By Kenny Chee

THE phasing out of the Jobs Credit scheme, which subsidises the wages of Singaporean workers, makes sense as the economy is picking up, said economists.

Lowering the payouts under the scheme next year would cut the risk of Singapore losing competitiveness, they added. yesterday.

They were responding to an announcement by Prime Minister Lee Hsien Loong yesterday that the Government would extend the scheme by six months, but with smaller payouts.

Dr Peter Kriz, assistant professor of economics at the Singapore Management University (SMU), said that with the worst of the crisis over, "this step down is reasonable".

Dr Randolph Tan, an assistant professor of economics at the Nanyang Technological University, said that with its smaller payouts, the extended scheme would help only "sound businesses with long-term viability, and not prop up non-viable ones".

The smaller payouts also mean "less possibility that the scheme will distort the competitive market adjustments needed to prepare for better growth ahead", he added.

Yesterday, Mr Lee promised that new schemes would be introduced in next year's Budget to help companies grow and be more productive.

Dr Tan said that this suggests that the Government has decided to exploit themuch-improved economic environment to come up with policies that will address the weaknesses exposed by the downturn.

He expects to see more targeted measures to help different groups of firms and workers, instead of a one-size-fits-all policy like the Jobs Credit scheme.

Disapproving of schemes to help companies grow, Dr Kriz said: "Instead, the Government should provide an environment conducive to growth. The marketplace will reward firms."

Mr Lee also noted yesterday that, with the improving economy, interest in a programme that subsidises the training costs of workers - the Skills Programme for Upgrading and Resilience - has waned.

He urged Singaporeans to continue upgrading their skills, because global competition for jobs and investments has become stiffer than before.

Ms Bebe Wong, who oversees the operations of Ethics Apparel, said that the extended Jobs Credit scheme will help offset her firm's losses. Her sales last month was 20 per cent less than the same month last year.

But it will not have a big impact as the payouts are smaller, she said.

Still, "we feel comforted that the Government is taking care of us", she said.

kennyc@sph.com.sg

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