Budget 2026: SMEs need help with costs and competitiveness as outlook weakens, says SCCCI
Sign up now: Get ST's newsletters delivered to your inbox
The recommendations were derived from SCCCI’s Annual Business Survey 2025, which polled more than 700 senior representatives.
PHOTO: LIANHE ZAOBAO
Low Youjin
SINGAPORE – The Singapore Chinese Chamber of Commerce & Industry (SCCCI) on Dec 3 released its proposals for Budget 2026 as its annual survey found businesses were cautious about next year’s outlook and wanted help with rising costs.
The proposals came a day after the Ministry of Finance launched its call for public feedback
SCCCI president Kho Choon Keng said that local businesses are facing an increasingly complex and uncertain landscape, with near-term challenges weighing on their operations.
“Budget 2026 can provide the strategic lift that enables our businesses, especially small and medium-sized enterprises (SMEs), to strengthen their competitiveness while building new capabilities for the future,” he added.
SCCCI’s recommendations, he said, “can contribute towards strengthening Singapore companies to seize growth opportunities in the new economy”.
The recommendations were derived from SCCCI’s Annual Business Survey 2025, which polled more than 700 senior representatives from local businesses across diverse sectors.
Topics ranged from business sentiments to the impact of the US tariffs and government schemes, among others.
The recommendations
SCCCI’s first recommendation centres on easing business costs and improving firms’ competitiveness.
It includes calls to refrain from raising government fees, extend support schemes that offset rising manpower costs, and streamline grant processes – alongside other measures aimed at reducing operational burdens.
The second recommendation seeks to quicken the pace of SMEs’ pursuit of sustainability, noting that firms often face high costs and technical hurdles even as customers, investors and financiers increasingly expect stronger green credentials.
SCCCI proposes initiatives such as a government-backed sustainability recognition scheme for smaller firms, allowing trade associations to pool SME needs and obtain stronger funding support, and introducing a simplified “Enterprise Sustainability Programme-Lite” grant for companies taking their first steps in sustainability.
The third recommendation urges the establishment of a “trusted digital business hub” to help SMEs adopt artificial intelligence (AI) more effectively and strengthen their competitiveness.
SCCCI noted that many SMEs struggle with the high cost of AI solutions, capability gaps and uncertainty about where to start.
It proposes a government-supported hub that brings together SMEs, institutes of higher learning and AI providers to co-develop and validate AI projects, as well as an “AI micro-grant scheme” to support the adoption of pre-approved solutions, among other suggestions.
The fourth recommendation seeks to enhance government support for trade associations and chambers (TACs), which SCCCI says can play a bigger role in helping SMEs expand into new markets amid a small domestic base and a volatile global environment.
Its proposals include raising funding support for TAC-organised overseas missions, supporting more in-depth market research, introducing incentives for foreign-local joint ventures, and increasing the grant cap under the Market Readiness Assistance scheme.
The fifth recommendation calls for stronger support for TACs that deliver industry-relevant training linked to employment outcomes, noting that businesses are expected to shift more decisively towards skills-based hiring.
To build a workforce with deeper competencies, SCCCI proposes that SkillsFuture Singapore extend more financial support for specialised training led by industry experts.
It also suggests providing funding support of at least 70 per cent to TACs with Approved Training Organisation status to offer courses – including modular and micro-credential programmes in areas such as AI, advanced technologies and sustainability – that facilitate job transitions, among other suggestions.
Survey findings
SCCCI’s survey found that the top three business challenges were rising costs, manpower shortages and a need for transformation.
Businesses generally signalled a cautious outlook for 2025, with just over 26 per cent stating that they were optimistic or very optimistic. The rest were either neutral (36.7 per cent) or feeling pessimistic (33.4 per cent) or very pessimistic (3.6 per cent).
About half of the respondents also reported being hit by a 25 per cent surge in business costs. Nevertheless, 75 per cent expect profits in 2025, but over half foresee it will be lower than in 2024.
On manpower, about eight in 10 respondents said they struggled to hire locals for rank-and-file roles.
To solve this, respondents mainly resorted to hiring foreign workers (35.5 per cent) or raising salaries (19.9 per cent).
Other solutions included automating these roles to reduce manpower reliance (18.4 per cent) or redesigning the roles to make them more attractive (15.6 per cent).
Notwithstanding the costs of doing business and resource constraints in Singapore, the majority still said that they will retain part or all of their operations in Singapore (95.3 per cent).
But challenges such as a lack of internal expertise and resources (40.9 per cent) and resistance from staff (36.7 per cent) are the top causes of hindering their transformation journey.
As for government schemes, the survey found that the most useful ones were related to supporting digitalisation (44.4 per cent), manpower management (40.8 per cent) and business transformation (30.7 per cent).
The least useful were schemes related to becoming sustainable and seizing growth opportunities in sustainability (12.2 per cent).
That said, many businesses said they were uncertain about what schemes would be the most appropriate for their business needs (37.9 per cent), with a slightly smaller percentage finding the application process too complicated (37.7 per cent).
Only 21.5 per cent of respondents reported having no challenges in applying for government schemes. THE BUSINESS TIMES
