What the Budget means for a lower-income Singaporean? (Part 2)

What the Budget means for a lower-income Singaporean? (Part 2)

By Leong Sze Hian

Saleswoman in health food store

My name is Jane (not my real name). I am a 33 year old Singaporean worker with a basic pay of $500 a month. With overtime and allowances, I can earn as much as $1,900 because my normal work hours are 12 hours a day for six days in a week.

How many low-income workers?

I understand that there are about 400,000 local workers who only earn about $1,200 or less a month.

How many workers earning about $1,900 or less and are below age 35 are there, like me?

Not old enough to get Workfare?

I don’t qualify for Workfare because I am not 35 years old or older.

Not old enough to get Medisave top-up?

I don’t get the one-time Medisave top-up of $200 as I am not age 45 or older.

I don’t get the GSTV Medisave Special Payment, as I am not 65 years or older.

Don’t earn enough to pay income tax?

The Income Tax rebate does not apply to me as I don’t earn enough to pay income tax.

Labout costs increase?

My employer tells us that his labour costs will go up, because of the increase in the foreign workers’ levy.

His transport costs may also go up because of the minimum 40 per cent down-payment and reduction of the maximum car loan period to six years.

Because of the lower foreign worker dependency ratio, he may have to pay more than previously, to get more local workers.

From past experience, he thinks that permanent residents (PRs) may be more willing to work for a lower pay, relative to Singaporeans.

100% local workers can be PRs?

So, I guess I may still end up as one of the very few Singaporeans in my company, because 100 per cent of the local workers can be PRs.

With the population white paper saying that there may be as much as 30,000 new PRs granted per year in the future, perhaps this state of affairs may continue.

Wage Credit Scheme means pay increase?

Existing workers like me may not get a pay rise, if my emoloyer has to pay much more to get new workers.

With all the above problems, I think my employer may be hinting to us that there may be no increase in pay again this year.

Inflation may rise?

With all these talk about rising costs, will inflation rise and make my life even harder?

I also had no pay increase last year because my company lost a contract to a competitor company which tendered a lower bid, as i was told that they were paying their workers even lower wages than our company.

Foreign worker’s levy works?

In the past, whenever the foreign workers’ levey was raised, some employers simply managed to get new foreign workers from countries who were willing to accept lower wages. This, in turn, caused Singaporeans’ wages to be depressed too.

As the recent “bus drivers’ strike” incident has shown – the foreign drivers were still about 25 per cent cheaper than Singaporean drivers, even after accounting for their foreign workers’ levy, accomodation and transports costs. (“A statistical analysis of the SMRT strike? – Balancing Growth, Foreigners & Meritocracy“, Dec 4)

So, I doubt as to whether my employer will increase my pay by much, due to the 40 per cent subsidy under the Wage Credit Scheme.

Dependency or target ratio?

I don’t know why they call it a dependency ratio, as I see so many companies treat it like a dependency target, to max out the non-Singaporeans that they can employ. Everywhere, I see jobs like administration, reception, IT, etc, that i believe Singaporeans are willing to work if the pay is decent or they don’t have to work 12-hour days forever like me.

Still need more time to study?

The budget statement said that they still need more time to study what other countries do – allow foreigners only when employers can show that they have tried and are unable to get citizens to work – this problem has been going on for years – so, how much more time do they need to study some more?

How much more revenue?

The budget statement was very detailed about how much it would cost the Government to give out so many benefits to businesses and individuals, but I don’t seem to be able to find any mention as to how much additional and total revenue are estimated to be collected, due to the increase in foreign workers’ levies.

It may be akin to telling you how much we will spend to help you, without telling you how much more money will be made?

So, the budget statement’s rhetoric that it is for a more inclusive society, may mean very little to me, and others like me.

(Note: Jane is a fictional character)