Singapore’s Minister for Finance, Heng Swee Keat, delivered the FY2016 budget statement in Parliament. Here's where you can catch the major manpower and labour related announcements.
ALSO READ: Full text of the Budget speech
"Even when new jobs are being created, (our people) wonder how they can keep up. I understand Singaporeans' anxieties and concerns," affirms Minister Heng.
Firms must restructure - the higher the productivity, the higher the wages. "We must aim for a virtuous cycle of higher productivity, higher skills, and higher wages."
Learn, unlearn and relearn quickly, says the Minister. "Our people are now increasingly better educated, and we are investing significantly in lifelong learning through SkillsFuture."
Measures for lower-wage workers
Workers 35 years old and above - Workfare Income Supplement (WIS) Scheme will have simplified criteria, where WIS will be now paid for every month worked.
Workers can also look forward to receiving WIS payments sooner, monthly rather than the current quarterly.
Updates to the SkillsFuture programme - "Learn, unlearn and relearn quickly"
- Already announced Earn and Learn programme in 12 sectors
- SkillsFuture programme has been showing progress since October 2015
- Credit has already been rolled out to Singaporeans early this year
What has been planned for the near future:
- MOM will enhance employment support through the Adapt and Grow initiative. Wage support schemes will be expanded to encourage employers to hire those who are finding it harder to find jobs, such as those affected by retrenchments or business restructuring.
- Efforts to enhance the matching of employees to jobs in SMEs.
- More than double the current outreach for PMETs from 2,000 to over 4,000. MOM will commit an additional $35 million a year from the Lifelong Learning Endowment Fund and Skills Development Fund to support these initiatives.
- ICT sector - New TechSkills Accelerator will be set up for skills development.
Minister Heng anticipates that the spend on SkillsFuture and related initaitives will average over S$1 billion per year till 2020.
Childcare and parental support
- KidStart - Government and community resources for children who need additional support. Expected to benefit about 1,000 children.
- Expand outdoor adventure education for all students - Masterplan to build a new outward bound adventure project on Coney Island. Expected to be ready in 2020 and cost about $250 million.
Introduction of the Industry Transformation Programme (ITP)
New industry transformation programme - builds on the previous quality growth programme. This will help firms in creating new value in 4 ways:
- Integrating different restructuring efforts
- More targeted sector-focused approach to better meet the needs of firms in each sector
- Deepen the partnership between Government, workers and industries.
- Stronger emphasis on technology adoption and innovation - national research fund to get a top up, among other initiatives. Businesses will also be able to list out the costs of acquiring IP over more than just the current 5 years.
Minister Heng cites the example of the food manufacturing industry, which has seen 250 management associates and interns. Real value add per workers has grown by more than 9%.
Focus on innovation through the ITP
- Launch of the Jurong Innovation District - Expected to become the future of enterprise learning and innovation, housing all activities in a single, next-generation industrial district. First phase targeted for completion around 2022.
- Infrastructure for the future - Changi Airport's terminal 5 will get a $1 billion top up to its development fund.
Measures for transforming enterprises: A new business grants portal will be started in Q4 2016. It will focus on - capability building, training and international expansion. Firms will not have to go from agency to agency to see which schemes apply to them.
SME related measures
The Government will proceed with levy increases of S Pass Holders in every sector - in view that the foreign workforce has continued to grow in the past year, as well as levy increases for services and construction work permit holders.
For viable SMEs with cash flow concerns - they will get an SME working capital loan of up to 30,000.
Special employment credit - The Government will modify and extend the SEC to 2019, to provide employee wage offsets for re-employed workers, up to the pay of 4,000.
To help SMEs, Minister Heng will raise corporate income tax rebate from the current 30% to 50% of tax payable. SME Mezzanine Fund - will be expanded from the current $100 million to $150 million.
Automation support package for initial period of 3 years. Improve SMEs access to loans for projects which qualify for this - government will reduce its risk share with participating financial institutions from current 50% to 70%.
How to address economy-related challenges - 3 ways
Budget 2016 has 3 key thrusts to address economy related challenges.
- First, to address cyclical weaknesses, which includes relief measures for SMEs.
- Second, firms have to build deeper capabilities and develop their people, as well as internationalise. They have to emerge stronger to benefit from the broader global recovery, when it takes place.
- Third, the Government will support people with skills, and in facilitating employment and job matching. We have convened a committee for this.
The need to restructure is both urgent and critical, says Minister Heng, while also commenting on how we in Singapore are well placed to benefit from regional growth and the fact that Singapore started restructuring early.
Expect GDP to grow at 1-3% for this year
MTI expects GDP to grow at 1-3% for the year - not very different from the 2% in 2015.
While conditions are difficult, we should not be overly pessimistic, reminds Minister Heng. "Even as we tackle cyclical weaknesses, we must be alert to major structural changes abroad and at home."
Unemployment remained low at 1.9% - even so, some sectors such healthcare, education and ICT are hiring.
We must keep working on productivity growth, says Minister Heng. "I am aware the conditions are difficult... Workers are anxious as retrenchment as increased, including among professionals."
"We have tightened the inflow of foreign workers, invested in broad-based measures like PIC, and introduced the restructuring support packages. Progress has been promising. Nine in 10 SMEs embarked on productivity initiatives in 2015."
Introduction - "This year, we start our journey for the next 50 years"
The Budget will focus on four core areas - economy, people, home, and security.
Minister Heng thanks the thousands of contributions and suggestions received, leading up the Budget.
For our economic transformation, we will draw on the strengths of individual skills, businesses and associations.
We must encourage all Singaporeans to care for all citizens and plan for the future. The core for us to succeed is the spirit of partnership, which we have inherited from our kampung days.
Security - We have to invest more in capabilities and intelligence, this translates into higher spending needs. But we have planned in advance for this.
Spending on education in FY2016 = $12.8 billion
"Last year we celebrated all that we achieved together for the past 50 years. This year, we start our journey for the next 50 years," opens Minister Heng.