SINGAPORE: More targeted help for small- and medium-sized enterprises (SMEs), refining the implementation of Industry Transformation Maps (ITMs) and ways to spur innovation are among some suggestions Members of Parliament (MPs) raised on day two of the Budget debate.
For local businesses, the MPs who spoke on Wednesday (Feb 28) hoped the Government could offer more financial assistance in the form of new grants or an extension of current schemes.
Nominated MP Azmoon Ahmad wants more financial help for SMEs to help them with premise rentals, an area he said was left out of Budget 2018.
Describing rent as one of “two major components” of business operating costs in Singapore, Mr Azmoon said near-term relief measures targeting this would have made a “big difference”.
“I would even go one step further – it would be great if we can find a structural solution to this,” he added. “Hopefully we can hear good news in the next Budget year.”
East Coast GRC Jessica Tan also hoped for more financial help for SMEs in the form of targeted grants for costs related to intellectual property (IP) and research and development.
This comes as SMEs have given feedback that they were not able to benefit from tax deductions on licensing payments for the commercial use of IP, even with the S$100,000 annual cap, she said.
"For many of the SMEs that are developing in this space, many have little or no profits, hence they will not be able to benefit from tax deductions," she added.
Bukit Panjang MP Teo Ho Pin suggested a further extension to the Wage Credit Scheme to help SMEs retain staff by including performance and loyalty-based bonuses as part of the scheme.
This is because SMEs continue to face key challenges in the areas of recruitment and retention, he pointed out.
The Wage Credit Scheme was first launched in 2013 and most recently extended to 2020 to help businesses cope with wage increases.
HELPING SMES COLLABORATE
Beyond giving more financial help, other MPs urged the Government to create an environment where SMEs can work together and with bigger firms.
Non-Constituency MP Dennis Tan said this could come in the form of pairing up smaller players with different expertise to help them take on bigger projects.
By linking up various SMEs through an "appropriate platform", SMEs of different specialisations can work together to develop products and pitch for bigger businesses and contracts internationally as a consortium, he said.
Jurong GRC MP Ang Wei Neng asked if the Government could require overseas firms to form joint ventures with local companies.
“This will be advantageous as working with these multinational corporations will allow us to learn their expertise, technologies and processes,” he said.
REFINING IMPLEMENTATION OF ITMS
Still, Potong Pasir MP Sitoh Yih Pin said the implementation of the 23 roadmaps that were first announced in Budget 2016 as part of a S$4.5 billion industry transformation programme could be refined.
There remains "a gap of understanding" among businesses about how ITMs are relevant and what action they should be taking, he said.
This echoed sentiments from business and industry leaders that emerged before the Budget. Half of the roughly 1,000 businesses surveyed by the Singapore Business Federation also said they still do not know enough about the ITMs to assess their impact.
"This is an opportunity for Government and businesses to deepen their existing collaboration and roll out targeted quality communication on ITMs execution," Mr Sitoh said
While the ITMs help to build on Singapore’s existing capabilities, Pasir Ris-Punggol GRC MP Sun Xueling said, more could be done to mine certain sectors for new development opportunities.
For example, Ms Sun suggested taking advantage of the aviation and maritime industries, given how they account for 170,000 jobs and 10 per cent of Singapore's gross domestic product (GDP).
As mega investments like the construction of Changi Airport’s Terminal 5 provide Singapore with a strong platform to develop new avenues of growth, data from its airports and ports can be monetised, she said.
“For instance, can we create our own global online travel company given the amount of data we have about the preferences of travellers? We can also leverage on data to market to travellers even after they have left our shores,” she added.
MPs also urged more to be done when it comes to encouraging local businesses to embrace change and innovation.
Dr Teo noted that despite the introduction of many assistance schemes, SMEs have been slow to tap on them to build up their capabilities.
Last year, the Northwest CDC SME centre reached out to 1,080 SMEs to provide information about various SME assistance schemes. Among them, only 148 firms took up the schemes, he said.
“From the feedback gathered, while SMEs are keen on solutions, they were afraid of the process of adapting to these changes. This trend is unhealthy as it affects the survival of our SMEs,” Dr Teo elaborated.
The initiatives to support the fostering of “pervasive innovation" also remain inadequate, with Mr Azmoon describing them as “initiatives that touch on the surface".
The fostering of pervasive innovation in the economy was mentioned by Finance Minister Heng Swee Keat in his Budget statement as one of the three key enablers that lay the foundation for ITMs.
Referring to the expansion of the National Robotics Programme and various tax deduction changes announced in Budget 2018, Mr Azmoon said: "At most, it will only give a scratch. What I thought is missing is the soul of 'innovation'.”
Nominated MP Chia Yong Yong suggested that the Ministry of Education make "structural changes" to Singapore’s education landscape.
"Schools, Institutes of Technical Education and Institutes of Higher Learning should ensure students know some machine basics with different routes for deeper learnings," she said. "Courses may be restructured to allow differentiated exits into other courses."
Without an innovative psyche, Ms Chia said, “we will be nothing more than buyers and users of technology, machines and skills”.
“The Government schemes will be tapped upon for expenditure but we will not achieve our aim of fostering pervasive innovation throughout our economy,” she added.