SINGAPORE - In his Budget address on Monday (Feb 20), Finance Minister Heng Swee Keat announced some measures that will give companies some near-term support to weather the current economic slowdown, as well as new measures that will help them innovate, scale up and go global.
Here are some quick takes from business chambers, tax experts, economists and industry consultants on various aspects of this year's Budget:
The Singapore Business Federation: Disappointed with short-term help for companies, welcomes long-term measures
"The Singapore Business Federation is disappointed with Budget 2017's short-term measures, mainly with the inadequate short-term support to lower business and compliance costs. The business community has repeatedly conveyed their concerns on rising business costs through various platforms.
"For example, the deferment of foreign worker levies by one year for only the marine and process sectors should have been extended across other sectors which are still experiencing cost challenges. There is also an absence of measures on rental rebates for businesses in general.
"However, SBF welcomes the medium- to long-term measures, namely in the areas of internationalisation, innovation and development of digital capabilities, which continue to pave the way for the future economy.
"While it is comforting to know that this year's Budget has a strong focus of preparing our SMEs for the future economy, the current business outlook remains challenging. The business community requires immediate stimulus. We hope to see more details shared at the Committee of Supply debate."
Singapore Chinese Chamber of Commerce & Industry (SCCCI) president Thomas Chua: Long-term Budget with not enough near-term help for businesses
"This is a long-term Budget that is aligned with the CFE recommendations for the medium and longer term. It has outlined specific initiatives in innovation, internationalisation and digitalisation. Businesses need to transform according to the new direction to capture new opportunities, create new revenue sources and to stay relevant.
"However, businesses, especially SMEs, who are facing challenges are disappointed that there are not enough near-term measures to help them. Businesses are concerned with the impact on their business costs, especially with the immediate increase of diesel tax, and soon water price."
KPMG tax partner Alan Lau: Corporate tax rebate welcome but not enough relief from rising costs
"The Government's decision to increase the corporate tax rebate cap to $25,000 (from $20,000) will certainly be welcomed by corporates in Singapore. However, this may not sufficiently help businesses, as many are still grappling with rising business costs on all fronts."
KPMG tax partner Mak Oi Leng: Focus on local firms, not much for MNCs
"This year's Budget focus is very much on helping our home-grown enterprises to grow and expand overseas. However, MNCs may be disappointed that there wasn't much targeted at retaining and attracting them."
KPMG tax partner Harvey Koenig: Measures to help SMEs innovate is good start
"The measures to strengthen SMEs capability to innovate is a good start and builds on the strength of our agencies. However this is only the beginning as many SMEs are only commencing their innovation journey. They will need even more help along the way to navigate issues such as working with innovation partners, protecting their intellectual property and commercialising their ideas. SMEs should look to schemes such as the Capability Development Grant and R&D tax incentives to fund their innovation projects."
Cushman & Wakefield Singapore director & research head, Christine Li: Water price hike will hurt some industries
"The rise in utility costs will have a greater impact on properties with high electricity consumption and require large volumes of chilled water for cooling purposes, such as data centres. Consequently, Real Estate Investment Trust (Reit) dividends may be marginally impacted due to the decrease in the buildings' net operating incomes.
"The semiconductor industry will also be greatly impacted by both the increases in electricity tariffs and water costs. Operating expenses for wafer fabrication plants are expected to rise significantly due to large fabrication facilities (Fabs) requiring up to 4.8 million gallons of water per day for the production process and high electricity consumption which amount up to 30 per cent of operating costs. This does not come at an opportune time for the industry, which has only recently started recovering from a long slump."
KPMG head of real estate Tay Hong Beng: No change to property cooling measures
"Despite nothing being mentioned on the lifting or recalibration of the property cooling measures in the Budget, there is nothing to stop the Government from reviewing the situation at a later stage. Changes to the rules could probably be brought about in a gradual manner in order not to unintentionally create an immediate spike in demand in the property market.
"Given the challenges faced by local property developers and owners, it's disappointing that there is no relief on property tax for vacant land and properties or land slated for development. Any reduction in property tax would certainly help developers and owners of vacant properties cope with the slowdown in the property market.
JLL national director for research & consultancy, Ong Teck Hui: CPF housing grant increase positive for property market
"The Budget 2017 measure having an impact on the property market is the increase in CPF housing grants for resale flats. For four-room flats or smaller, the grant is being increased from $30,000 to $50,000, while for five-room flats or bigger the increase is from $30,000 to $40,000.
"The above CPF housing grant increases are likely to assist more buyers interested in resale flats and expected to sustain the increase in resale volume, which already rose 7.8 per cent in 2016 year-on-year. The resale price index, which has remained largely flat since the third quarter of 2015, will certainly stabilise or perhaps rise slightly with increased demand and higher resale volume.
"A healthy HDB resale market with stable prices would lift sentiments among HDB households aspiring to upgrade to private homes. Demand for private homes may improve more than earlier expected and help to stabilise the private residential market."