Thursday, 21 August, 2014

Published March 03, 2014
Top execs praise Budget but also see limitations
More could be done about self-compliance and to attract MNCs
BT 20140303 KLVIEW3 980907

Forward-thinking initiative: The budget's centrepiece, a package of measures to address healthcare costs for the elderly, were particularly lauded. - PHOTO: YEN MENG JIIN

BT 20140303 KLVIEW3 980907

[SINGAPORE] Singapore's top executives praised the 2014 Singapore Budget's proposed measures to improve productivity and innovation, but also noted areas where more could be done.

"What stood out most about the 2014 Budget was its focus on quality sustainable growth while building a fair and equitable society," said Hugues Delcourt, ABN-Amro's country executive for Singapore and chief executive of private banking in Asia and the Middle East.

"From the pioneer generation that shaped what Singapore has become to supporting aspiring companies set to shape Singapore's future, there was something for everyone."

Most of the comments in a BT survey of executives were positive about the budget.

The budget's centrepiece, a package of measures to address healthcare costs for the elderly, were particularly lauded.

"This is an excellent initiative that upholds the values of Singapore as an integrated and equitable society," said Max Loh, country managing partner at Ernst & Young. "The best part of this is the promise of support being funded regardless of future economic conditions. It is such forward thinking, fiscal discipline and willingness to shoulder responsibility that has distinguished Singapore for half a century."

Business decision makers also noted an abundance of measures aimed at incentivising productivity and innovation, especially at small and medium enterprises (SMEs). The Production and Innovation Credit (PIC) scheme was extended to 2018 and its size expanded, while the Infocomm Technology (ICT) for Productivity and Growth (IPG) programme was introduced.

"The opportunity to work smarter by harnessing technology enables SMEs to level up the playing field and be better poised to compete with the larger players," said Tim Moylan, president of Asia Pacific for Infor. "SMEs which understand that technology is not just a tool for large corporations can better streamline business processes to achieve that competitive advantage, and become stronger in the long run."

But the executives also noted where the budget may not have gone far enough.

Yeoh Oon Jin, executive chairman of PwC Singapore, thought that more sweeteners could have been given to improve Singapore's attraction to foreign multinationals.

"The budget should have included further measures to incentivise MNCs to bring greater and real economic activities, assets, etc into Singapore that can withstand scrutiny from any domestic or foreign interest groups," Mr Yeoh said.

Self-compliance was also an area that could have been better explored.

"In parallel, the budget could also have been more innovative by introducing other self-compliance measures even though Singapore has already committed to meet international standards through greater transparency and exchange of information. My hope is that we can take some off-budget measures to do so," Mr Yeoh said.

Dora Hoan, co-chairman and chief executive of Best World International, also thought that too much of a cookie-cutter approach may have been taken with the IPG, which aims to promote the adoption of proven ICT-based productivity solutions.

"Companies are unique and hence, the 'proven solutions' may not be suitable for some," Ms Hoan said. "While they can try to pilot new solutions, the risks and resources involved may be too high. Perhaps the government may wish to review this policy more."

Some executives also noted that the issues of productivity and healthcare costs that were addressed by the budget required a holistic approach.

"It would therefore have been more complete if the 2014 Budget had introduced incentives to harness more private sector participation," said Lim Soon Hock, managing director of Plan-B ICAG. "Businesses and entrepreneurs can complement the government in tackling the many challenges facing health care in Singapore."