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SINGAPORE: Singapore will pump in S$5.5 billion over the next five years to improve productivity among workers and companies. This will be in the form of tax benefits, grants and training subsidies.
Finance Minister Tharman Shanmugaratnam said this will help Singapore achieve its ambitious productivity growth target of two to three percent annually over the next 10 years.
At Japanese restaurant Ebisboshi Shotengai in Singapore, you can order your food using a wireless system. Simply tap on the menu, and your orders will be sent to the kitchen and the cashier. This efficient system has reduced customers' waiting time and enabled the restaurant to hire fewer staff.
Mr Tharman cited this restaurant as an example of how companies can improve productivity through innovation. And he hopes that other firms will make use of the government's help to innovate and create more value.
The minister said: "Higher productivity is how we will achieve higher incomes and improve living standards, including those of low-wage workers. With 2% to 3% productivity growth each year, we can raise incomes by one-third over a decade."
To achieve the productivity growth targets, Mr Tharman laid out three plans:
1) Restructure the economy towards higher-value activities and depart from less efficient ones;
2) Upgrade individual industries and enterprises; and
3) Raise the skills and expertise of each worker.
To help companies - especially small and medium enterprises - invest in innovating their work processes, the government will introduce a Productivity and Innovation Credit scheme.
Under the scheme, companies will get significant tax deductions when they invest in a broad range of activities such as automation through technology and design, and staff training.
Businesses can deduct 250 per cent of their expenditures on each of the activities from their taxable income, up to a cap of S$300,000.
To emphasise how serious the government is in improving skills and productivity nation-wide, Deputy Prime Minister Teo Chee Hean will chair a high-level National Productivity and Continuing Education Council.
The council will come up with priority areas and programmes to tap on a new S$2 billion National Productivity Fund. For a start, the fund will have an initial sum of S$1 billion to support initiatives over the next five years.
Mr Tharman stressed that while the government will throw its weight behind the national productivity drive, companies and workers must also play their part in upgrading skills and innovating work processes.
- CNA/ir
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