NCMP seeks preferential treatment for local SMEs

Local small and medium-sized enterprises (SMEs) should be given preferential treatment in government procurements, to help them grow and compete globally, Non-Constituency MP Hazel Poa said yesterday.

The Progress Singapore Party (PSP) member also called for an increase of the wage component in the gross domestic product (GDP), and called on the Government to reveal the size of the reserves.

On helping SMEs, she cited Israel, which in 1995 approved the "Preference for Israeli Products" regulation stipulating a 15 per cent price differential preference be awarded to Israeli manufacturers for certain items, and for products with 35 per cent Israeli content and with a value not exceeding $500,000.

A "Mandatory Industrial Cooperation" regulation also required foreign suppliers that had won government or public tenders to engage in an offset procurement in Israel to the extent of 20 per cent to 50 per cent of the contract value.

They could do so by local subcontracting, procurement of local goods and services, cooperation in research and development, and investment or assistance for an Israeli industrialist or exporter abroad, she said. These regulations have not impacted Israel's competitiveness to a degree that it is no longer globally competitive, she added.

She said the PSP urges the Government to "consider similar preferential treatment for local businesses in government procurements".

She also called "inadequate" the $900 million allocated in the Budget to help households ride out the Covid-19 crisis this year. "With more business closures and unemployment expected to increase after March when many of the support measures start to taper off, more households will likely suffer financial stress," she said, hoping support would be raised for those needing it.

Ms Poa also noted that wages here formed about 43.6 per cent of GDP last year, lower than the 54 per cent in Germany and 53 per cent in the United Kingdom. "If we want to ensure that our people enjoy the benefits of this economic growth, we should set an initial target of having the wage component form at least 50 per cent of GDP."

She asked if President Halimah Yacob was aware of the size of the nation's reserves when she gave in-principle approval to draw on them for a second straight year, and said MPs are being asked to vote on a Budget that would require a draw on the reserves, without knowing its actual size.