Singapore Budget 2015: Positions people and companies alike for the future, says business federation chief

SINGAPORE - Budget 2015 sets the basis for the future as it invests in people and businesses, said Singapore Business Federation (SBF) chief executive Ho Meng Kit on Monday.

"We applaud the Government for introducing a comprehensive and meaningful Budget that invests in our future, which addresses the here-and-now issues businesses face," he told The Straits Times.

These include the high business costs and pace of tightening foreign workers, said Mr Ho, which many small and medium enterprises are grappling with.

"We are glad this Budget extended the Transition Support Package, in terms of the Wage Credit Scheme and corporate income tax rebate for companies for another two years."

The package has supported businesses since it was launched in 2013, and was due to expire this year.

Deputy Prime Minister Tharman Shanmugaratnam said the transitional support will be phased out gradually by extending the scheme and rebate for two additional years, while letting the Productivity and Innovation Credit Bonus expire.

But more importantly, said Mr Ho, the Budget this year "sets the basis for the future".

The SkillsFuture move is particularly meaningful as it invests a lot of money into the skills of Singapore so workers and continue to be productive and Singapore will be more competitive, he added.

Each Singaporean 25 years old and above will receive an initial credit of $500 from 2016 for further education and training for instance, said Mr Tharman.

Mr Ho said: "There is also a lot of support for companies in innovation and internationalisation. That will form the seeds of the economy in future - companies that are innovative and not just growing in Singapore but also overseas."

One example is the enhanced double tax deduction, which will now cover salaries incurred for Singaporeans posted overseas.

However, Mr Ho noted that embarking on SkillsFuture is not easy, as it goes beyond the relationship between employers and employees.

"Like Mr Tharman said, the deeper mindset change is needed, for every individual to take responsibility."

Mr Ho also noted that some moves will increase costs for businesses such as raising the Central Provident Fund (CPF) contribution rates for older workers and a higher CPF salary ceiling.

"We recognise where this is coming from and and this of course will increase cost for businesses. But there is the temporary employment credit that will meet some of these cost increases over the next two years," he said.

The SBF was also expecting the PIC bonus to be extended for another two years, and "some of our companies were a little bit disappointed but we are happy that the Wage Credit Scheme and corporate income tax rebate were."

Despite some misses, Mr Ho said the Budget was "a thoughtful one for the future".

rachaelb@sph.com.sg