Thai govt looks to restructure wages

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Thai govt looks to restructure wages 
: 20 Apr 2011

Ministry looks to restructure worker wages

Skill levels to pave the way for 25% pay hikes

The Labour Ministry is proposing a revamp of the wage structure, basing it on workers' skill levels in 11 types of jobs, to pave the way for the Democrat-led government's policy to raise the minimum wage by 25% in two years.

Cabinet approval would be sought for the wage scale. Once the scale is published in the Royal Gazette, the minimum wage committee has to follow it in setting the minimum wage, said permanent secretary for labour Somkiat Chayasriwong yesterday.

The ministry assured that those who passed the tests would be "really skilful labourers", he said.

The 11 work areas under the wage scale are three types of car services - painting, reshaping and repair - Thai cooking, Thai massage, western spa work, computer repair, household and factory electricity maintenance, air conditioner repair and electrical appliance repair.

The wage rates vary in different work fields and within certain fields, while workers are classified in accordance with their abilities, according to the Labour Ministry.

Car engine repair workers get lower wages than car painters and car reshapers. Level 1 car engine repairmen are entitled to 275 baht a day, at Level 2 360 baht and 445 baht for Level 3 while Level 1 car painters start on 315 baht, Level 2 get 380 baht and Level 3 445 baht. Car reshaping workers get the highest salaries in the group. Level 1 workers are entitled to 335 baht, Level 2 420 baht and Level 3 505 baht.

There are two skill levels for cooking Thai food and western spa workers.

Level 1 Thai cooks get 280 baht and Level 2 360 baht while Level 1 western spa workers get 350 baht and Level 2 are paid 460 baht.

Level 1 Thai masseurs and masseuses are paid 310 baht, Level 2 410 baht and Level 3 510 baht a day.

Workers in the electricity and electrical appliance repair areas get 300 baht for Level 1, 400 baht for Level 2 and 500 baht for Level 3.

Currently, the daily minimum wage for all types of workers varies by province from 159 to 221 baht.

Labour Minister Chalermchai Sri-on said the wage scale would pave the way for Prime Minister Abhisit Vejjajiva's policy of increasing the minimum wage by 25% in two years.

The new wage structure aims to cushion the impact on employers once the planned minimum wage hikes come into effect because employees could pay salaries based on workers' skills.

To earn more, workers would have to improve their skills, needed for bolstering the competitiveness of their employers given the salary hikes, he said.

"The proposed wage structure is not an intervention of the tripartite minimum wage committee but it follows the government's policy which wants labourers to have better lives," the minister said.

http://www.bangkokpost.com/news/local/232727/ministry-looks-to-restructure-worker-wages
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Democrats to focus on consumption taxes
Bangkok Post: 20/04/2011

The Democrat Party plans to highlight consumption taxes as a key tool for narrowing the income gap in its policy platform for the coming election.

The party believes its model of tax restructuring will generate more revenue, and it would introduce the reforms in the first year of its term if it forms the next government, said Korbsak Sabhavasu, the Democrats' election strategy director.

Under the progressive principle, people who consume more should pay more. Examples are a progressive rate for electricity bills, luxury cars, and a polluter-pays environmental tax.

"High-income earners also should pay more than lower-income earners if they consume more [goods and services] than others," said Mr Korbsak.

"The existing Thai tax structure provides benefits to high income earners such as deductions from taxable income for investors in long-term mutual funds."

Only nine million people pay income tax and some of them should be allowed to pay less in order to have more disposable income, he said.

Mr Korbsak said the party also planned more tax restructuring to support businesses, such as lower raw materials import duties and corporate income tax. It would also promote the development of more efficient logistics, support for access to new markets abroad, or for relocating factories to neighbouring countries to enjoy cheaper labour costs, while also offering incentives for businesses that acquire advanced technology to improve efficiency.

He said the new tax structure should be put in place before wages increase in order to give companies time to prepare to cut costs and increase revenues.

The Democrats have made a 25% rise in minimum wages over the next two years a centrepiece of their campaign.

Discussing megaproject development, Mr Korbsak said the Democrat Party would take a selective approach given limited budgets. It will not support the construction of dust-free roads nationwide but it will back the development of backbone infrastructure including a standard-gauge rail line and the upgrading of Laem Chabang port with around 100 billion baht worth of investment over four years.

He said the previous government had approved a plan to increase the capacity of Klong Toey port to 1.4 containers a year from 1 million but that would simply create more traffic problems in Bangkok.

Mr Korbsak said the Democrats favoured redeveloping some of the Klong Toey port area for recreation as part of a tourism infrastructure investment of 100 billion baht a year.

The party also intended to go ahead with the second phase of an insurance programme for agricultural products.

"The proposal [by the opposition] Puea Thai party to bring back the crop mortgage policy will not be practical," he said. "Implementing such a scheme covering 5 million farmers is impossible because we lack sufficient silos to store their production."

The Democrat Party aims to add around 15,000 small farmers to the one million to be covered under the price insurance programme.

Mr Korbsak said pressure on the government to revive the crop-mortgage policy was coming from certain local politicians supported by rice millers and rich farmers in the central areas. Many of these farmers have more than 50 rai of land each and do not qualify for the price insurance programme.

http://www.bangkokpost.com/business/economics/232738/democrats-to-focus-on-consumption-taxes