Yahoo Finance Budget 2023: Singapore raises Progressive Wage Credit Scheme by $2.4 bil, enhances labour market support
This is part of a range of measures announced by Wong to help lower wage workers achieve better career progression and wages.
As part of Budget 2023, deputy prime minister Lawrence Wong announced that Singapore would maintain the increase to the Progressive Wage Credit Scheme (PWCS), and top up the fund by $2.4 billion.
The PWCS is a scheme through which the Singapore government jointly funds wage increases for lower-wage workers. The scheme was introduced in the Budget last year to provide support from 2022 to 2026 for employers.
In 2023, the government will continue to co-fund up to 75% of pay increases for workers earning a gross wage of up to $2,500 a month, tapering down over time till 2026. For those earning between $2,500 and $3,000, a lower co-funding ratio will apply.
This is part of a range of measures announced by Wong to help lower wage workers achieve better career progression and wages.
According to him, the Singapore government has been studying policy moves to further strengthen this ecosystem to ensure “good employment outcomes”.
Wong says there is a need for “labour market intermediaries” to optimise training and job placement, as there are workers who may not know which training programmes to go for and employers who may be unfamiliar with such a landscape. “Training programmes can vary in quality. Some lead to recognised certifications, but others may not be so relevant.”
These intermediaries, or job-skills integrators, can be existing institutions and will be appointed to work with industry, training and employment facilitation partners to deliver outcomes such as engaging with enterprises to understand the manpower and skills gap in the sector.
They will also work with training providers to update existing training programmes, or develop new ones that will close the skills gap. By working closely with employment facilitation agencies, Wong says this should enable intermediaries to attain buy-in from industry partners and unions, and identify individuals with the right aptitude.
“They must also ensure that training translates into better employment and earnings prospects,” he emphasises
This programme will be trialled in the precision engineering, retail and wholesale trade sectors, where there are higher concentrations of mature workers and small and medium enterprises (SMEs), says Wong.
Meanwhile, the Senior Employment Credit, which provides wage support to employers, will be extended to 2025.
Under the scheme, employers will continue to receive wage offsets for hiring Singaporean senior workers aged 55 and above, and earning up to $4,000 a month to adjust to the higher retirement and re-employment age.
The Part-time Re-employment Grant will also be extended to 2025 to encourage employers to offer part-time re-employment, other flexible work arrangements and structured career planning to senior workers, he adds.
Lower-wage workers will continue to be offered access to career progression and wage support through the Progressive Wage Model, which was extended in 2022 to more sectors and occupations.
To support employers who hire people with disabilities, the Singapore government will also enhance enabling employment credit to cover a larger proportion of wages and longer duration for persons with disabilities (PWDs) who have not been working for six months.
There will also be new time-limited wage offset for firms to employ ex-offenders, in collaboration with the Yellow Ribbon Project. Wong says that the outcomes of this initiative will be reviewed in 2025.
According to him, these moves represent a “major investment” in its people by the Singapore government. “Reskill and upskill to seize new opportunities — this is how we achieve quality growth in an economy that works for all,” says Wong.
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