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With 2019 as the Centennial celebration year, did the 2019 Budget come with a “Big Hongbao” for businesses?

Today’s globalised economy is a stark contrast to Thomas Friedman’s “The World is Flat” with protectionism reshaping the dynamics behind the major economies like the U.S and China, and Brexit. Finance Minister Heng Swee Keat pointed out that with the current global economic situation looking more inward, the 10 countries in Asean can potentially seize this opportunity to be collectively the 4th biggest in the world economy. Examples mentioned were the Unicorns of Asia in excess of USD1 Billion which have emerged in this part of the region.

In this environment, his message focused on the need for Singapore’s openness and connectivity to remain relevant to the current and future global place. Touching on the nation’s Total Defence and its 5 pillars, and introducing a newcomer – the 6th Pillar – Digital defence.

So how can Singapore continue to stay relevant? Dig Deep, deep and deeper.

A 3 Thrust (Deep, Deep and Deeper) strategy was initiated:

 

Deep Innovation

Deep enterprise capabilities in the likes of technology adoption, customising and financing will be further enhanced for companies who have the potential to upscale. The efforts are aimed to contribute to Singapore’s vibrant start-up eco-system.  In 2018, 220 deals were stuck, churning SGD4.2 billion dollars.

Following Start-Up SG, the Government will announce details of Scale-Up SG (Innovate, Grow and Internationalise) with an additional SGD100 Million set aside for 2019.

This spells good news for companies as loan financing will be more accessible and a catalyst to growth. The Enterprise Financing Scheme will be expanded in Oct 2019, encompassing Government-backed 70 per cent of funds, with working capital loans extended till March 2021, available to companies who are in operation for under 5 years.

Deep Productivity

Singapore’s productivity growth is uneven across sectors. The services sector was of concern with its 3% productivity gains predominantly driven by S-Pass growth. If we continue down this path, it will be “highly unsustainable”, and Singaporeans will find themselves being displaced. With foreign worker quota reduced, current employers with existing quotas will have one year to adjust.


Deeper Partnerships to Win

Mr Heng touched on the need for deeper and stronger partnerships between companies, between companies and Government agencies and between Government agencies. While companies compete to differentiate themselves, there is a need to cooperate to solve common challenges.

Examples cited include the Singapore FinTech Association which partnered with foreign FinTech associations and Singapore’s commercial participation in numerous overseas trade fairs.


3 Thrusts: Global 101

Mr Heng talked about another 3 Thrusts, called the Global 101 or Industry Revolution 4.0.

The first thrust is in research innovation with continued funding given for research that generates innovation. Needless to say, NUS, NTU, A-star and 14 corporate labs were mentioned.

The second was the spirit of entrepreneurship and investing in our people.

And the last was on fostering global partnerships. Good news, Singapore Fintech Festival will be back in November 2019.

With so much said about jobs and enterprises, our takeaway is that jobs come before enterprises. Reinforcing this, SGD4.6 billion in total will come from the Government’s coffers, out of which SGD3.6 billion goes to workers and the rest for companies. This demonstrates that what is high on the Government’s agenda is investing in its people to reskill, upskill and adapt to a high-tech world.

Find out more about Budget 2019 here.

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