Singapore has started to see some progress in its efforts to raise productivity, but the country is still in the early to middle stages of its economic restructuring and so has to press on with its efforts, Deputy Prime Minister Tharman Shanmugaratnam has said.
The upcoming Budget, which he will unveil on Feb 21, will therefore include more measures to help companies - especially support for small and medium-sized enterprises (SMEs) - to stay the course, he added.
This Budget comes as Singapore has been four years into moves to restructure the economy and raise productivity, so as to reduce the country's reliance on foreign labour, and raise average wages. However, many firms have asked for help with increased costs. Mr Tharman was speaking to the media on the sidelines of a family carnival in Jurong yesterday.
He said Singapore has to stay on course with the restructuring of the economy and the upgrading of its SMEs so the country can create better jobs, and wages of average and lower-income workers can rise over time.
"That is a multi-year task. It is not something that can be achieved in two or three years," he said.
"We are in the early to middle stages of that task. Wages are rising. The labour market is extremely tight; the pain is being felt by the businesses.
"But we are only beginning to see the pickup in productivity."
The Government has started seeing many interesting cases of firms using new technologies, changing their old way of operations and gaining market share and business advantage as a result, he said.
"Upgrading is not just about reducing costs. It is about gaining business advantage. So that process is now starting."
The fact that productivity has not picked up much despite the tight labour market is understandable, he said, but added that Singapore is now going to see better results.
The Government will do its part by providing more support, not just through broad-based schemes like the Productivity and Innovation Credit which any company can apply for, but more industry-specific measures too, he said.
The Government is working with industry associations and individual firms, he added, to help companies invest in technology and their supply chains and provide them with assistance so that large firms can help small firms.
Mr Tharman added that the Budget will also include health- related measures for seniors that focus not just on health- care costs but on keeping them active.
"It is really a commitment by the Government to honour the pioneer generation and to do it in a way which is sustainable," he said.
"In other words, this is not a one-year bonanza, but providing them with sustainable help so that they can live good long lives, happy and long lives."
This article was first published in The Straits Times on Jan 20, 2014