Channel NewsAsia
Updated: 11/13/2012 05:23 | By Channel NewsAsia

Govt remains fully committed to help willing SMEs restructure

Govt remains fully committed to help willing SMEs restructure

Govt remains fully committed to help willing SMEs restructure

SINGAPORE: Senior Minister of State for Trade and Industry Lee Yi Shyan said restructuring for higher growth and productivity is challenging but achievable.

He said the government remains fully committed to help willing SMEs on their restructuring journey.

Nominated MP Teo Siong Seng moved a motion expressing challenges faced by SMEs especially increasing rental and manpower costs.

Speaking in Mandarin, Mr Teo said in the climate of a slowing economy, the wish list of SMEs includes the easing of the foreign worker policy, rental subsidies and a review of grant criteria offered by government ministries and agencies.

Mr Teo said: "The government has tried very hard and invested much effort into designing many assistance schemes for enterprises. But what actual results have been achieved? If the carrots are hung too high up, rabbits are unable to consume them."

He acknowledged that SMEs should try to increase productivity but said more time is needed.

Mr Teo also used feedback from the Restaurant Association of Singapore in his speech.

The association pinpointed "innovating" of rental structures, and benchmarks led by large property developers and Real Estate Investment Trusts (REITs) for causing rapid rise in rentals.

On government assistance grants, Mr Teo, who is also President of the Singapore Chinese Chamber of Commerce & Industry (SCCCI) said small companies find application "not an easy task at all".

"According to a survey jointly conducted by the SCCCI and Nanyang Technological University, 93 per cent of respondents understand the importance of innovation, 62 per cent of respondents reported not being able to find suitable schemes and thus are unable to apply, while 32 per cent of the companies surveyed said that the application procedures of government assistance schemes are very tedious and burdensome."

Mr Teo asked if the policy can be eased and if rental subsidies can be provided.

He also wanted a review of the criteria of grants offered by government ministries and agencies.

He said the increase in commercial rentals have been moderating since the beginning of 2011. The government has also since three years ago signalled the need to tighten the inflow of foreign workers.

In response, Mr Lee assured the government is paying close attention to the needs and challenges faced by SMEs.

"My colleague, Minister of State Teo Ser Luck is currently chairing a review effort to ensure that our strategies, schemes and programmes remain SMEs friendly. The review will consider ways to streamline existing schemes and simplify applications processes and reimbursement procedures. He will announce the recommendations when ready," said Mr Lee.

Mr Lee added that businesses need to re—double their restructuring efforts.

"We must re—double our efforts in restructuring our economy. Yes, the process of change and restructuring can be painful. But as we benchmark industries in other leading economies, we know for a fact that others have achieved productivity 30 per cent, 50 per cent or even more than ours. Hence, we are not trying to do the impossible. On the contrary, raising productivity is achievable.

"We have to manage the pace of manpower tightening carefully to make sure that the changes are gradual and companies have enough time to adjust, and that it strengthens our competitiveness and does not stall growth. In short, we need to re—position ourselves for the future. We need to usher in a new phase of productivity—driven growth."

Mr Lee agreed that assistance programs can be user—friendly. He said a review is underway to ensure that strategies, schemes and programs remain SME—friendly.

The review will consider ways to streamline existing schemes and simplify application processes and reimbursement procedures.

— CNA/fa

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