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The Straits Times (Singapore)

<strong>Budget Day is on Feb 17</strong>

Melissa Tan

SINGAPORE'S Budget for the year ahead will be delivered on Feb 17, the Ministry of Finance (MOF) said yesterday.

The Budget is expected to feature measures to ease business costs and raise productivity, but short-term handouts as the economy slows are unlikely to be on the cards.

All eyes are on hot-button topics such as foreign worker levies and coping with the manpower shortage in a tight labour market.

With five weeks to go, members of the public still have time to make suggestions.

The ministry has called for ideas on taxes and public spending for Budget 2012. Feedback can be submitted until Feb 5 via its Budget 2012 website at www.singaporebudget.gov.sg

Already, local businesses have urged the Government to bring in more business-friendly policies as the economy slows.

Discussions have been held with business associations, and companies have released their own wish lists for this year.

Accounting firm PricewaterhouseCoopers suggested cutting the headline corporate tax rate.

Fellow accounting firm Ernst & Young proposed giving small and medium-sized enterprises corporate income tax rebates.

Both recommended easing the rules for the Productivity and Innovation Credit Scheme, which offers tax deductions for companies that invest in improving output and driving innovation.

The Singapore Chinese Chamber of Commerce and Industry said its members are hoping for a corporate income tax rate cut and a review of the foreign worker policy, as well as incentives to encourage firms to employ low-income and older workers.

The Singapore Business Federation's survey of members yielded a similar wish list, with firms seeking more help with hiring.

But, going by earlier comments, companies and workers ought not to expect as much short-term relief as in the Budget of 2009.

That was when Singapore faced a 'once in a generation' recession, Prime Minister Lee Hsien Loong said earlier this month, signalling that this year's Budget would be different. People would have to take this year's slowdown in their stride, he said.

Deputy Prime Minister Tharman Shanmugaratnam has also said that this year's Budget must focus on stepping up long-term economic restructuring efforts instead of on short-term help.

He said earlier this month that he believed Singapore was facing at least two years of sub-par growth.

Mr Tharman, who is also Minister for Finance and Minister for Manpower, added that the Government would help companies to upgrade, boost productivity and eventually raise wages.

He will deliver the Budget statement in Parliament. A live webcast will be hosted on the Budget 2012 website.