Straits Times: Most MPs back Jobs Credit Scheme

A few, including Low Thia Khiang of the opposition, doubt its effectiveness

• BY SUE-ANN CHIA
SENIOR POLITICAL CORRESPONDENT

THE Jobs Credit Scheme dominated the debate in Parliament yesterday on the Budget Statement, with MPs describing it as “bold”, “innovative” and “cleverly crafted”.

But there were also dissenting voices amid the strong chorus of support, with at least four MPs questioning its effectiveness in saving jobs.

Their main concern: Is the $4.5 billion used for the scheme well spent?

A key plank in the Budget’s $20.5 billion Resilience Package, the scheme subsidises part of employers’ wage bills, in a bid to defray costs to save jobs.

The novelty of the scheme clearly grabbed MPs’ attention, as the issue was raised by almost all the 24 MPs who spoke on Day 1 of the Budget Debate.

Only two other issues proved to be as popular – the unprecedented move to dip into past reserves to pay for part of this year’s Budget, and the urgency of helping companies get credit during this severe downturn.

On Jobs Credit, most found no fault with the cash grant. It covers 12 per cent of the first $2,500 of monthly salaries of local workers who are paid CPF.

The cost savings are equivalent to a 9- percentage-point cut to employers’ CPF contribution rate, a move which MPs prefer to a CPF cut.

Labour MPs like Madam Halimah Yacob (Jurong GRC) were the most effusive in their praise.

“It is an excellent scheme, and is frankly much more than I had expected,” she said, noting that feedback from companies has been positive.

“It aims to make Singaporeans more attractive to employ and retain, and it also protects our CPF.”

She quoted a human resource manager in a manufacturing firm who told her: “Yes, it does help. We have been under tremendous pressure from HQ to trim headcount…This may not be a long-term solution but it helps to delay the actions at our site.”

Not everyone felt the same way.

Opposition MP Low Thia Khiang (Hougang) was among a few who were doubtful whether the scheme could save jobs in companies whose sales have plunged.

He was promptly taken to task by six People’s Action Party (PAP) MPs, five of them from the labour movement, including labour chief Lim Swee Say.

The spirited 20-minute exchange during the seven-hour Parliament session ended with Mr Lim challenging Mr Low to choose between having the Jobs Credit or a CPF cut.

Mr Low maintained he was not in favour of a CPF cut, but neither did he believe that Jobs Credit was the solution.

A similar, but shorter, exchange followed later in the debate between four PAP MPs and Nominated MP Siew Kum Hong, who also criticised the scheme.

Two PAP MPs also wondered about the scheme’s effectiveness.

“Even with the Jobs Credit Scheme announced, we keep receiving news of more retrenchments in the pipeline,” said Dr Lim Wee Kiak (Sembawang GRC).

“Will it be money well spent or will it be water pouring into sand?”

Dr Ahmad Magad (Pasir Ris-Punggol GRC), said the scheme’s impact could be ‘short-lived’ and insufficient.

“This measure cannot hold workers till the end of the crisis. It has to be coupled with additional measures,” he added.

He suggested that more money be given to companies if the economy worsens six months from now.

“This should not be a direct credit but tied to some form of compulsory upgrading for the workers,” he said.

It could be a subsidy of up to 60 per cent of the pay of a worker on training, but only for the first $2,500 of the worker’s monthly pay.

Some MPs also urged the Government to have help schemes for the jobless or newly retrenched, instead of focusing its firepower on cutting business costs to save jobs.

Noting that Jobs Credit is not without critics who say the number of jobs saved is disproportionate to the cost of the scheme, Nominated MP Gautam Banerjee said it was a “negative and overly critical way” of looking at it.

“Because we are in a crisis of extraordinary proportions, we need measures which are extraordinary,” he said.

“We must also be prepared to take some calculated risks.

“By devising this scheme which is simple, transparent…and provides a measure of relief to every employee, the Government now has every right to expect all employers to behave responsibly and in a caring manner when dealing with their employees during this crisis.”

The debate continues today.

sueann@sph.com.sg

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