Budget 2026 wish lists: SMEs seek cost relief, trade chambers focus on industry needs

SINGAPORE – Every Budget season, Singapore’s trade bodies turn into wish‑makers.

Across the board this year, towkays have told their trade leaders they want government subsidies to defray costs, hire more workers – including foreigners – and checks put on rent-raising landlords.

The booklets and documents that went to the Finance Ministry at the close of its Jan 12 consultation deadline detailed most of their wishes, and included many more to support overseas business expansion, business consolidation, multinationals’ tax relief and decarbonisation tax credits.

There were also proposals for more funding and empowerment for business associations.

The add-ons happen more or less every Budget recommendation season, but it is not due to a loss in translation, said Mr Ernie Koh, president of the Singapore Retailers Association (SRA).

Rather, businesses express what they want, industry associations collate what the industry should have, and apex trade chambers take a view on where the economy should be headed.

He said: “The apex associations take a more visionary perspective of where the business is going, and industry associations tackle the more immediate two-to-three-year situation.”

So, while the Singapore Business Federation (SBF) might press for support in areas such as economy-wide digitisation, sustainability and internationalisation, groups for restaurants and property agents make sector-level requests such as caps on rental hikes, streamlined licensing fees and a roll-back of stamp duties on property purchases.

SRA is asking for the expansion of climate and CDC vouchers to benefit more merchants, the lowering of the Dependency Ratio Ceiling for retailers to hire more foreigners, and an extension of progressive wages subsidies to 2028.

Some of these wishes, Mr Koh conceded, are perennial.

“Sometimes we sound like a broken record. We know that the Government sometimes finds it quite difficult to fulfil our wish list. But if we say it enough, then they will start engaging with us to see what they can do,” he said.

The Straits Times highlights four recommendations that stand out:

1. Build IP financing hub

The idea to create a digital intellectual property collateral registry and use IP as financing collateral was jointly proposed by SBF and consultancy firm PwC Singapore.

The idea is to allow businesses with strong IPs access to financing without them having to find traditional forms of collateral recognised by banks here, such as property and equipment.

In a media briefing, PwC Singapore’s executive chairman Marcus Lam warned that China, Hong Kong and South Korea are already advancing IP financing initiatives, and “Singapore should keep up”.

The pair also asked the Government to widen its risk-sharing schemes to cover IP-backed loans with higher ratios of 70 per cent to 80 per cent.

2. Fine-tune help for SMEs

Micro-enterprises that hire 10 or fewer workers make up 77 per cent of local enterprises. Small firms that hire 11 to 30 employees account for 17 per cent.

Together, these businesses make up 94 per cent of enterprises, and employ 45 per cent of the four million-strong workforce.

The Association of Small and Medium Enterprises (ASME) has put this long-overlooked group at the heart of its Budget wish list, calling for tailored help to cope with rising costs and foreign competition.

These firms have two longstanding bugbears: missing grant headcount or revenue thresholds, and cash flow stress while waiting for grant payouts.

​On Jan 23, the association said it has secured $10 million in existing grant funds for this group, and is working with UOB to offer loans to tie them over the waiting periods.

One of its wishes is milestone-based funding, in the range of $15,000 to $30,000, to be administered through trade associations so that checks can be done without burying firms in paperwork.

With scrutiny from China on companies that might be using Singapore as just a landing point to the West, ASME president Ang Yuit expects new Chinese investors to show more interest in using local suppliers.

When they do, local SMEs must have the scale to be “interesting”, he said. ASME wants more support to help firms consolidate through mergers or acquisitions for scale.

He said: “You cannot be 100 times smaller, then you have very little value to these investors. Maybe you are 20 per cent of its size – or even at 10 per cent, you may provide some value.”

Consolidation will also help these SMEs grow overseas.

“Singapore SMEs’ problem is that our game is too small. And, naturally, if our game is small, we will squabble over who has more space.”

3. Hire senior workers

Workforce recommendations were given a back seat in 2026, with several government policies already in the roll-out phase, said SBF.

But with a rapidly ageing workforce, the federation is pushing for incentives to raise the hiring of older workers. By 2030, one in four Singaporeans will be aged 65 and above.

SBF has asked the Government to lead by example on flexible and fractional work, offset SMEs’ higher health and insurance costs for older hires, launch boot camp-style AI upskilling for seniors, and run a national campaign plus awards to tackle age bias.

SRA proposes extra foreign worker quotas for firms hiring those aged 50 and above.

Ernst & Young Advisory called for extending the Senior Employment Credit, a subsidy for re-skilling costs for seniors shifting into digital, AI and green roles, as well as higher SkillsFuture subsidies tailored for them.

The firm’s partner at people consulting Goh Jia Yong said: “Launching a job fractionalisation incentive scheme to help companies redesign full-time roles into part-time, flexible or shared roles suitable for seniors would be helpful too.”

4. Better use and integration of foreign talent

The political hot potato of foreign talent drew SBF to suggest initiatives such as orientation programmes for overseas workers, a central online repository of integration resources for companies, and training courses on local-foreign workplace integration.

Professional services firm KPMG in Singapore and the Singapore Institute of Directors jointly proposed a dedicated work-pass category for these professionals to lead upskilling or leadership development programmes.

KPMG in Singapore managing director Lee Sze Yeng said: “They could work fractionally across multiple organisations rather than being tied to just one company, as is the norm now. This way, more businesses can benefit from their expertise.

“For smaller enterprises or those with limited resources, this makes it much more practical to access emerging technologies and drive research and development efforts. It’s especially critical in areas like AI and innovation, where shared expertise can really help companies take that first step and build their capabilities in a sustainable way.”

More business may crash in 2026, focus on reallocation

A total of 66,571 new businesses opened in 2025, when the economy galloped to a surprisingly good finish with 4.8 per cent growth. That is 12,211 more than 2024.

But with no let-up in global trade pressures and rising costs, what business associations like SBF and ASME can do is to try flying parachutes to spiralling firms before they hit hard land.

These are the business transformation road maps and grants, and financing options which might extend these firms a lifeline before they get distressed.

SBF chief executive Kok Ping Soon said: “We have announced a partnership with Enterprise Singapore to set up a centre for enterprise financing to elevate the awareness of the different financing instruments available to SMEs, beyond the traditional loans secured against the usual collaterals.”

Like it or not, it is imperative for businesses to explore overseas, he said. “I think we all acknowledge that Singapore is a very small market.”

There are over 461,000 registered businesses in Singapore. A total of 54,360 business entities closed in 2025, which works out to 149 a day.

Mr Kok said: “The question is, for every business that has failed, what is the role of the Government to help?”

It must be to ensure that the displacement of workers is taken care of, and the remaining capital is redeployed.

He said: “It’s not so much about helping particular businesses, but it’s to find a way to rechannel the capital, the talent into other productive uses.”