SBF lauds well thought-out and comprehensive Budget 2020
Tuesday, 18 February 2020 [Singapore] – As Singapore businesses contend with headwinds brought on by global trade and geopolitical tensions, economic slowdown and uncertainties from the COVID-19 outbreak, Budget 2020 strikes a balance between helping companies overcome temporary bumps in the road and positioning them for the fast lane in the recovery ahead.
Stabilisation and Support for Enterprises
Budget 2020 signals the Government’s priority to help companies stay afloat and safeguard employment in the face of the COVID-19 outbreak and anticipated economic slowdown. The S$4 billion “Stabilisation and Support Package” is a good balance of broad-based and targeted measures. Corporate tax rebates, the enhanced Enterprise Financing Scheme's Working Capital Loan and flexible rental payments help ease businesses’ costs and bolster cashflow, providing businesses with much needed reprieve at a time of declining demand and revenues. Wage support in the form of the Jobs Support Scheme and enhanced Wage Credit Scheme will help preserve as many jobs as possible.
As expected, adversely affected industries such as tourism, food services, aviation, retail, and point-to-point transport services received greater support with redeployment programmes, rental waivers and property tax rebates to assist businesses on operating costs and liquidity. This direct and timely assistance will adequately help companies to ride out the COVID-19 storm.
Transformation and Growth
Budget 2020 reiterates the transformation and digitalisation agenda of past budgets, as part of a wider push to position Singapore as the global Asia node of technology, innovation and enterprise. Sustained innovation investment (S$8.3billion over three years) will drive good jobs, transform our economy and strengthen Singapore’s position in the global economy.
In deepening enterprise capabilities, it is important that the Government recognises the need to provide and tailor-make support and assistance to businesses based on their differing stages of development and needs, rather than adopting a broad-brush approach. The Enterprise Grow and Enterprise Transform packages offer comprehensive support, from identifying business needs, technology adoption, entering new markets to leadership development for companies, big and small. This will allow our enterprises to sustain their competitive advantage and successfully overcome disruption in their industry sectors.
Enabling Employers and Employees
Business transformation must go hand-in-hand with deepened enterprise capabilities, job redesign and worker upskilling. In this regard, the continued investment into upskilling workers will not just support their employability and re-employability, but also give them a competitive edge in navigating the future economy.
The new SkillsFuture Enterprise Credit scheme will provide the impetus for them to do so. This initiative empowers companies to tailor programmes for their unique needs and challenges, while the enhanced Productivity Solutions Grant which includes job redesign consultancy services will be helpful for companies, especially SMEs, who lack the expertise and skills to do so.
SBF is heartened by the support measures for employers for mid-career and senior workers who are most vulnerable to job disruption in the new economy. The new SkillsFuture Mid-Career Support Programme will help our PMETs become more employable.
As the retirement and re-employment ages are raised gradually over the decade, the Senior Worker Support Package which provides employers with grants as well as wage and Central Provident Fund (CPF) contributor offsets will help cushion the impact of employers’ wage costs and increased contributions to the CPF for older workers. The extension of the SEC and re-introduction of the TEC were among the SBF SME Committee Budget Recommendations this year.
Tightening of Foreign Workers’ Quota
With labour shortage being a persistent challenge for our businesses, the reduction of the S Pass sub-dependency ratio ceiling from 20% to 15% in two phases from January 2021 for construction, marine shipyard, and process sectors may come as unwelcome news, but this is aligned with the Government’s efforts in the past years to manage manpower growth and encourage our enterprises to restructure and reskill local workers.
Mr. S.S. Teo, SBF Chairman said, “Budget 2020 is a balanced and forward-looking one that helps companies and workers transform, while ensuring adequate support to cushion the impact of the COVID-19 outbreak and anticipated economic slowdown on local companies, especially SMEs. Besides targeted measures for the more adversely affected sectors, we would have liked for the Government to address the knock-on effects of COVID-19 on other industries and the larger companies that are also badly affected. If and when the situation worsens, we are confident that the Government will be agile in rolling out more support.
We urge companies to make use of any downtime and training incentives to upskill and reskill their workers, and to continue their transformation journey so they can be ready for the upturn. The success of these measures rests on their implementation. We call on the Government to simplify access to these schemes, which are a much-needed boost in these difficult times, so companies can easily leverage them.
Beyond the budget measures, our companies should also help one another cope with the impact of the COVID-19 outbreak. They should help their suppliers with cash advances or simply ensure that they pay on time. Together, we can emerge stronger.”
Mr Ho Meng Kit, SBF CEO said, “With the sustained investment on innovation and deepening enterprise capability, Budget 2020 offers companies a chance to turn crisis into opportunity. But the onus cannot just lie with the Government. We urge companies to embrace the technology incentives introduced in Budget 2020 and continue to invest in manpower planning, capability building and change management as part of their digital strategy. This is key to generating long-term value.
As Singapore’s population ages, mature workers are an important untapped pool of talent. With the new budget measures, we hope to see more companies be more inclusive in their hiring, redesign jobs and careers around the abilities and strengths of older workers and provide them with appropriate training. As the apex business chamber, SBF will continue to work closely with the Government to strengthen Singapore’s business community. We are very encouraged to hear that the Government recognises the important role TACs play in deepening industry-wide capabilities and will enhance its support for TACs through two new schemes – the pilot Executive-in-Residence Programme and the Heartland Enterprise Upgrading Programme. This will empower us to do more in driving transformation in our businesses.”
Mr Kurt Wee, Chairman, SBF SME Committee said, “With a strong focus on deep-tech and training for Singaporeans, this is clearly a budget that looks to the future. While there is good support in the form of loan liquidity for our SMEs, the measures are targeted and focused, and perhaps too much so. With the extent of the broad-based impact on the COVID-19 outbreak with regards to business slowdown and cashflow, I believe more broad-based measures can be in place to support SMEs in the area of liquidity. For example, the Government could work closely with financial institutions to put in place a moratorium on loans for an initial period of six months. For businesses, cashflow is their oxygen. More help in this area can help them regroup and power through this tough time.”