- It is clear to me, from the Minister's speech, that the direct intended outcome of JCS is essentially to give money to businesses, for them to spend as they desire. It is, as I said in my speech, a handout for businesses. If we accept that our reserves are so precious, then there is a valid question as to whether it is right to just give them out to businesses like that. Also, many, like I, would question the fairness of giving handouts for businesses, but not Singaporeans.
- The Minister cited some examples of how the funds could be used, ranging from keeping workers to paying suppliers on time. But other possible uses include dividends for shareholders, bigger bonuses for CEOs, spending on incentive trips and remitting back to foreign headquarters for MNCs. In other words, saving jobs is only one possible use, and there is no direct correlation between JCS and saving jobs. I think this is quite different from how JCS was first portrayed when it was announced, and that mis-portrayal was one of the key reasons for my decision to focus on JCS.
- The consequences of JCS include a stimulation in demand (as is implicit in the Minister's references to the multiplier effect from JCS), and retention of jobs through keeping businesses afloat. But the Government has repeatedly pointed out that demand stimulation in Singapore is of limited utility, due to the high leakage in our open economy. So I would not place so much weight on that as a benefit of JCS. As for retention of jobs through keeping businesses afloat, that is a very indirect outcome that is subject to many dependencies, including sufficient demand as I mentioned in my speech.
- The Minister and many MPs have cited anecdotal evidence of businesses saying that JCS would affect their retrenchment decisions. I may be cynical, but I would take those statements of support with a big pinch of salt. If Santa Claus asks a kid who has just received a great big present for Christmas whether he was happy, would the kid say no? Especially when there is the prospect of another such present next year? In fact, I have received a lot of support from folks in the private sector agreeing with my speech privately. One even described the reasoning in my speech as being exactly identical to how his management team thinks through such issues.
- Finally, it has been suggested that JCS will make businesses more ready to retrench foreigners as opposed to locals. This may not be quite right. The employers' CPF contribution rate for most locals (excluding older locals, etc.) is 14.5%. JCS equates to a 9% point reduction in that rate. So local employees are still 5.5% more expensive than foreign employees. An employer who is minded to think this way, of axing the cheapest employees, will still look to retrench locals first, since they are still more expensive even with JCS. The exception would be older workers, since the employers' contribution rate is lower. With JCS, the Government would actually be subsidising the business for employing these older workers.
These reasons are why, even though I thought Minister Tharman delivered a really solid speech, I remain unconvinced about the merits of JCS. But like I said, I hope I am wrong.