By Avelyn Ng, with additional reporting from Shukry Rashid
Themed "Together, A Better Future", the Budget 2018 aims to prepare Singaporeans for three challenges ahead – the shift in global economic weight towards Asia, emergence of new technologies and an ageing population.
Minister for Finance Heng Swee Keat said the three trends will "interact together to affect us in profound ways", bringing new challenges and opportunities.
He delivered the Singapore Government's Budget Statement for Financial Year 2018 in Parliament on 19 February 2018.
Tackling Near-Term Challenges
On the economic front, the Government noted that there are some near-term challenges that will first need to be addressed.
To ease cost pressures for employers, the Government is extending the Wage Credit Scheme for three more years to co-fund wage increases for Singaporean employees. The Corporate Income Tax rebate will also be raised to 40 per cent of tax payable, with a higher cap of $15,000.
Responding to this, NTUC Assistant Secretary-General (ASG) Cham Hui Fong, said: "Jobs will be redesigned and there will be new skills acquired. With productivity hitting at 4.5 per cent last year, we want to see the momentum continue. With new jobs, new skills and productivity improvement, workers will expect better wages. Employers should be mindful that they will be getting the wage credit and reward workers fairly."
The earlier-announced foreign worker levy increase will be deferred for the weaker marine shipyard and process sectors.
It was also announced that more than 3,700 mid-career individuals have gained employment through the Professional Conversion Programmes (PCPs) last year.
In view of the increasingly fluid workforce, the Government will be evolving its Work Trial scheme into a Career Trial programme to provide more funding support for workers transiting to new careers.
Making Breakthroughs
Mr Heng also touched on a key focus of this year’s Budget - industry transformation.
"In the next phase of our ITM [Industry Transformation Map] journey, we will take a more cluster-based approach to reap synergies and strengthen linkages across multiple industries, and to explore new opportunities,” he said.
To do so, the Government is rolling out a series of grants and initiatives that are a key feature in all the ITMs - innovation, capabilities and partnerships.
Ms Cham highlighted that the ageing workforce is a valuable manpower resource in the transformation process.
“We should make good use of the older workers because they are certainly our key engine of growth. While we will certainly expect a lot more companies to adopt innovation pervasively and aggressively, that will certainly translate into new jobs, new skills. Our immediate concern is certainly whether the retraining, reskilling of our older workers can keep pace with or if not [be] faster than the changes in terms of technological disruption,” said Ms Cham.
Notably for innovation, companies will get to develop and test related technologies under the new Aviation Transformation and Maritime Transformation Programmes. They will help to improve the operations and traffic management in Singapore’s airports and seaports respectively.
Construction, too, has been singled out to adopt greater use of robotics and increase its productivity through the National Robotics Programme.
Funding support such as a consolidated Productivity Solutions Grant and tax deductions for research and development and intellectual property expenses were also announced. More details will be revealed during the Committee of Supply.
On the Productivity Solutions Grant, Ms Cham added that while companies can tap on it to improve their innovation and productivity initiatives, they need to combine it with human capital development and ensure that workers are “reskilled quick enough to take on all these new jobs and new challenges”.
Strengthening Digital Skills and Partnerships
According to Mr Heng, the Tech Skills Accelerator (TeSA) launched in 2016 has helped workers secure some 27,000 training places to date.
This year, an additional $145 million will be injected into TeSA. The programme will not only help more workers pick up emerging digital skills, but also be expanded into new sectors such as manufacturing and professional services.
To encourage firms to forge regional collaborations and internationalise, the Government will strengthen its funding support through the Partnerships for Capability Transformation (PACT) scheme and develop an ASEAN Innovation Network. More details will be revealed by Ministry of Trade and Industry at a later stage.
A Holistic Budget
NTUC ASG Patrick Tay described this year’s Budget as “a strategic Budget which sets out the long-term needs and the areas we need to address to overcome the various structural challenges.”
“On the manpower front, I am glad to hear that the PCPs will be strengthened, Wage Credit Scheme extended, Work Trial Scheme expanded to Career Trial Scheme and closer collaboration sectorally to roll out the ITMs and SkillsFuture initiatives including the digitalisation, robotics and ICT [Information Communication Technology] programmes,” he said.
For more Budget 2018 news, visit LabourBeat.org.
