Latest measures 'not enough' to ride out current headwind
Companies disappointed with lack of short-term support for businesses in this year's Budget
Many companies and business associations here are only lukewarm over measures for businesses unveiled in this year's Budget.
Small and medium-sized enterprises (SMEs) in particular had been hoping for more help in a tough economy but feel dissatisfied given the lack of support to ride out the current headwind.
The Singapore Business Federation (SBF) said it is "disappointed" with the lack of short-term measures for companies this year, given that rising business costs have been a persistent concern.
"For example, the deferment of foreign worker levy (increases) by one year for only the marine and process sectors should have been extended across other sectors that are still experiencing cost challenges," it said. "There is also an absence of measures on rental rebates for businesses in general."
SBF chief executive Ho Meng Kit told The Straits Times the latest measures - coming as industries, including oil and gas, retail, and food and beverage, remain heavily challenged - are simply "not enough", as survival remains a question for many companies.
Mr Thomas Chua, president of Singapore Chinese Chamber of Commerce & Industry, acknowledged that the Budget has initiatives in innovation, internationalisation and digitalisation to help firms transform and stay relevant over the longer term.
But he cited inadequate support for firms looking for immediate help. "Businesses are concerned with the impact on their business costs, especially with the immediate increase of diesel tax and soon, the water price."
The Government has said it will take steps to alleviate the problem of rising costs - a major and persistent bugbear for many companies - with measures such as the enhanced and extended corporate income rebate tax. But the move may benefit only those reporting corporate income in Singapore.
For 3D printing firm EOS Singapore, for example, the rebate is unlikely to help much, said Mr Terence Oh, vice-president of Asia Pacific operations.
Singaporeans need to understand that we can’t afford to have a ‘big bang’ Budget every year. DBS Bank economist Irvin Seah
"In our current business dealings, customers are invoiced through our headquarters in Munich. As such, the profit registered here is minimal and the tax rebate would have minimal impact to our bottom line for the Singapore entity."
Still, the firm is converting its Singapore entity into its regional headquarters, which will allow it to better benefit from the tax rebate, he said.
Deloitte Singapore tax partner Ong Siok Peng noted it would have been more helpful to re-introduce the SME cash grant to help businesses which are not tax-paying to cope with rising business costs.
DBS Bank economist Irvin Seah said it is understandable that some sectors see the Budget as more muted than those of previous years, given the lack of "a big key thrust" for companies.
Still, he also noted the Government's primary deficit position is set to deepen to $5.62 billion this year, more than double 2016's $2.72 billion - meaning it will be spending much more in the year ahead.
"What people have forgotten is that a lot of the help measures were put in place two to three years ago, and that they still remain in place. Singaporeans need to understand that we can't afford to have a 'big bang' Budget every year."