Singapore budget 2016: five ways it might affect HR
Author: PM editorial | Date: 16 Mar 2016
A bigger budget for SkillsFuture and extra help for SMEs expected to be on the agenda
The annual budget statement of Singapore will be announced on Thursday 24 March by finance minister Heng Swee Keat.
It is the first budget of a new government, and political commentators are expecting an air of caution for the year ahead – with one eye on the slowing growth of China.
Here are five topics expected to come up in the budget, which HR professionals will be looking out for.
Lifelong learning investment
The government is predicted to keep pushing continuous learning as a way of improving productivity. The lifelong learning aid SkillsFuture – providing Singaporeans over 25 with ways to train and learn outside of traditional workplace routes – might see its budget increase to S$1billion a year by 2020.
Targeted support for SMEs
Small and medium-sized enterprises are likely to struggle most during a slowing economy; they are more vulnerable to the effects of problems such as rent increases.
“There will likely be a clear differentiation between SMEs and multinational companies, so if any help is rendered, it will be towards the SMEs because they face the most difficulties during these times,” ANZ economist Ng Weiwen told Channel NewsAsia.
There are calls for productivity and innovation credits (PIC) to be redefined so the funds can be used more accurately. The scheme was set up in 2010 to help SMEs with costs including training, research and development activities, and acquiring intellectual property rights.
An increased market readiness assistance grant
The market readiness assistance (MRA) grant helps Singaporean organisations to enter the international marketplace by subsidising expenses incurred when setting up overseas ventures (such as market assessment). Business experts believe that increasing the size of the grant from a 70 per cent subsidy capped at S$20,000 to one double that size would make it far more effective in tackling high start-up costs.
Protection for contract workers
The National Trade Union Congress (NTUC) has called for the Employment Act to offer better protection for contract workers and for there to be a limit to the number of short-term contract extensions an employer can give before they are obliged to hire the worker on a long-term basis.
Flexibility with the retirement age
The NTUC has also suggested the government should investigate the feasibility of a more flexible retirement age. The current retirement age is 62, but employers are required to offer re-employment to eligible employees up to the age of 65. The NTUC argue that a flexible retirement age, based on industry sector and occupation, would mean organisations benefit from a more experienced talent pool.