SINGAPORE — The Wage Credit Scheme and the issue of healthcare costs dominated a post-Budget dialogue yesterday organised by REACH.

While many participants lauded the Wage Credit Scheme as a “creative” way to help companies raise productivity, some were concerned whether it could be open to abuse — for instance, employees promising prospective hires that their income will be raised under the scheme but failing to do so later — or employers simply raising wages to tap on the scheme without doing anything to improve productivity.

Minister of State (Finance) Josephine Teo — who was co-chairing the dialogue with REACH Chairman Amy Khor — noted that the scheme is tied to employee records from the Central Provident Fund.

Under the scheme, the Government will co-fund 40 per cent of salary increases given to Singaporean employees earning a gross monthly wage of up to S$4,000. Noting that employers “still have to pay 60 per cent of the wage increase”, she said: “Employers still have to think hard whether this is sustainable or not.”

About 150 participants attended the two-hour dialogue. The participants were divided on the measures to further restrict the inflow of foreign workers.

While some were concerned about competition with foreigners for various public services, others were worried that the curbs will adversely affect the economy and in particular, the services industry.

Adding that Singapore “will have to find the right balance”, Mrs Teo said: “That’s why we have to be more selective in the kinds of businesses, and the way businesses are done in Singapore.”

On healthcare, Dr Khor, who is also Minister of State (Health), said that the Government has “started making moves” since last year to ensure affordability. These included increasing subsidies on medication and top-ups to Medisave and MediFund.

This year, more types of medication will be added to the subsidised standard drug list while Medifund’s scope will be widened to include middle-income patients. WOO SIAN BOON