SMEs ‘screaming for help’, panellists say, as they urge Budget support on costs and overseas push
Enhanced internationalisation schemes, greater access to government financing facilities among measures that could make a difference
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[SINGAPORE] Singapore’s small and medium-sized enterprises (SMEs) should receive greater government support to manage costs, ease cash-flow pressures and expand overseas, as operating conditions move further away from “business as usual”, panellists said at a pre-Budget roundtable on Friday (Feb 6).
Maneesh Tripathi, a board member at the Singapore Indian Chamber of Commerce and Industry, described the situation bluntly: “SMEs are the growth engine of the country, and they are screaming for help.”
He pointed to two areas where Budget support could make an immediate difference. The first is greater flexibility in tenancy agreements, particularly the inclusion of breakaway clauses.
Under current arrangements, SMEs facing cash-flow difficulties and missing a month or two of rent can be required to pay the remaining lease balance in a lump sum, he said. Without such a clause, the business “will die”, he added.
The second area is access to financing under existing government trade facilities, such as the Enterprise Financing Scheme. While the government bears up to 50 per cent of the risk under the scheme, Tripathi noted that many banks still require SMEs to provide 100 per cent collateral. “If the SME has 100 per cent collateral, it will not need the (loan),” he said.
Tripathi was among 12 panellists at the annual pre-Budget roundtable hosted by the Institute of Singapore Chartered Accountants (Isca), which was attended by more than 300 participants.
Prime Minister and Finance Minister Lawrence Wong is set to deliver the Budget 2026 statement in Parliament on Feb 12.
Held at YWCA Fort Canning, the two-hour session was co-chaired by Saktiandi Supaat, chairperson of the Government Parliamentary Committee for Finance and Trade and Industry, and Song Yeow Chung, an Isca council member.
Clearer carbon tax guidance
Energy costs, particularly carbon taxes, also featured in the discussion. Singapore’s carbon tax rose to S$45 per tonne in 2026 from S$25 per tonne previously, and the government has said that it will reach between S$50 and S$80 per tonne by 2030.
Clearer guidance in the upcoming Budget on where the eventual rate will land would help businesses manage costs, said Musa Fazal, chief policy and operating officer at the Singapore Business Federation, as higher carbon taxes would indirectly translate to higher energy costs across a wide range of industries.
“Carbon tax increases are one of those things where Singapore does not need to be top of the class,” he noted.
One way to ease the burden could be to introduce a progressive carbon tax structure, rather than a flat rate, suggested Ajay Sanganeria, partner and head of tax at KPMG in Singapore. This would tax companies based on their emissions levels.
On overseas expansion, Ang Yuit, president of the Association of Small and Medium Enterprises, proposed enhancing internationalisation schemes such as the Market Readiness Assistance Grant for group-based efforts.
“If five guys come together, you feel a bit better, you have more resources, and we can fight together – and if we can incentivise with even higher support, it makes a lot of sense, because we are pooling resources together,” he said.
At a broader level, the government could also do more to signal a culture of collaboration, including encouraging government-linked companies to work more closely with SMEs, he added.
“We have to start signalling to all the businesses… that we want to collaborate,” he said. “We as a nation (now) do not collaborate.”
A “two-speed” workforce
Panellists also discussed artificial intelligence (AI) and how the government could better support SMEs – and their workers – in adopting the technology.
Aslam Sardar, chief executive officer of the Institute for Human Resource Professionals, cautioned that a “two-speed” workforce could emerge, where some groups – such as younger workers – are highly skilled in AI, while older workers risk being left behind.
As Budget measures on upskilling are considered, he said more resources may need to be directed at workers aged 40 and above to help them build AI capabilities.
On adoption costs, Lennon Tan, president of the Singapore Manufacturing Federation, suggested creating an “aggregator” of AI tools that would allow SMEs to pay on a fractional basis, depending on how much of each tool they use.
Without such an approach, subscribing to multiple AI tools across an entire workforce could quickly become costly, he warned.
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