Bt300 wage push will hit SSO contributions, govt warns

The government would subsidise medical treatment to beneficiaries if SSO funds were insufficient, while payment of retirement returns starting in 2014 would not be affected, he said.

Somkiat did not say how much the government's SSO contribution - currently at five per cent - would be reduced by.

He did not support his statement by explaining what he or the SSO would do to secure a government subsidy, or provide a guarantee that the government would subsidise SSO treatment funds.

Somkiat was speaking at a Bangkok seminar for employers and owners of small-medium businesses worried about their operations being affected or forced to shut down because of the Yingluck government's election promise to raise the daily wage to a flat Bt300.

The seminar was told that a number of foreign electric appliance firms were preparing to move operations to locations in Burma, across from Kanchanaburi and Tak's Mae Sot district, and to Cambobia's Poi Pet and Koh Kong Island, where an Bt80 daily wage is allegedly paid to local assembly workers.

"The foreigners are all worried about the flat Bt300 to be imposed in Thailand. They vow to move when the new rate is in effect, because they will have to shoulder higher costs," said Chianchuang Kalayanamitr, a partner with a foreign company.

Dragan Radic, a senior International Labour Organisation official, suggested a government measure be put in place immediately to assist around 300,000 SME owners in Thailand who will be affected.

Help would also be needed for a large number of new graduates who could be without jobs for many years, as employers would seek only experienced workers to get full value for having to pay them Bt300 a day, he said.

Labour Minister Phadermchai Sasomsap said a request was made to the Financial Ministry on ways to cut corporate tax from 30 to 27 per cent next year - and to reduce electricity and water bills for SME owners, hopefully with the cooperation of electricity and waterworks agencies.

Phadermchai said skill enhancement would be crucial for all parties involved, and a request for Bt3 billion had been made to the government to improve existing skill and career training centres or to build new ones.

Anantachai Khunananthakul, chairman of the Employers Confederation of Thailand, said subcontractors likely to be hit hard by the push for a flat Bt300 a day wage should be granted immediate assistance, because they relied solely on labourers and the increased cost would be a big burden.