Budget 2013: $3.6 billion wage credit scheme, more productivity incentives for smaller businesses
Announced in Singapore Budget 2013, the Government will provide support to help businesses raise workers' wages through a new Wage Credit Scheme, on which it will spend $3.6 billion over three years.
Under the scheme, the Government will co-fund 40 per cent of wage increases given to Singaporean employees earning a gross monthly wage of up to $4,000. Wage increases given in 2013 to 2015 will be eligible.
This is part of its three-year transition support package to help companies during this period of restructuring, under its Quality Growth Programme, Deputy Prime Minister Tharman Shanmugaratnam said in his Singapore Budget 2013 speech on Monday.
Wage Credit Scheme
Source: Ministry of Finance
The Government is also dangling more carrots in Singapore Budget 2013 to encourage businesses to boost their productivity. For starters, it is enhancing the existing Productivity and Innovation Credit (PIC) scheme by introducing a new cash bonus for participating firms.
Businesses that spend a minimum of $5,000 in PIC activities in a year will receive a cash bonus equivalent to the amount spent. The bonus will be capped at $15,000 per year for the next two years of assessment, up to Year of Assessment 2015. It will be paid over and above the existing PIC benefits.
Source: Ministry of Finance
A new incentive is also available to firms that participate in industry-wide collaborations to help solve productivity challenges in their sector. This Collaborative Industry Projects initiative will be adopted in seven priority industries, including food manufacturing, retail, textile and apparel and furniture manufacturing, and will cost the Government an estimated $100 million over three years.
Small and medium sized enterprises (SMEs) will also receive more help in working with large multinationals to develop world-class capabilities. The Government will extend the Partnerships for Capability Transformation (PACT) scheme, which was initiated in the manufacturing sector, to other sectors.
Another new initiative is the Land Productivity Grant, to support firms which intensify their use of land in Singapore. Help will also be given to those who choose to relocate some operations offshore, including to the immediate region, while retaining core functions in Singapore and saving land. This will cost the Government about $60 million,
The Government is also launching an SME Talent Programme, which will provide awards to encourage polytechnic and Institute of Technical Education (ITE) students to work at SMEs upon graduation. In addition, the Government will improve the accessibility of Government support schemes for SMEs. Details will be shared in the following weeks.
For more news and analysis on Singapore Budget 2013, click here for ST's Big Story coverage.