Experts say Budget 2019 does have pro-business initiatives , Latest Business News - The New Paper

Experts say Budget 2019 does have pro-business initiatives

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Economist says some schemes are 'game changers'

Businesses might feel a bit short-changed after Monday's Budget, given the oodles of help dished out for social programmes, but a closer look reveals some key benefits, according to corporate experts.

A first glance shows less spending on economic development compared with past years and fewer new measures to aid companies and workers.

Total spending for the economic development sector, which includes the budgets of the Trade and Industry and Transport ministries, have been cut from $17.8 billion last year to $16.5 billion this year.

Around $4.6 billion will be spent over the next three years to fund schemes to help businesses grow and workers lift their skills.

The bulk - $3.6 billion - will go to assist workers dealing with industry disruptions while $1 billion is earmarked to support businesses.

Mr Joseph Incalcaterra, HSBC chief economist of Asean, said yesterday: "While significant, the $4.6 billion over three years - or about $1.5 billion each year - does seem to be on the low side versus pro-business measures in past years, considering how much the industries need to transform."

He compared this with the 2016 Budget, which launched major economic policies such as the $4.5 billion Industry Transformation Programme to map out transformation efforts for each industry sector as well as other moves to benefit businesses and workers.

This Budget did include new schemes such as a Scale-up SG programme to help companies innovate and grow, and an Innovation Agents initiative that aims to put companies in touch with experts who can give insights into innovation opportunities and commercialising technologies.

Another new item, the SME Co-Investment Fund III, aims to bring in additional venture funding for small companies.

Singapore Business Federation (SBF) chairman Teo Siong Seng said while there were no broad-based measures for companies this year, it does not mean that the Government is less committed to growing businesses.

The new programmes can address a top priority for SBF members - getting more government help in accessing new and critical technology, said Mr Teo.

"We see Budget 2019 as a continuation of the Government's efforts over the years to transform Singapore's economy," he added.

Mr Incalcaterra agreed, saying: "These measures consistently follow the Government's playbook of supporting businesses and workers."

DBS senior economist Irvin Seah said policymakers have opted to "double down" by expanding existing schemes and making them more effective so more businesses can benefit.

Mr Seah looked beyond what was budgeted in simple dollar terms to note that the Government has chosen to invest in certain programmes that will not show up on its balance sheets but are "game changers" in their own right.

He cited the new Enterprise Financing Scheme that combines eight existing funded initiatives under one streamlined programme.

The scheme will also involve the Government taking on up to 70 per cent of the risk for bank loans for young companies, up from 50 per cent now.

"This scheme would cost very little to the Government, unless a borrower defaults.

"It would also reduce administrative costs of having multiple similar schemes," noted Mr Seah.

"You can put in billions into economic policies, or come up with many new programmes. But if companies can't access these funds, it is as good as zero."