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 this case, there is a very distinct possibility that one day, in effect, the withdrawals could exceed contributions to the fund. In the case of CPF, it is a personalised savings account. The money that a member withdraws is from contributions which he made during his working life, and the interest earned by the accumulated savings. He also asked whether we could consider reducing the CPF rate. The CPF contribution rate was fixed at 40% since July 1991 to meet the three basic objectives of CPF, which are old age savings, housing and medical expenses. At this total contribution rate, a CPF member would be able to purchase a house, meet his medical expenses, including putting aside $15,000 for hospitalisation and medical expenses during retirement, and still have sufficient savings for old age. The 40% contribution rate is not excessive by any means. In terms of a nest egg for retirement, it can only provide a monthly income of between 20% of the last take-home pay for high-income earners and 40% for low-income earners for 20 years. Any reduction of the CPF contribution rate will result in less savings for housing loan, Medisave and would also result in members being unable to set aside the Minimum Sum prior to their retirement. With the rapidly ageing population, this will lead to serious problems in the years ahead when more and more aged Singaporeans end up with inadequate savings for their old age. Sir, I am quite surprised that Mr Chiam should come to this Chamber to ask for a reduction in the CPF contribution rate.”
“As for Mr Chin Harn Tong's suggestion that a scheme be introduced to provide living income to retirees by requiring the child to look after the parent, if the child wants to inherit the parent's property, my Ministry's view is that such matters are best left for families to work out. As to the cases where children wilfully neglect their parents, there is the Maintenance of Parents Act which can be invoked to safeguard the parents' interest. Next, I would address the points raised by Mr Chiam. He asked how is it possible that in 1993, according to the CPF Annual Report, there were more withdrawals than annual CPF contributions. I have not seen the figures. I do not have the figures with me. I do not know whether the figures he quoted are correct or not. But I would like to tell Mr Chiam that CPF contributions and withdrawals are not linked, because of the way the CPF is operated. The CPF is not a pool fund. The withdrawals will depend upon whether more members are buying property and what are the prices of properties in any given year. And because CPF is a personalised savings account, it is entirely possible in any given year to have more members making withdrawals and to have more withdrawals than contributions in that year. Even though the withdrawals exceed contributions, there is no fear that members will in fact be losing their savings. It is because the CPF funds are kept as personal saving funds. The contributions that members put in will be the contributions that they can withdraw, including the interest gained over the years. It is not like any other welfare or social security scheme where individuals contribute into a pool fund, and then a member makes a claim for unemployment benefits from the pool fund.”
“I would like to point out that in assessing the value of the property under the revised Minimum Sum scheme, the CPF Board has, since October 1995, been using the valuation price of the HDB flat as published by HDB, and not the original purchase price, as claimed by Mr Ling. And prior to October 1995, the CPF Board used HDB's posted price or HDB's resale price or valuation provided by the member, whichever was available. Sir, Mr Othman asked whether CPF will pay a higher interest for savings under the revised Minimum Sum scheme. Mr Teo Chong Tee asked whether the CPF Board could peg the interest of CPF savings to fixed deposit interest. My Ministry recognises that CPF savings in the Special and Retirement Accounts are long-term savings. That is why with effect from 1st July 1995, savings in the Special and Retirement Accounts receive an additional interest of 1.25% over and above the interest paid for savings in the Ordinary Account. Sir, these interest rates are adjusted every six months. The interest rate for savings in the Ordinary Account is in fact pegged to the average of the savings account and fixed deposit rates of the four local banks. The current interest rate for savings in the Special and Retirement Accounts is 4.77%, which is higher than the 12-month fixed deposit rates offered by the four local banks. Although the interest rate paid on the Minimum Sum fluctuates, depending on the Ordinary Account's interest rate, the CPF Board guarantees a minimum interest rate of 3.75%, which is an effective hedge for the Minimum Sum amount against inflation, as, generally, our inflation rate has been consistently lower than 3%.”
“As I said, contrary to the perception that Government is trying to hold back CPF savings, we are actually doing everything we could to encourage CPF members to withdraw their Minimum Sum for more secure and more profitable investment, such as an annuity policy from an insurance company. However, despite the Board's efforts, many CPF members still prefer to keep their money with the Board. The CPF Board will continue to educate its members so that they can decide how best to make use of the Minimum Sum. 2.15 pm Sir, it is unfortunate that Mr Ling is not in the Chamber right now. Last Monday, Mr Ling How Doong alleged that a CPF member had to pledge his flat to cover the Minimum Sum and, at the same time, pay cash of about $36,000 into his Minimum Sum. When I rose to query him, Mr Ling retreated into an elaborate explanation. He clarified that he did not really mean what he said. The truth is that Mr Ling must have been quite confused over how the Minimum Sum is being operated. As I said last Monday, no CPF member is required to pay cash to make up his Minimum Sum. In fact, if a CPF member has only $5,000 in his CPF account at age 55, he can withdraw all of it. And if he has only $60,000, he can withdraw half or $30,000 under the withdrawal rules. On the need to set aside a cash component of the Minimum Sum, I would like to reiterate that the cash portion ensures that the member will have a monthly income for retirement. Otherwise, he may have to sell his house and live off the proceeds. Last Monday, Mr Ling also mentioned that the CPF Board has based the amount that can be pledged on the value of the property at the time of purchase and not the market value of the property. I am afraid Mr Ling was either confused himself or deliberately confusing.”
“A CPF member buying such an annuity from an insurance company will also be assured of a monthly annuity for as long as he lives. The CPF Board therefore encourages every member upon attaining the age of 55 to purchase an annuity or deposit their Minimum Sum amount in the bank if it can give him a higher interest rate. In fact, to encourage members to purchase annuities, the Board sends to each member, who is about to turn 55 years old, a letter with an attached note showing how monthly annuities offered by seven insurance companies can offer a higher rate of return. In addition, the Board invites CPF members about to reach the age of 55 to attend an annuity talk, jointly organised by the Board and the life insurance association to familiarise them with various options available. With your permission, Sir, may I ask the Clerk of Parliament to circulate copies of the CPF Board's note and invitation for hon. Members' information. [Copies of documents distributed to hon. Members] It shows how we have been trying to help CPF members to optimise the returns from their Minimum Sum, far from what many Opposition Members have been alleging that the Government is trying to hold back CPF members' savings for its own use. Sir, of the 1,184 CPF members who set aside the Minimum Sum in cash between July 1995 and January 1996, 45% have in fact taken the Board's advice and purchased annuities from insurance companies. Two members chose to deposit their Minimum Sum with an approved bank and the remaining 55% preferred to keep their Minimum Sum with the CPF Board.”
“They were not required to set aside the full Minimum Sum of $40,000 because, under the procedures of the revised Minimum Sum scheme, members need at most set aside half their cash balance in their CPF account. This is to ensure that every CPF member will be able to withdraw at least half their CPF savings upon reaching the age of 55. Sir, Mr Chin Harn Tong commented on the cash component of the Minimum Sum. He pointed out that it will be increased to $40,000 in the year 2003. There was some concern on whether a CPF member can meet this cash component requirement. Our projection of members' accounts shows that 84% of CPF members who turn 55 in the year 2003 will have cash balance exceeding $40,000. Also, for a young man to enter the workforce today, more than 80% would have the equivalent of $40,000 in 1996 real dollars accumulated in his Special Account alone which is only four percentage points of his CPF contribution when he reaches the age of 55. Therefore, the cash component required of CPF members can be met by most CPF members. Sir, CPF members on reaching the age of 55 may withdraw all their CPF savings, including the Minimum Sum amount, or they can choose to leave the Minimum Sum with the CPF Board and make monthly withdrawal upon reaching the age of 60 or the prevailing retirement age. However, if they decide to withdraw all their CPF savings, they must use an amount equal to the Minimum Sum to purchase either an annuity from an insurance company or deposit the Minimum Sum with an approved bank. In fact, annuities from insurance companies can generally provide a higher monthly payment compared to leaving the Minimum Sum with the CPF Board.”
“This will enable him to enjoy a standard of living somewhat higher than that of subsistence level which is better than what the old scheme would have afforded. Mr Teo also asked whether retirees can be assured of being able to withdraw their Minimum Sum savings. In effect, almost all retirees should be able to withdraw their Minimum Sum savings in the Retirement Account because the nominal monthly payment of $613, which I mentioned a moment ago, is calculated on the total Minimum Sum of $80,000. The cash component is only $40,000. So you can readily appreciate that in fact almost every retired member would be able to withdraw the full cash component within his lifetime. Sir, Mr Othman Haron Eusofe asked for the progress of the revised Minimum Sum Scheme. Between 1st July 1995 and 31st January 1996, 19,000 CPF members attained the age of 55 and were eligible to withdraw their CPF savings. Of this, about 10,500 members have come forward to make the withdrawal and, surprisingly, the remaining 8,500 members have opted to leave all their savings with the CPF Board. They have decided not to withdraw any savings at all. Of those who came forward to make the withdrawal, 11% of them set aside the full Minimum Sum of $40,000 in cash. Another 28% were able to set aside the full Minimum Sum through a combination of cash and pledging their property value. I must point out that this does not mean that the remaining 61% did not have $40,000 of CPF savings at age 55. On the contrary, many more members actually have $40,000 or more in their CPF accounts when they reach the age of 55.”
“Sir, I will first respond to the Members who spoke on the Minimum Sum scheme. Just a quick recap. On 1st July 1995, we implemented the revised Minimum Sum Scheme with the objective of providing retired CPF members with a higher retirement income. The revision will take effect gradually over a period of 10 years. The first step was to raise the Minimum Sum from $35,400 to $40,000 on 1st July 1995. Out of the $40,000, a minimum of $4,000 must be in cash while the rest can be in the form of a charge or pledge on the property owned by the member. The Minimum Sum will gradually be increased from $40,000 today to $80,000 in the year 2003 when half the amount must be in cash and the other half can be secured as a pledge on the property. After the year 2003, the Minimum Sum will be adjusted for inflation in order to preserve its value. Sir, Mr Teo Chong Tee pointed out that a member, who was 55 in 1991 and is now reaching the age of 60 and is ready to withdraw his Minimum Sum monthly payment, can only withdraw $243 a month from his Retirement Account. This is correct. The monthly annuity is related to the principal set aside. In 1991, the Minimum Sum was only $31,600. It is precisely because the old Minimum Sum scheme could not provide an annuity that could meet more than just the subsistence level that we had to introduce a revised Minimum Sum in order to be able to pay out to retired CPF members a higher monthly annuity. Under the revised Minimum Sum scheme, if a member sets aside the full Minimum Sum of $80,000 in the year 2003, he will be able to withdraw a nominal monthly sum of $613 when he retires at the prevailing retirement age.”
“And in designing a workmen's compensation scheme, it is important for us to strike a balance between safeguarding the workers' interest on one hand, and the overall cost of providing workmen's compensation on the other. My Ministry reviews the Workmen's Compensation Act regularly and the question of leave entitlement will be included in the next review. Sir, I believe I have covered all the points.”
“The guide that we are using today is based on the guides to the evaluation of permanent impairment published by the American Medical Association (AMA). In order to keep our guide simple and easy to use, it focuses on injuries to the musculo-skeletal system which is the most commonly affected system in industrial accidents. In the case of injuries to other systems, such as the nervous system, doctors may always refer to the AMA guidelines. I would like to assure the Member that the Ministry has been periodically updating the guide to make sure that it is consistent with international norms. The latest revision was in 1990. My Ministry is presently carrying out another study of the practices of other countries and will consider incorporating relevant provisions into the guide. 1.45 pm Dr Soin also asked whether we would review the leave entitlement under the Third Schedule of the Workmen's Compensation Act and she pointed out the present entitlement of 14 days outpatient medical leave is not adequate, particularly for orthopaedic cases. My Ministry is of the view that the present guidelines on providing two weeks of full-pay leave for outpatient treatment is a fair compromise between workers' welfare and the employers' concern over cost. Of course, if an employee has been injured in the course of work and has to be hospitalised, then he will have a further 60 days of hospitalisation leave. In fact, for those who are unable to work, they will be further paid two-thirds of their monthly earnings for a period of up to one year. If we were to expand the coverage of the Workmen's Compensation Act to grant longer leave for outpatient treatment, it would translate into higher premiums for workmen's compensation.”
“Sir, as there is already a consultation with employers and unions, and since my Ministry will only grant exemptions to applications on very strong and valid grounds, I am of the view that it is not necessary to set up another committee, whether it is another tripartite committee or some other external committee, to review such applications. On the exemption of cabin crew from the Retirement Age Act, this decision was made by my Ministry after applications were received from five airlines, and not one, as mentioned by Mr Charles Chong. We actually received applications from five airlines for exemption. Our investigation took into consideration various factors, including the nature of work, business strategy and the safety of passengers. The overall consideration for the exemption was to ensure that the Retirement Age Act would not undermine the competitiveness of the airline industry in Singapore and ultimately the interest of all airline employees. Sir, I would like to reassure Mr Chong that my Ministry will continue to be careful and judicious in processing all applications for exemption and will only grant exemptions when such applications are fully justified. Sir, I will next address the point raised by Dr Soin with regard to the Workmen's Compensation Act. She felt that the guide for assessing disability from traumatic injuries is not complete. The First Schedule to the Workmen's Compensation Act sets out the percentage of loss of earning capacity arising from various injuries sustained by a workman. The guide serves to help medical doctors when they are assessing the extent of injury and the extent of incapacitation.”
“For this purpose, paragraph 2(e) of the Retirement Age (Exemption) Notification allows employers to seek exemption in respect of any class of employees, where being of a particular age or in a particular age group, is a bona fide occupational consideration or requirement, whether for reason of safety or for any other reason. Let me assure the hon. Member that there has not been a huge rush of applications for exemption. In fact, by and large, most employers have accepted the provisions in the Retirement Age Act. To-date, my Ministry has only received 30 applications for exemption under this paragraph in the regulations. Out of these 30 applications, only 12 were approved, 12 were rejected after careful study, and the remaining six were withdrawn by the employers concerned after we had an opportunity to discuss with them. To facilitate the processing of applications, my Ministry has formulated internal guidelines to ensure that exemptions are granted only when employers are able to give full justification for their applications for exemptions. In processing an application, my Ministry will consult not just the employer and the unions concerned, but we would also conduct site visits where necessary in order to get a better feel of the actual nature of the job. My Ministry may also seek expert advice from outside to ensure that safety and health of the workers would not be compromised. A decision will only be made after an application has been thoroughly investigated and evaluated.”
“The trade union and employers' representatives on the tripartite committee had requested for more time to study these issues carefully and to allow employers and unions to consult their members. Sir, the need to raise the retirement age beyond 60 is not to deal with an immediate problem. We have already raised the retirement age from 55 to 60. We have made excellent progress in this area. We do not have to move in a great hurry to go beyond 60 at this juncture. We need to raise the retirement age beyond 60, but it is to better prepare Singapore for the future, not to solve an immediate problem. We should take time to study all issues connected with the raising of retirement age beyond 60. We should study these issues carefully. My Ministry has therefore agreed to the tripartite committee's request for more time to study the details. I am confident that the committee will be able to address the issues which are of concern to both employees and employers and come out with workable recommendations. The committee is expected to complete its deliberations and make recommendations later this year. Sir, Mr Charles Chong has raised a specific query on how we look into requests for exemption from the Retirement Age Act. Let me reiterate that the objective of the Retirement Age Act is to provide opportunities for older Singaporeans to continue to work up to the age of 60 and beyond. To ensure that the implementation of the Act will not impede companies' operation or undermine their competitiveness, companies are allowed to apply for exemption from coverage of the Act.”
“There was agreement that the need to raise the retirement age is recognised and that retirement age can be raised beyond 60 in steps. The first raise should be made from 60 to 62, but the timing of the raise should take into account prevailing economic conditions, as mentioned by Mr Stephen Lee earlier on. The committee agreed that there is a need to move away from the seniority-based wage structure to one which could better reflect the value of the job. In line with the recommendations of the 1986 tripartite committee on wage reform, the maximum to minimum salary ratio of 1:5 for workers doing the same job should be achieved as soon as possible. The committee also agreed that the base-up wage system, proposed by the NTUC, could be an alternative system once the desired salary ratio of 1:5 is achieved. The base-up wage system needs further study before implementation. The committee also agreed that there is a need to provide alternative health care system which could help contain rising medical costs and motivate workers to remain healthy. Lastly, the committee recognised the importance of training of older workers and the need to introduce out-placement programme to assist those who are unable to continue in their existing jobs, due to the strenuous physical demands or other special requirements of the job. While there was consensus in many areas, as I have just listed, the committee had also identified some issues which needed further study. These included the base-up wage system, an alternative health care system, training and out-placement programme as well as, if possible, incentives for employers, including tax incentives. All these issues are complex and have far reaching implications.”
“The high cost of retaining older workers is mainly due to the existing seniority-based wage system and the greater tendency for older workers to incur higher medical expenses. Hence, employers have proposed cost cutting measures such as capping retrenchment benefits and further reduction in CPF rates for older workers whose retirement age is raised beyond 60. On the other hand, union leaders are concerned that cost cutting measures would be unfair to older workers and would in fact demotivate them from continuing to work beyond 60, thus, defeating the whole point of the exercise. My Ministry understands and appreciates the concern of both the unions representing the workers and the employers. But the matter cannot be resolved by viewing from one perspective only. We have to build a consensus between employers and employees, which was why my Ministry formed a tripartite committee to study the cost implications of extending the retirement age beyond 60. The committee was to study all issues, including issues relating to the seniority-based wage structure, medical benefits and retrenchment benefits. The committee, with members from unions, employers and Government, was tasked with recommending appropriate measures to enable companies to retain older employees without undermining business competitiveness. Mr Chin Harn Tong has asked for the progress made by the tripartite committee, and whether the fact that there was no major announcement suggested that there was a wide gap between the position taken by both the union representative and the employers' representative. I would like to inform this House that the committee had in fact made excellent progress. It had held six meetings to discuss the subject. There was in fact broad agreement on many areas.”
“We have no choice but to introduce changes to cope with this issue now. Prior to 1993 the normal thing to do was to retire at age 55. This was despite the fact that many workers at this age were still healthy and could continue to work. It seems ironical for us to retire healthy mature workers and at the same time let in more foreign workers to meet the needs of employers. For this reason, we have to raise the retirement age norm from 55 to 60 and beyond. The raising of the retirement age to 60 and beyond will benefit workers and employers. By working for a longer period, Singaporeans will be able to save more money for eventual retirement. Employers will have a pool of mature and experienced workers to deploy. Since its implementation on 1st July 1993, the Retirement Age Act has provided employment opportunities for some 50,000 persons who would otherwise have retired at the age of 55. This has helped to enlarge our labour pool, as shown in the increase in labour force participation rates for workers aged 55-59 from 47% in 1993 to 49.7% in 1995. Sir, we have previously proposed that the retirement age be progressively raised to 67. It has been almost three years since the retirement age of 60 was implemented. We are now looking into raising the retirement age beyond 60. As the extension of the retirement age would have cost implications to employers, it is understandable for employers to be concerned over the high cost of retaining older workers and its impact on business competitiveness. This has been explained very clearly by Mr Stephen Lee, who is also the President of the Singapore National Employers' Federation.”
“Sir, I will respond to the Members who have spoken on the retirement age and the base-up wage system mentioned by Mr Sinnakaruppan. Before I address the questions raised by hon. Members, I would like to remind the House of the underlying concern which led to the retirement age legislation. 1.30 pm Singapore is confronted by a population trend which would have a severe impact on our long-term economic viability and competitiveness. This is the rapid ageing of our population which several hon. Members have touched upon. Increasing life expectancy and lower birth rate will result in a very rapid change in our population. At present we have eight economically active persons supporting one aged person above the age of 60. In 15 years' time, this ratio of economically active people supporting the aged will fall to 4:4. It will fall further to 3:1 by the year 2020, ie, in 25 years' time. In fact, by the year 2030, 35 years' time, a full 25% of the population will be aged 60 and above, compared to only 9% today. What this means is that in the future there will be fewer people to drive the economy, generate growth and revenues for Government to support the essential social services, in particular, services to meet the needs of a growing population of aged Singaporeans. At the same time, a declining birth rate also means that there would be fewer young people entering the labour market. This would result in a levelling off of our labour force growth and subsequently a reduction in the size of our labour force. If we do nothing to address this issue, the long term trends would have serious repercussions on our economic competitiveness. Because we are a small country with a small population, the impact of such rapid ageing of our population is far more severe.”
“We will work closely with the employers' associations and trade unions to change the mindset of employers and to encourage them to provide more programmes for part-time and flexible work arrangements. This will enable us to tap the pool of potential workers and help reduce our reliance on foreign workers. Sir, I believe I have covered all the points.”
“My Ministry's survey showed that 78% of local workers who were retrenched in the third quarter of 1995 were re-employed by December, less than six months after their retrenchment. However, with the change in business conditions, particularly with the increasing number of companies undergoing restructuring and relocating their labour-intensive operations, the incidence of retrenchment is likely to increase. I therefore agree with the Member that we should make more efforts to assist retrenched workers and my Ministry will offer more comprehensive assistance to retrenched workers. We will look into the need for retraining of retrenched workers. 1.00 pm Training is an essential requirement in preparing retrenched workers and potential workers to return to the workforce. We will work closely with other agencies, such as the National Productivity Board, NTUC and the Singapore National Employers' Federation to identify and provide specific training requirements so that retrenched workers and those who wish to rejoin the workforce can acquire marketable skills. My Ministry is therefore, as I have explained earlier, planning to expand the scope of the Job Placement Section to provide a better service to job seekers and to achieve better utilisation of our limited manpower resources. We will put more efforts in raising the labour force participation rate, particularly women in the 30-54 age group. To attract those who have already dropped out of the workforce to return to work, we should address their need for more flexible working arrangements and reorientation to working life. This cannot be achieved by my Ministry alone. We need the support and cooperation of employers.”
“By providing employers and employees with clearer definitions and guidelines, we hope to facilitate more part-time and flexi-work arrangements. My Ministry is also revamping the Job Placement Section within the Work Permit and Employment Department to expand the scope of service to job seekers and employers. We will promote part-time and flexi-work arrangements as part of our overall effort to increase female labour force participation rate. However, while we can facilitate and provide the legislative framework, the support and active involvement of employers is crucial. Part-time or flexi-work arrangements are currently not widely practised. This could be due to employers' fear of higher cost or lower productivity as they will need to employ more workers. However, this need not be so if appropriate terms and conditions are agreed upon in the first instance. I urge employers to seriously consider flexible and innovative working arrangements in order to attract more women to rejoin the workforce. In a tight labour market situation such as the one we are in now, employers must realise that it is in their long term interest to have more flexible work systems that can help more of our women to balance their dual commitment of family and career. Sir, Mr Othman Haron Eusofe has asked how my Ministry will help retrenched workers to find alternative employment and whether we will be expanding the Employment Service Department. Currently, the Job Placement Section within my Ministry's Work Permit and Employment Department helps the unemployed to find jobs quickly. This service is also extended to retrenched workers. Due to our strong economic growth and tight labour market, retrenched workers so far face no difficulties in securing alternative employment.”
“Sir, these measures have been effective in deterring errant employers. Hence the number of ill-treatment cases has been very low and such cases are exception rather than the norm. Sir, we recognise that foreign workers come mainly from rural background and may not be totally familiar with modern city life, including living and working in high-rise buildings and busy urban roads. Employers and employment agents have a responsibility to orientate these foreign workers to our environment, so that they can adapt and adjust quickly and be more productive. On our part, the Ministry has made it compulsory for foreign workers working in the construction and marine sectors to undergo safety orientation course before they are issued with work permits. This will ensure that they are safety conscious and reduce the risk of encountering accidents while working. Although I do not believe that we should launch a public education programme, as suggested by the Member, my Ministry will explore other ways of raising awareness of employers to the need to orientate their foreign workers. Next, I turn to Mr Sinnakaruppan on the subject of women in the workforce. My Ministry agrees with the Member that alternatives such as part-time or flexi-work arrangements, including virtual organisations suggested by the Member himself, should be employed to encourage more women to remain in the labour market. If such working arrangements can enable women to work and at the same time attend to their family needs, we will also reduce our dependency on foreign domestic workers. We have recently amended the Employment Act to include a new section on part-time work. This section defines part-time work and provides for formalisation of guidelines on terms and conditions of part-time employment.”
“Foreign workers in Singapore are protected by our employment laws just as local workers. Our labour laws do not discriminate between local and foreign workers. Those covered by the Employment Act and the Workmen's Compensation Act enjoy the same protection as local workers, including the right to join unions. Whether they join unions or not depends on how they perceive their interest can be advanced by membership in the trade union. And unions are free to recruit members from among a company's foreign workforce. We should leave it to unions to encourage more foreign workers to join. In fact, some unions have even elected foreign workers to serve on their committees. Foreign workers who have employment disputes with their employers can seek assistance from the Labour Relations Department of my Ministry. We have a unit to conciliate and resolve any disputes between foreign workers and their employers and the service is provided free of charge and is available to all foreign workers. Sir, I would like to emphasise that employers should treat their foreign workers fairly and with due respect. I should point out that Singaporeans generally do treat their foreign workers well. This is evident by the fact that many foreign workers renew their work permits. Nevertheless, my Ministry takes a serious view of employers who victimise or ill-treat their foreign workers. Those who cheat their foreign workers of wages will be dealt with by my Ministry's Disputes Settlement Section. In the case of abuse of foreign domestic workers, the employer and the spouse are barred from employing domestic workers in the future. And those who are convicted of abusing their domestic workers face heavy penalties, including fines, imprisonment, and even caning.”
“The arguments for and against minimum wage are legion, and I do not intend to go through all these arguments here. Time simply does not permit me to go through all the pros and cons of having a minimum wage system. But I would like to point out that Singapore has done well economically for the past 30 years because Government has adopted sound and pragmatic policies in managing our economic resources. We have found it effective to allow free market forces to determine wages, and not interfere by setting up minimum wages for Singaporeans. In doing so, we avoided rules which distort the labour market. We avoided inefficiency and rigidities which can only hinder our competitiveness. That is why we have not set a minimum wage for Singaporean workers. And for the same reason, we should not do so for foreign workers. Contrary to what Dr Soin claimed, foreign workers come here for work because they find our wages competitive. I have mentioned earlier on that notwithstanding the imposition or implementation of a foreign workers' levy system, we have seen a growing number of foreign workers coming here to seek employment. We would not have seen the increase in foreign workers over the years if the levy had unrealistically depressed their wages. Today, we have more than 350,000 foreign workers, and many foreign workers renew their work permits after the initial two-year period. If they had been victimised or cheated by employers who paid them below market wages, they would not have done so. Setting up a minimum wage system for foreign workers can result in unrealistic labour cost for employers and undermine our economic competitiveness. It would also make the labour market less responsive to changing trends.”
“At any rate, we should guard against the expectation that foreign domestic workers will always be easily available and that they are automatic entitlement to every dual-income household. Sir, may I now address Mr Chiam's points which he made yesterday? Mr Chiam expressed concern with the growing number of foreign workers. I have already pointed out that my Ministry monitors the growth of the foreign worker population carefully. We use the foreign workers' levy and the dependency limits to regulate the entry of foreign workers. The construction industry is most dependent on foreign workers because very few Singaporeans want to take up such jobs. This is not surprising in view of the higher education of our workforce and preference for jobs in other sectors. Unfortunately, the construction industry is also not making effort to upgrade its operation. Many contractors still depend on labour-intensive construction techniques. Others do not invest in labour saving equipment or construction systems. There is a need for the construction industry to raise its productivity which has lagged behind other economic sectors. For example, in 1995, productivity gain in the construction sector was minus 3.8%, compared to more than 6% in the manufacturing and service sectors. With regard to the training of national servicemen in the Singapore Civil Defence Force, the skills they acquire in the Construction Brigade may encourage some to choose a career in the construction industry. However, I am in no position to provide Mr Chiam with the details on the training of national servicemen. I suggest that Mr Chiam take up the matter with the Minister for Home Affairs. May I now address the points raised by the Nominated Member, Dr Kanwaljit Soin?”
“Some may even qualify for PR on the basis of the skills that they have acquired during their period of working in Singapore. While it is not exactly on the basis of behaviour, as suggested by Mr Cheo, law-abiding, hardworking and skilful foreign workers are indeed given a chance to take up residence in Singapore. Sir, on the point of abolishing levy for the employment of foreign domestic workers as suggested by Mr Cheo, there is no contradiction in the approach in imposing levy on foreign domestic workers and the effort to encourage women to rejoin the workforce. Women are free to remain at home to attend to their family needs or enter the workforce. For those who choose to rejoin the workforce, they can claim a tax relief of twice the amount of the foreign workers' levy paid for one foreign domestic worker employed by the working married woman or her husband. Sir, I would also like to point out that reliance on foreign domestic workers to raise female labour participation rate is not tenable in the long run. Already about one in 10 households employs a foreign domestic worker. Apart from the social and political costs of a growing reliance on foreign domestic workers, there is also the question of values imparted to our children brought up mainly by foreign domestic workers. We should also look at how many other developed countries do not have to rely on a large population of foreign domestic workers to achieve a very high female labour force participation rate. The statistics which I gave earlier for Japan were particularly relevant. We should thus explore other alternatives to employing foreign domestic workers.”
“We have found that some of the worst offenders were actually contractors who had not bothered to apply for work permits for their workers. They had resorted to employing illegal workers simply because they wanted to avoid paying the foreign workers' levy. An example in mind is a contractor who was convicted last week for employing 105 illegal foreign workers. Not only was the contractor a first-time offender he was also the employer caught with the largest number of illegal workers. He had never applied for work permits for any of the 105 workers when he could have done so legitimately and obtained work permits for some, if not most of them. We can only conclude that the temptation to cheat on the levy is great for employers. In fact, the vast majority of contractors are operating well within the 1:5 dependency ratio. Only 8% of companies in the construction sector have exceeded the 1:5 ratio while another 10% are operating within the range of 1:4 to 1:5. The majority of contractors, 82% in fact, are still comfortably far from the dependency ceiling. 12.45 pm Mr Cheo may wish to note that in computing the dependency ceiling, non-construction local staff of the contractor can also be included. The local worker in the 1:5 ratio could in fact be a clerk sitting in the office and not a construction worker. Sir, not all of Mr Cheo's suggestions are completely impracticable. Yesterday he proposed that well-behaved foreign workers be given a longer work permit and maybe even considered for PR. In fact, my Ministry does encourage employers to send their foreign workers for training and skill upgrading. A foreign worker who succeeds to upgrade his skill and can pass certain trade tests is eligible for a longer stay in Singapore.”
“Without the foreign workers' levy and the dependency limits, demand for foreign workers will grow rapidly. We already have more than 350,000 foreign workers in Singapore. This number can shoot up drastically. Wages of Singaporeans will be severely affected. The social cost can grow to intolerable proportion within a short time. I am afraid that Mr Cheo's suggestion is simply impracticable. On the point of abolishing the levy for foreign workers so that employers could attract better qualified foreign workers through higher wages, my Ministry is not convinced that the levy had a depressing effect on wages of foreign workers. Since the introduction of the foreign workers' levy in 1982 we had imposed levies for the employment of non-traditional source workers and also for traditional source workers. Despite the introduction of this levy, foreign workers had continued to come to Singapore to work indicating that our wages had been and are still competitive. If our wages are not competitive, we would not have seen the rapid increase in foreign workforce over the years. Neither will we see many foreign workers applying to renew their work permits after the initial stay of two years. It is thus doubtful that the levy had significantly depressed foreign workers' wages and affected the quality of workers that employers are able to recruit. What we can be sure of is that abolishing the levy will lead to a soaring demand for lowly paid unskilled foreign workers resulting in a much larger foreign worker population in Singapore. Mr Cheo complained that many contractors are forced to employ illegal workers because they cannot obtain work permits. This is not the experience of my Ministry's Enforcement Section.”
“If we do not upgrade our industries we will be ill-equipped to cope with future economic competition. We have to start making concerted efforts to moderate our dependence on foreign workers to ensure that growth of our industries and our economy can be sustained over the long run. Sir, I now turn to Mr Cheo and Mr Chiam. Mr Cheo offered a novel approach to the management of foreign worker population in Singapore. It is unfortunate that he is not here this afternoon to listen to my response. Unlike Mr Sinnakaruppan who urged the Government to be cautious, or even Mr Chiam who expressed strong reservation yesterday on our growing dependence on foreign workers, Mr Cheo suggested that we should not regulate the entry of foreign workers by "quota or percentage". By percentage, I take it to mean our system of dependency ceiling or dependency ratio. Let me point out that we do not have a pre-set quota on the entry of foreign workers. We use the system of dependency ceiling such as 50% of foreign workers in the manufacturing sector or dependency ratio such as one local worker to five foreign workers in the construction industry, to control the number of foreign workers that can be employed by any one employer. By having different dependency limits, we are able to better meet the labour requirements of different economic sectors. On top of the dependency limits, we impose a system of foreign workers' levy which varies according to the economic sectors. For example, $330 for a first-tier worker in the manufacturing sector and $440 for an unskilled worker in the construction industry. Mr Cheo suggested that we should abolish the foreign workers' levy system. I am afraid this will aggravate the problems already worrying both Mr Sinnakaruppan and Mr Chiam.”
“We cannot afford to accommodate a large number of foreign workers. Increasing our reliance on foreign workers is therefore not tenable for Singapore in the long run. Employers should not look towards the employment of foreign workers as the only solution to their manpower needs. Instead, they should look for ways to reorganise their businesses and manufacturing processes so as to raise productivity and to cut down on manpower requirements. At the same time, they should also look for ways to optimise the use of our local workforce. As I mentioned yesterday, one alternative is to tap the pool of economically inactive persons, such as housewives and younger retirees. We have a very low labour participation rate among this group of people. The 1994 participation rate of women between the ages of 35 and 54 in Singapore is way below that in many other countries, eg, Japan. Participation rate for women in the age group from 35 to 39 is 58% in Singapore whereas it is 62% in Japan. In the case of women aged 40 to 44, it is 54% in Singapore and 70% in Japan. For women between 45 and 49, it is 50% in Singapore and 71% in Japan. In the case of women between 50 and 54 years of age, it is 38% in Singapore and 67% in Japan. This shows that we still have a long way to go in terms of mobilising our local labour force. Employers should try to persuade as many as possible to rejoin the workforce by way of offering flexible and part-time working arrangements which are better suited to the needs of this group of people. Continued reliance on low-wage and low-skill foreign labour will only delay upgrading and restructuring of the economy and in the process prolong the inevitable problems of labour shortage.”
“There is already a large number of non-traditional source workers here. We should not add to their numbers and aggravate the social problems caused by such workers. My Ministry monitors the requirement for foreign workers closely. From time to time, when there are strong justifications, policies on the employment of foreign workers are modified to better meet the needs of the industry. We have in the past relaxed the dependency ceiling for different sectors when feedback indicate an unhealthy shortage of workers. We will continue to monitor closely the needs of various sectors. Adjustments will be made from time to time. However, we must be mindful of the long-term goal of economic restructuring as well as the social and political implications of having a large foreign workforce present in Singapore. While foreign workers may alleviate our labour shortage in the short-term there are adverse long-term effects. Mr Sinnakaruppan had touched on some of these adverse effects. My Ministry is equally concerned that easy access to low-wage foreign workers would discourage employers from training and upgrading the skills of local workers. Employers may even favour foreign workers over the investment in upgrading or automating their production processes. Secondly, a large number of foreign workers who are willing to work for lower wages will certainly depress wages of local workers, as pointed out by Mr Sinnakaruppan. That is why we have to impose a foreign workers' levy on the work permit holders. The foreign workers' levy serves to equalise the wage gap between Singapore workers and foreign workers. As the wages of local workers rise, we must also adjust the foreign workers' levy from time to time so that the disparity will not widen. Lastly, Singapore is a small country.”
“Sir, yesterday, just before the moment of interruption, Mr Sinnakaruppan delivered a very important message for employers in Singapore. He pointed out that unions are concerned with the effect of a large population of foreign workers on the wages of Singaporeans. While foreign workers do make important contributions to economic growth they also depress the wages of local workers. Mr Sinnakaruppan urged the Government to balance carefully our dependency on foreign workers with long term national interests. This is precisely my Ministry's mission in managing the pool of foreign workers in Singapore. Presently, foreign workers on work permits are allowed to work in the four main sectors of the economy, namely, construction, manufacturing, services and the marine sectors. These sectors experience greater shortage of workers. Foreign workers are required to supplement the local workforce in order to sustain higher economic growth. In general, foreign workers from traditional source are allowed to work in all the four economic sectors. Non-traditional source workers, however, can only work in the construction sector, the marine sector as well as domestic workers. These are areas which face the most serious shortage of local workers. Sir, my Ministry recognises that the manufacturing and service sectors face increasing difficulties in recruiting workers. However, compared to the construction and marine industries, manufacturing and service industries are still in a better position to attract local workers and also workers from traditional source. This is because the working environment is generally much better compared to that in the construction and marine sectors. We have therefore not allowed non-traditional source workers into manufacturing and service sectors.”
“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 1996/1997, and ask leave to sit again tomorrow.”
“If we allow town council contractors and other service sector employers to recruit non-traditional source workers, we will add to the numbers and make it more difficult for us to manage this group. There are many other problems such as housing, which the Member himself mentioned earlier on. Unlike construction workers who could be housed on worksites by the contractors, or marine workers whose employers usually have the resources to provide proper accommodation for their non-traditional source workers, cleaning contractors may have much greater difficulties housing their non-traditional source workers. My Ministry has been monitoring the labour needs of town councils. We have recently conducted a number of inspections to determine the extent of illegal non-traditional source workers employed by town council contractors. We will review our policy in the light of enforcement findings and in consultation with the town councils. Sir, I believe I have covered all the points raised up to now.”
“We can easily assist them to determine whether such workers supplied by the sub-contractors are in fact holders of valid work permits who can be allowed to work on the construction sites in Singapore. Sir, I next turn to Mr Chew Heng Ching. He has asked whether my Ministry is aware of the problems faced by town councils in service and conservancy work, and whether we would allow town councils to employ up to 10% - if I heard him correctly - of foreign workers to help them undertake the service and conservancy work. In fact, currently, cleaning contractors come under the service sector and they are allowed to employ up to 25% of foreign workers from traditional sources. My Ministry's concern really is whether we should extend this permission to employ foreign workers to include employing non-traditional source workers. I believe that is what the Member is really interested in, because we have already allowed them to employ up to 25%. So 10% would not quite help them. We are concerned that if we allow town councils or cleaning contractors in general to engage non-traditional source workers, we will open a floodgate of requests for non-traditional source workers from many other employers in the service sector. I think many employers in the service sector would like to recruit non-traditional source workers in view of the present tight labour market situation, and also because they know that the non-traditional source workers are willing to work for a much lower wage. We already have a very large number of non-traditional source workers in Singapore. They are here mainly in the construction and marine sectors.”
“Last November, we amended the Employment of Foreign Workers Act to address this issue. Among other things, we introduced a new provision to hold the principal contractor liable for any illegal foreign worker found on his site, unless he can prove that he has exercised due diligence to institute measures to prevent the entry of illegal foreign workers. The new provisions have been brought into operation with effect from 1st March 1996. Contractors have been given ample warnings since March 1995 on the changes. In September 1995, the Police had issued, to all contractors, an advisory note on security measures, similar to those prescribed in the Act. Contractors, therefore, had ample time to familiarise themselves with the new regulations and the required security measures on their sites to prevent illegal employment. To further assist contractors, my Ministry, in conjunction with the Ministry of Home Affairs and the Singapore Police, held a briefing for members of the Singapore Contractors' Association Limited in January this year to explain the amendments and the security measures which have to be taken by the contractors. Many issues were discussed and my Ministry is reviewing some of the feedback obtained from the session to help contractors to comply with the regulations. Let me assure the House that we will make every effort to assist contractors to make the adjustment but, at the same time, contractors should also be forewarned that we will take action to seek out all illegal workers present on the worksite. In the case of contractors who are not sure of the status of the workers provided by their sub-contractors, as mentioned by Mr Othman, I would urge the main contractor to check with my Ministry as soon as possible on the status of these foreign workers.”
“For instance, there is a very large pool of economically inactive people in Singapore, such as housewives and older men. For instance, the 1995 Labour Force Survey showed that there are more than 300,000 women between the ages of 30 and 54 years as well as 24,000 men between the ages of 50 and 59 years who are not working. Employers should try to attract as many as possible from this group to rejoin the workforce. Perhaps they may have to introduce innovative and flexible working arrangements which are better suited to the needs of this group of people. In fact, the service sector is probably the sector which is best positioned to tap this pool of human resource, because of the nature of jobs in the service sector and their working environment. Sir, Mr Othman has also raised a question about contractors and illegal workers in Singapore following the amendment to the Employment of Foreign Workers Act. In fact, my Ministry and, I understand, the Ministry of Home Affairs are both very concerned with the extent of illegal workers in Singapore, in particular, the extent of illegal workers in the construction industry. As I have explained to this House previously when we were amending the Employment of Foreign Workers Act, this is perhaps due to the nature of the industry, because of the existence of a multi-layered sub-contracting system which makes it very difficult for us to identify who actually is the employer of an illegal foreign worker caught on a worksite. Furthermore, the frequent deployment of workers from site to site also makes it very difficult to detect these illegal workers. And many of the worksites, in fact, have hardly any security measures in place to regulate the entrance of workers.”
“But, at this juncture, I want to point out that it is quite common for many organisations, in order to help their members to have a better understanding of their constitution or regulations that govern the running of the organisation, to distribute their constitution free of charge to their members and make it freely available. So in the case of trade unions, we would also like to enable bargainable employees or lower income employees to have easy access to copies of their trade union's constitution. We should bear this in mind in reviewing the changes. 5.30 pm Sir, I next turn to Mr Othman's remarks on the labour market, and whether we should raise the dependency ratio for the service sector companies. In fact, we already have more than 350,000 foreign workers in Singapore. Foreign workers make up about 20% of the total workforce. In other words, one in five workers is a foreign worker. The dependency ceiling for the service sector was raised from 20% to 25% in December 1994. My Ministry has, in fact, just reviewed the need to raise the dependency ceiling for service sector companies. We have concluded that it may not be adjusted at this juncture. Currently, only 6.5% of the companies in the service sector have hit or exceeded their dependency ceiling, while 4.9% are close to the current ceiling of 25%. Thus, the majority of the service sector companies are operating well within the 25% dependency ceiling. Sir, service sector employers should seriously consider alternatives to employing foreign workers. They will have to look into how to re-engineer their work processes to raise productivity and to cut down on manpower requirements. Employers should also look at ways to optimise the use of our local workforce.”
“The Member is concerned with the possible abuse by employers of the right to retrench workers. I would like to assure him that while employers are given the discretion under the Industrial Relations Act to retrench employees on the ground of redundancy, such decision has got to be supported by valid grounds. Valid grounds would include business downturn, introduction of new technology to upgrade operation, company restructuring and relocation of labour intensive industries, all of which may require a reduction in manpower requirements. Although the employer has the right to reduce their workforce for reason of redundancy, this right has got to be exercised judiciously. So far, there is no evidence to suggest that employers have abused this right and, in fact, other than a few companies which were under liquidation due to insolvencies, in all cases of retrenchment, the unions have been able to secure retrenchment benefits for the affected workers although the quantum may vary depending on the circumstances and financial position of the company. Sir, Mr John De Payva has also raised the question of the right for a member of the public to acquire a copy of the trade union's constitution. He made the point last year that the sum of $1 is not realistic and perhaps it is time to review it. Yes, my Ministry has included this point in our overall review of the Trade Unions Act. When the total review is completed, among which there are several other provisions that we are studying, we will take up his suggestion about changing the fee for acquiring a copy of the union's constitution.”
“In these cases, the Minister is empowered to make regulations in regard to the health, safety and welfare of employees engaged in these activities within the premises or factories. The Factories Act is conceived to protect workers working in factories which are considered to be places of higher risks. Hence, up to now, office work is not covered under the Act. But I would like to inform the Member that my Ministry will study the need to include office work under the Act and to see how other regulations or alternative legislation could be introduced to cover such work. With regard to the MRT stations, my Ministry will study the work activities and safety performance at MRT stations before deciding whether these stations should in fact be brought under the ambit of the Factories Act. Incidentally, all of SMRT's depots and workshops are already covered under the Factories Act. Sir, I next turn to Mr John De Payva's point on section 17(2) of the Industrial Relations Act. He suggested that unions should be allowed to challenge the right to retrench employees. Sir, employers are responsible for the management of their companies. To enable companies to function effectively, employers should be given the discretion to carry out certain basic functions and responsibilities of management without being subjected to the process of collective bargaining with trade unions. For this reason, section 17(2) of the Industrial Relations Act accords management the right to decide on some of these issues, such as promotion, transfer and appointment of employees to fill vacancies, retrenchment by reasons of redundancy or reorganisation, assignment and the location of duties, and the dismissal of employees on the ground of misconduct.”
“Unions can always seek the help of my Ministry to look into cases where they feel that employers have given bogus titles to front-line supervisors or the junior management levels. My Ministry will study each case that is brought to our attention. If the job of the employee is found to have not substantially changed in spite of the change in job title, employers will be asked to allow these employees to join the rank-and-file union. In fact, if at that stage, we still cannot persuade the employers, then the matter can be referred to the Industrial Arbitration Court for arbitration. The implementation of these tripartite guidelines has provided adequate protection for unions to seek remedy in situations where the employers have changed or inflated job titles for the purpose of excluding them from union representation. Finally, on this subject, I would like once again to reiterate that employers should encourage more of their supervisors and management staff to join the unions. This will help to strengthen the union movement and contribute to a long-term harmonious industrial relations in Singapore. Sir, Mrs Yu-Foo Yee Shoon also asked whether the Factories Act could be amended to provide protection for office employees and whether MRT stations should also be covered under the Factories Act. The Factories Act was last amended in 1995. The amendments expanded the scope of the Act to cover workplaces that pose significant safety and health hazards to workers, such as warehouses, industrial testing laboratories and airport aprons. It also covers activities, such as work involving the use of pesticides or visual display units.”
“Member, section 16(3) of the Industrial Relations Act restricts a rank-and-file union from seeking to represent executives and managers. As employers are concerned over the possible conflicts of interest arising from the executives and managers joining the rank-and-file union, my proposal at this juncture is that we should not proceed to amend the section. We should not proceed to amend the law. I would like to point out that, as I have already mentioned earlier, since the law does not prevent employees from joining the rank-and-file union voluntarily, then the union should adopt a persuasive approach and encourage employers on their own accord to allow more of their executives and managers to join such rank-and-file unions. By taking a non-legislative approach, we will establish a more flexible system better suited to the wide range of company structures and organisational needs. Sir, the Nominated Member, Mr John De Payva, has also expressed concern over some employers who inflate job titles. Some may have done it because of market requirements, changing profiles of the workforce and changing expectations of people entering the job market. I would like to point out that, in so far as union representation is concerned, it is not the job title but the nature of work that determines whether a person is considered traditionally bargainable to join a rank-and-file union directly, or he has now become an executive as in a managerial level. As Members know, we have the tripartite guidelines to assist unions and companies to decide whether an employee should in fact be allowed to join a rank-and-file union. These guidelines have been implemented smoothly and effectively.”
“Our harmonious industrial relations climate is an important factor for BERI to rank Singapore workforce as the best in the world since 1980. In the current report, 1996, BERI has once again ranked Singapore workforce ahead of others. In particular, we have made significant improvements in the technical skills sub-index. This can be attributed to the important contribution of the labour movement to encourage workers to go for skills upgrading. I agree with hon. Members that trade unions are responsible and they have played a constructive role. Therefore, employers should view the unionisation of their employees as a positive development. Although a union which is already representing bargainable workers cannot under the law ask to represent middle management personnel, including executives of a company, this should not prevent employers from voluntarily allowing their executives to be part of the union movement. In fact, some companies with house unions have already allowed their junior and executive staff to join the rank-and-file unions. And in such companies, there is no evidence to suggest that the inclusion of the executives in the rank-and-file unions has given rise to a conflict of interest, or more labour-management problems. Sir, to help enlarge the scope of union representation to better reflect the changing profile of the workforce, NTUC has proposed that companies should allow 80% of their employees to be unionised. Given the good track record of the trade unions in Singapore, I would like to take this opportunity to urge employers to view NTUC's proposal in a positive light and to give it serious consideration, particularly if their middle management, ie, their executives, are keen to join the union movement. Sir, as pointed out by the hon.”
“More details will be released by the CPF Board. Sir, next I turn to the subject of union representation raised by Mrs Yu-Foo Yee Shoon, Dr John Chen and Mr John De Payva. I agree with Dr John Chen, Mrs Yu-Foo and Mr John De Payva that with more better educated Singaporeans entering the workforce, the proportion of executives, managers and professionals in the workforce would certainly increase. As such employees are traditionally excluded from union representation, this trend would mean that the scope for union representation will correspondingly be reduced over time. While trade unions in Singapore would like to extend the scope of their representation to middle management personnel, employers are concerned that this could give rise to a conflict of interest and problems in labour-management relations. The apprehensions of employers, particularly employers in the multinational corporations, could be due to the experiences with unions elsewhere. On employer's concern, I would like to point out that, unlike their counterparts in other countries, trade unions in Singapore have adopted a different approach. Our trade unions are responsible labour organisers and not militant radicals. They have played a constructive role in labour-management relations. Their approach to industrial relations is non-confrontational. Over the last 20 years, trade unions in Singapore have demonstrated that by working closely with management to solve problems, ie, upgrade the skills of their workers and raise workers' productivity, they could bring about a higher wage increase, better welfare and enhanced job security for workers. As a result of close union-management cooperation, we have avoided strikes and other industrial disputes which could hamper our economic growth and competitiveness.”
“Sir, in view of the experience gained from managing the Basic Investment and Enhanced Investment Schemes which showed that CPF investors are generally prudent in their investment decisions, my Ministry feels that it is no longer necessary to maintain two separate investment schemes. I am pleased, therefore, to announce that with effect from 1st January 1997, the two schemes will be merged to form one scheme, the CPF Investment Scheme. This new scheme will replace the two existing schemes. The investment rules will be simplified and all CPF investors will be able to choose from a wider range of investment instruments. The long advance notice that we are giving today is to prepare CPF members and to give agent banks which maintain the CPF investment accounts time to make the necessary changes. Sir, to qualify for the CPF Investment Scheme which will take effect on 1st January 1997, a CPF member must meet the current eligibility criteria of the Basic Investment Scheme, which is to have at least the Minimum Sum, including the cash component, before he is allowed to invest up to 80% of the excess. Thus, all existing BIS and EIS members will automatically qualify for the new CPF Investment Scheme. Also, all the approved instruments under the Enhanced Investment Scheme today, such as Government bonds, bank deposits and endowment insurance policies, will be included in the new CPF Investment Scheme. However, a sub-limit of 20% of available funds will be imposed on the purchase of non-trustee shares. 5.15 pm Sir, the deadline to allow unit trusts and fund managers to invest in stocks listed in the exchanges of the developed countries will also be advanced to 1st January 1998 instead of 1st January 1999 as was announced previously by the CPF Board.”
“The introduction of these two new schemes not only increased the amount of funds available for investment but also widened the choice of investment instruments available to CPF members. At the end of the second accounting year, ie, since 1993, in September 1995, 380,000 CPF members out of 800,000 eligible members have opened investment accounts. In other words, 380,000 members have taken advantage of the investment schemes, whether it is the Basic Investment Scheme or the Enhanced Investment Scheme, to withdraw CPF for investment purposes. Sir, our experience over the last two years showed that CPF members have generally been prudent in the use of CPF savings for investment. For example, more than 95% of the invested Basic Investment funds were invested in trustee shares and more than 90% of the invested Enhanced Investment funds were invested in trustee shares, bank deposits and endowment insurance policies. Three-quarters of CPF investors have invested less than half of their investible funds under the Investment Schemes. If the accrued CPF interest was not taken into account, out of the 380,000 CPF investors, 71% made realised profits over the past two years. In order to safeguard CPF savings because of the need to ensure they all have long-term savings for their retirement days, we have deliberately adopted a conservative approach of only allowing CPF members to withdraw realised profits over and above the accrued CPF interest on all savings withdrawn for investment. As a result of this conservative approach, 16% of CPF investors were able to withdraw profits this year.”
“Despite these efforts to explain the amendments to the Employment Act and how they should be applied in practice, we do anticipate that some companies may still encounter problems, arising from the need to change their existing employment practices as a result of the changes in the Employment Act. If companies and unions and workers need further clarifications or advice on the implementation of the amendments, they should approach the Labour Relations Department of my Ministry. We will provide every assistance to any employer or employee who has difficulty over the application of the amended provisions. Sir, on public education programme, my Ministry has an on-going training programme on the Employment Act itself for employers and human resource managers, particularly those from the SMEs. The amendment to the Employment Act will be included in this training programme for both employers and human resource managers. We welcome everyone who has a need to have a better understanding of how the amended Employment Act should work to also enrol in such training courses. I would like to assure the Chairman of the GPC for Labour that my Ministry will continue with its effort to provide employers education programme to bring about a better understanding of the Employment Act, including the latest amendments. Mr Othman had also asked for an update of the CPF Investment Schemes and what is CPF Board's experience in managing the schemes since they were last revised. Just to reiterate, CPF savings were first allowed for investment as far back as 1986 with the aim of giving CPF members an avenue to enhance their old-age savings. In 1993, the scheme was liberalised with the introduction of the Basic and Enhanced CPF Investment Schemes.”
“Sir, allow me to respond to the hon. Members who have spoken up to now. First, I would like to address the points raised by the Chairman of the GPC for Labour, Mr Othman Haron Eusofe. The Employment Act was first amended in November 1995. It took effect on 1st March this year. The amendments were in fact quite extensive and covered many different aspects of the basic terms and conditions of employment. To ensure that employers/companies have a good understanding of the amendments to the Employment Act and can put these amendments to work expeditiously, my Ministry has recently conducted a series of talks and seminars for employers and human resource managers. Up to-date, about 3,000 employers and human resource managers had attended these briefings and seminars. They came from multi-national corporations, large local companies and SMEs. They represented both unionised and non-unionised companies. Mr Othman had reported that NTUC had also been briefing trade union leaders and their members. I appreciate NTUC's effort to help the Ministry to reach out to more employees. This will certainly supplement the efforts of my Ministry in explaining the rationale and implementation of the amendments to the Employment Act. Sir, the briefings and seminars conducted by my Ministry had enabled us to explain in detail the amendments and also provided opportunities for participants to seek clarification on specific issues or how a particular amendment should be applied within the context of a company's employment practices. And, in fact, many participants had indicated that the briefings and seminars were useful and helped them to gain a better appreciation of the new employment provisions.”
“Mr Speaker, Sir, my Ministry looks at all applications for foreign domestic workers on the basis of whether the household income is able to sustain the payment of the foreign workers levy and also the domestic worker's wages plus all the other expenses. We do not have a hard and fast rule. It may well be $2,000. It may well be $3,000. It depends on the circumstances of the application. Since I am on my feet, Mr Speaker, Sir, would you allow me to seek clarification from Mr Ling? I heard him saying that people have been asked to pay cash to top up their Minimum Sum. I would like Mr Ling to produce evidence that we have asked people to pay cash to top up their Minimum Sum because that is not how the Minimum Sum is being operated and that is not my understanding of how the revised Minimum Sum Scheme is being implemented.”
“Therefore, the remaining unmarried sibling cannot own and occupy the HDB flat on his own. Mr Cheo Chai Chen (Nee Soon Central)( In Mandarin): I would like to ask the Senior Parliamentary Secretary whether he agrees that in the circumstances cited, it will be unreasonable for HDB to take back the flat. A single person below the age of 35 cannot apply for a HDB flat, or even to purchase a HDB flat from the open market. As we all know private properties are very expensive ---”
“Mr Speaker, Sir, the answer is yes. My Ministry has been conducting more inspections to detect and deter illegal employment in the entertainment sector. The number of inspections in the entertainment sector had increased by four-fold between 1994 and 1995. As a result, the number of illegal foreign workers in the entertainment sector caught in 1995 was 130 compared to 25 in 1994. We will continue to monitor the situation in this sector closely. HOUSING AND DEVELOPMENT BOARD FLATS (Unmarried person under 35 years as sole lessee of existing flat) 7. Mr Cheo Chai Chen asked the Minister for National Development whether the Housing and Development Board will consider allowing an unmarried person, under 35 years of age, to be the sole lessee of an existing flat which was inherited by him and his sibling upon the death of their parents and, with the marriage of the sibling, leaving him as the sole occupier. The Senior Parliamentary Secretary to the Minister for National Development (Mr Matthias Yao Chih) (for the Minister for National Development): Mr Cheo cited a situation in which two siblings inherited an HDB flat upon the death of their parents. Now one of the siblings is married and intends to move out of the flat, leaving behind the remaining sibling as the sole occupier. The issue is whether the remaining sibling qualifies to be the sole owner and occupier of the HDB flat. To optimise the use of the limited land resource in Singapore, a proper family nucleus is made one of the eligibility conditions for owning an HDB flat. Single person households, unless the single person is more than 35 years old, are not allowed to own HDB flats. If we allow single person households to own HDB flats liberally, this would lead to an under-utilisation of HDB flats.”