By CHEN HUIFEN

Expectations are high among business owners that the forthcoming Budget will contain new measures to help reduce operational costs, stimulate demand and address the liquidity situation.

So far, off-Budget measures such as a $2.3 billion business financing package introduced by the government late last year have eased the credit crunch slightly. But businesses are hoping for more.

'The chamber received feedback from members of larger enterprises that they are not able to benefit much,' said the Singapore Chinese Chamber of Commerce and Industry. 'For instance, the loan quantum for bridging loan is insufficient to sustain their operation requirement, which requires fund injection in the range of millions. Others, such as those in the bunkering business, for instance, are not eligible for the loan insurance scheme.'

Lawrence Leow, president of the Association of Small and Medium Enterprises (Asme), said members would like to see the government raising its default risk undertaking for micro loans to 90 per cent, from 80 per cent currently. They also hope the loan quantum for a bridging loan can be raised to $3 million to $5 million, from $500,000.

Aside from tweaking existing schemes, businesses are also keeping their fingers crossed that the government will cut the corporate tax, currently at 18 per cent, by another one to two percentage points.

Other moves that could help reduce operational costs include cuts in the foreign worker levy, property taxes, stamp duties, ERP charges for commercial vehicles, as well as rental rebates for government-owned space.

Against a backdrop of weak external demand, the domestic economy has become key. So these cost-cutting measures need to be coupled with private spending stimulants to avoid a deflationary spiral.

Since the government has ruled out a GST cut, other ideas have surfaced - food vouchers, cutting miscellaneous taxes like road, TV licence and income taxes, and even a tax holiday this year, in the hope that consumers will spend the extra cash.

'During the initial period, it (the extra cash) may go into savings banks,' explained Singapore Indian Chamber of Commerce and Industry executive director Predeep Menon. 'But as confidence is restored, the expense will start to happen.'

Small and medium-sized companies are also hoping that more deferred public infrastructure projects will be brought forward, said Asme's Mr Leow.

'Perhaps the government could (also) help by enhancing access to non- traditional markets whether through partnerships with local companies or through providing incentives,' he added. 'Access to new markets is a long-term solution to build a sustainable business.'

The incentive could come in the form of cost reimbursement for international business travel, and simpler profit repatriation rules, said Phillip Overmyer, chief executive of the Singapore International Chamber of Commerce.

With major developed economies harder hit by the global financial crisis, it may be apt to encourage companies to suss out opportunities in emerging markets.

China, India and Vietnam, for instance, are building up their domestic economies, which will have very different supply requirements from the past when the focus was on selling to the Western markets.

'So we want our businesses in those markets to understand how to meet and serve these new domestic market needs in these countries because they will be new markets for us,' said Mr Overmyer.

All said, business owners are hoping for a wide range of measures to be introduced to help them keep their operations going and in so doing, save jobs.

Freddy Sim, chairman of Eternal Financial Advisory, puts it this way: 'This economic crisis is really a chain effect so everybody will be badly affected. And if you don't have enough business to sustain the overhead costs, the business will cease.'

With additional reporting by Zeinab Yusuf

This article was first published in The Business Times on January 19, 2009.