The Government will not let Singapore businesses be priced out of global markets but it will also allow market forces to prevail, said Finance Minister Heng Swee Keat yesterday.
Mr Heng was responding to a question from Mr Edmund Koh, head of UBS Wealth Management Asia-Pacific, who led a dialogue session as part of a wealth insights conference organised by the Swiss banking giant.
Referring to the recent results of a survey by Singapore Chinese Chamber of Commerce and Industry (SCCCI), Mr Koh asked if policies would change in the light of higher interest rates and lower profit margins.
"We will always make sure we don't price ourselves out of the global market, but at the same time, we need to allow market forces to shape these costs," said Mr Heng.
He said that providing a stable environment for Singapore businesses is the best - and most important - factor. This serves as a foundation for firms as they build their competitiveness amid structural changes.
Mr Heng, asked a question from the floor about a review of property cooling measures, said in reply that "as far as Budget 2016 is concerned, I've not seen anything on my table relating to measures about property".
Mr Heng also noted how a group of businesses have suggested reducing land or property prices so rents can come down, for instance. He pointed out that Singapore's focus has always been on the medium term rather than reacting when markets move, which might leave the economy vulnerable.
Earlier in his welcome remarks, Mr Koh said that "it's a changing economic, geopolitical world" this year. "We continue to have quantitative easing in Japan and Europe, interest rate rises in the US, and China restructuring its economy. These four elements are a potent mix that will impact currencies, commodities, interest rates, and equities."
But Mr Koh was positive about the many opportunities in Asia's booming Internet industry, with e-commerce the dominant trend and China's Internet giants benefiting amid industry consolidation.
Mr Heng said businesses will have to embrace structural changes to the economy, invest in new technology and upgrade their skills to stay competitive. That involves firms taking the lead to develop a "far greater entrepreneurial spirit" as the economy transforms to become more service-led, instead of an over-reliance on the Government.
Businesses here have to embrace technology such as robotics to its fullest potential to move Singapore to higher value-added and high productivity industries. He said: "This is one major trend that we cannot avoid, and I hope that Singapore businesses will be among the best in the world in making use of technology to raise productivity."
Mr Eric Boo, chief operating officer of Colourscan, a digital imaging and printing firm, said: "With technological advances, you can bring down your cost. We also have to upgrade our workforce, and gear them for technological changes so they can be the ones operating the new technology, rather than being replaced by them."