(C) JOBS FOR SINGAPOREANS

C.1. The first and most important thrust in the Resilience Package is jobs for Singaporeans. We will introduce a Jobs Credit scheme to help employers to keep their workers. We will also strengthen our subsidies for training and provide additional support for lower-income workers who face a reduction in pay during the downturn. Finally, the Government will also expand recruitment across ministries and statutory boards, for all levels of employees, and including mid-career professionals.

Jobs Credit

C.2. To sustain jobs for Singaporeans, we will introduce a Jobs Credit which will encourage our businesses to preserve jobs as much as is possible in the downturn.

Everybody has a part to play

C.3. Everybody has to make adjustments in this downturn. Workers are already facing cutbacks in bonuses, reduced overtime and in some instances, involuntary no-pay leave. The National Wages Council has recommended that companies may implement a wage freeze or wage cut to remain competitive and save jobs. Workers will therefore be making significant adjustments in this crisis to allow businesses to survive and to keep their jobs.

C.4. But wages are only part of the total cost of doing business. We expect businesses to find every way to cut unnecessary costs in their operations, improve efficiency so as to reduce overheads without having to retrench workers. As NTUC Secretary-General Lim Swee Say has urged, businesses should cut costs to save jobs, not cut jobs to save costs.

C.5. The Government will however, provide a significant incentive for companies to retain existing workers, and where their business warrants, to employ new ones. The Jobs Credit will provide every employer with a cash grant to reduce their costs of employing Singaporean workers during the crisis.

Jobs Credit will have broadest impact

C.6. The Jobs Credit that an employer receives will comprise 12% of the first $2,500 of the wages of each employee who is on the CPF payroll. It will be given in four quarterly payments, with each payment being based on the workers who are with the employer at the time. This will therefore provide incentive for employers to retain their local workers. For example, for a worker whose wage is $2,500, an employer will get $900 a quarter, or $300 a month.

C.7. Employers will receive the first payment at the end of March this year. The next three payments will be in June, September and December 2009. (Details of the Jobs Credit are in Annex A ( 25kb).)

C.8. The Jobs Credit of 12% of wages, will be equivalent to a 9 percentage point CPF cut³ . The Government did consider cutting the employer CPF contribution rate but has decided against it. The fundamental problem in this recession is not that of wage competitiveness but that of a slump in global demand. There is therefore no need for an across-the-board cut in wages at this time. Furthermore, by designing the Jobs Credit to cover the first $2,500, which is in fact pegged at the median wage in Singapore, we are also giving companies special incentive to retain low and middle-income workers – more than a CPF contribution rate cut would achieve.

C.9. The Jobs Credit is also better than the alternative of giving companies a corporate tax rebate during the crisis. It helps all companies, including our SMEs as well as those who pay much lower income tax under our tax schedule. This broad-based approach is important because our SMEs account for six of 10 Singaporean jobs. The Jobs Credit will add to the resilience of companies that are still viable but have been caught by the severity of the crisis and would otherwise be forced by cash-flow difficulties to shed workers.

C.10. The Jobs Credit will cost the government $4.5 billion. This is not intended to be, and must not be, a permanent scheme to subsidise employment. It is a temporary scheme to help companies through an exceptional downturn.

C.11. However, if the downturn continues, it may be necessary to extend the Jobs Credit, in some form, over the following year as well. We will review this later depending on the state of the economy.

Re-skilling: SPUR for workers and professionals

C.12. The second component of our Jobs programme is to help Singaporeans upgrade their skills so that they can stay employed or seek re-employment. This is the reason why the Government launched the Skills Programme for Upgrading and Resilience (SPUR) last December which provided higher course fee support for companies and individuals and absentee payrolls for companies that send their workers for training.

C.13. Workforce Development Agency (WDA) has recently expanded by five times, the number of courses covered under SPUR including courses in human resource, healthcare, precision engineering, and ICT. We have also extended SPUR support to in-house training that meets quality training standards, for companies that commit to the Tripartite Guidelines for Managing Excess Manpower. With the recent expansion, there will now be more than 800 courses, covering 24 industries, and a total of 230,000 training places under SPUR.

Help for PMETs

C.14. We have to step up training across all levels of the workforce, including our PMETs (professionals, managers, executives and technicians). To cater to the needs of PMETs, WDA aims to double the number of Professional Conversion Programmes over the coming year, from 23 currently.

C.15. We will make two more enhancements to SPUR to help PMETs re-train. SPUR currently provides course fee subsidies of 80% for PMET-level courses. We will be increasing the subsidy rate for PMET courses that are eligible for SPUR to 90%, the same subsidy level as rank-and-file level courses. This includes all Specialist and Advanced Diplomas offered by our polytechnics.

C.16. Further, WDA will bring under SPUR, selected tertiary courses at UniSIM and our three publicly funded universities.

C.17. Complementing SPUR, the Economic Development Board (EDB) will introduce a $100 million programme where EDB co-shares manpower, training and related costs with companies, especially focused on engineering and technical jobs. It will also fund on-the-job training opportunities for fresh graduates.

C.18. These re-training and upgrading measures are expected to cost $750 million over the next two years. It is money well invested in the human capital of our workers.

WIS Special Payment to help with lower wages

C.19. The third component of our Jobs programme will be a temporary top-up to the Workfare Income Supplement (WIS) received by low-income workers. Some of them may have to accept lower wages or work less overtime because of the downturn, which means they will take home less pay. We will give them a temporary WIS Special Payment, to supplement their pay and encourage them to stay at work.

C.20. The WIS Special Payment will provide low-income workers with an additional 50% of the WIS payments that they will receive over the course of this year. As an illustration, a 50-year old employee who has been working throughout 2008 and 2009, earning $1,000 a month, will receive $600 in WIS Special Payment, fully in cash. This will be on top of the $1,200 in WIS that he will receive for this year’s work.

C.21. As this is a special measure for the downturn, we will relax the work eligibility criteria of the WIS Special Payment to allow those with less regular employment to also qualify. The WIS Special Payment will cost the Government $150 million.

Government will hire more now

C.22. The Government will also be expanding recruitment.

C.23. In all, we expect a total of 18,000 public sector jobs to be made available over the next two years⁴. (This includes government-supported jobs outside of the Government in areas such as childcare, tertiary education, and restructured hospitals.)

C.24. The Government is not expanding hiring simply to pad up our ranks. We are doing this so as to build up capabilities and strengthen quality. The downturn is the right time to do so, and enhance our ability to deliver quality education, healthcare and other essential services. We also need more people to handle an increased workload and scope of services such as in security and for social schemes. In all these areas we will remain lean and efficient, and avoid over-manning.

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