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SINGAPORE : Singapore companies have welcomed the government's announcement that next year's Budget will offer measures to help them through the difficult economic environment.
But some said that it may be too late by the time the Budget is announced next February.
A cut in Singapore's goods and services tax (GST) could encourage consumer spending. And this is one of the measures local businesses facing tight cashflows are hoping to see in next year's Budget.
The Singapore Chinese Chamber of Commerce and Industry is suggesting cutting the GST from 7 per cent to 3 per cent.
Members of the Association of Small and Medium Size Enterprises (ASME) said that cashflow is currently a massive challenge.
Chan Chong Beng, chairman, Goodrich Global, ASME member, said: "The main challenge right now to any SME is cash flow. And when you hear your banking friends saying that they are not going to give you loans, they are only managing what they have, you get scared.
"When you are in a down business, where revenue is not coming in, relying hard on cash flow, timing is very important. I think off-Budget measures can help before the Budget actually comes in."
Finance Minister Tharman Shanmugaratnam said the 2009 budget will focus on helping businesses with their cashflow and costs to enable them to stay competitive.
But some businesses said the government should look at businesses with potential, and help them now instead of next year.
Though some companies are still enjoying a healthy inflow of customers for now, others are asking whether or not it is a question of timing - 'will measures implemented in next year's Budget be too far away to help?'
Mr Chan said: "I think first of all, the Budget won't be held until February next year, so it is a question of time, would it be too late for putting measures for companies that are already in trouble.
"The challenge is to find those companies that need this support, help them through this current time so that when the good times come, they will be able to reap the benefit, and it will be to the country's advantage if they can survive through."
Come February, companies can expect lower taxes as well as help for things like employee training.
P K Basu, chief economist, Asia ex-Japan, Daiwa Institute of Research, said: "I think we can expect a cut in corporate tax rates or at least a rebate, for corporate and personal income tax.
"We can expect targeted incentives and spending on things like skill development, retraining, on infrastructure... a basic pump priming package which is entirely appropriate at this time, given that globally, we have a liquidity trap and banking system that is globally broken - though it is far from broken in Singapore and Asia."
The Budget is also expected to address training needs that can help workers facing retrenchment or looking to add value to their skills. Observers said this will be useful in the current environment. - CNA/ms
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