Views from the top: Balanced budget

How well does Budget 2008 address the business needs of your industry and the economic needs of Singaporeans generally? Is there more that can be done to fine-tune particular proposals?

Chaly Mah
CEO
Deloitte Asia Pacific

FINANCE Minister Tharman Shanmugaratnam presented a well-balanced Budget, not only in macroeconomic terms (with the Budget in rough balance) but also in balancing the interests of many different constituencies. Personal tax rebates and spending programmes have been designed to benefit the lower and middle income groups to a greater extent while the abolition of estate duty will benefit the more affluent sections of our society, and at the same time will provide yet another boost to the mushrooming wealth management sector in Singapore.

The focus on education, training, and research and development will undoubtedly strengthen the economy over time. The commitment to increase overall research spending to 3 per cent of the GDP by 2010, with one-third of this being publicly funded research, the topping-up of the National Research Fund by $800 million to a total of $1.8 billion, together with the slew of education and training initiatives, will help the economy to continue to move up the value chain. This is imperative if we are to continue to prosper in an increasingly competitive and globalised economic environment.

The decision to leave personal tax rates unchanged for now was somewhat disappointing. The gap between the highest personal tax rate in Singapore (20 per cent) and Hong Kong (standard rate 16 per cent) is significant for the top foreign talents who are high income earners whom Singapore is trying to attract. The gap is in fact higher if the impact of our 7 per cent Goods and Services Tax (which Hong Kong does not levy), is taken into account. Mr Tharman did, however, say that personal and corporate tax rates will be reviewed again and lowered if necessary. Hopefully, this will happen in the not-too-distant future.

Danny Teoh
Managing Partner
KPMG

AS anticipated, Budget 2008 reinforced the message that the government continues to focus on the longer term sustainability of the local economy while caring for the more needy in our society.

What has perhaps been left to future deliberation are some of the new issues that may ultimately drive Singapore’s future development and competitiveness.

For example, Finance Minister Tharman Shanmugaratnam signalled that innovation would be a key thrust of Singapore’s future economic progress and announced new incentives for promoting entrepreneurship. We would have liked to see more tax incentives encouraging the retention in Singapore of the intellectual property created from innovation.

New tax incentives targeted at encouraging energy efficient and pollution-reducing equipment for businesses in the light of current concerns about environmental protection would also have been welcome.

Lastly, with the view of encouraging workers to continually upgrade themselves as they age, we had hoped to see more tax incentives for encouraging businesses to employ older workers.

Lim Soon Hock
Managing Director
Plan-B ICAG Pte Ltd

THE 2008 Budget excels in form, but more can be done to fine-tune particular proposals.

I applaud the government in making the bold move to invest in education and the development of our human capital to power Singapore into the future. The doubling of the Lifelong Endowment Fund to $800 million, enhanced aid for needy varsity and poly students, subsidy for part-time degree courses and top-up of education accounts for students, are all steps in the right direction.

The removal of estate duty is also a step in the right direction, but I feel that we are somewhat overdue in not adjusting the personal tax reliefs. In addition, the proposed Growth Dividends and increased public assistance payouts for the poor may not be sufficient to help them tide over inflation and the increased costs of living in the next one year.

The top-up of Medisave accounts for those aged above 51 by up to $450 is another welcome move. However, the tax reliefs for topping up of CPF accounts, incentives for CPF Life and the 20 per cent income tax rebate may have inadvertently missed out on those who need this most.

I would like to suggest that the government take a radical step to reduce GST by 2 percentage points for at least the current fiscal year, to rein in inflation, projected at 4.5 to 5.5 per cent for 2008. I believe our government can afford to do this, given that in the last fiscal year, GST of $6 billion accounted for 15.1 per cent of the total revenue of $39.65 billion. It also registered an increase of $1.15 billion over the budgeted figure which translates into 18.1 per cent of the $6.35 billion surplus.

For businesses, perhaps more could be done to address the rising cost of doing business, as a result of increased costs in transportation, utilities and rentals. This is a more pressing need of many companies, which may not be adequately addressed by the proposed increase in tax deductions on R&D and tax reliefs for renovation costs, although easier tax exemptions for SMEs are a boon. The training levy for higher wage workers will further increase the costs for companies with graduate workers and executive staff.

Lastly, as the icing on the cake, our government can afford to give out more from our large surplus, to help deserving charitable organisations as a one-time effort to provide the much needed relief for fund raising, to provide better care for our fellow citizens who are disabled, chronically sick, destitute, aged or less privileged.

Albert Phuay
Chairman and Group CEO
Excelpoint Technology Ltd

THE 2008 Budget recognises that innovation and self-rejuvenation are essential to Singapore’s continued growth. What we have in Singapore today is talent. As such, talent-building is crucial for our survival and growth in the changing global environment.

I’m heartened to see that the Singapore government has even taken into consideration the two heavy items on our expense sheets - talent and infrastructure costs - and has put in place new measures such as freeing up space in prime areas, the equity remuneration incentive scheme and tax incentives for R&D and learning to help us maintain costs while capitalising on growth opportunities in our industry.

I believe that the tax incentives for R&D and continual learning will help to create an innovation hub in Singapore in the long run.

Speaking as a Singaporean, I believe that the future is in our hands. We have to build for ourselves and our families a solid future with a good income through hard work and continual learning. We must also play an active role in managing our health and wealth. The 2008 Budget has provided incentives to help us ordinary Singaporeans take the future into our own hands. We must not lag behind.

Oliver Foo
Managing Director
Alcatel-Lucent, Singapore & Brunei

ITâ€^TMS clear that Budget 2008 emphasises laying strong foundations for our economy. The government has been very transparent and has set clear goals to accomplish its desired objectives. Alcatel-Lucent welcomes these measures where the technology sector will benefit from increased priorities on education, training and R&D.

These initiatives will help businesses and start-ups in the technology sector improve and expand their talent base. This way, they stay prepared, competitive and ready to innovate. We believe these strategies will help Singapore businesses weather uncertain times ahead and be poised for growth once the global economy recovers.

Gerald Chan
Country Head
UBS Singapore

OVERALL, it was a good Budget aimed at creating a stronger economy, enhancing business competitiveness and building a resilient community.

The multi-year step-up in development spending (especially in transportation) and the generous cash-back to low-mid-income families is very positive.

The removal of estate duty should further benefit Singapore as a wealth management hub. The removal might further attract wealthy individuals from Asia as will the tax incentive scheme for family offices. Furthermore, the incentives to foster Islamic banking could help the financial industry further.

The incentives to foster R&D in Singapore are also a good structural initiative to move Singapore’s economy up to higher value-added sectors.

EH Lim
CEO
Avi-Tech Electronics Ltd

BUDGET 2008 is generally a balanced one with something for everyone with particular attention given to older Singaporeans and the lower income group. Among the welcome announcements for Singaporeans must be the 20-per-cent personal income tax rebate and the $865 million Growth Dividend to be distributed in cash to all adult Singaporeans.

Nevertheless, the tax rebate was capped at $2,000. It would have been better to have a rebate of 10 per cent with no cap which would have benefited the society as a whole more fairly.

With respect to healthcare and education, the $200 million top-up to the Medifund and Comcare fund will help the less well-off with medical and education needs. However, the rising cost of healthcare in general was not addressed and this must be worrying for all Singaporeans.

With respect to businesses, those in fields such as biomedics will benefit greatly from tax incentives for research and development. Having said that, businesses in general will not benefit much from the 2008 Budget as higher operating costs were not specifically addressed in the Budget. No incentives, allowances or rebates were given to manufacturing companies such as ours. The cost of doing business is expected to further increase this year and this will impact many companies which do not fall within the incentivised group.

Gary Harvey
CEO
ipac Wealth Management Asia

I BELIEVE the Budget unveiled several measures that will encourage the further development of Singapore into a major wealth management centre. The one-off income tax rebate of 20 per cent, incentives for start-up companies, tax credits on foreign-sourced income, and a 5 per cent concessionary tax rate for offshore Islamic insurers will help us turn into a key private banking centre. The abolishment of estate duty will help draw foreign investors and encourage the creation of multi-generation wealth.

These initiatives, in time, will encourage both the growth of the economy and development of the financial market. However, some points we may need to fine-tune are the potential for the range of incentives to become too complex. Hence, they require simplification if people are to benefit from and understand the changes easily so that all individuals take retirement planning seriously. We should also look at creating more incentives to motivate those who are 55 years old to enhance their retirement funds especially as demographic changes will cause people to stay in the workforce longer.

Deborah Ho
CEO
DBS Asset Management

FOR the wealth management industry, Budget 2008 will be remembered for the elimination of estate duty, which brings Singapore in line with other countries such as Hong Kong and Malaysia. This will boost our reputation as a global wealth management hub, in attracting both Singaporeans and foreigners to base their assets here. It is also a timely move that complements the launch of Formula One and the integrated resorts, in drawing more well-to-do individuals who can contribute to our economy.

I am also pleased to note that this Budget is an inclusive one, as all Singaporeans will get a share of our nationâ€^TMs surpluses through the Growth Dividends. This will go some way in boosting incomes and helping to counter the impact of inflation. This is especially so for the middle class in managing spiralling living costs.

Gery Messer
President
Red Hat Asia Pacific/Japan

BUSINESSES and citizens should be encouraged by the generous Budget 2008. Most importantly, the focus on innovation would be key in augmenting Singapore’s competitiveness globally. As companies leverage on the R&D and innovation incentives, it would be advantageous for them to also be cognisant of the added abilities of various developer communities at large, such as the open source developer community in driving accelerated innovation.

The prowess of communities coupled with the government’s focus on innovation can result in a formidable synergy towards propelling Singapore ahead in the global innovation race. This will forge a truly competitive position for Singapore as the economy of choice on a global front.

VR Srivatsan
Vice-President, South Asia
Business Objects

I AM heartened to know that Finance Minister Tharman Shanmugaratnam had highlighted in his 2008 Budget speech that Singapore will invest in a total upgrade of business and IT infrastructure to enable new growth in the decades to come, as this commitment reflects a positive outlook for the IT industry. The focus on providing affordable top-tier tertiary education reflects Singapore’s investment in human capital which companies in various industries can benefit from in the near future.

The much welcomed measures, such as Growth Dividends and income tax rebates - to help Singaporeans of various income groups cope with inflation and the rising cost of living - does reduce some pressure on businesses to help their employees cope with the burden, especially in the first half of the year.

Mary Yeo
Managing Director
UPS Singapore

UPS applauds the government for a comprehensive Budget with an overall beneficial scope for the nation. Although there are no major breaks for multinational companies, we believe MNCs will still benefit, as the 2008 Budget lays the framework for Singaporeâ€^TMs continued stability and attractiveness as an investment destination.

According to UPS Asia Business Monitor, a survey on SMEs’ competitiveness, innovation is consistently highlighted as one of the key obstacles SMEs face in Singapore. The move by the government to provide tax incentives for SMEs to encourage R&D and innovation is definitely a booster shot for them. With SMEs forming the backbone of the economy, their growth will provide strong growth impetus for Singapore’s economy, which will drive the nationâ€^TMs competitiveness and benefit logistics and supply chain companies like UPS.

We agree that the best way to stay competitive, in an uncertain global climate, is to invest in the future. Hence, we are heartened to note that our commitment to the long-term economic benefits of education is one that the government shares.

On the whole, we are satisfied that the Budget will have a positive impact on MNCs, SMEs and ordinary Singaporeans alike. UPS looks forward to a resilient and growing economy in 2008.

Tan Chong Huat
Managing Partner
KhattarWong

BUDGET 2008 addresses the needs of the legal industry through various initiatives. The unilateral tax credit claim for foreign income taxes incurred to all types of foreign-sourced income earned in countries that have yet to conclude an Avoidance of Double Taxation Agreement will mean better profit margins for legal firms with regional aspirations and may provide the impetus for them to further their practice.

Likewise, the double tax deduction for recruitment and relocation costs for global talent will provide a much needed shot in the arm for the increasing demands of good legal professionals here in Singapore. These, together with the measures taken to liberalise the legal services market, will enable Singaporean firms to both look outwards and grow locally in this increasingly competitive marketplace.

The average Singaporean who can now claim tax relief for course fees leading to a vocational qualification will stand to benefit as it will encourage the spirit of life-long learning. I laud the move to make CPF top-ups more easily available to Singaporeans below the age of 55, with tax reliefs of up to $7,000 for those who wish to top up their CPF to the Minimum Sum before age 55. Employers are now permitted to contribute to an employee’s pension fund via the Supplementary Retirement Scheme (SRS). This gives Singaporeans more incentive to start planning earlier for retirement.

The annual values of properties were recently revised upwards. In this exercise, we felt that the restraining effect of an existing lease (if any) on the rent attributable to a property cannot objectively be overlooked, as is the current practice. This was something we had hoped the Budget would have addressed because of the very significant impact it has on business costs in Singapore.

Liu Chunlin
CEO
K&C Protective Technologies Pte Ltd

I MUST commend the Minister for a fine balance and addressing a wide spectrum of needs.

In my Views from the Top piece previously, I had alluded to the potential double whammy of inflation and an economic slowdown.

However, quick fixes against inflation only address symptoms. I am glad that besides the goodies to individuals, there are provisions in the Budget for R&D incentives which address longer-term economic sustainability. Perhaps the threat of a slowdown is ironically also helping to impose a reality check, and hopefully a check on inflation, as people are brought back to the need for true value creation.

Our business, which is protective technologies, straddles both construction and manufacturing. The R&D and start-up incentives are particularly relevant. However, because our business is a niche and new market, it does not quite fall into the incentives for categories like maritime or finance. It is our hope that we can grow our particular business into an industry by itself worthy of even greater government attention and incentives in the future beyond start-up incentives.

Shaun Meadows
Chief Executive Officer
Aviva

IN A volatile business environment with changing employment patterns, we understand that lifetime employment is no longer a common trend. Employees will need continuous in-patient medical provision when they change jobs.

With the introduction of the 2 per cent tax deduction limit extending to in-patient benefits through Portable Medical Benefits Scheme (PMBS) either by paying insurance premiums directly or by reimbursing premiums into employeesâ€^TM Medisave, the employer can ensure that their employees get a portable medical plan instead of doing nothing to their Medisave top-up.

We anticipate greater demand from employers for group insurance coverage now that the tax incentive has been introduced. This should further encourage insurance companies to provide better and more innovative products and is a good step forward for us.

Douglas Foo
CEO
Apex-Pal International

WE welcome the changes announced in the 2008 Budget. As an F&B company that is expanding aggressively overseas, every little bit will help us achieve our vision of building global brands. For one, we will certainly benefit from changes to the Skills Development Fund levy as we employ many mature employees and foreign service crew earning less than $2,000. The savings from the levy can be channelled into non-functional company-wide training programmes such as cardiopulmonary resuscitation skills.

With the relaxation to the Equity Remuneration Incentive Scheme, we can also consider using share options or shares to reward our employees. We hope this will help us to attract and retain staff especially when manpower shortage is a constant challenge for the F&B industry.

The Fixtures and Fittings Incentive will give a much needed boost to companies in the service industries who may be reconsidering plans to renovate in view of climbing costs and a slowdown in economic growth and business. This is also critical at a time when Singapore is attracting mega sports and arts events to be hosted here.

Timely renovation is one of the key aspects that can provide an unforgettable experience and thus enable us to meet the sophisticated demands and high expectations of tourists and increasingly well-heeled and well-travelled locals. While the quantum is not a lot, especially for bigger F&B companies managing multiple F&B outlets, it’s a good start.

More can be done for those who aspire to be global companies with a presence in every corner of the world. With merger and acquisition as a key strategy that can help companies expand quickly, changes to the treatment of fees of professional services such as legal fees and financial advisory fees, that is, as tax deductible expenses, will also help SMEs.

Overall, we are happy that the government is giving us the help we need in the challenging year ahead.

Valerie Wong
General Manager
Rolls Royce Motor Cars Singapore

I WELCOME a Budget that has invested in the community and tried to help curb inflation. This is a cautious Budget which anticipates the threat of global economic recession.

Against this, we see a backdrop of oil prices breaking the US$100 mark, shrinking COE quota and other pressures on the consumer which will definitely affect the outlook for the motor industry this year.

In terms of fine-tuning, perhaps one idea could be to examine niche demands and look at how we can catalyse the automotive industry in other areas - for example, high value chain activities such as motorsport R&D, which was successfully implemented in the UK, attracting a wealth of Formula One intellectual capital.

Kenny Chan
Managing Director
The Hour Glass Ltd

THE government is driving business growth and attracting investments here by removing estate duty, as well as grants and rebates for companies engaging in R&D activities. The former makes Singapore an attractive place for wealth to be invested and built up, for both Singaporeans and foreigners; while the latter helps to lure companies with a strong technological edge to expand their presence here.

The Hour Glass applauds this approach to grow Singaporeâ€^TMs economy and hopes that the government will continue to attract and retain foreign investors. This way, the economy will be kept buoyant, building the momentum in the high-end retail sector.

Bernard Lim
Chief Executive Officer
Design Studio Furniture Manufacturer Ltd

WE applaud this Budget for being people-centric with more incentives for the low to middle income families. This will help to offset the rising cost of living with $1.8 billion set for individuals by way of top-ups, cash handouts, Growth Dividends and personal tax rebates.

While Budget 2008 defers $1 billion worth of the construction sector’s public projects to spread demand till 2010 and beyond, we still see growth in real estate developments as Singapore is currently at the implementation stage of multi-year initiatives announced since 2006.

Our furniture manufacturing facilities leverage on computerised automation and we are constantly seeking ways to incorporate new technologies and innovation methodologies to further strengthen our competitive edge. As such, the incentives extended to encourage R&D are certainly welcomed.

Goh Chong Theng
General Manager
Singapore Branch
Rabobank International

BUDGET 2008 seems more people-friendly rather than business-friendly which I think reflects the general consensus that inflation, rather than a possible recession, is the biggest worry for Singapore this year.

However, I’m not sure if all of the people-friendly policies are in sync with one another. For example, abolishing estate duty with immediate effect will make Singapore a more attractive home for the overseas-based high net worth individuals (HNWIs) whom we want to attract. On the other hand, the Budget goodies will benefit mainly the lower and middle income groups. In other words, we are trying to cater to diverse needs, which is noble - but is it feasible?

The Budget has addressed concerns in many areas including cash on hand (Growth Dividends), education (Post Secondary Education Account), healthcare (Medisave), retirement (CPF Life) and more. Generally, the way the goodies have been structured - meaning who gets what, and how much - suggests that the government is looking to achieve two aims - one, to address the rising cost of living (which impacts retirement planning); and two, to tackle the widening income gap which poses potential risks.

Both aims are laudable but let’s be honest - as Singapore further globalises and transforms into a services-led economy, our Gini coefficient will inevitably rise because of the HNWIs’ higher marketability. Therefore, can we realistically achieve the second aim?

Overall, Budget 2008 subtly illustrates one of Singapore’s biggest conundrums - how to strike a balance between interlinked needs such as economic growth, talent attraction, living costs and social cohesion.

From a commercial standpoint, perhaps more could be done to address business concerns such as higher salaries, costlier rents and pricier materials. Then again, incentives for fostering innovation, continual learning and other traits are always nice to have.

Teng Yeow Heng Michael
Managing Director
TR Formac Pte Ltd

THIS is indeed a peopleâ€^TMs Budget because Singaporeans from the poor to the rich will benefit from it. I am happy that the middle class is also benefiting from this Budget. But I am disappointed that it does not do much to lower business costs in the short term especially for the manufacturing sector.

Rising business costs are not addressed for manufacturers such as lowering costs associated with utilities, power, factory rental, manpower and transport.

There are some sweeteners provided in the financial support for innovation and R&D as well as manpower training, but these are long term benefits for manufacturers. Also, corporate tax was not lowered further to attract multinational and foreign companies to set up manufacturing operations or continue to operate in Singapore.

Many manufacturers need immediate financial help to survive the current slowdown in the global electronics sector and defray escalating business costs.

However, I am glad that the government is providing some financial assistance to our manufacturing enterprises in innovation and R&D as these are crucial for us to sustain and hone our competitive edge.

I define innovation as a good idea that gets successfully developed and marketed. Merely having a good idea is not good enough. Many successful corporations started off not with great breakthrough technologies or fabulous R&D effort, but because the founders found a market niche or innovative idea, got it successfully developed and marketed to dominate the global market. Thus, I hope that the financial incentives provided for the R&D projects would also include the whole gamut of product development, prototyping, market testing right up to commercialisation for all local and foreign manufacturing companies operating in Singapore.

Vijay Iyengar
CEO
Agrocorp International Pte Ltd

QUITE frankly, we were not expecting anything specific to our business in the Budget.

The only request that had been made specific to international trade and entrepot business had been to see if some of the special tax incentives such as the Global Trader Programme companies could be brought down in keeping with the declining corporate tax rates but this was not to be.

The Budget has been described a safe one. There are probably measures in reserve that may be brought into play if there is an economic slowdown later in the year.

Standout features are concessions to start-up ventures and the seed funding for research and development.

Removal of estate duty and personal tax rebates are all steps in the right direction.

Rising business costs in Singapore are a worry but this applies to all major international centres that compete with Singapore.

Food inflation is another worldwide phenomenon and the concessions to the elderly and low income earners are welcome.

These are issues that the government will have to deal with on a continuing basis.

Incentives could have been given to promote the use of energy efficient equipment or fuels in keeping in worldwide environmental concerns. However, this is something that we may see in future Budgets.

Poul Lorentzen
Vice-President
Dematic SEA Pte Ltd

THE diversification of food sources, as announced in the Budget, strikes Dematic as highly relevant to Singaporeâ€^TMs logistics industry. In food handling and storage, Singaporeâ€^TMs challenge lies in consolidating an integrated cold chain food supply, while maintaining a diverse network of relationships with import sources.

While more food sources may negate possible cost spikes, the overall cost of ownership may be higher without a concise plan to manage a large inventory effectively. This may further lead to risks like compromises in food safety, as seen in recent health scares in Asia. Coupling this vision with the possibilities of automation in large distribution centres can be the next step in providing higher standards of hygiene, cost efficiency and safety for food handling and storage in Singapore. Automation also addresses the problem of an ageing workforce which can continue to contribute in such an environment.

Wee Piew
CEO
HG Metal Manufacturing Ltd

BUDGET 2008 continues the theme of the previous years’ Budgets which seek to address the widening gap between the lower and higher income groups. While the Budget is generous, I cannot help but feel that the government could have been less prudent in its fiscal policy given that Budget 2007 threw up an unexpectedly large surplus of $6.4 billion. I think more could have been given in cash handouts to the lower income and senior citizens and also rebates and tax allowances for SMEs and businesses.  This could have helped lessen the impact of rising inflation as well as boost domestic consumption as a counter-balance to the impact of a very likely US recession.   While the much-anticipated personal income tax cuts did not materialise, the one-time tax rebate of $2,000 will help middle income earners.  However, I think that personal income tax will have to be aligned with the corporate tax rate of 18 per cent sooner rather than later in order for Singapore to continue to attract high net worth individuals and to stay competitive with other Asian cities like Hong Kong.

On the other hand, the abolishment of estate duty is a right step to help Singapore’s bid to establish itself as a wealth management centre.

Tan Ser Giam
Chairman
Eastern Navigation Pte Ltd

THE Budget, while giving tax reliefs and cash benefits to the adult population, does not provide adequate help to the lower income and those with larger families to alleviate the higher cost of food and inflation.

While a wealthy family might spend about 10 per cent of its income on food, a poorer family could spend up to 50 per cent on feeding itself and thus the burden of higher food prices falls disproportionately on poorer and larger families.

Families who have more children at the urging of the government are at a disadvantage.

Food prices are likely to trend higher and it is best to find a longer term solution to the situation instead of having the disadvantaged depend on unpredictable handouts.

Just as in the US and Australia, we could re-visit the granting of GST exemption on basic foodstuff like rice, sugar and flour to remove the double whammy of the price increases.

R Theyvendran
Chairman/Managing Director
Stamford Media International Group

THOUGH generally encouraging, Budget 2008 is lacking in measures to keep business costs down and facilitate growth.

Inflation, which is expected to be between 4.5 and 5.5 per cent (a 25-year high), needs radical action.

With a surplus of some $4.6 billion remaining, corporate tax could be reduced from the current 18 per cent. Office rentals and utility services for relocated start-ups and SMEs could be decreased.

Even for the few vibrant small-and-medium media and related companies as well as SMEs in other industries, the Budget does not stir up any passion for entrepreneurial risk-taking. However, necessary interventions for some industries, like the financial sector, have been made.

The governmentâ€^TMs financial backing for technological upgrading could be increased. The tax reduction and allowance for R&D could be further fine-tuned to link up with foreign counterparts and markets. Recruitment of workers could be for the company rather than for a particular job.

Finally, in an “inclusive nation”, those concerned should bear in mind that not all workers earn enough to pay income tax. Others, for some reason or other, are not part of the mainstream. Yet, they all are subject to the GST regime. Public transport in itself is too expensive for some. Basic necessaries could be taken off GST.

Charles Reed
CEO
interTouch

THE comprehensive range of business incentives in this yearâ€^TMs Budget is generally good news to companies. It is especially heartening to note that the Budget has been allocated to subsidise the costs of businesses that rely heavily on intensive R&D. interTouch, for instance, will benefit from the tax incentives with its ongoing investment in R&D to enhance its technology offerings for the hospitality industry.

Over the long term, such incentives also encourage more entrepreneurs to enter the thriving R&D sector, and help Singapore grow as a knowledge hub.

Another sector that could be addressed is the hospitality and service industry. With the upcoming integrated resorts in Singapore and with the Asia Pacific being the fastest growing tourism destination in the world, it is increasingly critical to provide incentives that encourage hospitality companies to train talent as well as pursue product and service excellence.

On the individual level, while the Budget provided bonuses to help Singaporeans cope with the the rising cost of living, perhaps providing long-term assistance such as a special discount card for the needy to purchase basic amenities would be more targeted and effective.

Dora Hoan
Group CEO
Best World International Ltd

NOTWITHSTANDING the mild forecast for economic growth, there is good reason to have faith in the future of Singapore’s economy. Strategies and measures outlined in the 2008 Budget should spur the growth of innovative enterprises with significant incentives for innovation. The emphasis on education and training opportunities for our students and those in the workforce is laudable as it is key to an increasingly knowledge-based economy.

It is also worth noting the adjustments on tax policies to enable Singapore to remain competitive through supportive measures for the growth of SMEs, and the enhancement of our role in the region as a financial and business hub.

As expected, measures to deal with inflation have been outlined. Knowing that those who have less in life will be the hardest hit, I believe in strengthening our financial security programmes to protect the aged workforce, and in social intervention and targeted assistance for the less well-off members of society. Among the many measures cited, needless to say, keeping our economy competitive and building up our people’s capabilities for economic growth is the most fundamental.

I note with keen interest the abolition of estate duty which I have been anticipating for years. I believe it is high time that we re-think our policies on wealth creation. Today, wealth is being created in an entirely different manner through the spirit of entrepreneurship by people who started off with little.

In the final analysis, each must do his part to realise the nation’s economic growth prospects. As a nation in the new global order, we shall be all the better for creating a mindset where anyone who works hard enough to create new wealth and opts to maintain their assets within the country will be inspired and well-equipped to do so. That in turn will benefit Singapore’s economy and society for years to come.

Sam Yap S G
Group Executive Chairman
Cherie Hearts Group Int’l Pte Ltd

THE S$1.8 billion giveaway in Budget 2008 is a huge ‘hong bao’ for individuals and companies alike; it is definitely a boost to our economy. For instance, the ease with which start-ups can now qualify for tax exemptions, as well as the strong emphasis on R&D, are highly welcome and augurs well for the long-term growth and sustainability of businesses in Singapore.

Slightly regrettable, though, is the lack of direct benefits for childcare businesses, which in my opinion, play a pivotal role in improving the quality of life for middle to high income families in Singapore, and more indirectly, to all other businesses in general by allowing both husband and wife to work.

Lars Ronning
President, Asia Pacific (excluding China and Japan)
Tandberg

THE Singapore government’s ICT (information and communications technology) industry policies have generally focused on setting the right framework through improved information flow and streamlined procedures. Like Norway and Korea, Singapore has a good track record investing in, and widely adopting ICT.

The next steps must address the changing skill levels and skill mix of employees, the expanded range of services and capabilities (of enterprises) vis-a-vis ICT. Also, besides large firms, the government needs to look at how it can help small and medium-sized businesses fully exploit the broadband environment.

There was little mention of such initiatives in Budget 2008 to overcome any lack of awareness, skilled personnel or specialist services in these firms. In the mid to long term, measures such as education, skills and professionalism will address this disparity, and increase the competitive edge of Singapore companies on a global scale.

Poh Mui Hoon
CEO
NETS

WE are encouraged by the fact that Budget 2008 included rebates and dividends that are weighted towards middle and lower income households. Higher income households are also not forgotten as they receive more in absolute dollars. Given the growing concerns of inflation and a lurking recession in the US, this will provide some comfort for consumers. These goodies are made possible because of sound economic policies and good business performance.

Together with the focus on mitigating the effects of inflation, fiscal policies that continue to keep the economy buoyant are certainly welcome. The emphasis on spurring the growth of innovative enterprises, and adjusting tax policies to ensure businesses stay competitive is indeed timely given the uncertain global outlook.

Such measures will support the growth of SMEs and encourage companies to be better risk takers. This is a well-balanced Budget which will ensure that Singapore remains an attractive place to engage in business and for Singaporeans to call home.

Fong Loo Fern
Managing Director
CYC The Custom Shop Pte Ltd

THE 2008 Budget is both stimulating and generous. I believe the economy will continue to do well despite the uncertainties in the global market. We hope that the extra money in people’s pocket will translate into more consumption. I appreciate the generosity of the Finance Minister in sharing the surpluses chalked up. My only concern is that more could be done for the needy, the aged and the disadvantaged.

Tan Kok Leong
Principal
TKL Consulting

THE 2008 Budget is the biggest and probably the best in a decade. Its size of $43 billion expanded 23.2 per cent from $33 billion previously, with the biggest surplus of $6.4 billion. The assistance measures to help the low income, the old and the sick, and to innovate the economy was the highest at $5.4 billion.

The Budget is built on the foundation of the past and the booming economy. It is to equip Singapore for the long term global challenges. It has the interest of every citizen at heart and it strives to maintain social cohesiveness.

Derek Goh
Executive Chairman/Group CEO
Serial System Ltd

BUDGET 2008 is a landmark Budget for our citizens as we share the fruits of our labour. Although the Budget does not introduce fresh fiscal measures for the corporate sector, the enhancements for individuals have the overall impact of boosting domestic consumption. This will in turn benefit business.

In anticipation of a potential recession in the US, the government can put in a contingency plan to mitigate any possible business slowdown. The business federation together with the Ministry of Finance and the Ministry of Trade and Industry can jointly set up a Business Contingency Council to develop a series of economic scenarios as guard posts to signal businesses on responses to different economic challenges. Such engagements will prepare businesses mentally and financially for any adverse challenges.

Dhirendra Shantilal
Senior Vice-President, Asia Pacific
Kelly Services

BUDGET 2008 is a commendable peopleâ€^TMs Budget looking into the needs of the population through several types of grants including medical and educational grants. Weâ€^TMre seeing rising living costs in Singapore and this yearâ€^TMs Budget has identified ways to help the local community overcome it in the short term and at the same time advising that handouts are not the long term solution to an upward trend in inflation. Government-aided training and certification programmes will help individuals advance their careers to the next level and Singaporeans should continue to take advantage of these courses.

Younger Singaporeans are privileged to have tremendous support from the Singapore Budget. Our education system is a much sought after system by students in the region and many covet the opportunity to have a place in our schools. So it is encouraging to see the strengthening of our educational system to adequately equip our talent for future challenges in the workforce. Our young people need to understand why the government is placing so much emphasis on their education, appreciate the educational grants given to them and utilise them wisely.

From an industry point of view, businesses have been challenged with very rapidly rising business cost issues within a short span of time. Weâ€^TMre also facing a talent crunch which adds to the rising costs. We were hoping to see government-aided training programmes in the Budget, specifically targeted at the professional and technical talent, that would allow them to pick up skills that are transferable across industries. The Budget could also have addressed the corporate income tax rate and reduced it further.

The CPF Life scheme is much more attractive now with a dozen options to choose from but we may not see organisations immediately taking this up as their companyâ€^TMs ‘pension scheme’ as it would be considered an additional business cost.

David Miller
President of Asia Pacific & Senior Vice-President
Lenovo

LENOVO’S presence in Singapore has stemmed from its need to centralise key sales support, procurement and treasury operations in a secure, stable and economically progressive Asian base. To date, we’ve been able to achieve economies of scale through our seamless and streamlined value chain using Singapore as a key hub. According to the most recent Budget, the government will be attempting to adjust its tax policies so that we stay competitive, support the growth of SMEs, encourage risk-taking, as well as strengthen Singapore’s role as a financial and business hub which all lend credence to our decision to strengthen our position here.

Singapore’s strong financial infrastructure and taxation policies have allowed us to base many of our key financial and business functions here. Our Treasury operations are based in Singapore, as are our worldwide heads of Global Supply Chain and of Services. Despite the projected slowdown in the global economy, the Budget shows a commitment to manage pressures on the currency, easing the planning burden of companies in the IT industry amongst others so on that front, we’re not worried about any drastic changes to the way we do business.

On a personal level, the tax regime has definitely made it easier for multinationals, such as Lenovo, to attract executive talent. This has led to Singapore being one of the best (if not the best) and most logical place for global executives to be based in Asia.

I am also glad to see a healthy amount of attention being paid to cultivate knowledge creation and innovation within industry, academia and the public service. Hopefully this will lead to the creation of new enterprises and ventures which will in turn enhance the position of other companies like Lenovo within the economic ecosystem here in Singapore and throughout the region. We’ve always believed that the next wave of global companies will be moving towards globally sourcing or “worldsourcing” their talent, resources, intellectual property and services. Building this ecosystem of cutting edge firms positions Singapore as a vital node in this future global network.

Source : Business Times - 25 Feb 2008