Budget 2013: New PIC bonus scheme to encourage companies raise productivity

SINGAPORE: The government will enhance its Productivity and Innovation Credit (PIC) scheme to encourage more companies to improve productivity.

Finance Minister Tharman Shanmugaratnam, in his Budget Statement in Parliament on Monday, said a new PIC bonus scheme will be introduced.

Businesses which make use of the PIC scheme and invest at least S$5,000 to improve productivity in a year will receive a dollar—for—dollar matching cash bonus.

The bonus is capped at S$15,000 over three years until 2015. It’ll be paid over and above the existing PIC benefits.

Mr Tharman believes the S$5,000 minimum qualifying expenditure will encourage small businesses to undertake meaningful productivity investments.

The PIC bonus is expected to cost the government S$450 million over three years.

The government will also embark on industry—wide collaborations to help individual firms in the productivity drive.

These include industry projects in which consortia of firms will develop solutions to industry—specific productivity challenges.

Mr Tharman said this approach will be adopted in seven new priority industries.

He believes this will also enable best practices to be widely replicated.

The initiative is expected to cost the government S$100 million over three years.

In addition, the existing Partnerships for Capability Transformation will be broadened and enhanced beyond manufacturing to cover other sectors.

— CNA/ck/fa