Founder and Chair
Terrific Mentors International
THE Budget was excellent, balanced and visionary. The objective to develop Singapore SMEs (small and medium-sized enterprises) into Singapore MNCs will meet with everyone's approval.
This transformation will take more than just policy changes or new government schemes. For example, when I took over SME Brands Essence of Chicken and developed it into an MNC, Cerebos Pacific, my biggest asset was visionary shareholders.
A British company and the Abu Dhabi Investment Authority held a majority of Cerebos Pacific's equity.They allowed me to take risks and make mistakes building Asia-wide hospitality, grocery, winery, soft drinks and other businesses.
The result: a business that was 82 times their valuation. How can we change the culture of SME leaders to be less risk-averse?
Yeoh Oon Jin
PwC SingaporeIT is a good Budget with a needed focus on growth around specific sectors but remembers to care for people in need. Nevertheless, there are a few areas missed. Let me focus on two.
We should have introduced an incentive to allow for greater deferral of taxation for share options and stock award schemes targeted at budding enterprises and SMEs. This would allow them to attract talent with an alternative remuneration package that promotes greater entrepreneurship and shareholder thinking.
Secondly, the government has said it supports the Organisation for Economic Co-operation and Development's initiatives to counter Base Erosion and Profit Shifting (BEPS). It was therefore surprising that the Budget did not address the relevant recommendations by OECD - for example, country-by-country reporting requirements for Singapore multinationals.
ASEAN and Singapore Managing Partner
Ernst & Young
BUDGET 2016 has been forward-looking, targeted in approach and inclusive in enabling businesses and people to progress through economic transformation. It is now up to businesses and individuals to leverage these enabling initiatives and execute their strategies. An area which should have been included is around BEPS. Unlike several other countries, Singapore had not announced specific measures to counter BEPS.
Realistically, there is little time for businesses to wait further - those that act now to anticipate and plan for BEPS-related changes will be better placed to execute their international growth strategies successfully. Uncertainty may also stifle investors' confidence.
A clear statement on no major shifts in our tax-competitive policies will offer the needed assurance for investors to anchor existing investments here and encourage new inbound investments.
Chief Executive Officer
THE finance minister has laid out a well-balanced Budget, mainly benefiting SMEs and continuing the recent focus on restructuring the economy for greater value creation.
It was a prudent Budget, mindful of the global economic slowdown, but managed to increase spending with no significant tax increases and still maintaining a Budget surplus, largely thanks to the net investment returns contribution.
Many had expected more significant tax changes in this Budget - perhaps a change in corporate tax rebate caps or personal tax allowances might have been beneficial to stimulate growth and domestic spending. For now, the approach seems to be "wait and see". One area the government will surely look at is the tax implications and potential of new business models and modes of consumption - for example, by applying GST on online transactions. In addition, groups operating internationally will hope for more clarity soon on Singapore's adoption of OECD's BEPS minimum standards.
Wong Heng Chew
IT was great to see that the 2016 Budget included educational programmes to help develop a stronger workforce and meet the increasing demands of the ICT (information and communications technology) industry in Singapore.
However, there is also a need to further upgrade the abilities of the existing pool of ICT talent. In the push for an innovation-driven economy and as Singapore makes progress on its quest to be a Smart Nation, there will be growing demand for specialist talent in fields such as data science to harness the digital revolution. Building a local hi-tech workforce will enhance Singapore's status as a technology hub in Asia-Pacific.
Saleh M Haji Munshi
TO achieve sustainable growth, businesses need to embrace self-disruption, instead of waiting to be disrupted by the market. Enterprises in Singapore today have adopted automation and technology to boost productivity; the next phase is to embark on digitisation, an essential for disruption success. While businesses understand the urgency, only few have made the leap.
The government can support this by rolling out incentives and creating a digitisation blueprint for businesses to easily understand, adapt and adopt. There should be a more concerted effort to ensure that digitisation is not only understood, but also fully implemented.
Lee Fook Chiew
Chief Executive Officer
Institute of Singapore Chartered Accountants
BUDGET 2016 focuses on helping companies, particularly SMEs, to innovate, build capabilities and capacity. Perhaps there could be more measures to help businesses better manage costs to help them remain viable in the short term while undertaking long-term transformation. Cost management was also one of the top business concerns raised by respondents in the ISCA pre-Budget survey 2016.
One concern is that professionals, managers and executives are among those whose jobs are hardest-hit during this period of economic transformation. While the Budget has announced that employment support will be enhanced through the "Adapt and Grow" initiative, we look forward to the government providing more details on the help extended to this group during this difficult period.
I COMMEND the 2016 Budget for taking an integrated approach to promoting innovation among SMEs. The Industry Transformation Programme (ITP) is geared towards driving productivity and cost efficiencies primarily through infrastructure and talent via comprehensive funding programmes. SMEs are constantly looking for a competitive advantage, in any economic landscape, and a key way they can achieve this is through IT innovation.
Increasingly, data security is becoming a greater concern for businesses especially in Asia, as industry figures show they are 40 per cent more likely to be targeted by hackers. In the upcoming Budget debates, I'd like to see more focus on protecting businesses from cyber threats and data breaches, where there is an opportunity to create stronger synergy between security agencies, service providers and businesses.
Walton International Group (S)
THIS year's Budget has been thought-through carefully in view of the challenging economic outlook. Although there are numerous schemes which SMEs can take advantage of, many small firms with limited manpower may not know where and how to start. They need a helping hand from the government agencies.
Given the manpower limitations of the government agencies, perhaps the government can start a scheme which can tap on PMEBs who are either retrenched or retired and have the experience to play mentors to these SMEs. With their guidance, these SMEs may grow and eventually transform themselves under the ITP.
It will be a win-win situation for the SMEs and PMEBs.
Kai Y Chan
Carlson Wagonlit Travel
IT is encouraging to see the strong focus on innovation through the ITP in this year's Budget. Technology has already revolutionised the business travel industry, and the pace of change keeps accelerating. The ITP will help businesses harness technology to boost the productivity of their workforce, as well as offer better products and experiences to their customers.
We were also hoping to see programmes aimed at developing data analysis skills. Increased adoption of technology gives access to a bigger pool of data, and the ability to effectively interpret and analyse this data is becoming a vital skill. We certainly find this in our industry where clients are constantly looking for data-driven intelligence to better understand how their employees travel, and also how they can better drive savings.
Singapore High Commissioner to Ghana
THE local Singapore market is small. It is a sine qua non that our SMEs must venture overseas in order to thrive. Singapore has an excellent brand name. Our reputation for trust and dependability is a valuable cachet for breaking into new markets. But SMEs need more tangible assistance when venturing abroad. In particular, they need cash and connections.
A scheme for export financing and credit insurance underwritten by the government would be most desirable. Similarly, a much-wider overseas network of International Enterprise Centres staffed with officers who can identify reliable foreign partners for our SMEs to team up with will go a long way in helping our SMEs internationalise.
Lim Soon Hock
I WAS more interested in what the Budget should not provide for businesses. It is opportune for the government to compel businesses, especially SMEs, to build resilience in their operations, for both good and bad times, and not be overly dependent on grants or subsidies. I therefore welcome the targeted approach to government funding, through initiatives such as the ITP, National Robotics Programme and SkillsFuture.
The government should fund only deserving and promising companies - for example, those with solid plans to transform and upgrade, or have a good track record in business acceleration or business turnaround. Nine in 10 companies are SMEs. They contribute to over half of our GDP and employment. The targeted approach can only uplift the entire sector. Hopefully, more unicorns can be created in the future.
In a nutshell, the government, with this new targeted approach, should not fund mismanaged companies - for example, those that cannot manage costs. Businesses do not fail; people do.
Robin C Lee
Bok Seng Group
THE finance minister has cautioned Singaporeans against resigning ourselves to a self-fulfilling prophecy by simply giving in to a bleak outlook. We have to continue to make great strides in innovation and positive transformation, especially in the face of trying times. Therefore, I am delighted to note that in spite of all the prudence in this Budget there were no expenses spared in our charge to further innovate and quicken the transformation of our businesses. This is especially heartening for SMEs, allowing them to be more forward-looking in the new digital world.
However, I feel more could be done to make taxes more progressive not just in placing a new cap on total reliefs for top earners but also in taking greater aim at excessive and luxury consumption.
Managing Director, Behavioural Consulting Group and Head of APSCo Asia (Association of Professional Staffing Companies)
A KEY area to be addressed is the widening gap between the jobs available and the PMETs who are out of work. The skills required don't match the skills and experience available. This situation is further compounded when employers discriminate against age and reject experienced candidates on the grounds that they are earning too much even when they are willing to earn a lot less. This is a growing issue that needs to be addressed urgently with education, governance and incentives that make hiring mature or experienced workers more attractive to the employers. Current schemes need to be further enhanced.
Hans Hanegraaf Country Executive, ABN Amro Bank NV Singapore and CEO of ABN Amro Private Banking Asia and Middle East
THE 2016 Budget is a prudent and inclusive one. Apart from the continuing investment in education, infrastructure and healthcare, there are measures to help soothe the pain of SMEs brought about by the current slowdown. At the same time, new initiatives were introduced to strengthen them for a more challenging environment. The targeted approach to help SMEs transform, and prepare the local workforce for the future, is a step in the right direction.
While it is understandable that the finance minister has chosen to keep the powder dry, we are hopeful that should the economy slow further, some of the new initiatives would be extended to the service sector to defray the rising costs.
Founder and Chairman
THE planned rollout of the business grants portal by Q4 2016 is encouraging. Cooperation with associations such as the Singapore International Chamber of Commerce, Association of Small and Medium Enterprises and Singapore Chinese Chamber of Commerce and Industry should be welcomed as we are optimistic their involvement would certainly enhance the portal's overall potential. We are also glad the programmes under "Supporting Scale-Ups" will be magnified as the respective incentives are very impactful. However, the identification of financing options for smaller companies remains challenging. The existing "Internationalisation Finance Scheme" is limited to credit facilities from 12 financial institutions and we recommend broadening this scheme to encompass a greater set of financing options and structures.
Group Managing Director
SMEs would definitely benefit from the 2016 Budget. Much focus has been put on helping SMEs to get more rebates and funding. One major announcement is the ITP. Besides supporting individual firms, another target of ITP is to support innovation. This is highly important as innovation is critical - especially to SMEs - in order to improve productivity. Local SMEs are generally dependent on foreign workers. I would also like to see more assistance for SMEs on strategic talent acquisition and management, that will help them excel in the war for talent.
PrimeStaff Management Services
I'M glad to see that many measures to help companies sharpen their capabilities amid the continued restructuring have been included in the Budget, such as the new ITP, increase in the Corporate Income Tax Rebate to 50 per cent, and Special Employment Credit.
It is a good move to defer the levy increases for foreign workers in the marine and process sectors but this deferral should perhaps have been extended to all sectors in light of the economic headwinds we are facing.
For example, levy increases for the services and construction sectors will proceed despite the continued challenges they face due to the shortage of manpower, rising business costs and declining consumer spending.
EASB Institute of Management
SMEs play a key role in the economy, accounting for about half of GDP and 70 per cent of jobs in Singapore. The issues facing businesses - especially SMEs - in this time of a slowing economy are high business costs (rentals, wages) and manpower shortage. More concrete and specific actions to reduce pressure in these areas will be more helpful instead of tax rebates which are quite irrelevant where businesses are just trying to stay afloat.
What specific assistance might the government provide for companies trying to go overseas?
Best World International
ON the whole, Budget 2016 seems to be aimed at improving the capabilities of Singapore businesses in the longer term, with the strong encouragement for automation and robotics. This is targeted very much at larger enterprises. The introduction of the SME working capital loan scheme can provide temporary assistance for SMEs facing cashflow difficulties. We hope to see financial institutions participate in approving such loans to SMEs with the reduced risk exposure. The need for Singapore SMEs to plan to expand to other markets is crucial to survival. We hope to get more details during the upcoming Budget debate in Parliament.
I THINK Singapore's 2016 Budget should open up the hiring of foreign workers for SMEs, especially in the construction sector. Few Singaporeans (if any at all) wish or want to be a construction worker. We have big labour constraints as a builder and developer. A deferral of foreign worker levy hikes has not much impact for SMEs.
More direct assistance will be a better way to help SMEs. With income tax rebates, for instance, we would need to generate a certain level of income in order to enjoy the rebates. We do not have much business to begin with.
Chairman and CEO
Grey Group Asia-Pacific
A FURTHER measure for Singapore's 2016 Budget could be assistance for family care. Highlighted in the Association of Women for Action and Research's recommendations for this year's Budget, women are 10 times more likely to be outside the labour force as they tend to be family care-givers.
In this instance, the family loses a source of income and the women become dependent on working family members, leading thus to inadequate savings for old age.
Policies and assistance to address this aspect of society can help to create a more diverse workforce that can include different viewpoints for better problem-solving as well as lead to an increase in a company's bottom line. Focus on this policy can also ease the manpower crunch many industries face.
Managing Director and Co-Founder
CONTRACT and freelance workers make up a growing part of the Singapore workforce, particularly with the advent of services such as Uber and AirBnB. Indeed they would be a common reality in a 21st century "sharing economy" workforce. At present, these workers have far limited protection than regular employees.
While the Budget does have upgrading schemes for workers facing difficulties in finding employment, we would have liked to see support programmes and measures to assist this growing segment of the workforce.
LOCAL enterprises, especially SMEs, are hit by the double whammy of an economic slowdown and rising business costs. They operate in a tight labour market and face headwinds competing with online businesses and other players in an open environment.
Perhaps we should revisit the idea of an Exim Bank or a similar initiative to help SMEs enhance their financial position, stability and growth.
It is typically more difficult for SMEs to tap the mainstream financial institutions or access alternative financing. They also have greater challenges in assuring lenders of their credit-worthiness.
Mainstream financial institutions would also not be as willing to partner SMEs on perceived higher-risk projects in new markets or new technology.
An Exim Bank or similar venture can cover these gaps and also be more focused in meeting the needs of the SMEs. It could also advise SMEs on how to merge their operations or hunt as a pack.
THIS Budget is focused primarily on building future-readiness for businesses and people. I would have liked greater focus on how to productively deploy our human capital assets with lifelong learning put in place. The Budget provides enhanced support for the young and old, low wage earners and people with disabilities, for lifelong skills upgrading, but these skills must be usable to improve their employability. Not skills trained for no specific immediate use or as a hobby.
My point is that lifelong learning and training should be pegged to one's employment prospects. An example will be a 63-year-old worker retrained for a new role like retail supervisor. There could be special employment credits to help offset overall manpower costs - as well as a "quota booster" for the hiring of foreigners to complement the employment of the older worker or people with disabilities.
This article was first published on April 4, 2016.
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