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Government to help employers pay Singaporeans more

Singapore has broken new ground with a novel scheme to increase the wages of Singaporeans.

The government will bear 40 per cent of the pay hike for Singaporeans earning up to 4,000 Singapore dollars (over $3,200) a month. This should benefit at least half the Singaporean workers as they earn less than that. The gross monthly income from work of Singapore citizens and permanent residents working full-time was 3,480 Singapore dollars last year, according to the Ministry of Manpower.

The 3.6 billion Singapore dollar Wage Credit Scheme is to help Singaporeans cope with the rising cost of living and reduce the income gap.

At the same time, the government will make it more expensive and harder to hire foreign workers. It will raise the levies and slash the quotas for foreign workers, who will also have to be more highly skilled to work in Singapore.

Businesses will have to increase productivity to make up for the reduction in foreign workers, and this will translate into higher wages for Singaporeans, said Finance Minister Tharman Shanmugaratnam, announcing this year’s budget in parliament yesterday.

The new measures seem intended to appease Singaporeans unhappy about the rising cost of living, growing economic disparity and the influx of foreigners.

Significantly, while foreign worker levies will be raised, the foreign domestic worker levy will be lowered for families employing maids. This is another step to help them cope with the cost of living.

This is how the government will help Singaporeans earn more. If an employer raises a Singaporean worker’s monthly wage by 200 Singapore dollars this year, the government will pay 40 per cent of that amount – or 80 Singapore dollars a month. The employer will have to pay only 60 per cent – or 120 Singapore dollars a month.

The government will bear 40 per cent of the wage hike for three years. If the Singaporean worker’s monthly wage is raised by another 200 Singapore dollars in 2014, the government will chip in an additional 80 Singapore dollars to cover 40 per cent of that amount. So if a Singaporean worker’s monthly wage up goes by 400 Singapore dollars in two years, 160 Singapore dollars of that amount will be paid by the government.

The government will continue to co-fund 40 per cent of the wage hikes till 2015. So if the Singaporean worker’s wage is raised by another 200 Singapore dollars in 2015, that would include another 80 Singapore dollars from the government. In other words, if a Singaporean worker’s wage goes up by 600 Singapore dollars in three years, 240 Singapore dollars of that amount would be paid by the government.

The government will help Singaporeans get better jobs, too. The Ministry of Manpower “will put in place a framework to ensure that firms give fair consideration to Singaporeans in their hiring practices”, said Finance Minister Tharman Shanmugaratnam.

Announcing this year’s budget in parliament yesterday, he said: “In short, we are building a better Singapore: a more inclusive and caring society, with an innovative and dynamic economy, so that Singaporeans can have better opportunities and more fulfilling lives.”

This year’s budget breaks new ground not only by offering direct government assistance to increase the wages of Singaporeans. The finance minister also acknowledged: “Meritocracy alone will not assure us of this (social mobility),”

“We must do more to mitigate inequality,” he said. “We are making our fiscal system more progressive, by tilting our taxes and benefits in favour of the lower- and middle-income groups.”

The Ministry of Education will also develop online resources so that all schools have access to the best teaching material.

“This budget is for a better Singapore,” the finance minster said. It is certainly aimed at helping the people.

About the author: Abhijit Nag loves reading, writing and getting news and information online.

  • Cremora Tuesday, February 26, 2013, 6:40 pm

    don’t think you’ve edited your piece properly. there’s a whole second half after a long break. here you repeat some of what is in your first half, and …. well, go take a look.

    • Abhijit Tuesday, February 26, 2013, 7:55 pm

      You are right. Thank you very much for pointing it out. Now I have fixed it, thanks to you.