Budget wish list: SMEs want tools to 'fight fires'

Budget wish list: SMEs want tools to 'fight fires'

Small and medium-sized enterprises (SMEs) here want more help from the Government to cope with the rising costs of doing business, say leaders of business groups.

Singapore firms face increasing pressures from high rents and manpower costs amid a slowing economy. They hope that the Government will roll out measures in the March 24 Budget to help them "fight fires" in the short term, the leaders say.

Manpower costs have been on a steady climb over the past few years, and it has been very challenging for the small businesses, said Singapore Manufacturing Federation president Douglas Foo.

Some SMEs, especially those in the manufacturing sector, are practically in a "survival mode" now.

He hopes that the Government will introduce measures to help companies pay for the wage increase component, just like the Workfare Income Supplement for low-wage workers.

"If the country can help uplift (the wages), the pressure will be taken off the companies."

He noted that the Government is very innovative, and has been dishing out different "medications" in the last few downturns.

"There have always been interesting levers that have been created, and I believe that the Government can have some creative solutions and play a critical part in this."

Singapore Business Federation chairman Teo Siong Seng echoed the call for help on manpower costs.

Other than a freeze on further hikes in the foreign worker levy, he hopes that the Government can give companies which are keen to restructure - but unable to find enough suitable Singaporeans to employ for now - some leeway to hire more foreign workers.

Given that the economic situation looks likely to worsen before things get better again, Mr Teo is also concerned about the banks cutting credit lines to the SMEs.

"The Government could take reference from the measures implemented in 2009, and use some of them to help our companies pull through the difficult period," said Mr Teo.

In the 2009 Budget, the Singapore Government announced a $20.5 billion resilience package to help preserve jobs, stimulate bank lending, and enhance business cash-flow, among other measures.

Mr Kurt Wee, president of the Association of Small and Medium Enterprises (ASME), called on the Government to give a bolder push to help businesses with costs.

"The ground sentiments are a lot poorer this time compared with the 2008 downturn. It is not a temporary sharp downturn, but a very serious structural slowdown," he said.

Going overseas could also help SMEs broaden their cost base, and help with long term sustainability.

So Mr Wee hopes that the Government could introduce some form of business expansion grant for SMEs wanting to explore overseas markets in the upcoming Budget.

"It should be broad-based like the Productivity and Innovation Credit (PIC) scheme, that is available to all companies, and not by selection."

The Government could also consider setting up overseas incubation centres to help Singapore startups set up shop overseas, he added.

Beyond the immediate survival needs, local businesses are also aware of the need to continue with capability building, to prepare for the next upturn.

"Based on the feedback in our Pre-Budget Survey 2016, businesses hope that the Government can strengthen its effort for promoting a pro-SME environment to help SMEs be future-ready," said Singapore Chinese Chamber of Commerce and Industry (SCCCI) president Thomas Chua.

Some of these include extending the PIC scheme beyond 2018 and making schemes on changing business model and innovation easier for SMEs to qualify and apply, said the business chamber.

This article was first published on March 9, 2016.
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