ASEAN KEY DESTINATIONS
Budget 2016: S$4.5 billion package to help firms and industries
SINGAPORE: To drive longer-term economic transformation and take Singapore to the next phase of development, the Government will set aside S$4.5 billion for firms and industries under a new Industry Transformation Programme (ITP).
The package, announced by Finance Minister Heng Swee Keat in his Budget speech on Thursday (Mar 24), consists of three prongs – one targeted at providing support at the firm level, one targeted at providing support at the industry level, and one that supports innovation.
"Even as we provide immediate relief and support amid the current cyclical slowdown, we must press on with economic transformation," said Mr Heng.
"The global economic landscape is changing, and our challenges are pressing. We have a narrow window. We must find every opportunity to transform, to emerge stronger in the coming years."
Pledging a "more targeted and sector-focused approach to better meet the needs of firms in each sector", and better integration of different restructuring efforts, Mr Heng said the ITP will feature four specific measures to provide support for individual firms:
A Business Grants Portal to be launched in the fourth quarter of 2016 will help firms access grants from various Government agencies, for purposes such as capability building, training, and international expansion. The portal will start with grants from IE Singapore, SPRING, Singapore Tourism Board, and Design Singapore, and progressively include other agencies.
An Automation Support Package will provide S$400 million over three years for firms to automate, drive productivity, and scale up. Where possible, IE Singapore and SPRING will also partner businesses to access overseas markets under the scheme.
Financing and tax incentives to support scale-ups were also announced, which will include expanding the SME Mezzanine Growth Fund to S$150 million, from the current fund size of S$100 million, and extending till May 31, 2022, upfront certainty of non-taxation of companies’ gains on disposal of equity investments. To support more mergers and acquisitions (M&A), the M&A allowance will be granted to qualifying deals with value of up to S$40 million, up from the current cap of S$20 million.
The Double Tax Deduction for Internationalisation scheme will be extended to March 31, 2020, to encourage small and medium enterprises (SMEs) to internationalise. This covers qualifying expenses incurred for activities such as participation in overseas business development and investment study trips.
"We need to form close partnerships among firms, industry associations and Government to drive industry-level transformation," Mr Heng also said. To this end, three measures were announced:
A National Trade Platform costing over S$100 million will be developed, to support firms, particularly those in the logistics and trade finance sectors. This one-stop trade information system will be developed as an open innovation platform, and will eventually replace the existing TradeNet and TradeXchange systems.
The National Robotics Programme will receive S$450 million over the next three years, to drive robotics development and deployment across sectors like healthcare, construction, manufacturing, and logistics.
A Local Enterprise and Association Development-Plus (LEAD-Plus) programme, costing S$30 million over the next five years, will be introduced to encourage trade associations and chambers to lead the development of industry-wide solutions for common challenges. The Government will also second up to 20 public officers to interested trade associations and chambers to forge closer partnerships between Government and industry.
"Innovation is enabled and enhanced by the use of technology but innovation goes beyond that. It is fundamentally about new ways of doing things to meet the needs of people and industries better," said Mr Heng.
Calling it "the engine of value creation and growth", Mr Heng outlined three ways to make innovation "pervasive" in society:
To deepen innovation capabilities, there will be a S$1.5 billion top-up to the National Research Fund. Up to S$4 billion under the Research, Innovation and Enterprise (RIE) 2020 Plan will also be directed to industry-research collaboration. In addition, the Government will allow businesses the flexibility to write down the cost of acquiring intellectual property over different periods of 5, 10, or 15 years, instead of the current 5 years.
A new entity called SG-Innovate will be set up to promote start-ups in new and existing industries, by playing an accelerator-type role. This include matching budding entrepreneurs with mentors, introducing them to venture capital firms, and helping them access talent in research institutes.
A Jurong Innovation District will also be launched to bring together innovation, research, and production to create products and services of the future.
The ITP will be complemented by two new initiatives to transform the workforce.
The first, named the ‘Adapt and Grow’ initiative, is aimed at helping Singaporeans adapt to changing job demands and grow their skills.
The second, known as the TechSkills Accelerator, is a skills development and job placement hub for the Information and Communications Technology (ICT) sector. It is aimed at helping Singaporeans learn new ICT skills quickly.
Details on the two initiatives for the workforce will be announced at the Committee of Supply by the Ministry of Manpower and the Ministry of Communications and Information respectively.
Meanwhile, Mr Heng said the existing SkillsFuture initiatives will see continued investments, to help provide career support to Singaporeans.
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