Budget 2016: SMEs get help
Budget 2016, delivered by Finance Minister Heng Swee keat in Parliament yesterday, had a big focus on Small and Medium Enterprises (SMEs) and on creating a caring Singapore. We look at the help SMEs will get
Budget 2016, delivered by Finance Minister Heng Swee keat in Parliament yesterday, had a big focus on Small and Medium Enterprises (SMEs) and on creating a caring Singapore.
We look at the help SMEs will get.
Business Grants Portal
An enterprise-centric portal that will help SMEs wade through the numerous schemes on offer by various government agencies. The portal will be ready later this year.
National Trade Platform
This is a one-stop trade information management system that supports trade firms and allows sharing of information between companies and the Government.
This platform, which will cost more than $100 million to develop, will help SMEs cut costs and streamline processes to save over $600m worth of man-hours a year.
ACTION & INNOVATION NATION
Implementation of Automation Support Package
Over $400m will be set aside for the next three years to support companies trying to initiate or scale up automation projects.
It includes a grant of up to 50 per cent of the project with a cap of $1m, and will also provide a 100 per cent investment allowance for automation equipment.
SMEs' access to loans will also be improved and International Enterprise Singapore and Spring Singapore will work to help businesses expand overseas.
Enhancement of National Robotics Programme
Over $450m will be set aside in the next three years to scale up development and adoption of robots by providing packaged robotic solutions to SMEs at reasonable costs.
Deepening Innovation Capabilities
Up to $4 billion from the Research, Innovation and Enterprise (RIE) 2020 Plan will be directed to industry-related collaboration. The National Research Fund will also get a $1.5b top-up and there will be greater flexibility for the cost of acquiring Intellectual Property.
Setting up SG-Innovate
A new entity to match budding entrepreneurs with mentors and introduce them to venture capital firms. The initiative will also facilitate access to new technology, talent, markets and investors.
Setting up of Jurong Innovation District (JID)
The JID will provide a space for entrepreneurs, researchers and students to test and develop ideas and innovation. The first phase will be completed in 2022.
Continued Support from Transition Support Package
Introduced in FY 2013, firms will continue to receive the $1.9b set aside for dispensing qualifying wage increases under the Wage Credit Scheme.
Increasing Corporate Income Tax Rebate
Increase in rebates for corporate income tax from 30 to 50 per cent, with a yearly cap of $20,000 for this year and next.
Supporting Scale-ups through financing and tax incentives
The SME Mezzanine Growth Fund will be expanded from $100m to $150m, to provide SMEs with more capital to scale-up and go international.
Extension of Special Employment Credit (SEC)
The scheme provides employers with a wage offset for older workers earning up to $4,000 a month. The SEC scheme will be extended for three years and will be tiered by employee age to encourage employers to hire older workers.
Introduction of an SME Working Capital Loan
Loans of up to $300,000 per SME will be given to viable companies that have cash flow problems or wish to expand. The measure, which will be available for three years, will see the Government co-share 50 per cent of the default risk with participating financial institutes to encourage lending.
GO BIG OR GO HOME
Enhancement of Revitalisation of Shops Scheme
Heartland shops will be made more vibrant through promotional activities and upgrading projects in HDB towns and neighbourhood centres. The initiative is expected to cost about $15m annually.
Extension of Double Tax Deduction
The scheme will be extended until March 2020 to cover expenses incurred for activities such as overseas business development and investment study trips.
A new skills development and job placement hub in the information and communications technology (ICT) sector that will help to train people with relevant ICT skills.
It will also encourage employers to place greater value on certified skills proficiency rather than academic qualifications alone.
Adapt and Grow
Initiative A scheme to help mid-career jobseekers and workers facing difficulties finding jobs by helping them to grow their skills and adapt to changing job demands.
Foreign worker levy
Levy increases for work permit holders in the marine and process sectors will be deferred for a year. But as announced in Budget 2015, the levy for work permit holders in the manufacturing industry will remain unchanged and those in the services and construction sectors will increase. The S Pass levy will also increase in every sector as announced last year.
The long-term plan which was launched in 2014 will continue to help Singaporeans broaden and deepen their skills by utilising their SkillsFuture Credit.
Initiatives like the SkillsFuture Earn and Learn Programme and the SkillsFuture Study Awards are also in place.
Budget 2016: You innovate, we support
What does a mixing machine for soups and sauces have to do with a cheesecake business?
In an innovative move, chef Daniel Tay, 45, turned it into a mixing machine for cream cheese instead.
Now, the machine is helping his food supplying company, Foodgnostic, produce high-quality cheesecakes. But it was not all rosy in the beginning.
Foodgnostic, which was started in November 2013, had a deficit of $300,000 in its first year and $200,000 in the second.
But Mr Tay, who started cafe and dessert chain Bakerzin and sold it off in 2007, said: "Nobody can start a business and profit immediately. I was prepared for the losses.
"Starting a business is like jumping off the plane without a parachute."
Meanwhile, he was looking for a way to produce large volumes of cream cheese quickly for his new venture - online cheesecake shop Cat & the Fiddle, which Foodgnostic would supply cakes to.
That was where the soups and sauces mixing machine came in.
After two months of trial and error, he created a method that would mix 300kg of cream cheese in just three minutes.
Mr Tay, who has three children aged between eight and 16, stressed the importance of innovation.
He said: "We have to innovate to keep up with times. We can't expect productivity to come with old ways.
"But innovation must be coupled with support from banks and the government."
One equipment Foodgnostic has in its factory is an ultrasonic slicer that cost about US$160,000 (S$220,000).
From requiring five workers to manually slice the cakes, only one is needed now to operate the machine.
"It's not a matter of whether I should or should not buy innovative equipment. I have to buy it.
"One must start somewhere and get the quality of the products right. Everything else will then fall in place," said Mr Tay, who intends to scale up Foodgnostic's automation processes.
This is in light of the new Automation Support Package that was announced in yesterday's Budget speech.
The package includes supporting the rolling out or scaling up of automation projects by funding up to 50 per cent of the project cost, with a maximum grant of $1 million.
Mr Tay said: "Automation has always been the direction Foodgnostic is going towards. Whatever support offered by the Government is beneficial."
The company had earlier received grants from Spring Singapore and applied for the Productivity and Innovation Credit scheme to help with machinery costs.
Responding to the announcement of the Business Grants Portal, which will help companies access grants from government agencies, Mr Tay said: "The portal will make it easier for companies to approach the right agencies to seek help."
The portal will be launched in the fourth quarter of this year.