Speech by Mr. Derrick Goh, MP for Nee Soon GRC at the Budget Debate 2022 on “Supporting SMEs and tackling crime“
2 Sir, we are in the midst of navigating the Covid-19 pandemic. We have collectively fared well so far. I attribute this to the leadership of our Government and the trust and cooperation of our citizens.
3 I applaud the Government for boldly putting forward a holistic and expansionary budget of $102.4B. Taken as a whole, the Budget is not only fairer, greener and more inclusive for individuals and businesses. Importantly it tackles existing challenges and yet prepares Singapore for opportunities that are before us.
4 Budget 2022 is a clear step forward, It demonstrates the Government’s commitment towards a fairer society where the better off amongst us contribute more with a progressive and resilient tax system. The GST hike, higher carbon taxes and wealth tax increases as sources of funds are not immediate and this budget has provided more clarity and certainty for individuals and firms to plan ahead.
5 For the above reasons, this budget, aptly titled Charting Our New Way Forward Together, resonates with me. Our plan is to ensure that no one – individual or business, will be left behind as we ride the wave into a more complex, more digital and greener world. To achieve that, I would like to like highlight two areas which we will need to focus on:
One, Supporting and accelerating our SMEs in their recovery and growth in the new economy
Two, Redoubling our efforts to tackle escalating crime trends – specifically to safeguard our citizens against digital crimes such as scams, as well to protect our youths from the perils of drug abuse
1. Supporting our SMEs
6 I will first speak on supporting our SMEs, which are the backbone of our economy.
7 Although, Singapore’s economy is projected to grow 3 to 5% in 2022. Businesses are cautiously optimistic as the world opens up. Headwinds remain. SMEs expect higher business costs from macroeconomic risks such as rising energy and commodity prices, worsening geopolitical conflicts and supply chain disruptions. Locally, the Progressive Wage Model and tighter foreign labour policies instituted will help uplift lower-wage workers and boost the hiring of residents respectively, But they translate to even greater expenses for our SMEs. I therefore welcome the $500M Jobs and Business Support Package. This provides payouts to SMEs most affected by Covid-19 restrictions, on top of the extension of other financing schemes.
Growing in the New Economy
8 Budget 2022 is clear in its push for SMEs to strengthen their capabilities : $200m for the Digitalisation schemes, $600m to expand the Productivity Solutions Grant; and $100m to scale company training. All in, the support for our SMEs to transform and thrive in the new economy is sizeable.
9 Nevertheless, what may weigh on the minds of SME owners are the certainty of cost increases against the uncertainties of the benefits of transformation. Therefore, beyond funding, what is key to realise our plans for a new economy is good execution. The Government can consider a more active role to engage and transform our SMEs quicker.
10 Mr Jimmy Goh, owner of SME500 Awardee Sin Chwee Mini Mart, recently told me how grateful he was for the support provided by the Productivity Solutions Grant and advice from an SME Centre. This helped him to take the bold step in 2019 to successfully digitalise his father’s traditional seafood trading business of over 30 years. While the digitalisation journey was rewarding, he shared the uncertainties that could deter SMEs, such as the heavy reliance on outsourced solution providers and therefore the worry of the loss of control of key business data and IT systems. Another feedback provided by the Association of Trade and Commerce noted that SMEs amidst the journey are unclear of the roadmap to digitalise, such as the need for online marketing after developing a sales website. SMEs hence found themselves under-estimating the costs and the time required to build a digital channel.
11 As we speak about a greener future, what has hogged the media and public conversations has been about the planned Carbon tax increases. Looking forward, the focus for SMEs should really be about how to remain competitive and, in fact, capture more opportunities that are ahead. Increasingly, MNCs and governments will require SMEs to be ESG-compliant to continue to be on their panel of vendors. These standards are not easy to implement and sometimes confusing, so it is no wonder that many SMEs do not quite know where to start and how to measure and report compliance. While there are different resources available to help businesses in our pursuit of a digital and green economy, SMEs still see transformation as a cost rather than a strategic investment or advantage.
12 This is where the challenge is not about funding alone. But it is about how the Government can play a bigger role in actively engaging our SMEs. More can be done to spark a mindset shift in SMEs, marshal them towards the right resources, shape role models in different industries, and to sustain partnerships in their transformation journey. One angle is for the Government to rope in Trade Associations and Chambers of Commerce (TACs) to contribute more as an effective bridge between our agencies and SMEs. If we do this right, SMEs can really benefit and be ahead of the curve against regional competitors in the new economy.
2. Redoubling our efforts to tackle escalating crime trends
13 Sir, as important as the Budget’s focus on economic progress is the strengthening of our social resilience. This includes keeping our country safe and secure. I note that Budget 2022 has provided for a modest 1.8 increase in MHA’s planned expenditure , I hope that it has catered for the expanding of resources and capabilities to deal with evolving crime trends.
14 In last year’s Budget debate, I called for more action and resources to curb the rise of scams. For 2021, SPF reported over 46,000 crimes – while physical crimes have plunged, scams quadrupled from 2017 and victims lost over $633m. This is more than the $500m Jobs and Business Support Package or the $560m Household Support Package, to help our young and old.
15 As we battle scams, it is not difficult to worry that more sophisticated cybercrimes that have emerged in other countries such as ransomware, where perpetrators steal monies and/or data, can also impact us.
16 Given the above, we need to dedicate more resources, both skilled staff and capabilities, to the SPF to build on the initial success of the Anti-Scam Centre and leverage its partnerships with other stakeholders in the digital ecosystem. We need more public engagement with both individuals as well as businesses. Everyone has a role to play as part of a holistic, multi-layered strategy.
Drug Abuse by Youths
17 An equally worrying trend is that of drug abuse by youths. We owe much thanks to CNB’s effectiveness in seizing illicit drugs and apprehending offenders, particularly traffickers, to keep our community safe. Notwithstanding this, youths aged under 30 continue to form around 60% of new abusers in recent years. This could be due to the more liberal attitudes they have towards drugs and the advent of New Psychoactive Substances (NPS) could make this trend worse.
18 We know that along with drug addiction comes many social ills. We cannot allow the lives of youths, who are our future, to be marred by drugs. Therefore, more could be done in a concerted effort to engage youths, and teachers at schools as well as parents at home to deal with at-risk youths for timely intervention.
19 There is no silver bullet to solve these challenges. We have to act swiftly and resolutely to protect our citizens.
20 In conclusion, Sir, I am optimistic that the Budget is poised to pivot Singapore as we move towards a post-pandemic world. While challenges remain, we can take heart at the resilience and the unity that have propelled us forward and look ahead with renewed confidence.
21 I support the 2022 Budget and the plans in Charting Singapore’s New Way Forward Together.
Watch the speech here.