SBF-PwC Budget wishlist includes help for S’pore SMEs with M&A and simpler listing rules

SINGAPORE – Initiatives to help firms deal with rising business costs and expand via mergers and acquisitions (M&A) are centre stage in a Budget wish list put forward by PwC Singapore and the Singapore Business Federation (SBF).

The recommendations are among 17 spread across four key areas that seek to keep small and medium-sized enterprises (SMEs) globally competitive and sustainable, accelerate workforce transformation, boost the business ecosystem and encourage firms to contribute to societal well-being.

Another significant recommendation for Feb 18’s Budget suggests deepening local capital markets and encouraging more SMEs to list on the Singapore Exchange.

SBF and PwC suggest simplifying the listing process, while also introducing concessionary income tax rates for newly listed companies in their initial years. They also want tax deductions for listing costs and notional interest on equity capital.

Their Budget proposals released on Jan 16 stem from work done by the Alliance for Action on Business Competitiveness in November that was jointly led by SBF and the Ministry of Trade and Industry.

SBF chief executive Kok Ping Soon said: “As a small open economy, we cannot direct the winds, but we can adjust our sails.” He added that Singapore’s success will depend on its ability to adapt and thrive despite these vagaries.

Take the M&A suggestion. Because SMEs may be deterred by the complexities and significant costs connected with such deals, Mr Kok hopes to have a group of financial advisers who can work directly with firms, uplift their capabilities and look through their financials.

“We want to engage the business owners to view financing as a strategic option, in conjunction with their growth plans, and help them gain access to some of these opportunities,” he said.

The SBF-PwC proposals also call for establishing new Singapore Enterprise Centres in partnership with respective trade associations and chambers in promising emerging markets, such as India.

There is also a call for a more holistic approach to financing schemes for these businesses. This includes making the Productivity Solutions Grant, which focuses on enhancing digital transformation, more flexible.

Another recommendation looks at combining two existing financing schemes into a new Enterprise and Workforce Transformation Grant to encourage businesses to improve both their operations and their workforce simultaneously.

It also seeks to bring all the separate application procedures under one roof, making them easier for SMEs to access.

A key recommendation on workforce transformation suggests expanding the support for job redesign while promoting job fractionalisation, in which full-time roles are broken up into smaller discrete tasks that part-timers can do.

This is seen as allowing employers to tap under-utilised labour pools, including seniors, people with disabilities, gig workers and caregivers, for both white- and blue-collar job roles.

While this may not apply to every job, particularly those that are time-sensitive or customer-facing, one upside is that businesses can fine-tune their workforce needs, thereby improving efficiency and profitability.

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