S'pore panel advises major busines moves

S'pore panel advises major busines moves

SINGAPORE (AFP): A high-level committee on Wednesday recommended sweeping business cost-cutting moves worth an estimated S$10 billion (US$6.06 billion) a year to help Singapore ride out its recession.

The government-business Committee on Singapore's Competitiveness (CSC), rejecting currency depreciation as an instrument to spur growth, called for a 15 percent cut in total wage costs as the centerpiece of its plan.

It also proposed basic strategies to boost Singapore's competitiveness as a manufacturing, finance and business center in the 21st century.

"We face intense competition," committee chairman Trade and Industry Minister Lee Yock Suan said one day after government economists declared the island technically in a recession after a 0.7 percent economic contraction in the third quarter.

"When the region recovers, our competitors will be leaner and fitter," he told a news conference.

The committee also called for reductions in levies on foreign workers, lower land and factory rental charges by government- linked developers and managers of industrial parks, and cuts in utility charges.

It also urged the government, which will announce its response in a parliamentary debate later this month, to reduce or extend rebates for corporate and personal income taxes in fiscal year 1999.

The proposed $10 billion in business costs savings would be equivalent to about seven percent of Singapore's gross domestic product.

The main element is a proposed reduction in employers' contributions to the state-run pension fund.