January 22, 2024
SINGAPORE – The Singapore Business Federation (SBF) wants to bring firms and policymakers together to put a dampener on costs in 2024, with a proposed grouping it has named Alliance for Action (AfA) on Business Competitiveness.
New green taxes, rising utility rates, a shrinking workforce, expensive raw materials and supply chain crunches will likely continue to hit firms from multiple fronts.
And while markets expect interest rates to soften, the days of near-free loans are unlikely to return, said the apex trade association on Jan 18.
At a dinner it hosted for journalists, SBF chief executive Kok Ping Soon delivered the report card for 2023 and outlined its plans for this year.
On one of the five main tasks he set out, he said: “We are proposing that the Government consider forming an AfA on business competitiveness.”
The Government may not own the switch on interest rates or energy costs, but there is no looking away from firms suffering from rising operating costs, he said.
The former GovTech executive, who also wants more enterprises to lead and own the onus of improving business conditions, hopes to make the discussions open.
“Rather than not addressing it, rather than doing it in closed dialogues, why don’t we grab the issue by the horns and put it out in the business public,” he said.
“Let’s unpack the issue, understand the drivers of this and look for opportunities where we can actually make a difference, not on a broad-based basis, but on a targeted sectoral basis.”
SBF also made the call in a joint proposal with consultancy firm KPMG for the 2024 Budget session, which Deputy Prime Minister and Finance Minister Lawrence Wong will open on Feb 16.
Wage costs, often one of the top cost components of businesses here, along with rent, are expected to continue to surge as policies such as progressive wages for low-wage workers and tighter reins on foreign talent continue.
“These pro-worker policies are all right, but if you look from a business point of view, they do increase business costs,” Mr Kok said.
The representative of 30,000 businesses plans to get views on the cumulative effect of these policies on sentiments and pass them on to the Government.
The association has jumped at the Government’s invitation to be part of its planning for the Johor-Singapore Special Economic Zone, announced with a memorandum of understanding (MOU) on Jan 11, to promote cross-border trade and investments between the neighbours. “We would like to use this opportunity to provide inputs to shaping this MOU,” he said.
Workers are also on the task list. The association wants to support the Green Skills Committee led by the Government to groom talent to help firms meet sustainability and decarbonisation targets.
“We can define some of this competency development work,” said Mr Kok. “Just as we embed digitalisation skills in every other job, we’ll be expecting to embed some of these (green-economy) skills into jobs.”
A development guide, training programmes and a certification process for sustainability officers could be on the cards.
In 2023, SBF organised more than 600 events in its mission to support businesses’ overseas expansion, digitalisation and transformation, and to develop talent.
It had 24 discussions with ministers and developed 10 policy papers on areas including foreign worker policies, business leadership development, sustainability reporting and trade facilitation.
To help businesses address manpower challenges, it held 270 training courses for 3,600 workers, while training and placing more than 500 trainees.
As signs point to a stronger fiscal focus on social programmes in 2024, businesses should brace themselves for less government support, Mr Kok said.
It is time for Singapore’s business leaders, seen as more passive than their global peers, to step forward as a team, he added.
“It comes with a very pro-business, competent, strong government – nothing wrong,” he said. “But we have seen the writing on the wall, we have seen how the operating environment has changed. We know the Government doesn’t have all the answers in the world, and the fiscal environment is getting tighter and tighter.”
Would bigger businesses now step up to help others, for example? In the green transition, would queen bee companies – those with strong industrial expertise and influence – help their suppliers make the cut, he asked.
“I hope SBF can play the role to build this strategic business collective,” he said.