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The Social Security Office (SSO) should wait and watch economic developments, particularly unemployment in China, the TDRI said.

The SSO is considering a measure designed to ward off lay-offs. Under the current system, both the employer and the employee contribute 5 per cent of each salary to the Social Security fund. The new proposal would see that figure drop to 3.5 per cent for both.

TDRI president Nipon Poapongsakorn said the measure should be implemented, because it would help reduce employers' expenses as well as employees' personal income payments.

"The measure, however, gives a bigger advantage to employers than workers," he said. "Employees will pay a maximum contribution of Bt2,700 per person."

The SSO should consider whether actual statistics show that the situation is really serious. So far, there are many figures that create confusion. Besides, the SSO needs not to rush implementing the measure within the next few months.

"Whatever measure is drawn up to enhance the country's economy is good, but we should focus on employee and employer benefits. We should not implement any policy based on the political situation," Nipon said.

The measure is expected to cost the Social Security Fund Bt27 billion in contributions. But that is too low an assessment, because the office would have to pay a lot in unemployment insurance - a maximum of six months - from manufacturers' lay-off policy, he said.

The Social Security system would also see members drop out as the economic crisis starts to bite, he added.

Suwit Darasichon, director of the Employers' Confederation of Thai Trade and Industry, said employers did not get anything from the fund, but rather were the real payers. It helps to cut some costs for them, but it really benefits big companies with large payrolls.

He said the government had no clear policy of encouraging manufacturers despite the economic slowdown. They have to continue paying taxes as required by law.