Some members of parliament in Singapore have warned that the Wage Credit Scheme is likely to benefit larger firms in the country and other firms linked to the government instead of small and medium enterprises in the country.

The Wage Credit Scheme, which is the prime part of government's transition support package for companies for three years, was analysed as the ministers started debate over the budget 2013 yesterday. The MPs said that the scheme would result in higher wages without real efficiency gains and this may lead to higher inflation and job cuts.

Workers' Party Non-Constituency MP Yee Jenn Jong said that the scheme would simply result in extra cash for firms. The government is proposing to fund the 40 per cent of wage increases for workers earning up to $4,000 a month during the next three years. The National Wages Council is recommending an increase in annual wage for the entire economy to promote economic and social progress.

Labour chief Lim Swee Say on Saturday said that the as the country's economy is going through a phase of restructuring over the next few years, it is important to maintain the correct the right pace. The right pace should be maintained to boost growth in the coming years.