Budget 2020 Roundtable: Businesses should work together to pull through crisis

Firms' main mode of business might normally be to compete relentlessly, but now, they should work together to pull through the coronavirus crisis.

If firms band together and share their risks, they might benefit all, experts noted during a roundtable session last week.

Singapore Business Federation chief executive Ho Meng Kit said: "Big companies might be in a better place if they pay their small companies on time, (easing) the cashflow problem for (them).

"So it's not that with everything, you need to rely on the Government. The behaviour of big companies in treating supply chains better can also help. Every company, big and small, has a part to play," he said.

"If we do this together, we have a good chance of getting out of this without hitting a recession."

Nominated MP Walter Theseira, an associate professor of economics, said the crisis gives businesses the chance to think about risk sharing and risk protection. "It really highlights the strengths or weaknesses in your risk-sharing framework," he said.

Citing the typical relationship between landlords and tenants, he said: "When businesses sign lease agreements to rent space, if you have a shortfall or a drop in revenue, basically all the risk is borne by the tenant. It's not borne by the landlord. The landlord collects the rent anyway.

"That's just one example of how you need to think about risk-sharing mechanisms, because in a crisis like this, we need to share risks more broadly across society and across different groups, between tenants and landlords, between workers and employers, and workers and the rest of society."

Mr Ho added that landlords can also help to keep retailers and food and beverage (F&B) companies going, as they have been hard-hit by falling crowds.

He noted that those renting space from the Housing Board are getting half a month's rental waiver.

But those renting from commercial landlords depend on them to pass down the benefits of property tax rebates.

"(Commercial giant) CapitaLand has been quite good in saying that it is going to pass it through and they're going to do more," he said.

"But the other mall owners have, maybe not a contractual, but a social responsibility to help their tenants at this time.

"Help will be very important and would not be able to save all, but you can help some of the retailers and F&B companies to keep going and then they don't have to shed workers."