COMPARED to 2023, more businesses this year hope that the Budget will provide inflation-related support, incentives to go green and SkillsFuture credits, according to the UOB Business (SME & Large Enterprises) Outlook Study 2024.

At the top of businesses’ wish list for Budget 2024 was government support to cope with high inflation, with 45 per cent of respondents wanting this. This also had the biggest increase from the previous year’s survey, up 19 percentage points from 26 per cent before.

The next-largest increases were for higher SkillsFuture credits (cited by 42 per cent) and incentives to adopt sustainable practices (29 per cent). In both cases, the share of firms hoping to see these moves in the Budget rose by 10 percentage points, from 32 per cent and 19 per cent, respectively.

The bank’s findings were from a survey of 800 small and medium-sized enterprises across key industry verticals in Singapore. The study was conducted from end-December 2023 to mid-January 2024.

According to the survey, 84 per cent of businesses said they were somewhat or highly affected by inflation, with its effects being felt the most in the industrials, oil and gas sector, as well as the manufacturing and engineering sector.

About 63 per cent of businesses saw increased operating costs from higher inflation, while 42 per cent flagged increased raw material costs.

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Smaller businesses harder hit

The survey found that more small businesses (39 per cent) are looking for help to cope with the 9 per cent goods and services tax (GST) this year, compared with medium-sized businesses (30 per cent).

More small businesses (28 per cent) are also seeking additional support to manage their working capital needs, compared with their medium-sized counterparts (16 per cent).

Among the industries polled, firms in the community and personal, and business services sectors indicated the greatest need for such support.

The bank also noted that fewer businesses were prepared for the GST hike this year (60 per cent), compared with 2023 (74 per cent). Higher direct business costs (52 per cent) and indirect costs (41 per cent) were cited by firms as the biggest challenges expected from the GST hike.

In addition, a larger proportion of small businesses (33 per cent) are worried about the loss of profits due to lower customer spending, compared with medium-sized businesses (19 per cent).

Meanwhile, when it came to awareness of Budget-related initiatives, businesses were most familiar with the SkillsFuture Enterprise Credit, Productivity Solutions Grant and Progressive Wage Credit Scheme.

However, such awareness has not translated to higher application rates. Firms surveyed said they were unsure of the relevance of these initiatives to their business, and did not know where to find information on them.

On sustainability, 74 per cent of businesses surveyed believe that it is important, with those in the industrials, oil and gas, and tech, media and telecom sectors placing a higher importance on this.

At the same time, they cited increased costs to end customers (29 per cent), insufficient knowledge to identify and execute the right initiatives for the company (28 per cent), as well as a lack of manpower (26 per cent) as the top three challenges in implementing sustainable practices.

With regard to support to implement sustainable practices, the two most popular measures desired by businesses were tax incentives (33 per cent) and easier access to funding (33 per cent).