The Snitch

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Is $20.5b enough?

with 2 comments

The eagerly anticipated government Budget has just been announced earlier this afternoon, with many people wondering what measures the government would take in order to fight what could possibly be the worst recession in a long time.

According to ChannelNewsAsia, some of the workforce-related recession measures include:

  • Low-wage workers on the Workfare scheme will get 50% more in payout. A 50-year-old worker earning $1,000 a month stands to get $600 more, on top of the $1,200 he receives from the workfare scheme for work done this year. This means, he will get a total of $1,800.
  • The government will introduce a Jobs Credit which will encourage businesses to preserve jobs as much as possible in the downturn. The Jobs Credit that an employer receives will comprise 12% of the first S$2,500 of the wages of each employer who is on the CPF payroll. It will be given in four quarterly payments, with each payment being based on the workers who are with the employer at the time.

Other business-related measures include:

  • 40% tax rebate for industrial and commercial properties.
  • JTC Corporation, Housing and Development Board (HDB) and Singapore Land Authority (SLA) will pay a 15% rental rebate to their tenants and land lessees.
  • All foreign-sourced income earned before January 21, 2009, will be tax-exempted.
  • Goods vehicles, buses and taxis will get a 30% road tax rebate for a year.
  • Corporate income tax rate will be cut from 18% to 17% for the Year of Assessment 2010

Some thoughts from KPMG Tax Services on the Budget:

  • Danny Teoh, managing partner, KPMG LLP in Singapore

“The measures announced by the Minister demonstrate a clear understanding of what needs to be done to support the economy in these turbulent times. The exceptional injection of funds will go a long way towards saving jobs and positioning Singapore for future competitiveness.”

  • Chiu Wu Hong, executive director, KPMG Tax Services on the impact on SMEs

“SMEs are the big beneficiaries in this budget package with clear steps laid out to help viable companies stay afloat in these challenging times. Companies have also been provided incentives to encourage them to position themselves for long-term growth. Particularly innovative is the manner in which bridging loans will provide a life-line and liquidity to cash-strapped companies, while the Jobs Credit scheme helps to keep workers in the factories and at their desks.”

  • Owi Kek Hean, head of tax, KPMG Tax Services on the 1% reduction in corporate tax

“The proposed corporate tax rate reduction of one percent is in-line with what we expected. While significant, it may not be helpful for cash-strapped companies in the short term since it only takes effect in 2010. Nevertheless, it should go towards helping make Singapore a more attractive destination for foreign investment.”

What are your thoughts? Are these measures enough to keep your business afloat? Are the Job Credits helpful enough to want to retain your employees? Let us know what you think.

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Written by Human Resources

January 22, 2009 at 6:25 pm

Posted in Retention

2 Responses

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  1. >Are these measures enough to keep your business afloat?

    These measures only influence the supply-side of the economy. If demand do not pick up for the businesses, they will still face liquidation or more cost-cutting measures.

    Job Credit is a good incentive to retain the employees, however as said above, if demand do not materialise, no amount of job credits can help the business stay afloat.

    Bernie

    January 29, 2009 at 3:18 pm

  2. Well, I guess the government only wanted to help reduce business costs and keep Singaporeans employed (since there really isn’t a dole system in place).

    Only time will tell if the Jobs Credits will help keep the unemployment rates down.

    Lisa Cheong

    January 29, 2009 at 5:46 pm


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