HomeSNEF’s Budget 2024 Proposal to Help Employers Remain Sustainable and Thrive
SNEF’s Budget 2024 Proposal to Help Employers Remain Sustainable and Thrive
14 Dec 2023
Representing over 3,500 members, the Singapore National Employers Federation (SNEF) has submitted our Budget 2024 Proposal to the Government. Against the backdrop of deepening geopolitical conflicts, growing uncertainties and weaker economic outlook, SNEF’s Budget 2024 Proposal includes measures to ease wage cost pressures, support to build new capabilities and boost productivity, as well as support for foreign-local capability transfer. These measures also align with the national priorities of forging a strong social compact, building a resilient nation and developing a competitive and sustainable economy with good jobs for all.
Support to Ease Wage Cost Pressures for a Strong Social Compact
- SNEF’s poll1 showed that three in four employers anticipate higher wage costs in 2024 resulting from the Central Provident Fund (CPF) changes and have asked for more support in this area. As such, SNEF proposed for the CPF Transition Offset (CTO)2 to be extended and for transitional support to be provided for the increase in the CPF monthly salary ceiling. These measures will help employers manage the increase in wage costs even as the increased CPF contributions enhances retirement adequacy, especially for senior workers.
- Additionally, with the expansion of the Progressive Wage Model (PWM) and introduction of the Occupational Progressive Wages (OPW), employers will continue to face significant and cumulative increases in manpower costs. The Progressive Wage Credit Scheme (PWCS) had been a great help but the funding level is slated to reduce significantly from 2024. With half of the employers surveyed citing that an extension and enhancement of the wage support scheme would be useful, SNEF proposed for the co-funding levels for both tiers of the PWCS in 2024 to remain the same as in 2023, and for an extension of the PWCS to 2030, i.e. in line with the target to move lower-wage workers closer to the median worker by 2030. This will help ease wage cost pressures for employers even as they play their part in forging a strong social compact.
Support to Build New Capabilities and Boost Productivity for the Future Economy
- More than 86% of SNEF members polled sought more support from the Government to upskill and reskill the workforce. Therefore, besides support measures such as the SkillsFuture Enterprise Credit (SFEC), SNEF also renews our call for higher absentee payroll funding and course fee funding. This helps employers in their efforts to equip workers with the skills they need to stay relevant in a fast-changing world, while keeping training costs affordable.
- At the same time, employers recognise that driving productivity remains important to ensure that Singapore maintains its global competitiveness even as wages continue to rise. Productivity improvements can be driven by artificial intelligence (AI), which is expected to transform the business landscape. More than a third of employers surveyed cited that more support could be introduced in this area. As such, SNEF propose for (a) better subsidised training for AI-related courses, so that workers can build these new capabilities to contribute to firm-level productivity, and for (b) specific grants to be introduced to drive corporate adoption of AI. This will allow for more local businesses to transform, innovate and position themselves well for the future economy.
Incentivise Foreign-Local Capability Transfer for a Competitive and Sustainable Economy
- SNEF’s poll also found that employers, especially among large companies, would like the Government to provide more support for capability transfer from foreign workers to local workers. Therefore, SNEF proposes for the government to help employers by increasing the funding and duration of the Capability Transfer Programme (CTP), which subsidises the costs of sending local workers overseas for training or engaging foreign specialists to train local workers. Though the CTP, the skills and capabilities of the local workforce can be enhanced to increase productivity, innovation and competitiveness of Singapore’s economy. This will also enable Singapore to remain an attractive investment destination with more opportunities for growth and development
- Thanking SNEF members feedback which had contributed significantly to shaping SNEF’s Budget 2024 Proposal, SNEF President Dr Robert Yap said, “SNEF appreciates the strong support from the Government for employers. We will continue to work with our tripartite partners to help businesses thrive. As we press on with economic restructuring and business transformation to build capabilities and seize opportunities in a new era of global development, we hope that Budget 2024 will continue to include measures to help employers thrive.”
1 SNEF conducted a survey in October 2023 to better understand employers’ current and future challenges as well as the types of support measures that would be most useful. 237 SNEF members responded to the poll.
2 CTO provides transitory wage offsets to alleviate the rise in business costs due to the increase in CPF contribution rates for senior workers.