Comprising three main components, a new $1.3 billion Enterprise Support Package aims to help Singapore businesses manage rising costs through:
The Enterprise Support Package will provide much welcomed and needed support to SMEs, be it to improve cashflows or see the company through a period of expansion. It will provide short term relief to SMEs that are struggling with rising interest costs, and reward companies that are committed to growth and sound business practices despite current headwinds. That said, the impact of the measures may be felt differently across different sectors.
Businesses that are working capital intensive like trading, logistics and construction are more likely to benefit in the short term; others whose profitability are adversely impacted by the current slow economic environment may not reap the full benefit of the one-off corporate tax rebate.
In all, the extension of the EFS and SFEC is testament to the Government’s responsiveness to voices from the ground, as these have been on the minds of industry and business associations. Businesses that are committed to restructuring and transforming amid the challenging macroeconomic environment should make full use of the Enterprise Support Package.
The current Partnerships for Capability Transformation (PACT) scheme will be enhanced to catalyse co-innovation and promote greater collaboration between MNEs and SMEs. The enhancements include supporting partnerships in additional areas such as capability training, internationalisation and corporate venturing.
While PACT is not a new scheme, encouraging corporate venturing can help to increase the alignment of interests, and generates “stickiness” in the value chain that can be critical to successful partnerships between the MNEs and SMEs. Furthermore, these SMEs will benefit from the exchange of world-class management practices and the upskilling of their workforce, which ultimately raises their profile and credentials in the international arena.
David Toh