SINGAPORE – Another Budget wish list has landed on the Government’s in-tray, with the Singapore Chinese Chamber of Commerce and Industry (SCCCI) calling for help in reducing business costs – one of the key concerns among local firms.

An association survey, whose findings were released on Jan 10, found that 76 per cent of companies faced rising costs in 2023, while around 80 per cent said such expenses grew by 25 per cent.

The survey, which polled 636 respondents from mostly smaller companies in sectors like services, manufacturing and construction, noted that 68 per cent do not expect to have racked up better profits in 2023 than in 2022.

Manpower issues, especially a shortage of suitably skilled labour, were prominent concerns among those polled.

SCCCI president Kho Choon Keng said: “We received feedback that businesses foresee rising business costs, shortages of suitable manpower, inflationary pressures, geopolitical uncertainties and a slowdown of global and regional economies.”

The SCCCI’s Budget recommendation said the Government could help to lower business costs and inflationary pressures through a range of schemes.

The business chamber called for no further increases in government compliance costs and charges, and a reduction or freeze on rentals of government properties, including industrial and commercial space.

It suggested that a higher threshold could be considered for qualifying expenses incurred by growth-oriented businesses when it comes to deductions against taxable income.

The Government could also consider a higher threshold for corporate income tax rebates.

Time-bound rebates could also be provided to help small and medium-sized enterprises (SMEs) manage electricity costs when the tariff rate spikes and goes beyond a certain threshold.

There could also be more help for growth-oriented SMEs to access lower-cost financing, since most depend on bank loans for operational needs, the SCCCI said.

The Government could also extend enterprise financing schemes that are due to lapse in 2024.

“In the prevailing environment where interest rates stay high, alongside other rising business cost components, higher borrowing costs have become an additional burden for SMEs and have eroded their profits,” it added.

The SCCCI wants funding support of at least 70 per cent to launch a services centre that will help under-served local trade associations that continue to face challenges and capability limitations.

This should assist such associations in raising their capabilities in areas like governance and financial management.

The centre could also boost the SCCCI’s capacity to help local trade associations take on industry development initiatives like sustainability and technology adoption.

Besides helping trade associations, the Budget to be handed down on Feb 16 could also include more incentives to help SMEs consolidate and grow, such as tax deductions over three years or wage support.

This could make it easier for firms in financial difficulty to be bought out instead of shutting down, which in turn would encourage companies to take risks and expand their operations, making them potentially more competitive.

“This approach also offers a lifeline to promising SMEs with near-term challenges that might otherwise fail.

“By becoming part of a stronger entity, these businesses can benefit from better management, more resources and a broader customer base,” the SCCCI said.

It wants SkillsFuture Singapore to provide more financial support for programmes that equip people with industry-specific skills, rather than common broad-based ones.

The availability of suitable manpower came in second in the survey of top business concerns, with 37 per cent of businesses also citing the lack of suitable training programmes as an issue in 2023, an increase over the 24 per cent recorded in 2022.

SMEs also grapple with the high cost of pursuing green initiatives. The Government could expand the capability-building component of the Enterprise Sustainability Programme to make it easier for firms to benefit from the scheme, and increase the grant quantum, the SCCCI said.

An energy efficiency grant that lapses in March could also be extended to include more SMEs outside the current sectors of food services, food manufacturing and retail, to help them invest in energy-efficient equipment.