SINGAPORE - Unemployment benefits for workers who have been laid off will come under an expanded SkillsFuture system, Deputy Prime Minister and Finance Minister Lawrence Wong said on Tuesday.
This does not have to take the form of an insurance scheme, but could instead be “appropriately sized” benefits, funded by the Government, to help tide retrenched workers over their immediate difficulties, he said.
For a long time, the Government has been cautious about introducing unemployment benefits, as automatic unemployment benefits have resulted in negative outcomes in other countries, where people find it more attractive to stay unemployed rather than get back to work, he said.
“But looking at the faster pace of change and churn in our economy, we have revised and refreshed our thinking,” he added, elaborating on the scheme to help retrenched workers announced in Prime Minister Lee Hsien Loong’s National Day Rally in August.
The aim is to support these workers as they continue with their upskilling and job search so that they can eventually bounce back, he said.
Mr Wong made the remarks at the Economic Society of Singapore Annual Dinner on Tuesday, during which he set out how the Government will deal with the issues of inequality and social mobility.
One of the prongs of the Government’s approach is to ensure the broad middle of workers continue to see rising real incomes and living standards, amid a more challenging operating environment, he said. He noted that these workers will be affected by game-changing technologies like generative artificial intelligence (AI), which will not only drive innovation and productivity, but also bring disruption to workplaces and jobs.
While workers had also experienced disruption during the computer wave of technological change in the early 1990s, the disruption from AI will be greater, and many workers – including professionals, managers, executives and technicians – will find their existing job roles becoming obsolete, he said.
He added that there will still be other opportunities created for these workers, but it means they will have to be better prepared for multiple transitions in their careers.
Some, such as workers in their 40s and 50s, may also have caregiving obligations which can make it difficult for them to set aside sufficient time to meaningfully refresh their skills, he acknowledged.
To better help workers adjust to this quicker pace of change, the Government will strengthen SkillsFuture as a key part of Singapore’s social system, he said.
Besides benefits to tide retrenched workers over, initiatives being considered are top-ups to the SkillsFuture credit for mid-career workers, and training allowances for mid-career workers who take time off to pursue full-time, longer-form courses.
Support for career planning and guidance so that individuals can proactively improve their career prospects, and better job matching to help workers move into jobs that better reward their skills, are also in the pipeline.
During a question-and-answer session after his speech, Mr Wong noted in response to a question that returns on the Government’s investment in adult education and training may not be easily quantifiable.
But they are necessary to help Singaporean workers adjust to a world with greater churn and disruption, he said.
“This is not something that we can just leave to the market – the Government has to step in, recognising that we are in a different environment and you want to provide better assurances and support for Singaporeans,” he said.
Ultimately, if Singaporeans feel assured, there will be continued support for an open and vibrant economy, which will give Singapore the best chance of generating sustained growth in the long term, he added.
