SMALL businesses form a large community that is at risk from Covid-19 and the economic situation arising from rising operating costs. Here, a disparate group from a variety of industries voice their views following the announcement of Budget 2020.
One Size Does Not Fit
Fong Loo Fern, Managing Director, CYC Company Pte Ltd
FOR a retailer feeling the heat from the Coronavirus epidemic, the help extended with the Job Support Scheme and Wage Credit Scheme is much appreciated.
The quantum may not be large, and may not offset the fall in revenue, but it is a short lifeline that hopefully can help us through this storm.
My only disappointment is that the Finance Minister did not offer a waiver of Foreign Workers’ Levy during this period.
For those of us who have foreign worker staff in China who are not able to return, as the Ministry of Manpower needs to stagger the flow, it would help to reduce our operational cost if the levy were waived for staff not permitted to return.
The pro business part of the budget is encouraging for SMEs as many of us struggle with how we can transform our business. However, one size does not always fit everyone.
I hope the various new grants that will be rolled out will be flexible to help SMEs who are in different stages of their business journey. I look forward to how we can tap on government assistance to transform.
Battling Hidden Costs
Bernard Yang, Managing Director, Nanyang Optical
MY first reaction was that this is an “election-friendly” budget.
There is something for everyone and the handouts are generous compared to previous years. I like the strong emphasis on retraining and reskilling. This is timely as the world has been changing rapidly and new skills are needed.
As a company, we are already pushing our employees to change their mindset, but for some the urgency is not there. The revised and new initiatives do give us the confidence to continue our push to elevate and increase productivity in our organisation.
With regards to assistance for retailers I am frankly disappointed.
Rent is a big component of our OPEX, easily taking up to 25% of our sales. On top of that there are many hidden costs like gross turnover audit fees, retailers bearing 100% of legal/stamp duty.
I am not sure how many landlords will pass on the full 15% property tax rebate, if at all. Most will adopt the wait-and-see attitude. For retailers to tide through this period, now is the time for landlords to step up and show they care, and work hand-in-hand with their tenants to enhance the shopping experience and make Singapore a preferred shopping destination.
Interestingly I received a call from a bank asking me to take up an SME loan as the quantum has increased. However the guarantees from directors remain even though it was announced that government now undertakes 80% of the risk.
Rising To Harvest Opportunities
Mark Low, Entrepreneur, FarLee Pte. Ltd.
WHILE our product — rice — is a staple that has thousands of years of history. But we are still driving hard to go digital as that enables us to smoothen work processes and gives us good insights from our various work flows/business transactions.
Hence, we welcome the SME Go digital programme and Stabilisation & Support package” measures.
As a former senior car industry executive, in addition to the rebates for electric general purpose vehicles/heavy goods vehicles, to help reduce smog on our roads, initiatives to assist enterprise funding for SMEs would have benefitted from the easing of loan curbs in 2020.
Gobinathan G, Director, Brainwave Consultants
APART from the short term direct rent, property tax rebates, or wages support, I am not sure how the new enterprise schemes, or other schemes outlined in Budget 2020, are going to help Singapore businesses or people at large.
As a one-man entrepreneur, I do not believe any of this temporary “financial help” will reach me. I was hoping the government would have taken some bold steps to at least bring down the cost of living by reducing indirect taxation and GST, instead of doing their traditional “handouts”, which does not go far.
Why harbour the intention to increase GST by a further 2% down the line, and then put aside S$6 billion as a GST relief fund?
I am puzzled, as it looks like we are paying for our own GST relief fund.
According to IRA statistics, GST revenue is about 21% of total tax revenue in year 2018/19 which is quite decent already. So why increase it further and burden the citizens with a yet higher cost of living?
It is commendable that the government has finally decided to do something about climate change, which I hope it will be carried out in earnest.
Keeping Healthcare Workers Healthy
Dr Kevin Co, Clinical Director, TLC Dental Centre
Budget 2020 has addressed the immediate need which is to help the service industry overcome the unexpected downturn due to Covid-19.
The delay of the GST hike is a welcome decision as it gives the industry more time to ride out the uncertainties.
The healthcare industry will benefit from specific financial support that helps to defray extra cost of personal protection equipment which has been increasing in price due to the prevailing market conditions.
But the Budget missed out direct support for healthcare clinics and healthcare workers.
Targeted support for healthcare staff in private and public clinics can be beneficial for long term retention of talent in the industry.
Rose Tan, PR Practitioner
IT IS a great, forward-thinking budget, but where is the help for the small merchants and freelancers?
Helping sectors that are affected by the outbreak, offering more grants to SMEs are great but this outbreak actually affects everyone especially those who live from hand to mouth.
The Stabilisation and Support Package, and the Working Capital bridging loan are not going to help small merchants like eateries, heartland fashion stores, tuition centres and businesses run by family members. Freelancers, like tour guides are feeling the heat most.
I wish there was more the government would help the general public with.
But I also understand that there is so much a government can do.
Singaporeans, as a whole, can help towards the revival of our economy. Hence, we must help ourselves by living life as normal and take preventative measures.
Gaps To Be Met
Oliver Tian, CEO, HutCabb Services
OVERALL, it has been a generous budget.
However, I think there is a huge component missing in addressing more on the needs of our frontline workers which includes healthcare and customer service.
In the past few years, we have given much spotlight to the reserves (elderly pool), but not enough to the frontline (service personal).
The only silver bullet seems to be re-training — but this cuts across all categories in the workforce. We perhaps need some special attention to be given to the healthcare workers who are combatting Covid-19, dengue and other illnesses, customer-facing service staff who are digitally less aware, fearing the automation and future of their jobs, as well as transient workers who are looking towards their retirement and withdrawing their CPF, but facing new challenges to extend their economic life due to our lengthening longevity.
Budget 2020 seems to reinforce many of the past programmes but did not assess the impact and effectiveness of some of them.
While it appears that everyone would receive something, I must say that the devil is in the details (of execution). In the past, there have been situations where a great thought through policy ended being twisted to address the noises of “squeaky wheels”.
I had a few expectations for the budget, including targetting sectors for investment. How are we addressing these target sectors and building it ready for investments to come into Singapore for investment? This is useful because our local companies can align, just like in the ’70s and ’80s when big boys like HP were supported by many local sub-contractors.
I’m happy to hear that there is budget for the next generation, but the application of such funds has not been explicit.
I was also looking for a budget to build up Singapore’s core competency and necessary skills for our economic survival. Our dependency on foreign skills, in a situation like Covid-19, puts our economy to the test.
It is also quite evident that this year’s Budget was reacting to the current crisis. I would have preferred if the issue of Covid-19 was addressed separately from the Annual Budget.
Nothing Significantly New
Charlene Kang, Director, Vault@268
This is an election budget, to show that there is a lot of money being injected for the next decade.
Other than the Covid-19 pay out, which is immediate, the rest of the monetary injections are long term.
I am happy that the GST rise is postponed; due to a drop in tourism.
I am also happy to phase out ICE vehicles, promote electrical cars and charging pods in carparks. We have no choice but to go green, even if the carbon taxes will be detrimental for a small city like ours.
The retraining of those aged between 40 and 60 (a huge group of us) and wage credit schemes (WCS) are already existing, and we do our part, as part of Ngee Ann Kongsi. I think there should be a fundamental mindset change. At age 48 onwards there is wage stagnancy, especially among women. There are no incentives for women to enter or continue to stay in the workforce.
Time To Spend Together
ChinKar Tan, Publisher, Write Editions
While Budget 2020 appears to be broad-based and seeks to tackle the short-term impact of the Covid-19 outbreak and long-term structural transformation of Singapore’s competitiveness, in particular human and technological capital, I believe more can be done to inject economic activities.
This can be done via a more generous direct transfer or extraordinary time-based measures to encourage Singaporeans and residents to spend.
Many SMEs, especially those in the F&B and tourism sectors, may not survive the next few months, and thus would never be able to ‘enjoy’ the various corporate tax rebates/loan schemes announced.
We need a collective ’Singapore Together’ effort here to boost the economy, not just top-down measures from the Government.
Links to all the Budget 2020 reaction articles: