Budget 2015 addresses social goals, but is also business-friendly

BUDGET 2015 has been heralded as one for the man in the street - giving low-income, middle-income and older Singaporeans a helping hand, and promoting social inclusion and greater progressivity. But its business-friendly aspects should not be underrated.

Companies and businesses have much to cheer in this year's Budget, especially small and medium-sized enterprises (SMEs). The difference this time though is that the approach to economic restructuring has shifted slightly. Moving away from the carrot-and-stick approach of restricting the supply of foreign workers to companies while subsidising their adoption of labour-saving technology, the government has introduced productivity-inducing measures that are more targeted and which will hurt companies less, if at all. With the productivity drive not having achieved the level of gains that had been expected, Budget 2015 shifts the focus to three elements in particular: innovation, internationalisation, and skills upgrading.

Provided companies make the effort, innovation and internationalisation will help them boost topline growth. In line with this, the demands of the new Singapore workforce will also change to cater to a business environment where companies are expected to be more innovative, technologically driven, outward-looking and operating higher up the value chain. The Budget is farsighted in seeking to fulfil the future needs of the workforce by focusing on skills upgrading. The SkillsFuture scheme is exactly what is called for; it is flexible and can be customised to individuals. SMEs, which may not have the resources to provide adequately for skills upgrading, will be the major beneficiaries of this. By thus making training a "public good" which can benefit all companies, the government may have given the productivity drive a major boost.