A one-off aid package to help ease the pain of the ongoing economic slowdown is at the top of companies’ wish lists for tomorrow’s Budget, according to a new survey by The Straits Times and PwC Singapore.
About half of the 158 respondents to the online poll said they hope the Budget will contain short-term measures that will give firms a shot in the arm and help them cope with slowing growth.
These could include more tax relief, help with costs or even freezing foreign worker levy hikes.
Singapore’s economic outlook has dimmed since the start of the year amid an ongoing global slowdown, with the impact felt most starkly in export-dependent sectors like manufacturing as well as sentiment-sensitive industries like finance.
The economy’s weakness has hit the labour market, with layoffs climbing 20 per cent to 15,580 last year even as job vacancies fell.
About 38 per cent of poll respondents said their top concern for this year is rising costs, while 34 per cent said they are most worried about declining sales and profits.
Mr Abhijit Ghosh, international tax partner at PwC Singapore, said these results are “not surprising” given weak market sentiment.
However, he pointed out that despite the slowdown, companies “should be more open to exploring markets outside Singapore”.
A significant share – about 45 per cent – of respondents expect most of their growth to come from the domestic market over the next two to three years.
Another 26 per cent said the South-east Asia region will be a key focus, while 18 per cent are looking towards the wider Asia- Pacific.
The greatest challenges companies venturing abroad face include coping with the different culture and business environment, difficulty in obtaining finance for overseas ventures and unfamiliar regulatory and tax environment.
“We can continue to strengthen the support (in these areas) further,” said Mr Ghosh.
The poll also showed that about 61 per cent of respondents plan to invest in innovation this year, with about 45 per cent saying that additional government grants and tax breaks will encourage them to pump in more money.
Finance Minister Heng Swee Keat has indicated that the Budget will focus on the economy, raising expectations that there will be measures offering some relief to firms hit by the slowdown.
This article was first published on March 23, 2016.
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