From Trump’s ‘tariff tantrum’ to the Johor-Singapore SEZ: highlights from BT’s post-Budget dialogue
Panellists also discuss how businesses can stay competitive and manage costs
[SINGAPORE] Business costs, US President Donald Trump’s tariffs and the Johor-Singapore Special Economic Zone (JS-SEZ) were among the key issues discussed at The Business Times Singapore Budget 2025 Dialogue on Tuesday (Mar 18).
These are edited excerpts from the dialogue.
Speakers:
- Indranee Rajah, second minister for finance and national development
- Han Kwee Juan, group executive and group head of institutional banking, DBS
Moderator: Anita Gabriel, deputy news editor, The Business Times
On costs
Anita Gabriel: Budget 2025 offers some relief through tax rebates and wage support. But how is the government helping businesses manage costs more sustainably in the long run?
Indranee Rajah: Well, actually, it’s not the role of the government to manage businesses’ costs. It is the role of businesses to manage their costs. The role of the government is to act as a catalyst – to provide grants and financing schemes that catalyse growth for the companies.
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There are a range of things that we would strongly encourage companies to tap. One is the Productivity Solutions Grant. That is intended to reduce costs, because the greater productivity a company has, it means more output for less cost.
Another area is innovation. For that, I think this Budget has got quite a lot of schemes. And then obviously, putting money into research and development, because you hope that the outcomes will be able to benefit companies and businesses, especially in terms of costs if they can do something more efficiently.
Then, of course, you have just the straightforward grants that everybody taps. But I think the key thing is to see how you can create more value using the resources you have, because that’s how you grow your revenues.
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Gabriel: Higher costs are one spillover effect from US President Donald Trump’s “tariff tantrum”. Are businesses in Singapore worried about inflation from the tariff threat?
Han Kwee Juan: When you look at the local businesses, the real costs that they are seeing are really from land – rentals – as well as manpower. When you look at supply chain costs, there was some disruption coming out from Covid. But I think that has largely settled down for quite a few of them.
The supply chain has already shifted somewhat from the first term of Trump, and many of them – especially those in China – have gone out to Asean. I just came back from Indonesia and I don’t hear businesses there talking about costs of doing business.
On the JS-SEZ
Gabriel: How is the Singapore government playing a part to ensure the success of the JS-SEZ? Can we expect more government incentives to promote the SEZ, or for foreign companies which face rising operating costs in Singapore?
Indranee: Johor is our closest neighbour, and the key to ensuring that the SEZ becomes a success is to optimise the complementarity. What does Johor have? It has got a lot more land. It is cheaper. Costs of certain things are also lower, and some manpower costs would be lower.
But in Singapore, you also have certain skill sets which you may not have over there. We’ve got connectivity, we’ve got our ecosystem, and we’ve got infrastructure. What we need to do is to see how we can leverage both sides to get the optimum outcome.
Some of it might be headquartering here and then doing the operations or the manufacturing in Johor, but the goods ultimately may flow through Singapore.
The key to making this work is that kind of complementarity. And don’t forget, Singapore also has got manpower constraints. But with the SEZ and especially with the Johor Bahru-Singapore Rapid Transit System Link, you will have a flow of people moving back and forth. So we need to see how to leverage this and make things work for both sides. But there’s a lot of potential.
Gabriel: Is the JS-SEZ a focus for DBS?
Han: We don’t have a branch in Malaysia, and so we can’t participate directly through any presence in Malaysia. However, we do work quite closely with Johor Corporation to just bring (our customers) out and tell them about the environment and the opportunities.
For those companies with greater capital expenditure – such as data centres that you see in Johor, where they want to raise funds in US dollars – we do participate to finance those and when they expand in Johor.
And finally, we do have partnership banks in Malaysia, and we work with them to refer our clients and then support our clients through them.
On staying competitive
Gabriel: What is one key assumption about Singapore’s economy that businesses can no longer take for granted?
Indranee: You cannot assume that the old playbooks still work. This means that companies need to be constantly looking ahead and trying to figure out how to position themselves. Companies need to know that they are not alone, because the Singapore government spends a lot of time doing that also.
If the government says that something is coming around the corner, don’t ignore that. Look to see how you can tap what the government has made available, whether it is programmes, schemes or grants, to take the challenge head on. We have done this consistently, whether it is digital, AI (artificial intelligence) or sustainability.
Singapore is only going to be able to survive when people, businesses and the government all work together, pull in the same direction, share knowledge and harness synergies. That’s what’s going to keep us going in the future.
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