03 Feb 2020  (457 Views)
Helping the tourism sector tide over the economic slowdown

How can the govt help the tourism sector tide over the economic slowdown caused by the Wuhan virus?

Here are my suggestions. 

We have to identify what is the likely problem that will arise. Many small businesses in the tourism industry will have to close down. Even the larger businesses, such as airlines and hotels, will have to retrench workers to cut down on their operating expenses. 

When many workers lose their jobs, they have to cut their spending. It will cause problem to other businesses, especially the domestic sector.

The first goal is to ensure that many people remain employed. How can this be achieved?

All right, here are my suggestions:

a) The businesses that are affected can apply to the govt to be registered. 

b) They agree to keep all their existing workers and reduce cost by giving no-pay leave, say 20%. 

c) The affected workers can be allowed to withdraw from their CPF savings to the extent of their no pay leave. If they have no CPF savings, they can take a loan from the govt for the same amount at an interest rate of 2.5%.

d) The businesses can apply to the govt for a loan, also at 2.5%, of 20% of their worker's payroll. This will help them to pay the rental.

The affected workers have the additional time to do part time work, or just to take a rest. With the money from CPF or govt loan, their financial position is intact, as before. 

This suggestion is not perfect. When workers take money out from CPF, they deplete their savings for retirement. It cannot be helped. They need the money now, and not many years down the road. If they can afford to meet their living expenses at a reduced income (say drop of 20%) without withdrawing from their CPF, they do not need to do so).

Minister Chan - I hope you are listening. 

Tan Kin Lian

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