14 January 2014
Budget 2014: Singapore SMEs seek more help: ASME

Budget 2014: Singapore SMEs seek more help: ASME

THE Association of Small and Medium Enterprises (ASME) is hoping for more governmental help this Budget to boost productivity and growth.

Majority of SMEs would like to see more initiatives to help them hire local staff and talents as well as to reduce rental costs.

They expect to see their operation costs, led by manpower, foreign worker levy and rental, to increase in 2014.

SMEs have also voiced for the Productivity and Innovation Credit (PIC) scheme, in particular, to be extended for another 2 to 3 years, ASME said following its survey which saw 473 respondents participating.

PIC was introduced in the Singapore Budget 2010 to provide significant tax deductions for investments in a broad range of activities along the innovation value chain. It covers six activities, one of which is 'Investments in Design'.

SMEs said the scheme is currently limited to new research only.

"ASME calls for the PIC scheme to be expanded to include new product development in order to encourage innovation amongst SMEs,'' the association said.

About 47.3 per cent of SMEs rated Budget 2013 had a positive impact while 37.4 per cent said it had no impact. About 15.4 per cent said it had a negative impact.

SMEs lamented that new schemes introduced in 2013 were "unhelpful as they require businesses to pay upfront and be reimbursed later", causing strain on cashflow. They are hoping more speedier approval processes for reimbursements and less complication criteria for schemes and grants.

About 57.9 per cent of SMEs indicated that shortage of funding was among their top concerns when considering overseas expansion.

They recommend the government introduce equity financing schemes that will help SMEs make local and overseas acquisitions.

"Typically, banks only offer financial assistance to SMEs purchasing goods, equipment and properties, yet, do not provide or only provide limited funding for SMEs interested in their expansion of equity,'' ASME's President, Wee Chorng Kien said.

He noted this was crucial since about 71.3 per cent of respondents expressed their intention to expand overseas over the next two years, yet, pointed out that they have no strategy for overseas expansion.

ASME has plans in place to set up a pro-business centre and an incubation centre and is seeking assistance from government statutory boards such as the Singapore Workforce Development Agency (WDA) and International Enterprise (IE) Singapore.

It hopes to see more incentives to help SMEs retain staff in order to improve productivity.