Govt will help SMEs, but only if they help themselves first

Govt will help SMEs, but only if they help themselves first

At first glance, this year's Budget does seem a lot more generous than the past few years', especially to small and medium-sized enterprises (SMEs).

There is the $5.3 billion three- year transition support package announced by Deputy Prime Minister Tharman Shanmugaratnam to help companies ride out the restructuring process.

The biggest piece of the package is the $3.6 billion Wage Credit Scheme in which the Government will co-pay 40 per cent of the pay raises of Singaporeans earning gross monthly wages of up to $4,000 for the next three years.

All companies will benefit from this, but the bulk of the measures will aid SMEs most, a critical sector of the economy that has been calling out for help since the restructuring drive began in 2010.

But Monday's session during the Ministry of Trade and Industry's (MTI's) Committee of Supply debate showed that the Government's offer of help is not as simple as it seems.

Gone are the days when the Government would dish out rental rebates or tax concessions that help all companies, regardless of whether they are productive, inefficient, loss-making or profitable.

These days, every dollar that is offered comes with a condition attached. With the exception of the corporate income tax rebate of 30 per cent capped at $30,000 for three years, most of the other policies rolled out by the Government had a specific objective in mind: moving SMEs up the value ladder and getting them to grow their businesses out of the resource- limited country.

Nominated MP Teo Siong Seng and Mr Inderjit Singh (Ang Mo Kio GRC) Monday repeated calls, as they have in the past, for more measures to help companies cope with rising costs, particularly industrial rents.

Trade and Industry Minister Lim Hng Kiang's response to their concerns was polite - and firm.

He said he recognised SMEs will face more difficulties ahead, but reiterated that there was no turning away from restructuring.

Mr Lim cited the Productivity Innovation Credit (PIC), as well as the Wage Credit Scheme (WCS), as ways for companies to defray rising costs.

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