MPs laud support for firms, but warn against crutch mentality
MPs have questioned whether schemes to help businesses have ended up creating an over-reliance on the Government. TODAY file photo
SINGAPORE — The first day of the Budget debate kicked off in Parliament yesterday, with Members of Parliament (MPs) lauding greater funding support for businesses amid economic uncertainty. But they stressed the need for prudence and warned against creating a crutch mentality among firms when the going gets tough.
In all, 26 MPs — including labour chief Chan Chun Sing — rose to speak during a six-hour debate on the Budget statement which was delivered by Finance Minister Heng Swee Keat on March 24. They touched on a range of topics such as measures to help small and medium enterprises and workers as the economy restructures. Several MPs also weighed in on how best to raise productivity and innovation, while others sought indicators to track returns on Government initiatives.
Recounting feedback he received on the Budget, Marsiling-Yew Tee GRC MP Alex Yam said he received an email that read “this year no ‘ang bao’”.
Mr Yam said: “We cannot expect each Budget to be one bearing gifts aplenty. Unlike Santa Claus, we need to work within the budget and we certainly don’t have an army of elves turning out gifts by magic … we need to be wise with what we spent.”
Sembawang GRC MP Lim Wee Kiak wondered whether schemes to help businesses could “over-shelter” firms and end up creating an over-reliance on the Government.
“Like the plants growing (in) a sheltered green house, (businesses) will not have the resilience to withstand a storm or winter,” he said.
He added: “I don’t know if we are doing good each time when we anticipate an imminent economic turbulence, everyone would look to the Government to provide shelter. Businesses are always hopeful and confident that the Government will introduce measures to help them tide through over the crisis.”
Dr Lim noted that economic crises are meant to spur businesses to emerge stronger. However, this would not happen if companies do not feel the pressure to improve.
“By all means, give them the fishing rod and teach them to fish, but do not just give them the fish. The Government and our enterprises should not waste a good opportunity to learn from a crisis,” he said.
Jurong GRC MP Ang Wei Neng stressed the need to keep closer watch on the effectiveness of initiatives to help businesses such as the Productivity and Innovation Credit and Special Employment Credit schemes. Asking if too much is being done to “protect and cushion” private firms, he drew references to views from business experts who noted that subsidies may unwittingly help “lower-ability entrepreneurs” survive.
On productivity and innovation, Workers’ Party Non-Constituency MP Leon Perera suggested a benchmarking system for companies to monitor how they fare in productivity, while his party colleague, Associate Professor Daniel Goh, proposed a framework to evaluate returns on investment in innovation.
Several MPs also reiterated the need for fiscal prudence as social spending spikes and the workforce is expected to shrink in future.
Sembawang GRC MP Vikram Nair warned against institutionalising subsidies for industries. While the costs of such subsidies are distributed across society, the benefits are concentrated only on a few people, he pointed out.
“My only concern is that as these support schemes get increasingly institutionalised and the base of people receiving support rises relative to the working population, there is likely to be (a) significant additional strain on the Government budget,” he said.
He cited the need for more creative ways to fund Government spending such as providing low-cost financing to companies in the form of loans, instead of grants.
Potong Pasir MP Sitoh Yih Pin noted that as Singapore becomes more successful, it is only natural that Singaporeans want more from the Government.
Still, financial prudence is important, he said. He proposed that any decision on future spending must focus on the long-term good of the country, and for outcomes to benefit not just the present, but successive, generations of Singaporeans.
Holland-Bukit Timah GRC MP Liang Eng Hwa said that even though the increase in the Net Investment Returns Contribution — following the inclusion of Temasek Holdings in the framework — has helped to balance the books in this year’s Budget, long-term returns are not guaranteed given the economic situation which has central banks in Japan and Europe, for example, adopt negative interest rates.
Given the huge sums dished out to help businesses, some MPs, including West Coast GRC MP Foo Mee Har, questioned how the Government will be tracking the outcomes on initiatives such as SkillsFuture and the S$4.5 billion Industry Transformation Programme. Similarly, Mr Yam pointed to programmes such as the Wage Credit and Special Employment Credit schemes and asked for more transparency on their effectiveness.
Mr Chan pointed out that the true measure of success for all Government schemes does not lie in their continuous expansion. “Our mark of success is that really in time to come, we are able to slowly but surely wind down the proportion of workers who are dependent on such schemes,” said Mr Chan.
