Lee Boon Yang
Singapore
“6 The other guidelines are that there must be a post office sited within 5 km of every private residential estate and within 1 km of any commercial or industrial estate. MAID LEVY CONCESSION (Applications by the disabled) 32.”
“Madam, can I quickly respond to the point on assistive technology? Certainly this is an area of interest. We cannot say that we have the capability at this juncture but we will certainly look into what is possible and work with our ICT sector.”
“Nevertheless, if the spouse of the homemaker is working, he will be eligible for WIS if he satisfies the criteria. Husbands of homemakers are further eligible for tax relief.”
“Sir, I do not think it is quite correct to say that we always expect our own artists to perform for free or do public service. There are, of course, occasions where we do seek Singapore artists and arts companies to contribute to the national causes. For instance, when we went international for Singapore Season in China.”
“Ms Sylvia Lim asked the Minister for National Development (a) what checks does the Ministry or the National Environment Agency have in place to prevent mistaken payments to hawkers who cease operations due to upgrading works at hawker centers; (b) how did the mistaken payment of $18,000 to Mdm Lee Ah Muey come about; and (c) what will the…”
“While it was also true that initially the reaction or the response of the licensing authority was that foreigners should not participate in such an event at the Speakers' Corner - because there is already an existing prohibition against any foreigners taking part in any activities at the Speakers' Corner - subsequent assessment resulted i…”
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“Then, we have to go in and start setting wages for every sector, every vocation. For instance, let me cite an interesting point, which is that occupational groups show the wage gap between male and female. For instance, within an occupational group, there may be a wage difference between male and female. But the occupational groups are fairly large. So you have, for instance, a group called plant and machine operators within an occupational classification of our labour force. You will find that males tend to earn a lot more than females in this occupational group. Is it because they are discriminated against? Or is it because the work they do is being under-valued? The answer is no. The answer is that, interestingly enough, in this particular occupational group, females tend to concentrate in occupations such as electronic component assembly. They work in an electronics factory as assembly production workers which generally pays less than the other group of plant and machinery operators, which include bus drivers, for instance. There are not that many female bus drivers, and bus drivers are paid quite well compared to these assembly line workers in an electronics factory. So, as a result, you will find that within this occupational group, there is this difference in wage gap. So should we then go in and tell employers that, no, within this occupational group, you have a big wage gap, you have to do something to fix that wage gap, and you have to address the fact that the women are earning less? But, in fact, within every occupational group, you find this distortion. So, it is not easy for us to go in nor is it desirable for us to artificially go and try to bridge this gap.”
“Mr Speaker, Sir, with regard to the Nominated Member's first point, yes, I agree with her. We should continue to work, we should continue to chisel away at some mindset about how to help women better cope with work and family. I mentioned earlier on things that give recognition to companies that adopt family-friendly practices. I think this would help. But it is not going to result in an overnight transformation. The civil service will also incorporate some of these ideas about family-friendly practices, and gradually more can be adopted where it is possible. I think this is being looked at. Various Ministries, including the PSD, would be looking at how they can make work in the civil service more family-friendly. With regard to the other point about some jobs commanding a lower salary and whether the Ministry will look at how these jobs are rated, we know, of course, that we do not have wage controls, and we do not have minimal wages in Singapore for very good reason, ie, to allow the marketplace to operate freely. I think it would be quite difficult, and I do not think it is desirable for us to go around setting wages for child care givers or teachers, or for other vocations. We have to accept that wages are best set by the market to ensure that there is appropriate reward for the effort contributed. If, in fact, there is a serious shortage of child care givers in our child care centres, for instance, then the market will respond. The people who operate child care centres will have to bid higher for the workers that they need, and for the quality of the workers that they need, they will have to pay more. So, I think, we must let the market forces operate. It is either we believe in it or we do not.”
“If we equip them well, they will be needed by the employers when the economy turns around and picks up. They will command a wage that the market will decide and the employers will pay. If we try to include all these little ideas of how to favour them, we will discourage employers from employing more women. So, let us be very careful about what we want to do. Are we here to help the women workers to bridge the gap, or are we going to make life more difficult for them? I would urge you to be very circumspect in proposing such measures. On the part of the Government, we will continue to try to help and equip our women workforce, which is half of the population. If we do not give them every means to upgrade themselves so that they can perform well in the new economy, then we are doing ourselves a serious disservice. Let me assure all hon. Members that Government will pay particular attention to the needs of the women workers, to help them bridge this gap.”
“Mr Speaker, Sir, I think there is a tendency to try to draw parallels all over the place, and we can arrive at very unusual conclusions. The reason why Government gives increments to NSmen within the civil service and encourages the private sector to give the males who have to perform 21/2 years of national service the same recognition is self-evident. Because they have to give up 21/2 years of their career to perform national service at a very nominal allowance from the Ministry of Defence. So, we try to make up for them by encouraging employers in the private sector and in the civil service to give them two increments when they join the service. As for women taking time off to mind their families and look after the children, I think there are many other ways people can balance work and home. To have a rigid structure whereby you say that the employer will have to pay the woman worker X number of credits by way of increments upon rejoining the company after a certain number of years, I think this would increase the rigidity in our labour market. The more rigid we make our labour market, the more difficult it is for us to achieve the kind of growth and competitiveness that we want. The world is not getting any more friendlier in terms of economic competition. On the contrary, competition is heating up. The more we introduce these little tweaks here and there, the more difficult we will make it for the women to get work in the future. So, far from helping women, such rigidity may discriminate against women. I would therefore urge Members to be careful when advancing ideas about how we want to help the women. The way to help them is actually through education and skills training.”
“Mr Speaker, Sir, since 1997, or earlier than that, my Ministry has been actively promoting family-friendly human resource management practices. We have given awards to recognise firms with practices which are actually family-friendly, particularly for their women workers. We will continue to do so. We will continue to explore how we can encourage companies and employers to adopt family-friendly practices for their female workers in order to allow them to better balance their career and also the needs of the mothers and wives to manage the home. These are issues which are constantly being looked at. With regard to the specific study that the hon. Member said that she raised in 1997, I have to look it up, because I do not have the answer with me right now.”
“As I said, we will continue to look at more skills upgrading programmes for the cohorts of women who are already in the workforce, particularly the older women in their 40s and above. They have poorer education and lower level of skills. The way for them to narrow the wage gap is, in fact, to go for skills upgrading, and take advantage of the many programmes that we have, whether it is the National Skills Recognition System, the Skills Redevelopment Programme or one of our strategic manpower conversion programmes that will help them to acquire new skills for jobs in different areas. If they take these opportunities to upgrade themselves, I am sure they will be able to earn a higher wage.”
“Mr Speaker, Sir, we cannot say that we are completely satisfied with the situation. We will want to work towards a point in future that the skills and qualifications of the women workers are equal to that of men, so that they will be able to earn the same pay. On a national basis, looking in total, this will take time, because we still have many cohorts of older women. And if we look at the education of the older women, they tend to lag behind that of their male counterparts in the same age cohort. The way to narrow this gap is, in fact, through education. As I mentioned earlier on in my main reply, in the age group of 25 to 29, the women actually earn more than the men. And through better education, we will find the women entering the labour force will have as good an education, and as good a training as their male counterparts, and they will earn the same wages as their male counterparts. So, with education, we will gradually narrow the gap. What has the Ministry done? In terms of continuing education and training, my Ministry also makes no distinction between male and female workers. We give equal encouragement and support to women who come forward to undergo skills retraining or upgrading. In fact, we have many programmes which help the lower skilled workers, and you will find a disproportionate number of women among the lower skilled. They are the ones who stand to best benefit from this programme for skills upgrading. And we will continue to implement programmes to help the lower skilled to uplift their skills for the new jobs in the new economy. This is the way for us to speed up the narrowing of the wage gap. What else can be done?”
“Sir, the underlying concern in Dr Neo's question on wage gap is whether women in Singapore are discriminated against in employment. Average monthly earnings of women have significantly increased over the years. While differences in wages still exist, I would like to emphasise that it is not the result of discrimination at work. Rather, it is due to legitimate work-related reasons such as working experience, years of service, types of jobs held and skills, as I mentioned earlier. The Government's policy on employment is based on the principles of equal opportunities and meritocracy. Our employment practice emphasises equal opportunities for all, and a reward system based on performance. The Singapore Civil Service adopted the principle of equal pay for equal work since 1962. NTUC and its affiliated unions make no distinction between male or female members. In collective agreements signed between unions and employers, the principle of equal pay for work of equal value is the norm. In addition, the National Wages Council, which is the national tripartite advisory body on wages, formulates wage increase guidelines each year based on key economic indicators, such as GDP growth, productivity, inflation and international competitiveness. This has enabled Singapore workers, both men and women, to enjoy a fair share of the fruits of economic growth.”
“Mr Speaker, Sir, based on the Central Provident Fund Board's records, the average monthly earnings of females increased from $2,256 in 1998 to $2,588 in 2001, or at a rate of 4.7% per annum during the period. After discounting for inflation, the real earnings rose from $2,263 to $2,535 at an annualised rate of 3.9% during the same period. Earnings data prior to 1998 are not comparable due to a change in the collection methodology. The hon. Member asked for data from 1997. Because of the change in collection methodology, I gave the figures for 1998 onwards. Sir, females in Singapore generally earn less than males at the aggregate level. This is not unlike the experience in many other countries. In 2001, the average monthly earnings of females was 72% that of males. This reflects the higher concentration of females in lower paying occupations due to the poorer educational attainment of the older cohorts of female workers. The tendency for females to withdraw from the workforce because of childcare and household responsibilities also reduced the average years of service and experience of working females. With our seniority-based wage system, females, as a group, will therefore earn less than males. For the younger age group, the wage gap differential is generally smaller. In fact, in the age group of 25 to 29, women working as managers, professionals, associate professionals and technicians, and service and sales workers actually earn more than their male counterparts. Other factors contributing to the gender wage disparity include differences in skills, qualifications, age, job nature and position. The wage gap was largely unchanged over the last few years. It was also 72% in 1998.”
“HDB has also introduced several measures to further improve certain aspects of its flats, such as the tiles, doors, partition walls and sanitary fixtures. For example, HDB implemented an improvement programme for tiling works this year. Training workshops were held for contractors' supervisors and handbooks on tiling techniques were produced, to encourage implementation of good practices. Tilers, Sir, working in HDB contracts are also now pre-screened and approved to ensure that they are sufficiently skilled to carry out such works. Nonetheless, Mr Speaker, Sir, if Dr Maliki knows of any defects in his estate within the defect liability period, please inform us so that we can look at the nature of the problem.”
“Mr Speaker, Sir, I thought I have explained to him the decision to reject the appeal was made on the best interpretation of the provisions in the CPF Act at that time. There is no question of a mistake. It was a question of how the interpretation, and subsequent review of the legislative intent, was made. HOUSING AND DEVELOPMENT BOARD FLATS (Complaints on unsatisfactory workmanship) 12. Dr Mohamad Maliki bin Osman asked the Minister for National Development (a) how many complaints have been received by HDB from residents of unsatisfactory workmanship in the design and build of flats in New Towns such as Woodlands and (b) what is HDB doing to ensure better quality control to overcome such unsatisfactory workmanship. The Senior Parliamentary Secretary to the Minister for National Development (Assoc. Prof. Koo Tsai Kee) (for the Minister for National Development): Mr Speaker, Sir, under the Construction Quality Assessment System, known as CONQUAS in the trade, run by BCA, assessments of public and private residential projects have shown that, generally, the workmanship in HDB flats is comparable to the workmanship in private residential estates. The number of complaints that HDB receives concerning unsatisfactory workmanship in HDB flats varies across towns and design types. In the case of Woodlands, for every 1,000 flats completed in recent years, about 200 instances of unsatisfactory workmanship were reported within the defects liability period. As part of HDB's quality improvement system, regular reviews and analyses of public feedback are carried out so that continuous improvements to building design and finishes can be made. Over the years, Sir, HDB has pushed for the use of more pre-cast components in the construction of its flats to improve flat quality.”
“Therefore, since there was in place an agreement for HDB to extend a housing loan to Mdm Koh and her late husband jointly, and the Home Protection Scheme premiums had been deducted from the CPF accounts of Mdm Koh and her husband, the CPF Board could discharge Mr Yee's liability to repay the housing loan to HDB. This review has brought about a favourable outcome for Mdm Koh. Sir, in the course of the review, the Board has also looked at past claims, rejection cases, in order to see if there were similar cases that require a re-look. The Board told me that there is only one case that might require re-consideration. This case is being reviewed now. Similar incidents are unlikely to occur in the future as we have now clarified the legal interpretation as to when the Home Protection Scheme coverage would take effect for cases of this nature. The CPF Board has also introduced new procedures to ensure that such cases will not be repeated. Sir, in fact, in order to avoid any ambiguity in the interpretation of the relevant provisions of the Act, my Ministry will consider amending the legislation. We intend to rephrase the legislation such that the Home Protection Scheme coverage for a member would begin once there is a valid housing loan agreement with the HDB or any other approved mortgagee and the HPS premiums are deducted by the CPF Board.”
“Her subsequent appeals were rejected as the Board explained that the Home Protection Scheme (HPS) did not apply to Mr Yee since he had not withdrawn any monies from his CPF account to repay the HDB housing loan. This was premised on the interpretation of section 29(2) of the CPF Act which provides that the HPS applies to a member of the CPF Fund who had withdrawn monies standing to his credit in the CPF Fund to repay any instalment of housing loan. Prior to this case, the CPF Board's interpretation and procedures had worked well for practically all the Home Protection Scheme cases. In a way, Mdm Koh's case is exceptional as it involved the question of whether there is insurance coverage before a person becomes a legal owner of his flat. As hon. Members are aware, my Ministry conducted another review of the case and, in particular, the legislative framework which governed the scope and application of the Home Protection Scheme was re-examined. I thought this was necessary as I was concerned that there may be pre-existing ambiguity in the interpretation of the provisions governing the scope of the HPS. In this regard, guidance was sought from the Attorney-General's Chambers. Mr Speaker, Sir, the Attorney-General's Chambers has advised that the legislative scope of the Home Protection Scheme is provided under section 29(1) of the CPF Act and that this section did not require Mr Yee to complete the purchase transaction or to withdraw monies from his CPF account to repay the loan in order for the Scheme to apply to him. It was sufficient if there was a valid housing loan discharge and the Home Protection Scheme premiums had been deducted.”
“Mr Speaker, Sir, before I answer Question No. 11, may I have your indulgence to inform the Nominated Member that earlier on, when he raised Question No. 3, my colleague was not in the Chamber to answer his question and also Question No. 4. And with your indulgence, if time permits, before the end of Question Time, my colleague would seek your permission to answer Question Nos. 3 and 4. I will now turn to Question No. 11. Mr Speaker, Sir, the Home Protection Scheme (HPS) is a mortgage reducing insurance scheme that protects CPF members who have obtained housing loans from approved authorities against losing their flats purchased under the Public Housing Scheme should they become disabled or pass away before their loans are repaid. A CPF member would qualify to claim under the Home Protection Scheme if there was an outstanding loan to discharge. Sir, in Mdm Jenny Koh's case, based on the intended loan commencement date, 1st August 2001, as provided by the Housing and Development Board, the CPF Board had deducted the premium and sent Mdm Koh and her husband, the late Mr Yee, a certificate informing them that the cover commencement date was 1st August 2001. The cover under the Home Protection Scheme was premised on the condition that the purchase transaction would be subsequently completed. Sir, unfortunately, Mr Yee passed away before he completed the purchase transaction. In the light of this, the CPF Board took the position that a housing loan had not been taken, as Mr Yee was not the legal owner of the flat at the time of his sudden demise. Therefore, while we sympathised with Mdm Koh and her family, the Ministry was not able to accede to her appeals and had the CPF Board discharge his loan liability to HDB when there was no outstanding housing loan to discharge.”
“There were 2,119,700 persons in the labour force in June 2001. The labour force comprised 2,046,700 persons who were employed and 72,900 unemployed. Of the employed persons, professionals, managers and technicians made up 46%, followed by production workers, cleaners and labourers (30%) and clerical, service and sales workers (24%). There were 1,121,100 economically inactive persons aged 15 years and above. Of which, 496,600 (44%) were home-makers, 279,200 were schooling or taking courses (25%) and 159,200 were retired (14%). The figures as at June 2001 are summarised below: Total Workforce (aged 15 years and 2,119,700 above): Employed Persons: 2,046,700 Professionals, Managers & Technicians 933,900 Clerical, Service & Sales 505,500 Production, Cleaners and Labourers 607,300 Unemployed Persons: 72,900 Economically Inactive Persons (aged 15 1,121,100 years and above) Home-makers 496,600 Schooling/Taking Courses 279,200 Retired 159,200 Others 186,100 Source: Report on Labour Force in Singapore. SPALLING CONCRETE IN HDB FLATS 5. Dr Ong Seh Hong asked the Minister for National Development (a) what is the extent of the problem of spalling concrete in HDB flats, especially those flats built during the "accelerated programme" years in the 1980s; (b) what are the plans, if any, to help rectify the affected flats; and (c) whether his Ministry will consider extending the HDB grant to subsidise the repair cost of spalling concrete.”
“But the Board cannot say it will not impose penalties or it will just overlook late payments and allow employers to get off scot-free, because if we adopt that approach then many more employers may choose not to pay their CPF on time and then we can run into hundreds of thousands of workers, CPF members, having difficulties. And who will answer to them? Certainly, Mr Chiam would not be here to answer to all these people who find that their CPF accounts are not credited on time and they have great difficulties meeting their financial obligations. So, I suggest that Mr Chiam look at the issue from both sides of the coin - from the employers, we are sympathetic, but we cannot ignore the needs and the rights of the employees. HOUSING AND DEVELOPMENT BOARD (Review of policy on 3-room flats) 15. Dr Lily Neo asked the Minister for National Development whether there is a need to review the HDB policy on 3-room flats in view of the demand now for such flats.”
“Sir, the CPF Board takes no pleasure in imposing penalty on employers who are late in their CPF payments. We are sympathetic to the employers and to companies that have cash flow difficulties, and are not able to meet the payments on time. That is why we give them a grace period of two weeks to make the adjustment. We do not impose a penalty immediately. But if we were to take Mr Chiam's suggestion, and take a very relaxed approach and say "Well, if you cannot pay, do not worry, you pay when you can", then we must look at the other side of the coin - the impact of such a policy on the CPF members could be quite tremendous. We will have to bear in mind, as I said in my main answer, CPF members depend upon timely crediting of their CPF contributions into their accounts so that they can meet their housing mortgage repayments. They may have to pay hospital bills for themselves or for their dependants. They may have to withdraw money to pay for their children's education, if they have taken out a loan against their CPF under the Education Scheme. So, if we allow employers to delay the payment and if we do not have any measures that will encourage, and, in fact, compel employers to meet their statutory obligations on time, we will end up with questions in Parliament by other Members asking why is it that the Board is not recovering or helping employees to have their CPF credited on time. And, we will have to answer those other questions instead. So we have to have a balanced policy. Where we can, if there are really genuine reasons, the Board can consider giving some extension/grace period.”
“Mr Speaker, Sir, currently, the CPF Board already provides employers with a grace period of 14 days after the end of the month when contributions are due. Penalty interest is charged after the grace period so that members would not lose out on the interest that is due to them had their employers been prompt in their payment. This is also to deter employers from delaying CPF payment. Sir, employers have the obligation to pay the full amount of their employees' CPF promptly. CPF is considered as part of the employees' wages and employers should not delay CPF payment, just as they must not delay payment of wages when wages are due. Moreover, many CPF members use their CPF monies for their housing, healthcare, children's education and insurance needs. Late payment of CPF contributions would affect the employees' usage of their CPF for these on-going needs.”
“We have even introduced a programme of self-employment training so that retrenched PMEs, who want to start up a new business, can sign up for this programme and learn how to start up a small business on their own and make use of their past working experience to start up a business. We do have programmes that are focused at meeting some of the needs of the PMEs. Finally, Mdm Ho asked whether SPEC, which is a cooperative of professionals, managers and executives, can also share the space at the new NTUC Building. May I suggest that she put her proposal directly to NTUC because the Government has subsidised the building of a new NTUC Building at Marina South Downtown, in recognition of the contributions made by the trade union movement in helping us to mobilise our workforce, participating in workers' training and also, generally, looking after the welfare and well-being of our workers. This is a very important contribution that has made a very significant contribution to strengthening our economic competitiveness. In return, the Government has given NTUC this special recognition. We have alienated land for them to build a new headquarters and we have also subsidised the construction of the NTUC portion. If SPEC wants to co-locate its operation/premises with NTUC, I think SPEC should make a proposal to NTUC to see whether this is feasible or not. Mr Chairman, I think I have addressed most of the concerns.”
“But let me assure her that it was not the intention to exclude this group. That is why, in fact, when she asked whether there is any specific fund under the Manpower Development Programme to assist the professionals, managers and executives, the answer is yes. We do have programmes that are designed to help the PMEs, especially those who have been retrenched. We have programmes, such as the Strategic Manpower Conversion Programme, where we can help professionals to be retrained for redeployment in a different sector. Not only are there programmes in the MOM's Manpower Development framework, but there are also programmes in EDB, Infocomm Development Authority (IDA) and in MAS where they have seed funds which are targeted to help develop professionals, managers and executives within their particular area of economic activities. There are quite extensive programmes available to help the PMEs. It is not as if that MOM had overlooked this group. In fact, our People-for-Jobs Traineeship Programme was designed to be able to reach out to the younger group of PMEs because we crafted the salary support, 50% of the salary of anybody who is aged over 40, at the level of $2,000, that means anyone earning $4,000 can benefit. The middle-management group, who is earning around $4,000, and who has been retrenched, can perhaps benefit from the People-for-Jobs Traineeship Programme. When they get a job, the employer will receive 50% of his salary for six months offsetted by the Government. It will help them get jobs. We have also introduced a Work Skills Training Programme to help executives equip themselves with better career planning and job search skills so that they can cope with this period of difficulties.”
“In fact, in Singapore, the employment terms of managerial and executive staff, who are not covered by the Employment Act, are generally equal, if not better than those who are covered through a process of individual contract negotiations or through the market forces at work. Even though they are not covered, they have been able to arrive at individual contracts that provide equal or better benefits. Mr Steve Chia also raised the same point. We are able to assist those who feel that they have been unfairly dismissed by the employer or their employment terminated unfairly as a result of pregnancy. If there are such cases, he is free to inform us or advise the employees who feel that they have been unfairly dismissed to appeal to the Ministry. We will certainly look into their case to help them. I next turn to Mdm Ho's comments on our Ministry's Mission Statement. Yes, we use the word "workers" in our Mission Statement. But when we use the word "workers", we were not thinking of blue collar workers. We were thinking of workers in a wider sense, perhaps workers as being equal to employees. It was not meant to be workers in the way that she defines it where we have excluded the professionals, managers, executives and the technicians. That was never the intention. We will certainly take note of her comments. If there is this implication, if there is this perception that we have excluded this group, my Ministry is actually in the process of reviewing our Mission Statement. It was crafted sometime ago when we were transformed from Ministry of Labour to Ministry of Manpower. I think it is timely for us, in the light of these few years of experience, operating as the Ministry of Manpower, to review our Mission Statement. We will certainly take note of her comments.”
“This feedback is being considered in finalising the draft Bill to extend occupational safety and health protection to more workers at different workplaces. This process of consultation and gathering feedback has taken more time than expected, because many employers have expressed a lack of understanding about how the new legislation will impact on them and have raised certain concerns which my Ministry is addressing. Hence, the timeframe for introducing the Bill to Parliament has been delayed. We hope to complete this whole cycle of consultation and addressing their concerns and feedback and finalise the Bill and introduce it in Parliament later this year. The answer to Mdm Halimah's request on the income ceiling under both the Employment Act and the Workmen's Compensation Act is yes, we will review the salary ceiling in these Acts. We will also rationalise the difference in definition between the Workmen's Compensation Act and the Employment Act in terms of salaries or the earnings of the workers concerned. However, we will have to implement a new ceiling at a point in time when the economy has sufficiently recovered in order to be able to absorb this additional cost on employers. We will review and find a suitable time to introduce this new ceiling. On anomalies, again as Ms Indranee has mentioned, on maternity leave, there is a segment of the workforce that is not covered, mainly the managers and the executives who are excluded from the Employment Act. But it does not mean that female managers or executives, who are not covered by the Employment Act, do not receive the maternity leave benefits that are received by those who are covered by the Act.”
“We have also introduced safety training for all levels of personnel and also, last but not least, through a range of stringent enforcement exercises. I think we have brought the point home to many of the employers, so they are paying much more attention to this area of occupational safety and health. Our experience shows that the Safety Management System is an effective tool in improving safety in factories. Hence, last year, my Ministry extended the implementation of the Safety Management System to process plants, wafer fabrication plants and metal working factories employing more than 100 workers. With regard to Mr Yeo's concern about fatal accidents resulting from a fall from heights, this is a concern which my Ministry also shares. In fact, two of the main causes of fatal accidents are due to workers falling from heights, or being struck by falling objects. These accidents usually arise at the edge of buildings under construction, or in shipyards where scaffoldings have to be used in the course of their work. My Ministry will introduce regulations to ensure that scaffoldings used at workplaces are safe and of sound construction. As I have informed this House in the last Parliament, my Ministry is planning to amend the Factories Act to extend coverage to more workers at other workplaces. In the process, we have embarked on an extensive consultation and feedback programme from the affected workplaces. Our staff have met with organisations, such as the Singapore Dental Association, National Healthcare Group, Singapore National Employers' Federation, Singapore Hotels Association, the Restaurants Association of Singapore and also several Government departments.”
“She asked what are our plans for ratifying more Conventions. At the moment, we have ratified a total of three out of the eight core Conventions, namely, Convention 29 on Forced Labour, Convention 98 on the Right to Organise and Collective Bargaining, and Convention 182 on the Worst Forms of Child Labour. We have announced that we will ratify Convention 100 on Equal Remuneration. We will convey the Instrument of Ratification at this year's International Labour Conference in June. With this latest ratification, we would have ratified a total of 22 ILO Conventions, including four of the eight core Conventions. I think this compares quite favourably to many countries, including some of the developed countries. We will continue to evaluate the other Conventions and consider ratifying those that are relevant to us. In the process, we will consult both the trade union movement and also the employers' federation. Mr Yeo Guat Kwang has raised some questions on occupational safety and health at the workplace. He noted that the number of fatal accidents had dropped, but the total number of accidents had, in fact, increased. But over a longer period of the last 10 years, the number of accidents in factories had in fact declined quite significantly. This improvement can be attributed to measures that were taken by my Ministry, such as the implementation of the Safety Management System for construction, shipbuilding and ship repair industries. We have also introduced other measures to inculcate and instill greater awareness of occupational safety and health. For instance, we have a debarment scheme for contractors in the construction industry. If they fail to meet certain standards, they could be debarred from tendering for public projects.”
“More than 80% of the foreign domestic workers who come into Singapore are currently employed through employment agencies. We feel that if we have an accreditation system, it will help to upgrade the professionalism and the ethical standards of these employment agencies, and also provide employers with information that they need to make decisions when they are selecting the employment agencies for their services. Under the accreditation system, the employment agencies will be assessed on a number of factors, including adopting fair and ethical trading practices, having well-trained staff, providing accurate information on the foreign workers, the nature of the foreign workers' training, and providing after-placement services. The details of this accreditation system will be announced by CASE in due course. The scheme initially will start off as a voluntary scheme. So employment agents are welcomed to participate, to have themselves graded and evaluated. But my Ministry intends to eventually make it compulsory for all employment agencies that deal with foreign domestic worker placements to be accredited when they renew their licence. We hope that through such a system we will, over time, be able to raise the ethical standards in the industry. 3.00 pm Next, I turn to Mdm Halimah Yacob who asked whether our labour standards are up to par. Let me assure her that our labour standards are up to par. In fact, our labour legislation has been rated quite highly every year by BERI in its assessment of our labour force. The fact that our labour legislation is rated highly must mean that we have a good framework for managing or regulating the labour market. I am quite confident that our labour standards will stand up to scrutiny by any international organisation.”
“In the process, it means that the foreign worker would receive better welfare, better treatment from the employer, because the employer does not want to jeopardise his bond by ill-treating the foreign worker to the point that he will run away. The result speaks for itself because, over the last 10 years or so, if I remember correctly, we have only about a thousand-odd cases of employers who lose their bonds, which works out to about a hundred-odd cases a year. This is for foreign domestic workers who absconded and caused their employers to lose their bonds. So the numbers are not large, which should mean that, in fact, the bond system does work. The vast majority of employers are conscientious about their undertaking to the Government, and they do repatriate their workers at the end of the period of working in Singapore. He also expressed concern about the employment agents, and whether they have treated the foreign workers fairly or not. Here, I would like to make clear that there are two sides to the coin, because while the foreign workers claim that they pay enormous sums of money to agents, they are referring to the agents in their own country who extract huge sums of money from people wanting to leave their home country to work in Singapore. These agents' activities are obviously beyond our control. They are outside our jurisdiction. But for the employment agents that are in Singapore, of course, we do license them and we do regulate their activities to ensure that they serve the interests of both the employers and the foreign workers who are here to work. I would like to inform the Member that my Ministry is working with CASE to introduce an accreditation system for employment agencies, especially those that deal with the placement of foreign domestic workers.”
“When he exceeds 40%, for additional foreign workers employed between 40% and 50%, which is the maximum allowed presently, he pays a higher levy. So we have such a system. When we review the levy system towards the end of the year, we will look at whether this multi-tier system should remain as it is or should be refined. Let me now turn to Mr Ong Ah Heng, also on work-permit related matters. His concern is that employers whose foreign workers abscond or run away will result in the employers losing their security bond, ie, the security bond posted by the employer will be forfeited if the employer is not able to repatriate the foreign workers. I understand this concern. Employers say that they cannot be 100% responsible for their foreign workers while they are here, and some of them do run away. They are not in a position to monitor the foreign workers' activities round the clock. This is true. On the other hand, if we do not have a requirement that the employer who brings in the foreign worker gives this undertaking that he will repatriate the foreign worker at the end of the contract, or when the work permit is terminated, we could end up with a situation where there would be large numbers of foreign workers brought in to work and then end up being abandoned by the employer on the streets of Singapore. That is why the security bond is important. It serves a useful purpose. There is a hold on the employer, that he cannot abandon these foreign workers and leave them to their own devices, find their own way around, and then he goes off and recruits some other foreign workers. The bond makes sure that the employer knows that he stands to lose a substantial sum of money if he does not repatriate the worker.”
“Nevertheless, if the employment pass holders need more time to settle their affairs in Singapore, we are prepared to consider. They just have to let us know. We are prepared to even grant an extension up to six months for them to settle their affairs here. Finally, on Mr Inderjit Singh's point on work permit, suggesting that since we have a dependency ratio or a quota system, we should consider lowering the levies for the foreign workers, or have multi-tier levies, to reduce costs for the employers. I would like to point out that the quota or dependency ceiling system is in place to prevent over reliance on foreign workers. Levy, on the other hand, although it will moderate demand on the part of employers, also serves another useful purpose, ie, to narrow the wage gap between work permit holders coming from low-wage countries and Singaporean workers who are basically doing the same kind of job. Therefore, we have to maintain a balance, so as not to result in increasing replacement of Singaporeans by low-wage work permit holders. However, we do recognise that levies add to the cost of employers. That is why, during the economic downturn in January 1999, we reduced the levy across the board, except for the construction sector, and these lower levies will be maintained until December this year, as announced by the Deputy Prime Minister and Minister for Finance during the Budget Statement. On Mr Inderjit Singh's point about having a multi-tier levy system, we already have such a system in the manufacturing sector. There is a two-tier system. If the employer employs foreign workers up to 40% dependency ceiling, he pays a lower levy.”
“The number of employment pass holders investigated for employment pass abuses went up by more than 55%, from 247 in 2000, to 384 in 2001. The majority of these abuses involve false declaration of salary, followed by forged educational certificates, and illegal employment or deployment of employment pass holders. A total of 152 companies were involved in these abuses. Sir, the recent recession showed that lower-skilled Singaporeans are most adversely affected in an economic downturn. If we make no effort to check those who abuse the employment pass system to bring in low-skilled foreign workers masquerading as international talent, then we are only doing a disservice to Singaporeans. A barrier-free system means that more Singaporeans are going to face unfair competition for jobs. So, while our rules and procedures should not obstruct companies in need of genuine international talent, we will always need some checks and balances. Since our present system already sees 90% of the "P" pass applications being approved within a week, we feel that the system is adequately serving the needs of the vast majority of employers. The Member also brought up the problem of employment pass holders whose employment passes are terminated or not renewed, that they are given a very short period of stay, currently about two weeks, to settle their affairs and to wind up. Let me first point out that if the pass is not renewed, very often the employment pass holder will know about it well in advance. The company does not just spring a surprise on the employment pass holder because, if they are not renewing their contract, they will have to let them know in advance so they will have a chance to make arrangements.”
“Next, I would like to turn to Mr Inderjit Singh's points on the dilemma faced by some of the smaller companies when they apply for employment passes. We welcome international talents, regardless of who in Singapore is trying to employ them. Employers in Singapore, whether they are large or small, if they recruit well-qualified international talent, they will find that the application process is quite straightforward. The processing time is actually quite short. For hon. Members' information, more than 90% of the applications for "P" employment passes, ie, for top-quality international talents, are processed and approved within a week. Although salary is an important criterion in the overall assessment, it is not the only criterion that we use to decide whether an employment pass should be issued to the international talent. We also have to consider the applicant's background, as well as the background of the company. But let me assure the Member that we are always flexible and, if employers feel that they have a very special case, they have a very special person whom they should bring in, who warrants exception or deviation from the rules to be made, let me assure Members that we are prepared to consider such appeals. And we have, in fact, made such exceptions and deviations, on appeal from various employers. At the same time, however, I have to caution Members that while we are prepared to make exceptions, we must also guard against abuses by some employers. Some companies make false declaration either as to educational qualifications or salaries in order to bring in foreigners of a work-permit calibre masquerading as international talents. They do so to circumvent the restrictions on the entry of low-skilled foreign workers of the work-permit holder type.”
“I am glad to inform Dr Ong that, in fact, we do have such a facility, we do have such a service. This is our Contact Singapore. Contact Singapore has a network of offices in the world and they do offer advice and assistance to international talents who are keen to come to Singapore to take on jobs. They also offer a wide range of settling-in services, once the international talent arrives in Singapore. Contact Singapore has a local office here that will provide assistance to international talent. The local Contact Singapore office also works with other economic agencies to organise events to help international talent to network with Singaporeans, to get to know more Singaporeans since they are total strangers here, and also to build up contacts with members of their own community in Singapore. At MOM, we also work in partnership with other Government agencies, such as the Ministry of Community Development and Sports, the People's Association and various other organisations of foreign nationals here, to provide opportunities for foreign talents to interact with Singaporeans and for them to also participate in community work. This is a point that Dr Ong also mentioned, that they should be involved in community life, so that they can start to sink roots in Singapore and, hopefully, more of them may be persuaded to stay on for good. In the process, we do hold regular get-together, dialogue sessions and feedback sessions for the international talents, who are here on employment passes, to better understand the issues that they face when they come to Singapore, and to help them overcome some of the difficulties, if there are any.”
“Sir, I thank all hon. Members who have spoken on a wide range of subjects under my Ministry. I propose to give the response in the order of their speeches as they came along. So I will begin with Dr Ong Seh Hong. I thank him for giving us a very colourful lesson in the warring states and the dos and don'ts of buying dead horses. The valid point that he made was that, despite the economic downturn and the increase in unemployment, we still need international talent. And I thank him for supporting this position because there is always the tendency when you are faced with some crisis or difficulties, for instance, rising unemployment, people will think that that is the time to shut the door and try to preserve jobs for our own citizens. We have explained on many other occasions why in fact we should not do so. Today, in this age of globalisation, capital and talent do not recognise any borders and boundaries. For us to succeed in this more competitive, global environment, we really need to supplement our domestic talent, our home grown talent, with those that we can recruit from the flow of talent in the international labour market. There is an ebb and flow of talent going around. And our mission at MOM is to try to attract and recruit a fair share of these international talents to Singapore. They can help us to become more competitive. They can help us to reach out to new opportunities. They can in fact create jobs for fellow Singaporeans. 2.45 pm Dr Ong emphasised that there is a need for us, apart from just bringing them here, to try to help them to settle in quickly. He proposed that we should have a one-stop agency to help these international talents when they freshly arrive in Singapore.”
“Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates of Expenditure for the financial year 2002/2003, and ask leave to sit again tomorrow.”
“The problem is that in the short-term to the medium-term, structural reform will create more unemployment for this particular group of workers. It is the responsibility of the Government to deal with the emerging employment problems resulting from these structural reforms. Our present measures may not be effective enough to help these low-skilled workers find jobs going by the rate of job-matching. We need to foster the informal economy which can provide jobs for these workers. I would urge the Ministry of Manpower to work with our Community Development Councils (CDCs) to expand job opportunities for these workers - not on an ad-hoc basis, as some CDCs do now, but in a structured way all over the island. These jobless people may, otherwise, be susceptible to engage in illegal activities or rely on public assistance. I would like to ask the Minister how the Government intends to deal with the problem of structural unemployment.”
“Sir, I do not have the figures with me. I understand that the CPF Board does publish such figures on the use of CPF in public housing and private housing. It is not such a big secret. It is all published in the annual report. Ms Irene Ng Phek Hoong (Tampines): Sir, structural unemployment has arrived in Singapore and looks set to stay for some time. Over the last five years, those with secondary and below secondary qualifications made up an average of 75% of unemployed Singapore residents. It did not matter if it was a good year or a bad year. In 1998, when our growth rate was minus 1%, this group made up about 77% of unemployed Singapore residents. In a good year, in 2000, when the growth rate was a whopping 10.3%, they made up about 74%, just a minimal drop. These figures are culled from the Labour Force Survey of the Manpower Ministry. Sir, it seems clear that economic growth has had little effect on the lot of these workers. In good years or bad, jobs are not coming their way. This is despite the array of training programmes rolled out over the years, and the millions spent on these initiatives. They are victims of the restructuring process. My Parliamentary colleague, Mr Khaw Boon Wan, once talked about the Singapore Cause. He was referring to the core ideals of this society - meritocracy, fair play and equal opportunities. This structural unemployment is the Singapore Cost. We cannot allow an under-class to develop and harden in Singapore. There are social costs associated with unemployment. There is a need to change the employment system to bring it in line with socio-economic changes that make structural reform necessary in the first place. We restructure the economy to create more jobs for Singaporeans.”
“Whatever penalty interest that the CPF Board collects from the employers, at the end of the day, the first charge goes towards restoring the lost interest, the interest which would have otherwise been earned if the CPF contribution had been paid on time into the employee's account. That is the most important portion of the penalty interest collected that will be credited back into the member's account immediately and, what is left over, is used to defray the expenses incurred by the Board in collecting this overdue payment. The penalty interest is necessary to ensure that employers are on time in paying their employees' CPF contributions. After all, the majority today, 20% comes out of the employees' wages and only 16% comes out from the employer. So it is part of the employee's wages and any delay is unfair to the employee. We have to impose a sufficiently effective deterrent to ensure that employers pay their CPF contribution on time. I am glad to say that the majority of employers do pay their CPF contribution for their employees on time. It is only a small percentage of cases who are delayed in such payment. 6.00 pm”
“Of course, over and above this private-sector health insurance, CPF also offers members the basic MediShield insurance, which is a catastrophic insurance scheme, and also MediShield Plus. Later this year, when ElderShield, a scheme under which senior citizens can be insured by private insurance companies, is launched, CPF members can also use Medisave to pay for their ElderShield premiums, not just for themselves, but also premiums for their spouses, children, parents or grandparents. As and when we implement the portable medical benefits system, the Ministry of Health and the CPF Board will also allow workers to use their Medisave to buy appropriate health insurance for themselves and their family members. Last but not least, let me respond to Mr Ong Kian Min's point. He asked what happens to the interest that the CPF Board charges or levies on employers who are late in paying their employees' CPF contributions. He mentioned that the CPF charges a penalty interest at the rate of 18% per annum on such late payments. Let me explain. Currently, the CPF Board gives employers a 14-day grace period, from the end of the month, to make the CPF contributions for their employees. If payment is not made at the end of the 14 days' grace period, a penalty interest is charged. The purpose of this penalty interest is to ensure that the defaulting employers make the payment as quickly as possible, and to deter them from paying CPF contributions late again in future. It is not true that CPF keeps all the penalty interest. The penalty interest is 11/2% per month - that is where we get this 18% per annum - but very few employers delay their payment for such a long period of time.”
“I would like to inform the House that the Economic Review Committee's Sub-Committee on Wages, CPF and Taxation is also reviewing the recommendation of the study report by the Tripartite Committee, and it will then recommend a mechanism to implement such a portable medical benefits system. So, we will have to wait for the ERC to complete its review of this proposal before I would be able to inform the House on what else we need to do and how we should implement this recommendation. Dr Lily Neo has also asked whether we could allow CPF members or workers to use their Medisave to pay premiums for private health insurance. The answer is yes. We do allow CPF members to use their Medisave to buy health insurance from private-sector insurance companies. In fact, I understand that, currently, there are five approved private medical insurance schemes, namely, Income Shield and Managed Healthcare from NTUC Income Cooperative, Health Shield from AIA, Supreme Health from Great Eastern Life, and Max Health from the Overseas Assurance Corporation. These are the companies that have approved health insurance which CPF members can purchase using their Medisave savings. They can use their Medisave to buy this health insurance, not just for themselves only. They can also use Medisave to buy insurance for their spouse, their children, parents or grandparents, up to the withdrawal cap for every policy. There is a withdrawal cap of $660 per year, and this has been set to prevent premature depletion of the Medisave savings. Private-sector insurance schemes also have to be designed with co-payment and deductible, to moderate demand and over-consumption of medical services, which Dr Neo also mentioned as to be important points to consider.”
“In a nutshell, it recommended that a medical benefits scheme, based on the principle of portability, co-payment and affordability, be introduced. The scheme will cover both inpatient and outpatient benefits supported by a medical insurance structure - deductibles and co-payment features, and allow accumulation of the unused medical benefits to meet future medical needs. Sir, the proposed system will ensure that employees are covered by medical insurance not only during employment but also when they are in between employment and even after retirement. By enabling younger workers to start putting aside more savings in their Medisave for their later years, the proposed system could also help to improve cost competitiveness and employability of older workers. With the element of deductible and co-payment, the scheme will encourage individuals to take greater personal responsibility for their own health, and this will help to contain the rise of medical costs in the long run. Concerning the points raised by Mdm Ho on whether an additional 1% Medisave contribution will be sufficient for employees moving on to this portable medical benefits system to buy their health insurance, our experience with a similar system that has been in operation in the civil service since 1994 is that, with an additional 1% Medisave contribution, most of the employees should be able to buy an adequate level of health insurance. Of course, this will have to be reviewed over time, and they should also be given options in the choice of the level of insurance health coverage that they want.”
“While some Members are asking for the CPF to be opened up, I note that Dr Tan and Mr Yeo argued that the CPF should be re-focused to its original objective of providing for CPF members' home ownership, retirement and healthcare needs. This clearly illustrates the tension in our different objectives. The more liberal we are with CPF withdrawals, the harder it is for Singaporeans to accumulate enough for the core objectives of the CPF. So, I agree with both Dr Tan and Mr Yeo, that we should go back to the fundamentals. Sir, in conclusion on the CPF issues, Members of the House will appreciate that what I have sketched out are not straightforward issues. I may not have given all the answers to the questions that Members have raised. But, these issues are interconnected. Each has an implication on the others, and we need to look at these issues as integrated and part of the same solution. Let me reiterate that no decision has been made at this point in time. While Members and the public are understandably anxious about the outcome of the CPF review, let us wait for the Economic Review Committee to thoroughly review and debate the issues before making its recommendations. I would like to assure Members that our intention is to help workers cope with future uncertainties and to enhance employability. Sir, may I now turn to the points that have been raised by Mr Yeo and Mdm Ho on the medical benefits system. Mr Yeo has asked what is the progress and prospect with regard to the implementation of the portable medical benefits system. I would like to update Members of the House that the Tripartite Committee, chaired by former Minister of State, Mr Othman Haron Eusofe, had concluded its study on the portable medical benefits system.”
“I agree with Mr Yeo's observation that the cash amount that members set aside would be much lower, if they pledge their property for part of the Minimum Sum. The property itself may not generate cash for the CPF members. Of course, it could, if they are prepared to sublet part of their property, eg, a room, if it is a 4 or 5-room HDB flat, or, in a more drastic case, maybe willing to downgrade to a smaller property or find a reverse mortgage for the property. But let me reiterate that the CPF Minimum Sum is what its name implies: the bare minimum, adjusted for inflation, to see us through retirement. It was never intended to maintain one's standard of living before retirement and after retirement. Dr Chong Weng Chiew requested that needy CPF members, who have financial difficulties, be allowed to withdraw their CPF savings to meet their current financial problems. This is a very well-intentioned plea. While I do sympathize with those who face such difficulties, I am also fearful of the consequences when we rush to unlock the CPF savings. No doubt, if we face a prolonged recession with very high unemployment, the CPF will have to be unlocked to bail Singaporeans out, and the Government is prepared to do so. But, our present situation is not so grave as yet. Premature unlocking of the CPF can do us more harm than good. I would like to suggest that we make use of other Government and community assistance schemes, eg, the Economic Downturn Relief Scheme (EDRS), the many programmes that we have in my Ministry for training and job placement assistance, before we turn to prematurely unlocking the CPF for this group of people.”
“Over the longer term, is this prudent, or is this sustainable? 5.45 pm Mr Seng Han Thong has asked whether the Government should consider setting a cap on the use of CPF for housing. This is related to the question of whether it is prudent or not to allow such a high level of withdrawal to service the mortgages. The ERC is, in fact, at the same time, also reviewing CPF housing schemes to ensure that we do not, willy-nilly, end up doing what Mr Yeo Guat Kwang and other hon. Members are concerned about, ie, encouraging over-consumption in housing. However, we are well aware that this is a very sensitive area, tied to the assets of many Singaporeans and the health of the property market. The Government has no intention of spooking property prices and hurting practically all Singaporeans. We are talking about fine-tuning a basically sound system, and not making emergency repairs to a broken-down system. If any changes are necessary, we will implement them cautiously and gradually, and we will phase them in over an extended period, probably lasting several years. Mr Yeo Guat Kwang asked for the basis that the CPF Board uses to determine the adequacy of the Minimum Sum. The Minimum Sum is pegged at a level that would enable an individual to maintain a modest standard of living, somewhat higher than the subsistence level, upon reaching the prevailing retirement age. The CPF Minimum Sum was not intended to be the only source of income for retirees. CPF members would have withdrawn part of their CPF at age 55 and, hopefully, invested these CPF savings either in the form of an annuity or some other investments to generate additional income when they finally retire at age 62. They may also have their own private savings to supplement the monthly income from the Minimum Sum.”
“For those who are prudent and bought properties appropriate to their income to house their families, the answer is "no". They have not over-invested or over-consumed. But for those who rush into the property market for speculative gains, especially at the top of the property boom and over committed themselves, the answer is a painful "yes". Sir, as in everything else, prudence is very important. CPF members should be prudent in their property purchases and not over-stretch themselves financially. They cannot assume that their wages will go up year after year, they cannot assume that they will never become unemployed during their whole working lives. Otherwise, they may find themselves vulnerable to sudden shifts in the economy and the property market, such as the recent recession. Sir, we also need to ask another question. Having reached practically full home ownership, going forward, how do we refine the CPF system? There are two aspects worth considering. First, we have announced in year 2000 that we will gradually increase the contribution to the Special Account to reach 4%, 6% and 8%, depending on the age. Today, the rates are 4%, 6% and 6%. It would take us some time to reach 4%, 6% and 8%, the ultimate target that we have announced two years ago. Beyond that, over the longer term, will this target rate be sufficient? Secondly, currently, it is not uncommon for a CPF member to withdraw up to 130%, or even 140%, of the valuation price of a property to service a mortgage. This obviously eats into the saving that he needs for old age. By the end of the mortgage, the CPF member may find that, even though his property has appreciated in value, it is still worth less than the total amount of CPF that he has used up.”
“Mr Yeo also asked whether older workers would then have enough savings for old age and healthcare needs. Sir, the Economic Review Committee and its Sub-Committee on Wages, CPF and Taxation are currently assessing the impact of various CPF changes on the ability of mortgagors to service their mortgages, and the accumulation of savings for old age and healthcare. We will certainly continue to adopt a very careful approach in this study. We will not disregard the needs of CPF members, especially those with housing commitments. Let me assure hon. Members that surfacing of these issues for discussion, at this juncture, is not indicative of a decision. Dr Tan Cheng Bock said that with two Ministers speaking about it, Singaporeans think that the decision has already been made and will be implemented. Let me assure Dr Tan and hon. Members that a decision has not been reached. We are still studying this issue. The Economic Review Committee and its Sub-Committee are looking at the data, looking at the statistics. We will study carefully what could be the impact from the changes that are being considered. Mr Yeo Guat Kwang has also asked whether Singaporeans have over-consumed or over-invested in property. Sir, today, 86% of Singaporeans live in public housing flats and 92% of HDB residents own their own flats. Without the CPF and the HDB, it would not have been possible for Singapore to attain one of the highest home ownership rates in the world. Is this good for the nation? The answer is an unequivocal "yes". Home ownership added to our sense of belonging, rootedness and share of economic progress. But if we ask a further question: have some Singaporeans over-consumed or over-invested in property, the answer is less clear.”
“We discussed it thoroughly with the unions and it was accepted that this was a good move. In fact, over the years since we made these changes, the labour force participation of the group of workers aged 55 and above had increased year by year which shows that it had achieved its purpose of helping the older workers stay employed. So I think the allegation that it is unconstitutional, or that it is discriminatory, is not valid. But what we have to consider is whether some adjustments in the CPF rates for workers who are approaching 55 will complement the effort to retrain and reskill workers to enhance their employability. This is a separate issue from the CPF rate in general, which we still aim to restore from 36% to 40% as soon as feasible, as soon as the economy is able to bear this additional cost. Dr Amy Khor was concerned that if we change the CPF contribution rate, it would cause bigger problems than benefits and urged the Government to look for some other measures as it may not be the best way. Mdm Ho Geok Choo said that the workers aged 40 are still in their prime working years and should not be considered as senior citizens or liabilities. I agree with both Dr Khor and Mdm Ho. The CPF is a very entrenched system. Changes to contribution rates for any group of workers will have far-reaching impact. The Government would certainly not make any change without careful consideration. If any adjustment is needed, we will certainly try to zero in on the group of workers whose employability we are trying to enhance, in other words, the older group of workers approaching age 55. Dr Tan Cheng Bock, Mr Yeo Guat Kwang and Mr Seng Han Thong are concerned that reducing the employer's CPF contribution for older workers will affect their ability to service their housing loan.”
“Members that my Ministry is constantly exploring how to better help older workers bridge this skills gap. However, skills upgrading alone may not be sufficient. Under a seniority-based wage system, the higher cost of older workers can be an impediment. This puts older workers at a greater risk when a company is forced to downsize. It also makes it more difficult for older workers to seek re-employment because of their higher wage expectations. Sir, we could leave it to market forces to make all these adjustments. But our experience with promoting the monthly variable component, for instance, since 1999 shows that the wage structures cannot be changed readily just by market forces alone. Furthermore, for an unskilled worker, the take-home pay, net of CPF, may well be too low to be attractive. And this is one reason why some unskilled workers stay without regular jobs. They prefer to do "odd jobs" for cash without making any CPF contributions. Mdm Ho Geok Choo said that any change to the CPF contribution rate on the basis of age would be discriminatory and unfair. Let me point out that currently, employers' CPF contributions are lower for workers who are more than 55 years old. Workers below 55 receive a total CPF of 36%, the employer contributes 16%, the employee contributes 20%. Workers from age 55 to 60 get a total of 18.5%, the employer contributes only 6% and the employee contributes 12 1/2%. In fact, the CPF rates for workers above the age of 60 is even lower. When we moved to make this change, there was no allegation that it was unconstitutional, or that it was discriminatory. In fact, everybody understood when we introduced this change that it was to help the older workers aged 55 and above to remain employed. And everybody accepted that it was a good move.”
“While the 40% total contribution remains our target, we must still try to see whether we can fine-tune and seek a new balance for the CPF system to help our workers stay ahead and employed. What are some of these areas or issues that we must examine with a critical eye? Mr Yeo Guat Kwang has asked whether CPF for older workers should be lowered and, if so, what would be the impact and how serious is the problem of unemployment amongst these older workers. As at December 2001, the unemployment rate for older workers aged 40 and above was 4.9%. This may not appear exceptionally high. But what is of greater concern is that, once retrenched, they face more difficulty in securing re-employment compared to those who are younger. Their re-employment rate last year was 62% compared to the younger workers' re-employment rate of 70%. It also took older workers longer to get another job. The median duration of unemployment for workers aged 40 and above was 14.2 weeks. For those aged 50 and above, it was 21 weeks. This compares very unfavourably to the 11.5 weeks for younger workers below 40 to get re-employment. Sir, with continued economic restructuring, we must expect this trend to worsen. There are a number of reasons for this trend. Older workers may not have the right skill-set for the new jobs. Dr Amy Khor mentioned that outdated skills may well be a very important factor for the difficulty confronting older workers in seeking re-employment. I agree with Dr Khor. So we have introduced many programmes, such as the Skills Redevelopment Programme, the People-for-Jobs Traineeship Programme, even basic training, such as critical skills and skills in IT, to help the older workers acquire relevant marketable skills. More needs to be done in this area. Let me assure hon.”
“Sir, may I respond to the Members who have spoken on the CPF issue. Eight Members have spoken on this question of possible changes to the CPF system. I would like to address their concerns now. First, a quick word by way of introduction. I am sure all Members are very familiar with the CPF system. We started out in 1955 as a very basic retirement saving plan. Over the years, it has evolved into a comprehensive social security scheme to enable workers to save for their homes, to save for old age and also to meet healthcare expenditure. The system has served us well over the years since its inception in 1955. The question is, going into the future, will the same system continue to serve us as well as it had in the past? Sir, today, we are facing more competition. In fact, competition is so fierce that the Malaysian Prime Minister recently publicly spoke about skinning Singapore in more ways than one. If we are complacent, we may well end up decorating somebody's trophy wall. So we should not just be complacent and depend on an institutional system that has worked for us in the past, to carry us on to the future. It is in fact timely for us to take a hard look at our economic institutions, including our CPF system, in preparation for these new challenges. But let me make it absolutely clear right from the beginning that the fundamental objectives of the CPF system, home ownership, retirement and healthcare, are still valid and relevant and will remain so for the future. As DPM Lee said, we do not intend to muck around with these fundamentals. However, we do need to examine whether the CPF can be refashioned to better cope with the new economic challenges.”
“Mr Speaker, Sir, currently, there are more than 500,000 foreign workers on work permits in Singapore. Work permit holders are allowed to stay in Singapore for up to four years. Those who wish to stay longer have to upgrade their skills. Work permits are issued on the condition that the foreigner seeks approval prior to marrying a Singaporean. In considering such applications, we will look at the education and skill of the work permit holder and the Singaporean. My Ministry has approved more than 80% of applications by work permit holders to marry Singaporeans. Hence, we do not consider the present criteria too stringent. BILL INTRODUCED SINGAPORE PRODUCTIVITY AND STANDARDS BOARD (AMENDMENT) BILL "to amend the Singapore Productivity and Standards Board Act (Chapter 303A of the 1996 Revised Edition), and to make consequential amendments to certain other written laws", presented by the Senior Minister of Trade and Industry (Mr Tharman Shanmugaratnam); read the First time; to be read a Second time on the next available sitting of Parliament, and to be printed. ANNUAL BUDGET STATEMENT Order read for resumption of Debate on Question [3rd May, 2002], "That Parliament approves the financial policy of the Government for the financial year 1st April, 2002 to 31st March, 2003." - [Minister for Finance]. Question again proposed. 1.30 pm”
“The Government takes a serious view of employers who abuse their foreign domestic workers (FDWs). The Penal Code was thus amended in 1998 to enhance penalties committed against a foreign domestic worker (FDW) by 150%. Since then, the number of maid abuse cases has declined significantly. According to the Police, the number of substantiated abuse cases has dropped from 157 cases in 1997 to 41 cases in 2001. This declining trend should also be seen in the context of a rising FDW population. Employers and their household members who are convicted for abusing their FDWs will also be debarred from employing another FDW. My Ministry has also been focusing our efforts at educating employers on how to better manage and forge a harmonious working relationship with their FDWs. We will continue with our promotional efforts. Ultimately employers should realise that they have a social and moral responsibility to look after the welfare of their FDWs and not impose unrealistic work demands on their FDWs.”