Costs, manpower top business worries

Cost concerns and manpower issues came to the fore at a Budget forum yesterday as business leaders questioned if the Government can help relieve the impact of a water price hike, a diesel tax and strict foreign manpower controls.

Faced with these questions, Minister in the Prime Minister's Office Chan Chun Sing urged businesses to continue improving their value-add and venture overseas for growth.

Mr Chan joined a panel discussion alongside the Singapore Food Manufacturers' Association president, Mr Thomas Pek, and the Singapore Chinese Chamber of Commerce and Industry president, Mr Roland Ng.

The Chinese-speaking session, with an audience of about 250 people in the business sectors, was part of the Lianhe Zaobao Singapore Budget Business Forum at Shangri-La Hotel.

"Food manufacturing uses a large amount of water all day, and my industry peers have urged me to ask whether it's possible for us to have some government relief on this," Mr Pek said.

The 30 per cent water price hike has been hotly debated since its announcement in this year's Budget.

The new 10-cent-per-litre diesel duty will also affect industrial users, Mr Pek cautioned.

The discussion needs to go beyond cost management, Mr Chan said in response.

"There are two aspects that we can work on. The focus is often on costs only. But when we are not able to compete on costs due to structural constraints of land or manpower, we must, in turn, improve the value of our products," he added.

Businesses must also set their eyes on overseas expansion, making full use of the trusted reputation of the Singapore brand.

While the Government has "no choice" but to raise water prices due to water scarcity and high usage, other initiatives are on the cards to create a more cost-effective business environment, Mr Chan said.

These include the push for a nationwide natural gas network, and the development of more large-scale centralised infrastructures akin to Marina Bay's district cooling system.

Questions on foreign worker controls also came up during the two-hour session.

Mr Chan said policies on this front are not just about managing the total number of foreign workers.

"Our issue is not one of numbers, it's one of getting the balance right in the types of foreign labour required to complement our economy," he noted.

"At the macro-level, how many people we can take in depends on how well we are able to integrate them into our society, how well our infrastructure can cope.

"But we also need to shift away from dependence on low-skilled foreign workers. If we can switch some of these numbers to higher value-added sectors, that will then open a lot of policy options for us."

In figuring out its policy approach and providing better support to businesses, the Government needs trade chambers and associations to play a larger intermediary role.

"Our economic challenges are much more diverse than in the past. We can't have generic, one-size- fits-all policies... we need to apply a much more targeted approach," Mr Chan said.

He added: "The Government can do this only if we work closely with trade and business associations, as they are closer to the ground and know their respective needs."

This article was first published on March 17, 2017.
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