THE Singapore Chinese Chamber of Commerce and Industry (SCCCI) has called for the government to provide targeted measures to help small and medium-sized enterprises (SMEs) ease business costs, improve workforce productivity and build green capabilities more quickly, in its Budget 2025 wish list.
It has also asked for more support for trade associations and chambers (TACs), so they can better aid businesses in their internationalisation and upskilling efforts.
SCCCI’s Budget 2025 recommendations were based on findings from its annual business survey, which was conducted from June to August 2024. SMEs made up 92 per cent of the 651 respondents.
Rising business costs were cited as the top concern for businesses by nearly three quarters of the respondents. This was followed by the availability of suitable manpower (54 per cent), and transforming one’s business to pivot to growth areas (37.6 per cent).
About 75.6 per cent of businesses are projecting a rise in business costs in 2024, while 57 per cent of them are forecasting less profits this year compared with 2023.
The survey also noted that 64 per cent of businesses are planning to maintain their manpower strength in 2024, amid a tight labour market.
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To help businesses ease rising costs, SCCCI has thus recommended the government to:
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Extend schemes such as the Career Conversion Programmes, SkillsFuture Enterprise Credit and Central Provident Fund Transition Offset to defray rising manpower costs, as well as further simplify the application process of such schemes;
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Consider a higher threshold for qualifying expenses incurred by growth-oriented businesses to help them stay competitive for deduction against taxable income;
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Implement a higher threshold of corporate income tax rebate to tax-paying companies in 2025;
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Extend and enhance the Enterprise Financing Scheme, so SMEs can continue to access affordable sources of financing and working capital; and
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Review property tax for commercial properties and provide tax rebates to cushion the impact of the considerable property tax increases over the past two years.
Tackling manpower challenges
On manpower, the top two challenges faced by businesses were the inability to attract and retain local staff with necessary skills (35 per cent) and rising manpower costs (34 per cent), which includes the cost of foreign manpower.
When it came to reskilling and upskilling employees, businesses encountered challenges such as a lack of suitable and relevant training programmes (38.4 per cent), as well as difficulties convincing employees of the need to acquire new skills (36.5 per cent), the survey noted.
Therefore, SCCCI is recommending a “balanced approach” towards local and foreign manpower, where foreign workers complement local talent.
For rank-and-file positions that are difficult to fill, it urged the government to consider broadening the sources of foreign workers beyond the existing non-traditional sources (NTS) of Malaysia, China and North Asia to include nearby Asean countries.
It also proposed expanding the NTS Occupation List to include a selected list of job roles in sectors with economic merits. This is on top of reviewing work permit regulations to allow foreign workers to be cross-deployed across legal entities in the same corporate group, with the same dependency ratio ceiling.
Driving sustainability, internationalisation
Third, SCCCI said the government can better support SMEs in tackling the high costs associated with sustainability practices, building green capabilities and pursuing green initiatives.
Based on its survey, the top obstacles hindering businesses’ sustainability efforts were the high costs of adopting sustainable practices (53.1 per cent), business survival taking precedence (47.3 per cent), and a lack of capabilities and resources (39.3 per cent).
Therefore, SCCCI suggested that TACs aggregate the common needs of SMEs looking to pursue sustainability, and be allowed to seek funding support of at least 70 per cent for participating SMEs.
It also recommended introducing an Enterprise Sustainability Programme-Lite scheme for SMEs, which will simplify their application process to obtain government funding support to kick-start their sustainability journey.
Fourth, SCCCI requested the government to provide more support to TACs which offer industry-relevant training or productivity improvement courses. This is especially for programmes that can lead to good employment outcomes and targeted job placement opportunities.
Fifth, the government can enhance support for TACs to help SMEs expand overseas, said SCCCI.
When it comes to internationalisation, the top challenges faced by businesses were the uncertainties in overseas economic environments (64 per cent); lack of understanding of overseas markets, including regulations and potential partners (53.5 per cent); and lack of suitable manpower to pursue internationalisation (36.6 per cent).
Therefore, SCCCI has recommended:
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Enhancing the funding support for overseas fairs and missions to 80 or 90 per cent, up from 70 per cent;
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Increasing the funding support level to at least 80 per cent for TACs to undertake thorough market research before embarking on business missions, given the increasingly complex business environment; and
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Increasing the grant cap of the Market Readiness Assistance programme, in view of rising business expenses incurred for internationalisation.
Last, the government can provide incentives to catalyse the consolidation and growth of SMEs in sectors with significant economic impact, said SCCCI.
This includes:
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Providing grants for companies to offset advisory fees incurred during due diligence and mergers and acquisitions activities;
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Wage support for key employees, to facilitate hiring and mitigate job losses during the transitional consolidation process;
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Incentives for companies that commit to retaining a high percentage of their workforce post-consolidation;
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Funding to support staff in reskilling and training for redeployment, so as to minimise unemployment after the consolidation process; and
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Allowing businesses to treat eligible consolidation-related expenses as qualifying investments in the evaluation of lease renewals.
SCCCI’s president Kho Choon Keng said: “In the face of an increasingly complex and volatile external environment, SCCCI’s Budget recommendations seek to sharpen the competitive edge of Singapore companies while addressing near-term challenges.”
