Singapore GE 2020 – What’s in store for Businesses

Singapore GE 2020 – What’s in store for Businesses

1350 900 Neera Gupta

Singapore elections are around the corner, and the stakes are even higher. Multiple factors will shape the opinion of voters, and many of these are first-time-ever factors. One, there was never such a disruption in the Singaporean economic activity as has been triggered by the COVID-19 crisis. Two, the preceding year’s GDP growth rate was the lowest in a decade. Three, the economy is set to contract in the current financial year, and the ruling party’s sops and subsidies may not be enough to keep businesses afloat.

All that said, let’s figure out what businesses have at stake and the key issues facing them that the warring political parties must address, not only in their rhetoric but also by prudent decision-making.

The Government & COVID-19 Situation

First things first. The city-state presently has some 5.7 million inhabitants, of which nearly 3.5 million are Singaporean citizens. In the latter figure, many are business owners. This community was already reeling from a subdued economic activity even before the n-coronavirus pandemic struck. The ruling People’s Action Party, popularly known as PAP, did not delay its response when COVID-19-induced lockdowns hit businesses’ revenues. Consider this. The government came up with total spending of S$ 93 billion to contain the pandemic’s financial fallouts. In as many as four budgets within a short span of four months, the government explicitly said that it will not shy away from intervening in a timely and effective manner. In fact, ailing businesses have even been supported by defraying up to 75 percent of wage costs. It has an upper limit of $4,600 per month, and the support will last until August.

As per Minister of Trade and Commerce, Mr. Chan Chun Sing:

This election is not about the survival of any particular opposition party, or how many seats the PAP is going to get. This election is really about how we get through this.

The Opposition & Their Campaign

The opposition parties are hitting the right chords in their respective campaigns. While the relatively newer Progress Singapore Party (PSP) has chosen ‘You Deserve Better’ as its slogan for the upcoming elections, its secretary-general, Tan Cheng Bock, has stressed on the rising cost of living for common people as the key issue for polls. The party has maintained that the ruling PAP has been unable to acknowledge and effectively address the underlying core issues that ail the economy. There is also a rallying call in PSP manifesto for ‘the economy to serve people and not the vice versa.’ Having divided the manifesto into three parts, PSP also maintains that the inundation of the city-state by foreign workers has resulted in lower wages and has also aided price rise due to rising demand for goods and services.

On the other hand, the main opposition party, The Worker’s Party, has been unequivocal regarding its agenda to win in the upcoming polls. One, the party has clearly outlined its disapproval of ruling party’s proposal to hike the Goods and Services Tax (GST) to as high as 9 percent by the year 2025 by saying that there can be alternative ways to boost up revenues rather than hitting the business community by levying higher taxes. Another key campaign promise of Worker’s Party that can have a serious impact on the economy and thus businesses is the introduction of a national minimum wage of $1,300 a month. Higher disposable income in the hands of those earning less than this amount can certainly boost demand and help businesses in the near-term.

The Ruling Party and The Road Ahead….

Having discussed what the opposition has to offer to Singaporeans, let’s also take a quick glance at what the ruling party brings to the table. Indeed, their manifesto must concern the business community, given that the PAP has ruled the city-state ever since independence, and it is eying a successive 15th term in the 2020 polls. The secretary-general of PAP, Lee Hsien Loong, who heads the present government as the Prime Minister, is quite clear about the party’s stance. At the launch of PAP manifesto, PM Lee laid more stress on fighting the pandemic than any long-term proposals for the economy. While the opposition parties are stressing much on economic reforms, PAP has focused relatively on near-term goals.

PM Lee has talked of ensuring the safety and well-being of all Singaporean inhabitants, including migrant workers, during COVID-19 times. Secondly, he has talked about giving adequate support and care to all people during the prevailing uncertainty. Thirdly, he has also made mention of transforming the economy. In the last strand that can shape the business community’s attitude, PAP has talked of its long-term plans to build a better city-state. Another interesting element to note in the PAP approach to 2020 polls is that party’s new faces that will contest to secure parliament seats consist of as high as 11 women; in 2015, this figure was 5. It may be the party’s strategy to win the trust and vote of women entrepreneurs who would like to see more women MPs to address their issues properly and promptly.

Source: Freepik

GE2020 Election Debate :The Ruling Party & The Opposition

All the candidates from the opposition party and the currently ruling party debated on three major issues which Singapore is presently dealing with – rising unemployment, job creation for young & old Singaporeans, and improving the quality of lives of Singaporeans amid the crisis times.

Amid virus the rising issues of unemployment has gained lot of traction during election debate. For businesses, this community brings benefits like reduced wage outgo and superior skills in certain technologies. As per opposition party, there are more that 100,000 local unemployed PMETS (which later refuted by Ministry of Manpower that as per June 2019 reports there are 39,000 local unemployment PMETS) and it is foolish to employ more foreign workers.The opposition parties have made it clear that the present system of foreign workers employed with many businesses would see an overhaul should they come to power.  To be precise, the PSP has even said that the Singapore’s Comprehensive Economic Cooperation Agreement (CECA) with India must be rethought as it allows Indian nationals to easily find jobs in Singapore, thereby sidelining their own citizens.

However Dr Balakrishnan who is contesting from Holland Village – Bukit Timah GRC, mentioned that PAP’s central focus is to create new and save jobs. The current government has rolled out immediate relief schemes to save jobs such as Job Support Scheme (JSS) and Self-Employed Person Income Relief Scheme. Under the JSS payout more than 140,000 employers will received S$4 billions to create more job opportunities and to save the current jobs. 

Opposition parties have also raised a concern that the government’s financial aid announced in the wake of the coronavirus crisis is a direct bailout of large government companies. It does not address the needs of SMEs, which the opposition spokespersons have alleged in debates, are ‘operating in the ICU.’ High rental costs for SMEs have been a regular mention in poll debates, and more financial support for SMEs is being demanded by the opposition owing to the hit on their cash flows due to COVID-19. Even the rising unemployment has been a major poll issue with the opposition blaming the ruling party’s failure to create enough jobs for local Singaporeans.

Dr Balakrishnan addressed the above issues that Singapore government has implicated corporate tax rebates to keep the SMEs afloat and provided grants to SMEs to digitally transform. Also cited that it will create growth opportunities in various sectors like healthcare, infocomm and other professional services. 

But What Does It Mean For The Businesses?

Campaign promises of the parties aside, let’s also note some elements that concern businesses the most. One key thing here is the revival of demand, or better said, the revival of the revenue stream of businesses. Some sectors, including tourism and hospitality, are the most adversely hit by the pandemic wave. Indeed, the slowdown in these industries has also damaged the revenue stream of virtually all other businesses. Another element is the operating cost for businesses. Although the government has helped the business community through the wage subsidy measures as cited above, the support may not be available once the scheme expires next month. Costs for businesses also include rentals that can go way high and even unbearable, given the current pandemic-induced slowdown. Most landlords comprise state-linked companies, and there are more than just property tax rebates to landlords that will eventually benefit the tenants that businesses seek. In fact, they hope for a tangible drop in rentals.

As cited by PM Lee, the Singapore Economic Development Board (EDB) could rake in as high as S$13 billion in investments. It surely reflects the trust that global investors hold in the city-state’s economy. Although the coronavirus hasn’t subsided completely, businesses and employees are reverting to work with high spirits. Plus, many businesses have realized that they will have to focus on other trading countries than China alone to have enough economic activity when exports to China have seen a downfall. From adapting to remote working culture to focusing on means to improve productivity, businesses are ready to reinvent.

Indeed, the upcoming polls will be a litmus test for all political parties. It is so because the looming contraction in the city-state’s economy may be the worst-ever since independence and issues like the foreign workers taking over the jobs of locals and high operating costs for SMEs were never as weighty as they are now. Also, the pandemic has limited the scope of poll debates, and the focus has squarely been on how businesses will recover from the losses they will sustain until the crisis abates. Business owners are all set to weigh the poll promises of various parties and then cast their votes for the most deserving candidate. Let’s wait and watch how everything plays out.

Polling Guidelines: Since the upcoming elections are to be held amid the pandemic crisis, there are a few things that voters must be aware of before realizing their right to vote.

  • Coronavirus-infected individuals and those quarantined cannot vote in the 2020 polls.
  • The Election Department (ELD) has confirmed there will be a special hour (7 pm to 8 pm) for voters serving stay-home notices, those on medical leave, and those who display fever of above 37.5 degrees Celsius.
  • Regular voting hours are from 8 in the morning till 7 in the evening
  • All voters will have to wear mask and maintain 1m social distancing

However, ELD has sought cooperation from voters to only exercise their right during the time allotted to them. As we all know that voting is compulsory for all who have their names in Registers of Electors, it’s best to make the best use of it. Still, those unable to vote due to being unwell can have their names restored to Registers without paying any penalty.

Neera Gupta

Neera Gupta is the Founder and Director of Kit Kat Events & Marketing. She has more than 13 years of experience in the Events industry with global companies such as AMEX, CWT, IQPC. Along with that Neera is TV host, Emcee, Champion Networker, Marketing Guru, Women Empowerment Ambassador, Charity worker and Author of a bestselling novel, ‘Careful What You Wish For’. Did we mention she is also a dentist!!!

All stories by:Neera Gupta
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Neera Gupta

Neera Gupta is the Founder and Director of Kit Kat Events & Marketing. She has more than 13 years of experience in the Events industry with global companies such as AMEX, CWT, IQPC. Along with that Neera is TV host, Emcee, Champion Networker, Marketing Guru, Women Empowerment Ambassador, Charity worker and Author of a bestselling novel, ‘Careful What You Wish For’. Did we mention she is also a dentist!!!

All stories by:Neera Gupta