Helping SMEs beyond 2013 Budget

AN ADVOCACY group for small and medium-sized enterprises (SMEs) has made public its wide- ranging list of suggestions for Budget 2013 and beyond.

The SME Committee, led by the Singapore Business Federation, said it aims to help SMEs not only with immediate challenges, but also with long-term growth.

The committee yesterday released 33 suggestions that it sent to the Government last month.

The list included an expected slew of proposals to help SMEs deal with current hot button issues of rising business costs and tighter foreign worker policies.

But the committee has also turned its attention to suggestions with a longer-term focus. For example, it noted a rising trend of smaller firms seeking opportunities abroad even before establishing themselves locally.

The Government could help these firms gain a foothold overseas by giving them more opportunities in public tenders, for example; and it should review some of its procurement requirements to allow more SMEs to participate.

Overly stringent tender criteria often rule out SMEs, it added.

"For example, for the project to build Terminal 4 at Changi Airport, no local architect participated," said Mr Ricky Souw, chairman of its internationalisation and market access sub-committee, at a media briefing.

The Government could also encourage big firms and government-linked firms to partner SMEs for overseas projects. For example, the Government could provide incentives to big firms that engage SMEs as subcontractors or suppliers for overseas projects.

Once they have such overseas projects, these SMEs would need talent to manage their foreign operations. However, local employees tend to be unwilling to be posted overseas, the committee said.

Meanwhile, foreign trainees are subject to the same foreign worker quotas and minimum salary requirements as other long-term foreign workers here.

The Government should thus set up a new category for foreign professional and management trainees, and the usual work pass and work permit conditions should not apply, it suggested.

Another area of long-term growth for local SMEs is the creation of intellectual property (IP).

The Intellectual Property Office of Singapore, A*Star and Spring Singapore could form an IP bank to "conduct more accurate assessments of the value of IPs, provide greater access to capital for IP-based SMEs and also promote and syndicate IPs", said SBF chief operating officer Victor Tay.

Other suggestions were aimed at more pressing issues. At the top of the list were ideas to help SMEs manage rising business costs, such as giving a one-off cash grant of $10,000, and supplying more affordable industrial facilities.

The committee also suggested delaying further rises in foreign worker levies and removing S-Pass levies altogether.

These were followed by proposals to help SMEs deal with the tight labour market and to encourage them to hire locals and rely less on foreign workers.

A firm that actively reduces the number of foreign workers in its headcount, for example, could perhaps be given a levy rebate.

Minister of State for Trade and Industry Teo Ser Luck, who was also at the briefing, said the Government is reviewing the proposals.

He said: "We have gone through some of the recommendations and found that there are some practical ones that can be implemented and that can actually help the business sector."