WHILE Covid-19 vaccines are becoming available globally, supply issues may mean that it could take some time before we get sufficient doses to achieve herd immunity.
This means we will likely still have to deal with Covid-19 for months to come.
Clearly, the support offered by the government must be suited for a long-drawn out recovery.
Worryingly, though, it appears that it is the short-term measures, such as the i-Sinar programme involving the EPF (Employees Provident Fund) and a blanket moratorium on loan repayments, that are receiving a lot of attention.
EPF money and a moratorium on loan repayments are not “free money”. Such measures come from the future pockets of the people.
EPF withdrawals now mean that contributors will have less money (especially once compounding of interest is considered) once they retire.
A delay in debt repayment only means that either the borrowers will need to pay for a longer duration or a higher amount.
I am not discrediting the effectiveness of these measures, especially in the short term to help individuals transition towards productive work (looking for a new job or starting a business
The key points here being “short term” and “transition”. In the long term, these measures are simply unsustainable and would only damage people’s finances, and they risk falling into a debt spiral that they may not recover from completely for years.
What is more important now is to focus on sustainable and job-creation measures. The government needs to step in to subsidise and provide incentives for businesses to create jobs, and for individuals to upskill/reskill and look for productive work.
The wage subsidy programme is a good example of this: Subsidising part of workers’ wages allows businesses to retain people and perhaps even to recruit more.
This in turn allows people to contribute economically. While their output will likely be lower than before, it would still be more beneficial than keeping our country’s human resources – ie, labour – idle.
Although the trade-off here means that the government will need to direct resources towards subsidies and incentives, the benefit here is three-fold.
Firstly, with people being able to generate income instead of being unemployed, savings from unemployment benefits can be redirected to fund these measures.
Secondly, having a bigger income-generating workforce naturally means that there will be greater economic activity that will support economic recovery.
Thirdly, by not relying on our future financial well-being to support us through the pandemic now, we’re less likely to witness a debt crisis or a retirement crisis in the future.
Our leaders’ conversations should not be dominated by short-term support measures that will damage our national well-being in the long run just because these measures are popular during this period.
They should instead focus on measures that actually create jobs and generate income that can support the economy’s long-term well-being and to achieve a sustainable recovery.
WONG TECK JIN