SINGAPORE: Several Members of Parliament (MPs) touched on support for businesses amid the current economic slowdown on the first day of the Parliamentary debate over Singapore’s 2017 Budget on Tuesday (Feb 28).
While some voiced concern that the Budget fell short on near-term help for local businesses to tide through immediate challenges such as the rise in operating costs, others stressed the need to adopt "alternative long-term solutions”.
Nominated MP Thomas Chua said that while the Budget has taken on a “far-sighted approach” to building up Singapore’s mid- to long-term competitiveness, businesses remain concerned about rising operational costs in the current environment.
Regarding the Government’s move to raise water tariffs to ensure a sustainable supply and defray rising operational costs, business owners feel that “infrastructure is part of public service and the Government should not compute this on a commercial basis”, said Mr Chua, who is also president of the Singapore Chinese Chamber of Commerce and Industry (SCCCI). The SCCCI, alongside other trade groups such as the Singapore Business Federation, have expressed disappointment with the measures targeted at businesses in last week’s Budget.
Echoing his concern, Mountbatten MP Lim Biow Chuan said Budget 2017 contained “little positive impact” for smaller businesses, with some measures such as an increase in water prices likely “hurt(ing) them more” amid a tough economic climate.
“I don’t believe that businesses are hoping for handouts from the Government. What they are appealing for is for the business climate (to) be less costly and friendlier to businesses,” said Mr Lim.
As such, he proposed rental rebates from Government landlords, a property tax relief that private property owners have to pass on to their tenants and a one-year deferment of all planned foreign worker levy increases until the economy has stabilised.
But MP for Holland-Bukit Timah GRC Liang Eng Hwa argued that the Budget for 2017 struck an “appropriate balance”.
Given that the Singapore economy is not witnessing sharp contractions similar to those in economic downturns, massive rescue packages are not necessary, said Mr Liang, who is chairman of the Government Parliamentary Committee for Finance and Trade.
Instead, the Government should “continue with and enhance existing schemes” such as the Wage Credit Scheme, on top of the other assistance measures outlined in the Budget, he added.
Dishing out broad-based short-term cash grants to companies will also do little to reverse the job losses that come with efforts to intensify digitisation, Mr Liang said. Meanwhile, with the search for less-polluting fuels and the rising cost of operating Singapore's water supply system being “irreversible trends”, “alternative long-term solutions” should be adopted instead of “short-term painkillers”, he proposed.
For example, when it comes to coping with the rise in water prices, players and stakeholders in the food industry could leverage the Industry Transformation Map (ITM) to seek longer-term solutions, as well as work with national water agency PUB and research agency A*STAR for R&D and resource support, Mr Liang suggested.
Ms Foo Mee Har, MP for West Coast GRC, also said targeted help for businesses in this year's Budget would be "more efficient" than dishing out support in a broad-brush approach.
Meanwhile, Minister for Trade and Industry (Industry) S Iswaran noted that the Government recognises immediate challenges that small- and medium-sized enterprises (SMEs) face and will monitor rental and other business costs closely.
“Industrial, retail and office rentals all fell in 2016. We will continue to maintain a steady pipeline of industrial land and space to ensure that rents remain affordable,” he said.
Mr Iswaran added that customised support for specific industries, such as the speeding up of S$700 million worth of infrastructure projects to help the ailing construction sector, “are an illustration of (the) Government responding with a more targeted response and support for SMEs and other businesses". "It is a complement to the broad-based measures we already have in place," he said.