Thai Labour Ministry Urges Relief For Firms Hurt By Wage Hike

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Ministry urges relief for firms hurt by wage hike

TINNAKORN CHAOWACHUEN

THE NATION

BANGKOK: -- The Labour Ministry will propose to the Joint Standing Committee on Commerce, Industry and Banking a raft of urgent relief measures to lessen the burden on businesses of January's nationwide increase to Bt300 in the daily minimum wage.

Speaking at a seminar yesterday on the effect of the minimum-wage hike on small and medium-sized enterprises, permanent secretary Somkiat Chayasriwong said the ministry planned to propose three groups of measures to minimise the impact.

The first relates to lowering the burden on business operators. Proposals include reduction of contributions to the Social Security Fund and tax cuts.

The second group, which includes loans for the promotion of employment, is aimed at increasing companies' liquidity.

Previous credit measures faced difficulties in practice and discussion would be needed to ensure enterprises have more access to credit, he said.

The third group concerns the enhancement of production and labour efficiency. Measures already in place are for the long term, so some adjustments will have to be made to make them suitable for short-term solutions, he added.

The ministry has held discussions with some private groups, including the Thai Contractors Association, but Somkiat said no conclusion had yet been reached on the planned establishment of a fund to compensate businesses for the minimum-wage rise.

The ministry will set up a centre to facilitate efforts to lower the impact of the wage hike in all provinces, he said.

Tanit Sorat, former vice chairman of the Federation of Thai Industries, told the seminar that the planned compensation fund would be the best relief measure and urged the ministry to push for its implementation.

SMEs and labour-intensive industries should be the target groups, he said.

He proposed that the fund should have capital of Bt50 billion for the first year.

The government could postpone the planned corporate-tax reduction from 23 per cent to 20 per cent scheduled for next year, and use the money it would save to capitalise the fund, he added.

Yuttana Siapsarnvitch, executive director of the Thai Garment Manufacturers Association, said the government could set production-efficiency conditions for operators eligible for the compensation fund or credit.

Jirabool Vittayasing, president of the Premiums and Decorative Association, urged the government to make credit easily accessible for SMEs, as they continue to face problems when requesting funding from financial institutions.

The government could allow private organisations to certify which of their members had the potential to access credit under the government's measures, he said, adding that this would strengthen SMEs and the organisations themselves.

Jirabool, who said the association's 1,500 members would be affected by the nationwide implementation of the minimum-wage increase, stressed the need for continuity of the planned measures.

-- The Nation 2012-11- 29

[markt7081]

So, increase the minimum wage, then give companies handouts , so they can pay it.

And the handouts will have to come from the taxpayers, no matter how you look at it.

Give with one hand & take away with the other!

[gabruce]

So, increase the minimum wage, then give companies handouts , so they can pay it.

And the handouts will have to come from the taxpayers, no matter how you look at it.

Give with one hand & take away with the other!

and don't forget to pay attention to actually get's the money at the end of the day - and which private organizations get to say who get's credit and who is eligible for credit - I guess it wouldn't be independent businesses - or businesses that don't belong to an influential organization or perhaps just those who offer the best incentive for approval. Too cynical I guess. It's interesting that they are proffering to forgo the tax cuts - and then move that money to where (who) they want it to go to.

[Thai at Heart]

Isn't the ministry part of the government? So the ministry briefs against the government's policies?

They will propose to whom? Themselves? Isn't a ministry responsible for enacting the government's policies? Is this the civil service telling the government what to do? Quite bizarre.....

[dcutman]

When you are borrowing more than a trillion baht whats another B50 billion between thieves.

first car scheme B30 billion

first home scheme B20 billion

tablet computers up to 33 billion

rice pledging scheme B570 billion and counting

flood prevention B 470 billion

roads to Dawei B45 billion

[whybother]

I thought the reduction of company tax from 30% to 23% was supposed to be relief for the companies.

It's the ONE policy that the government has fully implemented. Is the ministry saying they got it wrong?

[rubl]

Begin of July, 2011 Prime Minister-elect Yingluck said:

"Yingluck says before the policy is implemented, she will hold talks with both business and labor. Speaking at a news conference, she said the government would gradually implement the policy and ease the impact on businesses through corporate tax rate cuts.

"The policy of the minimum wage we will do at the same time as reducing the corporate tax from 30 percent to 23 percent," the prime minister said. "But we have to sit down and discuss with all the business [sector]. So I won't be launching or implementing ...concerning the impact so we have to sit down and gradually see how we can find a solution together.""

http://www.voanews.c...724/141964.html

Guess what got implemented as the very first policy.

[Thai at Heart]

I thought the reduction of company tax from 30% to 23% was supposed to be relief for the companies.

It's the ONE policy that the government has fully implemented. Is the ministry saying they got it wrong?

By the time most smes have bought a few properties for dormant offices, paid the extended family, and bought a couple if new mercs every year, there is no tax to pay anyway.

[stoli]

Lowering the captial gains tax rate for SME's in an attempt to offset their higher cost from the minimum wage increase only helps those SME's that are profitable. For those that have not yet reached this milestone, (it takes time to show a profit for any business), the increase in minimum wage may make it impossible for them to continue, and stop those new business's with their plans to start a new business. It is a "feel good" policy to raise the minimum wage, and I wish it was possible for everyone, but if it puts you out of business, then how good to you "feel" when you lose your job? Until you actually have had to meet a payroll, rather than just accept a check, you will never understand the above.

[OzMick]

Isn't the ministry part of the government? So the ministry briefs against the government's policies?

They will propose to whom? Themselves? Isn't a ministry responsible for enacting the government's policies? Is this the civil service telling the government what to do? Quite bizarre.....

"Isn't the ministry part of the government?" Well, no. The Minister is part of the government, and is quite likely to be some brainless incompetent mate/relation of Thaksin who draws a huge paycheck while actually doing very little, except perhaps looking for means of corruptly enriching himself.

The Ministry OTOH is the organisation of public servants employed to look after those matters included in the Minister's portfolio. It is their duty to carry out government policy conceived by a group equally as incompetent as the Minister and employed for the same reason. This policy is often (recently you could say usually) flawed in concept and having intent only miniscule in resemblance to its stated goals.

It is the task of the Ministry to foresee problems these flawed policies may cause, and alert the government before the problems make the government look like a bunch of incompetent idiots. That is why the Ministry of Labour is suggesting employers may need assistance before Thailand ends up with a higher minimum wage not being received by a large number of unemployed (voters).

[Thai at Heart]

Isn't the ministry part of the government? So the ministry briefs against the government's policies?

They will propose to whom? Themselves? Isn't a ministry responsible for enacting the government's policies? Is this the civil service telling the government what to do? Quite bizarre.....

"Isn't the ministry part of the government?" Well, no. The Minister is part of the government, and is quite likely to be some brainless incompetent mate/relation of Thaksin who draws a huge paycheck while actually doing very little, except perhaps looking for means of corruptly enriching himself.

The Ministry OTOH is the organisation of public servants employed to look after those matters included in the Minister's portfolio. It is their duty to carry out government policy conceived by a group equally as incompetent as the Minister and employed for the same reason. This policy is often (recently you could say usually) flawed in concept and having intent only miniscule in resemblance to its stated goals.

It is the task of the Ministry to foresee problems these flawed policies may cause, and alert the government before the problems make the government look like a bunch of incompetent idiots. That is why the Ministry of Labour is suggesting employers may need assistance before Thailand ends up with a higher minimum wage not being received by a large number of unemployed (voters).

So ordinarily, such advice would be related to such minister privately, as opposed to splashed all over the papers right?

Their job as you say would be to implement and advise, not lobby on behalf of business? They are the labour ministry, not the business ministry right?

Edited November 29, 2012 by Thai at Heart