Straits Times: Is scheme to save jobs truly effective, asks Low

Budget debate

Opposition MP Low Thia Khiang (Hougang) says the Jobs Credit scheme is not targeted enough. ST FILE PHOTO

EXCERPT of the exchange between Opposition MP Low Thia Khiang and the PAP MPs over the Jobs Credit scheme:

Mrs Josephine Teo: Does he agree that the Jobs Credit scheme will help reduce joblessness and create an incentive for employers to hire Singaporeans first? Does he not agree that the best support for families is a job for the breadwinner…Does he not support the Government going all out to save jobs for our workers, including using our past reserves?

Mr Low: Needless to say, I support the Government’s initiative to help Singaporeans stay employed. But being the Government, when you are spending the past reserves, you have to consider what is the effect of the expenditure, what is your target. My question is, does Jobs Credit necessarily achieve the target as intended? Can we have some figures? If not, then why are we spending past reserves to do something which is not certain?

Mr Heng Chee How: When he says the Jobs Credit scheme is of doubtful effect, does he not also agree that when companies are facing difficulties…pay is in fact recognised as an important component of cost, and when the Jobs Credit comes forward to subsidise the payroll, it actually relieves the pressure on the company and reduces the risk of retrenchment and increases security of jobs for workers?

Mr Low: I agree in principle, but the Jobs Credit doesn’t do the job of really saving the wage cost of the company. Given the current circumstances, it’s not so much of the cost but the demand. When the company has no demand, no business, and your wage credit scheme is such that it’s just neither here nor there, how does it work? I don’t think it works.

Ms Jessica Tan: Is (he) aware that Jobs Credit is actually targeted at Singaporeans, so organisations large and small that hire Singaporeans benefit and Singaporeans benefit. I have spoken to small companies and they said this is an immediate relief to actually keep the capability.

Mr Low: It does somewhat help certain companies. But my question is how effective it is and why (do) you need to spend the reserves for something which to me is not really effective. I have spoken to some companies as well. They would rather have credit facilities that ease their cash flow (and) go on with the business to keep their employees, rather than having Jobs Credit. Yes, it’s for Singaporeans, but when you are talking about using the past reserves and expanding on government expenditure, it’s prudent to look at what we want to achieve, whether the money is well spent to achieve the result.

Mrs Teo: Is he saying that because the Jobs Credit scheme has not proven its effectiveness, it is better for us not to have the scheme and forget all about it?

Mr Low: Yes, I believe that with Spur and other assistance schemes that are available with the credit facility, we should be able to keep viable businesses afloat. We could have used the Jobs Credit scheme to help those who are retrenched. It’s direct help for them and at the end of the day, we have to face the fact that, whatever schemes you have now, be it Jobs Credit or Tripartite (guidelines on managing excess manpower)…there are retrenchments. We can’t stave off retrenchments.

Madam Halimah Yacob: (Is he) saying it is better to help workers after they are retrenched, instead of having the Jobs Credit scheme which is meant to help them before they are retrenched?

Mr Low: Schemes like Spur, of course, would pre-empt retrenchments and help companies not retrench. But does it need to add on with Jobs Credit. How much does it help? Yes, for some, it may be helpful but, eventually, the effect is limited. You may help companies keep some workers but some will still be retrenched. If there’s no business, there’s no demand.

Mr Heng: (He) said that because the Jobs Credit scheme in his view is not going to be able to save every job, so it is not worth having. I’d just like to ask (him), if companies were to get credit, is there any guarantee they will not retrench? There is no guarantee. Therefore, is he also saying forget about (offering) the Risk-Sharing Scheme, except (to companies) that can guarantee there’ll be no retrenchment?

Mr Low: I am saying that you have to be targeted and to be sure what will really help. I am not saying that you should not help at all, but I am doubtful about your Jobs Credit scheme – as to how much it will help companies and whether it’s justifiable to spend the past reserves to help companies in this way.

Of course, you could say Singaporeans will benefit as they can stay employed. But the figure is something that is not certain. So can we use that money for something else? For better utilisation of the limited financial resources we have by helping workers who are retrenched or by other schemes which can more effectively help companies stay afloat?

Mr Lim Swee Say: Am I right to say that if the Workers’ Party is the government, and that in this crisis, the party under the leadership of Mr Low would not implement Jobs Credit? And that between implementing Jobs Credit and asking Singaporean workers to take a 9 percentage point CPF cut, the Workers’ Party would implement a 9 percentage point CPF cut rather than introduce a $4.5 billion Jobs Credit to save jobs?

Mr Low: I thought I made it clear in my speech that I welcome that CPF is not used in this downturn as a tool to cut employers’ cost. And if the Workers’ Party is in government, I’d rather that we use the money – if there’s a need to save employers’ cost – to pay directly to the CPF account of members…for companies which are in difficulty, rather than have a Jobs Credit scheme that gives companies, regardless (of) whether they are profitable.

Mr Lim: If the choice is between implementing a $4.5 billion Jobs Credit versus a 9 percentage point cut in CPF – you cannot have both, it’s either you introduce a Jobs Credit or you take a CPF cut – if that’s the situation, which one will the Workers’ Party go for?

Mr Low: Our position is that we will never cut the CPF. But the question is, must it be Jobs Credit? Could it be other forms to help employers to cut costs? There may be other forms. But to me, Jobs Credit as it is, I don’t think it’s effective.

Low’s salary queries

HOUGANG MP Low Thia Khiang questioned if the Government was sending “a mixed signal” to Singaporeans with its estimated salaries for political office-holders in the coming fiscal year.

He said the Budget for political appointments across the Government’s 14 ministries and the Prime Minister’s Office went down by “just 1 per cent” from $61.8 million in revised fiscal year 2008, to $61.4 million in 2009 estimates.

This refers to the total sum of money set aside to pay ministers, ministers of state, and parliamentary secretaries.

The budgeted sum for each ministry is listed in the Budget Book, and is based on the number of political positions and their estimated salaries.

Said Mr Low: “This does not square with what Minister Teo Chee Hean disclosed in this House that the MR4 salary will drop by 20 per cent compared to 2008.”

Mr Teo, the Minister in charge of the Civil Service, said last month that senior permanent secretaries and entry-grade ministers at the MR4 grade will get 20 per cent less in 2009, compared to 2008.

Mr Low queried this. He said that despite head count staying the same, the political appointment budget estimates for five ministries and the Prime Minister’s Office saw a 5 to 12 per cent spike.

The figures also remained almost unchanged for six ministries, while there was a drop of 4, 12 and 29 per cent at three ministries. “Are we sending a mixed signal to the people? How can the Government ask Singaporeans to tighten their belts when it fails to restrain its own salary estimates?”

The Workers’ Party chief said that workers are facing more than just a wage freeze or cut. They are “staring down at the prospect of no-pay leave and retrenchment”.

“The Government should take the lead in tightening its belt wherever possible and spend generously and wisely in a focused manner to ride out the recession,” he said.

He also asked if “we really need to increase expenditure for defence by $644 million over FY 2008? I would imagine Mindef would be able to buy more for the same dollar in a world in recession.”


%d bloggers like this: