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Budget 2019 tipped to help Singapore companies face the future
On February 18th, the Singapore Budget 2019 was announced, introducing and extending several specific measures that should brighten the business landscape. Along with a feel-good factor of domestic bonuses for the elderly, healthcare and a Bicentennial Bonus, PageGroup’s Singapore head feels this year’s expansionary budget will help Singaporeans and local companies compete in the fast-changing business landscape, particularly in three key ways.
1. Bolstering Singapore’s continued FinTech growth
Several measures within the budget emphasise a continued focus on making Singapore a FinTech hub in the region. “Tech as a space has grown exponentially in Singapore,” notes Nilay Khandelwal, Managing Director for Michael Page Singapore. “The investments in this area will support skills upgrades in a focussed manner that addresses the needs of the hour for companies who are already digitalising – and help local companies initiate their journey into digitalisation while remaining competitive.”
Measures include the Scale-up Programme for start-ups by Enterprise Singapore, providing support in tech adoption, customised assistance and better financing options. The Innovation Agents Programme was announced as a pilot, providing tailored assistance to high growth companies, to focus on innovation, growth and globalisation. Funds adding up to S$1 billion over several years are earmarked to help local companies overcome scaling challenges. The Professional Conversion Programme for one, aims to help professionals develop skills within Digital, including software, blockchain and pre-fabrication.
"It's great to see the government recognising the cost of restructuring and digital transformation, which we know is on a lot of client's minds,” says Khandelwal. “Over the next three years, S$3.6 billion for assisting workers, and S$1 billion to help firms bolster capabilities, can help assist them in ensuring they have the necessary skillsets to face tomorrow's challenges head-on.”
2. Support for Small to Medium Enterprises (SMEs)
The Budget measures also seek to ensure that the vibrant SME sector can both compete in the current market and make necessary upgrades along their digital transformation journey. “Last year, the story was a positive one for SMEs. For example, in industries like Electronics or Aerospace OEMs, demand for local talent such as Engineers and automation experts has been high. These moves would support the talent supply gap within these industries and many more; and would add weightage to growing the local talent skill sets,” says Khandelwal.
One major initiative is expansion of support for the Go Digital Programme for SMEs launched in 2017. Having helped 4,000 SMEs adopt digital solutions, the new expansion, will pursue more cost-effective and pre-approved digital solutions, to address challenges in artificial intelligence (AI) and cybersecurity. A business grants portal makes it easier for SMEs with limited resources to access and apply for funding support of up to 70% of these solutions.
3. Automation is coming - and companies will be ready
Budget 2019 includes an expansion of the Automation Support Package (ASP) first launched in 2016, and aimed at helping companies tackle large automation projects. More than 300 companies have used this to automate operations. Highlights include:
- Allowances for the launch of projects such as robotics and Internet of Things (IoT)
- Support of up to 50% of qualifying costs for roll-out of scaling up of automation projects capped at $1million
- A 100% investment tax allowance provided on the amount of approved capital expenditure, net of grants, capped at $10 million per project