Mixed reaction from business community

SINGAPORE — With further tightening of manpower policies but more support to improve productivity, initiatives announced in Budget 2013 drew a mixed reaction from the business community.

“There are carrots and sticks for businesses in this Budget,” said Mr Victor Tay, Chief Operating Officer of the Singapore Business Federation.

“The sticks, in the form of things like further tightening of foreign manpower, may prove a severe challenge in the short-term. But the carrots, with things like the enhanced productivity scheme and the Wage Credit Scheme, should mean that companies are getting substantial help to transform themselves. But they have to be willing to go through the process.”

However, many businesses TODAY spoke to think the Budget compounds rather than addresses their problems.

“Increasing productivity is good, but we’re a labour-intensive market,” said Mr Darren Lee, owner of Wafflicious Cafe.

“We will always need people to man the store, so what can done to reduce our reliance on manpower? Also, space constraints make it difficult for us to deploy automation equipment like dishwashers.”

Another issue that discourages small and medium enterprises (SMEs) from productivity investments is the limited market size, said Mr Wei Chan, Business Development Director at Pine Garden’s Cake.

“For example, I have a tunnel oven that lets me bake 1,000 cakes per day, but I can only sell 50 on a good day. It’s a stopgap, not a holistic approach,” he said.

“It’s arm-twisting us and makes the problem harder, and SMEs get more stressed by the Budget.”

Sterling Engineering Business Development Manager Marc Sim added that the pace of foreign workforce tightening should be eased. “I feel like the Government is going cold-turkey on us. In the first place, the Government was the one who made foreign manpower easily available to SMEs, but now they are doing the opposite. I feel the change should be gradual and less radical,” said Mr Sim.

However, the Singapore Manufacturing Federation (SMF) welcomed the Budget as it highlighted the need for businesses to be innovative and productive.

“Notwithstanding the high level of productivity in the manufacturing sector, there is a need for manufacturers to achieve greater innovation and productivity in order to stay competitive and to achieve long-term sustainable growth,” said Mr George Huang, President of the SMF.

Mr Tay from the Singapore Business Federation said that mixed reactions are not surprising given that some of the measures will take time to yield results. “We will not see the productivity results in the next one to two years. It’ll be a long-drawn-out process. Will we reach the Government’s aim of a transformed economy?

“Progressive companies will try to accelerate towards that goal but smaller companies who are vulnerable may see this as a glass that’s half empty. The verdict will only be known numerous years down the road,” Mr Tay said. Additional reporting by EUGENE NEUBRONNER & KELLY NG