SINGAPORE – Amid slowing global growth, ongoing geopolitical uncertainty and technological disruptions to industries and jobs, the 2019 Budget unveiled on Monday (Feb 18) was perceived by business and industry leaders to be focused on accelerating the development of digital skills and adoption of innovative solutions, strengthening cyber security, and reskilling the workforce with less reliance on foreign workers.

Mr Christian de Guzman, vice-president – senior credit officer of Moody’s Investors Service, said: “Against the backdrop of a deteriorating external environment, the mildly expansionary Budget announced by Singapore Finance Minister Heng Swee Keat provides some support to growth, with room for manoeuvre in the event of a prolonged slowdown.

“The restated commitment to avoid borrowing and to use revenue enhancements, such as higher GST (goods and services tax) rates, to finance these larger long-term spending commitments help to preserve Singapore’s structurally robust fiscal position,” Mr Guzman added.

Some observers say the focus on building deep enterprise and worker capability should help sharpen Singapore’s global competitive edge, amid rising protectionism and an increasingly adverse global environment.

Professor Tan Yong Kam of Nanyang Technological University: “Asean will become the fourth largest economy in the world by 2030. And Indonesia has become a more important external engine of growth for Singapore. We can position ourselves to soar with the rising regional wind. This will help to mitigate against the impact of global protectionist headwinds.”

Precursor Group managing director Tan Khoon Guan pointed out that by moving away from providing short-term benefits such tax or cash rebates or even a reduction in tax rates, Budget 2019’s focus is on ensuring that businesses and employees stay relevant.

The introduction of customised support programmes such as Scale-up SG, and Innovation Agents, a two-year pilot to help firms tap industry professionals for opportunities to innovate and commercialise technology, could help local firms deepen their capabilities and internationalise. This, in turn, will generate good jobs, better career opportunities and wage growth for local workers, the Singapore Business Federation said.

Singapore FinTech Association (SFA) president Chia Hock Lai said: “Scale-up SG will increase the chance of producing Singapore-based tech unicorns, while Innovation Agents will increase the chances of success for tech start-ups.” 

He added: “This is the year SFA will be launching SMEs Go FinTech to raise awareness on the various fintech solutions to address their complex financing needs.”

WeInvest chief executive and co-founder Bhaskar Prabhakara said Scale-Up SG will help the start-up access much-needed financing and mentorship as it plans to expand into Malaysia and Thailand this year.

In addition, local enterprises can also look forward to easier access to financing. Precursor’s Mr Tan said that the setting up of the SME Co-Investment Fund III will make more funds available, the SME Working Capital Loan Scheme is being extended, and the introduction of Enterprise Financing Scheme will streamline existing financing initiatives for small and medium-sized enterprises (SMEs).

Mr Toby Koh, group managing director of Ademco Security Group, said he hopes that his firm can “get on the radar” for such co-investment programmes.

“But I am surprised and disappointed that there are no tax incentives for SMEs that have gone international,” he added.

The extension of existing schemes such as the Automation Support Package and the SME Working Capital Loan will address smaller companies’ financial needs. Expanding the coverage of SME Go Digital will encourage broader adoption of digital technologies by SMEs, while extending the Enterprise Development Grant and enhancing the Productivity Solutions Grant will promote innovation.

Ms Irene Tai, corporate tax director of PwC Singapore, said: “The streamlining of financing schemes… should also allow Enterprise Singapore to channel the funds to where they are most needed.” 

KPMG head of enterprise market Jonathan Ho noted that the Government is taking up to 70 per cent risk on bank loans to companies less than five years old, and the extension of the SME working capital loan scheme will help catalyse start-ups with innovative ideas, as these companies may need some gestation period.

Mr Anuj Kagalwala, PWC’s asset & wealth management tax leader, said: “The Government has set aside an additional $100 million for investment in SMEs as co-investment with private sector investment… Such investments have a direct correlation to investments and employment in Singapore.”

The Singapore Manufacturing Federation (SMF) noted that since October last year, it has implemented a manufacturing digital plan to help SMEs realise Industry 4.0 standards. The programme helps SMEs that want to go digital, but do not have the scale, tap “mentors” or digital project managers to help them deploy technology, SMF president Douglas Foo said.

Mr Terrence Oh, senior vice-president (Asia-Pacific) at EOS, a technological provider in additive manufacturing or industrial 3D printing, said the expected investment of $3.6 billion to help workers thrive amid industry and technological disruptions is timely.

“At present, the skills gap in industrial 3D printing is a challenge – niche expertise is required,” he said.

Mr Daryl Pereira, KPMG’s head of cyber security, management consulting, said that the measures to transform the private security industry will help, but government support could also have been extended to help businesses address cyber threats through tax incentives or grants to adopt stronger cyber-security practices.

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