Budget 2024: S’pore businesses, workers and families want help to defray costs, stay productive

For Singapore’s growing ecosystem of 4,800 technology start-ups, help in accessing the funds they need to operate and grow will be needed.

For these young companies in the early stages of growth, getting a bank loan can be difficult, especially for early-stage start-ups with no track record or collateral. Even if a start-up can get a loan, the interest rates can be prohibitively high.

This, coupled with the increasing scrutiny by investors on short-term profitability, limits their ability to take a long-term view, said Ms Lim Kexin, a partner specialising in entrepreneurial and private business and tax at PwC Singapore.

“Many start-ups are caught in a tussle between pursuing immediate short-term returns, managing operating cost pressures and dedicating time needed to fully develop their emerging business models and technologies,” Ms Lim said. 

To help these young companies get off the ground, Singapore should go beyond short-term grants or dollar-to-dollar government matching for fund raising, she said.

For SMEs, high costs coupled with negative business sentiments are some of the main concerns.

There are around 300,000 SMEs in Singapore, which contribute nearly half of its gross domestic product and employ about 70 per cent of the total workforce.

“If there are measures to help these companies actively manage cost increases in core factors of production like rental, manpower, electricity, it would really help this year,” said Mr Ang Yuit, president of the Association of Small and Medium Enterprises (ASME).

SMEs in sectors ranging from healthcare and retail to construction and manufacturing are also concerned about digitalisation and sustainability.

In the process of digitalisation and transformation, many SMEs continue to face in-house talent shortage on skill sets that are required to support the process.

ASME recommended a top-up in the SkillsFuture Enterprise Credit for SMEs to invest in the transformation of their businesses and the skills of their employees. 

It also suggested incentives to encourage larger companies to partner SMEs. 

The Government can also help businesses through workforce transformation to upskill or pivot to key growth sectors such as advanced manufacturing, logistics, air transport and aviation, said Mr Chai Wai Fook, partner of tax services at Ernst & Young Solutions.

Measures can also be explored to encourage Singaporeans to upgrade their skills and pivot to key growth sectors, he said. 

More support should be considered to ease the labour crunch in roles that are critical to business operations but often shunned by locals, he added.

SMEs also play a critical role in the global supply chain and can have considerable influence over carbon emissions across their value chains, but most said they lack the expertise on sustainability issues and do not know where and how to start.

The Government tends to focus on larger energy projects, inadvertently sidelining SMEs which face limited resources and competitive pricing, said Dr Hsien-Hsien Lei, chief executive officer of the American Chamber of Commerce (AmCham) in Singapore, which has over 7,000 members from about 670 companies.

“In this light, AmCham welcomes and encourages the expansion of energy conservation programmes to encompass a broader spectrum of opportunities, thereby enabling more inclusive participation of SMEs in sustainability initiatives,” Dr Lei said.

The Government can support SMEs to invest in carbon pricing and modelling solutions as well as projects such as value-chain emissions management and decarbonisation. Measures can include further deductions on expenditure incurred, or co-funding, Mr Chai added. 

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