I refer to the article “Govt mulls extending productivity scheme” (Today, Jan 27).
Govt mulling extension of productivity scheme?
It states that “Responding to calls from firms for the continuation of the Productivity and Innovation Credit (PIC) scheme, Senior Minister of State for Finance Josephine Teo (picture) yesterday said the Government is considering the merits of extending the scheme.
Businesses find the scheme helpful?
Feedback from businesses shows they are finding the scheme helpful and are making an effort to improve productivity, said Mrs Teo, adding that it is timely for the Government to give an update on its economic restructuring during Budget 2014.”
The obvious question – has productivity improved?
In considering whether to extend the scheme, or for that matter any scheme – isn’t the most obvious question – how has the scheme contributed to productivity growth?
Since “It was introduced in Budget 2010 and enhanced in 2011 and 2012. Last year, the scheme was enhanced with a cash bonus in addition to existing tax deductions and cash payouts. These benefits are available until next year”
– I looked at productivity growth in 2011, 2012 and the first three quarters of 2013 (latest available).
Productivity – 3.2 last 2.75 years?
It was 1.3 and – 2,7 in 2011 and 2012, respectively. For 2013 Q1, Q2 and Q3, it was – 3.6, 0.2 and 1.6, respectively, giving a cumulative – 1.8 for the first three quarters of 2013.
So, does this mean that since the scheme was launched in Budget 2010, cumulative productivity growth for the last two and three-quarter years is – 3.2.
And we can have media reports that arguably give the impression to the unknowing public that productivity growth has been such that the Government is mulling its extension?
Productivity was better before the scheme?
If productivity growth since the launch of the scheme has been a dismal – 3.2, or an average of – 1.16 per annum – what about productivity growth before the scheme?
Well, according to the Department of Statistics – cumulative productivity growth for the 5 years, from 2006 to 2010, was 2.6 or an average of 0.52 per annum.
So, does it mean that the average per annum productivity growth for the 5 years before the launch of the scheme, at 0.52, was even better than the – 1.16, after the scheme was launched?
And I normally do not like to repeat myself – but yet we are mulling its extension?
Wages can only increase with productivity growth?
Also, with the consistent rhetoric that wages can only rise with productivity growth – what is the fate of Singapore’s workers?
Leong Sze Hian