Relentless transformation key for continuous growth: EY

The quest for productivity growth won’t be an easy one.

The Jubilee Budget highlighted Singapore’s need for relentless transformation in order to secure continuous growth.

According to EY, there is a need to deepen skills and capabilities, make innovation pervasive, and strengthen the economic and social infrastructure of the country in order to secure a distinctive place in the global economy.

“It has not been, and will not be, easy. Singapore’s quest for productivity growth, underpinned by many broad-based measures in recent years, has not yielded significant productivity growth overall. This signals that measures with good intent and purpose must be changed if they do not deliver the intended results. This Budget seeks to do just that – the schemes, both existing and new ones, are more targeted, and there is a conscious effort to make them accessible,” stated EY.

EY’s full commentary can be accessed here. 

Here’s more from EY:
The SME sector, which contributes more than 50% of economic output and 70% of employment, is the backbone of Singapore’s economy. Growing the nation will necessarily mean giving homegrown enterprises a lift. It is not surprising that SMEs are one of the main beneficiaries of this Budget.

For one, the Capability Development Grant scheme will be extended, and more importantly, the scheme will be made more accessible with a simplified application process. Other funding schemes such as the venture debt risk-sharing programme, have been introduced to further reduce the funding gaps for innovative start-ups.

With the strong funding support now available to SMEs, it is time for our local players to think and act bigger and bolder.

This also means that SMEs should have the courage and appetite for scaling up and move beyond the comfort of our shores. Additional support from IE Singapore through its grant schemes and Double Tax Deduction for Internationalisation scheme will help to this end.

The usual lament by homegrown enterprises is that our tax incentive programmes often lean towards benefiting the MNCs. The introduction of a new International Growth Scheme is a welcomed move to address this perceived gap. Homegrown enterprises can now expand overseas and enjoy a 10% concessionary tax rate on their incremental income from qualifying activities, while retaining key business activities and headquarter functions in Singapore.