Singapore Manufacturing Federation hopes Budget 2025 will speed up the industry’s green transition

THE Singapore Manufacturing Federation (SMF) hopes the upcoming Budget 2025 will deliver grants and other support to help manufacturers with their green transition, among other moves to keep the sector competitive.

In an SMF survey last November, 91 per cent of manufacturers identified sustainability initiatives as “essential” for global competitiveness. But a key challenge is the high cost of adopting sustainable technologies and practices, SMF said in its Budget wishlist.

It suggested introducing a green equipment subsidy scheme to help companies adopt energy-efficient machinery, such as electric forklifts and solar panels.

Other recommendations include a circular economy grant to support research and development (R&D) in sustainable materials and closed-loop systems, as well as “simplified access” to carbon-credit trading platforms. The latter, SMF said, would allow small and medium enterprises (SME) to monetise carbon-reduction efforts or offset emissions.

The federation also called for the establishment of “collaborative green innovation hubs” with organisations such as the Agency for Science, Technology and Research, so government grants can fund the co-creation of green solutions.

Also on SMF’s wishlist are moves to boost collaboration between SMEs and multinational corporations, since such opportunities are limited.

Apart from the green transition, the federation listed four other “critical priorities” that it hopes the Budget will address.

One is workforce development in emerging technologies. There is a lack of skilled talent in areas such as artificial intelligence, robotics and green technologies, said SMF. This is even as 88 per cent of manufacturers identified workforce upskilling as “critical” in the federation’s survey.

Here, an expansion of SkillsFuture funding could help, as could more funding for programmes by schools and trade associations to promote interest in science, technology, engineering and mathematics, said SMF.

SEE ALSO

Deloitte calls for interest-free tax instalments for multinationals in Budget 2025 wish list

EY calls for innovation advancement support, tax system tweaks in its Budget 2025 wish list

Also helpful might be talent-retention incentives such as salary support and grants tied to certified training programmes that lead to improved career progression.

A second priority is supporting internationalisation and trade resilience, as SMEs have limited resources to expand overseas and fortify their supply chains.

Third, Budget 2025 could provide more financial support for companies making a transition from Industry 4.0 to Industry 5.0, including grants for R&D or pilot projects.

Finally, SMF called for improved access to capital for SMEs, since they struggle with the high costs involved in innovation and sustainability projects.

At SMF’s annual general meeting last year, president Lennon Tan highlighted a need for “greater adaptability and strategic planning to remain competitive” among manufacturers, amid intensifying global pressures.

“Singapore’s manufacturing sector is at a significant turning point,” he said, and Budget 2025 is a “critical juncture” for rolling out measures to reinforce the country’s innovation and resilience in the global market.