Transforming Our Economy

We have made skills, innovation and productivity the basis for economic growth and rising real incomes. This is key to keeping our economy vibrant, with a strong core of Singapore-based companies and with every working Singaporean in well-paying, meaningful jobs. Restructuring is benefitting Singaporeans through higher real wages.

Median wages for citizens grew by 9%, after accounting for inflation. Higher than in other Asian NIES.

Investing in Productivity and Skills

We provide firms with strong support for every investment that could improve productivity. We set aside $2b for the National Productivity Fund, introduced the Productivity & Innovation Credit (PIC) scheme and other measures in previous years. Last year, we added a three-year Transition Support Package including the Wage Credit Scheme (WCS). Many SMEs have benefitted from these schemes.

Wage Credit Scheme
In end-March 2014, businesses will receive around $800m for employees’ wage increases in 2013
Since 2011, we have disbursed more than $1b in PIC benefits. Two out of three SMEs with turnover of more than $1m have claimed PIC benefits

Productivity has increased by 11% since we began the restructuring journey. This was entirely due to the strong cyclical recovery in 2010, but there has been little improvement since. Budget 2014 will deepen support for companies that make efforts to strengthen dynamism and efficiency.

In Budget 2014

PIC Enhancements; More Support For SMEs

3-year extension of PIC to YA2018
  • Extend PIC for 3 years to provide continuing support for businesses as they restructure
  • Introduce PIC+ for qualifying SMEs: Raise expenditure cap for each qualifying activity from $400,000 to $600,000 from YA2015

Scale up Adoption of Infocomm Technology (ICT)
3-year ICT for Productivity and Growth Programme (IPG)

  • Proven ICT solutions: Target to extend these solutions to another 10,000 SMEs
  • Piloting of emerging solutions: Support 80% of qualifying costs, capped at $1m per participating firm
  • Enabling high speed connectivity for businesses: Subsidise SMEs' fibre broadband subscription plans of at least 100 Mbps and provide support to implement Wireless@SG services at their premises
  • Facilitating access to fibre broadband: Subsidise up to 80% of the costs of new in-building infrastructure, capped at $200,000 per building

Industry Transformation through New Industrial Spaces

Industry Transformation
  • Support clustering among firms to improve competitiveness
  • 5-year renewal of the Land Intensification Allowance scheme till Jun 2020 and extended to logistics sector

Investment in Skills and Training

Investment in Skills and Training
  • Top up $500m to the Lifelong Learning Endowment Fund to $4.6b, in line with our commitment to Continuing Education and Training

Tax Incentives For Innovation

  • Qualifying R&D expenditure:
    • 10-year extension of the 50% additional tax deduction till YA2025
  • EDB-approved R&D projects:
    • 5-year extension of the further tax deduction scheme till Mar 2020
  • Acquisition of Intellectual Property Rights:
    • 5-year extension of writing down allowance till YA2020

Helping Businesses Grow and Internationalise

  • Micro-Loan Programme (MLP) has provided 3,500 loans to SMEs over the last 2 years
  • Co-Investment Programme (CIP) has catalysed over $500m of investments from private sector players, over 3 times the Government's seed funding
  • IE Singapore provided assistance to more than 26,000 companies in 2013, including access to $775m in trade and financing loans

In Budget 2014
Helping Businesses Grow and Internationalise
  • MLP: Raise Government's risk-share for loans to young SMEs
  • CIP: Additional $150m to further catalyse growth capital for promising enterprises
  • Internationalisation Finance Scheme: Double the maximum loan quantum to $30m per firm
  • More support under Global Company Partnership Programme

Managing Foreign Workforce Growth

We have progressively raised levies and lowered Dependency Ratio Ceilings. To raise the quality of our foreign workforce, we have differentiated the levies for skilled and unskilled workers, and tightened the requirements for S Pass and Employment Pass holders.

Foreign Worker Inflow (excluding construction sector) fell from 60,200 to 16,800 in 2011 and 2013 respectively.

In Budget 2014

Construction — Targeted Policies and Upstream Measures

  • Increase levies for basic-skilled workers by $100 in 2016 to encourage employment of skilled workers
  • New Market-Based Skills Recognition Framework to help retain workers with better skills and experience
  • Extend maximum Period of Employment from 18 to 22 years for higher-skilled workers
  • Mandate use of productive technologies on selected sites
  • Increase buildability and constructability scores for private projects on non-Government Land Sale sites

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Last updated 14 Mar 2014

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