Around $4.6 billion will be invested to boost businesses and support Singaporean workers over the next three years. There will be $3.6 billion of this earmarked to assist workers during industrial disruptions while $1 billion will enable firms to grow their deep enterprise capabilities, Straits Times reports.
“But let me emphasise that supporting companies and supporting workers are mutually reinforcing,” said Finance Minister Heng Swee Keat. “Stronger companies provide better jobs and pay for workers, and highly skilled workers make companies stronger.”
Start-ups and small and medium-sized enterprises were also given help to boost business. Trade promotion agency Enterprise Singapore (ESG) in partnership with the public and private sector will launch a Scale-up SG programme to assist high-growth local firms identify how they can innovate, grow and venture overseas.
ESG will also run a two-year pilot to help firms obtain advice on innovation opportunities and ways to commercialise technology from “Innovation Agents” – industry veterans with expertise in technology and business.
Mr Heng said another way to help companies is to draw in “smart, patient capital that attracts investors with the expertise and the right time horizon”. To this end, an additional $100 million will be set aside for a new SME Co-Investment Fund III, adding to the $400 million already earmarked through two rounds of fund injections in the Co-Investment Programme launched in 2010.
The original two rounds attracted about $1.3 billion of additional funding for SMEs. Mr Heng expects the new fund will bring in another $200 million for these firms. Temasek Holdings will participate as a co-investor in this fund.
The Government will also increase the accessibility of loan financing for firms, said Mr Heng, acknowledging that banks such as DBS and OCBC have also been doing the same for SMEs.
In addition, the eight financing programmes offered by ESG will also be streamlined into a single Enterprise Financing Scheme to be launched in October, covering trade, working capital, fixed assets, venture debt, mergers and acquisitions and project financing.
The Government will take on up to 70 per cent of the risk for bank loans, up from 50 per cent in existing schemes, made by firms that have been incorporated for less than five years, said Mr Heng.
The existing SME Working Capital Loan scheme, which will be under the Enterprise Financing Scheme when it is launched, will be extended for two more years, until March 2021. This scheme has enabled loans of around $2.5 billion since it started in 2016.
Government help will also be available to assist firms build deep enterprise capabilities. The Economic Development Board, ESG and other agencies will provide customised support for large firms or those with strong growth potential. SMEs will be supported through “scalable solutions” while medium-sized firms seeking to grow will be given targeted support in their different industry clusters. The Trade and Industry Ministry will provide more details in the budget debate.
These measures come amid an expected moderation of global economic growth this year, said Mr Heng. “Our efforts to transform our economy are bearing fruit,” said Mr Heng, who cited the 23 industry transformation road maps that were launched in the 2016 Budget.
He noted that productivity has grown by 3.6 per cent a year since 2016, up from 1.6 per cent a year recorded in the preceding three years. While the manufacturing industry has performed strongly, construction and some services sector continue to show weaker productivity growth.
“But this is a continuing journey,” said Mr Heng. “There is much more we can do, especially in sectors like domestic services. We must press on.”