SINGAPORE: There are hits and misses in Budget 2017 when it comes to the mix of short-term and long-term supportive measures for local businesses, according to representatives of the various trade associations and chambers (TACs).
The Singapore Business Federation (SBF) said in a press release that it is “disappointed” with the short-term measures unveiled by Finance Minister Heng Swee Keat on Monday (Feb 20).
Even though the array of near-term targeted measures is likely to give businesses support of more than S$1.4 billion over the next year, SBF suggested that there is “inadequate short-term support to lower business and compliance costs” despite the business community repeatedly voicing concerns over rising costs.
For instance, the one-year deferment of foreign worker levy increases should have been extended beyond the marine and process sectors, SBF said. Apart from that, there was also a general absence of measures on rental rebates for businesses.
However, SBF said it welcomes the medium- to longer-term measures, such as those targeted at helping firms internationalise, as well as develop innovation and digital capabilities.
“While it is comforting to know that this year’s Budget has a strong focus of preparing our SMEs (small- and medium-sized enterprises) for the future economy, the current business outlook remains challenging,” said Mr Lawrence Leow, chairman of the SBF-led SME Committee (SMEC). “The business community requires immediate stimulus. We hope to see more details shared at the Committee of Supply debate.”
This is a point echoed by Mr Thomas Chua, president of the Singapore Chinese Chamber of Commerce & Industry (SCCCI).
Calling Budget 2017 a “long-term Budget” which is aligned with the recommendations of the Committee on the Future Economy (CFE), Mr Chua said the Budget outlined specific initiatives in innovation, internationalisation and digitalisation, which will likely help businesses to transform, capture new opportunities, create new revenue sources and to stay relevant.
However, local firms will be “disappointed” that there are not more near-term measures, he said. “Businesses, especially SMEs, who are facing challenges are disappointed that there are not enough near-term measures to help them. Businesses are concerned with the impact on their business costs, especially with the immediate increase of diesel tax, and soon water price,” he said.
Mr Kurt Wee, president of the Association of Small and Medium Enterprises (ASME) also said some portions of Budget 2017 were "rather disappointing".
“Although there are various schemes announced, there is a lack of broad-based internationalisation initiatives that ASME has called for over the past few years,” Mr Wee told Channel NewsAsia. “Also, there is no increase to the SME Working Capital Loan at all, and there are no cost measures in place to help local enterprises.”
“Construction levies are set to increase and there are also other peripheral increases such as the Additional Registration Fee (ARF) and the Restructuring of Diesel Taxes which may add on to SMEs’ cost burden,” he added.
Nonetheless, Mr Wee feels that new initiatives such as the A*STAR Operation and Technology Road-mapping will be “plus points” that will help companies enhance innovation and embrace technology. Additionally, there is a “great push to encourage greater workforce support and workforce development, especially in the areas of supporting seniors and wages support”, he added.