FMG Highlights: CEO Devadas Krishnadas moderates the SICC Post-Budget Breakfast Talk 2019

Date February 26, 2019

On 26 February 2019, FMG CEO Devadas Krishnadas moderated the SICC Post-Budget Breakfast Talk following the remarks from a line-up of expert speakers:

– Mr. Irvin Seah, Executive Director for Economics and Currency Research, DBS Bank

– Dr. Chua Hak Bin, Senior Economist, Maybank Kim Eng

– Mr. Rohan Solapurkar, Tax Partner, Deloitte & Touche LLP

The featured speakers shared concise analyses of the key measures, tax changes and policy directions of Budget 2019 and how they would impact businesses in Singapore.

Insights from our Chief Executive Officer:

1. “It is not possible to talk about low wage tiers and high wage tiers in the same context. Singaporeans who expect international wages must be prepared to face international competition. However, as a large proportion of Singaporeans are not competing on an international wage scale but on a domestic wage scale within the context of the domestic workforce, the government must view that category differently. This is because those competing domestically are one step away from the bottom line. There is no breaking point between that and falling below subsistence. Hence, I think that is a category that we need to be cautious and careful about. We do not want to turn them into an underclass which is to be continually dependent on government funds and grants. That will have inter-generational negative effects.”

2. “We have to be very conscious of the fact that in a very digitalized world, the locational advantages of Singapore degrades in terms of the competitive virtues. Unless we get a handle on business cost and operating cost, all the other virtues that have stood us very well in the previous decades will not do as well in the future.  In fact, they will become disincentives and Singapore may become a place where people simply come to retire. Although this is something we should be careful of, the government still has some levers to manage that.”

3. “There is a distinction between a trade war and a war on trade. There is a trade war between the US and China but there is not yet a war on trade. Global trade is still growing on an aggregate level and trade between these 2 countries is used as a weapon to get geopolitical maneuvering. What we should not conclude is that we have entered a space similar to the end of 1920s – early 1930s where actually aggregate trade is contracting, something we should be more worried about rather than this spat between the US and China.”

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