As the country is facing an economic downturn that may prove to be the most severe, we welcome any efforts from our government to boost the economy and provide a safety net for the poor, the old and the unemployed.
It is also laudable that finally, the leaders have come out openly to admit that we may be going into a recession. However, looking at and after speaking to quite a few people about the stimulus package, I find that the general consensus seem to be that most people on the street are disappointed about the package.
There was initially a high expectation that this package would do something to prevent the economy from going into a contraction, but from the looks of it, it might just fail to do that.
In order to tackle this economic downturn, I think there is a need to implement the following:
1. Cheaper access of funds - Interest rates have come down quite a bit but to enable people to have cheaper access to funds, the spread needs to be adjusted. This will help those with business loans as well as housing loans. It would also provide an incentive for the housing sector.
2. Put money into people’s pockets -
a. Help for the poor and the needy. This can include food stamps for the poor, the unemployed and the old, as well as the handicapped. Food stamps are basically accounts that come with a food stamp card which functions as a debit card.
The government will credit certain amount into the account every month and the account holder can use the card to buy essential food items (only food items ) from certain supermarkets and grocery stores.
It is a good way to ensure that no one will starve and there is no abuse of funds credited into the food stamp account.
b. Direct cash handouts to employers like the job credit scheme being implemented in Singapore. In Singapore, employers are given a maximum of S$300 for each employee employed, meaning that the state is now paying partly for the worker’s wages.
This will reduce the cost of doing business as well as prevent the retrenchment of workers.
c. Tax cuts. This will help the middle class which will be badly hit by economic downturn. Perhaps having a ‘tax free year’ will help.
3. More stimulus spending on construction, the building of roads, schools and hospitals, technical colleges etc
4. Create more jobs - Encourage private investments by having tax incentives (tax holidays for a few years); having a moratorium on the NEP to attract rich private businessmen to invest their money or start businesses which will provide more employment opportunities.
5. Set up training institution to train and retrain the retrenched workers for semi-skilled and highly-skilled jobs.
Allowances should be given during the training years to compensate for the loss of income. This will prepare the country for the ultimate upswing that will come when this recession is over.
Well, hopefully the government will take heed of the voices from the people and adjust this stimulus package to make it more effective.