Raising productivity only way to improve jobs and lives: Heng

Raising productivity is the only way to continually improve the jobs and lives of Singaporeans, which is the ultimate goal of the country's economic growth, Deputy Prime Minister Heng Swee Keat said yesterday.

Responding to MPs' comments on the Budget statement, Mr Heng noted that the $24 billion set aside for business and worker transformation over the next three years is about pursuing Singapore's medium-to longer-term economic priorities, even as the country tackles its immediate challenge.

The move also seeks to give Singapore's workers and companies a distinct advantage in the global marketplace, he added.

Acknowledging that several MPs, including Dr Koh Poh Koon (Tampines GRC), had highlighted the synergies between companies and workers, he said: "The fortunes of businesses and workers are inextricably linked, more so today than ever."

As Ms Jessica Tan (East Coast GRC) and others had pointed out, building a stronger Singapore core is at the heart of the Government's approach, Mr Heng added.

Highlighting points made by labour MPs about how the way forward for Singapore is as much about being stronger together as it is about emerging stronger, he said: "It is the strength of our collective capabilities and connectedness as an economy and as a society that will determine how far we will go."

While uncertainties and risks in the global economy remain given the Covid-19 pandemic and the emergence of new virus strains, the virus situation within Singapore remains under control.

Singapore's economic recovery is expected to be gradual and uneven across sectors.

The gross domestic product (GDP) growth forecast for this year is estimated at 4 per cent to 6 per cent, said Mr Heng, who is also Finance Minister.

"Now is the time to chart our course, position ourselves to catch the winds of opportunity and sail boldly in the reshaped world," he said, adding this is the focus of this year's Emerging Stronger Budget.

In his speech, Mr Heng outlined the efforts last year to support companies and businesses - a total of $27.4 billion in grants was committed to preserve jobs and help firms pivot to new growth areas.

This was more than 18 times the amount disbursed in 2019, he said.

The decisive response helped contain the economic impact of the Covid-19 pandemic to avoid deep scarring, which was also pointed out by Mr Liang Eng Hwa (Bukit Panjang) and Mr Desmond Choo (Tampines GRC).

These efforts are estimated to have prevented a further 6.6 percentage points of GDP contraction last year and mitigated the rise in resident unemployment rates by 2 percentage points.

Singapore's economy contracted 5.4 per cent last year - its worst recession since independence - and its resident unemployment rate was 4.1 per cent. The calibrated strategy Singapore has taken through the combined Budgets from last year and this year has also had positive outcomes for firms and workers, said Mr Heng.

Some of the hardest-hit sectors are starting to see light at the end of the tunnel, he said, citing how consumer-facing sectors such as retail and food services saw a gradual recovery by the fourth quarter last year.

Responding to questions from MPs, including Mr Zhulkarnain Abdul Rahim (Chua Chu Kang GRC), about what the post Covid-19 world means for Singapore's economy, Mr Heng outlined three areas Singapore must work on to pave the way for its next lap of growth.

First, the country must remake itself as a global Asian node of technology, innovation and enterprise.

This requires enhancing the country's connectivity and positioning its firms and workers at the intersection of key global chains growing out of Asia.

Second, as Mr Gan Thiam Poh (Ang Mo Kio GRC) had highlighted, the Republic must shift to a technologically advanced and innovation-driven economy where firms and workers are able to harness technology and intangible assets as a key differentiator.

Third, Singapore must invest in economic resilience and sustainability as a source of competitive advantage, Mr Heng said, noting how Mr Shawn Huang (Jurong GRC) had summarised it aptly - that is, for Singapore to survive, pivot and develop an edge to seize opportunities of the future.

"If we get this right, we can set our economy on the path of growth for the next five to 10 years."

Replying to Workers' Party MP Leon Perera's (Aljunied GRC) point about incentivising collaboration between multinational corporations and small-and medium-sized enterprises, Mr Heng said that the synergy of firms working together applies to companies of all sizes and sectors.

The Ministry of Trade and Industry will elaborate on initiatives for knowledge transfer and skills training at the debate on its budget, he added.

Singapore takes an ecosystem approach to economic development, sustaining an ecosystem of innovative and competitive firms to support a vibrant economy, Mr Heng stressed.

"All these efforts serve to create opportunities for our people."