Recommendations by Economic Strategic Committee (Update on Implementation)16 Aug 2010
Date: 16 August 2010
Parliamentary Question for Oral Answer converted to Written Answer by Mdm Ho Geok Choo:
To ask the Minister for Finance (a) if he will provide an update on the recommendations of the Economic Strategic Committee (ESC) Report; and (b) what are the major recommendations that have been implemented.
Reply by Finance Minister Tharman Shanmugaratnam:
1. The Government's major initiatives and plans in response to the ESC's recommendations were announced in Budget 2010 and during the Committee of Supply.
2. As members are aware, Budget 2010 focused on the first two broad priorities identified by the ESC: to boost skills in every job and undertake a comprehensive national effort to increase productivity; and to deepen corporate capabilities so as to seize opportunities in Asia and globally in the decade ahead.
3. The National Productivity and Continuing Education Council (NPCEC), chaired by DPM Teo Chee Hean, has been moving ahead actively on the key sectors it has identified as priorities for uplifting productivity. The National Productivity Fund is also being set-up, with the First Reading of the Bill required for its establishment being introduced later today. Guidelines on the Productivity and Innovation Credit (PIC), a major tax incentive to support enterprise upgrading, were recently released by IRAS and businesses can already start claiming enhanced tax deductions on their investments in skills and productivity.
4. The increase in foreign worker levies is being phased in, with the first step from 1 July 2010, in order to incentivise businesses to restructure and upgrade their operations and rely less on lower skilled foreign workers. The Workfare Income Supplement Scheme was also enhanced to increase the incentives for lower wage Singaporean workers to stay in employment, while the Workfare Training Scheme (WTS) has been implemented to upgrade the skills of older workers within the group in a systematic way. WDA has also recently expanded the range of courses available to PMETs to support the ESC's vision of capability and productivity driven growth.
5. With regard to the second priority of the ESC, which was to deepen corporate capabilities, here too work is in progress on the various measures that were announced in Budget 2010 and the Committee of Supply. This includes the Partnerships for Capability Transformation Scheme (PACT) which seeks to promote and strengthen enhance strategic linkages between local SMEs and MNCs; and the Public-Private Co-Innovation Partnership enabling government agencies to work with private sector companies in co-developing innovative solutions to meet medium- to long-term needs. SPRING is helping SMEs to take advantage of the various new government schemes to upgrade their capabilities and, together with IE Singapore, is rolling out enhancements to the Local Enterprise and Association Development (LEAD) scheme to help our trade associations to support SMEs in internationalising.
6. Progress is underway in the comprehensive review of our next 5-year R&D plan to develop greater commercial benefits from R&D investments. Several other key recommendations are still under study, including specific options for developing the market for cross-border financing for Singapore-based companies, and for catalysing growth capital through funds for co-investment with the private sector