Budget 2020: Jobs, measures to cope with COVID-19 impact dominate Day 1 of debate

Budget 2020: Jobs, measures to cope with COVID-19 impact dominate Day 1 of debate

This year's Budget will help mitigate COVID-19's economic impact on businesses and their workers, but more could be done, said Members of Parliament (MPs) on day one of the Budget debate.

SINGAPORE: This year's Budget will help mitigate COVID-19's economic impact on businesses and their workers, but more could be done, said Members of Parliament (MPs) on day one of the Budget debate.

Many MPs started off by lauding some of the Budget measures announced last week, including the Jobs Support Scheme that provides an 8 per cent wage subsidy for local workers, and the Skillsfuture credit top-ups of up to S$1,000.

“Manpower costs are also a significant expenditure for companies and the wage support measures that are announced during this period will help companies to ‘cut costs to save jobs’ instead of ‘cutting jobs to save costs’,” said Senior Minister of State for Trade Koh Poh Koon of the S$4 billion Stabilisation and Support Package that the Jobs Support Scheme is part of. 

READ: Budget 2020: S$4 billion support package for workers, firms amid COVID-19 outbreak

Still, the MPs urged the Government to expand the scope and expedite the timing of some of the measures, alluding to cash flow and retrenchment issues that might surface during this period of economic uncertainty.

“For some businesses, the impact of the current uncertainties (has caused a) drastic drop in business demand and impact on supply chain,” said MP Jessica Tan. 

“While the Stabilisation and Support Package provides some relief on wage costs and funds training support, they may not be sufficient to help businesses and employers.”

SMALLER COMPANIES NEED HELP NOW 

Mr Gan Thiam Poh was one of the many MPs that asked if the Jobs Support Scheme could be dished out before the start date of end-July.

Mr Gan said that many smaller companies are already struggling to stay afloat - making them wait for another five months will force some of them to cease operating. 

Nominated MP Arasu Duraisamy and Mr Seah Kian Peng also asked if the foreign worker levy could be waived or reduced at this point of time.

Manpower Minister Josephine Teo responded in speech, saying that “measures to deal with the short-term fallout should not negate efforts for companies to become less reliant on foreign manpower for growth in the longer term”.

READ: Foreign worker levies kept to reduce dependence on foreign workers: Josephine Teo

SPEED UP DISBURSEMENT OF SKILLSFUTURE CREDITS

Assistant Secretary-General of National Trade Union Congress (NTUC) Melvin Yong requested for the SkillsFuture top-up - originally scheduled for October 2020 - to be brought forward, so that workers can take advantage of the downturn to revamp their skillset in time for an economic recovery.

READ: Budget 2020: More support for transformation of workforce, including SkillsFuture top-ups

READ: SkillsFuture remains ‘one of the most important economic and social strategies for Singapore’s future’: Ong Ye Kung

He and fellow labour MP Mr Patrick Tay asked if the additional SkillsFuture Credit given to Singaporeans aged 40 to 60 years old can be used for courses beyond the 200 selected career transition programmes, such as those under the Workforce Skills Qualifications (WSQ) system.

This Special SkillsFuture Credit top-up should also go to those above the age of 60, Mr Yong added. Since the Government supports those who want to work after they turn 60, “we should also support them in their pursuit of lifelong learning”. 

FREELANCERS NEED MORE HELP

While the MPs said they were glad to see the Budget focus on mid-career workers, some said that those who are self-employed may not benefit from the schemes rolled out as they are channelled through companies. 

Mr Gan noted that self-employed workers will not be eligible for some of assistance programmes such as the Jobs Support Scheme. Instead, the Government could help those who do not have sufficient work to find an interim job. 

READ: Big businesses need to help smaller players, work together to tide through COVID-19 'crisis': Chan Chun Sing

Self-employed persons (SEPs) could also be given greater union representation or classified as workers under the Employment Act, said MP Desmond Choo.

Both of these approaches are not without their limitations but it certainly betters the lot of the SEPs”, said Mr Choo, who is also an assistant secretary-general at NTUC.  

Mr Patrick Tay suggested revisiting the Surrogate Employer Programme, a SARS-era scheme that allowed NTUC to step in as a surrogate employer and provide training and an allowance for affected workers during the downturn in 2003.

Calling it a “win-win-win” strategy, Mr Tay recalled that when the Singapore economy rebounded, “affected workers who had the training allowance as stipend, could return to their jobs and assignments quickly (and) they were armed with additional qualifications”. 

BRINGING TRAINING PROGRAMMES CLOSER TO WORKERS 

But besides looking to the Government for workers' support, the union has also stepped up to the plate by making plans to hold its training programmes at more convenient locations. 

The U PME Centre, which provides workplace, career and professional development advisory services for professionals, managers and executives, will now become a mobile centre, NTUC’s Mr Yong announced in his speech.

READ: New NTUC programme to improve job matching for workers before retrenchment

On-demand mobile centres will be available at three Community Clubs (CCs) in the Moulmein-Cairnhill constituency, but will be gradually expanded to all 11 CCs in Tanjong Pagar constituency, he said, with free workshops on project management fundamentals and digital marketing offered at these sites.

ENCOURAGING THE USE OF EVs

Another topic raised during the debate was the push for electric vehicles (EVs), following the announcement in Finance Minister Heng Swee Keat’s Budget speech that a series of measures will be rolled out as Singapore embarks on a vision to have all vehicles run on cleaner energy by 2040, with the nation placing a “significant bet” on EVs.

Mr Murali Pillai asked for the basis behind such a “significant bet”, while Mr Yee Chia Hsing pointed out that the measures listed might be not enough to convince Singaporeans to purchase EVs.

One of the measures which will be introduced is the EV Early Adoption Incentive (EEAI), where those who buy fully electric cars and taxis will receive a rebate of up to 45 per cent on the Addition Registration Fee. This rebate is capped at S$20,000.

READ: Budget 2020: Additional incentives to encourage use of more environmentally friendly vehicles

While describing the rebate as “generous”, Mr Yee pointed out it might not be enough to push more people to buy more EVs.

“A comparison of the price of EV versions with ICE (internal combustion engine) or hybrid versions of the same car model shows that EV versions currently sells at a significant premium to their ICE or hybrid equivalent. This is mainly because lithium ion batteries are very expensive,” he explained.  

“Moreover, costs incurred by car distributors to bring in EV models are spread over a small number of cars, thus increasing the per car costs.”

Given that the transition toward EVs will impact Singapore’s tax revenues, an interim lump-sum tax will be built into the road tax schedule for EVs to partly account for the loss in fuel excise duties, it was announced previously.

Factoring this in, EV adoption will continue to be slow, pointed out Mr Yee.

Instead he stressed the need to encourage local car distributors to bring in more EV and plug-in hybrids versions of their cars.  

“Last year, the top three car brands by sales were Honda, Toyota and surprisingly, Mercedes. Together, they account for more than 28 per cent of total car sales. Unfortunately, none of them brought in an EV or plug-in hybrid model.

“Unless we can make the car distributors bring in more EV models, our push towards EV is doomed to fail,” said Mr Yee. 

Among his suggestions were, a double tax deduction for expenses incurred to bring in EV and plug-in hybrid car models, as well as profits from such sales can also be taxed at a lower corporate income tax of 10 per cent.

DIGITALISATION AND TRUST IN GOVERNMENT

As Singapore continues in its digitalisation journey, effort must be made to ensure that the public has trust in those who deal with new technologies, said Professor Yaacob Ibrahim.

“I believe strongly that we must leverage on technology especially on those that would improve our quality of life,” he said. 

“But the flip side of all these new applications of technology are issues of accountability, transparency and trust. Can our Government protect us from being manipulated by the big tech giants? Can we trust our Government to use our personal data for the benefit of all Singaporeans and not some political agenda?

“These are questions of trust brought about by the use of technology in our everyday lives.”

Trust in public institutions in Singapore such as hospitals, schools, courts and security agencies are “very high” said Prof Yaacob. 

“This is because these institutions have been well managed, staffed by capable and competent people, and are known to deliver good and fair outcomes. We trust that these institutions will do what is right and just,” he said. 

“Similarly, as we digitalise our society, trust that these technologies will be used correctly is important.” As such, Prof Yaacob suggested the creation of an independent digital commision to look at possible issues that may arise in order to address concerns over privacy and transparency.

READ: Singapore Together movement has seen ‘good’ progress: Indranee, Desmond Lee

Ms Denise Phua also touched on the importance of the Singapore Together movement, calling it a “significant and necessary direction”.

The movement was announced by Mr Heng in June last year, when he outlined the fourth-generation leaders’ new strategy of working with Singaporeans to design policies and creating more community-level partnerships. 

“Issues are so many and so complicated and even complex that (the) Government no longer has the monopoly of ideas and action; sometimes even resources,” said Ms Phua. 

“Many citizens, myself included, want to be part of the solution to make our society not just successful economically but also significant in the world.”

And to ensure that the movement serves its purpose and helps Singapore to overcome current and future challenges, there has to be a culture which is "less ministry-centric and less controlling", Ms Phua added.

“The culture that will drive SG-Together to success will have to be one that learns to be less ministry-centric; and less controlling. The people of Singapore have trusted the Government for so long; it is time for (the) Government to also learn to trust the people – not blindly, not indiscriminately but in a less controlling and more facilitative manner,” she said.

“SG-Together is a very important direction for (this) Government. It can end up as a lofty aspiration; but if done right, it will be a powerful driver to a stronger Singapore that can weather many storms heavier than COVID-19.”

Source: CNA/mt(rw)

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