SBF welcomes Budget 2019 measures to help businesses and workers develop deep capabilities
- SBF encourages businesses to leverage Budget 2019 initiatives and incentives for businesses to deepen capabilities and upskill workers.
- SBF looks forward to partnering with the Government and TACs to promote a vibrant economy underpinned by sustainable growth.
18 February 2019 [Singapore] - In an increasingly uncertain global economy weighed down by trade tensions and rapid technological disruptions to industries and jobs, the Singapore Business Federation (SBF) welcomes the Budget 2019 measures to help companies boost innovation, promote internationalisation and improve worker skills.
The Government has introduced a set of forward-looking measures to meet Singapore’s long-term challenges and address the immediate and medium-term concerns our companies are facing. Budget 2019 is a continuation of the Government’s strategy to chart a steady course through economic uncertainty.
Helping Companies Transform
According to SBF’s National Business Survey 2018/19, a top priority among our companies is the Government’s support for accessing new and critical technology (63%).
In this regard, SBF welcomes the enhanced incentives to boost the innovation journey of companies to maintain their competitive edge in the global economy. The extension of the Automation Support Package (ASP) as well as the enhancement of the SMEs Go Digital programme will go a long way in boosting technology adoption, particularly among the SMEs and help our companies integrate technologies and re-¬engineer business processes to raise efficiency and enhance product development.
Easier Access to Grants
The SBF National Business Survey 2018/2019 revealed that one in three SMEs would welcome help with the complex schemes and grants for business transformation. Among the SBF SME Committee (SMEC) Recommendations for Budget 2019 was a call for the development of info-maps of the government support schemes and grants to better help SMEs understand and leverage the government assistance available to transform and grow.
SBF welcomes the measures to make it easier for businesses to transact with the Government, including the streamlining of existing financing schemes by Enterprise Singapore into a single Enterprise Financing Scheme as well as the launch of a pilot one-stop portal for the food services sector that will reduce the point of contacts for companies to one instead of 14.
SBF will continue to support by raising the awareness of these schemes to our companies and helping them navigate these schemes to increase utilisation.
Targeted Support for Growth Companies
In line with the approach taken in recent years’ budgets, Budget 2019 adopts a targeted approach with schemes such as the Scale-up SG Programme to help aspiring, high growth companies identify and build new capabilities to innovate, grow, and internationalise.
High growth or scaleup companies play a critical role in generating economic growth and contributing to the economic vitality of regional economies.
SBF looks forward to partnering with the Government to help high-growth enterprises scale up and transform into competitive companies of tomorrow. This will, in turn, generate good jobs, better career opportunities and wage progression possibilities for Singaporeans.
Improved Access to Financing
According to the SBF NBS 2018/2019, 71 per cent of SMEs believed favourable financing mechanisms will make the biggest difference to their businesses.
As such, SBF commends the budget measures to further deepen the pool of smart, patient capital via the SME Co-Investment Fund III, the stronger support under the Enterprise Financing Scheme, as well as the extension of the SME Working Capital Loan scheme for two more years.
Reskilling of Manpower
Based on the SBF National Business Survey (NBS) 2018/2019, manpower continues to be an issue for businesses, with hiring people with the right skills or attitude being the top challenge (61%). Hiring people with the right skills and attitude is the top challenge for both large companies (65%) and SMEs (60%).
SBF recognises the need for the Government and TACs to work closely with employers to redesign jobs and to develop the skills of our workforce so that businesses continue to stay relevant and competitive. We also welcome the launch of the new Professional Conversion Programmes (PCPs) which will help prepare Singaporeans to move into new growth areas.
Lowering of the Service Sector Dependency Ratio Ceiling (DRC)
While the lowering of the Service Sector Dependency Ratio Ceiling (DRC) was unanticipated, it is a strong signal from the Government of the importance of maintaining its current policy on foreign workers, so that Singaporeans can continue to enjoy meaningful and well-paying jobs in the future. SBF shares the concerns of the Government that some of our industries are not exhibiting strong productivity growth and are not restructuring fast enough. We, therefore, understand the move to lower the service sector DRC.
That said, the services sector is very diverse and adjusting the DRC can be a blunt tool. We hope to see some flexibilities in its implementation as some service sectors do have higher productivity and are facing local skill shortages. We appreciate that the implementation will be phased and Government assistance schemes to help affected enterprises restructure will remain in place in the transition period.
Strengthening our TACs
SBF welcomes the enhanced measures to help TACs transform internal competencies so as to champion industry transformation more effectively.
With extensive business networks and an in-depth understanding of industry needs and growth opportunities, TACs are able to complement efforts by government agencies to support and reach out to a wide pool of enterprises.
TACs play important roles to help companies transform their operations, enhance their competitiveness and capture new growth opportunities in domestic and overseas markets.
SBF applauds the budget measures to strengthen support for TACs through the Local Enterprise and Association Development (LEAD) programme. The five-year roadmaps enable TACs to take a longer-term and strategic approach in driving industry transformation.
Mr Teo Siong Seng, Chairman, Singapore Business Federation said, “SBF commends the Government for putting forward a well-balanced and progressive Budget that encourages companies to continue to transform and prepare for the future.
“We note the Government’s point that close collaboration between the Government and TACs is crucial to achieving our objectives, and we are thus very encouraged to hear that the Government will strengthen its support for TACs through the Local Enterprise and Association Development programme.
“A strong collaboration between the Government and business community will place Singapore in a better position to cope and thrive amid uncertainties arising from an increasingly complex operating environment. In addition, TACs are key enablers and valuable multipliers in the industry transformation and enterprise upgrading process. TACs can also facilitate the coming together of businesses. We encourage the business community to step up and collaborate more among themselves as well as with TACs to collectively scale greater heights as we move into the future economy.”
Mr Ho Meng Kit, CEO, SBF said, “I welcome Minister Heng’s positioning of Singapore as the “Global-Asia Node for Technology, Innovation and Enterprises” in his Budget Statement. This vision builds on the strength of our multi-cultural society and our position in the growing Asian region.
“It is a rich vision that can offer many benefits for many sectors of our economy. To realise this vision, it is important that Singapore continues to be welcoming of the right talents to our shores to maintain our diversity and deep connections with the region.
“This openness in our society is crucial as is the ability and willingness of Singaporeans to work and connect with the region. I therefore do not view the tightening of the DRC quota for foreign work passes for the service sector as a change in our policy to be open to foreign talent. It is more a specific response to deal with the slower pace of restructuring in some service sectors.”
Mr Kurt Wee, Chairman, SBF SME Committee said, “The SBF SMEC appreciates the Government’s recognition of the challenges that SMEs continue to face in today’s business climate.
“It is heartening to note that the Government will now take a more differentiated and targeted approach to helping SMEs, for example, by assisting growth companies with more account-managed help. The upcoming Scale-up SG by Enterprise Singapore will work with aspiring, high-growth local firms to identify and build new capabilities to innovate, grow, and internationalise.
“The streamlining of existing financing schemes offered by Enterprise Singapore into a single Enterprise Financing Scheme will be much welcomed by businesses.
“While the further tightening of the dependency ratio ceiling in services will encumber businesses in the sector, advance notice is welcome and implementation as a two-step process is much appreciated.
“However, measures to help SMEs continues to be targeted. In many respects, Budget 2019 is a continuation of current policies, and we hope to see bold moves on internationalisation and assistance on costs at the upcoming Committee of Supply debates.”
Find out more about how Budget 2019 supports our businesses for a vibrant and innovative economy.