Monday, 30 Mar 2020

Businesses urged to make the best use of Budget stabilisation package amid virus downturn

SINGAPORE – Businesses’ concerns that Budget measures may not be enough to get them over the rough patch are being heard, but the Government will “see where we are at in a few months’ time”, Second Finance Minister Indranee Rajah said on Thursday (Feb 20).

She encouraged enterprises to make the best use of the $4 billion Stabilisation and Support Package unveiled in Tuesday’s Budget to help firms get past the virus outbreak.

Ms Indranee, who is also Minister in the Prime Minister’s Office, was speaking at a Budget discussion with UOB economist Barnabas Gan, KPMG Singapore deputy head of tax Ajay Kumar Sanganeria, Association of Small and Medium Enterprises president Kurt Wee and Singapore Management University associate professor of law Eugene Tan.

She said the Government looked at the most immediate needs of industries and identified cash flow as one of the key concerns, noting that the bridging loan programme and corporate tax rebates were put in place to relieve these concerns.

“We’ll take this thing one step at a time, and businesses can be assured that the Government will be with them every step of the way with them,” added Ms Indranee.

“But rather than say what if, further down … because the package is for the here and now, use that $4 billion, and we’ll see where we are at in a few months’ time.”

Her remarks were in response to Mr Wee, who raised concerns about whether the measures to help firms alleviate their costs were sufficient.

“Businesses don’t really have the luxury of time to say, ‘Hey, I’ll wait three months and see what happens’ because their situations are quite fast and quite drastic right now,” Mr Wee said.

He noted that while the Jobs Support Scheme, which involves the Government committing $1.9 billion to offset 8 per cent of employee wages for three months, would help, it may not be enough.

Mr Wee added that a six-month period would be better and give businesses “a longer time to regroup and reorganise”.

Mr Gan noted that food and beverage outlets and taxi drivers are among those that have been the worst-hit: “The pain is here and right now, and this is the reality of things.”

Panellists at the discussion hosted by Money FM 89.3’s Elliott Danker and Ryan Huang said the Budget was well-rounded and addresses both short- and long-term challenges and opportunities for Singapore.

Mr Sanganeria said he was “very, very pleased” that the GST will not be raised in 2021, noting that businesses have to focus on changing their accounting systems and processes whenever there is a change in the rate.

Associate Professor Tan said that while the SkillsFuture Credit Scheme, which was enhanced in Budget 2020, gives people opportunities to upgrade their skills, it remains to be seen if it can be a means by which they can secure better jobs.

But he acknowledged that this is also about employers’ mindsets towards hiring: “It’s not an issue with SkillsFuture per se. The question is how do we get our employers to recognise people who are willing to learn new things, who show that nimbleness and adaptability.”

Ms Indranee replied that the SkillsFuture scheme should not be considered in isolation, but alongside the Adapt and Grow initiative, which includes a component that encourages employers to take in workers and train them.

“It’s to get people started (on this path),” she said, but agreed with Prof Tan that it is a matter of “societal and economic mindset change”.

Prof Tan also weighed in on the measures to drive Singapore’s sustainability in the long term.

“I like the initial $5 billion commitment, but I’m hoping that our approach to climate change will be like how we take defence and education, making consistent, annual investment,” he said.

“If we see it as a national priority, then I think it becomes important to continually invest in it.”

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