$1 billion incentive to boost hiring of local and older workers
New scheme is part of $8b Covid-19 support measures to save and create jobs, and seize new opportunities
When her three food and beverage (F&B) businesses were forced to shut during the eight-week circuit breaker period in April and May, she had to pivot quickly, switching to virtual events and finding new revenue streams.
Now, two months into phase two of the reopening of Singapore's economy, Ms Jamie Koh, 35, is looking to expand, and a new $1-billion jobs scheme has given the founder of Chupitos, The Beast, and Brass Lion Distillery a shot in the arm.
Deputy Prime Minister Heng Swee Keat said in a ministerial statement yesterday that the new Jobs Growth Incentive will support the hiring of locals in growth sectors amid the pandemic-triggered recession.
This incentive is part of an $8-billion injection into the economy that aims to save jobs, create new ones, and seize new growth opportunities.
Mr Heng said the money will go towards extending the Jobs Support Scheme (JSS) until next March and the Covid-19 Support Grant until December, supporting the battered aviation and tourism sectors, and enhancing the Start-Up SG Founder programme.
As part of the Jobs Growth Incentive's aim to create new jobs with a special focus on older workers, the Government will co-pay up to a quarter of the wages of new local hires for a year, subject to a cap, for firms that raise their headcount of locals over the next six months.
If these firms hire locals aged 40 and above, the subsidy is for up to 50 per cent of the wages.
The Manpower Ministry will provide more details soon.
Mr Heng, who is also Finance Minister and Coordinating Minister for Economic Policies, said: "There are bright spots amidst the severe economic situation. Our biomedical sciences, financial services and ICT (info-communication and technology) sectors continue to need more workers.
"The public healthcare and long-term care sectors are hiring. Some firms in the F&B and manufacturing sectors are growing and innovating."
Extending the JSS, which was due to end this month, by up to seven months will cost about $5.5 billion, of which, $3.3 billion will be disbursed in financial year 2020, the Finance Ministry told The New Paper.
The subsidies, which apply to the first $4,600 of gross monthly wages paid to each Singaporean or permanent resident employee, will now cover wages paid up to next March.
This will be adjusted to be based on the projected recovery of different sectors, Mr Heng said.
The aerospace, aviation and tourism sectors, which have been hit hardest by the pandemic, will get 50 per cent of wages paid from September until March.
As construction activity resumes in phases, built environment sector firms will receive 50 per cent of wages paid in September and October, and then 30 per cent of wages paid until March.
Arts and entertainment, food services, land transport, marine and offshore, and retail companies will get 30 per cent of wages paid until March. Most other firms will get 10 per cent.
Sectors managing well, such as biomedical sciences, precision engineering, electronics, financial services, online retail and supermarkets, will get 10 per cent of wages paid until December this year.
In all, most businesses will get 17 months of wage support.
So far, more than $16 billion has been paid out, benefiting over two million local workers in more than 150,000 companies.
For Ms Koh, the JSS payouts came as a welcome relief and allowed her to retain her local employees, who make up about two-thirds of her staff.
The new Jobs Growth Incentive will now let her hire more.
"It has been tough for small and medium enterprises in the F&B industry to hire locally. But with this support, we can actually increase the number of hires that we planned," she said.
Ademco Security's group managing director Toby Koh said the JSS extension could give companies that are considering laying off workers some respite.
He said: "If there is going to be a marked turnaround in the economy by March, perhaps companies will say, better keep the team together."
For Singapore University of Social Sciences economist Walter Theseira, the hope is that the Jobs Growth Incentive scheme can encourage employers to expand their headcounts, replace foreigners who are leaving with locals, and convert more of their manpower needs into permanent positions.
The big question is whether such a wage credit scheme, which is not a new idea, will actually translate into employment.
The former Nominated Member of Parliament said: "Employers almost never mention wage costs as a reason they don't hire locals. Usually the reason they give is a lack of experience, skills or expertise.
"Nobody is saying there are no Singaporeans with these skills or expertise, but the reality is we don't have enough to go around.
"The more specialised the position is, the less these kinds of incentives will make a difference because it is a problem of availability."