SINGAPORE (The Straits Times/ANN): Anticipating a tough year ahead for the Singapore economy, businesses hope the Budget will contain support for firms to innovate and develop capabilities in research and development, while also enabling them to hire more older workers.
A statement by The Singapore Business Federation (SBF) on Tuesday (Jan 21) said: "Manpower costs and the need for new or better ways to generate revenue have become the top challenges for businesses. While they recognise the importance of transformation to mitigate these issues, the cost of technology adoption is the biggest roadblock.
"And with a credit crunch experienced by one-third of the businesses, solving near-term issues like financing has emerged as a priority."
The SBF SME Committee submitted its recommendations to the Government on Dec 28 last year. Representing over 26,000 companies, SBF issues a list of recommendations for the Budget every year, some of which have been accepted.
It also noted issues have emerged amid a slowing economic environment as business sentiments remain weak, with nearly 50 per cent of respondents to a recent SBF survey expecting the Singapore economy to worsen this year.
To support companies in innovation, SBF recommended more funding help for companies in the areas of creation, regulation and the administration of their intellectual property filing in global markets.
The government can also put more resources into collaborative research and development (R&D) between institutes of higher learning, research organisations and local small and medium-sized companies (SMEs).
SBF also proposed financial incentives like a research expenditure rebate for SMEs.
"An option for a cash or cash-back system for companies that are not paying tax can be introduced to drive R&D activities amongst SMEs which are not yet profitable. This is currently practised by the Australian government, where companies with a turnover of less than A$20 million receive a refundable tax offset for eligible R&D expenditure," SBF said.
Besides technology, SBF also recommended that the government increase support for companies in hiring older workers, especially since the retirement and re-employment ages will be raised gradually over the decade.
SBF proposed that the Special Employment Credit, which provides subsidies of up to 11 per cent of older employees' monthly wages, be extended beyond Dec 2020.
A Temporary Employment Credit, which helps to cushion employers' costs in increased contributions to the central provident fund (CPF), can also be reintroduced every time the CPF contribution rates for older workers go up over the next decade.
Other business-focused proposals by SBF include setting up a one-stop digital trade platform to help companies buy and sell products online, as well as a cyber security programme to help SMEs identify gaps and adopt solutions.
SBF chief executive Ho Meng Kit said: "Our businesses are increasingly aware of the importance of innovation and transformation... We hope the government can build on that momentum with robust measures that encourage, support and strengthen the digitalisation and R&D efforts of our companies. This will position them well for the future economy.
"At the same time, we should not ignore bread and butter issues like facilitating adequate cash flow for our SMEs, especially during this prolonged period of economic uncertainty."
Kurt Wee, chairman of the SBF SME Committee, said: "The global slowdown in growth is likely to persist for the foreseeable future. Companies should seize this window of opportunity to upgrade their human capital, strengthen their digital capabilities and expand overseas for diversification of markets.
"Whilst more tangible support for SMEs is necessary this year, we would also like to encourage SMEs themselves to be more proactive in seeking out and leveraging available resources, be it provided by the Government, SBF or other trade associations and chambers." - The Straits Times/Asia News Network