Businesses hope for cost-easing measures in Budget 2013

By S Ramesh, Channel NewsAsia, 12 Feb 2013

Ahead of Budget Day on Feb 25, business chambers and employers have once again drawn up their wish-lists for the Minister for Finance.

The collective view of three business bodies here: That Singapore companies are facing triple challenges of a lack of manpower, stagnant productivity growth and rising costs.

Speaking to Channel NewsAsia, the Singapore Business Federation (SBF), the Singapore National Employers Federation (SNEF) and the Singapore Chinese Chamber of Commerce & Industry (SCCCI) said they are hoping that Mr Tharman Shanmugaratnam would announce measures to alleviate costs.

Describing last year’s Budget as very much a People’s Budget, they said companies did not get what they wanted. Take, for example, the reduction in the dependency ratio ceilings for foreign manpower and quotas for the construction industry.

SBF Chief Executive Ho Meng Kit said: “We did a recent survey with the business community and 70 per cent did not find it useful; 18 per cent said they did not find it useful at all.”

If numbers are anything to go by, companies appear to be still struggling despite various incentives to raise productivity. The SNEF said it expects productivity levels — which dipped by 2.4 per cent in the first nine months of last year — to have contracted in 2012.

The federation wants to see industry-wide initiatives to streamline operational processes across the board and to help companies reap economies of scale.

To spur such efforts, the SNEF and the SBF are planning an industry-wide event for companies to share best practices. Mr Ho said: “We will be organising a National Productivity Convention together with various industry associations as well as with the Government.”

MORE HELP WITH PRODUCTIVITY

More needs to be done to encourage businesses to tap help schemes such as the Productivity and Innovation Credit Scheme, interviewees felt.

Mr Ho said: “Our wish-list would be: Greater effort in terms of engagement, productivity improvement; greater resources put into productivity measures; simplification of schemes; broadening the schemes so that more companies can make use of them; more injection of resources to grow companies, whether it is on the technology and innovation side, or whether it is to link companies for growth outside Asia.”

SCCCI President Teo Siong Seng said: “Top on the list this year is how to improve productivity. People are aware of the tightening of manpower, we go along with it, but we ask for some flexibility. At the same time, we will ask our members to seek ways to improve productivity to overcome the manpower problem.”

As a result of declining productivity, the SNEF said labour costs went up by 4.6 per cent in the first nine months of last year.

It hopes the Government can help by recognising the skills and experience attained by foreign workers in Singapore. Lower the levy imposed to decrease the churn among such workers, the federation asked.

In January, Mr Tharman hinted that Budget 2013 would include measures to help businesses restructure and improve productivity.

TAP WOMEN, SENIORS

The SNEF said that as employers come to accept the Government’s tightening of the foreign-worker inflow, they hope for help to tap two alternative sources of manpower — women and older workers.

Last year, there were some 58,000 inactive women in the 30-39 age bracket and their numbers continue to increase, said the SNEF.

As for older workers, the federation added that the re-employment law, which has been in effect for a year, has seen good results, with the employment rate for workers aged 55 to 64 hitting a high of 64 per cent last year.

Businesses are also concerned with operating costs such as transportation, especially given sharp hikes in COE prices. “Our wish is that the Government look at ways to reduce costs in terms of COEs, ERPs, especially (for) commercial goods vehicles,” said Mr Teo.