It’s all about innovation and weathering the coming storm
With cyclical economic headwinds expected, Singapore Budget 2016 is set to provide immediate relief for businesses and support longer term economic transformation. At the same time, Budget 2016 will provide targeted support to those in need and invest in developing our people.
In his maiden Budget speech, Finance Minister Heng Swee Keat mentioned 3 key thrusts to address challenges for the economy:
Relief Measures Targeted at SMEs
1) Enhancing the Corporate Income Tax (CIT) Rebate
To help companies, especially SMEs, address near team concerns, CIT tax rebate is raised from existing 30% of tax payable to 50% of tax payable, with a cap of S$20,000 for the financial year of 2016 and 2017. The increased support is expected to cost the government almost S$1 billion dollars over the next 2 years.
2) Extending Special Employment Credit Scheme
In view of present economic uncertainties, employers will continue to enjoy the SEC for 3 more years (till 2019).
3) Introducing the SME Working Capital Loan Scheme
To support viable SMEs with cash flow concerns or those which wish to continue growing their business, the Government will co-share 50% of the default risk for business loans up to S$300,000. This is to encourage participating financial institutions to lend to SMEs.
4) Changes to the Foreign Worker Levy
In view of challenging business conditions in Manufacturing, Marine and Process sectors, these sectors will see a foreign worker levy freeze for one year. However, the Services and Construction sectors will continue to see levy increases due to the continued foreign worker growth in these sectors over the past year.
Transforming our Enterprises and Industries
Whilst we have introduced short term measures to provide firms some relief in the current economic slowdown, we must continue with our economic transformation. To do this, firms and industries can look forward to the new Industry Transformation Programme.
1) Introducing a new one-stop portal for business grants
A new Business Grants Portal will be launched by the end of this year. This one-stop enterprise-centric portal will make it easier for businesses to find out the grants they are eligible for. Businesses will no longer need to go to each individual agency to apply for them.
2) Introducing the Automation Support Package (ASP)
The ASP, which will cost S$400 million over the next 3 years, will provide support for SMEs looking to scale up their automation projects and improve productivity.
3) Developing a National Trade Platform
Close partnerships among firms, industry associations and Government is necessary to drive industry-level transformation. A National Trade Platform (NTP) will be developed to facilitate the formation of closer partnerships is by enabling electronic data to be shared among businesses and government.
4) Scaling up the National Robotics Programme
Robots can help us be more efficient in the workplace, especially in a tight labour market. It has the potential to transform the construction, manufacturing and logistics sector. In order to drive quicker adoption of these new technologies, the Government is setting aside S$450 million over the next three years to scale up the National Robotics Programme announced last year.
5) Strengthening Innovation and Enterprise Networks
Transforming through innovation involves nurturing our start-up ecosystem, including venture funding and support for accelerators and incubators. The Government will set up a new entity called SG-Innovate. SG-Innovate will match budding entrepreneurs with mentors, introduce them to venture capital firms, and help them access talents in research institutes. It will also look to expand the accelerator programmes to new and emerging sectors.
6) Creating the Jurong Innovation District
Transforming through innovation involves creating an open and innovative urban environment. The Jurong Innovation District will be the industrial park of the future. It will create an environment to encompass learning , research, innovation and production activities in a single next-gen industrial district.
Enabling Our Workers
Dealing with change will be a long-term endeavour, and through Budget 2016, the government will, together with employers and unions, support our people in three ways.
1) Adapt and Grow Initiative
Workers who may face greater difficulty in finding jobs will be eligible for wage support schemes under a new “Adapt and Grow” initiative, to encourage firms to hire them. The Adapt and Grow Initiative from MOM aims to help our people to grow their skills and adapt to changing job demands.
2) Introducing the TechSkills Accelerator
The TechSkills Accelerator is a new skills development and job placement hub for the ICT sector. It will encourage and help our people learn new ICT skills quickly and match them to new opportunities in growing sectors.
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