Govt’s enhancements to PIC scheme "generous": Yee Jenn Jong

SINGAPORE: Non—Constituency MP Yee Jenn Jong described the government’s enhancements to the Productivity and Innovation Credit (PIC) scheme as "generous".

The government made enhancements to the PIC scheme as part of the three—year transition support package to give companies time to restructure. The transition package is contained within Budget 2013.

Speaking during the Budget debate in Parliament on Tuesday, Mr Yee said that smaller companies will benefit from the enhancement.

He said: "PIC is given a new push with the new one for one top up grant of S$500,000 per year. It is a generous pay out over and above the earlier year PIC payouts.

"I think this will get more smaller companies to use PICs as they will get more cash than what they have invested. The PIC process is relatively easy to administer compared to most other government grant schemes.

"While PIC is useful to provide some relief to companies, it is limited in effectiveness for some types of companies who really need a major transformation. And it’s not always automation which will help companies restructure. Sometimes it requires drastic changes to business processes, organisation structure and to business models."

Under the new PIC bonus scheme, 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, and will be paid over and above the existing PIC benefits.

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

—CNA/ac