Helping SMEs Ride the Green Wave
Mr Speaker, Sir, we ended 2022 and emerged stronger from COVID-19, demonstrating resilience and trust between our people and the Government. However, Singapore and the world entered 2023 facing a confluence of continued geopolitical tensions and slower economic growth alongside persistent inflation and higher interest rates. We therefore cannot take our past successes for granted.
Notably, Budget 2023’s expenditure is 2.6% lower than last year, although higher than prior budgets before the pandemic. To me, this signals the balance of fiscal prudence along with continued support to Singaporeans to overcome near-term challenges and secure long-term prospects.
Last year, during the GST debate, I expressed my concerns from my Yishun residents about the impact of a GST increase to the cost of living, so I am heartened by Budget 2023, given the improvements to the Assurance Package and further enhancements to the Permanent GST Voucher scheme. Evidently, the Government has followed through on its commitment to make a regressive GST increase even more progressive, when taken as a whole.
The pandemic has changed the way we live significantly. As such, it is critical for the Budget to continue focusing on how we can move Singapore forward to increase our standard of living and strengthen our social fabric. There are three areas I would like to highlight: one, strengthening our economy and workers by better supporting and transforming our SMEs; two, enhancing the safety and security of Singapore by boosting efforts to tackle worrying crime trends, particularly scams and youth crimes; thirdly, fostering greater social harmony by improving the way we manage community disputes.
MTI forecasted our economic growth to be between 0.5% and 2.5%, down from 3.6% last year. Our SMEs continue to navigate a challenging environment with many forces beyond their control. Higher business costs are being driven by higher energy prices, wages and a tight labour market where vacancies are hard to fill. The interest cost businesses will shoulder will easily be twice given that rates are expected to be higher for longer, while revenue growth are less certain despite some bright spots, like China’s early re-opening.
Given the above, some local businesses have feedbacked that Budget 2023 seems to be pro-distribution and seemingly a shift away from pro-business growth. They wonder if this means that they should fend more for themselves and expect less help going forward. If indeed Budget 2023 is being rated by many as an A-grade for families and individuals, I suppose SMEs would score this Budget as a B or even a C!
Nonetheless, while much has been said about more support being provided to families, individuals, and vulnerable households, I do note that Budget 2023 has also factored some help for our SMEs. I welcome the extension of the Enterprise Financing Scheme and the Energy Efficiency Grant and am also glad to see the Government attempt a new initiative to address the jobs and skills mismatch through the Jobs-Skills Integrators. While I look forward to more details, I hope this can benefit SMEs, particularly smaller ones lacking a full HR function, through more relevant training with a targeted outcome to improve productivity. Crucially, better training and job-matching will give residents who are unemployed opportunities to learn by doing and gain confidence to re-enter the workforce. Hopefully, more incentives can be considered for SMEs to take a chance to hire them to fill the vacancies and help improve the mismatch between labour supply and demand.
I also hope that the administrative journey for grants and support schemes can be made more seamless. This will improve accessibility for more SMEs to benefit swiftly and minimise the need for intermediaries and documentation. This view is echoed by the industry such as the Association of Trade and Commerce, from which I had earlier received feedback.
Beyond the tactical aspects of the above schemes and from a strategic perspective, I wonder if these business initiatives, including the innovation grants, are enough to help our local businesses and SMEs capture new opportunities in the longer term.
Globally, the green movement is gathering momentum. For Singapore, we progressed with our Singapore Green Plan 2030 and committed to net-zero by 2050 alongside many countries. Our SMEs must hence, number one, boost efforts to reduce carbon footprint and two, be ready to capture new business opportunities.
Little has been said in this Budget specifically about SMEs strengthening capabilities in Environment, Social and Governance (ESG). I am glad that Budget 2023 retains existing measures such as the Resource Efficiency Grant for Energy as well as the Enterprise Sustainability Programme by Enterprise Singapore. However, I am uncertain if these are enough to help push our SMEs to step up their game sufficiently and in time as changes in the ESG space are rapid and exponential.
Notably, MNEs are focusing on ESG to meet demands from regulators, investors, lenders and consumers. They in turn expect their SME suppliers to be ESG-compliant.
Our SMEs must therefore adopt greener practices in their delivery of services and products. They too must apply the mind-boggling methods to measure, track and report their own carbon footprint. Otherwise, they could risk being disregarded as a preferred supplier or worst, being entirely left out of tomorrow’s greener supply chain.
Beyond internal transformation, SMEs who are more advanced in their green transition should venture out and capitalise on regional prospects such as helping businesses in the region to accelerate their sustainability efforts. Businesses should also be encouraged to co-create and contribute to the establishment of a sound classification and regulatory framework for voluntary carbon credits in Singapore to develop a transparent, liquid and scalable market.
These efforts will help establish Singapore as a growing and leading green hub, leveraging on and furthering our status as a trusted international centre for finance, consulting and legal services. In a nascent and growing market, it is not size but trust, credibility and speed that are fundamental, which we should capitalise as our competitive advantage.
Like ESG, not much was discussed specific to digitalisation in the 85-page Budget speech, so I hope that the Government can re-emphasise the continued measures to encourage SMEs on their digitalisation journey, which is difficult but also very rewarding.
To SMEs who may give Budget 2023 a B or C grade, I would encourage them to adopt a holistic view and factor the generous support measures provided by the Government over the last few years. Nonetheless, I hope the Deputy Prime Minister can clarify the Government’s commitment to local businesses in this Budget debate so that we can achieve a vibrant and growing SME and startup landscape, which can offer good jobs and opportunities for Singaporeans.
Sir, of equal importance to economic progress is the continued assurance of the safety and security of our people as well as the strengthening of social bonds.
I welcome Budget 2023’s estimates for Ministry of Home Affairs (MHA)’s expenditure to increase by 4% compared to a 1.8% increase last year, which I previously said seemed low. I hope this represents the re-doubling of efforts to tackle some worrying trends such as scams as well as youth crimes.
Despite commendable efforts by MHA and its partners, scams remain unabated and continue to evolve. Year 2022 saw both record cases and losses of $660 million. So far, close to $1.3 billion has been lost to scams in the past two years. A further $146 million would have been lost last year had our Anti-Scam Command not partnered banks and telecommunications companies or telcos for a swift intervention.
I look forward to hearing more details of MHA’s plans in terms of resources and capabilities to fight scams with a concerted all-hands-on-deck strategy, through deeper partnerships with entities in the digital value chain. Singapore has often been lauded as one of the safest cities in the world and we should extend this standing into the digital sphere.
Our youths, our perpetuating crimes are also under the spotlight. The Singapore Police Force (SPF) reported that the majority of those arrested for e-commerce scams were youths and CNB also highlighted a worrying trend of more youths abusing cannabis. Some abusers were even as young as 14 years old.
Our youths are the future of Singapore. I hope that MHA can continue to engage with all in the ecosystem – schools, parents, youth groups, media and so on – for swifter intervention so that their lives will not be marred by crime.
Finally, overcoming the crisis of our generation has taught us that our most formidable reserves lie not in our financial strength but in the unity and resilience of our people. We therefore need to keep investing and working on improving our social harmony as attitudes and norms evolve.
One significant way our lifestyles have changed is with hybrid working. Many continue to work and learn from home, which inadvertently results in more friction in our high-density heartlands, particularly regarding noise. I raised this point at last year’s debate and want to again highlight the need for a better framework to manage and resolve community disputes.
In my recent engagement with Dr William Wan, Chairperson of the Community Advisory Panel on Neighbourhood Noise, he too echoed the need for more legal teeth to make attending mediation and to strengthen the enforcement of agreements between quarrelling neighbours. Residents have also provided feedback that the current framework remains cumbersome and hence ineffective.
I look forward to the Government’s consideration of the Panel’s proposals as well as other measures for more proactive engagement by agencies, for quicker and more effective dispute resolution.
Sir, in conclusion, I would describe this Budget as big-hearted and forward-looking. I support the Budget and am confident that it can move Singapore and Singaporeans forward in a new era.
Watch the speech here.