 million, up from a current $500,000 limit. It will also, for the first time, share in the risks of trade financing. These measures, the government estimates, could hopefully produce $11 billion of loans this year.

These Special Risk-Sharing Initiatives (SRI) and the Jobs Credit scheme - costing $4.9 billion in all - are the two 'extraordinary' measures which the government will fund from past reserves, a move that requires the President's approval.

Singapore has more than enough savings to fund the entire FY09 Budget, which will be in deficit by almost $15 billion, or 6 per cent of GDP, before transfers and investment income, Mr Tharman said.

But tapping on past reserves will allow the government 'full flexibility to respond as the situation requires', he added, reiterating that Singapore stands ready to 'do more' if the recession worsens.

The other key planks of this significantly expansionary Budget - which Mr Tharman emphasised is not a normal one, 'not even a normal countercyclical Budget' - comprise more than $5 billion worth of various tax rebates and measures to enhance business cashflow and competitiveness, and to support households.

One highlight is a one-point cut in the corporate income tax rate - vastly welcomed, though not widely anticipated this time.

At 17 per cent, Singapore's tax rate will now be third after Hong Kong's 16.5 per cent and Ireland's 12.5 per cent. Coupled with existing tax exemption initiatives, the effective corporate tax rates here will be the lowest anywhere for small and medium-size businesses (SMEs) particularly, Mr Tharman said - a clear signal of the government's unequivocal commitment to be the region's best business hub, if not the world's best.

And while the big thrust is immediate aid to deal with the downturn, Singapore's longer-term goals are not being overlooked - the package also provides some $900 million of incentives to develop new R&D capabilities and spur innovation among companies, and billions more to build infrastructure, both physical and social. The latter includes $1.6 billion for pro-family initiatives.