The Budget measures might go a long way in helping profitable companies, but smaller businesses struggling to survive day-to-day need extra short-term help, a post-Budget roundtable heard.
Singapore Business Federation (SBF) chief executive Ho Meng Kit said he liked the way the Budget instantly laid out measures to help the hardest hit sectors during the coronavirus outbreak, but firms fighting for basic survival will need more to make it. Mr Ho said: “I like the way Deputy Prime Minister Heng Swee Keat tackled this because, clearly, this is the big issue. He had ammunition and financial resources and is prepared to spend it and spend big.
“He touched on all the pain points, gave some money back to companies and asked them not to lay off staff. For companies doing better, wage credit schemes may not apply to all. Corporate tax rebates (however) are more applicable to those who are profitable. It will help. But is it going to be enough?”
No amount of assistance can help a firm that sees revenue dropping by half, he said.
Businesses will have to restructure and look at minimising operational costs.
United Overseas Bank senior economist Alvin Liew said the measures applied more to big businesses that can use the downtime to train workers.
He said: “But when you’re a small and medium-sized enterprise (SME) with 10 or fewer workers, it’s survival. And the measures have to… relook how to focus more on letting them get through this.
“It’s good to retrain the workers but if it is a survival issue, they need something more basic, like more cash handouts or some direct help to get through. It may not be long, but it’s long enough to kill their business, unfortunately.”
Mr Ho said help from the private sector is also coming in.
Singapore property tycoon John Lim’s family office, JL Family Office, ARA Asset Management and Straits Trading Company have set up a $5 million fund to extend short-term loans to businesses here amid the outbreak.
A group of entrepreneurs in the SBF is pooling together a fund to lend money to SMEs.
Nominated MP Walter Theseira, an associate professor of economics, said some government support can help short-term cashflow issues, but companies have to be viable in the long term.