Singapore Budget 2009 : Job Credits

[Hatchet]

How much does it help Singaporeans?

 

Let's paint a hypothetical scenario, which could happen, since we are a open economy with lots of foreign investors/employers.

 

Let's say a guy is hired by a foreign company, his boss is in another country, which by the way also hires many other staff from all nationalities. Singapore government gives back 12% of $2500 = $300 per month for each Singaporean. This amount goes back to the books of the boss in another country (assume 500 Singaporeans staff) * $300 * 12 months= $$1.8Million.

 

This $1.8million goes back to the overall company's books, and than nobody is the wiser, and the company can use this amount of money to send any staff from any country for training or even hire someone from a lower cost country, since there is no guidelines issued that the amount can only be used locally.

 

Worst case scenario :- Money flowing back to the Singaporean $0, Money flowing within Singapore economy $0, Singapore reserves -S$1.8million.

 

It would probably be administratively difficult to police that all money be spent in Singapore, but at least there must be measures/guidelines put in place to ensure that the bulk of the reserves spent gets channeled back into Singapore's economy.

 

 

Key Budget Initiatives

 

 

Taken from :-

 

http://www.singaporebudget.gov.sg/key_initiatives/jobs.html

 

 

JOBS FOR SINGAPOREANS

 

(A) Jobs Credit

 

To sustain jobs for Singaporeans, the Government will introduce a Jobs Credit which will encourage our businesses to preserve jobs in the downturn. This is a temporary scheme to help companies through an exceptional downturn. Details of the scheme are as follows:

 

* Employers will receive a 12% cash grant on the first $2,500 of each month

[Silver_blade]

I also feel that this Job Credit can be very one sided....benefit the company...cos the company have no obligation to use that money to help the local staff.

 

I feel it would be better for the gov to directly debit the 12% into the local staff's CPF. By doing so, the company get to save that 12% and the local staff have the 12% for his/her retirement, etc...

[Drive_carcar]

The job credit scheme has it's limits. It won't save a company that is already in deep trouble and has no business to remain in business. It also won't save a worker who is whose performance and contribution to the company is bad. It's not a cure-all.

 

Yes, the credits would go into the company's coffer for them to spend as they deem fit. It's like that by design. It's meant to put cold hard cash to company's, as opposed to making them pay less. A cash in-flow is always sweeter than a lower cash outflow. So the aims of this scheme is simply to make it more attractive to keep locals. In another words, if companies really need to retrench, all things being equal, they would rather keep the locals because of the incentives involved.

 

In challenging times like this, what really helps is keeping and saving jobs, and better still create new jobs.

 

Having said that, the govt ministries and stat boards should step up employment. Even if it's employing for the sake of employing. Then as economy recovers, they can start to trim staff, releasing them to more productive use in sectors that are promising.

 

The purpose of govt employment is to prevent country from spiralling down into severe depression due to there being insufficient jobs. Laws can also be enacted to force choosy Singaporeans to take up any jobs that is offered by the govt if they are unemployed for more than a period of time. Even if the job only entails licking stamps at the post office.

[Kusje]

How much does it help Singaporeans?

 

Let's paint a hypothetical scenario, which could happen, since we are a open economy with lots of foreign investors/employers.

 

Let's say a guy is hired by a foreign company, his boss is in another country, which by the way also hires many other staff from all nationalities. Singapore government gives back 12% of $2500 = $300 per month for each Singaporean. This amount goes back to the books of the boss in another country (assume 500 Singaporeans staff) * $300 * 12 months= $$1.8Million.

 

This $1.8million goes back to the overall company's books, and than nobody is the wiser, and the company can use this amount of money to send any staff from any country for training or even hire someone from a lower cost country, since there is no guidelines issued that the amount can only be used locally.

 

Worst case scenario :- Money flowing back to the Singaporean $0, Money flowing within Singapore economy $0, Singapore reserves -S$1.8million.

 

They are not giving out the money for it to be spent on stimulating the economy. The money is being given out to ensure those 500 singaporean workers have a job. If the company wants to retrench workers, they'll definitely target the non-singaporeans since it doesn't get free $$$ from them.

[Drive_carcar]

The key to survival is employment. If one is un-employed, no amount of govt money is enough. So in that sens the job credit scheme is the right prescription. It's not a cure, but it's meant to alleviate the pain caused by the underlying disease.

 

Most diseases like viral infections, there's no cure, no antibiotics can fight off viruses. The body's defenses have to slowly overcome the virus, and the disease have to take time to be defeated. Likewise, given time, the world economy will recover. The best any doctors can do at this point is to alleviate the pains and symtoms.

[Wreckwrx]

Having said that, the govt ministries and stat boards should step up employment. Even if it's employing for the sake of employing. Then as economy recovers, they can start to trim staff, releasing them to more productive use in sectors that are promising.

 

The purpose of govt employment is to prevent country from spiralling down into severe depression due to there being insufficient jobs. Laws can also be enacted to force choosy Singaporeans to take up any jobs that is offered by the govt if they are unemployed for more than a period of time. Even if the job only entails licking stamps at the post office.

 

And then when the economy was good, we criticise the govt for wasting resources and being inefficient by having so many people on their payrol but when times are bad, we look to the same govt and ask them to hire staff even if it means over-staffing in order to reduce unemployment. Hmm.......

[Quirky_ster]

$300 may not give enough protection for the employer to retain the Singaporean.... Yes, it's never enough BUT if they prescribe a medicine, might as well start with a strong dose and then reduce them as deem fit.

 

Starting at $300 and then increase if company still retrench staff may not be sufficient as they have retrenched the workers. I would say, dose out 20% and cap to $5K max paid upfront. Company are to commit that these staff that can be claimed to be guaranteed jobs for the next 3-6 months.

 

When economy recovers, reduce it to 15%, 10%, 5% and then back to normal.

 

$300 sounds a little half hearted. What's the point.. $300 given out and yet the Singaporean staff still got retrenched coz' company see the amount to small to cover the current big hole...

 

Countries like the US are pouring out Trillions of dollars and we pour out 20B and makes one hell of a marketing campaign..

 

Overdose so that stability can be had and then let it recovers slowly... It's not that difficult to get back the money, once there's a sense of job security, then more people buy car, COE will shot up back to $10K, with 2500 all cats COE, they get back $25M per bidding... then economy can move like that..

 

 

[Donrobert]

aaawwww.. that is too bad...

[Drive_carcar]

And then when the economy was good, we criticise the govt for wasting resources and being inefficient by having so many people on their payrol but when times are bad, we look to the same govt and ask them to hire staff even if it means over-staffing in order to reduce unemployment. Hmm.......

These are exceptional times, which calls for exceptional moves. What would be logical under normal circumstances will prove either ineffective, or worse still, counter productive.

 

Actually another radically rediculous idea, would be to get every country to print more money. It sounds stupid, but I'm pretty sure if this is pulled off, the world economy will recover quite quickly.

[Drive_carcar]

$300 is never enough. Given the fundamental issue is not of cost, but slump in demand worldwide.

 

Job Credit is not a silver bullet, it can't keep a business alive if it has not reason to exist, and it can't keep a person employed if that person is really not needed, and no other ways to retain him / her.

 

The thing is, it is totally out of our hands how the economic stage will play out over the next few years. I think the govt can only at best mitigate the effects, get us to change our attitudes and move to other industries which may be more promising in the long term. But in the end, we still have to let the downturn run it's course and it will reverse eventually. So it's a matter of the decisions we make right now, will affect how well we will prosper when things gets better.

[Furrynadz]

the rich get richer, the poor get poorer

 

 

[Trex101]

They should cut GST back to 3% and cut their own bloody pay back to more reasonable level. WTF, pay millions to them yet still get our economy into should deep s--t. Still everyday claim they are talented with CEO caliber......

[Drive_carcar]

the rich get richer, the poor get poorer

The correct question is are there more poors? Or are there more middle and rich class? Which means people are moving upward in the socio-economic ladder.

 

The reality of life is that there will always be a group in the society that no matter what is done, will always be on poverty line. Short of striking lottery and becoming an overnight millionaire, there's no immediate way to turn their fortunes around, or even for the better.

 

The only way out of poverty is hardwork, grit and a little good fortune. My family took one generation to go from absolute poverty to being relatively well to do. My point is it is possible for fortunes to be made, and fortunes to be lost. What matters is whether our society allows the opportunities for people to improve their lot in life.

 

I dare say there are decent opportunities, and many forms of assistance for the poor, not just to alleviate the ills of poverty, but also to invest in their future through education. It's really up to the poor themselves to do their part. If they expect to be spoon fed all the time, and expect money to be given to them on a silver plater all the time, then they are destined to be poor forever. No amount of help will get them out of the poverty trap.

 

Here in Singapore, everytime when price increases or anything happens, our govt always put them first in priority, to help them and lessen the burden on them. So much so I get fed up and feel that middle class people like me feels very neglected at times.

[Drive_carcar]

While I agree with the GST cut and the pay cut for our MP and Ministers, I do not agree with the suggestion that this economic downturn was caused by the govt when you said

 

"WTF, pay millions to them yet still get our economy into should deep s--t. Still everyday claim they are talented with CEO caliber...... "

 

There is nothing any govt can do, no matter how highly or lowly paid, to avert this global economic meltdown. The epi center is US, it started there and spread throughout the world. What can be done? What would you have done if you were the PM?

 

We have no resources of our own, and we are small. Our domestic market is miniscule compared to everybody else that matters. So to survive we have to be an open economy, which nceesarily means we are always at the mercy of the economic woes of those countries we depend on for our survival, especially US.

[Yipsy1]

 

It's either we pay our Ministers their million dollar salaries NET, they cannot claim anything else or we pay them Suharto's salary at US$1,764 a month.

Then everything will be under table. We only know too well that is happening around our region. Starting from the top politicians to the lowest ranked policemen. No kopi money no talk.

 

It is no surprise that in terms of world corruption rankings, Singapore ranks 4, Indonesia 126.

http://en.wikipedia.org/wiki/Corruption_Perceptions_Index

 

FYI, Suharto and his family had amassed a fortune of around $15 billion, including $9 billion in an Austrian bank account. Pay peanuts, get monkeys.

 

[Drive_carcar]

It's either we pay our Ministers their million dollar salaries NET, they cannot claim anything else or we pay them Suharto's salary at US$1,764 a month.

Then everything will be under table. We only know too well that is happening around our region. Starting from the top politicians to the lowest ranked policemen. No kopi money no talk.

 

It is no surprise that in terms of world corruption rankings, Singapore ranks 4, Indonesia 126.

http://en.wikipedia.org/wiki/Corruption_Perceptions_Index

 

FYI, Suharto and his family had amassed a fortune of around $15 billion, including $9 billion in an Austrian bank account. Pay peanuts, get monkeys.

 

While I agree that an underpaid government have a higher propensity to corruption, the reverse is not always true... i.e. an overpaid govt means that they will always be uncorruptible. There is absolutely no evidence to support the notion that paying govt high guarantees that you get the best and most honest people to rule the country.

 

I'm not suggesting that our govt is corrupt, I'm sure they are made up of honourable men and women. Just that I feel that against benchmark of govt salaries of other developed countries, ours seems rather expensive even after the 20% pay cut.

[Trex101]

That's an excuse, when the economy is good. They claim it's due to their talent, foresight and leadership, that's why need to pay millions for "TOP TALENT". When the economy is in s--t hole, Temasek losing 58b of tax payer money and GDP probably dropping 10% this yr. They claim it's other ppl fault, like that they win liao lor.

 

If the gov is serious about pulling Sg out of this deep recession, they should backflop and cut GST, as cutting of GST will help everyone, from MNC to SME, down to every single man in Sg. Any deficit would be bore by our reserve, isn't this what it is design for? for a rainy day, now not rainy enough? Maybe not much reserve left liao after losing so much of tax payer money.

[Chosenone]

That's an excuse, when the economy is good. They claim it's due to their talent, foresight and leadership, that's why need to pay millions for "TOP TALENT".

I think i remember that is what they say when economy is goin strong that time...It is in order to retain talent but blast those who go overseas as quitters..what if we dont pay those minister the big bucks..are they goin to quit on us.... Why dont we suggest that the minister pay should be abt 3000 singapore dollars and we see their spirit of singaporeanism in action...they are singaporean are they..then should sacrifice for our counntry lor ..anyway they are civil servant and should get a salary what a civillians think is appropriate.