Budget 2022: companies support budgetary measures but are concerned about rising costs

SINGAPORE — While business leaders and associations welcomed initiatives announced by Finance Minister Lawrence Wong to move their operations forward, they said further measures would present obstacles and urged the government to help them stay on track.

They endorsed the Job Growth Incentive Scheme, the Temporary Bridge Loan Scheme and the Business Finance Scheme, but worried about the higher costs brought about by the Progressive Wage Model (PWM), rising of the Goods and Services Tax, the property tax increase, and the increase in qualifying minimum wages for new Employment Pass (EP) and S Pass applicants.

Mr. Douglas Foo, President of the Singapore Manufacturing Federation (SMF), said the group is grateful to the government for considering the views of its members in extending various business support initiatives.

“While the SMF and its members support and understand the push for a workforce with a strong Singaporean core, the announcement of higher wages for Jobs and the S Pass would also mean challenges in hiring in a already tight labor market in the manufacturing sector.

“SMF will work with its members and government agencies to see how SMF can help alleviate these concerns.”

Ms Rose Tong, executive director of the Singapore Retailers Association, said the lack of premises to join the retail workforce, combined with the new wage thresholds, could force retailers to further reduce the workforce. foreign labor to reduce operating costs.

Retailers may limit new store openings or expand overseas, or worse, close outlets to contain costs leading to job losses and unemployment, she added.

She noted that existing staff will have to take on additional responsibilities and that the increased workload could affect individual performance and mental health.

Mr. Yeo Hiang Meng, Chairman of the Federation of Merchant Associations, said the 2022 budget is pragmatic and forward-looking, providing increased support for capacity building, human capital investment and creation of a talent pool in Singapore.

However, he added that there will be a significant impact on core businesses which are smaller.

Mr Yeo said the implementation of the PWM, the GST hike and the S Pass wage adjustments will be areas of concern.

“Moving forward, these companies will need to look for ways to manage costs, get more out of technology, and create higher-value goods and services.”

The Chinese Chamber of Commerce and Industry in Singapore welcomes the many measures to help businesses, but said the increase in minimum qualifying wages for new EP and S Pass applicants could impact businesses in some sectors, including construction and manufacturing, where locals continue to avoid some. works.

He added that these salary adjustments will cause the labor bill to rise further as well as the costs of enterprise and infrastructure projects in an operating environment already facing inflationary pressures.