| 37. Dr Ong Seh Hong, Mr Lawrence
Leow and Dr Wang Kai Yuen spoke about the lack
of assistance for local enterprises and SMEs.
We have to see this Budget not in isolation,
but as
one of a series. Supporting entrepreneurship
and enterprise has always been a key pillar in
our
efforts to reinvent ourselves. In recent years,
we have taken several major initiatives, many
of which confer significant benefits to SMEs.
38. We have reduced taxes. We have introduced
numerous tax measures that will help SMEs. Our
tax burden is already low for start-ups and small
companies. In fact, for the first three years,
you do not pay tax at all. The tax system provides
for cyclical swings in business and in earnings,
because you have one year loss carry-back which
I introduced last year. If you make a profit
this year and next year you make a loss, you
can actually go to IRAS and claim back some of
the tax you paid the previous year and even out
your tax burden - in fact, lighten your tax burden.
39. We have also reduced our regulatory burden.
There is an online business-licensing scheme
to streamline licensing processes and cut business
costs. This year, we are reducing record-keeping
requirements for 17 statutes, which I believe
has been welcomed by members, and which will
be particularly helpful to small companies with
not a lot of space, not a lot of staff, and not
a lot of money.
40. We have also introduced many schemes to
help local companies upgrade and expand overseas.
In fact over the last five years, 9,000 SMEs
have benefited from the Local Enterprises Technical
Assistance Scheme, LETAS, to help them upgrade
their capabilities, and 12,500 SMEs have obtained
$3 billion of government-facilitated loans. $3
billion - it is bigger than the Progress Package.
It is quite a substantial amount. It has gone
to a lot of SMEs.
41. There are many, many schemes - too many
for me to list here. But I went to the EnterpriseOne
Portal yesterday, and I looked at the web pages
on government schemes for SMEs. If you print
them out, it will be 10 pages, over 60 schemes
- from tax incentives to grants and non-financial
assistance measures. We do not lack schemes.
Members have the handout.
42. What we need to do is help the SMEs take
full advantage of schemes already there, so that
they can be guided through this forest of assistance
in order to get what they need and what will
make a difference for them.
43. But nevertheless, I invite the members to
look at these 10 pages. Let me know if you have
other ideas, or if you think these ideas can
be simplified or improved. We will keep on improving
our package and, if need be, add to these web
pages, so long as it makes our assistance more
effective and does not increase confusion.
44. But I know that SPRING feels a mission to
help SMEs. This is not just a business, and those
are not just clients. They feel that this is
something which is worth doing, which they believe
in, and that there is promise and hope - something
worth promoting. They are going at it ‘heart
and soul’ and the Government is behind
them. We are happy to consider new ideas to help
SMEs succeed.
45. Our philosophy is that if SMEs have good
potential for growth and for success, we should
encourage and help them in all the ways which
are possible. But if SMEs are non-viable, then
we should not artificially prop them up because
that will just extend their pain and misery.
It would not do a real favour to their owners
and to the employees.
46. Mr Inderjit Singh and Mr Chay Wai Chuen
raised the question of incentives like the Global
Trader Programme and the Warehouse Retail Scheme,
which they felt were biased towards foreign companies
and multi-nationals. This is not true. As a principle,
our incentives are focused on promoting desired
activities and influencing where companies decide
to locate, be they Singaporean companies or foreign
companies. The incentives are not biased or structured
in terms of ownership.
47. In the case of the Global Trader Programme,
it is aimed at making Singapore a global trading
hub. It targets all companies that commit to
conducting substantial offshore trading activities,
and to carry out business activities which will
result in spin offs to our local economy. It
really does not matter whether these are local
or foreign companies. As a matter of fact, there
are some local traders which are enjoying this
incentive, such as Petra Foods and Agritrade;
maybe not as many as we would like, but it is
open to them.
48. In the case of the Warehouse Retail Scheme,
this is designed to encourage companies, whether
local or foreign, to establish their regional
activities in Singapore. The requirement for
this scheme is that 60 percent of the gross floor
area must remain industrial but the balance can
be used for retail. But when it is designated
for retail, the user is charged full retail rates,
comparable to retail rates in the vicinity. It
should not put retail businesses nearby at an
unfair disadvantage or at risk from large firms
which are enjoying concessionary rents. It will
increase the supply of retail shop space - that
is true - but that is supply and demand, and
I think, overall, that is good for the customers.
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