I refer to the Budget Speech 2010 ‘Towards An Advanced Economy: Superior Skills, Quality Jobs, Higher Incomes’ (Minister for Finance, Mr Tharman Shanmugaratnam)
Which patriot does not wish for Singapore to become an advanced economy where its citizenry sports superior skills, quality jobs and higher income? From this perspective as a Singaporean I understand and I certainly support Singapore’s strategic aims to uplift our nation’s productivity.
Yet there are many different methods of measuring productivity. For instance, in a factory, productivity can be measured based on number of hours it takes to produce ‘X’ amount of goods. On the other hand in a retail business, productivity can be measured based on the amount of revenue generated by an employee divided by his or her salary etc.
Given the massive treatment in this year’s budget on uplifting productivity, it is therefore critical for each Singaporean to understand what does productivity means in the first place? This is because for some, productivity simply means getting things done with lesser working hours. On the other hand, for others productivity means working longer to produce more.
Hence, to successfully uplift productivity, it is crucial for each Singaporean to reflect and to understand the definition of productivity in the context of his/ her work across respective levels in his/ her vocations and industries. Only when such understanding is established, only can our people collectively make Singapore into an advanced economy.
I have several observations regarding Minister Tharman’s speech on Singapore’s next leap in productivity and how it will involve transformations to Singapore's economy:
a) I cite C.3, ‘First, we have to restructure our overall economy towards higher-value activities and exit from less efficient ones’. This strategy in the macro sense makes sense, yet it is in the micro sense that hurts. This is because it is usually during such economic transitions that the pains of structural unemployment will be most painfully felt.
b) I cite C.4, ‘Second, we need to upgrade individual industries and enterprises. The Budget will extend strong support for them to do so, in every sector.’ I am of the view that it would had been very prudent if this transformation is a highly targeted one in developing the capabilities of purely organic Singaporean SMEs and not some pseudo SMEs which are in actual fact subsidiaries of certain GLCs
c) I cite C.5, ‘Third, we must raise the skills and creative potential of every worker.’ In practical terms there are limits to how much training can do to raise skills and creative potential in certain industries. For instance how effective will Continuing Education and Training be, in raising the skills and creative potential of a worker who works in a relatively mundane environment?
d) I cite C.32, ‘…we will introduce a Productivity and Innovation Credit. The credit will provide significant tax deductions, for investments in a broad range of activities along the innovation value chain’. This covers automation through technology or software. Most Singaporeans would understand the prowess of automation, so much so that it will probably form a lump in our throats as we read on C.37, where Minister Tharman gave the example of Japanese food outlet Ebisboshi Shotengai at Iluma Mall which invested $160,000 to implement a wireless self-ordering system from Japan. It is so successful that not only reduced customers’ waiting time, but it also reduced the number of staff it would normally have required. In the short run, where all other factors remain constant, jobs are certainly at stake.
e) I cite C.42, ‘The National Productivity Fund will provide grants to help enterprises in all sectors, with special emphasis initially on sectors where there is a potential for large gains in productivity.’ By targeting all sectors, somehow it gave me the impression of a rather ambitious and unrealistic target. Also it gave me an impression of possible arbitrariness in the granting of the funds. To be fair, Minister Tharman subsequently in C.43 specifically pinpointed construction as a key sector which productivity needs to be improved.
f) I cite C.55 -58, ‘The economic recovery – both locally and abroad – provides a window of opportunity for growth through acquisitions. We will facilitate merges and acquisitions, but companies must decide for themselves whether it makes more business sense to grow organically or through M&A.’ …. ‘I will therefore introduce, for five years, a one-off tax allowance scheme to help defray a portion of acquisition costs…. The allowance will be equal to 5% of the value of the acquisition.’ The skeptical me can’t help but wonder whether such facilitation of economic restructuring through M&A are meant to assist GLCs more or SMEs? In the spirit of growing home-grown SME enterprises, shouldn’t GLCs be excluded from this scheme?
g) I cite D.20, ‘Talent flow from the public sector research institutes to private corporate labs is part of the synergy these linkages can create. In the last three years, 650 research engineers and scientists have moved out of the public sector to join corporate labs, including 100 seconded to local enterprises, as part of a joint Spring-A* initiative to upgrade enterprises’ technological capabilities.’ This sounds to me like a public sector brain drain of 550 research engineers and scientists to the private sector, but of course packaged very nicely!
h) I cite D.24, ‘The Government, as a significant consumer of products and services, can itself play a larger role to help innovation-driven companies turn their R&D into marketable solutions. This as taken place on an ad-hoc basis in the past. We will now do it proactively and systematically. We need many more examples like Hyflux, whose engagement with PUB opened up the opportunity to delivery its capabilities and track record to help it grow internationally.’ Another possible area could be the leveraging on the expertise of Ministry of Education to assist Singaporean pre-schools to establish a global standard (currently none) in pre-school education and helping them turn their offerings into globally marketable solutions.
i) I cite E.25, ‘…I will also allow wives who are taxpayers to claim a spouse relief to $2000, similar to the current scheme for husbands. This will help families where the wife is the breadwinner, for instance where the husband has retired. Accordingly, wife relief will be renamed as ‘spouse relief’. The decision to grant tax breaks to working wives and those with elderly dependants is to be applauded. Concurrently I share similar views to that of Ms Dana Lam, president of AWARE that greater attention be paid to Singles who have devoted most of their lives to care for dependant family members, but end up with little CPF funds and other financial resources to support themselves.
To remake Singapore’s economy into an advanced one is a national effort, of not merely both employers and employees but also the government. Also along the way of economic transition, there will certainly be pains that will be experienced by some segments of our society. To build an inclusive society, it is vital for us to minimize such pains, so that none of our compatriot will be left behind.
Links:
Singapore Budget Speech 2010 (Minister for Finance, Mr Tharman Shanmugaratnam)
Better tax reliefs for more households (TODAY, 23rd Feb 2010)
日期: 23/02/2010 新闻来源: 联合晚报 