Speech by Minister for Transport, Mr Chee Hong Tat, for ASME Entrepreneur of the Year Award (EYA) Presentation Ceremony

Mr Ang Yuit, President of the Association of Small & Medium Enterprises (ASME)

Dr Chan Siew Luen, President of Rotary Club of Singapore

Mr Tan Ching Hwee and Mr Alan Tan, Co-Chairman of the Entrepreneur of the Year Award 2024 Organising Committee

Distinguished Guests

Ladies and Gentlemen

Introduction

1. Good evening. I am glad to join you to celebrate the achievements of our home-grown entrepreneurs, who have made significant contributions to Singapore's economy and workforce. Tonight, we honour 18 winners, and I would like to extend my warmest congratulations to all of them!

Importance of SMEs to Singapore's Economy

2. While we attract and anchor MNCs to invest in Singapore to provide business opportunities for our SMEs and create good jobs for our people, we will continue to groom local start-ups and companies. And we will help our companies to scale up their operations and expand their presence in Singapore and overseas.

3. These two moves are not at odds with each other, and are in fact complementary and mutually reinforcing. MNCs can benefit from a strong base of SMEs suppliers and partners. SMEs can also grow by leveraging on the knowledge and business opportunities from the MNCs.

4. We want to help our companies to be able to expand beyond Singapore, and tap on the growth opportunities and resources from the region. We also want to encourage more collaboration between our companies, and first is of course with our companies, and second with partners from overseas. Staying open and connected with the world is a better approach, compared to closing our doors and looking inwards, blocking the flow of international trade, investments and talent. For a small country like Singapore, pursuing inward-looking policies will lead to disastrous consequences for our businesses and workers.

5. I described this in an earlier speech when I was at MTI, as broadening our focus from what is "Made in Singapore" to include what is "Made by Singapore", which can be from here or overseas, and also what is "Made together with Singapore" to help our companies expand their options and grow in tandem with the region.

Government Remains Committed to Support SMEs

6. To help our SMEs, the Government has put in place a $1.3 billion dollar package, the Enterprise Support Package, as part of Budget 2024. This includes corporate income tax rebates; adjustments to the Enterprise Financing Scheme to help businesses access loan financing; and an extension of SkillsFuture Enterprise Credit to support transformation and skills upgrading efforts.

7. To enable SMEs to seize opportunities and remain competitive in the digital economy, IMDA's SMEs Go Digital programme provides resources such as Industry Digital Plans and the Chief Technology Officer as a Service platform. To date, the Programme has supported more than 90,000 companies.

8. To further support enterprises and workers in harnessing digital technologies to drive growth, we also launched the Digital Enterprise Blueprint (DEB) recently. The DEB focuses on the next bound of digitalisation for our SMEs, empowering enterprises to scale faster and supporting them to upskill their workers to make full use of digital capabilities. The DEB is expected to benefit at least 50,000 SMEs over the next five years.

Reducing Regulatory Burden and Cost for Businesses

9. Beyond providing resourcing support, we know businesses also need a conducive ecosystem and pro-enterprise environment to thrive. One important aspect of creating a business-friendly environment is minimising red tape, reducing compliance burden and lowering of our regulatory costs where possible. These will help to make the process of businesses transacting with the Government better and faster.

10. To give our pro-business efforts a further push, the Government has set up an inter-ministerial committee, chaired by DPM Gan Kim Yong, to review inter-agency regulatory issues faced by businesses. It will complement the work of existing regulatory review platforms such as MTI's Pro-Enterprise Panel. I am glad to be part of this committee. Some of you have interacted with me in my different capacities, and you know that I have always been a passionate advocate for Government and businesses to work together on rules review.

11. At MOT, I have set pro-business rules review as a priority area for my colleagues. Having done the same at MOF, where we worked with SBF and ASME to introduce Tender Lite and now work together to facilitate prompt payment by our agencies to help SMEs when they transact with the Government.

12. Let me recap some of the MOT examples which we had previously announced.

a. The Maritime Port Authority (MPA) has waived the need for security deposits and banker's guarantees for billing parties assessed to be of lower credit risk. This will benefit about 80% of MPA's existing billing parties, including many SMEs, and it will help to free up their cashflow by more than $20 million each year.

b. We also worked with other government agencies, such as Customs and MTI, to streamline the land transshipment procedure, so that companies transshipping goods via land checkpoints will only need to apply for one permit instead of two. When implemented in the first Quarter of 2025, it will help companies save time and save money. We estimate the cost savings aggregated across the industry to amount to $2 million annually.

13. Today, I will share three more examples from MOT family:

14. First, security deposits required by LTA. Currently, contractors of road and rail infrastructure projects may require road infrastructure modification works adjacent to or near their projects. These works are typically undertaken by LTA. In such cases, the contractors will have to submit a request to LTA. LTA will then ask its term contractors to carry out the works. After completion, LTA will recover the cost from the project contractors.

a. To insure itself against the risk of defaults, LTA requires contractors requesting for road infrastructure modification works to submit a security deposit before the work commences.

b. LTA has reviewed this, and since end of last year, they have removed the collection of security deposits for contractors which have other ongoing LTA projects, as the risks of default are minimal.

c. With this change, project contractors no longer need to submit security deposits. They avoided incurring time and money to provide more than $8 million worth of security deposits in the past 9 months, and we can expect the amount to grow over time. And this has helped contractors with their cashflow.

15. Second, fees for electric vehicle chargers. We enacted the Electric Vehicles Charging Act in December 2023 to ensure the safety of our EV charging infrastructure. All EV chargers must be approved and registered by LTA before they can be used in Singapore.

a. Applicants are subject to a fee upon charger registration, and this is to allow LTA to recover the cost of operating the regulatory regime.

b. We have received feedback that the registration fee for EV chargers is too high for industry players who are only using a charger for short periods. For example, industry promotional events like trade shows or exhibitions. I agree.

c. To lower the regulatory costs for such short-term use, LTA will waive the registration fee for chargers that are used for short-term purposes up to 2 months, and this is more than enough for trade shows and exhibitions. This will result in savings of up to $600 per charger.

d. For a company who is doing exhibitions and trade-shows, the cost savings could add up to a few thousand dollars per event.

e. We will start to implement this exemption by September 2024, after we have made legislative amendments.

16. Third, streamlining the approval process for cargo trackers that are used by air cargo shippers.

a. Air cargo plays a crucial role in global supply chains. Before goods are loaded onto the planes, air cargo shippers typically will have to track their shipments using portable electronic devices known as cargo trackers.

b. There are more than a thousand different models of cargo trackers in the market today and the number continues to increase. This is a good thing. But this means that local airlines are currently required to seek approval from CAAS for the use of each new model of cargo tracker.

c. The approval process previously can take up to two weeks. As a result, some time-sensitive shipments that are using newer models of cargo trackers had to be turned away.

d. CAAS has been working with our airlines to streamline the process, allowing most of the assessment to be done by the airlines in accordance with industry standards and established evaluation procedures. They have shortened the approval time using this approach from 2 weeks to 3 days.

e. I told CAAS it is a good start but I think we can go further. Let's find a way to reduce this from 3 days to zero days by removing the need to seek approval from CAAS for new cargo trackers. Could we give a one-off approval for the companies and their evaluation processes, and once we approve this, we let them decide subsequently on the individual cargo trackers?

f. CAAS can do spot checks from time to time, but I am confident this arrangement can work because the companies would share the same interests to ensure safety by only approving and using proper cargo trackers.

g. CAAS has agreed to make this change, and we plan to have the new arrangement in place by August 2024.

h. This will reduce the administrative burden, processing time and uncertainty for our businesses, and also helps to enhance Singapore's position as an air cargo hub.

i. It is a win-win outcome, good for businesses and good for the Government.

Working Together as A Community

17. These examples I have shared would not be possible without the strong partnership between the Government, our businesses and Trade Associations and Chambers (TACs) like ASME. Thank you for working with us on these rules and process improvement projects.

18. Businesses that regularly interface with government agencies know where are the pain points and areas for improvement, but the businesses on their own do not have the authority to change rules and regulations.

19. The Government has the levers to change rules and processes, but we may not know where to start and cannot make the changes effectively without the feedback and inputs from our business community.

20. This is why we should adopt a partnership approach, for government agencies and our business community to work in collaboration towards a win-win outcome which will benefit our companies and enhance Singapore's competitiveness.

21. Such an approach is also in line with what we hope to achieve under Forward Singapore, by bringing together different partners in our society to jointly tackle common challenges and achieve our shared objectives for Singapore and Singaporeans.

22. Each rule review change on its own may not seem very significant in scale or scope. But they do add up, and the cumulative benefits can make an impact. And with each change, we further strengthen this spirit of collaboration between the Government and industry and improve our operating environment. It also allows us to understand each other's perspectives, and reinforce in our agencies and public officers that it is important for the Government to be pro-business, and it is part of our mission to help businesses to succeed and do well.

Conclusion

23. To conclude, I would like to convey my heartiest congratulations once again to the 18 award recipients this evening.

24. You are dedicated to enhancing your businesses and have taken bold steps to innovate your products and services, and to grow new markets. Please keep up the good work, and continue to inspire others to follow in your footsteps.

25. I wish everyone a pleasant evening ahead. Thank you.