Rising costs, uncertain global demand and regulation key business concerns

PHOTO: Rising costs, uncertain global demand and regulation key business concerns

SINGAPORE - Rising business costs, especially rental cost, has emerged as the top key concern for businesses, according to research conducted by the Institute of Certified Public Accountants of Singapore (ICPAS).

Based on its pre-budget survey and polls which attracted a total of 575 respondents, ICPAS found that 60 per cent of them worried that high business costs could be a major challenge as they braced themselves for slower growth ahead.

Another challenge businesses faced is difficulty with hiring, with 50 per cent citing problems with manpower shortage.

Ahead of the Budget 2013, respondents indicated that they hope the Government can lend a hand in managing rising business costs.

A total of 60 per cent felt cash grants to Small and Medium Enterprises (SMEs) would be beneficial, while 45 per cent indicated a wish for the Government to consider reviving the Jobs Credit Scheme, as it has been found useful in retaining jobs during bad economic times.

Rental cost also continues to be one of the top concerns related to business costs for SMEs.

81 per cent surveyed want measures to reduce or offset rental cost as their top wish list item for companies in the coming Budget 2013.

Many suggested that foreign worker policies be refined to allow greater differentiation to meet the unique needs of the various industries.

With the reduction in Dependency Ratio Ceiling (DRC) and S-Pass quotas, 24 per cent of the respondents indicated they experienced severe adverse impact on meeting their manpower needs.

62 per cent of respondents polled indicated that they hoped to see customised quotas and ratios for industries which rely heavily on foreign labour.

Most respondents also said that the PIC scheme is a useful tool to enhance productivity, but can be further refined to benefit more businesses.

As many as 66 per cent indicated their desire for the Government to extend the reach of the various productivity schemes by tailoring them to better meet the needs of companies in the professional as well as other services sectors.

Respondents also said that they needed more help to understand the schemes offered by SPRING and IE Singapore.

Slightly more than half of the surveyed indicated that the double-tax deduction scheme is useful with respect to internationalisation activities.

62 per cent indicated they want more help to understand the available schemes, and 71 per cent want more financial support and information about regulatory and tax regimes in other countries to support them in venturing overseas.

Wish List for Budget 2013

Based on the survey findings, the respondents' top wish list items for Budget 2013 are:

- Reliefs or grants to help SMEs better cope with rising business costs
- Greater support to reduce rental costs
- Calibrating manpower policies on foreign workers for different industries
- Refining PIC to benefit more businesses
- More support and information regarding regulatory and tax in other countries to help them venture overseas
- Providing more healthcare and tax savings to help households cope with increasing costs