Costs and competition are unavoidable, but the government will help businesses transform: PM Wong
The country must press on with improving productivity, he says
COSTS and competition are unavoidable, but Singapore’s government will continue to help businesses that are willing to transform, said Finance Minister and Prime Minister Lawrence Wong on Friday (Feb 28).
In his round-up speech of the Budget debate, he responded to business concerns that Members of Parliament (MPs) had raised in the previous two days.
Global uncertainty is rising, he noted, with multilateralism “weakened by growing protectionist sentiments and unilateral measures” – which disadvantages small open economies such as Singapore.
“Countries are focusing more on their own defence and security interests, so it’s become more about zero-sum competition rather than win-win cooperation.”
Singapore is bracing for external competition, including through Budget 2025 moves such as topping up the National Productivity Fund to help attract investment.
At the same time, the country must press on with improving productivity in domestic businesses, said PM Wong.
Unavoidable costs
While small and medium-sized enterprises (SMEs) are concerned about high business costs, these are “economic realities” that cannot be avoided, he said. High land costs, for instance, are due to scarcity, while energy costs are affected by global price levels.
The government will provide short-term support “without blunting the incentive for them to restructure”, he said, citing the example of Budget 2025’s corporate income tax rebate.
Similarly, some MPs had raised SMEs’ concerns about consumer demand going across the border, with the Johor-Singapore Special Economic Zone and Rapid Transit System.
But “with e-commerce, competition is already happening”, noted PM Wong. Affected retailers will need to adapt and rethink their business models.
In general, companies themselves must transform, he stressed. “For firms that are willing to do so, the government will provide our full support.”
He cited SME-targeted initiatives in Budget 2025, arising from engagements with trade associations and chambers (TACs) and the Singapore Business Federation.
Alongside existing schemes, SMEs get a “considerable” total amount of help – yet utilisation rates tend to be lower than expected, he noted. The government is discussing the reasons with TACs, to understand how to make the initiatives more accessible.
Beyond SMEs, the government is also developing a pipeline of promising enterprises that will grow to become “global companies of the future”, he added.
Job anxieties
Yet, “with constant industry transformation, we can expect more churn in workplaces,” said PM Wong.
Technological progress and changes to jobs will “understandably” cause concerns, as MPs pointed out in the debate. Yet, while these concerns are real, Singaporeans must understand the underlying reasons for such change and “avoid pinning the blame on foreigners”.
Public discourse in Singapore must never be allowed to spiral towards xenophobia, he added.
“Our approach towards foreign workers is clear. We welcome them to work here, but we do this in a controlled manner and ensure that they complement Singaporeans.”
Foreign labour controls have been fine-tuned over time, he noted, including a new framework for Employment Pass applications and the Workplace Fairness Act.
Singapore’s approach thus far has resulted in low unemployment rates, good employment outcomes and rising real incomes – and still more will be done to support Singaporeans to adapt to change, he said.
“That is why we are taking decisive steps to strengthen SkillsFuture,” he said, citing moves in recent budgets. In specific areas raised by MPs, such as nurturing Singaporean corporate leaders and improving senior employment, government efforts are also under way.
But he added: “We know that there is still much more to be done.”
Compared to formal education, investment in adult training still lags behind. Yet Singapore is already in the forefront of adult training globally, with no models to follow, he noted.
The country will have to experiment and innovate, and the government will put in additional resources in the coming years to further strengthen SkillsFuture.
Said PM Wong: “We cannot save every job, but we will support every worker in Singapore.”
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