SBF-led SME Committee (SMEC) Discloses SME Business Community's Wishlist for Budget 2012
The 17 recommendations span four broad areas: Cost of Doing Business, Productivity and Manpower,
Financing, and Internationalisation and Market Access
The recommendations have been forwarded to government for consideration
Singapore, Thursday, 2 February 2012 - The SBF-led SME Committee (SMEC) today shared its recommendations for Budget 2012. The wishlist, which was forwarded last week for government's consideration, hinges on four immediate issues affecting SMEs - cost of doing business, productivity and manpower, financing, and internationalisation and market access. The seventeen recommendations, were aggregated from feedback from the SME Committee's 19 members who represent major local trade associations and business chambers, as well as qualified individuals representing SME interests.
SMEs form a significant part of Singapore's business fabric. The evolving global economic and business landscape makes it especially difficult for them to keep pace. Therefore SMEs are the hardest hit and deserve special attention during times like this. In arriving at its recommendations, the Committee noted that 2012 will be a challenging year for Singapore. As a largely export-led economy, Singapore will be affected by slowing external demand arising from weak growth in the developed economies and concerns over fiscal sustainability in the Eurozone.
Budget 2012 Recommendations
Substantiated by findings from SBF's quarterly and annual surveys on business sentiments and forecasts as well as inputs from SMEC members, the recommendations are:
I. Cost of Doing Business
- Introduce a SME Cash Payout Scheme of up to $10,000 per year to help smaller SMEs (using revenue and manpower-employed as proxies) for the next 5 years.
- For other businesses, extend the Corporate Income Tax Rebate for another year.
- On rental issues, provide a one-off grant to increase competitiveness of SMEs by helping them strategise and plan their relocation to lower-cost countries while maintaining linkages to Singapore.
- Propose that JTC reinstate its former developmental role of providing ready and affordable industrial facilities for SMEs.
II. Manpower and Productivity
- Productivity and Innovation Credit (PIC) Scheme
- Increase the maximum cash payout from $30,000 to $60,000.
- Allow smaller SMEs to benefit more from the cash payout by increasing the tax deduction cash conversion rate to beyond 30%.
- Extend the cash payout option from YA2013 to YA2015.
- Allow cash conversion option for companies who lease their Automation Equipment over more than one accounting period.
- Review PIC qualifying activities to benefit service companies who undertake productivity improvements.
- Double the expenditure cap for any qualifying activity so long as the overall PIC expenditure cap for all 6 current qualified activities is not exceeded.
- Expand PIC qualifying activities to include projects that help to improve the productivity of a company's operations e.g. operating processes.
- Broaden the qualifying in-house training expenditure to include internal training that need not be certified by Workforce Skills Qualification.
- Re-introduce a more focused Job Credit Scheme to provide grant support for companies who reemploy or hire older Singaporean workers.
- Introduce a productivity training foreign workers quota which is linked to efforts by companies who invest in building the long-term capability of their staff.
- Consider the experience of the employee when deciding to renew the work permits or S-Pass.
III. Financial and Cash Management
- Prepare to reinstate Special Risks Sharing Financing Schemes if the economic situation deteriorates further to ensure that SMEs are able to access affordable financing.
- Reinstate Bridging Loan Programme and enhance its loan conditions to address needs of startups and services sectors.
IV. Internationalisation and Market Access
- Reassess feasibility of EXIM bank for cross border trades, international project and infrastructure financing.
- Enhance iMAP grants to incentivise more SMEs to access overseas markets.
- Provide cash incentive to help SMEs establish their overseas presence in new markets for a period of 2 years.
- Provide more accessible and higher benefits, grants and subsidies for companies willing to embark on R&D activities that are assessed to be of higher commercial viability in Singapore.
- Provide a one-off grant/incentive to help SMEs safeguard their patents to insure their future survival or overseas expansion.
- Propose that MTI agency, in cooperation with private sector, function as Singapore's IP Bank taking "IP Deposits" from SMEs with subsequent buy-back provisions.
- Provide financial assistance for SMEs whose overseas operations are affected by unforeseen circumstances e.g. epidemics, natural disasters and political instability.
Mr Lawrence Leow, Chairman of the SBF-led SME Committee, commented, "The weak and volatile external environment will have adverse effects on businesses, with SMEs being particularly vulnerable in the face of sluggish demand and weak consumer confidence. One of the SMEC's immediate tasks was therefore to look at possible measures that can alleviate the plight and ease the burden of SMEs in the light of the challenging and uncertain conditions of the current global economic climate." He added, "We hope that the government will give due consideration to all the recommendations put forth by the SMEC which we believe will benefit the SME sector and our economy as a whole."
Commenting on the recommendations, Mr Ho Meng Kit, Chief Executive Officer of SBF, and Head of SMEC Secretariat, said, "The SMEC Committee is off to a good start. We are very encouraged by the strong support from our partners, Chambers and Associations in compiling this list of proposed measures for Budget 2012. Many of the issues are long term and cannot be solved with this set of budget measures alone. They will require careful deliberation and engagements between the SMEC and the Government agencies. As part of inputs to this process, SMEC will introduce more outreach activities to garner feedback from a wider business community. We are also seeking online feedback from the business community on these issues."
Over the next few weeks, the SMEC will be forming its sub-committees to address the above-mentioned four issues.
SBF-led SMEC Budget 2012 Recommendations (Click here)
About SME Committee (SMEC)
Established under the auspices of the Singapore Business Federation (SBF) in response to the growing challenges SMEs face in the evolving local business environment and global economic climate, SMEC aims to function as a key platform for engagement between the SME community and policymakers to discuss, research and analyse SME business issues to effect business-friendly policies in Singapore. The SMEC also aims to look ahead of trends and developments that impact business sentiments and growth, by leveraging on SBF's position as the apex business chamber to facilitate its work as an issue-focused outreach and feedback channel.
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