SINGAPORE: The Government is sparing no effort to help small and medium enterprises (SMEs) transit into the new economy, said Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam while wrapping up the Budget debate in Parliament on Thursday (Mar 5).
Mr Tharman said there needs to be a critical mass of SMEs in every sector of the country’s future economy, and the SkillsFuture initiative will be a transformative force.
Over the course of the debate, Parliament heard several stories of SMEs struggling to cope as the economy restructures. But still, new companies continue to be launched, Mr Tharman noted.
“During this time when we sought to restructure our economy, and grapple with the shortages we face in manpower and increasing constraints of land, we have seen significant increase in the number of firms being formed across every sector,” he said.
There were 20,000 new firms formed each year, over the past five years, more than twice compared to the preceding five years. The Finance Minister said the problem is that revenues are not growing as rapidly.
He noted the two approaches to restructuring – find a way to subsidise business cost across the board or, as some have suggested, withdraw support and speed up the process of restructuring by letting the market sort out the winners from the losers.
He said the Government has chosen neither approach. Instead, it chose the middle path – a phased tightening of the foreign worker policy starting in 2010, and letting levies flow back to companies that upgraded to improve processes.
Said Mr Tharman: “The shock treatment does not just weed out the weakest players. It does not just weed out unviable players. It has a way of weeding out good businesses as well. So we have taken this phased approach. We are not an economy in crisis, we can afford to take this phased approach. And secondly, we do not want to impose a large cost to our workers.”
Mr Tharman pointed to the many schemes targeted at helping SMEs, urging businesses to take them up.
He said: “If they are willing to take advantage of schemes, the schemes are there. They are more generous than any other economy I know of. When you add up all our schemes, the tax incentives, the grant schemes through SPRING, IDA, MDA and the other schemes, when you add it up altogether, it is very generous support. Please come take advantage of it.”
He added that the Government will work closely with trade associations and chambers of commerce to help SMEs. This will include appointing mentors to hand-hold small businesses as they journey through the path of restructuring.
Mr Tharman said: “So we are making some shifts in our approach towards focusing on innovation and breakthroughs, while maintaining a base level of support for all companies to get on to the basic level of productivity initiatives.”
Equally important, he said, is the development of Singaporeans through training options that are meaningful and relevant.
“We will place great emphasis on developing quality offerings. It is no point just creating an account where you put money into people’s account. You need to assure quality, you need to assure people of quality and you need to assure relevance to jobs and to individuals, and that is what our primary focus will be about,” said Mr Tharman.
news source & image credits: channelnewsasia.com