Singapore’s FY2023 Budget Statement was delivered on Tuesday, 14 February, by Deputy Prime Minister and Minister for Finance, Lawrence Wong. This budget comes as Singapore returns to DORSCON Green, the demand has picked up for sectors like F&B and retail, and air travel has resumed.
However, despite the waning of the pandemic, new challenges have arisen with a mixed and uneven global economy facing conflict and other major uncertainties and risk. New pandemics are also a possibility.
In light of these issues, Budget 2023, explained Minister Wong, aims to build Singapore’s capabilities and seize new opportunities in a new era of global development.
Developing Local Enterprises
“Economic competition will get stiffer in this new era where countries compete for power and influence,” said Minister Wong, adding that “Singapore will have to adapt quickly to these changes, to survive and prosper in a troubled world.”
Apart from efforts to maintain high quality investments, deepening capabilities, and nuturing pervasisve innovation, the government also plans to support local enterprises in accessing capital to scale up and become globally competitive.
SME Co-Investment Fund
A key part of this effort is to strengthen Singapore’s enterprise financing ecosystem, so that promising firms can tap on a wide range of private equity and venture capital funds, as well as financing from other financial institutions based here.
The Government has also been mobilising investments in SMEs through Heliconia Capital, which deploys equity financing to SMEs and catalyses additional growth capital from the private sector.
To date, $1 billion has been committed to this effort, and invested in about 60 Singapore-based companies. This has in turn catalysed around $2 billion of additional investments into these companies. The total revenue of this portfolio of companies has more than doubled after this investment, and over half of them have developed new capabilities or expanded beyond Singapore.
These efforts will be expanded through an additional $150 million set aside for the SME Co-Investment Fund, which will be invested in promising SMEs, and aims to catalyse an additional $300 million of private investments to support our SMEs.
Singapore Global Enterprises Initiative
The government is also developing a healthy pipeline of enterprises with a strong track record of international success and the potential to move to the next level. Budget 2022 introduced the Singapore Global Enterprises initiative to provide such companies with more dedicated and customised support.
This initative will receive a $1 billion boost, which will allow for promising companies to be offered specialised capability building programmes tailored to their needs. This could involve working with experts to strengthen the core leadership team, accelerate their internationalisation plans, and build a strong talent pipeline.
Enterprise Singapore will also support them to secure resources to execute their growth plans, and to build sustained research and innovation capabilities so they can strengthen their value proposition and stay competitive.
Equipping and empowering workers
Besides supporting enterprises, the Budget also makes provisions to support workers.
Strengthening SkillsFuture ecosystem
The government reaffirms that the value Singapore creates as an economy must benefit Singaporeans in the form of wage growth and job opportunities.
To this end they will continue to invest heavily in Singaporeans. Part of this involves strengthening the SkillsFuture ecosystem and to enhance support for displaced workers, and improve pathways to better jobs.
This comes with the acknowledgement that while it is good to have more skills training, the training programmes can vary in quality. Some lead to recognised certifications, or help workers gain specialised skills that are sought after by industry. But others may not be so relevant to industry needs.
“Workers themselves may not know what training programmes to go for, or what competencies and skills they need to secure better jobs,” said Minister Wong.
“Employers, especially amongst the SMEs, may also be unfamiliar with the training landscape, and often struggle to fill job vacancies despite available jobseeker pools,” he added.
Appointment of Jobs-Skills Integrators
In response the government seeks to develop labour market intermediaries who can work with industry, training, and employment facilitation partners to optimise training and job placement. These are termed Jobs-Skills Integrators.
The Integrators can be existing institutions, with new duties to engage enterprises to understand the manpower and skills gap in the industry, work with training providers to update existing training programmes, or develop new ones that will close the skills gap, and work closely with employment facilitation agencies, get buy-in from industry partners and unions, and identify individuals with the right aptitude and fit for training.
Most importantly, they must ensure that training translates into better employment and earnings prospects. These Jobs-Skills Integrators will be piloted in the Precision Engineering, Retail, and Wholesale Trade sectors, where there are higher concentrations of mature workers and SMEs.
Support for employers of senior workers
To encourage and support employers who recognise the value that seniors offer, invest in them, and enable them to keep earning a good living, the Senior Employment Credit will be extended till 2025, to continue providing wage offsets to employers that hire senior workers.
The Part-time Re-employment Grant will also be extended until 2025, to encourage employers to offer part-time re-employment, other flexible work arrangements, and structured career planning to senior workers.
Support for lower-wage workers
Moves in this direction have been made over the previous year, with the expansion of the Progressive Wage Model to more sectors and occupations, and we the requirement of companies that employ foreign workers to pay all local employees at least the Local Qualifying Salary.
Taken together, these moves cover the vast majority of lower-wage workers, and will help to uplift their wages.
To provide transitional support, the increase of the Government’s co-funding share for the 2022 PWCs will be maintained, and the PWCS fund will be topped up by $2.4 billion for this purpose.
Supporting hire of persons with disabilities and ex-offenders
To support employers to hire persons with disabilities, or PwDs, the government will enhance the Enabling Employment Credit to cover a larger proportion of wages and a longer duration for PwDs who have not been working for at least six months.
It will also introduce a new Uplifting Employment Credit in the form of a time-limited wage offset to encourage firms to employ ex-offenders.
Minister Wong highlighted that financial incentives are just one way we support PwDs and ex-offenders. We also need dedicated efforts on the ground, through organisations like SG Enable, Yellow Ribbon Singapore, and their community partners, as well as close cooperation with employers to provide meaningful job opportunities for PwDs and ex-offenders.
These moves, he added, “represent a major investment in our enterprises and people – from SMEs to large companies, and workers across various life stages and different forms of employment.
“We are doing all this so that our workers and businesses can be well prepared for the future, with all its uncertainties, challenges, and opportunities.”