SINGAPORE: Budget 2017, announced on Monday (Feb 20) by Finance Minister Heng Swee Keat has a "very targeted approach" to helping industries, said Second Minister for Finance Lawrence Wong.
Speaking on the sidelines of a recording of the Singapore Budget Forum 2017 at Mediacorp on Tuesday, Mr Wong noted that the economy is still growing overall. "Last year’s growth was in fact better than 2015, and this year’s projection is that the economy will continue to grow by 1 to 3 per cent. We are not in a recession. Our economy is still growing, but we recognise that the growth is uneven and there are some sectors which are going through a down cycle. That’s why the measures are focused on these particular sectors like marine and process, offshore engineering including construction. And I believe the targeted measures will help these particular industries" he said.
Some trade associations such as the Singapore Chinese Chamber of Commerce & Industry had expressed disappointment that the Budget did not have more near-term measures to help businesses in a challenging environment, but Mr Wong said across the board, the Government is continuing many of the short-term measures put in place to help businesses cope with rising costs. These include the Wage Credit Scheme, the Special Employment Credit – which it is enhancing – as well as the SME Working Capital Loan programme.
There were also concerns that changes to the diesel tax system and a 30 per cent hike in water prices announced in the Budget will impact the bottomline of firms, especially small- and medium-sized enterprises.
Said Mr Wong: "We are mindful of the concerns that businesses have over costs. We have put in place broad-based measures which are continuing from before, as well as targeted measures for specific industries. And we will continue to monitor the environment and if there is a need to, we will see what more we can do to help businesses."
Mr Wong clarified that a permanent 2 per cent cut in the budget caps of all ministries and organs of state announced in the Budget does not reflect a reduction in Government expenditure. Instead, the Government is better allocating resources to projects with higher priorities.
"What the 2 per cent cut does is, it takes resources from the cut in expenditure and it allocates them to areas of priority. So ministries that have projects that are of national importance or of priority to them, their projects will still be funded," he said.
Catch the Singapore Budget Forum 2017 on Thursday at 8pm SG/HK on Channel NewsAsia and 9.30pm SG/HK on Channel 5.