Budget 2017 seeks to strike a balance between short-term concerns and gearing up Singapore for the future, Finance Minister Heng Swee Keat said yesterday.
Responding to MPs who said during a two-day debate that companies hit by the slowing economy are not receiving enough help, Mr Heng said the Budget focus is on targeted help for the worst-hit sectors while encouraging companies to build deep capabilities for the long term.
"A painkiller may work for a while to dull the pain, but it masks the underlying problem and delays needed action," he told Parliament.
In his speech rounding up the 2017 Budget debate, Mr Heng said companies and workers are facing an increasingly volatile and complex world where economic growth is slowing and new, disruptive technologies have become par for the course.
He also acknowledged that companies in some segments of the economy have been hit hard by the slowdown, even as they face mounting operating costs.
But, he said, "unlike the 2009 global financial crisis or the 1985 recession, we are not in a crisis".
While some sectors are facing a cyclical downturn, others are doing well and cannot find enough workers to fill vacancies, he noted.
The worst-hit industries have received targeted help, he said, pointing out that the near-term support measures for businesses in Budget 2017 added up to $1.4 billion.
These include enhancements to corporate income tax rebates as well as extensions to existing measures like the Wage Credit Scheme.
Noting that $1.4 billion "is not a trivial amount", Mr Heng added: "These are on top of the substantial stimulus measures introduced in the last three to four years, of which their cumulative effects are still working through the economy."
While businesses are facing cost pressures, "we must also recognise that, in a functioning economy, cost pressures serve as price signals, so that resources can be channelled into the most productive use."
He added: "We must be careful not to hamper this process. An across-the-board stimulus would not be effective as it may further push up cost pressures. So we monitor the situation closely and calibrate the fiscal stance accordingly."
Beyond short-term relief, the Budget also builds on ongoing efforts to prepare companies for the challenges ahead, the minister said.
"We want to help our businesses build deep capabilities that will enable them to adapt to a fast-changing world, and seize new opportunities where they arise.
"This is the key to continued success," Mr Heng said.
Chia Yan Min