Budget 2020: Allocate more support for Singapore firms that deliver results, says WP’s Leon Perera
SINGAPORE: Singapore should consider allocating more support to local companies that have a track record of results and can contribute to the economy, said Workers’ Party Non-Constituency MP Leon Perera on Thursday (Feb 27), in what he described as a “strategic results-based” approach.
For firms that don’t, support from the Government can instead be “disciplined and focused on competitiveness improvement, jobs safeguarding and business succession planning”, he said during day two of the debate on Budget 2020.
This was how countries like Japan and South Korea developed their world-beating companies, he added, pointing to how the latter during the 1960s and 1970s provided loan support to “chaebols”, or large conglomerates, which could consistently grow the country’s exports and hard currency earnings. Such support was withdrawn from those that could not do so.
Mr Perera said he made this point in Parliament three years ago and then-Minister for Trade and Industry (Industry) S Iswaran had likened this to “picking winners”.
“I understand this counter argument that we don’t want to go too far down the path of picking winners … but some of our existing efforts like state-backed co-investment for example, could be seen as picking winners anyway. And why not let the winners pick themselves?
“This is a call for strategic results-based support to develop local entrepreneurs in ways that benefit domestic employment,” he said.
Other suggestions Mr Perera made in his speech include tapping more on fiscal resources to drive research and development, as well as having a programme that can inform and nudge workers in sectors that are at risk from Industry 4.0 to switch to high-growth industries.
READ: Budget 2020: Workers’ Party MPs suggest measures for upskilling mid-career workers, grocery voucher scheme
These, he said, may help to address issues in three areas.
One of the areas is the Singapore economy, which is not just battling near-term challenges caused by COVID-19 but also deeper structural challenges further down the road, he said.
These include dependence on a slowing Chinese economy, uneven productivity across sectors and companies, a pushback against globalisation globally and the rise of disruptive technology, the MP added.
The second is on livability and Mr Perera asked if more can be done in aspects such as helping Singaporeans with living costs.
He suggested building an “adjustment mechanism” for future conditions into policy making, “rather than leaving it to future acts of executive discretion which may or may not happen”.
An example will be to adjust the Silver Support Scheme for inflation from time to time, with these changes being based on policy design, instead of leaving it to Government and Parliament's discretion. MPs can still vote against these inflation-based changes should fiscal resources be insufficient, he said.
“But the fact that the design of the policy has a built-in mechanism to recommend changes creates some assurance that ‘Yes, society will not leave me stranded in the future one day’,” he said.
On the sustainability of the country’s fiscal resources, Mr Perera asked if there is scope to vary the growth rate of Singapore’s reserves so as to release more funds to invest in Singaporeans and local companies and address ongoing challenges.
“Should our reserves always go up and up at the same rate? Can we not have reasonable conversations about how to vary the slope of reserves growth, while agreeing that the principal should only be drawn down in an emergency?
“If we do use more fiscal resources to do that, we should also recognise that if our efforts are successful, we may be able to save on social safety net spending further downstream and we may also raise GDP (gross domestic product) and enhance tax revenue which are good fiscal outcomes,” he said.
SET “BOLD GREEN AGENDA” TO TACKLE CLIMATE CHANGE: DENNIS TAN
Fellow Workers' Party Non-Constituency MP Dennis Tan spoke on Thursday about environmental resiliency and urged the Government to set a “bold green agenda” for the future.
During his Budget statement last week, Deputy Prime Minister Heng Swee said Singapore aims to phase out the use of internal combustion engine (ICE) vehicles here by 2040, and outlined a slew of measures aimed at incentivising the use of more environmentally friendly alternatives, such as electric vehicles (EVs).
He also announced the set-up of a new coastal and flood protection fund, which has an initial injection of S$5 billion by the Government, to protect Singapore from rising sea levels.
Mr Tan welcomed the new fund as a “timely move” but wanted to know the details on its spending priorities.
READ: Budget 2020: New S$5b Coastal and Flood Protection fund to tackle 'significant' risk of rising sea levels
He also cheered the move to encourage more drivers to switch to cleaner EVs but said many practical issues remain.
Describing infrastructure as the “biggest elephant in the room”, Mr Tan said the phasing out of ICE vehicles could be taxing on Singapore's power grid with the increase in electricity demand.
He raised Sweden as an example, where a ban on such vehicles scheduled for 2030 has seen electricity demand out-growing capacity in the local grids. This is forcing charging networks for EVs to compete with other infrastructure projects for electricity, he said.
Mr Tan also raised a question about the adequacy of charging infrastructure for EVs here.
Singapore has plans to expand the charging infrastructure for EVs to 28,000 points by 2030, from the current 1,600, it was announced in last week’s Budget statement.
“But even assuming a 30 per cent conversion from the current vehicle population to EVs, it still means about one charging point to 10 EVs by 2030,” he said. “Should we even be content with this ratio?”
Mr Tan suggested setting up “battery-swapping stations” which have the advantages of speed and managing demands on the power grid while providing a ready infrastructure for battery recycling.
READ: Incentives likely to encourage electric vehicle adoption in Singapore, but questions remain, say analysts
He also said cooperation with regional countries will be needed for Singapore to successfully electrify its transport system. On that, he asked if the new measures could mean a ban on foreign ICE vehicles entering Singapore, with a key consideration being those from Malaysia.
“If there is no infrastructure in place in Malaysia to support commercial EVs, would that also impact our businesses with a top partner in trade?” he asked.
In his speech, Mr Tan also noted the importance of getting “buy-in” from Singaporeans.
Public education efforts should be given a boost to change people’s mindsets and consumption habits, while facts and evidence on climate change should be made easily accessible, he said.
On the latter, the National Climate Change Secretariat could work with public and private research agencies to translate latest research on climate change into “readable, digestible commentaries” for Singaporeans, he said.
This, according to Mr Tan, will help to "get further buy-in" and build awareness.