Singapore Budget 2016

Synopsis

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Read our signature Singapore Budget 2016 Synopsisfor an analysis of the Budget 2016 measures.

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Writing our SG100 story

“The future cannot be predicted, but futures can be invented,” wrote Nobel Laureate Dennis Gabor in his book Inventing the Future.

Last year, Singapore celebrated its 50 years of nation-building and economic progress, made possible through the sheer grit of our pioneer generation. Budget 2016 marks the beginning of our journey into the next 50 years.

I wonder how radically different and successful this little red dot might be by 2065, and how much of that is a result of the vision and ambition of the annual Budgets. More curiously, I wonder if this year’s Budget will find its way as a landmark chapter of our SG100 story.

What is for sure is that the Singapore Story belongs to all of us. Building a shining narrative requires partnership and ownership of the responsibility for progress by individuals, businesses and the nation collectively.

Transformation through enterprise and innovation

In 2065, I imagine we will be living in a hyper-connected world where everyday objects sense and communicate information with one another in the “Internet of Things”. The way we live, work, play, learn, create and consume will seem foreign by today’s standards. We will make better decisions using real-time data analytics and robots with built-in artificial intelligence will deliver our orders, drive our cars and dispense our medications.

These are not far-fetched thoughts — if innovative transformation truly takes flight in Singapore. Already, this year’s Budget aims to make that happen in various ways. The newly minted Industry Transformation Programme (ITP) seeks to enable a conducive ecosystem for innovation to flourish.

For example, the creation of the Jurong Innovation District, an integrated approach to urban planning where entrepreneurs, researchers, students can test-bed their new ideas, will be a boost to innovation. Businesses will also benefit from the Automation Support Package, where investment allowances can be claimed on new automation equipment, with grants and loans made available, to support the drive for productivity.

Also, SMEs who lament the lack of resources to undertake R&D will no longer have to walk alone. The government will partner Trade Associations and Chambers (TACs) to reach out to businesses to develop capabilities and industry-wide solutions. TACs will receive funding support for taking on industry-wide transformation projects. Further, various financing and tax incentives to support internationalisation and step-changes in scale are also enhanced and made available.

The government is also better engaging with businesses to enable growth. The new Business Grants Portal will bring various government grants onto a single platform for ease of access, which should drive utility by business. The envisaged National Trade Platform would improve the way trade data is shared electronically among businesses and government, thereby easing the manner of doing business.

If businesses seize the opportunities presented in these measures to restructure and grow, the SMEs of today could be the regional, or even global, players when 2065 arrives.

A competitive, caring and resilient people

In 2065, I imagine our people to be equipped with new, niche and higher value-adding skills, as well as deepened capabilities that may not exist today. Our human capital will be differentiated in the global economy, commanding higher wages by virtue of delivering higher productivity and value.

This is where the new skills and development job placement hub, TechSkills Accelerator, comes into play. By focusing on sectors such as the Information and Communications Technology sector, and partnership with employers and agencies, it enables our people to acquire new expertise and seize employment opportunities in new growth areas.

By 2065, I see our youths being entrepreneurial and not afraid to venture; programmes like the National Outdoor Adventure Education Masterplan announced this year would have instilled in them a bold and open mindset underpinned by a societal culture that is accepting of change and failure.

Our culture will also be one of compassion: people will participate actively in community work to care for the senior citizens, low wage workers and persons with disabilities. The newly launched Business and Institution of a Public Character (IPC) Partnership Scheme will be a success by then, as more businesses embed volunteering into their corporate social responsibility, and consider it important to their talent strategies. As businesses receive a 250% tax deduction on associated costs incurred (with a cap), employees will look beyond their paycheck and “pay it forward” in the community.

Conclusion

Singapore is at the heart of the Asian trade growth story. The ASEAN Economic Community, the Trans-Pacific Partnership, and China’s One-Belt One-Road initiative will open up new frontiers and opportunities that will set the backdrop for our SG100 story.

The key to seizing these opportunities is the spirit of partnership. It is no longer a debate of whether it should be a top-down or bottom-up, or public versus private sector approach. We need an all-inclusive commitment to work together.

With the work by the Committee on the Future Economy to be completed by the end of 2016, what’s next for our Singapore Story?

To be continued.…

 

Chung-Sim Siew Moon
Partner and Head of Tax
24 March 2016