Standard Chartered expects a cut in employers’ CPF contribution rate from the current 14.5 percent to 10 percent.
But it expects no change to employees’ CPF contribution rate, GST, personal income and corporate tax rates.
http://retrenchment-blog.breaking.sg/2009/01/stanchart-forecasts-significant-recession-help-in-budget-cpf-from-145-to-10/
good news or bad news?
you think?
like that better cut GST back to 3%
didn't they just say won't touch CPF?
Standard Chartered expects otherwise?
bad news for employees
CPF cut is only the last resort...and when you want to cut CPF , it must be a national issue, not just a small std charter bank calling the shot.
At the moment cost of wages is way too high in SG, and the SGD is far too strong even at it's current 1.45-1.5 levels vs the USD. To help MNCs and other companies control costs, cutting CPF makes the most sense. Depreciating the SGD would be another measure, but it would be slow and might have lesser impact in reducing costs. It would be in everybody's interest to prevent the closure of companies and at least sustain them for this bleak 2009, until the projected economic upturn in 2010. CPF rates can always be reinstated in 2009.
A cut in CPF, would only hurt homebuyers who bought overpriced homes in 2007/2008 and funding most of the mortgages with their CPF contributions monthly. A 4.5% cut would translate directly to a 4.5% cut in disposable income for these people, but then it's better than a 100% cut in disposable income if you lose your job.
Sure, Standard Chartered can't call the shots for CPF cuts. But they won't go around making public statements if it costs them brand equity. But a CPF cut is always a distinct possibility in any recession. If we had cut CPF rates during the Asian Crisis and SARS, why not now when it's the worst economic crisis in a century? The only reason the govt would maintain CPF rates is that they want to prevent a reduction in domestic consumption, but again giving Singaporeans more disposable income doesn't mean they will spend them accordingly. This would also involve the govt to help businesses by involving other means like cutting corporate taxes hugely and use the country's financial reserves.
Originally posted by ShitSandwich:At the moment cost of wages is way too high in SG, and the SGD is far too strong even at it's current 1.45-1.5 levels vs the USD.
A cut in CPF, would only hurt homebuyers who bought overpriced homes in 2007/2008 and funding most of the mortgages with their CPF contributions monthly.
That's dumb. Wages is not the most significant portion to a company's operating expenditure. Companies pay tax after expenses and wages is an expense. By reducing wage, you increase your taxable income; somewhat negating the effect. So to the government, you're reducing company expenditure to the expense of the employee and to the benefit of the government... in order words, the people is used to fund the government and the government's effort to help companies. Yet when the economy improves, the government increases their salary instead of reinstating the people's CPF.
A cut if CPF does not only affect those who bough homes in 2007/2008 but everyone who currently service a home loan. A reduction in disposable incomce will only hurt Singapore economy more as Singaporeans will spend even less. Couple this with the still declining economy, it will only get worse.
A more direct way to help companies is to reduce operating cost.. cut power tariff, reduce corporate tax and reduce GST (as mentioned earlier). This way, you help the company without the expense of the people and the economy.
Dumbass politicians should all be fired. They are not worth a tenth of the salary they are drawing..
The Number One Rule for the Poodle is No Pay Reduction.
They have to figure ways to increase the revenue even though the policy have not significant value in solving the actual problem regardless of the economic conditions.
In simple terms, they need the money.
We have spoiled the poodle so much that they figured that they are the cream of the society and deserved to be treated in the same way.
A obvious recent of a PS who spent huge amount of money to learn cooking in France.
Since he is actually spending his own money, I am not bothered by this but I am surprised that he can be so senseless to show it off on press.
It is a good time for the boss to perform a review of the cost-sucking poodle that are in the hound.
Think this year the ang pows will come earlier (maybe just after CNY), so as to encourage spending to pump prime the economy.
Originally posted by xirtil:Standard Chartered expects a cut in employers’ CPF contribution rate from the current 14.5 percent to 10 percent.
But it expects no change to employees’ CPF contribution rate, GST, personal income and corporate tax rates.http://retrenchment-blog.breaking.sg/2009/01/stanchart-forecasts-significant-recession-help-in-budget-cpf-from-145-to-10/
interesting source. Standard Chartered expects. To be more specific, the bank economist of Standard Chartered said that.
So this is more on expert opinion than on real policies to be implemented.
Will be nice to have the name of the guy who said that.
Originally posted by anonymous_dickhead:
That's dumb. Wages is not the most significant portion to a company's operating expenditure. Companies pay tax after expenses and wages is an expense. By reducing wage, you increase your taxable income; somewhat negating the effect. So to the government, you're reducing company expenditure to the expense of the employee and to the benefit of the government... in order words, the people is used to fund the government and the government's effort to help companies. Yet when the economy improves, the government increases their salary instead of reinstating the people's CPF.
dat is so frigging true.. at the end of day.. the govt just want to increase their coffer..
CPF cut, either employer or employee cpf, is better than
losing jobs.
I long ago also felt that this should be the way.
CPF is not cash as in it will go into a 'bank'.
salary is cash.
cash is more important.
so, before salary is cut, lets cut the CPF.
i hope to see employee cpf cut also. better make it as low as humanly possible.
i dun mind making it zero.
the plus is make singapore citizen workers competitive with FTs in terms of costing to employers.
so, in my view, cpf cut is overdued.
Originally posted by likedatosocan:CPF cut, either employer or employee cpf, is better than
losing jobs.
I long ago also felt that this should be the way.
CPF is not cash as in it will go into a 'bank'.
salary is cash.
cash is more important.
so, before salary is cut, lets cut the CPF.
i hope to see employee cpf cut also. better make it as low as humanly possible.
i dun mind making it zero.
the plus is make singapore citizen workers competitive with FTs in terms of costing to employers.
so, in my view, cpf cut is overdued.
Since you obviously have not worked before, here's salary 101.
You employer pays you a salary, say $100, your employee CPF is 20% so your employer will deposit $80 into your bank account and put $20 of your salary into your CPF (in addition to the employer CPF contribution). 90% of adult employee will use to service their home loan etc.
Reducing employee CPF will do fuck for employers because they are still paying you $100. The result is that the employee with have less CPF but a higher take home pay. But because of the reduction in CPF, they will have to use it to service the home loan in cash. So LPPL..
Reducing employer CPF will help make the company more profitable but the amount saved is insignificant to deter them from workforce reduction.
Those things that PM, SM and MM have been saying about reducing salary to have save jobs? It doesn't work in real life.
And you can forget about employee CPF reduction.. It will not happen because
1) It does shit except to make the illiterate happier on payday
2) our Govt needs our CPF money.