Delivered in Parliament on 6 April 2020
To say that the Covid-19 outbreak has been a curve ball for the world must be the under-statement of the century. In a span of two months, the viral outbreak has seen countries rich and poor scrambling to come to terms with understanding the health impacts of the disease and how to effectively contain its spread. Social distancing measures have upturned economic and social activity. Today, 6 April, is a milestone in Singapore, as most businesses prepare to shutter their premises in line with government directives, something that has not happened in my lifetime.
What is enough to deal with the impacts of the virus? At one level, the health consequences on most people are manageable, with serious consequences falling on mainly the elderly and those with pre-existing conditions. As such, it was recently pointed out by Harvard Professor Michael Sandel, that one could make a choice that economic and social activity should be kept up, as only a minority of people would become seriously ill. However, he warns that making that choice would be a purely utilitarian calculation that is detrimental to the common good, as there is a moral dimension that is immutable. We are all members of society, and the key question is: “What do we owe one another…” There is also the concern that the healthcare system should not be overwhelmed. With our own rising caseload from local transmissions, I agree that the circuit-breaker directive announced last Friday is necessary.
To ease the economic pain caused by Covid-19, G20 Leaders have agreed that governments should utilise available tools to minimise the economic and social impact. To this end, many governments have announced support packages to help businesses and households. The Resilience Budget before the House had a price tag of $48 billion; together with the first package announced in the Unity Budget in February, the total of about $55 billion amounts to about 11% of GDP. This is within the GDP range of the packages previously announced by some other governments. I also note the further support measures just announced in the Solidarity Budget, which brings the total package to about 12% of GDP.
As mentioned by Workers’ Party Secretary-General Mr Pritam Singh earlier, we will vote in support of the proposed government measures. That said, we have some questions about how the sums add up and whether some of the monies will go towards achieving their intended purposes. We are also concerned that large corporations who have received taxpayer help do not engage in irresponsible behaviour once recovery resumes. My other colleagues will speak on some of these aspects.
My speech today will focus on seeking some clarifications on the measures to soothe employment and income disruptions.
Jobs Support Scheme
In the Resilience Budget, the government announced wage support for local employees to cover 9 months of wages. This is to be paid to the employers, set at a base support level of 25%, with 50% support for food services and 75% for aviation and tourism related sectors.
There have been calls for the government to widen the definitions of qualifying businesses in the various sectors, as each sector has an ecosystem of suppliers of goods and services that will rise and fall with the industry. As an example, the industry for MICE (meetings, incentives, conventions and exhibitions) is listed in the Budget for enhanced wage support at 75%, but only for operators of purpose-built MICE venues. However, it was pointed out in a Business Times article on 3 April, that contractors who provided MICE-specific products and services to those venues would only get the 25% base level wage support. Such anomalies should be reviewed, as each industry has a supply-chain and ecosystem that will be similarly impacted. The situation is even more acute with the circuit-breaker policy in place.
It would also be opportune for the government to clarify how the JSS will directly benefit workers, since the wage offsets are paid to employers rather than to the employees. DPM Heng has urged employers who received the JSS to “hold on” to their workers. However, prior to the Resilience Budget, many employers had already initiated their own cost management schemes by asking employees to take salary cuts. For instance, some airline staff had been asked to go on No-Pay leave for varying periods. With airlines now getting 75% wage offset from the taxpayer, is there any obligation on employers to review these No-Pay leave arrangements reached earlier, to see if they are still justified after the wage offsets? To take another example, retail shops have seen minimal sales, and some employers have asked staff to work reduced hours and accept pay cuts. Over the weekend, after the circuit-breaker policy was announced, employers in “non-essential services” had told staff that their job situation was not assured.
To be sure, employers without revenue have to make tough choices. I understand that.
To that end, I note that DPM Heng’s speech included a “hope that those who receive support will use the resources wisely and responsibly”, and that the government “will not hesitate to take action against any abuse” (para C19, b). In the context of the JSS, could Minister clarify what would constitute abuse by the employer?
Assisting retrenched / unemployed workers
To assist retrenched and unemployed workers, the Resilience Budget offers the Temporary Relief Fund and the Covid-19 Support Grant. The Temporary Relief Fund has been announced to be a one-time $500 cash payout in the month of April, while the Covid-19 Support Grant gives 3 months of support at $800 per month for three months.
The intention behind these measures is to put cash into the hands of households where jobs have disappeared, and I agree with that. I have a clarification on the two schemes. It is stated that to qualify for these payments, the job loss must be due to Covid-19. Does the applicant have to prove the causal connection between Covid-19 and the job loss? For instance, take an employee of a company which had been incurring losses even before Covid-19 broke. If he is terminated by the company now, will his application for assistance be rejected because it is arguable that his job loss was not caused by the virus outbreak? If that is the case, it would seem very harsh, as it is going to be very difficult for him to find a new job in the current environment.
Conclusion
In early March I met a man who was in his forties, wearing the ubiquitous bright green T-shirt of Grabfood delivery workers. I assumed he had been doing such assignments for some time and asked him how it was going. To my surprise, he said that he had just started with Grab that very day, and narrated the turbulence he faced since the start of the year. In January he was still working as a restaurant manager, but due to poor business, the restaurant had to close. He then tried switching to be a mini-bus driver, but due to the lack of tourists, he had to abandon that idea. To make matters worse, his wife had concurrently lost her job too, as she worked in the travel industry. And to top it off, they have two children aged 14 and 12 to raise. This family’s experience is unfortunately becoming more common and affecting more industries. For instance, we know of a tentage contractor who has recently had to fold, as there have been no temple dinners for months.
Speaker, there is no doubt that the Covid-19 pandemic has wreaked economic havoc globally and governments need extraordinary measures to cushion citizens through it. We will support the government’s proposed measures and I look forward to the government’s clarifications on the queries I have raised about the Job Support Scheme, and the measures to assist displaced workers.
Finally, as we enter into a month of circuit breaker and possibly beyond, we shall surely miss the time spent together with our extended families, friends, colleagues and others we hold dear. This is also a time for reflection and appreciating what we may have taken for granted all this while.