Budget 2024: SME schemes extended, enhanced to encourage MNE partnerships, sustainability

EXISTING schemes for small and medium-sized enterprises (SMEs) will be enhanced to encourage more partnerships with larger companies, adoption of green solutions and cutting of emissions, said Finance Minister Lawrence Wong on Friday (Feb 16).

In his Budget 2024 statement, Wong said that the aim is to help local companies raise their capabilities and win new opportunities, noting that many SMEs have benefited from partnering with multinational enterprises (MNEs) based in Singapore.

The current Partnerships for Capability Transformation (PACT) scheme supports collaborations between larger companies and SMEs in supplier development and co-innovation. It will be enhanced to support partnerships in more areas, particularly capability training, internationalisation and corporate venturing.

“With the enhanced PACT, we aim to help more of our firms plug global supply chains, compete in markets abroad and grow to become industry leaders in their own right,” said Wong.

The finance minister also noted that companies have to embrace sustainability to be competitive, as many MNEs are looking to reduce their carbon footprint and expect their suppliers to do the same.

“In other words, to play in the MNE value chain, our own companies must be ‘sustainability-ready’,” he added.

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The government will thus extend the enhanced support for green loans under the Enterprise Financing Scheme and expand its scope to help more SMEs adopt green solutions.

The Energy Efficiency Grant (EEG) will also be extended to more sectors including manufacturing, construction, maritime, and data centres and their users.

The grant was introduced in 2022 for companies in food services, food manufacturing and retail sectors.

“Beyond pre-approved energy-efficient solutions supported under the grant, we will provide additional support for companies with more ambitious plans to reduce their emissions,” Wong said.

EEG will be enhanced to provide two tiers of support: a base tier for pre-approved energy-efficient equipment up to a S$30,000 cap, and an advanced tier to support companies that wish to make larger investments to drive energy efficiency.

Existing grant schemes for the adoption of energy-efficient equipment will be gradually streamlined and subsumed under EEG.

Companies registered and operating in Singapore with at least 30 per cent local shareholding, at least one local employee and group annual sales turnover of no more than S$500 million will be eligible for support under EEG.

The EEG GoBusiness webpage will be updated on Apr 1 to launch the shopfront for the manufacturing, food services and retail sectors, and will fold in the National Environment Agency’s Energy Efficiency Fund.

The other sectors will be progressively onboarded, and companies in all EEG-supported sectors will be able to apply for the grant through the Business Grants Portal by the end of 2024.

Wong added that the Ministry for Trade and Industry will elaborate on EEG and other sustainability-related measures at its Committee of Supply.

For more of BT’s Budget 2024 coverage, go to bt.sg/budget24