Government aid readied for SMEs as 300-baht wage causes 2,500 layoffs

2,500 jobs axed as daily wage hike bites

Cabinet okays package to help 300,000 SMEs

Published: 9 Jan 2013 at 00.00
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Almost 2,500 workers were laid off in the first five days after the 300-baht daily minimum wage was enforced nationwide on Jan 1, Labour Minister Padermchai Sasomsap says.

The minister's remark came on the same day that the cabinet approved a package it claimed would ease the strain on the almost 300,000 small- and medium-sized enterprises (SMEs) and create about 320,000 new jobs.Mr Padermchai quoted the Social Security Office (SSO) as reporting that 2,479 workers were laid off from Jan 2 to 6 after the wage increase took effect.The 300-baht minimum daily wage had already been in effect since last April in seven pilot provinces, including Bangkok. There were 243,141 workers laid off from April to December last year, the minister said.The cabinet Tuesday approved a package to ease the wage strains.Deputy Prime Minister and Finance Minister Kittiratt Na-Ranong said the package involves:- Corporate tax exemption for the first 300,000 baht of profit, up from 150,000 baht for SMEs with revenues of less than 30 million baht a year.About 210,000 SMEs will benefit from this measure while the government is expected to lose 2.8 billion baht a year.- A reduction in the tax paid by small-and medium-sized hotels from 80 baht per room to 40 baht per room for three years. This measure will cost the government some 14.16 million baht a year.- An increase in the budget for civil servant training to match the current economic situation. Job training and seminars held by state agencies are typically organised in provincial hotels.- The extension of measures already in place in the seven pilot provinces.These measures will be extended until Dec 31 this year across all provinces.Among those measures is the Social Security Fund (SSF), which is providing 10 billion baht in soft loans to boost the liquidity of SMEs.Other measures include: reducing employers' contributions to the SSF from 5 per cent to 4 per cent; tax deductions of 1.5 times that of wage hike payments; soft loans from the SME Bank; and guaranteed loans from Thai Credit Guarantee Corporation.Mr Kittiratt said the cabinet also authorised the Finance Ministry to study the feasibility of cutting the...

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bkk-farang
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Discussion 12 : 09 Jan 2013 at 08.0412
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@spiceman #10: Thanks for your answer. Where did you get the idea from that “Americans are supposed to be well-educated and well-informed”? That must be an urban myth.
I understand that you are not happy with Obama but please look at the republican alternatives. Would you prefer Mitt Romney, Sarah Palin or maybe Rick Santorum? IMHO American politics is all about money and one political party is almost as bad as the other. Wall Street and Big Money will always win.
I understand that some Thai voters have also a hard time to select a decent candidate and party but I think here are still a lot more choices than in the “land of the free"
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nns
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Discussion 11 : 09 Jan 2013 at 08.0311
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It is a fact of life that in a developing country, to achieve high employment rate, the labor cost will be low hence the low minimum wage at the expense of productivity and quality of life of the lower class. Let's face it, B300 a day is not a lot of money. It is a start of something fundamental toward developing into a more mature and better society at large, if that is something that we can agree to strive for.
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spiceman
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Discussion 10 : 09 Jan 2013 at 07.3310
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Khun BKK-Farang #7, please, don't be too harsh on our poorly educated and poorly informed Thai voters. At least, they have not bankrupted their country (yet). Just look at their American counterparts, who are supposed to be well-educated and well-informed. They have just asked for more of the same on-gong economic madness. Since last November, I have developed a new found respect for the Thai voters, seeing with my own eyes what has been happening here in the USA in the last 5 years.
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bkk-farang
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Discussion 9 : 09 Jan 2013 at 07.329
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@Eric #8, thanks for telling us “I have no qualms paying the increase, taking a smaller dividend”. So you tell us that this little wage increase is no problem for you because before you made lots and lots of money and now you only make lots of money - “taking a smaller dividend”?
Maybe you are unfamiliar with the concept but there are companies out there who have a small profit margin to begin with and with higher labor cost that margin is gone – thanks to the Shinawatra government and the people who voted for it.
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Eric
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Discussion 8 : 09 Jan 2013 at 07.208
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SMEs are a lucky lot with the government package of fiscal assistance. I bet most would not be able to benefit from the new tax scheme as most will not report any profit with some creative accounting. That's the state of SMEs who been in this low wage business model for years and the bosses taking big dividends and leaving nothing for training or mechanization. I falls nicely in this SME category and really see the hardship of workers trying to made ends meet. I have no qualms paying the increase, taking a smaller dividend and leaving cash for productivity improvement. Let this recalcitrant companies go bust or solve their own made problems.
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bkk-farang
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Discussion 7 : 09 Jan 2013 at 07.147
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Why do many voters still support a government which is completely incapable of thinking ahead and making sensible decisions? The 300B idea was first published maybe 1 ½ years ago when Thaksin’s party was looking how to get elected. And now, after a year that the scheme was in part introduced, they think about solutions how to ease the impact? Was this really something nobody could think about a year ago? Would it not be prudent to study the impact of a wage rise before promising it? This is so typical Thaksin: talk first and (maybe) think later. Why do Thai voters still accept this? When will they wake up?
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nowayout
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Discussion 6 : 09 Jan 2013 at 07.006
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First time car buyers will likely cost the government 60 billion Baht. Who is going to pay for all these government tax losses?
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ggh
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Discussion 5 : 09 Jan 2013 at 06.555
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It would be interested in seeing stats on jobs lost. Most likely unskilled labor would be the majority. Reinforces the need for a very close look at what the Ministry of Education is doing with their budget. With unemployment on the rise, job skills will be a necessity. The learning center started by Tesco Lotus (recent article) is an interesting concept. Perhaps the MOE could use some of their large budget for retaining the unemployed to be employable.
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whatajoke
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Discussion 4 : 09 Jan 2013 at 06.464
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"Prime Minister Yingluck Shinawatra said Tuesday there could be other causes of the job losses and she has ordered the Commerce Ministry to look into it."

- Classic. What 'other' causes pray tell. And didn't you already use that line six months ago 'appoint a committee to look into it'? Running a country isn't like running a monopolistic family business you know.
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oldairman
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Discussion 3 : 09 Jan 2013 at 06.243
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D1 That I what I don't understand either.
First the government mandates the pay rise despite being told what will happen.
Next prices rise across the country even though the pay rise is only in 7 provinces.
Now despite being told that jobs will be lost the government forces the pay rise across the country and is amazed when jobs are lost.
Next they SMEs will be subsidised by taxpayers money simply by reducing the tax income so the governemmnt will get less and borrow more.
The lunatics ARE running the asylum.
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Government aid readied for SMEs as 300-baht wage causes 2,500 layoffs | Bangkok Post: business

2,500 jobs axed as daily wage hike bites

Cabinet okays package to help 300,000 SMEs

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