Economic restructuring to raise productivity a priority: Heng Swee Keat

By Kimberly Spykerman, Channel NewsAsia, 10 Feb 2013

Economic restructuring to raise productivity must be a priority if Singapore is to raise living standards and strengthen competitiveness among businesses.

That's the message from Education Minister Heng Swee Keat to businessmen at a Lunar New Year event at the Singapore Chinese Chamber of Commerce and Industry (SCCCI).

The wishlist of the Chinese Chamber for the upcoming Budget is more help for businesses, especially SMEs.

President of SCCCI Teo Siong Seng said: "The general mood of the outlook for this year will be tougher than last year. One is actually the tightening of manpower, but that we actually support because there's no U-turn in terms of tightening of foreign labour. We're also concerned about the escalating costs of doing business, and also the environment externally whether Europe or US, is actually very uncertain. So overall, the businessmen are more cautious about the outlook for this year."

So raising productivity is a must and the Chamber has some suggestions - enhance productivity grants under the Productivity and Innovation Credit scheme and make it easier for businesses to qualify for them; give businesses more credit support by restoring the credit support scheme - it used to be 80 per cent during the financial tsunami in 2008, and was later brought down to 50 per cent; and re-look the Certificate of Entitlement (COE) scheme to reduce transport costs.

Mr Teo said: "COE has been going up. We actually urge the government to re-look the COE scheme. We also urge the government that some of the heavy duty vehicles for commercial uses, for example dump trucks - can there be a special category for commercial vehicles? They can put out rules like no carrying of passengers, so that people don't abuse it, but we hope they can consider, especially for commercial use vehicles to give it a special category. Because many of our members cannot afford to renew their fleet and they have to bring up the cost of transportation."

Referring to the debate on the Population White Paper, Mr Heng reminded businessmen that Singapore cannot rely on expansion of manpower to develop its enterprises.

He said restructuring the economy to raise productivity is a priority. He added that the government has started tightening manpower growth, and he shared, but these adjustments will take time.

Mr Heng said: "Well, going forward the economic restructuring to raise productivity is of utmost priority, and I'd like to see the government, businesses and our people working closely together to make this major transition.

"I believe that raising productivity will be the key to our future, the key to raising wages of all workers in Singapore, and to create opportunities for our young people. But at the same time, we need a period of transition and we should make the best use of this period of transition to make significant progress."

Asked about the White Paper's impact on the Our National Conversations which he spearheads, Mr Heng said he would make a formal statement on this soon.

Mr Teo said the Chamber generally agreed with the projections for economic growth in the Population White Paper.

"Not to forget we are in the middle of Asia where it's a high-growth area. So if our growth is too low, you know some people say 'why don't we relax a bit more', can we slow down? I don't think we can. Because if we do that, foreign capital won't come, and Singapore economy will hollow out," Mr Teo shared.

But he added that one concern SMEs have is that the measures to tighten foreign labour could leave them out in the cold.

He said: "The concern we have for the White Paper is the one to two per cent foreign labour growth. Not to forget we are building so many units of houses. We talk about increase in healthcare, nursing staff. We talk about doubling MRT lines. So this one to two per cent, is it enough to cater for this? Then what is left for the SMEs? One to two per cent may look like a lot but actually we think with so many projects going on, it's not going to be enough."