With the global financial crisis still lurking in the background, you would expect the upcoming Budget 2012 to dole out some fiscal measures to support companies with their businesses. You would think that it would be the most ideal way of helping businesses raise productivity and cope with the rising business and labour costs. Which is exactly why the recent comments of Budget 2012 focusing on intensifying long-term economic restructuring efforts surprised even myself.
Amidst the uncertain global outlook, the upcoming Budget 2012 plans to help Singapore businesses stay focused on its long-term strategy of raising productivity. I recognize that budgets in the past have implemented tax relief schemes to help small and medium-sized enterprises (SMEs) to invest in R&D and human capital. With the downbeat forecast of the global economy, the government should not simply abandon these SMEs in this time of uncertainty, but rather continue to offer such schemes in a plain, straightforward manner. Surely companies would like to utilize these schemes put in place by the government, but lack the proper information and time to take advantage of them. This can only be attributed to the strict criterions and complicated application processes that come along with these assistance schemes. What I’d like to see is more flexibility in these assistance schemes in order for more businesses to reap the actual benefits.
In the government’s defense, there is a danger of SMEs becoming overly dependent on them to hand out reinforcements every time a slowdown in the economy occurs. Yet it is hard for me not to expect the government to ease the burden of rising costs of businesses. Singapore’s economy is not fully recovered from the major economic downturn and the government prospectus of the economy rebounding has yet to materialize with its subpar growth of 3% this year. Relative to the circumstances of the global economic climate, uneven growth patterns in the US, turbulence in euro zone, coupled with faltering growth in Asian economies; clearly, one can only imagine the future outlook to be more unpredictable.
Come Budget Day, I expect that businesses concerns should be properly addressed. In order for Singapore to continue to be a competitive hub for businesses in the Asian region and compete with regional economic hubs, it needs to be able to retain the growth of its companies.