update SINGAPORE--The government unveiled Thursday a new initiative worth S$20.5 billion (US$13.6 billion) to boost business competitiveness and job security in a recessionary environment.
The Resilience Package involves expenditure of S$5.1 billion (US$3.4 billion) to preserve jobs, Finance Minister Tharman Shanmugaratnam said in his 2009 budget address in Parliament.
"The package aims to save jobs to the maximum extent possible in the recession, and to help viable companies stay afloat," he noted.
As part of the initiative, the government will introduce a Jobs Credit scheme to reduce the cost for employers of employing Singaporeans during the crisis. This essentially is a grant disbursed quarterly to businesses, and is calculated based on 12 percent of the first S$2,500 (US$1,660) earned by each employee under the country's pension program, or CPF.
The government will also increase spending on various schemes to help Singaporeans to upgrade their skills.
Among these, fee subsidies for courses aimed at PMETs (professionals, managers, executives and technicians) will rise from 80 percent to 90 percent under the Skills Programme for Upgrading and Resilience (SPUR) initiative. SPUR provides course fee support for companies and individuals and absentee payrolls for companies that send their workers for training.
The country will also commit S$900 million (US$602 million) in the next few years to spur innovation and research and development.
These includes the setting up of a S$230 million (US$154 million) Singapore Media Fusion (SMF) fund for the media and digital entertainment industry "where opportunities are growing rapidly". The government will provide grants to help local enterprises export content, applications and services overseas, as well as to build up a world-class media talent base.
To encourage firms in the sector to take advantage of intellectual property (IP) from Singapore, they will also be allowed to write down the cost of acquiring qualifying IP rights in two years instead of five currently.
Chiu Wu Hong, executive director at KPMG Tax Services in Singapore, told ZDNet Asia in a phone interview, such a write down would certainly help boost the island state's status as a media hub.
Tech players hail innovation push
Singapore Infocomm Technology Federation (SiTF) chairman Tan Yen Yen, welcomed the tax reductions, rental rebates and job credits that allow Singapore to be competitive as an ICT hub and remain attractive for foreign companies.
"The measures to promote innovation will provide companies, particularly small and midsize businesses (SMB), the opportunity to develop new areas of expertise in preparation of better times ahead," she said in a media statement.
Howie Lau, general manager of Lenovo Asean, too is encouraged by the emphasis placed on innovation in this year's Budget.
"Technology remains critical for companies as the engine for innovation and driving efficiency. So we look forward to the private sector picking up on the government’s call to innovate," he told ZDNet Asia in an e-mail.
"Continue to invest in innovation so that you will have offerings for your customers when the business cycle inevitably [returns] upward," he urged.
Tom Cheong, managing director, Singapore and Brunei at Cisco Systems, pointed out that in times such as the current economic crisis, new business models come forth while older, less efficient businesses fade away.
"One example of where these new business models will develop is on the next-generation National Broadband Network where new companies, dubbed retail service providers, will form to offer creative and innovative services that take advantage of the ultra-high speed network connectivity," he told ZDNet Asia in an e-mail.
Eric Hoh, Symantec's vice president for Asia South region and head of global account for Asia-Pacific and Japan, said in an e-mail: "A key point that resonated throughout Budget 2009 is the call to improve competitiveness and prepare for future opportunities once the economy improves...Singapore businesses [should] harness technology to drive productivity and increase efficiency."