Lim Swee Say as head of the workers movement must robustly champion the workers' interest within the tripartite. In what is supposed to be a rescue package ultimately for the benefit of workers and the people of Singapore, it turns out that companies turn out to be the main direct beneficiary getting the lion's share of the $20.5 billion help package. As sure as the sun rises, companies will still fold, workers will still lose jobs or suffer pay cuts. To these workers, the money which will go to the companies will have no benefit to them.
Not by any measure is he, as supposedly the workers' champion, justified to declare full satisfaction with the direct allocation to workers and to those who will be retrenched. Why didn't he tell the public that he had fought for a bigger direct share for the workers, even if he failed to get his bosses, oops I mean the other members of the tripartite, to change their minds.
Do you notice that with all the distractions of the recession and the help budget, the govt. has opportunistically sneaked in an increase of almost $1000 million to the security (defence and home affairs) budgets, bringing the Defence and Home Affairs Budgets to historical highs of over $11.4 billion and $3 billion respectively. This is one of the real reasons (quietly though) why our past reserves have to be used for this year's budget.
The Defence spendings tower above every other budgetary spendings. This, despite the gloomy outlook for the next 24 months or more. Money should be conserved (and channeled to fund more direct people-help programs, say, for retrenchment benefits). Some military spendings could surely be postponed or paced out until better days come back. It is not as though we are under-invested in defence. After years and decades of heavy military spendings, we have as of now already the most invested and equipped armed forces than the rest of ASEAN combined. That betrays the under-emphasis on real care and focus this govt has on people-related needs vs. growth and power.
The rating of “best” for this Budget is I think mainly based on the huge total amount of help programs. But if you look at the measurable benefits that will land in the hands of Singaporeans, then “best” is somewhat an overstatement. Let me say why:
1. The direct help for individuals & households amount to less than 13% ($2.6 billion) of the total. 66% ($13.5 billion) is given directly to companies. Past reserves are accumulated savings and wealth of the nation and hence of its citizens. If the reserve vault is to be opened, the direct benefits should be skewed for more to go to them instead of to companies. The $2.6 billion allocated represent only a modest increase over similar (such as GST refund, Workfare) 2008’s pre-recession and pre-hyperinflation help-budget. The stated justification for the huge allocation to companies is that individuals will be the beneficiaries of the help programs through jobs saved. The problem is the extent of leakages in this flow-down effect to individuals as huge number of jobs in aggregate is still projected to be lost despite these help programs.
2. Citizens are subject to various forms of means testing for programs such as the hospitalisation subsidies and share of workfare payouts. On the other hand the Job Credit program gives money from our reserves to all employers, regardless of whether they are financially strong or weak, big or small, earning big profits or suffering losses. If we citizens are subject to means testing, why is the govt. so generous without setting criteria to pre-qualify companies to be entitled to this particular. Banks, large property developers, large GLCs, most MNCs and govt ministries do not deserve nor need this financial subsidy to continue to be viable. Public reserves should not be used to enrich private enterprises, particularly the healthy ones. Mind you, these companies have logged in bonaza profits in the past years, and even if they will performance not as well in the near future, they will still make reasonable profits without Job Credit program.
Companies drawing on wage subsidies are not obligated to refrain from cutting jobs, cut pay or put employees on no-pay leave, if down-sizing is needed to ensure survival. So reserve money will drawn down and many workers will still get fired as the recession spreads and intensifies. If there is some form of means testing on companies, money saved can be used instead for another program to help individuals directly, say, for the retrenched whose jobs are not saved or the retired/aged with little income or have fixed income and are weighed down by the increased cost of living from last year’s inflation.
3. Even without the benefit of the Job Credit program for these healthy companies, the other numerous programs, taxes cuts/rebates and training subsidies/allowances, are still available to them and all other companies.
4. The bottom line is that although the help programs are declared to be ultimately to help the citizens by saving jobs, individuals will actually be getting the much shorter end of the $20.5 billion. More could also be done to help ease their cash-flow tightness, for example waiving or reducing GST on essential goods and services at least during these hard times or allow a small portion of a retrenched worker’s CPF savings to be withdrawn to tide him over while he seeks for new employment (by the way CPF is the worker’s own money and not even a subsidy).
That’s why I think this pro-company help-budget falls short of being BEST because it under-performs for the individuals.
14 comments:
If I were the govt of Singapore, I will say: The defence of Singapore is paramount. It is precisely at this point of time that we must increase defence spending because hostile countries may be looking at attacking us as a way out to enrich themselves in this downturn. If we spend most of our reserves on our citizens, we will have happy citizens who may soon be citizens of the invading country. Then what would happen to us and our millions and all that we have built up in the past four decades? Kaput! Sure it does not matter to the citizens whether they sing mari kita or more good years but it matters to alot to us. All the effort and sacrifices we made will be lost. Go get a sense of proportion. This is why we need to increase defence spending, because defence is our only salvation.
If I were Lim Swee Say, I would say: You guys have no sense of proportion, if I say that this is not a pro-worker budget, I will become a worker all over again. Right now I am making good money for myself and my family, you all want me to risk all that and say something against my interest? Look at it this way, you guys should be thankful that I have not squadered away your millions on cooking classes in Paris and $50,000 sushi dinners in Tokyo. I have maintained my modest image and my centre-parting to try to look and sound like you all workers. What more do you want? You want me to eat in the hawker centres, cafes or restaurants? Do you know how much GST I will have to pay if I take that $50,000 sushi dinner here? $3,500 in GST plus another $5,000 in service charge. That is $8,500 just for charges before I can sink my teeth into those succulent morsels. I can only do all these when I retire and no longer scrutinised by you guys. At the rate we are going, retirement for me is not on the cards for quite some decades yet. So help me lah, don't complain so much, in my heart I am very pro-worker one. If I have the chance, I will surely speak up for you all one, okay?
If I were the President I will say:
You guys are so ungrateful, you think it is an easy job for me to look after the nation's reserves? Just look at the amount of litter outside my house the moment I give you all a bit of leeway and invite you in for Chinese New Year. I stay up all night worrying about the nation's reserves and what is inside those things you put outside my garden. You must be more appreciative of our govt. I am very appreciative of what they have done for me and my family. We have more good years and more golden periods under their golden leadership. What more can a man ask for in these times?
By appearing to be pro-business and not giving direct help to individuals, the Government is also avoiding to face accountability later on if individuals are still retrenched. Also if firms refuse to share the benefits from the Budget with workers, the accountability issue would appear to be on the firms and not the Governnment.
This image and feeling is pertinent if the recession runs deeper, particularly if an election has to be called.
The original idea of giving lion's share of the money to employers rests on a simple but arguably mistaken assumption that the mployer will change his mind about firing. Yes and No. some do. For those who don't, the money from the govt is godsend as it defrays the huge costs of RETRENCHMENT benefits! So such companies will fire the employees even faster!! So i think if the govt gives money to the employers it will only work if it sets strings attached, the money must be returned to the govt if eventually the workers are sacked!! It is very important or else the giving of benefits to employers will have reverse effect, it will accelerate their desire to sack the workers as retrenchment benefits are "subsideised" by the citizen's money from the govt!!
REX
Even before the selling of the Jobs Credit scheme achieves its impact and objective, the MNC already start to retrench.
NEC Corp - 20,000
Hitachi - 7,000
Chartered Semicon - 540
SPUR or not, does it helps? What more to come?
It is more practical that NTUC voice out and fight for adequate retrenchment benefits for those who are actually axed. The Governemnt should also help those who are working in MNC firms where unions could not be formed or are prevented from being formed.
MNC, particularly foreign ones, are seldom buy-in by the concepts of tripartism.
Worst, there are inadequate legislatory protection in respect of retrenchment benefits for who are axed.
How dare you say that this budget is not the best so far?
This budget is the best for the employers!
Especially the largest employer in Singapore who do not intend to retrench workers but instead are still employing.
Think about it.
Unless there is a lowering of GST rate or income tax rate, it is ultimately shifting money away from tax-payers' pocket to help employers (companies). Even that CPF is not cut now, employers can still retrench while enjoying this temporary subsidy from tax-payers.
Hence, the NTUC Chief is not correct to say the budget is "pro-worker".
Instead of using the direct "blunt" tool by cutting CPF, the Government is using the "hidden" tool through the taxes Singaporeans are paying.
MNCs are seldom bought in by the holistic concepts of tripartism. Look, before the selling of Jobs Credit program can take its impact, MNCs are already retrenching. If they have to retrench, they will retrench.
NEC Corp - 20,000
Hitachi - 7,000
Our own Chartered Semicon - 600
SPUR or not, what more to come?
It is more practical that the NTUC yell for adequate retrenchment benefits for those who are axed since there is still inadequate statutory provisions to protect workers who are retrenched, in respect of their entitlement for retrenchment benefits.
The Govenment should also helped the non-unionised workers who are axed in view of shortcomings in statutory protection.
The news that came out from Chartered Semiconductors recently did not speak very well of the JOB CREDITS scheme. So much for the thumbs-up reports about this Job Credit budget by the Govenment.
We all know that this year is an extremely challenging year for businesses and households to run their budgets. Government has done the best even though it might not be seen as BEST!
There is only one thing I could not understand and that is Government's future investments should be paid by taxpayers' money.
Please take heed from this financial meltdown!
Firstly, unless you seriously think that a protectionist measure is the way to go, for an open economy like ours, we are unlike China with a lot of govt-owned enterprises and hence, cannot dictate companies on their strategies.
The Budget is meant to encourage companies to keep the employees, especially Singaporeans, coz the Jobs Credit scheme is only applicable to those with CPF. If they retrench people, this would mean less employees and hence, less cash for them. And in this case, if they still have to retrench, that would mean they are seriously in trouble. If they are in serious trouble, forcing them to keep their employees would only lead them to going bust eventually. This would be worse as even more people will lose jobs.
I don't know what can be done to stop companies from retrenching -- the government may be able to save a few but it cannot save everyone.
If you say the amount of money spent for this Budget is not enough, then how much is enough?
Take a look at Malaysia where even Johor is bigger than us. Their national budget is only 7 billion Ringgit.
In fact, I cannot think of any other country with a budget that is big enough to save everyone (within the country).
And on GST reduction, you may consult the article written by Wang Xin Min in yesterday's ST Forum page. It has a very good explanation of why GST reduction won't work. FYI.
Great analysis from a great mind. How come the scholar-minds can't see this?
Saw in a news report today that an audit of the visa applications revealed that a substantial amount of bailout money from the US govt were used to recruit foreign CEOs and foreign talents instead of being channelled to keep locals jobs.
Dear Mr Tan,
I read from another perspective (most likely from a scholar mind sympathizer) that the budget is pro-people and smart move so that we don't resort to minimum wage or amendments to the basic principles of workfare:
http://kwayteowman.blogspot.com/2009/01/on-budget.html
How does it differ from your view that the budget is not pro-people?
Don't worry,the govt has lots of ammo in its reserves.Once they decide to hold an election,expect them to shower money on the ppl. How else to win an election, every govt in the world does that.
thank you for this analysis.
What s worse is that com care funds budgetted for last year has not been spent. Why? Because of the severe guidelines and constraints before you can apply, and probably difficulty in passing the message to Singaporeans. What I find disturbing is also the medias reports on illegal hawkers. I hope the neccessary bodies will allow the people to be more entreupreunial and allow more of such roadside hawkers to bloom, so that they are not so dependant on the usual employers. Let us have a more vibrant streetside shops.
Thank you.
It is definitely not a budget to help the common man. Billions of dollars and robbing from reserve, why none good for me, a citizen that paid taxes for almost 20 years?
Post a Comment