SINGAPORE: More needs to be done to help local businesses – particularly small- and medium-sized enterprises (SMEs) – better understand and benefit from the Government’s industry transformation maps (ITMs), said industry leaders and analysts on Wednesday (Jan 9).
The comments were made at the annual pre-Budget discussion organised by the Institute of Singapore Chartered Accountants, where panellists also discussed the need to relook the foreign worker quota and certain property regulations.
A VAGUE UNDERSTANDING
The ITMs are sector-specific roadmaps that were first announced in Budget 2016 as part of a S$4.5 billion industry transformation programme. All 23 roadmaps have been rolled out as of March last year.
Even though it has been two years since the roadmaps were progressively rolled out, SMEs only have a vague understanding of how they stand to benefit from those transformation blueprints, noted the panellists.
READ: Budget 2019 to be delivered on Feb 18
“More often than not, it requires quite a bit of persuasion to get SMEs to come forward to take up ITM programmes,” said Singapore Manufacturing Federation’s (SMF) secretary-general Ahmad Magad.
He attributed this to a “lack of awareness in terms of what ITMs can do for each sector”, and suggested that the roadmaps be refined to “be clearer (and) more detailed”.
While the ITMs may have had some effect on nudging businesses to prioritise innovation, Ms Joanne Guo from the Singapore Business Federation, said that SMEs still need some guidance.
“Our SMEs would like to find out more in terms of how ITMs can help them and where they really need help on is guidance on ways to improve their manpower needs and talent pipeline,” she said.
Apart from awareness, another area of concern is whether the ITMs are broad-based enough to encourage a wider transformation exercise among businesses, said KPMG Singapore’s head of tax Tay Hong Beng.
Given that the roadmaps are currently being implemented across industries, some panellists said it could be time to fine-tune certain things.
“We should look at how to evolve the plan to suit the changing environment that we have, especially with all the uncertainties in the world,” said Mr Kenneth Loo, president of the Singapore Contractors Association.
Mr Liang Eng Hua, chairman of the Government Parliamentary Committee for Finance and Trade and Industry, said the ITMs have seen encouraging results thus far, although more can be done.
The Government, for instance, is looking at clustering some industries where there are convergence of activities.
He also said that a “collaborative effort” is needed for the ITMs to work well.
“The ministry and agencies can give out broad messages, but they will need to rely on partnerships with the trade associations and chambers (TACs) to finesse and bring them across to their members,” said Mr Liang, who is also Member of Parliament for Holland-Bukit Timah GRC.
“For ITMs to work well, the working mindset should not be just about ‘What can the ITMs do for me or my business’. The more appropriate question to ask is ‘What we want the ITMs to do for our businesses’.”
He added: “In other words, businesses and industries must ground up the agenda and the action to be taken. Because at the end of the day, it is the business and stakeholders who know what are needed for companies to thrive.”
Under the theme “Progressing with a Vibrant and Innovative Economy”, industry leaders and analysts discussed key issues surrounding the economy, such as the industry transformation maps and digitalisation, at the discussion. (Photo: ISCA)
RELOOK FOREIGN WORKER QUOTA, LEVY
Among the other issues raised during the discussion include recalibrating Government grants to make them more accessible and relevant for businesses.
KPMG’s Mr Tay pointed out how several grants aimed at helping companies with the digitalisation journey are focused on “ideation”, instead of the “real difficulty”, which is implementation.
“Thinking new ideas and getting it created is just one part of the journey; the other is on implementation. Even if you have good ideas, implementation costs or benefits that will take years (to materialise) will still deter businesses.”
Manpower shortage was also highlighted by several industry leaders. Mr R Dhinakaran, president of the Singapore Retailers Association, asked if there is a fairer way of determining the foreign worker quota across industries.
Some, like the retail sector, face more difficulty attracting Singaporean workers. “All these things need to be taken into account when fixing the quota,” he said.
Some solutions for this were raised during the discussion.
Mr Dhinakaran, for instance, suggested having a “seasonal quota” for foreign workers. This, he said, would help ease the sector’s manpower crunch without impacting the Government’s broader push for productivity.
Over in the emerging financial technology (fintech) space, a shortage of highly skilled tech talent has been a “critical issue” for many start-ups , said Mr Chia Hock Lai.
As such, the president of the Singapore FinTech Association asked if the manpower curb could be loosened for start-ups to hire foreign tech specialists to fill specific roles in areas such as artificial intelligence and blockchain technology.
Apart from loosening manpower curbs, Mr Ang Yuit, vice president of the Association of Small and Medium Enterprises, mentioned that the levies imposed on the hiring of foreign workers have ramped up business costs.
He hopes that the Government can review the levy to help local businesses remain competitive in the region.
LOOSEN SOME PROPERTY REGULATIONS
Meanwhile, Mr Chia Ngiang Hong, second vice president of the Real Estate Developers’ Association of Singapore, called for the Government to consider tweaking the five-year limit that developers have to sell all units at their residential projects.
Under the latest slew of cooling measures, which took effect last July, developers are subject to a non-remissible 5 per cent Additional Buyer’s Stamp Duty (ABSD) when they purchase en bloc properties for redevelopment.
They also face an increase in the remissible ABSD from 15 per cent to 25 per cent, which can only be waived if all the units in the new development are sold within five years of acquiring the site.
READ: Property curbs prompting developers, especially smaller players, to rethink strategy: Experts
“Even if you are with left with five or 10 units, you are hit with the full penalty with interest,” said Mr Chia. “This penalty is no joke.”
This “frightening risk” has prompted developers to become more selective in their land acquisition strategies, particularly for big sites.
“We are not asking for a waiver or a removal of the ABSD, but if the Government can tweak a bit, like giving bigger projects a longer period, that will be very helpful.”
