SINGAPORE (Jan 12): Business owners who want the government to do more about rising costs in Singapore need to be responsive to changes in the global economy, says Finance Minister Heng Swee Keat.

Speaking on Tuesday at UBS Wealth Insights 2016, the Swiss bank’s annual outlook event for its wealth management clients, Heng assured the audience that the government had no intention of pricing the country out of the global market.

“At the same time, we need to allow market forces to shape costs,” he says.

Heng notes that the inflation has been within the Monetary Authority of Singapore’s target range, implying that costs are by no means rising at unmanageable rates.

“The way to then go about building the competitiveness of our firms is to look at structural changes,” he adds. “There’s a whole range of schemes that businesses in Singapore can tap to undertake structural changes.”

In response to concerns about labour constraints, Heng emphasised that the local labour market was not shrinking – just growing at a slower pace.

“This is very consistent with the restructuring of the economy.”

He points out that even in markets such as China, where labour is still relatively cheap, companies are recalibrating their use of manpower.

Foxconn Technology Co, for instance, targets to achieve 30% automation in its Chinese factories by 2020.

“This is one major trend that we not only cannot avoid, but I hope that Singapore businesses will be among the best in the world in making use of technology to raise our productivity,” Heng continues. “If we resist that move, in five to 10 years' time, we will be way behind.”