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It’s been a challenging year.
The Singapore economy grew by 0.7% in 2019 — this is the slowest growth since the 2008 Financial Crisis. In comparison, our economy grew by 3.4% in 2018.
Our export-oriented economy first hit the brakes due to global trade tensions, and was further challenged by the cyclical downturn in the electronics sector. Just as things were slowly getting better, the COVID-19 outbreak occurred and affected many countries around the world, including Singapore.
Sectors such as retail and F&B businesses are facing decreasing demand and implementing cost-cutting measures. Jobs are affected. Trade and investment are affected as well. Changi Airport is much quieter now, with some flights cancelled. Hotels are also seeing fewer visitors. Even my favourite bubble tea stall has been shuttered for weeks…The ripple effect has indeed been sobering.
Thankfully, there are some kind-hearted Samaritans to help us along. Kudos to all the medical staff who have been working tirelessly, and the cleaners, the volunteers, the nice landlords cutting rent, and many others.
Ahh… Faith in humanity restored.
At a national level, the recent Budget Statement delivered on 18 Feb 2020 by Finance Minister Heng Swee Keat, who is also Deputy Prime Minister, deserves special mention. As announced at Budget 2020, the government would be rolling out measures to help Singapore’s businesses and workers stay afloat during this challenging period, and use this period to upskill and better position ourselves to seize future opportunities.
Beyond this Stabilisation and Support Package, there were further initiatives covering areas such as education, healthcare, retirement, community-building, climate change, and fiscal sustainability.
As there are too many to discuss, let’s just zoom in on some of the key measures introduced to help Singapore’s workers, and how we can benefit from them!
Curious to hear what other fellow Singaporeans are saying about Budget 2020? We also interviewed some people for their views:
- CY Lim, 47, graphic designer
- Susan, 45, unemployed
- Samantha Seah, 24, public relations consultant
- Nicole M., 30, learning & development executive
- UV Raman, 51, journalist
- Jena Wong, 58, administrator
- Benjamin Soh, 32, art director
“It is a good starter package for this year and I am glad that it is in place to support workers like me as well as a small non-profit company like mine. However, with the unexpected addition of COVID-19, I think extending the measures to cover between 9 months to 1 year might be a better move.”
“These are short-term measures. If the economy doesn’t pick up soon, they might not be enough. Instead of payouts, the government could offer better job placement initiatives for lower skilled/older workers (most dispensable during volatile situations). But of greater importance is the economic support of businesses through greater collaboration initiatives within the state and regionally.”
“The considerable sum of money directed towards saving jobs and small businesses will be helpful during this uncertain period. It’s a heartening and welcomed move to help Singaporeans tide through this challenging period.”
For CY, the COVID-19 outbreak has taken a toll on her job security, as she works in an events and publishing company.
“Because of the coronavirus, a major outdoor event we have been working on since June 2019 has been postponed indefinitely. However, we’re unable to reclaim costs such as venue and equipment rental. As a result, my company’s revenue forecast has been halved and I’m worried that I might be asked to take a paycut, or worse, get laid off,” CY shared.
For Susan, seeking employment has become tougher during this challenging time: “Many companies have stopped hiring, which makes it harder to find a job,” she said.
To help local workers and businesses impacted by the health scare, the government announced the $4 billion Stabilisation and Support Package. The package, developed to address near-term economic uncertainties, aim to help workers retain jobs and to use this period to upgrade skills. This is so that we’ll be raring to go once the economy recovers.
|1. Jobs Support Scheme
For every local worker in employment, the government will offset 8% of wages, up to a monthly wage cap of $3,600, for 3 months.
Think of it as something like an 8% cashback that eligible employers get for retaining each and every one of their local workers. This will be based on the company’s CPF contribution data for the months of October 2019 to December 2019, up to $3,600/month (excluding employer CPF contribution) per employee.
This definitely eases the burden on employers and helps them retain staff. However, they’ll still need to stick it out for a little while longer, as the payouts will be made by 31 May 2020.
|2. Enhanced Wage Credit Scheme
The monthly wage ceiling will be raised from up to $4,000 to $5,000, for qualifying wage increases given in 2019 and 2020. The government’s co-funding levels for 2019 and 2020 will also be increased by 5%, to 20% and 15% respectively.
Some background: The Wage Credit Scheme was introduced in Budget 2013, in a bid to help employers reward their staff financially, embark on transformation efforts and to encourage the sharing of productivity gains with workers.
Over 700,000 Singaporean employees from 90,000 enterprises stand to benefit — time for a pay raise when a pay raise is due!
|3. Enhanced support under Adapt and Grow
Employers will get additional support for redeployment programmes in the retail, food services, tourism, and aviation sectors — areas being hit especially hard during the COVID-19 outbreak. For those sectors, the funding period for reskilling will be extended from 3 months to a maximum of 6 months.
Over 330,000 local workers stand to benefit from this initiative. So if you feel like it’s time to up your game, now’s the time.
“I hope that our SkillsFuture Credits can cover more than just short courses, especially for those who seriously want to prepare for their next career switch.”
“From my experience, most courses cost upwards of $1,000 and even then, there is the age factor that could work against me when seeking a new career. The SkillsFuture Mid-Career Support Package, I hope, will be able to come to the aid of middle-aged employees looking for employment.”
“Having SkillsFuture inculcates in us a stronger sense to never stop learning. I’ve been wanting to prepare myself for a second career in horticulture or vet tech-animal husbandry to enhance my employability. However, due to my long working hours, I’m not able to at this point. I feel the SkillsFuture initiative can be further improved if we had up to $2,000 in credits as some courses can be quite expensive. Also, perhaps the government could work with employers so that we can be released from our duties to pursue these courses.”
“Print design is my passion and love, but I understand that I need to embrace digital design to stay relevant. Hence SkillsFuture and the Mid-Career Support Package make it possible for me to take up another course. I’m now considering taking up 2 courses this year — one of which is Hyper Island’s Human Centred Design. However, at $2,000 for a 2-day course, it’s still expensive after subsidy.”
While we tackle the immediate challenges, it is important to not lose sight of the future. This is why the Finance Minister also announced plans for the Next Bound of SkillsFuture, which include a one-off $500 SkillsFuture Credit top-up for adult Singaporeans aged 25 and above, and a new Mid-Career Support Package. The long-term aim is to develop our people, so that we can gain better access to good jobs and new opportunities.
Using her SkillsFuture Credit, UV previously took up a course in scriptwriting for short films in a bid to transition to digital journalism; while Susan is currently pursuing a project management course that she hopes can enhance her employability and land her a good job.
The top-up is a welcome move for CY, who has exhausted her earlier SkillsFuture Credit. She took up the Google Squared Digital Marketing course last year. With her SkillsFuture Credit plus IMDA’s subsidy, she paid just 10% of the course fee, or $2,350.
|1. One-off SkillsFuture Credit top-up of $500
Every Singaporean aged 25 years and above will get a $500 SkillsFuture Credit top-up, which is available for use from 1 Oct 2020 to end-2025.
|2. SkillsFuture Mid-Career Support Package
This will benefit locals in their 40s and 50s, to help them stay employable and move onto new jobs or roles. The capacity for reskilling programmes such as the Professional Conversion Programme (PCP) under the Adapt and Grow initiative will also be increased, so that more people can tap on the programmes to make a successful mid-career switch to their ideal job.
There will also be a hiring incentive for employers who hire local jobseekers aged 40 and above through reskilling programmes.
Plus, every Singaporean aged 40-60 this year will get a special SkillsFuture Credit top-up of $500. This is on top of the one-off SkillsFuture Credit top-up of $500, but the special credit can only be for selected reskilling programmes at Continuing Education and Training (CET) centres.
“These measures look good on paper. But when it comes to implementing them, I hope there are processes in place to ensure that employers do what is expected. For older workers, I think the most important thing is to get a chance to learn on the job. While it is true that their skills may be outdated, many of them are quick to learn when they actually do the tasks every day.”
“Having almost 40 years of working experience, I feel that recognition and motivation are very important to keep older workers active in the workforce. I’ll still continue looking for jobs that require my experience if possible, and contribute my best… so long as society still gives us the opportunity to do so.”
“My concern is that by the time I approach my senior years, measures to re-skill will not adequately prepare me for the accelerated pace of change and evolution of jobs. It is heartening that these measures have been introduced/improved, and hopefully with data, insights and feedback from older workers collected over time, the measures can be further refined. The government can also look into psychological/counselling support if our senior workers require it. At a later stage in my life, I envision my contribution to be more advisory or mentorship-related in a work setting, and hopefully more operational or execution-specific in a community-building setting.”
For senior workers, Budget 2020 also has some benefits in store for them.
To support more mature workers who are keen to continue working, the government has put in place the Senior Worker Support Package. This will help older workers who wish to continue contributing to their workplaces, or even make transitions and carve out new careers.
In addition, we are living longer — last we checked, the life expectancy here was 84.8 years, according to a 2017 report. So it’s good news that our seniors can be supported in their pursuit to stay active and remain connected to the larger society, should they desire to stay in the workforce.
Jena observed that these days, many organisations hire temporary and contract staff — “even the younger generation are taking a longer time to land a job.” From speaking with her older relatives, Nicole sensed that “they might feel quite alone when grappling with the prospect of re-employment at a later stage in their lives.”
Even for those still in their 40s, thinking about the future can be daunting. “Nothing will help if companies do not change their mindset on hiring older workers,” said Susan. She added that when promoting the value of older workers, much of the focus is on blue-collar jobs, rather than PMET roles.
|1. SEC and ASEC > Senior Employment Credit
From 1 Jan 2021 to 31 Dec 2022, the Special Employment Credit (SEC) and Additional Special Employment Credit (ASEC) will be refashioned into a Senior Employment Credit. Employers will receive wage offsets of up to 8% when they employ senior Singaporean workers aged 55 and above, who earn up to $4,000 a month.
|2. CPF Transition Offset
From 1 Jan 2021 to 31 Dec 2021, employers will be provided with wage offsets for local workers aged 55 to 70. This will help to offset half of the increase in employer CPF contribution rates in 2021, up to a cap of $6,000/month.
While employer CPF contribution rates will be increased from 13% to 14% in 2021, the CPF Transition Offset will provide relief of half of the increase. i.e. if the increase is $60 (1% of $6,000), the offset will be $30.
|3. Senior Worker Early Adopter Grant
From 1 July 2020, the government will provide funding support to companies that increase their own retirement and re-employment ages ahead of the legislated changes.
|4. Part-Time Re-employment Grant
From 1 July 2020, the government will provide funding support to companies that voluntarily commit to providing part-time re-employment to all eligible seniors who request for it.
Hopefully, these financial measures will help to propel a change in mindset and encourage employers to retain and employ senior workers.
A Budget to help Singapore’s workforce
These measures form part of the government’s broader plans to help Singaporeans cope with these near-term economic uncertainties. But more importantly, during this period, we can tap on whatever help is available to develop ourselves, from Budget 2020 and beyond, so that we’ll be ready to seize new opportunities when the economy swings up — regardless of what stage of our careers we are in.
For a more comprehensive look at Budget 2020, which covers other key areas of investment in Singapore’s future, head over to the Singapore Budget 2020 website.
What do you think of the Budget 2020 measures to help our workforce? Let us know in the comments below!