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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“In order to assist the unions in developing higher quality and higher level leadership, the Government had provided annual grants to the Singapore Institute of Labour Studies (SILS) where they conduct courses on leadership development and leadership training. To ensure that the Institute has sufficient resources to develop and upgrade the quality of union leadership, the Government has given a one-time grant of $2 million to the Institute's Endowment Fund in lieu of the annual grant. In recent years, the Government has also supported the labour movement in the development of many social and recreational facilities such as the Orchid Country Club and Pasir Ris Resort by allocating large tracts of land at concessionary rates through the Singapore Labour Foundation (SLF). More significantly, the Government has allocated a prime site in Marina South for the construction of a new NTUC building in place of its existing office in Shenton Way. Mr Deputy Speaker, Sir, the Government will continue to give strong support to the labour movement in its efforts to enhance the well-being of workers and to enable it to play a constructive and important role in economic development and nation-building. I am confident that the NTUC will continue to be a valuable social partner in our non-confrontational tripartite framework. Because the PAP and the NTUC have similar objectives to improve the lives of Singaporeans, we have worked closely together for the past 32 years. This is not surprising. We have the same objectives, we want to do the same thing to benefit Singaporeans. So we work together. And this commonality has evolved over the years into a distinct symbiotic relation between the PAP and the NTUC.”
“In many countries, trade unions are mainly concerned with the pursuit of sectional interest at the expense of the overall national objective. This has often given rise to conflict with the management and the government, which has resulted in poorer economic performance and inability to compete. As a result, in many of these countries where there has been a strong tendency to adopt a confrontational and divisive kind of approach, trade unions have become increasingly irrelevant in meeting the challenges of a highly competitive global environment which actually requires a high level of teamwork and cooperation among all the social partners, rather than more confrontation. In the case of Singapore, our trade unions have always placed national objectives before sectional interest, and long-term benefits of workers over short-term gains. This has ensured the continued relevance of the labour movement in Singapore and has allowed the movement to play an important role in our economic development for the benefit of all workers. The Government recognises the constructive and valuable contributions made by the NTUC. The Government therefore has always been supportive of the labour movement's efforts and initiatives to improve the economic and social well-being of workers. For example, the Government has provided assistance to the labour movement to set up many cooperatives so that these cooperatives can provide more and better benefits for union membership. The Government has also provided annual grants to the NTUC's Research and Administration Unit to carry out research and provide expert assistance to the trade unions in their wage negotiation and industrial relations matters.”
“Mr Deputy Speaker, Sir, in moving the motion, Mr Cyrille Tan referred to the need for the labour movement to stay relevant and focused on workers' needs. This, I believe, is absolutely necessary. For tripartism to work effectively, we must have a strong labour movement capable of providing leadership and constructive input to strengthen labour-management relation. This means a strong NTUC receiving full support from workers, with a growing membership fully supported by employers and Government. Mr Chiam has referred in his speech to the labour movement being controlled by the PAP. I think my colleague, Mr Lim Swee Say, has ably rebutted that point. What I would like to say at this juncture is that the NTUC is a fully independent trade union movement. The rights of workers to be a member of the union is enshrined in the Employment Act. It is provided for, subject to the laws on trade unions. So any worker or group of workers who thinks that an NTUC-affiliated trade union is not serving their interest will always have the opportunity of forming their own unions, if they believe that it will better serve their interest. The fact is that out of 82 registered trade unions in Singapore today, 73 are NTUC-affiliated. There are nine unions that have chosen not to be affiliated to NTUC. So there are plenty of opportunities for workers who feel that their interests have not been served to find alternative avenues. The truth of the matter is that NTUC has over the years proven to have been an effective champion of workers, to have served the interest and addressed the concerns of all the workers. That is why it has remained the mainstream union movement.”
“Because our fiscal policies have always been based on sound economic principles, we have not been affected to the same extent that our neighbouring countries have. Singapore's economic fundamentals remain strong despite the regional upheavals. Government will continue to adopt prudent financial policies. The Government is also aware of the problems facing businessmen arising from the recent financial turmoil and economic slowdown in the region. These factors will be taken into consideration in formulating the FY 98/99 Budget. However, Singapore cannot completely avoid the adverse impact from the regional economic crisis. We cannot assume that we will be able to sail through this critical period without some pains. We must, in fact, be prepared that the tidal waves which are lashing at our neighbours will also cause us some damage. We must be prepared for more difficulties ahead of us, as it will take quite a few years for our neighbouring countries to resume their normal growth. 1998, in particular, will be a more difficult year for Singapore and growth is likely to be less than what we have enjoyed before. It is thus more important at this juncture for workers, trade unions, employers, and the Government to work closely together to ride the storm. Therefore, I agree wholeheartedly with Mr Cyrille Tan and the other MPs that we need to further strengthen the tripartite partnership to enhance our competitiveness so that we can meet the challenges in the years ahead of us as we enter the 21st century. The question, Sir, is what must we do and what new ideas or areas of cooperation will help to strengthen tripartism. I would now like to touch on some of the important and practical ways of strengthening tripartism.”
“These measures included the introduction of the base-up wage system to replace the existing seniority-based wage system, wage reduction for workers after the age of 60, an alternative medical benefit scheme to encourage more responsible use of medical benefits, and the capping of retrenchment benefits to help companies to remain competitive. Some of these measures are major departures from current practices and may not be well-understood or well accepted by workers and employers at this juncture. However, in the Tripartite Committee, there was full consensus and commitment from union leaders and employers that the adoption of these measures is necessary if Singapore were to overcome the problems created by a rapidly ageing workforce and to ensure that the economy remains competitive in the future. A Tripartite Working Committee has now been formed to monitor the implementation of these recommendations and to develop guidelines for unions and management to smoothly raise the retirement age from 60 to 62. Sir, the effectiveness of the NWC and the Tripartite Committee on the Extension of the Retirement Age would not have been possible without a high level of cooperation among the three social partners and the ability to work together to address and solve issues that have national implications. This is the essence of tripartism which has served us well and which we must continue to nurture and strengthen. Mr Deputy Speaker, Sir, as pointed out by Mr Hawazi and several other MPs, this debate on tripartism is taking place against a deeply disturbing backdrop of economic crisis spawned by the regional currency and stock market turmoils.”
“Hence, in 1986, the NWC proposed that a flexible wage system be introduced to address the problems caused by a rigid wage system which hampered the employers' ability to cope with changes in the business cycle. Currently, more than 70% of companies in Singapore have implemented a flexible wage system which has enabled them to be more responsive to changing business conditions and to remain viable despite the emergence of more competition. As the Secretary-General of NTUC has pointed out, the flexible wage system has allowed companies to first trim wage cost instead of turning to retrenchment as the first response to a downturn in business cycle. I hope that all employers will heed this message and adopt this approach of using the existing flexible wage system as a measure to respond to slower growth and to avoid turning to retrenchment of their workers as a first reaction. Mr Deputy Speaker, allow me to quote yet another example of how tripartism had helped us to address difficult issues, especially issues which are going to affect us in the future and which may not be immediately apparent to workers in particular. In late 1995, we established the Tripartite Committee on the Extension of the Retirement Age. The Committee comprises Government representatives and representatives from a wide cross section of employers' organisations and, of course, trade union leaders. The Committee set out to study the complex issues relating to our ageing workforce and came out with a comprehensive and bold package of measures to cope with the impact of an ageing workforce on our economic vitality.”
“This is reflected in better housing, better health care, better education, access to more leisure and recreational facilities and even the means to travel widely during their holidays. Sir, tripartite cooperation has allowed us to adopt a proactive approach in tackling difficult issues affecting the economy, businesses, and the well-being of our workers. Nominated Member of Parliament, Dr Lee, has observed that the National Wages Council (NWC) is a tripartite institution. I too would like to highlight the NWC as an example of tripartism at work. The NWC comprises representatives from the union, employers' organisation and the Government. It was set up in 1972 to formulate and recommend wage increase guidelines. The guiding principle was that workers should be rewarded equitably but wage increases should not undermine our competitiveness in the global market. Each year, the NWC issues wage increase guidelines taking into consideration past year's economic performance, future economic prospects, productivity gains that have been achieved and wage costs as compared to economic competitors. For the past 25 years, NWC guidelines have helped to achieve sustainable wage growth and ensure that the economy remains on track with increasing regional and global competition. In many countries, wage negotiation is one of the most troublesome aspects of labour-management relations, often resulting in very violent consequences and protests. In Singapore, tripartite cooperation has allowed us to turn this process into a rational and forward-looking system of resolving the needs of both the workers and the employers. Apart from dealing with wage increases, the NWC also studied other wage-related issues to further enhance our competitiveness.”
“Standard of living and quality of life are comparable to that of many developed countries. Sir, all these have been made possible through the efforts of a hard-working workforce, sound economic policies, and a strong and deep rooted relationship between employers, workers and the Government, based on cooperation and shared objectives. I would like to point out that tripartite cooperation had served us well, not just in times of success, economic growth and prosperity. Tripartism had enabled workers, employers and the Government to work as a team in times of adversity to overcome difficulties. Several other MPs have spoken on the recession in 1985-86. I think that was a real test and a hallmark of the depth and strength of our tripartite relationship. In 1985-86, we faced the first economic recession after nearly 20 years of steady economic growth. While the onset of recession was sudden, the Government was equally swift in its response. An extensive package of anti-recessionary measures was formulated and implemented successfully with strong support from the employers, trade unions and their members. These measures included the drastic reduction in the employers' CPF contribution from 25% to 10%, and the acceptance of severe wage restraint and even wage cut. The prompt and thorough implementation of the cost-cutting measures helped companies and the economy to turn around quickly. Growth resumed in 1987 and since then, Singapore has continued to enjoy strong economic growth and workers have been rewarded with substantial wage increases and good bonuses. Coupled with low inflation, the purchasing power of workers has risen significantly and so has the quality of life.”
“In the past, Singapore had experienced the consequences of confrontational and adversarial labour-management relations. In the 50s and 60s, strikes, work stoppages and other forms of industrial action were common. Just to remind Members, in 1955 alone, there were 275 strikes, resulting in the loss of one million man-days. In 1961, we had 116 strikes and we lost more than 400,000 man-days. If BERI were to rank our workforce on such performance, I have no doubt that the Singapore workforce would be occupying a position quite near the bottom, and not at the top of the list. Sir, frequent strikes not only disrupted the smooth operations and viability of companies; it also undermined the well being and livelihood of many workers. More importantly, a poor state of industrial relations had scared away potential investors, discouraged business expansion and adversely affected economic growth. So it was not surprising that in the 50s and the 60s, there was economic stagnation and massive unemployment. Today, the situation in Singapore is very different. Singapore has consistently been rated as one of the most attractive places to invest in and has topped the World Competitiveness ranking. We have enjoyed rapid economic growth over the years, especially from 1987 to 1997, averaging about 8.9% GDP growth annually. Unemployment is no longer an issue. In fact, we now face labour shortage and tight labour market conditions. We have to admit more than 450,000 foreign talented professional workers, skilled and even unskilled workers to supplement our limited indigenous manpower resource. Singaporean workers have enjoyed substantial wage increases and significant improvement in their terms and conditions of employment.”
“Mr Deputy Speaker, Sir, I rise in support of the motion standing in the name of the Nominated Member of Parliament, Mr Cyrille Tan. I too believe that tripartite cooperation between employers, trade unions and the workers they represent and the Government is a key factor in our competitive advantage. It has, in fact, helped us to maintain harmonious industrial relations and established a non-confrontational framework for resolving labour-management issues. Instead of wasting our limited human resources and efforts on divisive confrontations between union and management, we have been able to concentrate our efforts, our resources on common goals, teamwork, skills and productivity improvements. Our harmonious industrial relations over the past three decades were very different from the experience of many other countries, particularly those saddled with adversarial labour-management relations. In fact, our strike-free environment over a long period of time may have resulted in harmonious industrial relations being taken for granted, especially by a younger generation of workers. Sir, BERI, in its worldwide ranking of workers, had consistently ranked the Singapore workforce as No 1, top of the list. This is, to a large extent, due to the labour legislation which reflect the strong spirit and practice of tripartism. Furthermore, the absence of industrial unrest, such as strikes, work stoppages, had contributed to the high relative productivity which has further enhanced our strong ratings by BERI. Mr Deputy Speaker, Sir, like Mr Zainul before me, I too would like to take this opportunity to remind the House that harmonious industrial relations cannot be taken for granted.”
“Like all other sources of revenue, the amount collected from the Foreign Workers' Levy goes into the Consolidated Fund which is used to finance Government expenditure on public infrastructure and amenities which benefit both Singaporeans and foreigners working in Singapore. All social amenities in Singapore are open and available to foreign workers. We do not prevent foreign workers from using any public amenities. I am sure the Member is aware that every weekend, foreign workers gather at places such as the Botanical Gardens, Orchard Mall, Crawford Park and Rochore Centre to meet and socialise. There is thus no need to provide special amenities for foreign workers. Apart from these public amenities, some employers also provide recreational and welfare facilities for their workers. These are open to both local and foreign workers in the company. Some even build special facilities for their foreign workers. An example of this is the Acacia Lodge built by Keppel Corporation to house its foreign workers. Besides accommodation, the Lodge has facilities such as a canteen, mini-mart, launderette and a multi-purpose recreational hall. HDB and JTC are prepared to lease out more sites to be developed as dormitories for foreign workers. When developed, these dormitory projects will also be provided with amenities and recreational facilities for the residents. IMPROVEMENT OF WALKWAY ALONG KALLANG RIVER 5. Mr Shriniwas Rai asked the Minister for National Development whe ther the Government can improve the walkway along the Kallang River by constructing tunnels underneath the roads so that pedestrians and cyclists could have continuous access along the walkway.”
“Registering two years ahead will not give enough time for construction of new schools, but will certainly give more time for parents to make the necessary preparations for their children. It will also allow the Ministry of Education time to make adjustments to classroom and teacher deployment to the maximum extent practical, in response to actual rather than anticipated demand. However, there are important pros and cons to making such a change. The matter has therefore to be carefully and thoroughly studied before a decision is taken. We will not change the current system until we are convinced that it will result in an improvement. PROTECTION OF PATIENTS RECEIVING BLOOD TRANSFUSIONS 24. Mr Ahmad Mohd Magad asked the Minister for Health what further procedures can be instituted to increase the protection of patients receiving blood through transfusions. 25. Mr Zainul Abidin Rasheed asked the Minister for Health whether the incident when two blood transfusion recipients contacted the HIV virus had resulted in the people losing confidence in the blood donation/transfusion system and what is being done to address the problem.”
“By adopting levy as a regulating instrument, we are leaving it to women to decide on working or staying at home after balancing their income with the total cost of employing a foreign domestic worker. The trend of increasing female labour force participation rates over the years show that the levy has not deterred women from working. In any case, working women should not consider foreign domestic workers as the only option in managing their households. I would like to point out that countries such as Japan has a higher female labour force participation rate compared to Singapore, and yet does not have a large pool of domestic workers. Furthermore, working women who employ foreign domestic workers, be it to take care of children or the elderly, can claim tax relief of twice the levy paid for the year. This tax relief helps them to meet part of the cost of employing domestic workers and thus providing incentive for more women to work. Hence, I do not think that the levy revision will deter housewives from returning to work especially if they are able to earn an income that more than offsets the cost of employing a foreign domestic worker. REGISTRATION OF PRIMARY ONE PUPILS 23. Dr Teo Ho Pin asked the Minister for Education whether his Ministry will consider registering primary one pupils two years before they start school so as to facilitate the provision of pupil placements, including the construction of new schools, and at the same time enable parents to make the necessary arrangements for their children. RAdm Teo Chee Hean: This is an interesting idea which my ministry will look into.”
“I would like to reply to the questions raised by Mr Zainul Abidin Rasheed, Mr Gerard Ee and Mr Zulkifli bin Baharudin together as they are on the same subject. My Ministry recently announced the increase in the levy for foreign domestic workers from $330 to $345 per month. The increase will take effect from 1st April 1998. We also announced the intention to review the levy annually to ensure that it remains effective in dampening the demand for foreign domestic workers. Future levy increases will take into account the increase in the number of foreign domestic workers as well as the income levels of Singaporeans. The levy on foreign domestic worker is meant to dampen demand so that Singaporeans will not become over-dependent on them. We understand that some families require the service of a foreign domestic worker and our policy is not to deny Singaporeans of such service. However, there is still a need to ensure that the number of foreign domestic workers remains manageable. Households employ foreign domestic workers for a variety of reasons. Some employ a foreign domestic worker to look after young children, others to look after the aged and handicapped or the sick, and yet others to attend to household chores or to do all these tasks. We should not favour any particular household or type of work by exempting the levy or granting a concession. The levy should remain a transparent pricing mechanism applicable to all employers. Granting exemption or concession on the levy will undermine Government's efforts to manage the demand for foreign domestic workers. The imposition of the foreign domestic worker levy is not inconsistent with efforts to get more women to join the workforce.”
“The above measures will minimise abuses of foreign workers and ensure that employers do not abandon their foreign workers. However, should this happen, my Ministry will ensure that the foreign workers' welfare is safeguarded. We will help those who wish to continue working in Singapore to find new employers. Apart from placing them with their main contractors and sub-contractors, the Ministry will require applicants for new work permit to consider these displaced workers before bringing new foreign workers to Singapore. I would like to assure the House that my Ministry will not tolerate the actions of unscrupulous employers who abandon their foreign workers. My Ministry takes a very serious view of unsavoury labour practices and will not hesitate to deal with such employers firmly. LEVY FOR EMPLOYMENT OF HOUSEHOLD MAIDS 19. Mr Zainul Abidin Rasheed asked the Minister for Labour whether the proposed increase in the levy for the employment of household maids will discourage housewives to return to work. 20. Mr Gerard Ee asked the Minister for Labour whether he will consider a waiver or concession on the foreign maid levy where a maid with suitable qualification is employed to care for an elderly family member requiring nursing aid. 21. Mr Zulkifli bin Baharudin asked the Minister for Labour whether there are long-term plans on the imposition of the levy on foreign maids and how these are consistent with efforts to encourage more women to work.”
“Last month, I announced that next year, we will implement a revised work permit allocation system which allocates foreign worker entitlements directly to main contractors only. The main contractor can then use their entitlement to employ foreign workers directly or allocate all or part of the entitlement to their sub-contractors. In this way, main contractors will have direct control of the foreign workers engaged for their projects. They will also have to take care to ensure that the sub-contractors to whom they allocate work permit entitlements are actually working on their project. The new work permit allocation system will minimise opportunity for abuses. Pending the implementation of the new work permit allocation system, my Ministry will also tighten the current endorsement procedures for work permit applications. Presently, both main and sub-contractors can apply for foreign workers directly from CIDB. Although main contractors are required to endorse the work permit applications of their sub-contractors, many do so without proper scrutiny. Henceforth, we will refer applications by sub-contractors to their main contractors for verification and support. Main contractors will also be required to undertake to employ and provide accommodation to foreign workers of their sub-contractors should the latter subsequently abandon their workers. This measure will compel main contractors to scrutinise the work permit applications of their sub-contractors carefully. Besides tightening the application system, MOL will consider introducing an additional security deposit for levy payment to deal with sub-contractors who are habitually late in their levy payments or who had defaulted on payments.”
“Investigations by my Ministry show that the majority of stranded foreign workers were construction workers whose work permits were cancelled because their employers default on levy payments. A small number were waiting for their salary disputes with employers to be settled. My Ministry will help foreign workers who were left stranded when their employers fail to pay the foreign worker levy. We will try to find alternative employment and accommodation for them. In the recent Chander Road case, we were able to assist more than 200 foreign workers with alternative employment and accommodation. This was achieved with the cooperation of the Singapore Police, the Singapore Contractors' Association Limited (SCAL) and main contractors who agreed to employ the foreign workers or re-assign them to their other sub-contractors. Unscrupulous employers who abandon their workers run the risk of having the $5,000 security bond forfeited. This is on the ground that they have infringed one of the conditions of the bond which is to provide proper accommodation for their foreign workers while they are in Singapore. Such employers will also not be allowed to employ foreign workers. Their applications for work permits will be rejected to prevent recurrence of abuse. The problem of stranded foreign workers is often caused by unscrupulous employers who recruit foreign construction workers mainly to profit from the monetary kickback from foreign and local employment agents. These employers are usually sub-contractors or labour suppliers masquerading as sub-contractors. Often they obtain the work permits by overstating or even falsifying their workload claims. My Ministry has studied these malpractices and we have already announced measures to prevent such abuses.”
“Mr Low Thia Khiang asked the Minister for Home Affairs whether the imposition of higher charges is an effective solution to curb the increasing number of calls for ambulance for non-emergency cases.”
“Sir, as I have pointed out, in fact, there has been an increase in higher order births. We can debate whether the increase is sufficient or what else we can do to make more families have a third and fourth child. That is a separate debate. The point is that in many developed societies where there is economic progress, in fact, better educated and higher income families generally do have smaller families. We are trying to buck the trend. This is not only a peculiarity in Singapore. In many other countries where they have far better maternity benefits, you see exactly the same trend, or even a worse trend of having no children at all. I am not sure if we just go along the line that she suggests by providing more incentives, we will achieve the result that we want. If we look at the experience of many other developed countries, for instance, the Scandinavian countries, they have tremendous benefits. Are they having a lot of children? I am not sure that they are. Look at all the other developed countries. I do not think they have achieved the purpose. Let us be focused, let us be clearer about what we are trying to achieve. And by way of tax rebates, if we can achieve some changes, some shift in thinking of the parents, particularly the better educated and the higher income level, I think that is success enough for us. Question put, and agreed to. Resolved, That Parliament do now adjourn. Adjourned accordingly at Twenty-Seven Minutes to Seven o'clock pm to a date to be fixed. WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT ANSWERED BY 1.30 PM HIGHER CHARGES FOR AMBULANCES FOR NON-EMERGENCY CASES 11.”
“Sir, in conclusion, I would like to point out that the policy to limit the paid maternity leave in the Employment Act for up to two children continues to be relevant and consistent with the policy to encourage procreation. By encouraging lower income families to keep their families small, they would be in a better position to provide opportunities and support for their children and to upgrade the standard of living for the whole family. We will continue to encourage working mothers who can afford it to have three or more children by way of tax incentives and tax rebates, so as not to add to the burden of employers. I believe this is a more focused and more effective means of achieving the objective of the new population policy. Dr Lily Neo rose -”
“Sir, I should also point out that the decision not to extend paid maternity leave to the third child has not really discouraged women from remaining in the workforce. In fact, the labour force participation rate for women in the child bearing age from 25 to 44 has continued to increase over the years. Between 1970 and 1990, the participation rate for women aged 25 to 29 increased from 31% to 81%. For those from the 30 to 34 age group, the participation rate went up from 23% to 68%. Among women in the age group from 35 to 39, the increase was from 19% to 60%. And for those in the age group from 40 to 44, their participation rate rose from 18% to 57%. So you can see that over the years, the absence of a third child maternity benefit had not deterred women from rejoining the labour force. In addition, let me point out that the number of third child live births had also increased significantly from 5,443 in 1986 under the old population policy regime to 8,293 in 1996, an increase of 52%. As Dr Neo pointed out, maybe in recent years, the increase had not been so dramatic. We would like to see more families who can better afford it to have three or more children. But we must also accept that there are other considerations and parents are in the best position to decide. What it shows is that there has been an increase in higher order births, particularly third child. Likewise, the number of fourth child live births had increased by 71% over the same period. This trend suggests that the Government's encouragement to Singaporeans to have more children if they can afford it is working.”
“In other words, income loss arising from a working mother's two months' unpaid maternity leave for a third child would be more than adequately covered by the various tax concessions. Although she is taking no-pay leave during the period of confinement, her real loss of income over a period of years as a result of taking those eight weeks' no-pay leave would be offsetted by future tax reliefs. Sir, the question today is whether the 1987 decision to lift that provision in the Employment Act, in fact, is still valid today. I think, on balance, it is still relevant to today's situation. In the light of globalisation and increasing economic competition, we must be cautious in adding to our labour cost. Whatever measures that can lead to increased cost to employers will have an impact on our competitiveness. If we accept her suggestion, it would mean that the Government would be simply passing on the cost of promoting larger families to employers, by requiring them to provide paid maternity leave for the third child. Bear in mind that increasingly more and more better-educated women will be entering the workforce, and we are trying our best to persuade even more housewives to rejoin the workforce that, in fact, if we make this a requirement, then the burden on the employer will, in the years ahead, increase. I do not think this is a good solution. I think it is better that Government continues to bear the cost of providing paid maternity leave for the third child or even the fourth child by way of tax rebates to the working mother or to the family. This way, we can promote larger families for those who are best able to afford more children without adding to the cost of employers and affecting our competitiveness.”
“And this is where Government, after looking at the issue, has come out with an alternative. Because we realise that for the new population policy to work, there must be incentives to overcome the restriction imposed by this particular section of the Employment Act. Otherwise, it will be extremely difficult to persuade women, working mothers in particular, to have more children. Hence, Government decided in 1987 that it would be more appropriate to give tax incentives to achieve the objectives of procreation. Since 1987, we have introduced a series of tax incentives to encourage women to have the third and fourth child. Currently, a women who gives birth to a third or fourth child can enjoy a special rebate of $20,000 which can be used to offset against her own or her and her husband's income tax liability. Where the woman is working, she can enjoy a further tax rebate equivalent to 15% of her income, which can be offsetted against her income tax liabilities. This amount is almost equivalent to the loss of two months' salary when she takes unpaid maternity leave for the third child. Both tax rebates can be set off against the parent's tax liability up to a maximum of nine years. Dr Neo pointed out that with the adjustment to the income tax regime, as a result of the introduction of GST, very few working mothers will be able to benefit. This would be true initially. When the maximum set off period was only five years, it was true that not many working mothers could benefit fully from the special tax relief and the third child tax incentive. But since 1994, the maximum set off period had been increased to nine years to cater to the reduction of income tax following the introduction of GST.”
“Because we still emphasise that parents wanting to have a third child should have the resource to look after their children, meaning all their children. While it was imperative to get more women to marry and have more children, Government wanted to ensure that parents must be able to provide fully for their children. Children need more than just tender loving care from their parents. As the then First Deputy Prime Minister, Mr Goh Chok Tong, in announcing the new population policy, said: `We must however be mindful that bringing up a child is a heavy responsibility. The child needs to be fed and clothed. He needs a supportive home environment, adequate care and parental attention. Every baby born must be well looked after by his parents. Otherwise, he or she would be put at a disadvantage against children from better homes.' Sir, parents who are having difficulty coping with a family of two children should not be over burdened with more children. Doing so could well impair the opportunity for the whole family to raise their standards of living. Hence, in 1987, Government concluded that it was undesirable for the Employment Act to be amended to extend maternity benefits to the third child. Providing paid maternity leave for the third child in the Employment Act could send a wrong signal and encourage those who cannot afford to have more children to do so. This will undo the good of the new population policy. Dr Neo asked whether by doing so we have denied women the basic right not to be able to claim maternity leave. I think what she meant is not to be able to claim paid maternity leave, because under the law, women are not entitled to claim for paid maternity leave, but they can always take unpaid maternity leave.”
“Mr Deputy Speaker, Sir, let me respond to the hon. Member for Kreta Ayer-Tanglin's motion for adjournment. As she pointed out, under the Employment Act today, a female employee is entitled to eight weeks of paid maternity leave for only her first two children. In fact, section 76(4) of the Employment Act, as it stands today, prohibits employers from granting paid maternity benefit to female employees with more than two children. Although employees holding managerial, executive and confidential positions are not covered by the Employment Act, it is common for the employers to adopt a uniform practice with respect to maternity benefits for all their employees. Hence, in practice, all female employees in Singapore generally enjoy maternity leave for eight weeks for the first two children. Let me, first, recount the background to this provision in the Employment Act. Prior to 1973, the Employment Act allowed for paid maternity leave for up to three children. In 1973, the law was amended to limit the benefit to two children. This was in support of the prevailing policy to encourage Singaporeans to have smaller families. With smaller families, parents with limited means would be in a better position to devote more time, resources and attention to their children. When the new population policy was introduced in March 1987, the Government did consider whether paid maternity leave for the third child should be provided in the Employment Act. The policy was, "have three or more if you can afford it". Here, I note that Dr Lily Neo agrees with this approach to have three and more if you can afford it. This new population policy was not a complete abandoning or rejection of the old population policy.”
“We will continue to work with the industry, the Singapore Contractors' Association, the Construction Industry Development Board and also HDB to identify and develop programmes to train workers on the safe operation of various construction equipment. We are also exploring new measures such as introducing a permit to work system, similar to that being used in the shipyards, to ensure that hazardous work on the construction site can be carried out safely. However, let me emphasise that safety at workplace cannot be maintained or ensured just purely from a regulatory point of view. We will carry out all the enforcement measures that are necessary. But at the end of the day, the contractor, their supervisors and workers must all do their part. They have the most to lose. They should take precautions. They should pay attention to the safety requirements when doing any hazardous work. 5.00 pm”
“Later in the year, we will expand it to a full day course and we will change the structure of the course to make it more practice oriented, so that by the time the construction worker finishes the one-day course, he will be more familiar with the potential hazards at the workplace and the kind of safety precautions that he should take in order to avoid accidents. Mr Yeo Guat Kwang has asked whether the safety management system is up to our expectation. Yes, we introduced this system in October 1994. Worksites with contract value of $10 million or more have to set up safety management systems. Those that have contract value which exceeds $30 million will have to audit this safety management system at six monthly intervals. A recent survey in April 1997 shows that most of the contractors have already set up their safety management systems, and we will monitor the progress of the implementation and to ensure that there is compliance with the auditor's recommendation. We have also required that the safety provisions be spelt out in contracts. With effect from 1st January 1998, all applications for registration of worksites must produce contract documents which show that provisions have been made separately for safety measures to be undertaken on site. The Ministry of Finance has also implemented a proposal to debar contractors who have poor safety records. This came into effect on 9th June. Contractors who have poor safety records will be debarred from tendering for public sector projects. This will encourage contractors to pay greater attention to safety at work sites and to ensure that they meet the safety criteria of the Ministry of Finance.”
“We also conduct training courses on noise monitoring and noise control, so that more and more people will be competent to deal with this problem at the workplace. We have similar measures with regard to toxic chemicals. New factories will be inspected. Existing factories known to be using toxic or dangerous chemicals will be inspected regularly to see that workers are not over exposed and that they have taken sufficient safety precautions to protect their workers. In the case of toxic chemicals, we require all suppliers of such chemicals to provide material safety data sheets to the user, so that the occupiers of factories which use such toxic chemicals know what are the dangers, and they also know what are the safety precautions which have to be taken in case of any spillage or over exposure. My Ministry will continue to work with unions and employer organisations to promote occupational health and safety, including awareness of noise and toxic chemicals. With regard to the safety improvement teams mentioned by Mrs Yu-Foo Yee Shoon, I entirely support that idea. I think it is a very good idea, new workers teaming up with experienced workers and the buddy system is a very good way to minimize industrial accidents, and more employers should apply this method at their workplace. We have introduced quite a large number of measures to promote and improve safety at construction sites, which was of concern to Mr Yeo Guat Kwang. We are going to enhance the safety training for workers in the construction industry. At present, we have a construction safety orientation course which is a half-day course for all construction workers.”
“I would also like to urge workers not to job hop for the slightest reason, because it is in their long term interest to stay long enough in a job to take up new skills and to gain experience, so that they can continue to contribute to the organisation. Or if they should leave at some future point in time, they would have a solid and sound track record. With regard to industrial safety which was raised by Mrs Yu-Foo Yee Shoon and Mr Yeo Guat Kwang, let me say that we have already implemented comprehensive measures to control or prevent the problem of noise induced deafness and exposure to toxic chemicals and also industrial accidents. Although there have been quite a large number of noise induced deafness cases, let me point out that most of these cases arose as a result of testing, not as a result of actual clinical disability. For example, 98% of the noise induced deafness cases detected in 1996 and the first half of this year were actually very early hearing losses with no clinical impact on the workers. There were fewer cases of chemical poisoning or over exposure to toxic chemicals The measures that we have to control both toxic chemicals and also noise level include requiring new factories applying for registration to be inspected so that noise hazards or exposure to chemicals are controlled, and workers are adequately informed and also there are sufficient protective measures taken against all these hazards. Existing factories are also inspected regularly to ensure that noise is kept within acceptable limits. We have the Factories Noise Regulation which was introduced in August 1996 to spell out the requirement for the employers to implement a hearing conservation programme which will reduce noise exposure among their workers.”
“I also think that it will not be effective in curbing job hopping. For instance, if you say that you cannot resign within a period of six months, otherwise you forfeit the six months' worth of employer's CPF, how do you stop an employee who then resigns a week after he reaches the six months and had the CPF credited into his account with the CPF Board? You have great difficulty also determining which resignation should be allowed and which should not be allowed, because you must recognise the fact that, in real life, some people do leave companies for very good reasons also. Since it is extremely difficult to differentiate workers who job hop frivolously and from those who resign for sound reasons, which could include those who upgrade themselves or where they have found that they really cannot contribute to the company, we believe that we should not resort to measures such as retaining CPF to restrain the problem of job hopping. I think the problem of labour turnover requires a lot of effort on the part of management and also workers to overcome. Instead of penalising workers who resign within a short period of employment, I would like to ask employers to practise more enlightened management, to motivate and retain workers. For example, companies could consider loyalty awards to reward those who remain with the company. Companies could also offer training, clear-cut career advancement, career pathways, and good welfare to retain their staff. Companies which do, in fact, apply these measures today usually do not have a problem with labour turnover.”
“The other alternative, using just a levy to regulate the inflow of foreign workers, could result in the need to have to set a very high levy. Because at today's levy level, we already have 450,000 foreign workers and the numbers are growing. And also if we use a levy alone, then getting the levy right itself is difficult. Over estimating the levy will cause a lot of hardship for employers. Under estimating the levy could lead to a sudden influx of foreign workers. As a result, we have to use a combination of foreign worker levy and dependency ratio to better ensure that only employers who are genuinely in need of foreign workers based on sound commercial considerations will recruit these workers. Sir, Mr Inderjit Singh has suggested that we look at the proposal to use CPF as a measure to discourage job hopping. This is an idea that has been considered in the past. This is not the first time that this idea has come up for consideration. In fact, it has been considered as early as in the 80s, and again seriously in 1988. Because in 1988, the then National Productivity Council (NPC) appointed a task force on job hopping to study job hopping in detail. The task force incorporated members from both the employers in the private sector and also the public sector. After careful consideration, the task force on job hopping did not support the use of CPF savings to deter job hopping, because it concluded that management should assume the primary responsibility for resolving labour turnover problems. I believe that the 1988 finding is still relevant today. Forfeiting a worker's CPF contribution to deter job hopping will detract from the basic CPF objective of building up savings for old age as soon as a person starts working.”
“I believe that we should maintain the manufacturing share of GDP by mobilising capital resources and upgrading the skills of our workforce to support more high value-added and skill-based industries. This is the only way for us to continue to maintain our competitive edge. With regard to Mr Lew and also Mr Magad's suggestion to use other means of regulating the entry of foreign workers, for instance, the use of a quota and fix the upper number of 500,000 or 600,000 foreign workers, and let the industry draw from this quota, I have, in fact, explained to this House on a number of previous occasions why we need to have a combination of measures to regulate the inflow of foreign workers. First, let me reiterate that the foreign worker levy is not intended as a revenue generating mechanism for the Government. We use the levy as a pricing mechanism to moderate the demand for foreign workers, and to make the cost of employing foreign workers comparable to that of local workers. Sir, a quota system alone would not be efficient to regulate demand for foreign workers. If we were to allocate foreign workers by sectoral quota alone, we would still need to decide how to distribute the quota fairly to companies within each sector. Having distributed the quota at the company level, we could encourage a situation where companies simply employ up to the maximum of their foreign worker quota, since the cost of employing foreign workers is lower. It is estimated that for the manufacturing and construction sectors alone, companies can employ over 550,000 foreign workers if they were to use up their maximum quota based on the current dependency ceiling. This is already 100,000 more than the total number of foreign workers in Singapore today. Can we accommodate that many more?”
“While this is particularly attractive to employers, it will significantly depress the wage and job opportunities for lower educated Singaporeans. Sir, allowing easy access to low cost foreign workers would also slow down economic upgrading because industries will be reluctant to invest in high value-added and labour saving technology. To sustain our long-term competitiveness, we need to restructure our economy to higher value-added and less labour-intensive industries where we have a competitive advantage. Easy access to unskilled foreign workers would undermine this effort to restructure. We must bear in mind that neighbouring countries with much larger labour resources are also enjoying economic growth and are competing directly with Singapore in the global marketplace. They will always have the advantage of more workers at lower wages. Is it wise for us to compete with them directly in these areas where we lack competitive advantage? 4.45 pm In war, Sun Tze said, "Know yourself, know your enemy. A hundred battles, a hundred victories." For economic competition, it is not really warfare. We should also size up our limitations, our strengths. We should also know what is our neighbours' limitations and their strengths. Is it in our long-term interest to focus energy and resources in labour intensive industries when we know that our neighbours, our competitors, will always have an edge over us in this area? Sir, the Minister for Finance in his Budget Speech has emphasised the need to maintain the manufacturing share of GDP at about 24%. But we should not do so by artificially depressing our wages by bringing in an excessive number of foreign workers. If we do so, we will only be depressing Singaporeans' wages and standard of living.”
“That such employers are subjected to stiff penalties under the law and public opprobrium demonstrate that we are, by and large, humane and just in our treatment of foreign workers. Sir, Mr Ahmad Magad has asked for an explanation to employer groups and industry associations who are not quite convinced on the need to have a stringent policy on the recruitment of foreign workers. Sir, while my Ministry is concerned with the growing influx of foreign workers, we are neither unreasonable nor over-cautious. That is why today, we have more than 450,000 foreign workers in Singapore, including more than 100,000 foreign domestic workers. This is a sharp increase from the more than 350,000 which we had last year. Sir, foreign workers have become a permanent feature of our workforce, representing more than 20% of our total workforce. They supplement our local workforce. However, given that Singapore is a small country, there is a limit to the number of foreign workers that we can accommodate without causing problems for ourselves, without causing problems of congestion, integration and social order. Furthermore, the presence of a large foreign workforce can affect the job opportunities and earning power of lower skilled Singaporeans. The 1996 Labour Force Survey showed that 39% of our workforce had lower secondary education or below and more than half of our blue collar workers had lower secondary education or below. If we admit unskilled foreign workers liberally without any control, there is a real danger that the livelihood of some Singaporeans, particularly the lower skilled and less educated, will be threatened. This is because foreign workers are prepared to work for much lower wages.”
“The penalties prescribed under the existing laws are already fairly severe and should provide sufficient deterrence. Mr Chen has suggested setting up a unit to conduct spot checks to prevent the abuse of foreign domestic workers. Let me first point out that there are about 100,000 households with foreign domestic workers. The vast majority of employers are responsible and treat their foreign workers fairly and decently. Domestic workers who face abusive employers already have several channels to report their employers' abuses. They can report to the police, they can report to the embassies and they can report to the Ministry of Labour. Public spirited and vigilant Singaporeans can also report instances of ill-treatment as in the recent case of an Indonesian foreign domestic worker. All reports of abuses by domestic workers or members of the public will be thoroughly investigated by the Labour Inspectorate of my Ministry or the police and firm action will be taken against every offender. Sir, under these circumstances, setting up a spot checking unit is not likely to be effective in preventing abuse. Sir, the current checks and penalties are sufficient to deter abuse even though they are not full-proof. It is humanly not possible to expect that with more than 100,000 families employing foreign domestic workers, there would not be some black sheep who would abuse their employees. But their actions will not be tolerated or condoned by fellow citizens. Their cruelty will be exposed and we will deal with them firmly and decisively. Fortunately, considering the several hundred thousand foreign domestic workers who have worked in Singapore over the years, the number of abusive employers is indeed very small.”
“Nevertheless, foreign domestic workers can approach my Ministry's Foreign Workers Unit if they have disputes with their employers, either directly or through their embassies in Singapore. In fact, last year, 210 cases were referred to the Foreign Workers Unit and all of them were resolved amicably. On the recent report of foreign workers who are housed in a rubbish bin centre, which Mr Charles Chong mentioned, I wish to point out that our investigation shows that all the foreign workers who are housed in the bin centre were illegal workers without valid work permit. Under the scheme to provide Town Councils with NTS conservancy workers, the contractor must undertake to provide proper housing for their workers. So the cases were those of employers resorting to illegal workers and, having nowhere to house them, they ended up by putting them in the bin centre. Both Mr Charles Chong and Mr Kenneth Chen have expressed concern over the recent cases of domestic workers' abuse. Sir, the abuse of domestic workers by employers is dealt with by the Police. Errant employers will be prosecuted. For instance, in January this year, a 61-year old grandmother was jailed for five months and fined for abusing her domestic worker. And in July last year, a housewife was jailed for two months and fined for a similar offence. In addition to these penalties, my Ministry will also bar employers and their spouses who are found guilty of maid abuse from future employment of any domestic workers. On Mr Charles Chong's suggestion to impose a penalty similar to the Corrective Work Order, I would like to point out that the physical abuse of a domestic worker is a serious criminal offence.”
“Sir, let me first take up the point on foreign workers' welfare and the treatment of foreign workers in Singapore. I would first like to assure Mr Charles Chong that foreign workers in Singapore enjoy the same protection as local workers under our labour laws. The Employment Act which spells out the minimum employment terms, such as rest days, overtime payment and other terms of employment, cover both local and foreign workers. Foreign workers can also enjoy subsidised health care at Government hospitals and also outpatient clinics. Foreign workers who are injured in the course of a work-related accident are compensated on the same terms as local workers under the Workmen's Compensation Act. Our civil laws and Penal Code also do not discriminate between foreign and local workers. Foreign workers who have employment disputes with their employers can seek assistance from my Ministry. We have set up a Foreign Workers Unit to conciliate and resolve employment disputes between foreign workers and their employers. This conciliation service is provided free of charge to all foreign workers and is readily available to them. So far, most of the cases that have been referred to my Ministry by foreign workers have been resolved amicably. Sir, foreign domestic workers, like local domestic workers, are not covered under the Employment Act because of the nature of their work and the widely varying working conditions. For example, it would be difficult to stipulate the duration of working hours for purposes of calculating overtime payment or the type of domestic duties since the habits of the employers vary tremendously. It is better to let the employer and the domestic worker agree on terms which are mutually acceptable.”
“However, changing mindset of both employers and employees will require a concerted effort and cannot be achieved overnight. My Ministry will work closely with the business community and other agencies to implement the back-to-work programme. I believe I have covered all the points, Sir.”
“This suggestion would be considered under the back-to-work programme. We will see whether it can in fact be implemented. The Member for Ang Mo Kio GRC, Mr Inderjit Singh, has also suggested that part-timers' CPF contribution be reduced to make part-time work more attractive under the back-to-work programme. My Ministry is of the view that this is not desirable. Firstly, there is no guarantee that the part-time worker will get a higher take-home pay if we reduce the employee's CPF because the employer may well adjust the overall salary. On the other hand, it will directly affect the existing 59,000 part-timers who are currently making full CPF contribution. Many of them use their CPF contribution for their housing, health care and old age needs. 4.15 pm My Ministry will also consider Mrs Yu-Foo Yee Shoon's proposal to link work permit applications with a company's employment of housewives and older persons as a last resort. At this juncture, we would prefer to actively promote the back-to-work programme instead of introducing an additional linkage. Sir, in order to better reach out to employers and job seekers who require employment service, my Ministry will be introducing a Labour Net Information System which will be launched later this year. This will allow on-line registration for employment assistance and job-matching to be done on-line. We will also work with the Community Development Councils to promote the back-to-work programme within their communities. Sir, part-time and flexible work arrangements should be seen as an integral part of our employment system. Part-time workers should be viewed as employees who could be relied upon to take on responsible and complex jobs and perform as efficiently and competently as their full-time counterparts.”
“On the other hand, the expectation of some housewives and older persons in wanting jobs which are within walking distance from their homes and could fit into their domestic schedules as well as jobs which pay a very good salary and provide a very comfortable working environment have prevented quite many from being successfully placed in employment. We have to make special efforts to change these attitudes and mindset of both employers and potential employees. Sir, the importance of training for housewives and older persons is also noted. Under the back-to-work programme, SDF provides 100% financial support for the core skills training of housewives and older persons who have secured employment. Each trainee who has successfully completed the course is also given $100 food and transport allowance. I encourage all employers to take advantage of this incentive to train the housewives and retirees who have registered for the back-to-work programme before they put them on to the job itself. The Member for Marine Parade, Mrs Lim, and also Mr Inderjit Singh have suggested preparatory training or orientation training to be provided to housewives and older persons to facilitate their return to the workforce. Let me inform the Members that the Productivity and Standards Board is currently exploring the possibility of providing free employment training to help housewives and retirees who have left the workforce for some time and have not kept themselves updated with working skills. To encourage active job seeking, the Chairman of the GPC has suggested that housewives and older persons be required to bear part of the training expenses. Perhaps the training expenses can be refunded only after they have successfully secured employment.”
“Sir, on the back-to-work programme, I thank the Members who have spoken in support of this programme. We launched the back-to-work programme in order to encourage housewives and retirees to return to the workforce and also to persuade employers to tap this potential labour pool to meet their manpower needs. This programme was launched with the support of the Productivity and Standards Board, NTUC and the Singapore National Employers' Federation. In the six months' period from its launching, the programme attracted 4,000 housewives and older persons who were keen to return to the workforce. Unfortunately, only about 700 applicants were successfully placed in employment. The number of successful placements is relatively low, but I think the response from the housewives and retirees was very encouraging. I agree with Mrs Yu-Foo Yee Shoon that the problems encountered in the implementation of the back-to-work programme are mainly related to that of attitudes and mindset. While the programme has generated a high level of interest, many employers are still not prepared to introduce part-time or flexible work arrangements or redesign their jobs to tap the potential pool of housewives and older persons. Employing full-time staff or turning to foreign workers to alleviate their manpower shortage is still the preferred option of many employers. As pointed out by Mrs Yu-Foo Yee Shoon and Mr Ahmad Magad, many employers also prefer to recruit younger workers.”
“Let me inform the House that in fact before we grant any employer or company such an exemption, we do advise them to retain their exempted employees through redeployment within the organisation. In situations where redeployment is not possible, companies could introduce outplacement programme, including the pre-release employment programme that Mr Charles Chong referred to. Such efforts are also recommended by the Tripartite Committee on Extension of Retirement Age. However, we should not make such programmes like pre-release employment programmes mandatory on each and every employer. I am of the view that outplacement programmes should be implemented through promotional efforts and market forces. Sir, the Member for Pasir Ris GRC, Mr Ahmad Magad, has asked whether there are labour policies and procedures to protect older workers from being displaced from our economy. I agree with the Member that with economic restructuring and industries moving towards higher technology activities, it would have an impact on the workers, particularly older workers who have lower education, and that many of such older workers may face the possibility of retrenchment. We will encourage and assist workers to upgrade themselves so that their skills will continue to be relevant. The NTUC, with the support of EDB, Productivity and Standards Board and ITE, has launched a pilot Skills Redevelopment Programme. This programme is aimed at helping workers, particularly older workers, to acquire relevant skills to enhance their employability. I also understand that the Singapore National Employers' Federation is initiating a programme to help SMEs step up training of their workers. These are some of the measures that will help older workers to remain employable in the years ahead.”
“But at the same time I would also like to ask that unions and workers should also voluntarily accept some salary adjustments in the spirit of the Tripartite Committee's recommendation. Sir, may I now turn to some of the other points that were raised by Mr Charles Chong on whether we would in fact now review the exemptions granted to some employers in 1993 when we first raised the retirement age to 60. Sir, the exemption of some categories of employees from the Retirement Age Act provided flexibility for companies to retire certain groups of employees at a younger age, provided there are strong and valid grounds for doing so. So far, my Ministry has granted exemptions only to a small number of workers. To-date, only 70,000 employees have been exempted and they constitute about 4% of the total employee population. Most of the exempted employees are in fact uniformed personnel. The Ministry has been stringent in assessing applications for exemptions. The company's reasons are scrutinised carefully, and in the case of unionised workers, we will consult the unions representing these workers. Exemptions would only be granted after careful and thorough consideration. The Member has suggested that a review be carried out on all exemptions granted so far. As of now, there are no indications that the circumstances under which the exemptions were granted have changed to warrant such a review. But if there should be any changes, let me assure the Member that we will conduct a review. The Member also suggested that the Ministry make it compulsory for companies to help exempted workers secure alternative employment before their early retirement from the company.”
“Employers should not have any reservations on the base-up wage system because it is proposed by the NTUC. It benefits both employers and employees. A working committee will be set up to assist unions and employers in implementing the various recommendations of the Tripartite Committee. We will issue a set of guidelines which have been drawn up jointly by the unions, employers and Government. With these guidelines and with the working committee available, I believe that we will be able to resolve any teething problems which may arise in the course of implementing the base-up wage system. Sir, the Member for Cheng San GRC, Mr Yeo Guat Kwang, asked that consideration should be given to the need to balance the interest of both employers and workers, training and retraining, outplacement and also changes in the medical costs. I would like to assure the Member that the Tripartite Committee had exhaustively considered all these factors before making its recommendations. Its present recommendations do take into account all these concerns. The Member for Sembawang GRC, Mr Hawazi Daipi, wanted to know what assistance would be given to workers reaching the age of 60 before the implementation of the retirement age to 62 on 1st January 1999. The Tripartite Committee encourages employers and unions to apply the higher retirement age and other recommendations on a voluntary basis before the actual implementation date. The Government supports this approach and would like to urge employers to voluntarily implement the higher retirement age before 1st January 1999. In a tight labour market, it makes sense for employers to retain every able-bodied and experienced worker.”
“Sir, with the extension of the retirement age to 62 on 1st January 1999, older workers would be given the opportunity to work longer, earn a regular income and at the same time continue to make contributions to our economy. For the employers, the cost-cutting measures recommended by the Committee should address their concerns on the higher cost of retaining older workers. For the economy as a whole, a higher retirement age will enable us to better utilize our limited manpower resources, enlarge our workforce, and help us to achieve further economic growth. I would like to take this opportunity to thank the members of the Tripartite Committee on the Extension of the Retirement Age for their valuable contributions. The work of the Tripartite Committee clearly demonstrates that in Singapore, the three social partners - trade unions, employers and Government - can work together effectively to address and solve complex problems that have national implications. Some of the measures which we are going to implement will be very tough for some workers. Yet union leaders had the courage and determination to accept these changes once they were convinced that the changes are needed to strengthen our economy and will eventually benefit workers. This augurs well for our harmonious industrial relations climate and our ability to meet economic challenges in the future. Sir, with tripartite consensus and support, I am confident that the recommendations of the Tripartite Committee can be implemented smoothly. Let me now turn to the specific question raised by several hon. Members. The Chairman of the GPC for Labour has asked the Government to actively promote the base-up wage system. This will be done in conjunction with the extension of the retirement age to 62.”
“The underlying principles of the proposed Scheme are in line with policy direction laid down in the 1993 White Paper on Affordable Healthcare. 4.00 pm Sir, the Government notes that the implementation of the Alternative Medical Benefit Scheme will result in employers having to make additional CPF contributions to be credited into Medisave Accounts of their employees. Currently, the Income Tax Act prescribes tax deductibility limits of 1% of ordinary wages for additional Medisave contributions and 2% of total remuneration for medical expenditure for employees. When employers adopt the Alternative Medical Benefit Scheme, the additional Medisave contributions and the total medical expenditure may exceed the existing tax deductibility limits. To encourage early adoption of the Scheme by employers, the Government will raise the tax deductibility limits for Medisave contributions and medical expenses of employers who adopt the co-payment system. At the same time, existing tax deductibility on additional Medisave contributions and total medical expenses will be reduced for employers who opt to remain on the current system without co-payment. While the Government has accepted the recommendations of the Tripartite Committee that employers be allowed to implement the Alternative Medical Benefit Scheme voluntarily, we will closely monitor the progress of implementation. If progress is slow, we will have to seriously consider legislating medical co-payment as part of our medical benefits system. This is necessary to prevent medical expenses from ballooning into a crippling burden on the individuals, companies and the nation.”
“For outpatient expenses, they would co-share part of their expenses and receive a salary adjustment as a trade off. The proposed Scheme would encourage employees to take individual responsibility for their own health and make responsible use of their medical benefits. Sixth, employers should introduce outplacement programmes, with appropriate financial incentives to assist older workers who cannot be re-deployed within an organisation. Such mutually acceptable programmes will enable older workers who may not be able to cope with the requirements of their existing jobs due to high physical demand and other factors to remain gainfully employed in other organisations. Finally, a Working Committee would be formed to monitor the implementation of the Tripartite Committee's recommendations. The Working Committee can also help employers and unions to make the necessary adjustments and resolve any teething problems that may arise in the implementation of the recommendations. Sir, I have highlighted the key recommendations of the Tripartite Committee. Details of the recommendations will be released separately by the Committee. The Government has accepted the Committee's recommendations and will proceed to make the necessary changes to the Retirement Age Act. Among the Committee's recommendations, of particular significance is the proposed Alternative Medical Benefit Scheme to replace the current medical benefit system. The successful implementation of the Scheme will encourage employees to take responsibility for their own health, adopt a healthy lifestyle and make responsible use of medical benefits. It will also help contain the increase in medical costs over the longer term.”
“The inherent weakness of the Seniority-Based Wage System is the wide gap between the minimum and maximum salary. As a result, the salary structure does not reflect the actual value of the job. This will hamper the employment of older workers and cause wages to be uncompetitive as the workforce ages. The Seniority-Based Wage System also demotivates younger workers who are doing the same job for a much less pay. The adoption of the Base-Up Wage System will narrow the minimum and maximum salary ratio and enable wage increases to be more closely linked to productivity growth. It will also ensure that the wage structure would better reflect the value of the job. Fifth, employers should adopt an Alternative Medical Benefit Scheme on a voluntary basis. A set of tripartite guidelines for the Alternative Medical Benefit Scheme will be issued. Under the proposed Scheme, new employees would be required to co-pay part of their outpatient expenses and be responsible for their inpatient expenses from the first dollar. To enable them to buy a sufficient level of medical insurance to cover their inpatient risks, they would receive an additional 1% CPF contribution from the employers (or more depending on union-management negotiations) which can be credited into their Medisave accounts. Existing employees would be given the option to remain under their old scheme or join the new scheme. If they join the new scheme, they would be responsible for their inpatient expense from the first dollar, and would receive a trade-off benefit equivalent to the average employer's inpatient expenses for the past three years plus 1% of their wages, which is subject to negotiation, as premium to be credited to their Medisave accounts.”
“First, the Committee recommends that the statutory minimum retirement age be raised from 60 to 62 with effect from 1st January 1999. The 18-month notice period from now till the end of 1998 will give employers, workers and unions sufficient time to make the necessary adjustments. The Committee also recommends that further extension of the retirement age should depend on the prevailing economic circumstances and also the experience gained from this adjustment. Second, employers retaining older workers beyond the age of 60 should be allowed to reduce wage cost by adopting the following cost-cutting measures:- (a) A reduction in employers' CPF contributions from 7.5% to 4% in respect of employees between the age of 60 and 65; and from 5% to 4% in respect of employees above the age of 65; (b) Employers should be given the discretion under the Retirement Age Act to reduce the wage cost of employees above the age of 60 by up to 10%. The reduction could be effected through a cut in basic wage or a combination of wage cost items including fringe benefits, variable bonus, AWS, and basic wage and a reduction in working hours. The 10% cut in wage costs would be over and above the reduction in employers' CPF contributions. Third, the service period for computation of retrenchment benefit be capped at 25 years. Based on the current norm in the payment of retrenchment benefit, the cap would mean that a retrenched worker who had worked for 25 years or more in a company would be paid between 1 and 2 years of salary as retrenchment benefit. This amount of payment should be sufficient to see him through the period of looking for alternative employment. Fourth, employers are encouraged to adopt the Base-Up Wage System in place of the current Seniority-Based Wage System.”
“It will fall to four by the year 2010, and 2.5 by 2030, less than three persons actively contributing to the economy to support each aged. Sir, this trend would obviously result in fewer people at work to drive the economy, and to generate growth. We are a small country with a small population. This rapidly ageing population will not only adversely affect our economic competitiveness but will also have very serious adverse social consequences. Prior to 1993, the retirement age norm in the private sector was 55 years. This was despite the fact that many Singaporeans at age 55 were still healthy and happy to continue working. In 1988, the Government set a 3-year time frame for companies to voluntarily raise the retirement age of their employees to 60 years. But progress was slow. Hence, in 1993, Government introduced a minimum retirement age to allow workers to continue working up to the age of 60. At the same time, the Government announced the intention to raise the retirement age to 67 sometime in the future. Mrs Yu-Foo Yee Shoon had also noted earlier that the introduction of the retirement age to 60 since 1993 had provided employment opportunities for about 63,000 older Singaporeans. This has obviously helped to enlarge our labour pool and, to a certain extent, helped to moderate the demand for foreign workers. This is reflected in the significant increase in the labour force participation rate for workers aged 55-59 from 47% in 1993 to 52.6% in 1996, an increase of 5 percentage points. Sir, after thorough deliberations of the issues connected to retirement age, and taking into consideration the views and concerns of both the employers and unions, the Tripartite Committee has made seven key recommendations.”