During his round-up speech for the Budget debates, Finance Minister Lawrence Wong touched on Singapore’s decarbonisation efforts and the government’s support for small and medium enterprises (SMEs) in Parliament on Mar. 2.
Wong said that not withstanding near term uncertainties in the external environment, “our overall prospects are good”.
Therefore, Singapore is “operating from a position of strength” and can make some “bold moves” now so as to position ourselves well to seize opportunities ahead.
Singapore’s green transition
One such decisive step is for Singapore to accelerate the decarbonisation of the economy and achieve net zero by or around mid-century.
In an interview with CNBC after the Budget announcements, Wong described Singapore’s carbon tax as “one of the most comprehensive” carbon taxes in the world, covering something more than 80 per cent of carbon emissions.
Besides carbon tax, he assured in his Budget round-up speech that Singapore will continue its research and development efforts in emerging technologies such as carbon capture and hydrogen.
Wong also said that these moves will “strengthen Singapore’s position as a choice destination for new investments in the green economy and ultimately create many more good jobs for Singaporeans.”
At the same time, the government will “step up training efforts to equip Singaporeans with the right skills to take on these new green jobs”.
On making too many changes at the same time
Wong also addressed the concerns expressed by PAP Members of Parliament (MP) Seah Kian Peng and Denise Phua that the government may be making too many changes at the same time in Budget 2022.
The worry is that the adjustments to foreign worker policies, progressive wages, Central Provident Fund (CPF) and carbon tax laid out in the Budget would add to cost pressures for businesses at a time when demand is still weak for certain segments of the economy.
“I understand these concerns and that is why we are continuing to provide significant support to the harder hit sectors including through the small business recovery grant,” said Wong.
He also pointed out that new requirements, such as the carbon tax increase and changes to S Pass qualifying salary, will be staggered over three phases.
“We are announcing these moves well ahead of time so that businesses can plan ahead and make the necessary adjustments,” Wong added.
Support for SMEs
Wong also noted that the government’s support and grant schemes for companies are designed to benefit SMEs the most.
“In this budget, 80 per cent of the payouts from the new and enhanced schemes will flow to SMEs,” he said.
SMEs which are actively training their workers and increasing their productivity would also receive significantly more support under the Productivity Solutions Grant (PSG).
In the coming years, as the government makes these policy moves, Wong said that the government will “continue to pay very close attention to SMEs”.
The government will also continue to help SMEs upgrade and maintain a vibrant SME sector in Singapore, he added.
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