Manpower moves to watch in Budget 2023

BESIDES unemployment support, other possible manpower announcements in Budget 2023 include enhancements to a scheme for the lower-income and tweaks to the Central Provident Fund (CPF) framework.

Progressive wages for more

The tripartite Progressive Wage Model (PWM) could be expanded to cover more workers and sectors. Economist Kelvin Seah from the National University of Singapore noted that several low to middle-income sectors – such as repair of computers, personal and household goods, and vehicles – are not yet covered by the policy.

Another group is skilled non-degree holders, such as Institute of Technical Education graduates, whose incomes are stagnating, said Singapore University of Social Sciences associate professor Walter Theseira. “They could also be targeted – and I think that is the most likely expansion route – but one would have to be much more careful about the potential trade-offs as the wage floors get higher.”

Support for local workers

As Budget 2022 saw several key changes to foreign manpower policies, observers expect no major changes in this area this year. “The focus will return to the local workforce and how they can be best supported,” said Dr Seah.

The Singapore National Employers Federation (SNEF) hopes to see greater training support for employers, as more workers covered by the PWM undergo training. “Higher support for absentee payroll will help in view of the rising cost of doing business, including the increase in wage costs,” said executive director Sim Gim Guan.

Employers could also be given more help to implement work-life policies such as flexible work arrangements and mental wellness programmes. “This would help to attract those who are economically inactive to enter the workforce, and generally take care of the well-being of workers,” said Sim.

Extensions and enhancements

SNEF’s Sim hopes the Jobs Growth Incentive will be extended beyond its current March 2023 expiry date, to continue providing salary support for employers to hire more locals.

For workers, Workfare Income Supplement and Silver Support Scheme payouts could be increased in view of high inflation, said Prof Theseira.

Higher inflation may also mean a need to revise CPF interest rates; provide ad-hoc top-ups or assistance for lower-income CPF members; or provide more competitive investment options, he added. He noted that the CPF Advisory Panel proposed a low-cost investment scheme years ago, but this has not been implemented.