Ministry of Finance Job Support Scheme was largely wasteful
The Jobs Support Scheme (JSS) was launched in 2020 to protect jobs and help firms retain local workers. The Government has committed over $25 billion to the JSS, and supported over 150,000 employers for up to 17 months.

I consider the JSS to be largely wasteful. It allows employers to keep workers on the payroll, doing nothing. 

Some of the businesses, e.g. banks, are not adversely affected by the economic slowdown, but they still continue to get the financial support. 

The money spent has now got to be recovered through other means, including an increase in GST.

What was an alternative approach?

At the start of the pandemic, I suggested that the government should allow the workers who are adversely affected by the economic slowdown to withdraw their personal savings from the Central Provident Fund. If their savings run out, they can take a loan from the government at a modest rate of interest. See link.

The employer can put a part of the workforce on unpaid leave, or reduce the working hours for a proportionate reduction in pay. The affected workers can access the CPF withdrawal or government loan. 

The affected workers can spend their non working time to earn a second source of income or to spend with the family. They do not need to idle in the workplace with nothing to do. 

This approach allows a larger group of people to get financial relief. It is not restricted only to workers who work in companies supported by JSS.

Some of the government loans will not be repaid. This has to be written off and is the real cost that has to be borne by the government. 

For workers with insufficient savings at an old age, they can get government financial support, such as a modest pension, or continue to work, if they remain healthy. The public sector should create suitable and useful jobs to use the available manpower. 

If the finance minister had been more prudent in using the national reserves, we may not need to raise GST from 7% to 9%.

Vote - do you agree that a large part of the JSS was wasteful?

Tan Kin Lian
 

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