Wage Credit Scheme Extension
14 Mar 2016Parliamentary Question by Mr Louis Ng Kok Kwang:
To ask the Minister for Finance whether the Ministry will consider (i) extending the Wage Credit Scheme beyond 2017 in light of the global economic slowdown and (ii) increase the quantum of 20% co-funding by the Government.
The Wage Credit Scheme (“WCS”) was introduced in Budget 2013, as part of a Transition Support Package, to help businesses cope with rising wage costs in a tight labour market, so that they can free up resources to invest in productivity and share the productivity gains with employees. Under this scheme, the Government co-funds 40% of wage increases for Singaporean employees earning gross monthly wages of $4,000 and below, over the period 2013 to 2015.
To provide more time for firms to restructure, the WCS was extended in 2015 for another two years from 2016 to 2017. This was in recognition that some businesses may require more time to adjust to rising business and wage costs. The support level was reduced to 20% to avoid Government support becoming a crutch even as we extended help to ease the transition within a tight labour market.
In the past few years, we have also stepped up targeted support for restructuring, through enhancements to schemes such as the Capability Development Grant and the Partnership for Capability Transformation. We will continue to monitor business conditions closely and calibrate our support for businesses, taking into account both short-term cost concerns and the need to sustain the impetus for restructuring.
To ask the Minister for Finance whether the Ministry will consider (i) extending the Wage Credit Scheme beyond 2017 in light of the global economic slowdown and (ii) increase the quantum of 20% co-funding by the Government.
Reply by Minister for Finance Heng Swee Keat:
The Wage Credit Scheme (“WCS”) was introduced in Budget 2013, as part of a Transition Support Package, to help businesses cope with rising wage costs in a tight labour market, so that they can free up resources to invest in productivity and share the productivity gains with employees. Under this scheme, the Government co-funds 40% of wage increases for Singaporean employees earning gross monthly wages of $4,000 and below, over the period 2013 to 2015.
To provide more time for firms to restructure, the WCS was extended in 2015 for another two years from 2016 to 2017. This was in recognition that some businesses may require more time to adjust to rising business and wage costs. The support level was reduced to 20% to avoid Government support becoming a crutch even as we extended help to ease the transition within a tight labour market.
In the past few years, we have also stepped up targeted support for restructuring, through enhancements to schemes such as the Capability Development Grant and the Partnership for Capability Transformation. We will continue to monitor business conditions closely and calibrate our support for businesses, taking into account both short-term cost concerns and the need to sustain the impetus for restructuring.