MORE support should be given to self-employed persons (SEPs) to help them upskill, and to the unemployed to aid their job search, labour MPs said on the second day of the Budget debate on Thursday (Feb 23).

When it comes to improving productivity, SEPs often find themselves caught in a bind, said Yeo Wan Ling, Member of Parliament for Pasir Ris-Punggol GRC. For example, freelancers must upskill to earn more, but this is costly, takes time and thus eats into their daily takings.

The government training allowance for self-sponsored trainees could be expanded to include SEPs, so that they can afford time off to upskill, said Yeo, who is a director at the National Trades Union Council (NTUC).

She also called for deeper support for SEPs to upskill in critical areas such as digitalisation, especially for those in sectors disrupted by technology, such as media and transport. Skills frameworks that include government-supported apprenticeship programmes could be developed for craft-based professions, such as photographers, videographers, plumbers and mechanics.

For personal income tax, the 60 per cent fixed expense deduction ratio should be reviewed to better reflect drivers’ “thinning margins”. This is the share of gross driving income that can be deducted as expenses.

Goods and services tax (GST) rebates could be provided for SEPs who are not GST-registered. Taxi operators should either co-share the GST with drivers, or fully bear the increase, she suggested.

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The tax relief limit for business expenses should be increased, and insurance – for prolonged medical leave, for instance – should be allowed to count as a business expense, she added.

Separately, NTUC assistant secretary-general Patrick Tay reiterated his call for short-term financial support for workers who have lost their jobs. While the pandemic-era Covid-19 Recovery Grant has been extended to end-2023, he called for the government to go further and introduce a permanent scheme.

“The support provides displaced workers the space to upgrade their skills and look for suitable employment, with the knowledge that they would be able to continue supporting their family’s basic needs during this period,” said Tay, who is Pioneer MP. This increases the likelihood that professionals, managers and executives (PMEs) will find a good job match, he added.

He acknowledged concerns that such support may cause workers to stay unemployed for longer, making it harder for them to re-enter employment. But in a survey by a taskforce for PMEs, almost 80 per cent said such support would help workers cover their needs during their job search, he said.

Job-seekers must be directed to the support they need, he added. “This could be in the form of customised career counselling and advisory, or training that would equip them to take on jobs in growth areas or redesigned job roles.”

Separately, Workers’ Party (WP) MP for Aljunied GRC Jamus Lim said that unemployment insurance schemes can be designed to reduce the tradeoffs, with optimal schemes tending to tie larger payouts to shorter durations.

Other possibilities are having benefits decrease over time, or having a wage tax after re-employment that is higher if the worker has been unemployed for a longer time.

The WP suggests a six-month duration and a payout of 40 per cent of the worker’s last-drawn salary – less generous than most other countries, he noted. “We were deliberately conservative here, to ensure financial sustainability; however, we leave open the door for increases, based on consultation and social consensus.”

To support more workers in upskilling or changing jobs, the SkillsFuture Career Transition Programme (SCTP) could be expanded to more sectors, said NTUC deputy secretary-general Desmond Tan.

To address concerns about the opportunity cost of going for training – such as income loss – there could be protected training leave for employees, or an SCTP training allowance, suggested Tan.

NTUC deputy secretary-general Heng Chee How said that the tripartite partners should use “in-company mechanisms” to ensure that senior workers get due consideration and opportunities for training and skills-building.

Desmond Choo, who is NTUC assistant secretary-general, suggested ways to support young students and workers. He noted the widening starting salary gap between university and non-university graduates, with the latter typically becoming associate professionals and technicians (APTs) rather than professionals.

“The value APTs bring to our economy might not be valued fairly by the market. Without APTs, those in professional occupations cannot complete their work with quality or at all,” he said. “We need to move towards a better balance in valuing both technical and academic routes of career advancement.”

Singapore must strengthen vocational training and apprenticeship programmes for students and graduates from the Institute of Technical Education, and provide good career pathways, he said.

“We can incentivise companies to develop structured work-study diplomas and even overseas training stints. This improves not only productivity but also Singapore’s pool of talent,” he said.

Better quality internships are also needed, to reduce the number of youths who end up not entering the jobs for which they are trained, he added.

Marine Parade GRC MP Mohd Fahmi Aliman suggested expanding the eligibility criteria for the Workfare Income Supplement to cover more middle-income workers, and to increase payouts for those with dependents.

Payouts could be indexed to inflation, and the ratio of cash payouts to Central Provident Fund contributions could be adjusted, added Fahmi, who is director of operations and mobilisation at NTUC.

Another suggestion was to annually review the Local Qualifying Salary (LQS), which is the minimum that local employees must be paid if their employer wants to hire foreign workers.

The current LQS of S$1,400 is much lower than the 20th percentile wage of S$2,800 in 2022, said Fahmi. He noted that most progressive wages are pegged at higher amounts, such as S$1,500 for a data entry clerk.

An annual review would ensure that wages keep pace with targets for lower-wage workers, he said. This can be done through a mechanism like the National Wages Council, which already provides annual guidance on the range of progressive wage growth.