By Benson Ang
Productivity: Several productivity initiatives were announced in the Budget unveiled by Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Feb 17.
Pressure: In Parliament yesterday, some MPs voiced concerns that the initiatives may not work at ground level.
Possibility: Some firms show productivity improves the way they operate
We need to watch the pace of economic restructuring because small and medium enterprises (SMEs) won't be able to keep up if it is done too fast.
Mr Inderjit Singh (below), MP for Ang Mo Kio GRC, told Parliament yesterday that he was worried that SMEs are facing a double whammy of rising costs and a tightening labour market.
They are already fire-fighting high costs like rising rent, so measures aimed at boosting productivity may not benefit them.
Second, SMEs are finding it harder to get cheap foreign labour.
Mr Singh said: "In the past, the Government was too liberal with our foreign worker policy and opened the gates for too many foreign workers to come in.
"Now, we realise that economic and social problems have been created, (so) we are taking the other extreme and completely turning off the tap."
He added that companies take time to adjustand the Government should be more realistic of the pace of such economic restructuring.
He suggested the Government review cost-reduction to minimise upfront costs for companies so that Singaporeans can earn higher incomes.
This could involve looking into the goods and services tax, foreign worker levies and taxes on utilities and transportation.
Said Mr Singh: "The Government should review all of these to see which could be removed or adjusted..."
This article was first published in The New Paper.