Tan Kin Lian's Blog: High cost of doing business

Monday, January 03, 2011

High cost of doing business

I experienced the high cost of doing business in Singapore. I had to pay a professional fee of $3,500 for an engineer to certify that the renovation to my premises is safe. I saw the drawing done by the engineer. It is similar to the drawing that done by me to ask for quotation. A fee of $500 would be more than adequate.

My staff faced a lot of trouble in applying for a work permit through the online process of the Ministry of Manpower. Each application took more than 10 hours of my staff's time to go through the many stages of the complicated process. Many telephone calls have to be made to seek clarification to go though the computer system.

The application for utility supply to the premises also took many hours. The process is complicated. Many telephone calls have to be made to the utilities company and the building developer to get information for the application. Many telephone calls are not answered.

The time spent by my staff has to be reflected in my cost of doing business. My staff do not work for free.

Each government agency and privatized company, operating under a near monopoly, can impose its costly requirements in time and money on the public, but the government leaders must realize that they add to the cost of doing business, which has to be covered by higher prices to be paid by the citizens.

The situation has become very bad in recent years, and is exacerbated by the high property prices, also an outcome of government policies, which adds to the cost of doing business and the cost of living. Matters have really got out of hand.

Tan Kin Lian

4 comments:

C H Yak said...: The irony is such costs are pushed to you while the Govt & civil service enjoys the "fruit" of bad productivity...they declared more than 3 mths bonus.

At the same time, they cried for Singapore to boost national productivity by 2%. Another irony.

If all the unncessary rules are cut and non-productivity by the public sector is ironed out, I think productivity would be boosted by 6% .... LOL.; January 03, 2011 8:50 AM
Benjamin said...: Dear Mr Tan,

Accounting/audit/tax firms are charging too much as well. A local tax consultancy wanted to charge me $600 to answer some simple tax queries from IRAS. I have two SPV companies and that is $1,200. The queries were similar in nature and I provided all the answers. This was over and above the annual tax fee charged per SPV. For many small companies, all these outsourced costs amount to a big sum every year.

Benjamin; January 03, 2011 9:51 AM
Tan Choon Hong said...: The high cost of doing business also translates into difficulties for startups that can grow the economy in new directions. In Korea, Hong Kong and Taiwan, thousands of small businesses operate out of low-rent premises scattered all over the cities and countryside providing affordable goods and services. This creates depth and diversity in the economy, and greater resilience to weather any downturn.

However, having too many free spirited individuals with the means to survive on very little, poses challenges for a government bent on control, and could be the seeds of its own destruction. Maybe that's why artists especially writers and painters, who throughout history, have been the custodians of freedom, have some difficulty finding affordable premises to flower and threaten the established order.; January 03, 2011 3:32 PM
Unknown said...: "The free market encourages renovations at the cheapest cost possible and hence may introduce hazards to the office premises. I feel this regulation is reasonable in order to protect consumers from unscrupulous renovation contractors.

Similar for work permit. I am glad the government is stepping in to regulate the employment of foreigners and I think it is a good step towards a more protected workforce for locals.

Someone already suggested reasons for the thorough checks for utility supplies and it definitely curbs the dishonesty that the free market breeds.

I agree with you completely that government agencies operate under a near monopoly. But I'm sure all of us feel safer and sleep better at night despite the high costs."

Would these have been suggested if these regulation weren't around in the first place? Free market may have its problems and regulations come with a set of its own. We can't have the cake and eat it. Without a bottom-line and profitability, it will be hard to encourage productivity in the public sector.; January 03, 2011 4:18 PM