Straits Times: Lively debate over Jobs Credit plan

Budget debate

Opposition MP’s doubt that it can save jobs spurs spirited challenge


SIX MPs – five of whom were from the labour movement – took opposition MP Low Thia Khiang to task yesterday over his criticisms of the Jobs Credit scheme.

In a lively exchange during the debate on the Budget Statement, the six took turns disputing the Hougang MP’s critical comments on the wage-subsidy scheme.

An abridged version of this was repeated a few hours later when Nominated MP Siew Kum Hong agreed that the scheme would not save jobs.

At one stage, even labour chief Lim Swee Say jumped in to defend the scheme.

On his part, Mr Low’s position on the scheme appeared to shift as the 20-minute exchange wore on.

While he started by expressing doubt over the scheme’s ability to save jobs, somewhere in the middle of the exchange, he stated plainly: “I don’t think it works.”

The cut and thrust of the debate was sparked by Mr Low questioning whether the $4.5 billion initiative would be effective in staving off retrenchments.

The proposed scheme gives bosses a 12 per cent cash grant on the first $2,500 of wages for every local resident worker on their CPF payroll. The grants are paid quarterly.

Mr Low questioned if this system would save jobs in companies where sales could not sustain overhead costs.

“Between waiting three months for $900 cash rebate from the Government versus saving $7,500 immediately by retrenching a worker, which choice does the Government think a struggling employer will make?” he asked.

He then suggested the scheme will simply benefit profitable companies that have no intention of retrenching workers.

Using supermarket operators Sheng Siong and NTUC FairPrice as examples, he asked: “Are we using our reserves to increase the profits of profitable companies in this downturn?”

Other MPs were quick to respond, pinning him down on whether he believed the scheme had no benefits.

Mr Yeo Guat Kwang (Aljunied GRC) asked if Mr Low was aware that the savings from the scheme will spur Sheng Siong to open more outlets, each one creating 80 more jobs.

Ms Jessica Tan (East Coast GRC) asked if he was aware that the scheme was targeted at making Singaporeans more attractive to employers.

Mr Low maintained a tone of scepticism until Mr Heng Chee How (Jalan Besar GRC) asked him pointedly if he thought the subsidy would not reduce the risk of retrenchment. Then, his scepticism turned into full-blown opposition.

Mr Low repeated his scenario of a company waiting three months for the grant versus retrenching the worker immediately and said: “How does it work? I don’t think it works.”

To cap off the exchanges, labour chief Lim upped the ante by throwing down this challenge: “If the choice is between implementing a $4.5 billion Jobs Credit versus a 9 per cent cut in CPF, you cannot have both…which one will the Workers’ Party go for?”

The WP chief said he would never cut CPF and would look for other cost-cutting options.

The tangle ended there, only to be revisited later – by a slightly different cast of MPs – when Mr Siew called the scheme an “expensive band-aid” which would have only a small and temporary impact on job losses.

Mr Inderjit Singh (Ang Mo Kio GRC), Ms Indranee Rajah (Tanjong Pagar GRC), Mr Zaqy Mohamad (Hong Kah GRC) and Mr Heng Chee How questioned his assertions.

Mr Zaqy, for instance, noted that Mr Siew did not mention any statistical indicators and questioned the basis on which he made his points.

To all, Mr Siew repeated the arguments in his speech that the Jobs Credit would not stop a company suffering sharp losses from firing workers.

“I may be wrong. I wish I was wrong but I do hold that opinion,” he said.

Then, when asked by Mr Heng if he had other suggestions, he replied that he did not, but challenged the Government to find better use for the money.

“Can you apply the $4.5 billion to better use in helping Singaporeans? That is the question I pose and obviously I do believe that you can,” he said.

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