The Business Times

Swee Keat: Embrace spirit of enterprise

Finance minister calls on Singaporeans to overcome challenges, innovate and seize opportunities, given the limits to government intervention

Published Wed, Apr 6, 2016 · 09:50 PM


THE government must know when to step in and when to step back, so as to avoid inadvertently undermining the natural workings of markets or the bonds of community, said Finance Minister Heng Swee Keat in his Budget Debate round-up speech on Wednesday.

To Mr Heng, in fact, it is not any scheme or government support that will sustain Singapore's future, but "the spirit of enterprise and caring".

"Enterprise - to not be held back by what appear to be limitations, to overcome challenges, innovate, and stay resilient, seize opportunities. Caring - to keep our Singapore a warm and giving home where we help one another through our personal challenges, where we each achieve our best, reach our dreams, and go on to inspire and serve others," said Mr Heng as he wrapped up this year's (and his first) Budget debate.

"We know where we came from. We know where we want to go. And we are committed to moving forward together - in partnership, in this spirit of enterprise and caring."

While he noted Budget 2016's tilt towards supporting small and medium-sized enterprises (SMEs), Mr Heng said that this was a carefully-calibrated move - designed to address cyclical concerns without impeding restructuring.

Devoting two-thirds of his 11/2-hour speech to the economy, he repeatedly stressed the need to "go for long-term vitality, and not short-term fixes" - even as the government continues to provide support for deserving businesses.

"We cannot permanently subsidise costs. All firms, large or small, in whatever sector, must compete on productivity and innovation," said Mr Heng, responding to Members of Parliament (MPs) who had asked the government to do more to tackle rent and manpower costs.

As for those who had voiced concerns about businesses' over-reliance on government support, Mr Heng quoted a metaphor relayed by a business leader: "Government support is like push-starting a car that has gotten stuck in a difficult patch - it can get the car going again, but the government cannot be pushing the car for miles and miles. It will run out of resources. So once the car is moving, it has to rely on its own engine to go for the long haul."

Indeed, he agreed that the government should not undermine the spirit of enterprise by allowing aid to become a crutch, or by giving the impression that the state will eliminate all risk and bail out any firm in trouble. He emphasised that Singapore's finite resources should not be wasted on "zombie" businesses, nor should workers be trapped in firms and sectors with poor prospects.

"I fully understand that restructuring is painful. But it is necessary," said Mr Heng. He added that he understands Singaporeans' anxieties about jobs, since good jobs and incomes in the future cannot be taken for granted.

He therefore emphasised the need for a coherent approach that creates the right jobs, develops the right skills, and enables the right match for Singapore workers. While the S$4.5 billion Industry Transformation Programme will go some way to address this, Mr Heng said that companies must also be willing to redesign jobs and develop their staff.

He added that the government, too, will need to innovate - especially as it takes a new and more targeted approach to economic restructuring.

Said Mr Heng: "Some may ask whether we are sure that the Industry Transformation Programme will succeed. As I've said before, there is no textbook answer to policy; there is no textbook answer to innovation. So in government, we too need to embrace a spirit of enterprise - we have some clear ideas of where we need to go, what we need to do, but we must be humble, and we have to figure it out dynamically, learning and improving and improvising as we go along, and working in partnership with businesses which know well what are needed. And based on our consultations, the consensus at this point is that this is the best way forward."

Even as he reiterated the government's shift away from broad-based support to more sector-specific help, Mr Heng took pains to stress that the Productivity and Innovation Credit (PIC) scheme has largely achieved its objectives - citing not only take-up rates but also the heightened awareness among SMEs of the need to undertake basic productivity efforts.

On the social front, Mr Heng discussed the various ways Budget 2016 helps to enliven "the spirit of caring and resilience" - through further support for families and children, more assurance in retirement, and greater incentives for charitable giving.

Still, he flagged the reality of ever-increasing spending needs - whether on healthcare, infrastructure, or defence and security - and the corresponding importance of fiscal sustainability.

To achieve this, Mr Heng said that Singapore must first place priority on the economy, in order for revenues to grow. But spending must also be prudent and targeted, with help reaching the right groups in the right way. The fiscal system, too, must be designed to be fair and progressive.

Said Mr Heng: "It is not possible for the government to keep handing out goodies to everyone, year after year . . . Instead, each Budget must build on the previous ones, to carry forward the momentum to future Budgets."

While he acknowledged that the road ahead would be "bumpy" and "full of unknowns", he urged Singaporeans to think not only of future challenges, but also of the victories that lie in store.

"Through all the good and bad unknowns of the years to come, I hope our spirit of enterprise and caring will run strong. I am honoured, and excited, to partner fellow Singaporeans on this journey.

"Let's get to work - together."


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