Taking the sting out of productivity push by tapping schemes

Building firm boss Sin Soon Teng has felt the pain of the Government’s push for productivity but he has taken a lot of the sting out by tapping the various industry schemes on offer.

Mr Sin, chief executive of Sysma Holdings, knows that the campaign to lift output is here to stay so he figured the best approach was to get on with the programme in every way. That meant drawing on government schemes to mitigate rising costs that were occurring on all fronts.

“The issues have always been the same – shortage of labour, higher material costs and levies, shortage of management staff, not many people joining the industry,” he said.

With the move to trim reliance on foreign labour and to encourage firms to be more productive, foreign worker levies rose from $400 a person to $450 last year, and will increase to $550 this year and $600 in 2015.

However, the Government has also provided some salve through the Productivity and Innovation Credit scheme, which offers tax deductions and payouts to businesses that spend on productivity-related investments.

The Building and Construction Authority’s Mechanisation Credit scheme, which provides funding for equipment used to boost productivity, has also made it easier for Sysma Holdings – which specialises in building good class bungalows – to ramp up output.

The firm has secured $120,000 from the Government and is using it to buy equipment such as excavators and dumpers.

Despite adjustment pains, Mr Sin noted that firms are becoming more efficient as planning details have to be down to a tee to prevent wastage. “We can’t force the levy to come down, we just have to adapt.”

Sysma also sends its workers for training to become “CoreTrade” tradesmen specialising in certain skills. Levies for such workers are also lower.

However, Mr Sin added that there are not enough subcontractors around to support the rising number of building contracts, a situation that could lead to delays in completing projects.

Mr Sin hopes that smaller firms will be given some leeway, perhaps with more of a staggered approach so that they are given more time than the big boys to catch up on productivity improvements.

“The industry is still adapting to the situation – it can be better but we need time for things to really benefit in the long run.”