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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“The reason I have suggested this amend ment is that the Minister has rightly pointed out that conciliation is the better way to deal with these things rather than going to court with a prosecution. Once you go to court with a prosecution, firstly, there is a problem because the prosecution has to prove the case beyond a reasonable doubt. If the employer says nothing, it is for the prosecution to prove that the dismissal was on account of age. How does he do that in the absence of any evidence? That is the first thing. The second thing is stigma. There is a stigma attached to being prosecuted and convicted in court. And I do not think, as a matter of principle, that we should criminalise behaviour of this sort. You cannot legislate good labour relations any more than you can legislate good husband and wife relations. So it is far better that the Ministry should play a conciliatory role than that this should be a matter for prosecution. The third thing is that an offence of this sort has repercussions beyond the Retirement Age Act. The Companies Act, at present in section 154, disqualifies a person who is being convicted of an offence involving management of a company. If a person in the management of a company dismisses an employee and is convicted under this particular section, it is arguable that he is disqualified from directorship and management for five years. This particular provision of the Companies Act will probably the amended once the Select Committee has gone through, but one cannot say. So it does have repercussions beyond this particular law, which is why I am not very happy about criminalising it. In most cases, an employee makes a complaint. The Ministry looks into the complaint.”
“Mr Speaker, Sir, accepting the Member's proposed amendment would, in fact, mean that fixed term contracts will no longer be used at all. Because I do not know what he meant by making a distinction between one where there is a clear-cut project with an ending and one where there is no ending and is renewed annually. I have already explained earlier on in response to the Member that should an employee complain that he has been dismissed and that his employer has used the fixed term contract as a mechanism to circumvent the law, then the investigating officer should be able to determine from the employer whether, in fact, the employee who has been retained on a fixed term contract was actually doing a different kind of work related to a specific project each time the contract was renewed. Or was he just carrying on doing the same work after each renewal of his contract and that there was no linkage of the term of the contract with a specific project? We are quite confident that that can be determined. If we ascertain that, in fact, the fixed term contract was not linked to a specific project, then we will conclude that the employer has tried to circumvent the law by using the fixed term contract, and we will rule in favour of the employee. So that will take care of the Member's concern that the employers may use the fixed term contract as a means to circumvent the law. Amendment negatived. Clause 2 ordered to stand part of the Bill. Clause 3 ordered to stand part of the Bill. Clause 4 - Assoc. Prof. Walter Woon: Sir, I beg to move, In page 3, lines 9 to 12, to leave out sub-clause (3).”
“This is why I have suggested the amendment. The Minister says it is not necessary because his Ministry will look at these things in the circumstances and I accept that. If the Minister is going to leave it to conciliation, then we do not have to worry with all these niceties of the law. But if we are going to expect the courts to interpret these sections, then I think we must look at them in the way that lawyers would look at them and try to anticipate what kind of loopholes will be poked in the statute itself.”
“Taking the example of the MRTC, it would mean that the MRTC would have to retain all the hundreds of architects and engineers who were employed in 1984 to the age of 60. This is completely not feasible. And it is also clearly not the objective of the law to compel employers to retain such workers on a permanent basis. Sir, hence clause 10 enables the Minister to grant exemption to certain categories of workers from the statutory requirement of minimum retirement age. And such exemption will be granted for employees who are on fixed term contracts. Under the circumstances, I do not believe that it is prudent to accept the amendment proposed by the Member. No matter how well intentioned it is, I think it will add to the rigidity of the labour market and make it more difficult for employers and employees to come to a certain agreement. Assoc. Prof. Walter Woon: Mr Speaker, Sir, I think the Minister and I are at cross purposes. When you have a situation like the MRTC, when the work disappears, the employees are dismissed not on the ground of age, they are dismissed because you no longer have work. And that is permissible under the Act, I presume. What I am thinking about is a situation where an employer says, "All right, we are going to have a problem when you guys get old. So let us give you 1-year contracts. Everyone has 1-year contracts. When you reach 55, I don't renew you." That is not a dismissal. That is the problem. This is why I have suggested it. Is this a dismissal or not a dismissal? If you are going to court with a lawyer, the lawyer will argue that non-renewal does not amount to dismissal unless you define "non-renewal" as dismissal. And if there is no dismissal, there can be no question of whether it is on age or not on age, if you follow what I mean.”
“Mr Speaker, Sir, the objective of the Bill is to raise the retirement age of employees who are on permanent employment to 60 and eventually to 67. This, however, should not prevent employers from employing workers on short-term basis for a particular project or where age is a genuine occupational requirement. Let me give Members an example. When the Government formed the Mass Rapid Transit Corporation (MRTC) in 1983 to design and construct the mass rapid transit system, it was necessary for MRTC to engage sizable numbers of engineers, architects and technical officers to undertake the project. Once the MRT system was completed, the requirement for such a large number of professionals would obviously decrease and decrease quite drastically too. Hence, MRTC in 1983 and 1984 engaged many professionals on fixed term contracts. It was entirely reasonable and acceptable by the employees. In fact, for the current phase of the MRT extension to Woodlands, the MRTC has also employed engineers and other professionals on fixed term contracts. Because once the current extension of the MRT to Woodlands is completed, again they would not need the number of engineers and architects. Therefore, genuine fixed term contracts based on particular projects or where age is an occupational requirement, whether it is for health or safety reasons, should be exempted from the provisions of the Retirement Age Bill. This approach allows for flexibility and, at the same time, safeguards the interest of workers. Sir, the proposed amendment by Assoc. Prof. Woon would make it practically impossible for employers to engage any worker, any employee, on a fixed term basis, as they would be compelled, under his amendment, to renew such contract even if there was no work for them.”
“One of the obvious loopholes is that if you want to get around this dismissal problem, you put people on fixed term contracts, six months or a year. Non-renewal of a contract is not dismissal, unless you define it as dismissal. This is why I am suggesting that the definitional section in clause 2 be amended in the manner that is stated, so that if an employer does have people on short-term contracts, non-renewal also would count as dismissal. If, on the other hand, the Minister accepts my latest suggestion to take out that criminal provision and leave it entirely to conciliation, then this first proposal is not absolutely crucial. Because the Ministry and the officials will be able to look at the situation and come to a just conclusion. Question proposed.”
“Sir, the rationale is quite simple. As long as a person is able to work, he should set aside some of his income to cater for the day when he is unable to work. The fact that he has been given permission to withdraw his savings at the age of 55 years should not nullify this principle because an average Singaporean's life expectancy is now 76 years. Even if he retires at the age of 60 years, there is still a good 16 years for him to live on. So he should, between the ages of 55 years and 60 years, continue to save as much as he can and the saving rate should be compatible to his needs at the point of time. Hence, we are reducing it to a saving rate of 20% and not 40%, unlike workers who are below the age of 55 years. So it is entirely rational that workers who are continuing to work beyond the age of 55 years should make some contribution to their CPF. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Dr Lee Boon Yang]. Bill considered in Committee. [Mr Speaker in the Chair] Clause 1 ordered to stand part of the Bill. Clause 2 - Assoc. Prof. Walter Woon: Sir, I beg to move, In page 2, line 35, at end, to add - "(c) the employer declines to renew a contract of employment, where the contractis for a fixed term.". The Minister has very usefully clarified that the Ministry will take a very flexible attitude towards the implementation of the Retirement Age Bill. But as long as you make it an offence under clause 4(3), you need to plug obvious loopholes. You have to look at the Bill in the way that a lawyer would look at it.”
“Sir, I think there is a misunderstanding here. It is not the intention of this Bill to make all fixed-term contracts void. On the contrary, it is my Ministry's intention to exempt all fixed-term contracts from the coverage of the Bill provided when there is a complaint about a wrongful dismissal, the employer can justify that the fixed-term contract is linked to a particular project and, therefore, it is a valid term contract.”
“The intention here is to get all the rest outside the unionised sector, which forms the vast majority of our workforce, to also enjoy the benefits of working up to 60 years and to do so, a CPF reduction would expedite the move. That is why we are moving to cut the employers' CPF contribution rate by 5%.”
“Mr Speaker, Sir, in my response to Dr Toh who suggested doing away with the employees' CPF contribution entirely when they reach the age of 55 years, I have explained why it would not help in the effort to get employers to retain older workers because cutting the employees' CPF contribution rate will not reduce the cost factor. While it will increase the employee's take-home pay, it will not reduce the employer's cost burden. Hence, when we were studying this issue of how to encourage more employers to retain their older workers, we felt that the 5% reduction on the part of the employers' CPF contribution rate will be worthwhile. As to whether we could do it gradually or not, I have already explained earlier on that it will take a longer time and we have already waited for four years for companies to raise their retirement age voluntarily. If we wait for another four years, we will have missed the opportunity to employ so many more older Singaporeans or keep them economically active. And I think we should not dilly-dally over this matter. We have given four years of notice. Why is it that we are now reducing the employers' CPF contribution while quite a number of unionised workers, in particular, are already enjoying a retirement age of 60 years without having to pay the price of a CPF reduction? We move to get all employers to raise their retirement age because it is a matter of national interest. While 10% of the companies have voluntarily raised their retirement age to 60 years, only a very small proportion of the total workforce is, in fact, enjoying this higher retirement age. Yes, they are all in the unionised sector.”
“Mr Speaker, Sir, in fact, I did answer that question just now. I said that the intention is to exempt certain categories of civil servants, including those who have the option to retire at an early stage and to collect certain pension benefits at an earlier age. We intend to exempt this group of civil servants just as we intend to exempt a small number of employees in the private sector who also have such retirement benefits pegged to 55 years. We are aware that a group of employees, particularly in the oil industry, who have contracts of service with their companies whereby they stand to gain certain benefits when they reach the age of 55 years. It is not the intention to overrule the provision of all these pension benefits. We will exempt these current workers who are benefitting from this scheme but we will require the companies, when they employ new workers, to ensure that the retirement age for their pension benefits will be pegged to 60 years.”
“As we have discussed during the Committee of Supply stage, CPF topping-up will, in fact, be practised by the Government. But whether we need to make a discrimination between older and younger citizens when we do a topping-up, that is something to be considered separately. Mr Speaker, Sir, I believe I have addressed most of the concerns raised by Members.”
“We now want to make sure that we do not waste any more time and the way to do so would be to give employers sufficient incentives quickly so that they will comply with the principle and the objective of the law to retain all their older workers when they reach the age of 55 years, rather than to adjust the CPF rate incrementally which could well mean that it may take a longer time for this principle of retiring at 60 years to be widely accepted by both the employers and the employees. I believe that I have addressed the concerns raised by Mr Shanmugam and Assoc. Prof. Woon on the difficulty of implementing the law. While I cannot go into the specifics of how we will adjudicate, or how we will investigate each and every case of a complaint for wrongful dismissal on account of age, let me assure him that I am quite confident that the procedures that have already been practised by the Ministry of Labour are sufficiently effective as to make a distinction between a genuine termination and a termination on account of age but disguised as some other form of termination. Mr Chia suggested that those categories of workers who are exempted from the coverage of the Retirement Age Bill should be spelt out clearly. I have, earlier on, listed some of those categories of workers who will be exempted. A more comprehensive list will be issued by way of a Gazette Notification. He also asked the Government to indicate its stronger support of older workers by a wide variety of measures, including tax reduction, medical allowance and CPF topping-up scheme for senior citizens. While all this may help to signal support, what is crucial is that we take a decision now to raise the retirement age and, as and when the Government is doing well, topping-up can be considered.”
“Mr Tong Kok Yeo also felt that with the flexible wage scheme being implemented since 1986, there should not be any need to reduce the CPF contribution rate of the employers on account of their older employees. Unfortunately, the flexible wage scheme has not worked to the extent to remove the additional cost for retaining workers. Even after six years of attempting to implement the flexible wage scheme, as a general rule of thumb, older workers are still being paid two to three times more than younger workers. So it is not as if the flexible wage scheme has already removed this wage gap between young and older workers. Therefore, we recognise that as the proportion of older workers increases in the workforce, employers could well have to bear a higher cost and this could affect their competitiveness. And in order to ensure that we do not unnecessarily dull their competitive edge, we have sought to reduce their CPF for older workers by 5%. Let me assure the Member that, as I said earlier on, the 5% reduction should not affect the older workers by way of their housing needs, retirement income or Medisave. Even with the 5% reduction, they will still be able to set aside eight percentage points for contribution to their Medisave account. In fact, by having another five more years of working life, of course, the worker will put aside much more money, particularly in his Medisave, to meet future medical expenses. Mr Tong also suggested that we consider incremental reductions of the CPF rate instead of a one-off reduction by five percentage points. We have already waited for four years for this higher retirement age to be implemented widely. But sad to say, it has not come about that way.”
“As I have explained to Members earlier on, the Ministry has a fairly well-tested and established procedure to deal with such complaints concerning terms of employment and service and also wrongful dismissal. He feels that it might be difficult, with the new legislation, for companies to remove their senior managers, because, in the past, they could just dismiss them. Now, there is this possibility that they might be asked to explain whether it is a dismissal on account of age. I think what is required now would be for all companies to ensure that they have a proper appraisal system for all their staff. And if they do have a proper appraisal system for their staff to assess their performance, then should they need to terminate the service of such senior management staff, it will be easier to put up a case that, in fact, they are terminating a person on account of his lack of performance, rather than on account of age. Mr Speaker, Sir, Mr Tong Kok Yeo suggested that all employers who want to terminate the services of their employees at age 55 or thereabouts should notify the Ministry. I do not think, at this juncture, it is necessary to call for such notification. it could become a bureaucratic bottleneck to require such notification. But my Ministry will be monitoring the situation once the law comes into force and is implemented, and if, in fact, there is widespread abuse, we may consider alternatives to monitor the situation which could include compulsory notification. He also suggested that the Ministry consult the unions when we are considering exemption for certain classes of workers. As I have explained in my response to Mr Goh earlier on, we will consult as and when the need arises.”
“We also received a total of 33 cases from employees who accused their employers of wrongful dismissal. We have, in all of these cases, been able to resolve the disputes either through a process of conciliation or adjudication. So the procedure is quite established. As I have said in my Second Reading speech, it is quite well tested over the years as we have been using such procedure. And I think termination on account of age will be another aspect of the application of this conciliation and adjudication procedure. Mr Low Thia Khiang also supports the Bill. He wants a reassurance that the CPF withdrawal age will not be changed. I have already given that reassurance. He asked about civil servants and officers in the SAF who have the option of retiring at an earlier age. The intention is to exempt certain categories of civil servants including officers of the SAF, and Police officers, from the coverage of the Retirement Age Bill. Because for their specialised vocation, it is not feasible to require that they work up to the age of 60. One can well imagine that for Police officers, Army officers or Army specialists, it would be very difficult to carry out some of the duties if they have to work up to the age of 60. So the intention is to exempt certain categories of civil servants and SAF officers. He also raised the question of the appeal procedure, which I have explained earlier on, and how my Ministry will go about handling complaints from employees who have been dismissed on account of age. Mr Chng Hee Kok has essentially raised the same concern that there will be difficulty. He expects there will be difficulty in handling complaints from employees who have been dismissed on account of age.”
“While it may appear a little difficult, my Ministry has, in fact, been regularly handling such complaints about termination of services. We will be able to treat such complaints of termination on account of age, as we have been treating various complaints brought to our attention for wrongful dismissal. Under section 14, subsection 2(a) of the Employment Act, employees, who make complaints that they have been wrongfully dismissed or unjustly dismissed by their employers, will give their reasons for thinking that it is unjust. My Ministry, on receipt of such a complaint, will call up the employer and seek explanation from the employer. And it is really up to the employers then to explain why the termination of service under the Employment Act is justified and it is within their right to give notice or even terminate the service of a particular employee without notice. So, in effect, employers must defend their action to terminate the service of an employee once a complaint has been registered. Otherwise, we will infer that the employee, whose service has been terminated, is right in assuming that he was unjustly or wrongfully dismissed and we will make the appropriate recommendation. Although it may appear a little difficult, my Ministry has been dealing with such cases and we should be able to continue to conciliate and adjudicate when complaints are brought to our attention about wrongful dismissal or dismissal on account of age. For Members' information, let me give some statistics. Last year, my Ministry received a total of 2,785 complaints concerning claims relating to terms and conditions of services. Out of 2,785, 601 cases were complaints of unfair termination of service by employers.”
“Let me assure him that this is necessary in order to protect existing workers who may well have entered into contracts previously where the retirement age norm is 55. It is also not a new principle in law to have such provisions to nullify contracts made previously. If the Member looks at section 8 of the Employment Act, he will find a provision which is very much similar to what is provided for under this Retirement Age Bill. Otherwise, a large number of workers who are presently working will not be able to enjoy the benefit of working to age 60, because they all have entered into contracts of service, whether written or verbal, where the retirement age norm is 55. So it would then take a very, very long time for the retirement age of 60 to become a norm, a practice, if we do not make all previous contracts void. Dr Toh also asked how much it will cost the Government to implement the Bill. It will cost the Government some money in order to set up the infrastructure that is necessary to investigate and to conciliate whenever complaints of retirement or unfair dismissal on account of age is brought to the Ministry's attention. But, as of this moment, I am not able to tell him exactly how much that would cost. Mr Umar, who also spoke up in support of the Bill, sought reassurance that workers will be able to withdraw their CPF savings at the age of 55. I have already given that assurance earlier on. Dr Soin, together with several other Members, including Mr Shanmugam and Assoc. Prof. Walter Woon, questioned the feasibility of implementing this law in view of the fact that employers today can terminate a worker's service, whether it is on a fixed term contract, or they can terminate the service by giving due notice, and, in some cases, even without giving due notice.”
“I think the categories of workers that we have considered for exemption could include some of these employees who are in positions or employment approved by the Minister or such other persons appointed by him where being of a particular age or in a particular age group is a job requirement, for the reason of safety or for any other reason. So employers will have to apply to the Minister for such exemption. Other categories of workers to be exempted are those employees who have entered into a fixed term contract of service. As I have mentioned earlier on, we intend to exempt this group of employees to ensure that the labour market remains flexible and adaptable. We will also be exempting persons whose employment is of a casual nature, as I mentioned earlier on. We will also exempt all foreign workers in Singapore who are here on either work permit or employment pass. They will be exempted. Because it is not the intention of the Government to ensure that all foreign workers get a job in Singapore up to the ripe old age of 60. They are here for a short term. When they have finished their short employment in Singapore, be it two years, four years or six years, they must go back. These are some examples. Other examples of exemptions are students working on a part-time basis. As you know, during vacation, many students take on part-time employment. It is not the intention of the law to include such student workers under the provision for minimum retirement age. Dr Toh questioned the need for clause 5 which invalidates any term of contract of service which is less favourable than that prescribed under the Retirement Age Bill, and whether or not it is back-dating the provisions of the Retirement Age Bill.”
“That would not be a viable alternative to what we are proposing now, which is a 5% cut on the part of the employers' contribution rate. The reason is that doing away with the employees' contribution does nothing to minimise cost. It does nothing to help employers shoulder the burden of an increasingly aged working population. While it will of course increase the workers' take-home pay, it does not make retaining older workers more attractive. So I am not in favour of reducing the employees' CPF contribution rate. Dr Toh also suggested that the PAP signals its support for older workers by fielding more older election candidates. I do not know how that has been linked with retirement age. But let me reassure Dr Toh that it is not true that the PAP only fields young candidates. He himself mentioned Dr Richard Hu. He stood as a candidate in the 1984 general elections, and has gone on to become one of the most notable Finance Ministers. He was way over, I think, 55 when he stood for election. PAP fields candidates for election based on their ability to contribute to the political process. It cannot be that the candidates are fielded just because they belong to a certain age group. I think that would not do our political system much good. But where we come across or where we can persuade people who are in the older age group, and who are able to contribute to the political process and offer leadership capability, then I am sure that the PAP will consider such candidates. Dr Toh and, I believe, a few other Members have also asked whether the provision under clause 10 for the Minister to exempt certain classes of workers will be made known. Yes, the intention is to gazette an exemption list when the Retirement Age Bill comes into force.”
“Mr Speaker, I may have misunderstood Dr Toh. On the other hand, he proposed that we do away with employees' contribution altogether, am I right?”
“He emphasised the importance of training of workers, particularly older workers. I agree entirely with him that older workers need additional support from their employers in order to get some skill upgrading and retraining, so that they can carry on working after the age of 60. That is why in my Second Reading speech I urged employers to treat the 5% CPF saving as additional resources for them to provide training and skill upgrading for their older workers. He is also concerned whether, with the reduction in CPF, it will in fact affect the older workers adversely. As I said in my Second Reading speech, the projection of CPF balance for workers up to the age of 60, with the 5% reduction in the employers' contribution, shows that there will be no serious adverse impact on workers for their housing, old age retirement income and also their Medisave requirements. In fact, with five more working years, a worker should be able to put aside a lot more money into his CPF account. And when he retires at age 60, he will be in a much better position than if he were to retire at age 55. So notwithstanding the 5% CPF reduction, he will be better-off. Dr Toh has supported the Bill. He proposed that the CPF withdrawal age be deferred to 60. He knows the consequences of doing so. I have all along been assuring all the workers that the Government intends to retain the present withdrawal age and there is no intention, in fact, of changing the withdrawal age at this juncture. Dr Toh Keng Kiat rose ---.”
“Mr Goh also asked whether reinstatement is workable because it is provided in the Bill that the Minister may order reinstatement of an employee who has been considered to have been dismissed on account of age. In considering the type of compensation which could include just payment to the employee who has been dismissed, the Minister will have to consider whether reinstatement is in fact viable. If the relationship between the employee and employer has not deteriorated to the level where they can no longer work together, then reinstatement will be considered. But in cases where the relationship has completely broken down, you cannot compel unwilling parties to continue to work together. Under such circumstances, it is more likely that the Minister will order a cash compensation to the dismissed employee. Mr Goh asked whether the Minister will confirm that the CPF withdrawal age will remain at 55. Let me assure him that it is the intention to retain the present CPF withdrawal age at 55. All workers who attain the age of 55 will be allowed to withdraw their accumulated CPF savings. I believe the Member for Hougang, Mr Low Thia Khiang, also raised the same point. So let me assure him that those who have reached the age of 55 can continue to withdraw their accumulated CPF savings. I think there could have been a slight misunderstanding earlier on, because some Members have asked where the 5% CPF reduction will come from. I said earlier in my Second Reading speech that the 5% reduction in CPF contribution rate will come from the employers' contribution. In other words, the proposal is for the CPF contribution rate for workers aged 55-60 to be 12 1/2% from the employee and 7 1/2% from the employer, making up a total of 20%. Mr Othman has spoken up in support of the Bill.”
“So, in fact, only genuine fixed term contracts will be exempted. Employers who intend to circumvent the law by putting their permanent employees on a renewable fixed term contract without sufficient justification will eventually have to face the consequence for violating the law. Mr Goh asked whether the Ministry will consult the union before it decides on the employers' application for exemption for certain categories of workers from the minimum retirement age requirement. Let me assure Mr Goh that the Government's objective is to encourage all Singaporeans to continue working for as long as possible. It is the Government's objective to do so. Hence, exemption from the retirement age law will not be granted liberally. It is meant to provide flexibility for a certain kind of work which may not be suitable for older workers, or for a certain kind of jobs which are linked to a specific project. In deciding on the merit of each case, the Ministry will consult the unions concerned as and when the need arises, and where the exemption could affect the collective agreement between the union and the employers. Mr Goh also asked whether seamen as a group ought to be completely exempted from the provision of the law. Some seamen are on permanent employment, others are on short-term voyage-based contracts with particular employers. In the case of those who are on permanent employment, it is not the Ministry's intention to exempt them. In other words, seamen who have permanent employment with the employers will be covered under the minimum retirement age law. However, those who are on a short-term employment, where they are employed for a particular voyage of certain vessels, they will be exempted. They will be treated like those who are on term contracts.”
“It will also help people who are prepared to spend part of their spare time on a casual job to make extra income. If even such casual workers are included, ie, covered by the retirement age law, then I think our labour market will become much less flexible and adaptable. This is not in the interest of both employees and employers. Mr Goh is concerned about the possibility of abuse by employers using fixed term contracts as a means of dismissing or terminating the service of the employee before the age of 60. Sir, it is the intention of the Ministry to exempt workers who are on fixed term contracts. The reason is to provide flexibility to employers who may need to employ workers for a specific project. In the event that an employee complains to the Ministry, after the law has come into force, that his employer has in fact abused the fixed term contract mechanism to retire him before the minimum retirement age, then the onus will be on the employer to justify to the Ministry that in fact the employee who is on such a fixed term contract is only required for a specific project. This would mean that an employer would not be able to continually renew short fixed term contracts and when the employee reaches 55 years of age he just refuses to renew such contracts. In fact, at the investigation stage, the Ministry officials will be able to determine that the employee carries on doing the work although he is on a short-term contract and that even after the contract is renewed, he still carries on doing the same kind of work. So there is no justification for him to actually be employed on a fixed term contract. We can then conclude that the fixed term contract is a disguised means to circumvent the requirement of the retirement age law.”
“Mr Speaker, Sir, I am gratified by the response from Members of Parliament to this Bill. Of the 11 Members who spoke, I think all of them, in principle, support the move towards a higher retirement age. They all support the need to get more Singaporeans who are now retiring at age 55 to continue working because of the need for the economy to stay competitive in view of the tight labour market. Members have raised quite a number of questions. I will attempt to go through them and answer the points that were raised. Let me begin with the question raised by Mr Goh Chee Wee, Chairman of the GPC for Labour. Mr Goh asked whether part-time workers and temporary workers would be covered under the new minimum age requirement because he is concerned that some employers may try to go around the law by converting permanent full-time employees to part-time employees. The way we look at it, Sir, is that part-time employees who are working on a regular basis will also be covered by the Retirement Age Bill. The intention is to cover all workers, including part-time workers. Since part-time workers are going to be covered, it will be less likely that employers would find it attractive to try to circumvent the law by just converting their workers from full-time employees to part-time employees. With regard to temporary or casual workers, it is not necessary to cover them under the law, as the nature of work for the casual workers is often of a short-term or irregular basis. This will allow some flexibility to employers who may need to employ casual workers for short periods, for example, during festive seasons where demand is high for a particular service. I believe that this approach will help people who need such casual jobs to supplement their income.”
“Mr Speaker, Sir, the raising of the retirement age would not affect the existing CPF withdrawal age which will still remain at 55. Although Singapore workers can continue to withdraw their CPF savings at age 55, I would like to urge all workers to continue working up to the age of 60 and beyond. It is in their own interest as well as in the nation's interest that they continue to work as long as they are able and in good health. Sir, I beg to move. Question proposed. 1.32 pm”
“In particular, it would not affect the Medisave needs of older workers because they would be able to continue to contribute to Medisave at the established rates. Projections of CPF balances at age 60 show that, apart from providing for the average worker's housing and medical needs, his CPF balance, after the 5% reduction, would still be sufficient to provide him with a monthly annuity which ranges between 20% and 40% of his last take-home pay. In fact, as I mentioned earlier, the additional five working years will ensure that an older person will continue to have a regular income and CPF contributions to boost up his CPF and Medisave savings. By the time he retires at 60 years or older, when we change the minimum retirement age in future, the worker will have more retirement funds to see him through his old age. Sir, I would urge employers not to treat this 5% CPF adjustment as a windfall gain. With increasing numbers of older workers continuing to work up to 60 years and beyond, employers must invest more in training and upgrading the skills of older workers. Such training investments will become more and more important as companies move up the technology and value-added ladder. Many of today's older workers are also generally lower educated and less skilled. Hence, employers should not view the 5% CPF savings as purely an incentive for them to retain older workers. They should make use of this 5% saving to meet the additional cost of skills upgrading and re-training for older workers and, where unavoidable, to prepare older workers for redeployment within the company. The CPF adjustment should, therefore, benefit both the employers and the employees.”
“Sir, though the Bill will give workers the right to work up to 60 years and beyond, I wish to stress that employers' right to terminate employees' service on grounds of poor performance or ill-health, or to dismiss employees on ground of misconduct, would not be abrogated. These are established rights of the employers. It is not the Government's intention to compel all employers to keep poor performers or ill-disciplined employees. It is important that we continue to maintain a disciplined and productive workforce. Sir, employers have also voiced their concerns that this law would result in higher labour costs since the current wage scales are still very much seniority-based. They are also concerned that having a higher percentage of older workers will result in higher cost in terms of medical expenses and longer annual leave entitlements, among other cost factors. They have therefore been reluctant to employ workers beyond the current retirement age as they fear doing so could affect their cost competitiveness. To address such concerns, the Government has decided to lower the employers' CPF contribution rate for employees from age 55 to 60 years by 5 percentage points. This will come from the employers' contribution. The total contribution rate for this group of employees would accordingly be adjusted from 25% to 20%. The CPF adjustment to reduce the cost burden of employers will help them to remain or to become even more competitive and, at the same time, enhance the job security of older workers. Sir, the adjustment to CPF contribution rate for older workers � this 5% reduction on employers' contribution for their older workers � would not affect their retirement income, housing and medical needs.”
“Employers had expressed concern that the proposed law would introduce rigidities into the labour market by compelling employers to retain all their employees to age 60, regardless of the nature of their work. Clause 10 will allow such concerns to be addressed. Employers will be able to seek exemption from the Ministry for workers who are involved in jobs which are not suitable for persons older than 55 years. Where there is sufficient justification, the Minister will be able to grant such exemption. The mechanism for implementation and enforcement of the Bill is provided in clauses 3, 7, 8, 9 and 11. Clause 3 provides for the appointment of investigating officers to implement and enforce the provisions of the Bill. Clause 7 allows aggrieved employees who have been unlawfully dismissed on account of age to appeal to the Minister. An employee who considers himself to be wrongfully dismissed may, within one month of the dismissal, make representation in writing to the Minister to be reinstated in his former employment. If the Minister is satisfied that the employee has indeed been wrongfully dismissed on account of age, the Minister can either order the employer to reinstate or to compensate the employee. Sir, this appeal procedure is similar to existing appeal procedures for wrongful dismissal provided in the Employment Act and the Industrial Relations Act which was introduced in 1968. The procedure has stood the test of time and has worked well for us. It also allows the aggrieved employee to pursue his complaint without having to incur substantial legal costs.”
“Sir, in order to help employers adjust to the eventual higher retirement age of 67 years, the Government will raise the minimum retirement age in steps after the retirement age of 60 years has been implemented. I envisage a move to 64 years in four to five years' time, with the final change to 67 years in seven to 10 years' time. Sir, the Bill's principal objective, the minimum retirement age of 60 years, will apply to all Singaporean workers, including those in the managerial, professional and executive positions. Sir, I shall now highlight the main features of the Bill. Clause 4 of the Bill provides for minimum retirement age of 60 and prohibits employers from dismissing employees on account of their age. There is also a provision for the Minister to further raise the retirement age up to 67 years in the future. Clause 5 provides that any provisions in the employment contracts or collective agreements which provide for a lower retirement age would be void. Clause 6 restricts the employees from contracting out of the Bill. So, employers and employees cannot mutually agree on a lower retirement age. This means that employers cannot ask employees to accept contracts of service which spell out a retirement age below that provided by law. Clause 10 empowers the Minister to exempt any employees or classes of employees from the Bill with or without conditions. The Minister may also revoke such exemptions, vary or revoke any existing conditions or impose new ones. Sir, in drafting the Bill, my Ministry has consulted extensively with the employers' and workers' representatives.”
“Employers in the non-unionised sectors have generally adopted a wait-and-see attitude and continued with the current practice of retiring workers at age 55. Sir, as the non-unionised sector is in fact much larger than the unionised sector, overall, only 10% of the companies surveyed have raised the retirement age to 60 voluntarily. And this was achieved after three years of exhortation, persuasion and determined negotiation by trade unionists. The Government, therefore, has little choice but to introduce legislation to raise the retirement age. We cannot wait or delay any further while the population age and our economic competitors overtake us. Sir, in the developed countries such as Germany, Switzerland, United Kingdom, Sweden, Netherlands and Italy, the retirement age norm is generally 65 years. For some countries such as Norway and Denmark, the norm is even higher, at 67 years. In the United States, mandatory retirement age has been prohibited since 1986. In other words, US employers cannot terminate the service of employees on account of age, regardless of how old the employee is. Even in the Asian NIEs, workers are now working well beyond 60 years. For example, the retirement age norm in Taiwan is now 65. Within ASEAN, the Philippines also has 65 years as the retirement age norm. As a country with a small population competing against the Asian NIEs and, increasingly, even against the developed countries, we should also aim to raise the retirement age norm to comparable levels. Lagging behind these countries would greatly limit our capacity to compete effectively for high value-added and high-technology investments, especially in the areas of experienced and skilled manpower.”
“If Singaporeans continue to retire at age 55, when only three working persons are supporting one aged person, our economy cannot remain competitive and growth will certainly be retarded. Sir, we should also bear in mind that the average life expectancy of Singaporeans has gone up from 68 years in 1970 to 76 years today. So if a person retires at age 55, he can expect 21 years of life as a retiree living entirely off his CPF savings. It would be a waste of valuable human resource if Singapore workers retire at age 55, when they are still healthy and full of vigour. It would be ironical and would not make economic sense at all for Singaporeans to retire at 55 while increasing numbers of foreign workers are allowed into Singapore to make up for the manpower shortfall. A sensible and practical solution must be to encourage Singaporeans to stay economically active and to continue to work beyond the current retirement norm of 55 years. By doing so, workers will earn income to supplement their accumulated CPF savings and to put aside more savings in their Medisave accounts to meet the high cost of medical care in old age. The Government, had in 1988, set a three-year time frame to allow employers to voluntarily raise the retirement age to 60 years. The National Trade Unions Congress and the Singapore National Employers' Federation gave their strong support to this voluntary effort. A survey covering 12,681 companies with at least 10 employees, conducted by my Ministry in early 1992, showed that 72% of the 1,041 unionised companies had raised the retirement age to 60 and above. However, the response from the non-unionised companies has been unsatisfactory. Only 4.5% of the non-unionised companies supported the move to raise the retirement age.”
“Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time." This Bill seeks to introduce legislation to provide for a minimum retirement age. The minimum retirement age will initially be set at 60 years of age. The Bill will also provide for the retirement age to be raised to 67 years in the future. It is the Government's intention to do so within the next seven to 10 years. Sir, the retirement age issue has been widely publicised and discussed since 1988. I will now recapitulate the reasons for legislation to raise the existing retirement age norm of 55 years. Singapore is confronted by two major population changes which would have severe impact on our long-term economic growth. These changes are an ageing population and the declining fertility rate. An ageing population will result in a situation where more and more workers would be leaving the workforce upon retirement. At the same time, a declining birth rate means that there will be fewer and fewer younger workers entering the labour market. This would result in a levelling of our labour force growth and, subsequently, a reduction in the size of our labour force. There would be serious repercussions on our economic potential and ability to compete in the world markets. Sir, at present, eight working persons support one older person aged 60 and above. This ratio will fall to 4.4 to 1 by the year 2010, and to 3 to 1 by the year 2020. By the year 2030, 25% of the population will be aged 60 and above, compared to 9% today. This drastic change of population structure and its effect on the labour force cannot be ignored. We must tackle the problem now. To do nothing would severely affect our economic viability in 10 to 20 years' time.”
“It is not that the Government is doing something which is superfluous, as alleged by him. Thirdly, he said that the GST has caused a lot of hardship to the lower income group. The GST will only come into force on 1st April next year. As they have not encountered the effect of GST yet they should not suffer hardship now. Mr Cheo Chai Chen( In Mandarin): Sir, just now I was saying that if the GST is implemented, it will cause difficulties to those in the lower income group or those who are unemployed, and they may resort to crime to make their ends meet. I think this is something which is not impossible. The GST will also cause hardship to the poor people. I think it is possible. We cannot say it is not possible.”
“Second, price increases will affect tourism. Third, price increases will mean reduced consumption and less business activities. Fourth, if poor people cannot afford this high cost of living, they may resort to criminal activities and there will be more crimes in Singapore or more trouble in their families. Fifth, because of administrative measures beyond control and ours being a free market society, profiteering is quite inevitable. This will cause inflation. So when we criticise GST, it is not politics of envy. We are showing our concern for the poor, the pensioners, the retirees and the people in the lower income group. Because the rich people can look after themselves. The poor people need the help of the Government. So our emphasis is to alleviate the problems of the poor, and not to help the rich. The Government should not assume that those who pay more taxes contribute more to the country. Although the poor people may not contribute very much in terms of taxes, they have contributed their blood and sweat for the benefit of our country. They have also contributed to the development of the country. Therefore, I will ask the Government, once again, not to implement the GST system in a hurry. Mr Peh Chin Hua (Jalan Besar GRC)( In Mandarin): Sir, I would like Mr Cheo to clarify two points. Firstly, he has insulted the lower income group of Singapore. In my constituency, there are many people who are in the lower income group. I do not believe that people from the lower income group will go to the extent of committing robbery just because of a 3% tax. I do not know whether he has used the wrong words in Chinese. Secondly, as the Government collects 3% GST, it gives back a lot of rebates to the lower income group.”
“If you are a businessman, you can easily increase your charges for services or goods to offset the increase in taxes. But to the worker, the salaried people, the lower income group and those old people who have no income, they will have no way to escape. It is like adding fuel to fire. So if the emphasis of the Government is to make this lower income group suffer more, then it is obviously wrong! I do not believe that it is the intention of the Government to do so. The Government has announced that when GST is implemented, certain measures will be taken to help the lower income group, such as the payment of Service and Conservancy (S&C) charges, tax rebates and so on. Such measures and assistance, I believe, are only short term because the subsidy will change according to the economic performance. But the GST impact is long term, irrespective of the performance of the economy. People will still have to pay GST in any circumstances. In future, it may very well be increased from 3% to a greater percentage. That nobody knows! So if we want to get more tax revenue or income from the GST and at the same time give rebates for S&C charges and income tax, then that is totally superfluous. Third, whether the good points outweigh the bad points of GST. Countries which have implemented GST are mostly welfare states, or countries which have serious tax deficits or are facing war crisis. Singapore is not a country that subscribes to welfarism. Our country always has surpluses. We do not face a war crisis of any kind. From these three points of view, we can say that the bad points of GST will outweigh the good points. Here, let me deal with the bad points. I will only talk about the bad points. First, GST will cause price increases and it is bad for everybody in Singapore.”
“Mr Cheo Chai Chen( In Mandarin): Mr Speaker, Sir, I was saying that GST will bring good things and bad things at the same time. So we have to be very careful before we make a decision. First of all, we must determine whether it is necessary. Secondly, we have also to consider and be very clear in our minds what is our emphasis. Do we want to help the rich or do we want to help the poor, the lower-income group or the middle-income group first? Next, we should also consider whether the good points of this policy will outweigh its bad points. Briefly, my point here is this: First, whether it is necessary. The implementation of GST, of course, is to collect taxes. If not, why do you want to impose a tax? The Minister for Finance said that when the Government implements the GST, it is for the purpose of tax restructuring to attract foreign investments and to encourage entrepreneurship and for more people to work harder. I think the reasons given are not convincing. Sir, we have a lot of reserves in our coffers. Is it really necessary to impose GST? The answer is very clear. It is absolutely not necessary. Furthermore, we have already some items which are subjected to indirect taxes similar to GST. Second, what is our emphasis? Are we helping the poor and the lower income group, or are we increasing their burden? On the face of it, GST is universal to everybody, it appears to be very fair. It is applicable to everybody. But if we look deep into it, we will discover that it is not so. Because the GST will increase prices. To the rich people, price increases will have less impact on them because they have extra money to meet such a problem. Furthermore, they are rich people. They are able to make enough money to offset whatever impact these may be.”
“It is precisely because in many industries where we allow foreign workers to take on jobs and there are also Singaporeans who are doing those jobs that we need a levy. Take, for instance, the construction industry. We allow five foreign workers for every one local worker. And if we do not have a levy, can you imagine what will be the wages of that single Singaporean worker in that company? It is because of a levy that the Singapore worker is able to earn a viable wage to live in Singapore. Otherwise, without the levy, that poor lone Singapore worker will have to live on a salary which is paid to a foreign worker, ie, $300 or $400, instead of a salary of maybe $700 to $1,000. The same thing applies in many other sectors. It is because there are Singaporeans doing these jobs, similar jobs as what the foreign workers are doing, that they need to be protected from the workers from low-wage countries. Mr Cheo Chai Chen (Nee Soon Central)( In Mandarin): Mr Speaker, Sir, I reiterate my opposition to the implementation of the GST from next year. We are living in a world of contradictions. When we do something, we will discover that it will bring us benefits and at the same time disadvantages. Similarly, when the Government implements a certain policy, it has the same problem. Undeniably, the GST will bring some good things and some bad things at the same time. So in deciding this, we should be very careful. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the item under discussion and the remaining item on the Order Paper today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng]. GOODS AND SERVICES TAX BILL Debate resumed.”
“It will only result in depressing the wages of Singapore workers, particularly, as I said yesterday, those at the lower end of the skill ladder.”
“Mr Speaker, Sir, I think Mr Ling is being rather simplistic in his approach to managing the pool of foreign workers in Singapore. He assumes that Government can just regulate and say employers must show that they have not been able to get Singaporean workers. The point here is that if you allow foreign workers in Singapore - bear in mind that these foreign workers are prepared to work for a very low wage - then what is there to stop employers from advertising for jobs at, say, $200 a month. And no Singaporean will apply for such jobs, because no one will work for $200 a month. After a period of time, they show the Government, "Look, I have put so many advertisements for workers, $200 a month, nobody turned up. I have got no applicants." How is the Government going to be in a position to judge whether the employer has offered a fair deal in this sense? In fact, he can get a foreign worker at $200 a month. So we need a levy to bridge the gap between the wages of our workers and the workers from the low-wage countries which are supplying the foreign workers in Singapore, rather than to try to have a system where Government has to go into every businessman's, every employer's operations and say, "For this particular job, I think you should employ a Singaporean, whereas for the other job, we will allow a foreign worker." We prefer to adopt a system of control on a global basis, in the sense that if you are able to pay a certain levy, you must extract more value added than the levy and the wage of the foreign worker and you will pay accordingly. You employ foreign workers only if you can get that value added. The Member's suggestion would just simply not work in practice.”
“Mr Speaker, Sir, I am not trying to clarify anything. I just want to point out to the Nominated Member who said earlier on that the CPF MediShield programme does not cover members beyond the age of 65. In fact, since July last year, CPF MediShield has extended coverage to those aged up to 70.”
“Let me tell the Member that in 1992, more than half of those who have applied have succeeded.”
“Sir, may I take up the point raised by Mr Cheo first. Why should the Ministry of Labour want to control the marriage of work permit holders with Singaporeans in Singapore? The reason is quite simple. We have more than 200,000 foreign workers in Singapore and if we do not exercise some control over who can marry Singaporeans and settle down in Singapore, we could very well be overwhelmed by a large number of low skilled, poorly-educated foreign workers in Singapore permanently. And I think that would not be in the long-term interest of Singaporeans. It is for this reason that we have to exercise control over the foreign workers who are allowed to settle in Singapore through marriage. The foreign workers have accepted this condition and it is made very clear to them when they come to Singapore to work that they should not marry Singaporeans without prior approval from the Ministry of Labour's Work Permit and Employment Department. So they know clearly the conditions under which they have been allowed to come to Singapore to work and they should abide by this condition. Otherwise, we would have a horrendous long-term problem of a large number of lowly educated, unskilled workers remaining here permanently and should the economy take a downturn sometime in the future, we could have serious social problems. Sir, now I come to the Member for Boon Lay's query on the success rate of those who have applied for approval to marry Singaporeans. The Chairman: Order. It is "guillotine" time.”
“Sir, our good labour-management relations reflect the ability of our union leaders and employers to work together to sharpen economic competitiveness and to enhance economic growth. The net result is to raise the standard of living of our workers. However, he asked what measures would the Ministry be taking to help to strengthen this harmonious industrial relations climate. The Ministry will continue to offer the mechanism to resolve any disputes between employees and employers without resorting to confrontational methods. And I think that is a major contribution to helping to preserve industrial peace. If we can succeed in continuing to maintain this harmonious industrial relations climate, the net result is that we will be able to raise the standard of living of our workers. However, I would like to take this opportunity to caution Singaporeans that we should not take good labour-management relations for granted. I urge employers not to be complacent in their dealings with unions and their employees. At the same time, I hope that unions representing workers will always maintain a responsible attitude and will always share a concern for the greater needs of the economy as well. If we can get unions and workers to continue to work together towards this common goal of economic growth, we will be able to build up our economy and make it more competitive in the years ahead.”
“In a tight labour market situation, such employers will eventually find that they would not be able to attract and retain good workers. They will not be able to foster a good corporate spirit, corporate image, among their workforce and foster loyalty among their workers. On the other hand, an employer who recognises his workers' contribution and efforts, who provides them with training to upgrade their skills, who provides welfare and recreational facilities for his workers and their family members and who rewards their employees when their performance is good, and when the company does well, will have better and more harmonious labour-management relationship. Such employers are more likely to succeed to create a thriving and competitive enterprise. Sir, coming to the Nominated Member, Mr Tong Kok Yeo's comment, as he has noted, we have enjoyed industrial peace for many years. In fact, as he has mentioned, with the exception of a short two days' strike in 1986, we have had no strikes or lock-outs since 1978, a period of 14 years. And over the years, the union-management disputes referred to the Ministry had, as I mentioned earlier on, been amicably settled through conciliation, with less than 3% having to be referred to the Industrial Arbitration Court for arbitration. Sir, our harmonious industrial relations climate has been consistently rated very highly by international business consultants, including BERI, and this has helped to promote Singapore as an attractive investment centre. Many foreign investors have found our harmonious industrial relations climate a convincing reason for investing in Singapore.”
“Sir, the Member for Marine Parade GRC has asked for an assessment of the industrial disputes which were referred to the Ministry of Labour. Sir, with responsible trade unionism entrenched in Singapore and with the support and cooperation of enlightened management, companies and their unions have been able to resolve their differences amicably on most occasions. Many of such disputes have been resolved at the company level. As a result, the number of disputes that need to be referred to the Ministry for conciliation has remained low and stable over the years. In the seven years from 1986 to 1992, my Ministry handled an average of 327 cases a year. Most of the disputes that were referred to my Ministry for conciliation involved issues of wage increase, payment of retrenchment benefits and other terms and conditions of employment. The majority of these disputes, more than 95%, were amicably settled at my Ministry without the need to be referred to the Industrial Arbitration Court for arbitration. Sir, this has been possible because our unions and union leaders have adopted a non-confrontational attitude and played a positive role in helping to resolve disputes that may arise from time to time between employees and management. Sir, the Member for Marine Parade GRC also mentioned that problems usually arise when employers do not give adequate recognition to the contributions made by the employees. I agree with the Member that employers should give due recognition to their unions and employees. Employers who do not do so are, in fact, unlikely to do well in their management of human resources. They are unlikely to do well in their enterprises.”
“Sir, I have no quarrel with that proposal. I have no difficulty with that. If, in fact, EDB has succeeded in attracting a new investor into Singapore and the investor needs to have workers with a particular skill that is not available in Singapore, I am sure EDB will set about to provide training opportunities for employees of the new investor. So the training will therefore be put to good use by the investor once his operation is off the ground. But to suggest that we set up training for all kinds of skills and abilities imaginable in the hope that an employer will come around for these trained people, I think that will be a little difficult. But if the Member accepts that we should have training or re-training of workers on the basis that employers must always be willing to support such training, then I agree with him. That is how we are going about providing training and re-training of our workers. It must always be employer-led. The person should already be employed. His employer knows that the particular training will be relevant to what he is going to do for the company, in which case, SDF will support such training.”
“Sir, there is a difference between allowing CPF savings for investment purposes, whether it is to buy trustee stocks or shares in other public companies, and that of allowing CPF savings to be used for part-time education. When a CPF member uses his savings to buy stocks and shares, there is a very good chance that the investment would yield a higher return than his CPF interest rates. That is the assumption, otherwise he would not have gone out and invest his money in stocks and shares. It must be because it would give him a higher return than leaving the money in the CPF account. On the other hand, if you allow CPF savings to be used for part-time studies, the savings will be consumed. Even when the student graduates or completes his part time study and starts repaying the loan, he would only be making good what has been consumed and returning what interest would have been lost as a result of the withdrawal from his CPF account. He would not have contributed an iota of appreciation to his CPF savings. Therein lies the difference in why we have been very reluctant to make another exception to the rule of not allowing CPF to be used for consumptive expenditure but only allowing CPF to be used for asset-enhancement investments.”
“If SDF were to come in to support the workers' own choice of training, then there is a possibility that the training may not correspond with the market demand for skills. There is no assurance that he would be able to find a job requiring those particular skills that he has been trained in. This, in the longer term, will lead to a wastage of the Skills Development Fund and also result in skill and job mismatch. That is why we have always felt that training and re-retraining of workers should be employer-led. This is to ensure that the new skills acquired by the worker through costly training programmes are usable and relevant to the needs of the employer. In a tight labour market, there should be many employers who would take in workers and train them in the new skills that are required for them to function effectively in the company and for the job for which they are taking on. Such upgrading programmes which are employer-led or employer-sponsored will then be fully supported by SDF. I think this is the best approach to tackle this problem of worker training.”