Last month, Singapore’s Finance Minister Heng Swee Keat unveiled the 2016 budget. This year the notable points for discussion focused on innovation and enterprise. A large section of the budget has been allocated towards the need for growth in Singapore businesses to an international level, as well as keeping up with developing modern technology.
The following are highlights from the budget that are relevant to the business sector:
Increased support for start-ups
As the main focus from the 2015 budget, this is an area that will continue to grow this year. The government will continue to support diversity and expansion. Regarding the development of technology, research, and tech start-ups, a new initiative has been established. SG-Innovate is a new programme that can match potential entrepreneurs with established advisors, introducing them to investment firms and allowing them access to research facilities, which will help with expansion to new markets.
SG-Innovate will work with other ventures to increase the support offered by other large investors. Sectors that are being focused on will be technology companies like internet of things among others.
Industry Transformation Programme
The minister allocated a budget of SGD $4.5 billion for a series of grants, tax incentives and support schemes to support start-ups that will allow for substantial growth and global expansion, including various incentives for mergers & acquisitions (M&A) and automation.
In order for this to be financially viable, the government will raise the existing Corporate Income Tax (CIT) refund by 20%, being capped at a limit of SGD $20,000. It will also lower the Productivity & Innovation Credit (PIC) rebate rate by 20% for all expenditures incurred on or after August 1st 2016. The PIC scheme will run for 2 years, ending in 2018.
Educating & specialising the workforce
Like most years, emphasis was put on education not only in youth, but throughout an individual’s life. The Minister assured that specialising the workforce will play a huge role in transforming Singapore’s economy. As part of the SkillsFuture initiative, TechSkills Accelerator was also unveiled, to refine methods of enabling the population to acquire specialised skills and proficiency.
The TechSkills Accelerator has been introduced in response to the apparent shortage of technical professionals on the island. The job market in Singapore currently has a deficit for specialists in the field of engineering, software coding and data specialists. The programme will recognise specifically where ICT skills are needed and provide training on to well suited and willing individuals, ranging from full time students to adults.
Up to SGD $4 billion will be allocated to the collaboration of industry and developing research methods. The National Research Fund, which has made numerous investments in SMEs previously, will be given an additional SGD $1.5 billion throughout 2016.
The NRF will also work directly with employers to match suited positions to skilled professionals. One industry that is already underway is coordination between major software & IT employers such as the Singapore Computer Society, this will allow for reduction of demand in this area as discussed above.
Building an innovative technology park
Finally, the government will launch a quarter of a century long project, hoped to be completed around 2022. The project will be named the Jurong Innovation District, a technology park that will home several industries and encourage collaboration in a community environment. It will serve as a space for researchers, students and entrepreneurs to design, prototype, and test their new innovations, the Minister stated.