Ministry urges relief for firms hurt by wage hike

Speaking at a seminar yesterday on the effect of the minimum-wage hike on small and medium-sized enterprises, permanent secretary Somkiat Chayasriwong said the ministry planned to propose three groups of measures to minimise the impact.
The first relates to lowering the burden on business operators. Proposals include reduction of contributions to the Social Security Fund and tax cuts.
The second group, which includes loans for the promotion of employment, is aimed at increasing companies’ liquidity.
Previous credit measures faced difficulties in practice and discussion would be needed to ensure enterprises have more access to credit, he said.
The third group concerns the enhancement of production and labour efficiency. Measures already in place are for the long term, so some adjustments will have to be made to make them suitable for short-term solutions, he added.
The ministry has held discussions with some private groups, including the Thai Contractors Association, but Somkiat said no conclusion had yet been reached on the planned establishment of a fund to compensate businesses for the minimum-wage rise.
The ministry will set up a centre to facilitate efforts to lower the impact of the wage hike in all provinces, he said.
Tanit Sorat, former vice chairman of the Federation of Thai Industries, told the seminar that the planned compensation fund would be the best relief measure and urged the ministry to push for its implementation.
SMEs and labour-intensive industries should be the target groups, he said.
He proposed that the fund should have capital of Bt50 billion for the first year.
The government could postpone the planned corporate-tax reduction from 23 per cent to 20 per cent scheduled for next year, and use the money it would save to capitalise the fund, he added.
Yuttana Siapsarnvitch, executive director of the Thai Garment Manufacturers Association, said the government could set production-efficiency conditions for operators eligible for the compensation fund or credit.
Jirabool Vittayasing, president of the Premiums and Decorative Association, urged the government to make credit easily accessible for SMEs, as they continue to face problems when requesting funding from financial institutions.
The government could allow private organisations to certify which of their members had the potential to access credit under the government’s measures, he said, adding that this would strengthen SMEs and the organisations themselves.
Jirabool, who said the association’s 1,500 members would be affected by the nationwide implementation of the minimum-wage increase, stressed the need for continuity of the planned measures.