SCCCI issues Budget 2015 recommendations

Singapore

TOPPING the wish list of small and medium-sized enterprises (SMEs) is for the government to not raise foreign worker levies and tighten quotas further.

Coming a close second is the desire for close consultation with trade associations and businesses before new rules/regulations are introduced so as to ease compliance costs.

Companies also wish for the government to provide employers with subsidies (to cover, for instance, medical and insurance costs) to encourage the hiring of Singaporean workers aged over 55.

These were the findings of a pre-Budget survey conducted by the Singapore Chinese Chamber of Commerce and Industry (SCCCI), which elicited responses from 356 companies. Of the survey participants, 96.7 per cent were SMEs; 92.6 per cent of the respondents were the decision- makers of the respective companies.

"As businesses have taken concrete measures to upgrade themselves, the government should continue incentives and programmes for businesses to help in their transformation," said SCCCI president Thomas Chua.

One way companies have taken steps to improve productivity is through investment in automation and equipment with the support of productivity schemes. However, companies - especially micro enterprises - still face cashflow problems due to the lengthy and protracted grant disbursement process, noted the SCCCI on Friday.

In addition to speeding up the administrative process, SMEs surveyed asked that they be allowed to apply and use the Innovation and Capability Voucher (ICV) to undertake productivity improvement projects concurrently to speed up productivity improvement.

According to the survey results, 90.3 per cent of the companies have adopted productivity measures, compared with 83.9 per cent a year ago. While micro- enterprises are still lagging behind (85.9 per cent), there is still a 5.3 percentage point increase over the previous year.

The SCCCI also recommended that the government widen the coverage of the Productivity and Innovation Credit (PIC) and ICV schemes.

"As trade associations and chambers (TACs) are regarded by the government as important channels to help industries transform, SCCCI recommends that PIC be extended to TACs as they need to upgrade their capabilities in tandem with this role. Where appropriate, TACs can also use PIC to support the purchase of machinery/equipment that can be commonly used by their members," it said.

A separate recommendation was to urge government-linked companies and large corporations to create more project opportunities for SMEs to help them build their track record.

The SMEs surveyed also requested that the government co-share eligible expenses to support their ventures overseas.

"Asean is a natural market for our SMEs in their internationalisation effort. With the impending Asean Economic Community in 2015, SMEs should be encouraged to be more proactive to seize opportunities from the combined Asean market," said the SCCCI. "Small SMEs will find cash subsidies more useful compared to Double Tax Deduction as many SMEs have lean profit margins."