Debate on Jobs Credit Scheme - Budget 2009

Lively debate on jobs credit

SIX MPs - five of whom were from the labour movement - took opposition MP Low Thia Khiang on Tuesday over his criticisms of the Jobs Credit scheme.
In a lively exchange that was a highlight in the debate on the Budget Statement, the MPs took turns disputing the Hougang MP's critical comments of the wage-subsidy scheme.

An abridged version of this was repeated a few hours later when Nominated MP Siew Kum Hong agreed that the scheme would not save jobs.

At one stage, even labour chief Lim Swee Say jumped in to defend the scheme.

On his part, Mr Low grew progressively more opposed to the scheme as the 20-minute exchange wore on.

While he started by expressing doubt over the scheme's ability to save jobs, somewhere in the middle of the exchange he stated plainly: 'I don't think it works.'

The cut and thrust of the debate was sparked off by Mr Low questioning whether the $4.5 billion initiative would be effective in staving off retrenchments.

The proposed scheme gives bosses a 12 per cent cash grant on the first $2,500 of wages for every local resident worker on their CPF payroll. The grants are paid quarterly.

Mr Low questioned if this system would save jobs in companies where sales could not sustain overhead costs.

'Between waiting three months for $900 cash rebate from the Government versus saving $7,500 immediately by retrenching a worker, which choice does the Government think a struggling employer will make?' he asked.

He then suggested the scheme will simply benefit profitable companies that have no intention of retrenching workers.

Using supermarket operators Sheng Siong and NTUC Fairprice as examples, he asked: 'Are we using our reserves to increase the profits of profitable companies in this downturn?'

Other MPs were quick to respond, pinning him down on whether he believed the scheme had no benefits.

Mr Yeo Guat Kwang (Aljunied GRC) asked if Mr Low was aware that the savings from the scheme will spur Sheng Siong to open more outlets, each one creating 80 more jobs.

Ms Jessica Tan (East Coast GRC) asked if he was aware that the scheme was targeted at making Singaporeans more attractive to employers.

Mr Low maintained a tone of scepticism until Mr Heng Chee How (Jalan Besar GRC) asked him pointedly if he thought the subsidy would not reduce the risk of retrenchment. Then, his scepticism turned into full-blown opposition.

Watch Low Thia Khiang's speech in parliament and you will understand why the need to have more in there!

Part 1, Part 2 and Part 3.