SUNBIZ

Government Highlights Wage Subsidy Benefits

Government’s provision of wage subsidies between 2010 to 2012 had led to employment of 428 employees until the end of the subsidy period in 2012. Permanent Secretary for Industry, Trade
06 Aug 2015 08:45
Government Highlights Wage Subsidy Benefits
Permanent Scretary for Industry, Trade and Tourism, Shaheen Ali.

Government’s provision of wage subsidies between 2010 to 2012 had led to employment of 428 employees until the end of the subsidy period in 2012.

Permanent Secretary for Industry, Trade and Tourism, Shaheen Ali, has revealed this before the Public Accounts Committee.

Mr Ali further confirmed to Fiji Sun that today Mindpearl employs over 750 people in Fiji and has 14 clients from all over the world.

These include, Swiss International Airlines, American Airlines, Home Direct, Coca-Cola Company, Recoveries Corporation, Travel Counsellors, Lebara mobiles, to name a few.  Government paid $565,626.05 between 2010 to 2012 to Mindpearl as wage subsidy which was part of Government’s incentive to attract the business process outsourcing investor.

In essence, Mr Ali said the company had contributed more through the pay as you earn (PAYE) tax of $360,000 and Fiji National Provident Fund contribution of around $310,000.

 

Wage subsidy decision

Mr Ali was asked to explain the reason which led to the decision to give the wage subsidy to Mindpearl.

To this, he responded: “The wage subsidy was part of the incentives offered by the Government to Mindpearl to encourage investment in this new sector.

“Mindpearl was considering other destinations apart from Fiji. At that time, we did not have business process outsourcing companies setting up in Fiji.

“However, when Mindpearl started operations, it was slow and started with only two clients.

“Mindpearl’s entry into Fiji also gave rise to other companies to come and set up here.”

Mr Ali used the example of ANZ shifting its business processing headquarters from Melbourne to Suva.

 

Monitoring

Mr Ali said the Ministry then monitored the hiring of staff members by Mindpearl and gave wage subsidies where it deserved.

“So Mindpearl had to employ an employee for one year to qualify for the subsidy and if it didn’t, then it didn’t get the subsidy,” he said.

During the three years of agreement, Mr Ali said only 428 employees were eligible.

After that, he said Mindpearl’s operations grew but the initial subsidy was important for the company to take off.

Mr Ali said the company has now become self-sufficient and is not in need of further subsidy.

 

Review

Mr Ali said following this, a review was conducted on whether Government should provide further such subsidies.

“The conclusion was, if it is a greenfield sector where no investment has taken place, then that justifies some unique incentives to be looked at,” he said.

“After the initial investor has come in, there are economies of scale, linkages and infrastructure for other investors to enter the sector.”

Feedback: rachnal@fijisun.com.fj



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