SINGAPORE – Budget 2012 will be delivered on Friday and it comes at a time of an uncertain economic landscape.
While the government has said the focus will be on the long-term competitiveness of Singapore, those Channel NewsAsia spoke with said there are immediate concerns that need to be addressed.
One thing cropped up among all those interviewed – rising costs not just for businesses but also the individual.
The call to increase wages remains a constant.
While productivity improvement is seen as a long-term solution, observers said the government can introduce some interim measures.
For example, subsidise the pay for low-wage workers, only for the short term, so companies have time to work on improving productivity.
Member of Parliament (MP) for Ang Mo Kio Group Representation Constituency (GRC) Inderjit Singh is one of them.
He said: “I’m not suggesting minimum wage fully on the burden of the employer but to be shared by the government.
“What I’m suggesting is that we should start thinking of a wage that is a reasonable, that the government supports in the short term. Employers will have to take over in the long term and they can only do that by productivity improvements”.
There are also calls to continue the focus on the middle-income group and Professionals, Managers, Executives and Technicians (PMETs) who are increasingly bearing the brunt of the downturn.
Labour economist from UniSIM Randolph Tan proposed the radical idea of an income tax credit for PMETs during the course of their job search.
Dr Tan said: “It could be done through some form of monetary incentive.
“What the government could do for example, is it could incentivise both the job seeker as well as the employer.
“One thing that hasn’t been explored is income tax credits for people who aren’t actually working but who are in the process of actively looking for a job. That could be taken into account and they can be awarded an income tax credit so that when they find a job that could be used to defray whatever income tax liability they may have in their new job.
“So it’s to give them a credit before they start on a new job. It’s quite radical because it’s never been explored.
“I think it’s something the government should start exploring because dealing with PMET unemployment is not as straight forward as dealing with unemployment of the lower-income groups because when you are talking of dealing with unemployment of the lower-income group, the way we deal with them is well trodden.
Dr Tan also suggested a targeted job matching scheme for PMETs.
“This jobs matching is not as simple as having a job fair because the nature of PMET unemployment is that you are dealing with people are who are probably a lot more qualified and don’t need a lot more educational upgrading.
“What you want is to match them to employers and match them to expectations as well. They may not be able to command immediately the wage that they want but that’s not a reason for them to stay unemployed or underemployed because then, they won’t be able to contribute to the workforce.”
Meanwhile, for businesses, observers said the days of cheap foreign labour are over.
President of the Association of Small and Medium Enterprises Chan Chong Beng said: “A lot of SME owners say, ‘look, you can cut off or you can reject my new applicants but please don’t cut off those that have been with us for three to five years because we have trained them’.
“A lot of SMEs don’t have the certificate of training but they have their own in-house way of doing things and if you give them new workers and reject the old ones, it will add costs to them.
“It’s going to force them to go into re-training of this and that will reduce their productivity.”
Mr Chan added: “I have a worker who had graduated from SMU, a foreigner and one of the conditions is that he has to stay in Singapore for three years.
“We took him in, put him in accounts and exactly three years on the dot, his application was rejected.
“So we have to train somebody all over again and we have a Malaysian now to replace him at a higher price (but) we are prepared to pay a higher price. It’s a disruption to the work.
And for productivity to improve, so too, the training for workers.
Mr Chan said the Association of Small and Medium Enterprises is in talks with the Workforce Development Authority to offer customised training for SMEs, including courses in Mandarin.
“The feedback is that the modules under the current national training schemes are not suitable,” Mr Chan said.
“You send them for training and when they come back you have to re-train them! I give you an example. In retail, they have a structured module, but SMEs, they are small – most of the workers multi-task.
“So what they train there may not be relevant to the current business. So some of the SME owners say, ‘look, we send them for training , they come back, I have to re-train them’.
Mr Chan cited another example in the hotel industry.
“Every hotel has a different way to train its staff on services so there is no structured way that they can follow,” he said.
President of the Singapore Chinese Chamber of Commerce and Industry Teo Siong Seng echoed this call.
He said: “The government can also consider funding these trade associations or maybe fund them or chambers together.
“So that these trade associations can have tailor-made training programmes for their members.
“I still think that the man on the ground knows better what is required and many of these associations can provide a good job together with government funding to provide training and upgrading for workers.”
Others whom Channel NewsAsia spoke with called on the government to continue with the Skills Programme for Upgrading and Resilience (SPUR) scheme.
The scheme provides course fee support for companies and individuals and absentee payrolls for companies that send their workers for training.
UniSIM’s Dr Tan said: “I think the most important thing for employees is not to become unemployable as a result of the structural changes that occur during a downturn.
“In the current situation, with certain sectors facing a slowdown, it’s also a good time for SMEs to look at hiring better people instead of trying to retrench because if you over do it, when the pickup comes, you just don’t have the momentum to carry on.”
Another item on the wish-list is help with relocation and rental costs.
Dr Tan said the government should not rule out the possibility of a CPF cut, if needed. CHANNEL NEWSASIA