THE Budget will likely unveil new initiatives to lift productivity, including measures aimed at boosting revenue, so firms can weather the pain of restructuring, said DBS Bank yesterday.
It noted that a new strategy could be in order to help businesses hit by rising costs and labour constraints.
"Rather than taking the carrot-and-stick approach of starving companies of foreign workers and subsidising the costs of investment in technology, the focus going forward could be on helping local companies improve their revenues," said DBS economist Irvin Seah.
Mr Seah added that expanding overseas could help alleviate the effects of restructuring, which is now in its fifth year.
He expects the Budget to roll out incentives to encourage local enterprises to partner with government-linked companies, multinational corporations and even foreign small and medium-sized enterprises on overseas ventures.
Mr Seah also predicts more targeted measures to help specific sectors that have been a drag on productivity. Construction firms, for example, could get more incentives to encourage them to pool resources to boost efficiency.
"As the restructuring effort moves into the second half, policy measures are likely to become more targeted and less painful," he added.
And while Deputy Prime Minister Tharman Shanmugaratnam has hinted that the Budget will focus on enabling "good and fulfilling careers" for the young and middle-aged, this too ties in with a refocused productivity push.
Mr Seah said: "Ultimately, the productivity drive is not only about upgrading technology; enhancing skill sets is just as important."
He expects Mr Tharman to unveil details of the SkillsFuture scheme in the Feb 23 Budget, "with special attention to enhancing industry-specific skills".
Generous subsidies for training and advanced education for professionals, managers, engineers and technicians are also on the cards, said Mr Seah.
If the $8 billion Pioneer Generation Package stole the headlines in last year's Budget, this year might be marked by the introduction of the Silver Support scheme.
As much as $10 billion to $12 billion could be set aside for the scheme, predicts Mr Seah, and this would comprise the bulk of what he expects will be a $13.5 billion special transfer to share Singapore's growth gains.
Silver Support was first mooted by Prime Minister Lee Hsien Loong in his National Day Rally speech last year. The scheme is expected to provide basic financial help for the low-income elderly with little family support and insufficient Central Provident Fund savings for retirement.
This article was first published on February 11, 2015.
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