Due to Singapore employers not willing to give a pay raise, the Singapore government will be spending S$660 million to businesses as a welfare scheme in the name of “wage credits”. About S$220 million of the fund will be given to multi-national companies, while the remaining 70% are given to SMEs.
The Ministry of Finance yesterday (Mar 17) said employers will receive the payout credited into their GIRO bank accounts by the end of March 2017.
Under the welfare scheme for businesses, the government taxes will pay for 20% of the salary increase for a Singaporean worker earning S$4,000 and below.
Singapore employers are reluctant to increase salaries because of the ease and availability of foreign jobseekers. Salaries have been depressed by the influx of foreigners in recent years, and the employment situation worsen last week with job vacancies surging to an 8-year-low at 129 jobseekers for every job available.
Singaporean employees are also unfairly disadvantaged when compared to their foreign counterparts due to National Service and CPF taxes. A company has to pay for 22.5% CPF tax for hiring a Singaporean. The CPF tax is a fake retirement fund where Singaporean account holders do not have full access to. Withdrawal limits and Minimum Sum have been repeatedly raised as the government use the CPF as a low interest-obligation (2.5%) fund to gamble in the stock market.