<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published August 18, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Review may entail tweaking Jobs Credit
A more targeted approach could be put in place
By CHEN HUIFEN
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The Jobs Credit scheme rolled out to tide Singapore businesses over economic hardship could be tweaked, but it is unlikely that this key component of the Resilience Package in this year's Budget will be withdrawn entirely at the end of this year.
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</TD></TR><TR><TD bgColor=#fffff1><TABLE border=0 cellSpacing=0 cellPadding=0 width=124 align=center><TBODY><TR><TD vAlign=top>'We hope that - as we get into Q4 and signals get clearer - if there's a need, the government will step in and help out, even if it's not to the extent that we saw this year... SMEs will still need help in 2010.'
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</TD></TR></TBODY></TABLE></TD></TR></TBODY></TABLE>This seems to be the sentiment among observers, after Prime Minister Lee Hsien Loong said the government will review the support package before the end of the year.
'I think there's a possibility they could take a more targeted approach,' said DBS economist Irvin Seah. Certain groups of workers in particular industries may have been structurally displaced because their companies have lost their competitiveness, he said. For them, Jobs Credit shouldn't last 'beyond end of this year'.
Mr Seah noted that structural unemployment - reflected as unemployment of at least 25 weeks - more than doubled to 16,600 people in the first quarter of 2009, from 7,500 a year earlier. Should Jobs Credit be withdrawn fully, more people could join the ranks of the long-term unemployed and the government would have to come up with other measures to address the trend, he said.
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</TD></TR></TBODY></TABLE>While not ruling out a more targeted approach, CIMB economist Song Seng Wun said the government is more likely to extend the support package if economic indicators in the remainder of 2009 do not signal a sustainable recovery in demand. The other possibility would be to lower the subsidy level - now 12 per cent of the first $2,500 earned. Given a general election is due by 2012, keeping unemployment low would be a strategic move.
'To end it when it is supposed to end would only be a natural action - if we are seeing enduring sustainable recovery,' Mr Song said. 'It's probably a bit early to tell at this point. So we may see an extension of Jobs Credit - maybe not a full year, but perhaps six months.'
The business community is reading the news of the Resilience Package review positively. Zooming in on the Jobs Credit scheme, it sees the review as an implication that the scheme may be extended. When it was announced in the Budget in January, Jobs Credit - estimated to cost $4.5 billion - was stressed as a temporary measure that would last a year.
'In a recent survey conducted by our chamber, Jobs Credit ranked tops as the most useful scheme in the Resilience Package,' said Singapore Chinese Chamber of Commerce and Industry president Teo Siong Seng. 'Understandably, this was because it offered an immediate boost to cash flow, especially among SMEs. We feel it would be premature to withdraw the scheme at year- end and we hope it will be extended beyond 2009.'
=> Got free money from taxpayers sure good one what! But how is subsidizing FTrash helping Sporns?
Predeep Menon, chief executive of the Singapore Indian Chamber of Commerce and Industry (SICCI), said: 'On the one hand, we are happy that the government is not saying there is no special package next year, but we do understand the special package cannot be indefinite.
'What we hope is that - as we get into Q4 and signals get clearer - if there's a need, the government will step in and help out, even if it's not to the extent that we saw this year. Maybe it will still help out a little bit, especially taking into account there will be SMEs and start-ups that will need continued support into next year.'
Apart from Jobs Credit, the government rolled out a Skills Programme for Upgrading and Resilience (Spur) scheme to help companies re-skill and upgrade workers, and a $5.8 billion Special Risk-sharing Initiative (SRI) to stimulate bank lending to firms. While Spur is likely to continue, as the $600 million budget set aside was for a two-year implementation, SRI may come under review as well by year-end.
Much hinges on economic developments in the US, Europe and China. As Mr Lee noted in his speech, companies here are seeing a pick-up in orders for Q3, but there is no visibility beyond that.
'I think most of the big-name manufacturing companies are not really sure what's going to happen for the rest of the year and early next year - whether some of the upturn is a permanent thing or more due to intermediaries restocking supplies,' said Phillip Overmyer, chief executive of the Singapore International Chamber of Commerce. 'We probably won't know for another couple of months whether the upturn in Q2 will be sustained or was just a short- term effect.' [/FONT]
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Review may entail tweaking Jobs Credit
A more targeted approach could be put in place
By CHEN HUIFEN
<TABLE class=storyLinks border=0 cellSpacing=4 cellPadding=1 width=136 align=right><TBODY><TR class=font10><TD width=20 align=right>
</TD><TD>Email this article</TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Print article </TD></TR><TR class=font10><TD width=20 align=right>
</TD><TD>Feedback</TD></TR></TBODY></TABLE>(SINGAPORE) The Jobs Credit scheme rolled out to tide Singapore businesses over economic hardship could be tweaked, but it is unlikely that this key component of the Resilience Package in this year's Budget will be withdrawn entirely at the end of this year.<TABLE border=0 cellSpacing=0 cellPadding=5 align=left><TBODY><TR><TD bgColor=#ffffff>[FONT=Geneva, Helvetica, Verdana, Arial, sans-serif]<!-- REPLACE EVERYTHING IN CAPITALS WITH YOUR OWN VALUES --><TABLE class=quoteBox border=0 cellSpacing=0 cellPadding=0 width=144 align=left><TBODY><TR><TD vAlign=bottom>
</TD></TR><TR><TD vAlign=top>
- Predeep Menon,
</TD></TR><TR><TD vAlign=top>CEO, SICCI
</TD></TR></TBODY></TABLE></TD></TR><TR><TD height=39>
'I think there's a possibility they could take a more targeted approach,' said DBS economist Irvin Seah. Certain groups of workers in particular industries may have been structurally displaced because their companies have lost their competitiveness, he said. For them, Jobs Credit shouldn't last 'beyond end of this year'.
Mr Seah noted that structural unemployment - reflected as unemployment of at least 25 weeks - more than doubled to 16,600 people in the first quarter of 2009, from 7,500 a year earlier. Should Jobs Credit be withdrawn fully, more people could join the ranks of the long-term unemployed and the government would have to come up with other measures to address the trend, he said.
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'To end it when it is supposed to end would only be a natural action - if we are seeing enduring sustainable recovery,' Mr Song said. 'It's probably a bit early to tell at this point. So we may see an extension of Jobs Credit - maybe not a full year, but perhaps six months.'
The business community is reading the news of the Resilience Package review positively. Zooming in on the Jobs Credit scheme, it sees the review as an implication that the scheme may be extended. When it was announced in the Budget in January, Jobs Credit - estimated to cost $4.5 billion - was stressed as a temporary measure that would last a year.
'In a recent survey conducted by our chamber, Jobs Credit ranked tops as the most useful scheme in the Resilience Package,' said Singapore Chinese Chamber of Commerce and Industry president Teo Siong Seng. 'Understandably, this was because it offered an immediate boost to cash flow, especially among SMEs. We feel it would be premature to withdraw the scheme at year- end and we hope it will be extended beyond 2009.'
=> Got free money from taxpayers sure good one what! But how is subsidizing FTrash helping Sporns?
Predeep Menon, chief executive of the Singapore Indian Chamber of Commerce and Industry (SICCI), said: 'On the one hand, we are happy that the government is not saying there is no special package next year, but we do understand the special package cannot be indefinite.
'What we hope is that - as we get into Q4 and signals get clearer - if there's a need, the government will step in and help out, even if it's not to the extent that we saw this year. Maybe it will still help out a little bit, especially taking into account there will be SMEs and start-ups that will need continued support into next year.'
Apart from Jobs Credit, the government rolled out a Skills Programme for Upgrading and Resilience (Spur) scheme to help companies re-skill and upgrade workers, and a $5.8 billion Special Risk-sharing Initiative (SRI) to stimulate bank lending to firms. While Spur is likely to continue, as the $600 million budget set aside was for a two-year implementation, SRI may come under review as well by year-end.
Much hinges on economic developments in the US, Europe and China. As Mr Lee noted in his speech, companies here are seeing a pick-up in orders for Q3, but there is no visibility beyond that.
'I think most of the big-name manufacturing companies are not really sure what's going to happen for the rest of the year and early next year - whether some of the upturn is a permanent thing or more due to intermediaries restocking supplies,' said Phillip Overmyer, chief executive of the Singapore International Chamber of Commerce. 'We probably won't know for another couple of months whether the upturn in Q2 will be sustained or was just a short- term effect.' [/FONT]
</TD></TR></TBODY></TABLE>
