Govt still says no to support for wage hike
The business sector is renewing efforts to win government subsidies amid fears the minimum-wage hike will force many small companies to close down and push living costs up nationwide.
Some manufacturers are planning product price increases to pass the burden to consumers. According to a retailer in Udon Thani, a dish washing liquid maker now introduces a smaller package for the product sold at last year's price. Some canned fish is sold at a higher price, though the Internal Trade Department insists prices of goods will be maintained for at least three months.
HSBC noted in a research paper that while core inflation, excluding volatile food and energy prices, should remain within target this year, it was likely to warm in the coming months owing to pressures from rising wages.
Cabinet will today consider extra relief moves that do not include a proposed Bt50-billion fund, the most sought-after measure. Available measures now guarantee access to capital loans, training for higher labour efficiency, and lower corporate income taxes.
Finance Minister Kittiratt Na-Ranong insisted yesterday that subsidies were against the government's thinking. He is convinced the wage hike to Bt300 nationwide will not lead to massive shutdowns but instead raise domestic purchasing power.
Despite the government's insistence that wage subsidies are out of question, according to Federation of Thai Industries (FTI) vice chairman Vallop Vitanakorn, the Joint Standing Committee on Commerce, Industry and Banking (JSCCIB) is adamant that they must reconsider this matter. They plan to re-evaluate government agencies which oppose the proposal and are prepared to come up with evidence to convince the agencies that business operators need financial support.
The committee includes the FTI, Thai Chamber of Commerce and Thai Bankers' Association. According to Vallop, a working committee on wage impact will convene next week to complete a report, which should convince the government that subsidies would not be wasted. In the last-ditch effort, they would also reconsider if the subsidies should be as much as Bt50 billion. They would be pleased if subsidies are granted in April.
Tanit Sorat, vice chairman of the FTI, said after meeting with regional FTI groups all were in need of subsidies and they wanted to meet Prime Minister Yingluck Shinawatra.
The FTI noted that industries in the North were largely affected by the policy, given their low wage base and the large number of labour-intensive factories. Some factories in the North now pay workers for pieces of completed products, not by daily wage.
"Provincial operators are in dire need for the subsidies. It's a must. It's the government's business to think how to finance it, but this must be announced soon. It should not wait till all factories are closed," Veerayuth Sukwattako, chairman of the Chiang Mai FTI, said.
Kittiratt rejected reports several firms shut down because of the higher wage, saying they were different things. When the wage hike took effect in seven provinces in April last year, productivity rose 9 per cent, according to the National Economic and Social Development Board, while unemployment fell from 0.9 per cent early in the year to 0.6 per cent at the end of the year. He insisted the move was part of economic rebalancing to cushion negative impacts on exporters, as well as to lift Thailand's income level. "Business operators must be patient as this is sudden. But purchasing power will rise soon and they will benefit from higher sales."
Yingluck yesterday dismissed the opposition claim her government's policy of raising the minimum wage would put 10 million people out of work. The wage hike has resulted in the layoff of at least 3,436 workers during the past six months, official statistics show.
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Article source: http://www.thethailandlinks.com/2013/01/08/business-steps-up-fight-for-subsidies/
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