Wage Credit Scheme to support restructuring, not a tool to compel bosses to raise pay, says Finance Minister of State Josephine Teo
Minister of State for Finance and Transport, Josephine Teo, says Budget 2013's Wage Credit Scheme is meant to help businesses restructure.
It is not a tool merely to compel employers to increase salaries.
She was addressing concerns over the scheme raised at a post-Budget dialogue yesterday.
Some dialogue participants were worried that the scheme, in which the government co-funds 40 per cent of wage increases in the coming years, would be prone to abuse.
They were concerned that employers might simply raise wages to tap on the scheme without doing anything to up productivity.
Mrs Teo explained that in the restructuring process, firms may face increased costs.
She said the scheme is meant to help them cope with the costs, without holding back on increasing wages.
She emphasised that the scheme is only for Singaporeans, and is tied to employee-records from the Central Provident Fund.
Mrs Teo said while some firms may try to abuse the system, the principle is not to make it too onerous for companies to benefit by introducing more paperwork just to safeguard the scheme.
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