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 people's 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 Singapore's logistics industry. In food handling and storage, Singapore's 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 government's 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 year's 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 people?s Budget looking into the needs of the population through several types of grants including medical and educational grants. We're seeing rising living costs in Singapore and this year's 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. We're 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 company's '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.
