4 ways Budget 2016 will help SMEs
Buzzwords such as "scale up and internationalise" and " industry transformation" were used frequently throughout Finance Minister Heng Swee Keat's maiden budget speech on Thursday (March 24) afternoon.
But what do they really mean?
Essentially, the Government wants to focus on transforming the economy by giving small- and medium-sized enterprises a huge boost when it comes to grants, tax rebates, and easier access to loans.
This will help SMEs "scale up and internationalise", as Mr Heng puts it.
So what do businesses and, more specifically, small and medium-sized enterprises (SMEs) get out of the budget?
Below are the main points.
1) More money!
To help firms cope during the economic restructuring period, they will get a Wage Credit Scheme this month which subsidises a business' wage increases. A total of $1.9 billion will be made available for this.
Another measure targeted at SMEs is the raising of the existing Corporate Income Tax (CIT) Rebate. These rebates will be upped from 30 per cent to 50 per cent of the total tax payable. But these rebates will be limited to $20,000 each year for the financial years of 2016 and 2017.
Firms hiring older workers will benefit from an extension of the Special Employment Credit (SEC). The scheme helps employers with older workers who are aged 55 and above and earn up to $4,000 a month by subsidising wage increases.
The SEC was due to expire this year but will be extended for three years until the end of 2019.
Businesses with cashflow problems may find the SME Working Capital Loan scheme helpful. Firms seeking loans of up to $300,000 can co-share half of the default risk with the Government.
2) More vibrant heartland shops
Fans of mama shops, rejoice! The Government will set aside $15 million a year to revitalise the heartlands.
This means that there will be more upgrading projects in HDB town centres and neighbourhood centres.
The Federation of Merchants' Associations and local merchant associations can also expect to have their capabilities strengthened so that they are better able to support heartland businesses.
3) Robots and automation
The Government wants to encourage firms to automate to increase productivity.
To do this, it will provide a grant to support projects which seek to use automated machinese. The grant will help fund projects by up to half of the project cost, with a maximum grant of $1 million.
The Automation Support Package will have $400 million to dish out for an initial period of three years.
There will also be a new 100 per cent Investment Allowance for automation equipment.
SMEs discouraged by high costs to scale up will have better access to loans. The Government will increase risk-share from 50 per cent to 70 per cent for such projects.
Lastly, International Enterprise (IE) Singapore, which facilitates overseas expansion of local firms, and Spring Singapore will help these businesses tap into the overseas markets.
More resources will go towards improving robotics to transform various sectors. More than $450 million will be pumped into the National Robotics Programme over the next three years.
4) More help for that next big start-up
Singapore's continued efforts to boost the start-up ecosystem is apparent with new entity SG-Innovate.
This will match the next Mark Zuckerberg with mentors and introduce them to venture capital firms.
SG-Innovate will also help entrepreneurs access talents in research institutes and open up new markets.