Enterprise and partnership needed for the future: Heng

Mr Heng says no step-by-step guide exists to show a clear way into the volatile, unpredictable future
PHOTO: The Straits Times

Detailed economic plans are no longer enough for Singapore as it moves into an uncertain future, said Finance Minister Heng Swee Keat on Thursday.

Instead, what the country needs urgently is a pervasive sense of enterprise and partnership so that risks - wherever and whenever they crop up - can be mitigated, he said in his Budget 2017 round-up speech.

In positioning the Budget as a forward-looking one, he said to Parliament: "The world is changing, but we do not know for certain the pace and the direction of change. ... What we need is not a cast-in-stone roadmap, but a spirit to constantly forge forward, and to find a new way forward.

"Let us develop the deep capabilities - strengthen the spirit of enterprise to adapt and try for new things, work together in partnership to care for and support one another."

Read also: Budget 2017: 5 things that may affect you directly

His hour-long speech summed up three days of parliamentary debate, involving 53 lawmakers and four ministers, on Budget 2017.

It also comes three weeks after the Committee on the Future Economy (CFE) issued recommendations on Singapore's economic transition.

Last month, Singapore reported 2 per cent growth for 2016, "comparable" to growth rates in other high-income economies.

But growth was not even. Some companies and sectors, such as the marine, construction and retail, bore the brunt from cyclical and structural woes, said Mr Heng.

Budget 2017 has short-term measures to help, he said, in response to one of the major strands in the debate - that of a perceived lack of immediate help measures for firms and workers to tide them through this difficult period.

Read also: Singapore's budget follows up on long-term economic strategy

He stressed that the S$1.4 billion set aside for immediate help is "not a trivial amount"; the sum is spread across the existing Wage Credit Scheme and Special Employment Credit, along with enhancements to corporate income tax rebates and the Additional Special Employment Credit.

It comes "on top of substantial stimulus measures introduced in the last three to four years, the cumulative effects of which are still working through the economy," said Mr Heng.

The Finance Minister also highlighted that Budget 2017 is a reflection of the government's preference for targeted measures over broad-based ones, as evidenced by the initiatives introduced.

This is because across-the-board stimulus will distort price signals, and prevent an otherwise-healthy economy from functioning properly.

But beyond addressing near-term concerns, Budget 2017 has a heavier task set out for it - that of laying out the government's initial response to the CFE proposals.

The mandate for the CFE, which Mr Heng co-chairs, is to find ways for the Singapore economy to create new opportunities for its people and improve their lives, even as demographic woes and external uncertainties hit.

Read also: Minister Chan Chun Sing rejects WP's take on Budget 2017

"This will not take place overnight, and Budget 2017 is but a step in that direction and builds on what the CFE has put forward," said Mr Heng.

Some S$2.4 billion, spread over four years, has been pencilled in to implement the CFE recommendations.

Expanding on the theme of enterprise made in his maiden Budget speech last year, the minister urged Singapore firms and workers to continue fostering that spirit.

Budget 2017 has therefore expanded on earlier initiatives to instil in companies and workers the fighting spirit to survive in a disruptive future. These include the operation and technology roadmapping service offered by A*Star, which helps firms innovate; employees, on their part, can tap into more SkillsFuture Credit and subsidies to train themselves.

The spirit of enterprise can also turn Singaporean firms and workers into disruptors themselves.

Budget 2017 has introduced initatives to help firms and workers create new value and bring "these ideas into new markets", where they stand to gain, said Mr Heng.

These include the International Partnership Fund for firms and Global Innovation Alliance, which helps young people gain more overseas exposure.

Equally important in helping Singapore navigate its way forward is a strong sense of partnership. The Industry Transformation Maps (ITMs), first proposed in last year's Budget, are a good platform for this, he said.

Budget 2017: Heng Swee Keat receives warm welcome back in Parliament

  • Finance Minister Heng Swee Keat delivered his second Budget speech on Feb 20, 2017.
  • Mr Heng's health took a hit in 2016 when he suffered a stroke in Parliament.
  • He returned to work in August, but has kept a low profile since, making his first public speech earlier this month at the release of the CFE's report, which he co-chaired.
  • His return to Parliament on Monday was greeted with support from fellow MPs, who thumped their seats as he began his Budget speech.
  • It was a shorter speech than the one he delivered last year, clocking in at about one-and-a-half hours - but still packed a substantial amount.
  • Budget 2017 addressed Singaporeans' immediate concerns while laying the groundwork for future growth.

By the end of fiscal year 2017, 23 sectors covering 80 per cent of the economy will have ITMs in place. The programme costs S$4.5 billion.

Partnership also extends into the social sphere, as "community action" is critical in providing customised assistance to the specific needs of certain communities. "Even the strongest social safety nets are no substitute for the caring hearts and helpful hands of neighbours," said Mr Heng.

Without naming specific initiatives in Budget 2017, he said that "each Budget builds on past Budgets", and Singapore has built up a strong social security system. Schemes include MediShield Life, Workfare and making GST Vouchers permanent.

The government stands ready to help and foster the spirit of enterprise and partnership, for example by reviewing regulations where appropriate, said Mr Heng.

For example, the Manpower Minister will soon talk about what can be done to help freelancers.

The Health Ministry is also doing a "major review" of severe disability insurance scheme ElderShield.

Read also: Budget 2017's water price hike: What you're not hearing about the 30 per cent increase

But executing these plans requires prudence on the government's part so as not to squander fiscal resources. That means agencies must "do more, do better, with less".

Turning his attention to the proposed water price hikes, the most hotly-debated topic for this Budget, Mr Heng said that in the next five years, some S$3 billion will be spent on sewerage network projects to beef up the resilience of the water supply.

This is more than the revenue from the water conservation tax, which will be about S$1.6 billion over the same period, he said.

"The cornerstone of water policy is the pricing of water on sound economic principles to reflect its long-run marginal cost."

At the same time, the government is conscious about the sustainability of Singapore's tax base. It also has to strike the right balance between current and future generations.

"There is no step-by-step guide for how to venture into the volatile, unpredictable future that lies ahead.

"But for Singapore, we have our compass, a compass of our shared values and our common hope," he said.

This article was first published on March 3, 2017.
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