24 Aug Most help should go to strategic and efficient sectors, instead of ‘hardest hit’
On 17 August 2020, the Deputy Prime Minister Heng Swee Keat released a ministerial statement detailing financial aid for Singaporean businesses, in particular the ‘hardest hit’ sectors. While concurring with the Government’s focus on knowledge-based sectors FMG CEO Devadas counters that these sectors should receive wage support, instead of enterprise schemes, to send a unified message on the importance of human capital talent in Singapore:
“The Minister of Finance is delivering well-intentioned but mixed messages.
We agree that critical sectors which are strategic such as Aviation should receive strong support. But Tourism is not a strategic sector in that it can rebound more easily, being low and semi-skilled and overcrowded with Hotel capacity as it is. More germane is the principle that ‘hardest hit will receive the most support.’
We agree to this only in so far as it applies to strategic and efficient sectors. Construction, Marine and Offshore and Hospitality are examples of sectors hurting badly but which should not receive subsidies at all because they have low productivity, overreliance on foreign labour and still apply inefficient processes and have a few big players but also highly fragmented and atomised SMEs segment that needs consolidation to be efficient and productive.
In contrast, the government’s emphasis on knowledge-based sectors which will become essential in the recovery is the right step. However, support is in terms of enterprise schemes. But these are human capital talent-based sectors and should benefit from higher wage subsidies or we may end up with a hollowing out of value-adding talent.
The principle of ‘never letting a crisis go to waste’ must prevail.”