THE Government will extend the Jobs Credit scheme by another six months by giving two more stepped-down payouts in March and June to help firms hold jobs, Prime Minister Lee Hsien Loong announced on Tuesday.
The first extra payment will be based on employees on the payroll in January, at 6 per cent of salary, and the second will be based on next April's payroll, at 3 per cent of the workers' pay. These additional payments will cost the Government $675 million and will be funded from its regular budget, unlike the earlier payments which came from past reserves, said PM Lee at the NTUC ordinary delegates' conference at Orchid Country Club on Tuesday morning.
The $4.5 billion scheme was part of the Resilience Package in Budget 2009, introduced to help ease companies' operating costs and avoid layoffs of workers during the economic downturn. For every resident worker on their Central Provident Fund payrolls, bosses currently get 12 per cent on the first $2,500 of the employee's monthly wage.
Lauding the scheme as 'an extraordinary response to a grave economic crisis,' Mr Lee said it has done its work and held retrenchment and unemployment numbers down. With the economy now having stabilised, he said it is timely to phase out Jobs Credit and adopt more targeted measures to support economic restructuring and enhance productivity.
On the six-month extension, Mr Lee explained: 'Strictly speaking, it is no longer needed. The economy is now recovering, and some companies are hiring again. But if we withdraw the Jobs Credit completely and suddenly, companies may have difficulties adjusting.'
'We have talked to employers and unions. They understand the need to withdraw the Jobs Credit, but hope to be given another few months. We have carefully considered all views and will extend the programme.'
Tue Oct 13, 2009 12:46 pm