Inclusive growth amid Covid-19 is key task post-GE2020: Business leaders

Singapore

THE bread-and-butter issues of job security and the cost of living remain pressing in the aftermath of Singapore's General Election, C-suite executives told The Business Times. But they also flagged a greater focus on inclusive growth.

The continuing uncertainties over Covid-19 mean that Singapore will need to remain nimble in economic policy-making while also placing more emphasis on low-income groups disproportionately hit by the pandemic, they said.

But even as calls for redistributive policies such as wealth taxes get louder, business leaders say they do not expect any sizeable impact on Singapore's attractiveness as a global hub for trade and talent.

In GE2020, the ruling People's Action Party (PAP) retained its supermajority in Parliament with a lower-than-expected vote share of 61.2 per cent. The result defied pundits' forecasts of a "flight to safety" among voters amid the Covid-19 pandemic.

The PAP saw "a fall in support among those in their 40s and 50s, and perhaps even those in their early 60s", possibly due to livelihood concerns, National Development Minister Lawrence Wong said at a press conference on Saturday.

These older voters may have voted against the PAP after losing their incomes, being forced to switch to lower-paying jobs or having their businesses disrupted.

GE2020 also cast a spotlight on calls for inclusivity from young voters. The Workers' Party (WP)'s win in Sengkang GRC, where the average age of voters is relatively low, would suggest greater openness among this group to redistributive policies proposed by the WP, such as a minimum wage and higher taxes on wealth.

Yeoh Oon Jin, executive chairman of PwC Singapore, said bread-and-butter concerns are likely to remain central for Singapore's policy makers.

"(Economic) and business policies that are grounded and fundamentally sound will continue to be important, albeit with more focus on driving sustainable growth, with added emphasis in the areas of environment, workforce and skills development, and uplifting those who have fallen behind," he said.

Bread-and-butter issues remain critical for voters "but there is a shift towards more butter rather than bread; basic necessities are critical, but the qualitative ingredients are now cherished", said Associate Professor Lawrence Loh of the National University of Singapore Business School.

Equalising access to the Internet and digital devices among the disadvantaged is one example of a bread-and-butter issue that has become more urgent.

Lee Siang, chief executive of the Dyslexia Association of Singapore, said the pandemic has highlighted how lower-income groups have been hit by the digital divide.

Nevertheless, the business community does not anticipate any drastic policy shifts at this point beyond a step-up in social spending.

"The government is unlikely to implement policies such as universal basic income or a GIC special dividend," said Sun You Ning, co-founder of Endowus, referring to the WP's proposal that GIC pay a periodic dividend from its investment profits into CPF members' Special Accounts.

"But it is natural to expect more social spending to level the playing ground and help the disadvantaged. This will naturally be supported by increased demands on Singapore's reserves and tax increases, perhaps in the form of taxing capital gains which only impact a narrow segment of the population," Mr Sun said.

He believes that Singapore will stay open for business, although there may be more focus on Singaporean workers with support for upskilling and incentives for employing locals. This may also mean that expatriates are tapped only to fill specialised skill gaps that the local workforce lacks, he added.

Dileep Nair, an independent director at Thakral Corporation, believes that it will also be important to address Singapore's reliance on low-wage foreign workers while upskilling local labour.

"The pandemic has already made us rethink many policies. We must drastically reduce our dependence on foreign labour through a strong push for higher productivity, giving a chance for wages in those jobs to rise and for locals to fill them," he said.

At the same time, he hopes for a moderate response.

"We must always bear in mind our fundamental limitations of size and natural wealth, having to rely on trade, openness and attractiveness to investors. Only then can we survive the devastating recession we are in and thrive thereafter."

John Ng, chief executive of YTL PowerSeraya, believes that Singapore's "fundamental system of stability" remains unchanged.

"I believe that Singapore will do its best to overcome its challenges in a trusting and transparent manner. Doing it right and in a timely manner will, in the process, also revive the business community to save jobs, and probably even create new and better ones," he said.

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