WCS meant to help businesses restructure: Josephine Teo

SINGAPORE: Minister of State for Finance and Transport Josephine Teo said Budget 2013’s Wage Credit Scheme (WCS) is meant to help businesses restructure, and is not a tool merely to compel employers to increase salaries.

She was addressing concerns over the scheme raised at a post—Budget dialogue.

Some dialogue participants were concerned 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 worried that employers might simply raise wages to tap on the scheme without doing anything to improve productivity.

Mrs Teo explained that in the restructuring process, firms may face increased costs, so 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.

She said: "We have to leave it up to employers, individual employers to decide for themselves what type of wage increases will be sustainable, then it’s during this three—year transition that we’re helping them make sure that it’s not too costly for their own business transition."

— CNA/xq