Debated in Parliament on 2 Aug 2023.
Mr Derrick Goh asked the Minister for Manpower in view of the Ministry’s lower-than-expected expenditure for FY2022/2023 by about $3.3 billion (a) what are the reasons for the variance between the expected and actual grants disbursed to businesses and individuals; (b) how have application processes to grants been improved and simplified to enhance their accessibility; and (c) what are the plans to use these unexpected funds available to further support the upskilling of individuals as well as to boost productivity and local employment by our SMEs.
The Ministry of Manpower (MOM)’s budget expenditure takes into account COVID-19-related measures. The bulk of this went into providing for the Jobs Growth Incentive (JGI). JGI was an extraordinary measure introduced during COVID-19 to support employers to expand local hiring. MOM took on a more generous stance in providing funding to preserve and increase hiring activity in the labour market, given the uncertainties posed by COVID-19 on the economy. The lower-than-expected budget utilisation for the last financial year was largely due to significantly lower COVID-19-related spending, particularly in the utilisation of JGI. This was due to the rapid recovery in the jobs market and the economy in general.
In processing grants, the Government aims to do so efficiently and expeditiously, while ensuring accountability for funds disbursed. For example, wage support schemes such as JGI, Enabling Employment Credit and Senior Employment Credit, are administered as automatic schemes, where eligible employers will receive support without having to submit an application. At the same time, we have to institute checks to detect possible cases of abuse or error, hence, a minority of cases are picked up for manual review based on a risk management framework.
As we manage our finances across an entire term of Government, the funds not used for JGI can be deployed to other spending plans, which could include, as Mr Derrick Goh suggested, efforts to support our small and medium enterprises (SMEs) and workers. The spending estimates are tabled for Parliament’s approval as part of the annual Budget process.
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