Finance Ministry lays out schemes to raise business productivity

SINGAPORE - The Finance Ministry yesterday set out to dispel an impression that the process of tapping on grants and incentives to boost productivity was an onerous one, as it laid out its schemes to help businesses, especially small and medium enterprises (SMEs), become more productive.

Referring to the Productivity and Innovation Credit (PIC) scheme, several Members of Parliament (MPs) at the ministry's Committee of Supply debate had pointed to its low take-up rate and questioned if the qualifying criteria were too rigid.

"The feedback so far is that the scheme is deemed to be generous, but convoluted and governed by criteria that are too strict," said Nominated MP Tan Su Shan, who cited a Singapore Business Federation survey which found that while 65 per cent of firms are aware of the PIC, only 24 per cent tapped on it.

Responding, Minister of State for Finance Josephine Teo said the process for tapping on the PIC is "fairly straightforward".

Claims, for instance, are made as part of the annual tax-filing process and businesses need only "provide a few additional lines of information" on their productivity investments on their tax forms. "The PIC does not require an 'ocean of paperwork' as feared by SMEs," said Mrs Teo.

She also noted the good take-up rate for the scheme: Based on tax returns filed last year, one in three, or more than 25,000 small companies, claimed the PIC.

With enhancements to the scheme this year - including an increased cash payout rate and relaxed criteria for claims for in-house training - this number is expected to go up, she added.

To better reach out to small neighbourhood businesses in the heartlands, the Inland Revenue Authority of Singapore will work with Community Development Councils to hold seminars on the PIC, starting this month at the Kembangan-Chai Chee Constituency.

Meanwhile, the Government will fully support guidelines under the Best Sourcing Initiative to outsource based on performance rather than price, by mandating that all government agencies procure services only from accredited contractors, said Mrs Teo.

Addressing concerns that outsourcing often exerted a downward pressure on workers' wages, Mrs Teo also said the Manpower Ministry, which is planning to enhance accreditation for the cleaning and security segment, was looking at all viewpoints, including those of workers and their salary concerns.

Yesterday also saw Ang Mo Kio GRC MP Inderjit Singh ask if the Government was doing enough to minimise overlaps between the portfolios of Temasek Holdings and the Government of Singapore Investment Corporation (GIC).

Mrs Teo assured that the Government systemically reviews for such risks, adding that the Monetary Authority of Singapore, GIC and Temasek "operate at different parts of the investment spectrum, even if there is some overlap". Lin Yanqin

Source: http://www.todayonline.com/Singapore/EDC120303-0000052/Finance-Ministry-lays-out-schemes-to-raise-business-productivity

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