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SMF submits Budget recommendations
MAINTAINING existing incentives such as the Productivity & Innovation Credit (PIC scheme) and Wage Credit; assistance in internationalisation; and promoting collaboration between bigger and smaller firms are some of the recommendations by the Singapore Manufacturing Federation (SMF) for the upcoming Singapore Budget 2017.
This comes on the back of a volatile economic climate and a manufacturing industry that has been in decline for the past few years. In its report, the SMF acknowledged that many firms in the sector are "struggling to stay afloat" due to the effects of globalisation, technological disruptions and the oil-and-gas downturn.
In a recent survey of its members, some 45.7 per cent foresee that their business performance will decline this year.
In anticipation of strong headwinds, 47.9 per cent said they will be looking at job or workflow redesign, while 34.3 per cent are considering a pay freeze or pay reduction.
SMF president Douglas Foo, who is also the founder and executive chairman of Sakae Holdings, said cost is still a serious issue for all enterprises, not just SMEs.
"We are helping enterprises to transform their business models, but if some help comes through the Budget, it will alleviate the situation."
One of the group's recommendation is to maintain existing incentives such as the PIC and Wage Credit scheme.
Mr Foo said that this would help sustain employment during difficult times and is useful in defraying costs in the upgrade of capabilities.
Another is for improved access to specialised assistance such as talent management, corporation transformation and internationalisation.
According to SMF, the industry needs more specialists in restructuring, turnaround, debt management, insolvency law, bankruptcy, junk bond funding and forensic accounting during difficult times.
More support is also proposed to enhance access to overseas markets, such as in engaging local consultants or local lab testing.
The group also recommended that the government encourage and incentivise multinational corporations and government-linked companies to collaborate and support local SMEs, especially when these are venturing overseas.
This could be done through tax incentives for the bigger firms.
While Mr Foo said there are still some bright spots in manufacturing such as the biomedical sector, he urged SMEs to take the opportunity to transform, instead of waiting out the cyclical downturn.
He added that the SMF wishlist was about giving the sector "a little bit of cushion" so that they can transform, knowing that it cannot completely take away the pain.