The National Solidarity Party (NSP) appreciates the PAP Government efforts to invest in the productivity growth of Singapore, but we are also concerned whether the scheme would really benefit a majority of our Small & Medium Enterprises (SMEs).
The local SMEs form the main group that needs a productivity boost, especially the smaller ones. However, most SMEs do not have the financial means to embark on sizeable investments in human resources and technology to improve their productivity. Thus, the higher tax rebates would not solve their woes, as they do not have the required funds in the first place. NSP understands from sources that even the Special Risk-sharing Initiative (SRI) has reduced the repayment period from 5 years to 2 years while interest rate has been raised from 5% to 5.5%. Such adjustment coupled with stringent criteria would have effectively rule out most SMEs from the scheme.
The new ‘Productivity and Innovation Credit’ scheme is apparently rather generic with no particular focus on SMEs. It may ultimately benefit the larger firms which may have less requirement for additional financial incentives. It seems that there is no clear cut lines drawn between foreign and local, big and small enterprises within the stated policy. NSP feels that special emphasis should be given to the local SMEs to help upgrade themselves from mere contract manufacturers and spare parts suppliers to that of MNCs, and from Original Equipment Manufacturers (OEMs) to that of Original Design Manufacturers (ODM), Private Label Manufacturers (PLM), or Main Brands Owners (MBO).
Countries such as Taiwan and Korea have fared particularly well in grooming their local SMEs into ODMs, PLMs and MBOs. Much concerted efforts had been jointly invested by their Governments and Corporations in funding and technological research facilities. The two Asian tigers overtook Singapore in the 90’s in grooming their local SMEs into higher value industrial players. Recently, China has also evolved quickly into an ODM industrial base. Over the past two decades, Singapore failed to implement any comprehensive plan to help its local SMEs to grow on par with other major Asian players. It is thus a great disappointment that the PAP Government should continue to with its oversight in addressing this malady in its Annual Budget.
The NSP is also concerned that the Budget ignores the need in enhance the social infrastructure and amenities to cope with the increased population of 5 million and growing. The tremendous stress caused by the liberal foreign workers policy, has weakened our social fabric and created considerable tension to our way of life in our overcrowded island. The capacity of our public transport system appears to be saturated. In particular, the MRT needs a major investment in upgrading their signalling system in order to improve on the frequency of trains during peak hours. Adequate and affordable housing poses another big challenge. The present model of City Planning, based on a population size of 3 million, is totally inadequate to accommodate the present population size of 5 million. We need a model that could better integrate housing and the public transportation system.
Apparently, the Government has eventually realized the folly of their over-liberal FT policy. However, the proposed implementation of a higher levy for foreign workers to curb their growth, lacks feasibility in the absence of a corresponding minimum wage policy or an effective quota policy. The increased levy could be translated into even lower wages for the foreign workers.
The Budget gives minimum attention to the reality of our aging population. The need to have more conducive facilities for the elderly in all aspects of life, grows with each passing year. The Government ought to develop specific infrastructure such as the “elderly” villages, specific trades and recreational facilities to accommodate and provide for the enlarged senior communities, before the demand for such facilities reaches another tension point.
Last but not least, NSP wishes to remind the PAP government that there are still Singaporeans without a proper roof over their heads and there are genuine cases of poverty that needs to be addressed. There is a need to set up a comprehensive social welfare system to cope with the various needs of the socially and economically disadvantaged groups of people so to help them get off from the poverty trap.
Goh Meng Seng
Secretary General
National Solidarity Party
The local SMEs form the main group that needs a productivity boost, especially the smaller ones. However, most SMEs do not have the financial means to embark on sizeable investments in human resources and technology to improve their productivity. Thus, the higher tax rebates would not solve their woes, as they do not have the required funds in the first place. NSP understands from sources that even the Special Risk-sharing Initiative (SRI) has reduced the repayment period from 5 years to 2 years while interest rate has been raised from 5% to 5.5%. Such adjustment coupled with stringent criteria would have effectively rule out most SMEs from the scheme.
The new ‘Productivity and Innovation Credit’ scheme is apparently rather generic with no particular focus on SMEs. It may ultimately benefit the larger firms which may have less requirement for additional financial incentives. It seems that there is no clear cut lines drawn between foreign and local, big and small enterprises within the stated policy. NSP feels that special emphasis should be given to the local SMEs to help upgrade themselves from mere contract manufacturers and spare parts suppliers to that of MNCs, and from Original Equipment Manufacturers (OEMs) to that of Original Design Manufacturers (ODM), Private Label Manufacturers (PLM), or Main Brands Owners (MBO).
Countries such as Taiwan and Korea have fared particularly well in grooming their local SMEs into ODMs, PLMs and MBOs. Much concerted efforts had been jointly invested by their Governments and Corporations in funding and technological research facilities. The two Asian tigers overtook Singapore in the 90’s in grooming their local SMEs into higher value industrial players. Recently, China has also evolved quickly into an ODM industrial base. Over the past two decades, Singapore failed to implement any comprehensive plan to help its local SMEs to grow on par with other major Asian players. It is thus a great disappointment that the PAP Government should continue to with its oversight in addressing this malady in its Annual Budget.
The NSP is also concerned that the Budget ignores the need in enhance the social infrastructure and amenities to cope with the increased population of 5 million and growing. The tremendous stress caused by the liberal foreign workers policy, has weakened our social fabric and created considerable tension to our way of life in our overcrowded island. The capacity of our public transport system appears to be saturated. In particular, the MRT needs a major investment in upgrading their signalling system in order to improve on the frequency of trains during peak hours. Adequate and affordable housing poses another big challenge. The present model of City Planning, based on a population size of 3 million, is totally inadequate to accommodate the present population size of 5 million. We need a model that could better integrate housing and the public transportation system.
Apparently, the Government has eventually realized the folly of their over-liberal FT policy. However, the proposed implementation of a higher levy for foreign workers to curb their growth, lacks feasibility in the absence of a corresponding minimum wage policy or an effective quota policy. The increased levy could be translated into even lower wages for the foreign workers.
The Budget gives minimum attention to the reality of our aging population. The need to have more conducive facilities for the elderly in all aspects of life, grows with each passing year. The Government ought to develop specific infrastructure such as the “elderly” villages, specific trades and recreational facilities to accommodate and provide for the enlarged senior communities, before the demand for such facilities reaches another tension point.
Last but not least, NSP wishes to remind the PAP government that there are still Singaporeans without a proper roof over their heads and there are genuine cases of poverty that needs to be addressed. There is a need to set up a comprehensive social welfare system to cope with the various needs of the socially and economically disadvantaged groups of people so to help them get off from the poverty trap.
Goh Meng Seng
Secretary General
National Solidarity Party
