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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“Employers who mistreat their foreign workers in the economic sector, for instance, face sanctions from my Ministry once such abuses are detected, for example, refusal to pay salaries to the foreign workers, a point that Mr Thomas mentioned. My Ministry will certainly be able to step in to help them. We have a Foreign Workers Unit in the Labour Relations Department that will help foreign workers to resolve any disputes that they have with employers. Mr Hawazi asked whether these disputes have actually gone up or not. We receive, on average, about 400 complaints or so a month from the foreign workers that are present in Singapore. By and large, we have been able to resolve most of these complaints. The numbers have gone up over the years simply because the base of foreign workers in Singapore is increasing. But I would not say that they have gone up drastically. 1.00 pm On the question of overstaying when employers retain the foreign worker's passport and the foreign worker unknowingly commits an offence of overstaying, my colleague, the Minister for Home Affairs, had reiterated last week that no employer has the right to retain a foreign worker's passport. In fact, employers should not do so. And there is no reason why foreign workers unknowingly overstay, because they know the terms of their work permit that were granted to them. They know that they should not stay beyond the validity of their work permit. And if the employer cancels the work permit, they would be kept informed by the employer, because no employer will just cancel the work permit and deliberately keep it a secret from the foreign worker.”
“We would continue to expand the intake of workers for such training so that they can go out and do a better job, and be more productive workers. Our experience with some of these workers who have already been through the training courses is that they have been able to do a better job and, in fact, many of them have been promoted in their companies to do a higher level job. We certainly would do more, in terms of job redesign, in order to ensure that foreign workers are not the only solution to companies that require this category of workers. Mr Hawazi and several other Members also said that we must take care of the foreign workers who are in our midst. We have, today, nearly 500,000 foreign workers on work permits here in Singapore. I agree with him that they are here to do a job, they contribute to our economy. We Singaporeans, whether as an employer of a foreign domestic worker or a company that employs hundreds or thousands of foreign workers, have to be responsible and we have to look after the welfare, housing, accommodation and all the other needs of the foreign workers while they are here. We take a very serious view of employers who, for whatever reasons, mistreat their foreign workers. Basically, all foreign workers, like local workers, are protected under the Employment Act. Those employers who are abusive or exploitative face action under the Employment Act, or under some other laws. For instance, in the case of foreign domestic workers, who are not covered by the Employment Act, the Penal Code was amended in May 1998 to enhance the penalty by one and a half times against employers who commit offences against their foreign domestic workers.”
“Sir, since there is really not much time left, I would have to be very brief in my reply. They have raised so many questions and I may not be able to deal with all the points that were raised in the short time that I have available. If they do not get an answer directly, they can always raise it again on another occasion. If it is a Question for Oral Answer, I would certainly try to give them a fuller answer. Mr Hawazi basically supports the foreign worker policy, but asked whether we can do more to get employers to redesign their jobs so that more of these jobs can be given to Singaporeans and cut down on the dependency. Essentially, the point was also made by Mr Loh Meng See. Yesterday, I have already explained what we are trying to do to encourage employers to look more closely into improving their business model, redesigning their jobs, so that they can tap on a pool of Singaporeans who are available for these jobs, rather than just turn to foreign workers as a first option. Mr Loh asked what can the Manpower Development Assistance Scheme do to facilitate such job redesigns. The answer is that we can do quite a lot, because with MDAS, we can help industries that want to carry out re-engineering and job redesign, and therefore requiring a different type of workers, to have the workers trained for their new jobs. MDAS can come in and assist such industries with its training. For instance, in the cleaning industry, commercial cleaning companies have come together to form a Centre for Cleaning Technology. It is located at the Bukit Merah Skills Development Centre and we are training several hundred workers who are doing jobs in the cleaning industry.”
“Sir, we are putting a tremendous amount of resources into this area of upgrading the skills of the older workers. We work very closely with the trade unions and the employers to ensure that the older group of workers is well informed of the various skills upgrading opportunities available to it. But I would also reiterate that we will continue to put in more effort, and we need more effort, to reach out to this group. We also need the support of community groups to help us to spread the message that skills upgrading is important, in order to cope with the changes in the economy.”
“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 2001/2002, and ask leave to sit again tomorrow.”
“For a start, even in skills upgrading, they need to be guided in what type, which area to go in for and which area of skills upgrading should they embark on because they may not be aware of the changes that have taken place in the labour market, that the demand for skills set has changed. And today, a whole new set of skills is being required by employers. That is why we are pioneering this one-stop career centre and we want to work with the community organisations to expand this network so that workers, particularly older workers, can have easy access to such counselling services where they can approach professionals who are well informed of the labour market trends and demands of the growth sectors where jobs are plentiful, but jobs which require workers with higher skills. So older workers can go to one-stop career centres to seek advice and counselling. I have indicated earlier on, in my response on the progress of Manpower 21 strategy, that the result that we have got from our one-stop career centre at the Ministry of Manpower has been quite encouraging. People who turn up have found it useful. We would like to multiply this experience. We would like to increase the number of such centres. It is best to have them located conveniently in the housing estates so that older workers, housewives and women who have family duties can all turn up. If they need advice or counselling, it can be made available to them. Sir, I think I have covered the points that were raised.”
“They are fit, they are healthy, they are able bodied and they can work. But they do not want to hold a full-time job. So for this group, maybe a part-time or contract work may be useful for them. So we will be looking at how this can be further improved and made more attractive so that they will remain gainfully employed and, in a way, also contribute to our manpower resources. Last but not least, I would like to reiterate the point that, as far as the older workers are concerned, some employers may have a misconception that they are less capable, less productive, less efficient. Mr Hawazi also made the point that employers should be more prepared to give older workers an opportunity. As the Government, what we can do is to help employers who are willing to take this step to ensure that the older workers that he recruits would be trained to the skill level that he needs. And this is precisely what we are doing through the various skills upgrading programme that we have already put in place. Any employer who today wants to employ an older worker, but is not quite certain of his capability, can always recruit the worker and then have the worker trained, or skills certified, so that they can be assured that he will be able to do a good job once he is hired. The other point that Mr Hawazi mentioned is the fact that older workers do not only need the training or skills upgrading, they also need some counselling. I agree with him entirely. This is the same point that Dr Jennifer Lee made earlier on that they need more than just skills upgrading. They need some guidance, they need some counselling.”
“This is to ensure that our employers do not become overly dependent on foreign workers at the expense of our Singaporean workers, particularly the older workers. So if we take that approach, we make every effort to train our older workers to give them the new skills that are in demand and, if the older workers respond positively by coming forward to accept the training, then we would be making some headway in resolving this problem. It was Mr Low who mentioned that the training went only to the better educated workers and that we had ignored the older workers. That is not true. As I said earlier, in my response on the Skills Redevelopment Programme, a lot of efforts have gone to the older workers and older workers have come forward. What is true is that among those who did not undergo any skills upgrading, many of them are in fact the unemployed. They are in fact the group most in need. They had not gone for the skills upgrading. That is why they still remain unemployed because they have not got the skills that the employers need. So, in effect, what we need to do is to get this group of unemployed, particularly, the older unemployed, to come forward to take advantage of our various upgrading and retraining programmes so that they can acquire new skills and then we can be in a better position to help them to look for new jobs. Mr Hawazi mentioned about the contract and part-time work, as a measure to help older workers. That is one possible approach. We will look at how part-time work and contract work can be better organised in order to create more job opportunities for older workers. But the flip side of the coin is that some older workers do not want to hold a full-time job, particularly those who are near their retirement age or already past the age of 62.”
“The question is whether we should now introduce a higher retirement age of 65, at this juncture, or we should wait till the economic situation becomes more stable before we initiate this review. We would like to wait a little bit longer to see what is going to happen in the light of the possibility that the economy will slow down before we make another move. So we will have to wait till the later part of the year after we have a clearer feel of the economy in the next one or two years before we commence a review. But let me reassure Members that the intention remains the same. We intend to raise the retirement age at the appropriate time from 62 to 65, and then on to 67. The rest of the Members have basically raised the same point about what we are going to do to help the older workers. Mr Seng Han Thong spoke about the older workers and asked whether we could reconsider incentives to the employers. My point is that, in response to Mr Seng and Mr Sin Boon Ann's request for tax incentives, we should not go in and micro manage and interfere in the labour market in this fashion to the point where you would say that if you employ an older worker, I would give you a special incentive or subsidy. What we should do is we should ensure that the older workers are fully equipped with the skills that will be needed for the job. But at the same time, we should not make it too easy for employers to substitute our local workers with foreign workers. That is why we will continue, and I will touch on it later on in our discussion on the section on foreign workers, to have restrictive measures in place with regard to the entry of lower skilled foreign workers, ie, work permit holders.”
“The Skills Development Fund also supports about 160,000 training places for older workers last year. This is an increase from 130,000 training places that were supported by the Skills Development Fund for older workers. So in many different areas, we are reaching out to the older group of Singaporeans by helping them to upgrade their skills to prepare them for the knowledge-based economy. Mr Yeo Guat Kwang has asked whether the skills development levy will be linked to the median wage level. We have announced that when we were going to increase the skills development levy. We will also make regular adjustment. The announcement was made last year and what we said was that we would adjust the skills development levy contribution ceiling to $2,000 by the year 2004. The first increase from $1,000 to $1,500 took effect only on 1st July last year and, subsequently, we will raise it in steps, $1,800 in 2002 and then $2,000 in 2004. This we have already announced last year and we have implemented it in July last year. Beyond 2004, we will review whether we need regular updating or review of the ceiling, or peg it to some measures, for instance, such as the median wage level. We will have a look at it again after 2004. Mr Hawazi and, again, Mr Yeo Guat Kwang also asked whether we would raise the retirement age currently pegged at 62. We introduced this minimum retirement age or statutory retirement age of 62 in 1999. So we have about two years of experience to work with this new retirement age. We will be looking at whether there is a need to review this at this juncture. Of course, in the longer term, Government's intention is to raise the retirement age to 67.”
“You do not need to have a Secondary Four Leaving Certificate. You do not need to have completed your Secondary Three. You do not even need to have completed your PSLE. All you need to do is to show an interest in upgrading your skills. We will find you an appropriate area where your skills can be upgraded, certified, and we will then help you to find an appropriate job. So I think that is the most important thing, and we should not be distracted by this feeling of hopelessness, that there is nothing we can do about it. That is far from the truth. The truth is that we are making tremendous effort to address the needs of the older workers, and we will continue to do so, but in a coherent and sensible manner that will yield results. 6.30 pm In fact, I would also like to point out that, of the 40,000 workers who have gone for skills upgrading under the Skills Redevelopment Programme, about 30% of them are in fact the older workers. So older workers are receiving their fair share of support, in terms of skills upgrading and, as I have said earlier on when I reported on the progress of the Manpower 21 Plan, those who have been through the Skills Redevelopment Programme actually saw enhancement in their job capability and 40% had increases in pay. And employers saw them as being more productive workers. So these findings confirm what we believe, that an older worker can be equally, if not, more productive and efficient as a younger worker. And employers should of course give older workers a chance for any job vacancy that is available provided, of course, that the older worker himself has taken the trouble to equip himself with the right skills and right competency to be able to cope with the job.”
“For instance, if a person, aged 40 and above, signs up for a SRP training programme, he will receive 100% of the cost fee subsidy. In other words, these people receive free training. And if they are already employed, then their employers will receive 85% absentee payroll subsidy, instead of 70% for the younger workers. In other words, there is already additional incentive given to employers to train their older workers. So we have introduced measures to specially address the needs of this older group of workers. The first and foremost issue is how do we equip the older workers with the skills that are needed in the workplace. It is no use talking about measures to help them get jobs if the older workers themselves do not have the skills for the jobs. You can give your employers all the tax incentives that they want, you can give them all the benefits that they want, but if the workers cannot do the job because they do not have the skills, then they will not be hired for the job. Today's marketplace is very competitive. If you do not have the workers with the right set of skills, who can deliver the product or the service productively and efficiently, you will go out of business. No amount of tax incentives can help you to stay in business. So the first and foremost challenge is to equip our older workers with the right skill set, and this is what we are doing. That is why we are providing more incentives for the older workers. That is why we have introduced the National Skills Recognition System, which is aimed at meeting the skills upgrading needs of older workers who lack basic education. That is why we design the system to be open entry. In other words, anybody can walk in and sign on for a course under the National Skills Recognition System.”
“Sir, let me respond to all the hon. Members who spoke so eloquently on behalf of the older workers. The Government shares their concern about the plight of the older workers, but we have to go about tackling this problem in a rational and sound way. Structural unemployment - higher unemployment rate for older, lower-skilled workers - is not a problem that is unique to Singapore. It is a problem that is also being experienced in other countries. You will see this problem emerging in the European countries, as stated in the International Herald Tribune article last Friday which I mentioned earlier on. They also have a problem - ageing workforce, widening skills gap; as a result, older workers are having more difficulty staying employed. So, let us not fall into a rhetoric trap. Mr Low said, "What has the Government done about these older workers?" He raised several points. What are our policies, what are our plans to help the older workers? He said that there are no concrete measures by the Government. I think that is very far from the truth of what has actually happened in the last three years. Mr Low knows very well that we have taken a very strong interest and deep concern on the plight of the older workers. Let me give you an example of what we have been doing. We actually promote training for older workers much more aggressively than for any other sector. We work closely with both the Productivity and Standards Board, the NTUC and self-help groups, to market and to package skills upgrading programmes targeted at the older workers. We even give older workers special funding support. In the case of those who are 40 and above, we provide the higher level of funding.”
“For instance, if we want them to come and join the National IT Literacy Programme, to learn how to use the computer, we would have to see what are the barriers or difficulties that they face. That is why we want to work closely with community organisations, whether it is the community club or the Community Development Council. By working closely with the community organisations, some of these issues, like having a nearby child care centre that can look after the kids for a couple of hours while the housewife is attending a course, are certainly possibilities that we should examine. Sir, I think I have addressed the points raised by the Members.”
“We are a little bit short, but we believe that with extra efforts this year and next year, we should be able to meet the target of 100,000 workers that we set initially when we launched the Skills Redevelopment Programme. But it will require tremendous effort and we need to work closely with the National Trades Union Congress, and the employer organisations to get them to mobilise their workers, to incentivise their workers to go forward for training. I understand that for older workers, there are barriers. It is very difficult for them, having joined the labour market 25 years ago, and have not been back to the classroom since then, to begin to think about going back into the classroom to learn a new skill. These are issues that we are addressing in the kind of training programmes that we can offer and the environment in which we provide the training. We will continue to improve the training methodology, course materials and also make training much more accessible to the older workers who may be very hard pressed for time, including the group of workers that Dr Lee mentioned who are holding more than one job. That is why we emphasise part-time training. We understand that not many people can afford the luxury of taking time-off from their job completely to go for six months' full-time training course. We, in fact, try to offer as many of our skills upgrading programme on a part-time basis, working closely with the ITEs. On the question of single parents, these are issues which we will have to address. It is not just single parents, but also housewives who have family duties, who have young children to look after.”
“This is a programme that is entirely community-based. We will work with community organisations. Individuals can apply for training under this programme and they will get support, both from the Lifelong Learning Endowment Fund and also from the community organisations. Even the Skills Redevelopment Programme has got an individual component in it. I mentioned that we have 20,000-odd people trained last year. We also have about 7,000 workers who went through the Skills Redevelopment Programme on their own, without the backing of employers because these were the workers who have been retrenched. They went through the Skills Redevelopment Programme with the support of the self-help groups. So there is an individual element in the Skills Redevelopment Programme. Doors are open for individuals who want to come forward to take advantage of the programme. I agree with Mr Loh that what is most important is for Singaporeans, faced with this situation, to quickly change their mindset and their attitude towards lifelong learning and upgrading their skills. Dr Jennifer Lee made a very good observation that while we have announced so many training programmes, so much resources are being pumped into skills upgrading and lifelong learning, how many people are coming forward to take advantage of this opportunity. If you look at the Skills Redevelopment Programme, we have made a tremendous effort to promote this programme and over the last three years, about 46,000 people have come forward to sign up and participate in the training places that have been offered to them. Our target is 100,000 in five years.”
“We introduced the scheme initially as an employer-based scheme. In other words, you can only have access to the training and the financial support through your employer. But in October last year, we widened the scheme to an individual-based scheme, so that even an individual can apply for support under the Strategic Manpower Conversion Programme through certain appointed organisations. To-date, we have about 200 trainees and 100 employers participating in the pilot programme. Based on the experience of this small-scale pilot programme, we will expand the scheme to cover more sectors which we have identified to have a growing manpower need, and where there is also a skill mismatch. Managers and executives, who need additional skills to fit into the new jobs, will benefit from this scheme. They can, in future, sign on for such conversion courses which will prepare them for the new jobs in the new economy. Mr Ong Ah Heng has asked for support for workers to acquire skills upgrading on their own, and whether they could apply to the Lifelong Learning Endowment Fund for some support. The answer is yes. As I have said, even in the case of the Strategic Manpower Conversion Programme, we are allowing individuals to make applications through appointed agents. The Computer Society is one of the appointed agents that will help us to promote this programme. Under the Lifelong Learning Endowment Fund, we will also introduce programmes which are both employer-based and, at the same time, open to the individuals, the workers themselves can take advantage of this programme, completely separate from what their employers would provide in the normal course of their work. For instance, I mentioned earlier on the National IT Literacy Programme.”
“We have heard some Members mentioning this problem during the Budget debate. When that happens, not all the branch managers or the executives in the larger branches can be re-deployed. Some branch managers or executives may face retrenchment, including some of those who have many years of experience as the branch manager. It is difficult for this group who are middle-age, facing such a situation, to be retrenched and having to look for an alternative job. Despite the difficulty, I think there are opportunities available for them but they may have to look beyond their immediate working environment. They may have to be prepared to look at allied sectors. If we take the example of the bank manager or the branch manager in the bank who has been retrenched, he may have to look beyond banking into insurance, other financial services or commerce. In other words, he must be prepared to widen his choice of an alternative job and, at the same time, I would like to emphasise that despite his years of working experience, he must also be prepared to make an effort to go out and acquire additional and newer skills that are perhaps more relevant to the needs of the labour market at this moment. And last but not least, when faced with this situation, he may also have to be more realistic and adjust his expectation of what a new job can give him. Mr Loh supported the Strategic Manpower Conversion Programme (SMCP) which we introduced in May last year. I thank him for his support. I just want to explain that this programme is aimed at facilitating the conversion of professionals to take advantage of job opportunities in high-growth sectors. We started out by looking at the infocommunications because that is one area where there is strong demand for IT professionals.”
“In order to support the economic growth, in order to meet skills needs of the employers and the new industries that we are attracting to Singapore, we have to continue to adopt an open-door policy as far as foreign talents are concerned. The way to cope with rapid globalisation and changes is, in fact, not to keep foreign talents out. If we keep them out, they will just simply go elsewhere to compete against us. The most effective way by which we can help Singaporeans is to give them the tools to compete. Hence, the Government will continue to spend a large proportion of the budget on education for young Singaporeans and our children. For those who are already in the workforce, we will continue to invest, as I have described earlier on, in all our skills upgrading programmes, so that older workers can continue to upgrade their skills and maintain their currency in the skills that are needed by the employers. Next, I would like to address the point raised by Mr Loh about the plight of the middle aged managers and executives. I recognise the difficulties that this group faces. For many affected managers and executives who are very experienced in their kind of work and with many years of working experience to be retrenched is a tremendous shock and a serious financial setback. But as I said, this is a group that is already skilled and fairly well-trained. However, as a result of economic restructuring, they also face uncertainty and the prospect of retrenchment. Their years of experience may have become irrelevant as industries or businesses undergo radical changes and are completely transformed. Let me give you an example. Local banks are streamlining their operations. Some of them are closing down branches.”
“45 pm Mr Hawazi also asked what would be the optimal proportion of foreign workers in Singapore, how do we balance the number of foreign workers with the needs of Singaporeans. This is an issue that has come up from time to time, as the number of foreign workers in Singapore increases over the years. In fact, it is an emotive issue, but we cannot react emotionally to this issue. We have to be rational, and be driven by economic principles. The fact is that we do need foreign talents because they help us to be more competitive in a global market. They add to our capability and help us to make up for the small number. Foreign talents, in fact, create opportunities for Singaporeans. If we adopt a closed door approach, it would only reduce our attractiveness as a business hub and force investment to go elsewhere where talents are more welcomed. Only last Friday, 9th March, I saw in the International Herald Tribunal an opinion piece headlined "The trends: A worker-hungry Europe in need of immigrants". I was a little surprised. I thought Europe still had a high unemployment rate, although I knew that the European unemployment rate has come down over the years, compared to what it was several years ago, a double digit unemployment rate. When I read the article, I realise that the writer had concluded that Europe's declining birth rate, widening skills gap and the growth of the knowledge economy, can only be solved by importing talents, and not just talents in the information technology area, but a whole range of talents with the right mix of skills needed by the growing industries. I believe his observations are quite relevant to our situation. On the question of what is the optimal number, I think it is a question of how fast is our economy growing.”
“Sir, we are also utilising funds provided under the Manpower Development Assistance Scheme to set up new training facilities for workers in industries which are moving ahead, to improve their business model and redesign their jobs. Such investments and support for the private sector's initiative will certainly play a part in transforming the workplace environment, and create more attractive and rewarding job opportunities for Singaporeans. In implementing Manpower 21, my Ministry has also worked closely with the public, private and the people sectors. Over the past year, for instance, we implemented the Singapore Learning Initiative. We held the inaugural Singapore Learning Festival 2000, which is the anchor event to promote life-long learning. This event was held over two weeks, from August to September last year. The festival generated over 300 learning activities by 65 partnering organisations. Nearly 150,000 people participated in the various festival activities. While this is a good start, more has to be done to inculcate a mindset of life-long learning in our people. We will use the lessons learnt from the past year to do more in the coming year, including redefining and improving the Singapore Learning Festival which will be held later this year. Sir, in summary, we have made progress in implementing Manpower 21, but there is still much to be done. Business environment and manpower demand are changing rapidly. We are still in the early stage of realising Manpower 21's objectives. The effort to develop our human resource is a long and continuing challenge. It will require the full commitment of workers and employers with Government support to achieve our objective of a globally competitive workforce. 5.”
“We have de-linked the work pass framework from the immigration regulations, introduced new schemes which can facilitate and encourage the entry of entrepreneurs into Singapore, coordinated the integration of talent attraction activities across many economic agencies, and put in place an international talent attraction processing and settling-in service with an expanded chain of Contact Singapore offices around the world. We have expanded the chain from seven offices in 1999 to 11 throughout the world. In the years ahead, we will continue to strengthen our links with Singaporeans living overseas, and also raise awareness among global talent of the opportunities and challenges available in Singapore. We will join in the global war for talent to seek our share of talent and to enhance our capabilities in many different areas. Manpower 21 also recommended that we take steps to transform our workplace environment. We have already initiated measures and programmes to professionalise certain sectors by encouraging and supporting the efforts of these domestic-based industries, to transform and upgrade the services that they offer and the jobs that they can offer to Singaporeans. The examples include the Construction 21 plan to reinvent the construction industry, the initiative to professionalise the commercial cleaning industry, steps to enhance service standards and productivity in the hotel industry and, most recently, the Productivity and Standards Board's announcement of the Retail 21 plan to upgrade and transform the retail industry. These efforts recognise the critical need to professionalise the jobs and transform the workplace environment.”
“10% were more aware of the various training opportunities, and another 6% actually signed up for training courses. To make it convenient for Singaporeans to access these services, we will work with various partners, such as self-help groups and the Community Development Councils to provide similar services at other convenient locations. This reflects the point that Mr Loh Meng See had made earlier on about the CDCs and other community groups playing their role as part of the network to reach out to Singaporeans to come forward to take advantage of our life-long learning investments. We will continue to work with all these community organisations so that we can bring our services closer to the people. We are also working to put our services, in terms of career guidance, job matching, training information over the Internet for those who are Internet-savvy, ie, those who are already capable of using the Internet, both the employers and the individuals. But, more than that, I think community organisations that want to help us to reach out to the people can play a role here, by having some of their service personnel trained to utilise our services provided over the Internet, so that they can help those who are not Internet-enabled to have access to our Internet services with computers that are provided at the various centres. Sir, the next strategy of the Manpower 21 plan that I want to touch on is the point about foreign talent, which Mr Hawazi mentioned. Manpower 21 clearly recognises the need to supplement our talent pool with foreign talent. Over the last two years, we have embarked on a comprehensive revamp of our work pass framework.”
“Sir, manpower development has also received an added boost with the creation of the $5 billion Lifelong Learning Endowment Fund. Already, the Government has committed $1 billion to the endowment fund: $500 million last year, and the Minister for Finance, in his Budget speech, promised another $500 million this year. My Ministry is working closely with the Info-Communications Development Authority and other agencies to launch the first major programme under the Lifelong Learning Endowment Fund. This will be the National Information Technology Literacy Programme which aims to reach out and train 350,000 people over the next three years, in basic computer skills and teach them sufficient computer skills so that they can surf the Internet, for instance. It is a programme that will help all Singaporeans to bridge the digital divide, and level up the lower-educated and older Singaporeans to the new economy. Currently, we have spent about $1 million in developing the courseware and to run a pilot project involving 5,000 people at several community clubs, Toa Payoh Community Library and a few other locations. Sir, as I said earlier on, information is important. Therefore, my Ministry has pioneered the establishment of the first one-stop Career Centre in July last year. The Centre helps individuals in their job search, career management, selection of training courses, and training incentives. It also helps employers in their recruitment and training of workers. The initial results from this one-stop Career Centre have been encouraging. 20% of those who came to the Centre for help in the first six months said that their visit had helped them to secure a job. Another 12% said that their visit had helped them to develop a better career plan.”
“In other words, with SRP training, they were able to take on more responsibilities at their place of work. 40% also enjoyed a pay increase, 70% of the employers reported that their workers were more productive after undergoing Skills Redevelopment Programme training. As for retrenched workers who took part in the training programme, 75% secured re-employment within six months of completion of their training courses. These are encouraging results. They show that training can make a difference. We will continue to work closely with NTUC to further promote the Skills Redevelopment Programme, and to convince even more employers and workers to participate in the programme in the years ahead. Sir, last year, my Ministry, together with the Productivity and Standards Board, launched a National Skills Recognition System, which is also aimed at helping lower-educated workers. It will provide open entry training courses and skills upgrading for workers. The training is designed to be job-specific and modular, with a nationally recognised skill certificate for each level achieved. As the skills would have to be relevant to actual jobs, the commitment and participation of industry groups and employers are of utmost importance. To date, 35 industries are already in the process of implementing the National Skills Recognition System. Close to 2,000 workers have been assessed. In the coming year, we will develop more skills standards covering more industries in different sectors and increase the number of workers who can be trained, assessed and certified. The National Skills Certificate will certainly help these workers to face the demands of the new economy.”
“Hence, we have established an enhanced National Manpower Information System to provide relevant manpower information to policy-makers, employers, training providers and workers, to help them in decision-making. We have also made available many up-to-date labour market information and statistical releases, manpower publications, and the results of various surveys in the labour market. For instance, Sir, we will be releasing information on employment trends and outlook for the various industries by the end of March in print as well as on the Internet. In order to give it wider circulation, we will put most of these reports on the Internet so that they can be conveniently accessed by anybody with a personal computer. Sir, our manpower planning framework is in place. Of course, it has to be refined and will be refined. It will be tuned, with the benefit of experience. Over time, it should enable us to have a better qualitative and quantitative estimate of our manpower demand. Next, I turn to life-long learning for life-long employability. This is one of the key strategies under the Manpower 21 plan. The Skills Redevelopment Programme (SRP) is a major initiative in life-long learning. For FY2000, about 23,000 workers participated in the SRP, an increase of about 60% over the 14,000 in FY1999. More than 90% of these trainees have no more than secondary education. They are the ones who will benefit tremendously from the Skills Redevelopment Programme, which has succeeded to raise their skills level and enhance their employability. A survey of SRP participants, jointly commissioned by my Ministry and the NTUC, showed that about 60% of the trainees reported an increase in their job scope after SRP training.”
“30 pm As we transit to the new economy, the demand for higher skill workers in professional, technical and managerial positions will increase, particularly in the growth industries in the service and manufacturing sectors. Sir, this phenomenon is already evident. As of September 2000, vacancies for professionals, managers and technical personnel form 35% of the total available job openings. This is nearly triple the 13% share that this group held in 1991. There is also an increasing need for workers trained in specialised and technical fields like engineering and the sciences. In the new economy, comparative advantages will increasingly hinge on innovations, development of new products, and the ability to apply new technology as soon as they come on-stream. Hence, we need to have a strong base of engineers and technically-trained manpower to provide the backbone for the manufacturing and key service sectors. In the light of these industries and the employment trend, the universities and polytechnics will increase their intakes for disciplines such as info-communication, engineering and the sciences, including life sciences, as well as education. The ITE will also offer more places for its technical courses. In the new economy, manpower planning must go beyond a number-counting exercise. Besides trying to anticipate changes in manpower demand, we must provide more information, and more timely information, to employers and workers so that they can respond swiftly to the changes taking place. This was a point raised by Mr Loh Meng See also, about how we are making information available to the workers.”
“Sir, first, may I thank all the Members who have spoken, especially those who have complimented the Ministry of Manpower on its Millennium Report, or the Annual Report, for the last financial year. I would like to address the points raised, particularly, by Mr Hawazi and also Mr Loh Meng See in regard to the progress that we are making in implementing the Manpower 21 strategies and in getting Singaporeans prepared for the changes that are coming at a very rapid pace. Sir, over the last two years, we have certainly made some progress in regard to implementing the Manpower 21 strategies. I would like to highlight a few of the key areas. We have established an integrated manpower planning framework to guide pre-employment training as well as in-employment training under the direction of the National Manpower Council. This Inter-Ministerial Council seeks to identify key growth areas and to channel appropriate resources to meet manpower demands in these growth sectors. It is not going to be an easy task and we may not be able to get it perfectly right all the time. Through the process of manpower planning, we should be able to better anticipate the rapid changes that are taking place in the wake of globalisation and also develop a workforce with all the right mix of skills so that they can help us to enhance our competitiveness. In our studies of the manpower demand from the various sectors of the economy, it appears that, in the short term, manpower demand is likely to come from industries like computers, information technology, communications and media, financial inter-mediation, and the chemical industry which forms part of the life sciences cluster. In addition, manpower demand in the social, healthcare and education services will also be high in the near future. 5.”
“Mr Speaker, Sir, since 1st July 1994, my Ministry had allowed foreign students above 14 years of age and who are full-time matriculated or registered students of approved institutions of higher learning, post-secondary, and secondary schools to work during their vacation without having to apply for a work permit. Since January 1997, we have also allowed full time foreign students in our tertiary institutions to work part time without the need to apply for a work permit. The maximum hours of work should be no more than 16 hours a week and these students should first seek the permission of their tertiary institution before working. This is to ensure that their studies will not be adversely affected by their part-time work. As the number of foreign students in tertiary institutions who intend to take up part-time work is relatively small, the exemption from a work permit is not so much to help ease our tight labour market but to provide foreign students an avenue to finance part of their studies in Singapore. With effect from 1st February 2001, foreign students from the following tertiary institutions: La-Salle-SIA College of the Arts, the Nanyang Academy of Fine Arts, the INSEAD, Singapore, and the University of Chicago Graduate School of Business in Singapore, have also been exempted from applying for a work permit if they intend to work part-time. 3G LICENCES (Auction) 3. Assoc. Prof. Toh See Kiat asked the Minister for Communications and Information Technology how the Government intends to conduct an auction for four 3G licences if only four or less than four bidders indicate interest, since an auction presumes that there are more bidders than licences available.”
“Dr Ker Sin Tze asked the Minister for Manpower whether he will allow post-secondary foreign students to do part-time work in order to relieve the labour shortage in certain trades.”
“Mr Speaker, Sir, the CPF Board had actually conducted publicity targeted at encouraging all those who are eligible to participate in the scheme. In fact, since the scheme was announced, more than 600,000 direct mail packages were sent to those who had Singapore addresses to encourage them to make the co-contribution to qualify for the top-up. We have also put up advertisements in the newspapers in the four languages, radio trailers on the various radio channels, including those in Malay, Tamil, English, Mandarin, Cantonese, Hokkien and Teochew, to target at the older citizens to encourage them to come forward to participate. Of course, the CPF Newsline, a publication in the main newspapers, which informs CPF members of various changes, regularly carried details of the top-up scheme and encouraged them to come forward to participate. There had also been a lot of other press publicity, including human interest stories about how senior citizens came forward to participate with the help of family members. If the senior citizen does not have the $100 to make the co-payment, then the children should come forward to help him. The children should be the ones to volunteer to contribute this $100 on behalf of their aged parents so that they would qualify for the top-up from the Government. As I said earlier in my main answer, the CPF Board will conduct a study to find out why this group of 200,000-odd Singaporeans, despite all this publicity and encouragement, had not come forward to participate. With that information in hand, I think we will be in a better position to focus further publicity on this group to ensure that more of them will come forward in the next round. POST-SECONDARY FOREIGN STUDENTS (Part-time work) 2.”
“Mr Speaker, Sir, the Central Provident Fund Top-Up Scheme was announced by Prime Minister Goh Chok Tong during his National Day Rally Speech on 20th August 2000. The top-up was given in appreciation of Singaporeans who have accepted the CPF cut to help Singapore overcome the challenges of the economic crisis. Singaporeans aged 21 years and above who have contributed at least a total of $100 to any of their CPF accounts between 1st January 1998 and 31st December 2000 are eligible for the top-up. Those who did not already meet this $100 minimum contribution requirement at the time of announcement had about 4 months to make voluntary contribution to qualify for the top-up. Of the 2.13 million Singaporeans eligible, 1.94 million (or 91%) qualified for the top-up. Of the 200,000 (9%) Singaporeans who did not qualify for the top-up, 69% are aged below 55, 8% are between the ages of 55 and 65, and 23% are aged 65 and above. 33% of them stay in 1- to 3-room HDB flats, in homes or are on public assistance, 27% in 4-room HDB flats and 40% in 5-room HDB flats or private housing. 55% are females. The CPF Board will conduct a sample survey to find out why these citizens did not participate in the scheme. The CPF Top-up Scheme has already taken into account the CPF contributions made over a generous 3-year period and 4 months was given for those who needed to make voluntary contributions to qualify to do so. There was thus sufficient time for Singaporeans to qualify for the CPF top-up. Nevertheless, the Government is prepared to consider allowing those who missed out on the first payment, a second chance to qualify for the full payment of the CPF top-up, nearer the date of the second payment.”
“Hence, training is also carried out by the industry through the Testing Centres in Singapore authorised by BCA and other training institutions. The polytechnics also provide training for the construction supervisors and sub-professionals. For foreign workers, most of them are trained at the source countries before they are tested at the Overseas Testing Centres. Although construction training and skills upgrading is a primary responsibility of BCA, BCA supports ITE conducting construction skills training courses if ITE should decide to resume this activity again. NEW/RESALE FLATS SOLD 3. Dr Teo Ho Pin asked the Minister for National Development (a) how many new flats (breakdown by flat type) were sold over the last 3 years; (b) how many resale transactions (breakdown by flat type) were processed over the 3 years; and (c) what are the pro-family policies or measures taken by the Ministry to encourage Singaporeans to stay near their relatives.”
“Early last year, it included the trade-related knowledge requirement for skilled workers. Arising from these measures, the new construction workers that come to Singapore to work are generally of higher skills and better educated. There is also a proposal for multi-skilling requirements for the construction workers. MOM has also introduced the 100% Basic Skills Certificate (BSC) requirement for construction workers from non-traditional sources. As a result of such efforts, the proportion of foreign construction workers certified at SEC level is 65% as at November 2000. The Government has also put in place incentives to upgrade the skills of local workers. Local workers pay lower test fees at CITI for most of the main trades. Employers can also enjoy subsidies from the Skills Development Fund of between 50% and 80% on the fees of many courses in CITI, such as courses in "Safety Construction Supervision" and "Mobile Crane Operations". Conduct of Construction Skills Training Courses Historically, construction-related training was carried out by the former VITB, which has been transformed to the present ITE. In 1984, it was decided that a separate construction training institution be set up under the former CIDB so that a wide range of training and testing programmes can be provided to meet the needs of the construction industry at one single location. As the Agency responsible for the construction industry, BCA has the primary responsibility of training and upgrading the skills of construction workforce in Singapore. The Construction Industry Training Institute (CITI), the training arm of BCA, has been responding to the training needs of the construction industry. However, BCA recognises that it alone could not provide all the training needs of the construction industry.”
“Specifically, at the professional level, the jobs in demand include project managers and engineers; for the associate professionals, these include foremen, site supervisors and project coordinators; as for the skilled craftsmen, these include bricklayers, plasterers and carpenters. Efforts to Upgrade the Construction Workforce The Construction 21 Blueprint also recognises the need to upgrade the skills level of the construction workforce in Singapore. It has recommended a number of measures to raise the professionalism in the industry and upgrade the skills level of construction workforce. With respect to raising professionalism, institutions of higher learning will be introducing new modules and enhancing the tertiary curriculum for construction-related fields to develop multi-disciplinary skills and strengthen cooperation between professionals. Professional bodies, trade associations and the Construction Industry Training Institute (CITI) have continuing professional and technical development programmes including harnessing Information Technology; the design-and-build concepts; and buildable designs. C21 also recommended making Continuing Professional Development Programmes mandatory for the renewal of professional and trade membership. The Board of Architects, Professional Engineers Board and the Construction Industry Joint Committee (CIJC) are taking steps to implement continuing education. To upgrade the skills of construction workers, BCA works closely with the industry to train construction workers and reviews training curriculum regularly to respond to industry needs. Since 1999, BCA has also progressively raised the skill requirements for foreign construction workers who come to work in Singapore.”
“Manpower Projection of the Construction Sector The construction industry has shown signs of improvement since the economic crisis. The third quarter Economic Survey of 2000 indicated that the sector has contracted by only 1.3% as compared to a decline of 14.2% in the third quarter of 1999. Despite the improved performance of the construction industry over the recent quarters, the construction industry is still sluggish. As a result, the employment in the near future is unlikely to grow. In fact, overall employment is projected to decline in absolute numbers over the next 5 years. This is partly due to efforts to reduce the number of foreign workers in the construction industry. The C21 blueprint had recommended reduction of the man-year entitlement (MYE) to 70% of the level in 1999 by 2005 and to 50% in 2010, or earlier if practicable. Based on a more cautious economic outlook for the sector, and the move to reduce MYE to raise productivity, the overall employment in the construction sector is likely to continue to decline over the next 5 years. The decline in overall employment will mainly affect the low skilled workers (eg general workers), most of whom are foreign workers. Despite the decline in overall employment for the construction sector, some jobs will still be in demand in the construction industry. Manpower demand is projected to grow for those with degree, diploma and post-secondary qualifications. In terms of manpower demand by occupations, professionals, associated professionals and skilled craftsmen will emerge as the fastest growing occupations in the construction industry.”
“More importantly, it will enable all segments of our population to be engaged in lifelong learning and bring about more active participation in the economy by Singaporeans. Sir, I beg to move. Question proposed.”
“The Minister for Manpower will appoint the date at which the Act will come into operation. Clauses 3 and 4 provide for the establishment of the Lifelong Learning Endowment Fund with capital money provided by Parliament. The capital money can only be used for investments authorised under the Financial Procedure Act (Cap. 109). Clause 5 sets out the purposes for which the income of the Endowment Fund may be expended. These include the promotion, establishment of facilities and provision of financial assistance for the acquisition, development and upgrading of skills to enhance employability. Clause 6 establishes an Advisory Council to advise the Minister for Manpower on the application of the income from the Endowment Fund. Clause 7 allows expenses incurred in connection with the operation and administration of the Endowment Fund to be defrayed out of the income of the Endowment Fund. Lastly, clause 17 empowers the Minister to make regulations for the purposes of the Bill. These may prescribe the procedures for payments from the fund, criteria for approval of applications for the fund and the procedure of the Advisory Council. Conclusion Mr Speaker, Sir, as Singapore transits into the New Economy, lifelong learning will be a key competitive strategy for our success and prosperity. We must nurture the spirit of lifelong learning to equip Singaporeans with relevant skills and knowledge. The establishment of a Lifelong Learning Endowment Fund is an important part of this effort. It will provide concrete support to foster a new spirit of learning among our people. It will enable us to embark on a learning revolution to make Singapore a Learning Nation capable of tapping every opportunity in the New Economy.”
“LLF Programmes For a start, my Ministry and the Infocomm Development Authority have been working with organisations, such as the National Library Board, People's Association, National Trades Union Congress, the Singapore National Employers' Federation, and also the self-help groups, to develop a National IT Literacy Programme. This programme aims to help Singaporeans acquire basic IT and Internet skills. It will minimise the dangers of a widening digital divide disadvantaging Singaporeans who lack such skills. A pilot project will be launched before April this year. About 5,000 adult Singaporeans from various organisations, including selected companies, the People's Association and the various self-help groups, are expected to participate in this pilot programme. The experience of the pilot project will enable us to refine the programme for wider application later this year. Sir, aside from IT, the Lifelong Learning Fund will progressively cover other employability skills and widen the supply of training opportunities. Today, we already have an excellent network of community facilities spread throughout Singapore. This includes community clubs, self-help groups and many voluntary organisations. We will work with these community organisations to bring lifelong learning opportunities closer to the heartlanders. For many Singaporeans, the convenience and proximity to home could make a big difference in getting them to take up lifelong learning. Such community-based learning and skills upgrading is an area which we will study closely. Provisions in the Bill Mr Speaker, Sir, let me now address the key provisions of the Bill. Clause 1 anticipates the setting out of the operational date of the Bill.”
“Today, we are taking another important step towards helping Singaporeans to embark on lifelong learning. Establishment of the Lifelong Learning Endowment Fund Sir, the establishment of a Lifelong Learning Endowment Fund will provide a secure and continuing stream of income to support our lifelong learning efforts in the years ahead. It is a testimony to the Government's commitment to continuous upgrading and re-skilling of workers. By setting aside part of our budgetary surpluses to build up this Lifelong Learning Endowment Fund, we are, in fact, investing the fruits of economic growth in the development of our people. This will help to sustain our competitiveness and ensure prosperity in the future. The Lifelong Learning Fund will ensure not only the continuity of existing manpower development programmes, such as the Skills Redevelopment Programme, but also create opportunities for new programmes to help our workers acquire the skills and capabilities for the knowledge economy. Size of the Lifelong Learning Endowment Fund The Fund will be started with an initial contribution of $500 million. Based on the prevailing CPF Special Account interest rate of 4%, the initial capital sum will earn about $20 million a year to support lifelong learning activities. When the Fund reaches the target size of $5 billion, we should have about $200 million each year to support lifelong learning activities. My Ministry will study the needs of employers and workers and develop programmes which can be supported by the Lifelong Learning Fund. More schemes will be added as we build up the capital sum. My Ministry also welcomes innovative ideas and proposals from community organisations which want to play a role.”
“The neighbourhood or backyard mechanics that we used to go to in the past are facing a lot of competition and a dwindling customer base. Why? Because the new generation cars come with computer engine management system and many other sophisticated devices. The old mechanics do not know how to service such hi-tech gadgets in the cars. And car-owners prefer to send their expensive cars to the agents for maintenance and for servicing, because the agents have trained mechanics who can deal with these sophisticated systems. The mechanics of old who cannot or do not want to upgrade their skill may well have to look for an alternative vocation. To put it simply, lifelong learning is no longer an option. It is a necessity. Sir, skills upgrading has a long history in Singapore. It is not a recent discovery or something that we just come upon overnight. In fact, since 1979, the Government had been providing incentives for worker training through the Skills Development Fund. National training initiatives, such as BEST and WISE, were also introduced to help the lower educated workers. In 1996, EDB and the NTUC introduced the Skills Redevelopment Programme (SRP). This programme was expanded in 1998 into a full-scale nation-wide programme to help older and lower educated workers facing retrenchment in the aftermath of the Asian economic crisis. In July last year, we revised the Skills Development Levy to provide more funds for skills upgrading. We also launched the $200 million Manpower Development Assistance Scheme, as part of our Manpower 21 action plan. Sir, our job is far from over. Lifelong learning is not a one-time effort, but, as the name itself suggests, a continual effort.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." Objective The Bill seeks to establish a Lifelong Learning Endowment Fund. This fund was first announced by the Prime Minister in August 2000 in his National Day Rally speech. The Prime Minister said that the Fund would be launched with an initial sum of $500 million from Government's surplus. It will be built up over the years from future budgetary surpluses to a target size of $5 billion. The Lifelong Learning Endowment Fund will be used to promote and support lifelong learning in Singapore. It will finance efforts to encourage Singaporeans to engage in lifelong learning, and provide assistance and opportunities for them to do so. This will help Singaporeans to meet the needs of a knowledge-based economy and cope with the threat of structural unemployment. In particular, the Fund will help to enhance the employability of those who are lower skilled or those who come from the lower income group. The Imperative of Lifelong Learning Sir, the importance of lifelong learning cannot be over-emphasised. Increasingly, knowledge and skills are becoming the key competitive advantage for individual workers, companies and entire nations. Today, a CD-ROM costs less than fifty cents to produce. But when that same CD-ROM is loaded with exciting computer game or some very efficient office software, the same article can now be sold for $50 to more than $100. It is the software knowledge and skills which created the value added. Sir, the rapid pace of technological advancement also means that the shelf life of knowledge and skills is getting shorter. We need life-long learning to remain up-to-date and in possession of skills which can drive the economy forward. Let me give you another example, Sir.”
“CPF is part of the wages, including the employer's portion which is part of wages. It is not an additional ex-gratia payment made by the employers for nothing. It is part of the employee's wages. Therefore, when we cut it, we are in fact cutting wages. That is why we have to be so careful about cutting the CPF. That is why I explained to you earlier on, that we should build up a separate monthly variable component as soon as possible, so that we do not have to periodically rely on this rather blunt instrument of cutting CPF across the board. If we have a monthly variable component, we would have a much more responsive, flexible and targeted measure to deal with any economic downturn. Let me assure him that employers' contribution to Singapore's economic competitiveness, to our prosperity, is fully noted. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Lee Boon Yang]. Bill considered in Committee; reported without amendment; read a Third time and passed. SILVER JUBILEE FUND (SINGAPORE) (REPEAL) BILL Order for Second Reading read.”
“Mr Deputy Speaker, Sir, the Minimum Sum is structured on the basic needs of a person when he retires, and it is set at the point in time when the person attains the age of 55. So I think we should keep to this same framework rather than to periodically raise this Minimum Sum for the entire cohort. Because they have to set aside this amount of money, and the top-up should be made in relation to what are considered basic retirement needs of persons in that cohort. As I said before, if you have children who want to make larger cash contribution, they are more than welcome. There is no rule to stop you from making contribution in cash to your parents, siblings, grandparents or to any relatives' CPF accounts. In fact, many people have opened up CPF accounts for their spouses who are not working, housewives, for instance. Husbands have opened up CPF accounts for their wives and from time to time put some cash into it, without seeking tax exemptions. And when the Government gives various top-ups, the housewives therefore benefit. So there is no impediment if children want to put in a higher cash top-up than what is allowed under the Minimum Sum scheme for their parents. The problem is, if they want to ask for an equal tax relief, then it would create some distortion and difficulties. So I think we should stay with the present arrangement as long as it is for the purpose of tax relief. But if it is outright, generous contribution, we have no difficulties. To Mr Tay, my only response is that Government is fully aware of the contributions on the part of the workers and of course on the part of the employers. The CPF scheme is a neutral system. It is a scheme whereby employers have to contribute and employees also contribute.”
“Anybody is welcome to put money into their parents' CPF accounts and not claim tax benefit, and leave it to the parents to enjoy the proceeds according to the rules of the CPF withdrawals. We welcome any amount.”
“Mr Deputy Speaker, Sir, I suppose Mr Yeo Guat Kwang's point is really not in response to my comments on the Second Reading of this Bill. He asked whether we would fine-tune the Home Protection Insurance Scheme. We are, in fact, doing it by raising the age limit from 60 to 65. If, in due course, lifespan goes even longer and people take out even longer mortgages, then we will of course look at it again. The comments on the workers' contributions to help Singapore turn around are noted. I agree with him that the workers have made great sacrifice and contribution. I think employers should take note of it. That is why I said in my response to Mr Tay that we will continue to shoot for a speedier restoration of the 10 percentage-point cut in the CPF. As long as the economy does well, we will try to restore the CPF cut as soon as we can. In the case of Dr Wang, he asked whether there should be no limit for the cash top-up for parents. As it stands, the cash top-up is to the Minimum Sum that the parents have to set aside when they retire at age 55. There is a reason for it, because of its tax benefit. The Minister for Finance has generously allowed such cash top-up for tax exemption. Therefore, there must be a limit to how much you can top up. If we say that there is no limit to the cash top-up and it continues to attract the same level of tax benefits, then, of course, there is opportunity for some form of abuse. Because you could put $100,000 in and claim tax relief, and then the parents would take it out and it will be siphoned back. So we have to bear that in mind. But if it is cash top-up without tax benefit, we welcome it.”
“Over the longer term, we believe that if members take a prudent and careful approach they would be able to enhance their old-age savings and it will benefit them. We believe our approach is sounder for the longer term than to have the Board act as a fund manager, as suggested by Mr Chng. Sir, I believe I have addressed the points raised by Members.”
“Of course, at the end of the day, as I have said in my Second Reading speech, the member has to be prudent himself and to exercise judgment. As to the suggestion for the Board to set up a Special Fund Management Division and to allow CPF members to transfer part of their Special Account into this Fund for the Board to manage, the Board itself cannot guarantee that its investment decision will be that much superior or that much more risk-free compared to any of the other approved fund managers that are available in the market. Yes, while it is true that if we do it as a group it will have a bigger base and, therefore, can be more diversified and have lower risk, likewise, if a CPF member were to take out his Special Account savings to buy a unit trust in one of the lower risk rated groups, one of the lower tiers of the Mercer's Risk Classification, he will be, in effect, putting his money into a bigger pool which will allow the fund managers of the unit trust to construct a properly diversified and hedged investment portfolio. So he will also have the same benefits. I think it is better for the CPF member to make this decision for himself and to take out his Special Account savings to invest with a reliable or appropriate fund manager that has already been pre-approved than for him to leave it with the Board because there will be no additional advantage for the Board to try to serve as a super-fund manager for all the CPF members in this sense. We are limiting the choice and the access. We prefer to take an approach where we give the members a greater option. Perhaps, it is part of the process. Some may make mistakes and some have made mistakes and lost money, in the case of the CPF investment scheme for the Ordinary Account savings.”
“If they are going to give more than 3% wage increase this year, they should consider setting 3% aside as a monthly variable component and paying the balance of the wage increase as a built-in wage increase. If all sectors do it, whether they are big companies or SMEs, I am sure they will achieve a much more flexible wage structure that will give us greater resilience the next time the economy runs into stormy waters. Mr Chng Hee Kok spoke in support of the Amendment Bill but expressed reservation over the investments of the Special Account savings. Let me point out that this is an enabling amendment. This will enable CPF members to have access to their Special Account for investment purposes. It does not mean that they all have to withdraw their Special Account savings and to place this in the various instruments that we have designated. We will continue to caution CPF members that all investments carry some risks and they should be very careful in making their investment decisions. They should not rush into it, and particularly they should not go into speculative type of investment. Hence, the classes of investment instruments that can be approved for the Special Account savings are much more limited compared to the CPF investment scheme for the Ordinary Account. For instance, a member cannot withdraw the Special Account savings to buy shares on his own account. We will not allow it. Neither will we allow him to withdraw the Special Account savings to purchase unit trusts in the higher risk groups which are more weighted towards equity, wholly or partially invested in equity. So there are already some measures to moderate the risk exposure for the Special Account investor.”
“The answer is yes. In June this year, the NWC recommended that employers should now start to introduce a monthly variable component in the salary structure. This monthly variable component, as is explained in the NWC recommendation, should be built up over time from wage increases that are being given to workers so that the next time we face a crisis, each company or each sector could on its own start to make adjustments to wage cost without having to wait for an overall CPF cut. If they put aside 2% to 3% each year of the wage increase into a monthly variable component, over the next five to six years they could easily accumulate 10% to 15%. This 10% to 15%, which comprise the monthly variable component, could then be the first line of defence against any sudden change or drop in business sentiment and they could immediately, at company or industry or sectoral level, make adjustment without having to wait for a national consensus on CPF cut. I would urge all employers to take this up seriously. As I understand it, since the NWC recommendation in June this year, already about 140 unionised companies had already taken up this suggestion and had introduced a monthly variable component in their collective agreements. Many other companies are also in negotiation with their unions, whether it is company unions or industry-wide unions, to incorporate such a monthly variable component. Likewise, all the SMEs should also consider introducing a monthly variable component. The NWC recommendation was that, if this year they are going to give a wage increase of less than 3%, perhaps all the 3% should go into a monthly variable component rather than a built-in wage increase.”