Lee Boon Yang
Singapore
“6 The other guidelines are that there must be a post office sited within 5 km of every private residential estate and within 1 km of any commercial or industrial estate. MAID LEVY CONCESSION (Applications by the disabled) 32.”
“Madam, can I quickly respond to the point on assistive technology? Certainly this is an area of interest. We cannot say that we have the capability at this juncture but we will certainly look into what is possible and work with our ICT sector.”
“Nevertheless, if the spouse of the homemaker is working, he will be eligible for WIS if he satisfies the criteria. Husbands of homemakers are further eligible for tax relief.”
“Sir, I do not think it is quite correct to say that we always expect our own artists to perform for free or do public service. There are, of course, occasions where we do seek Singapore artists and arts companies to contribute to the national causes. For instance, when we went international for Singapore Season in China.”
“Ms Sylvia Lim asked the Minister for National Development (a) what checks does the Ministry or the National Environment Agency have in place to prevent mistaken payments to hawkers who cease operations due to upgrading works at hawker centers; (b) how did the mistaken payment of $18,000 to Mdm Lee Ah Muey come about; and (c) what will the…”
“While it was also true that initially the reaction or the response of the licensing authority was that foreigners should not participate in such an event at the Speakers' Corner - because there is already an existing prohibition against any foreigners taking part in any activities at the Speakers' Corner - subsequent assessment resulted i…”
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“Employers train their older workers or for that matter any worker when they want to improve the performance of their employees. The training can be in their current job or for new responsibility to which the workers will be deployed as part of their career development or as part of the company's changing production processes. 2.00 pm Last year, 30,000 older workers aged 40 and above benefited from the various schemes of the Skills Development Fund. These various training programmes include the Fast Forward courses where 24% of those who have enroled, were from the age group of 40 years and above. So they are the older workers. 24% of the 30,000 workers who have been trained under the Fast Forward courses are 40 years and above in age. Under the Training Initiative for Mature Employees (TIME), over 1,000 older workers have been trained. There is also a Training Leave Scheme which receives 100% support from SDF for the fees for training older workers at their workplace during office hours. There is also a structured on-the-job training scheme for older workers. So I think there are adequate programmes to train and re-train older workers. But, on the other hand, as the Nominated Member has pointed out, if some older workers want to embark on a second career of his choice, different from what he is doing now, perhaps with a different company, then I think it will be difficult to provide such individual training. It will be better for him in that case to upgrade his own skill through his own effort by taking up some special courses on his own. Because if he is employed with a company, it is obvious that his employer needs his particular skill. The employer is unlikely to train him to prepare him for a job with another company.”
“The Minister for Finance has already announced in his Budget speech that this year workers will get a 1/2% reduction in their contribution rate with a corresponding 1/2% increase on the employers' side. He also said that if the economy grows satisfactorily this year, then the Government will adjust the CPF contribution rate by another 1 1/2 percentage point next year, 1994. Let me assure the Member that the Minister for Finance is quite a sincere person in this regard. If he thinks that he can raise it by 1 1/2% next year, there is a very strong likelihood that it will be raised by 1 1/2%. So the Member's fear that next year we might go back to another 1/2% and therefore we take a longer time to go back to the 20% plus 20% formula is quite unfounded. Sir, the Nominated Member, Mr Chia, asked whether we could help older workers who want to have training or retraining for a second career. Let me first of all express my agreement with him that training and retraining are very important, particularly for older workers. In view of the rapid changes in our industrial technology, in the way we do business, in the way we try to sharpen our competitive edge, training and retraining are the essential elements of how to achieve this competitiveness. Sir, the training of workers is really undertaken by the National Productivity Board of the Ministry of Trade and Industry. I understand that the NPB's approach is to help employers to train their older workers with grants from the Skills Development Fund. Such training includes programme for the development of skills such as supervision, selling skills and basic knowledge such as in Mathematics and in English to prepare the workers for a higher level of skill training.”
“If we allow CPF savings to be used for part-time studies, we should bear in mind that upon completion of the studies, the CPF member will have to start repaying the education loan in cash; just like the students who are in full-time studies, when they complete their studies and they start working, they will have to repay the loan they took from their parents' CPF account in cash. Repayment of the loans cannot be made from their CPF contributions. If a part-time student finds that after going through his course, his income has not increased significantly as a result of his part-time studies, then he could find himself in serious financial difficulties, having now to meet an additional payment. Worse still, if for one reason or another, the part-time student fails to complete his studies, he will have no means of enhancing his income to repay the loan. Sir, I believe that it is better for part-time students to plan for such efforts to upgrade themselves. With planning, they could time their studies only after they have saved enough for the fees, and most part-time students have been able to do this. Many are already doing so without difficulties. The additional effort of putting aside cash savings for the course could perhaps serve as a very strong incentive for them to succeed and to do well in their chosen course of study. Sir, for this reason, I would not support the call by various Members to allow the use of CPF savings for part-time education. Next, may I address the point raised by the Member for Yuhua. She asked whether we can raise the CPF contribution rate by the employer by 1% this year instead of 1/2% so that we could restore the CPF contribution rate of employer/employee to 20%/20% sooner.”
“Sir, several MPs have raised the issue of allowing CPF savings to be used for attending part-time training courses including those offered by the Open University. This is not a new issue. It has been raised, in fact, quite regularly since CPF was allowed for the use of full-time education in tertiary institutions. This subject of use of CPF savings for part-time education has been regularly broached in Parliament. Sir, I hope Members will understand that the CPF education scheme is a loan scheme meant to help students who are undergoing full-time studies. It is an exception made for the full-time students. Why do we make the exception? Because full-time students have no income and are likely to have difficulty paying for tuition fees with their own savings. For instance, this could cover young adults going straight from school or national service to the universities. They would have no savings of their own to pay for the tuition fees. So we have allowed their parents to draw on their CPF savings to pay for the tuition fees. On the other hand, students of part-time courses are mostly working adults who generally can afford to pay their tuition fees with their savings as they are working and studying at the same time. And most of them have been working for a number of years already and they have accumulated some savings of their own. I think it is wise not to allow CPF savings to be used for the fees for part-time studies.”
“I believe I have already answered all the points raised. Mr Ling How Doong rose ---”
“Sir, let me reply to Mr Chua. In fact, foreign workers in Singapore can avail themselves of various upgrading or skills training opportunities. They have ample opportunities to attend various worker training programmes. Basically, as long as the worker qualifies for the training course, there should be no difficulty for him to receive the training. Employers who are prepared to send their foreign workers for skills training can be given subsidies by SDF. Holders of three-year work permit - the more skilled foreign workers - are, in fact, given the same level of support as Singapore citizens and permanent residents, because these are foreign workers who have special skills whom we would like to attract to Singapore, and they can make a higher level of contribution to our economy. So SDF is quite happy to support them. On the whole, many employers do include their foreign workers when they organise in-house training courses for their workforce. They do not segregate between citizens and non-citizens. So many foreign workers also benefit from such in-house training courses.”
“Sir, as for the manufacturing firms that exceed the 35% dependency level, they can substantially reduce their foreign workers' levy payment by cutting down on their dependence on foreign workers. Bring it down below 35% and they will have a significant saving on the foreign workers' levy. In fact, as the Member has pointed out, demand for workers has come down in the manufacturing sector. Then I would say this is the clearer, most direct way to go about reducing their foreign workers' levy payments - reduce their dependency ratio. The Member also raised another point on training of foreign workers and he mentioned that foreign workers in Singapore do not receive Skills Development Fund (SDF) support for training.”
“The levy rate, however, remains unchanged at $300 per month if the dependency level of a firm is at 35% or below. So if the company retains only up to 35% of foreign workers in its workforce, then it does not have to pay a higher levy. It has been fixed at $300 per month. In fact, this levy of $300 per month was first fixed in August 1990 and has not been changed for the past 2 1/2 years. Sir, the second-tier levy of $450 a month only applies to the additional foreign worker employed by the firm when it exceeds the 35% dependency ceiling. This approach of having a two-tier system has worked well for the manufacturing sector. As a result of the differential pricing, 75% of the manufacturing firms are operating at the 35% dependency ceiling or below. In other words, 75% of the manufacturing sector are paying only $300 for each foreign worker. At the same time, the scheme also gives the remaining 25% of manufacturing firms the flexibility to operate at a higher dependency level, depending on their particular needs and on the value added that they can generate from the additional workers. Sir, there is no need to adjust this 45% dependency ceiling because more than 95% of the manufacturing firms are already operating within these limits. There is also no plan to reduce the foreign workers' levy for the manufacturing sector. The current first-tier level of $300 was set, as I said earlier on, 2 1/2 years ago. The Government has not raised this levy since then despite increases in the foreign workers since August 1990. We have not done so because we noted that the manufacturing sector experienced slower growth, particularly in 1992.”
“The other aspect of the sustainable economic growth will be 3-4% of productivity growth, from better labour utilisation, capital investment as well as continuous skills upgrading and retraining of the labour force. Sir, as in many other aspects of life, we cannot have the cake and eat it too. We cannot expect to generate high growth rate with larger and larger numbers of foreign workers in Singapore without suffering the increasing social cost and economic inefficiency. It is better for us to grow at a sustainable rate, sustainable by our indigenous labour force growth and participation, increasing productivity, increasing the use of technology and supplementing all this effort with a manageable pool of foreign workers. We have found the foreign workers' levy, dependency ratio, dependency ceiling to be effective in controlling and regulating the number of foreign workers in Singapore. We will continue to use these measures to regulate the pool of work permit holders. I have no plans to introduce additional measures at this juncture, such as a COE for foreign workers. Sir, now I turn to the Nominated Member, Mr Robert Chua, who spoke on the needs of the manufacturing sector. Mr Chua asked whether we could lower the foreign workers' levy for foreign workers in the manufacturing sector. Sir, although there has been a decline in the manufacturing sector, it is still one of the largest employers in the economy. There is no let-up in the demand for workers in the manufacturing sector. The Member, I am sure, is well aware and he can recall that Government introduced a dependency-based two-tier levy system for the manufacturing sector on 1st January 1992. The dependency ceiling for foreign workers was raised from 40% to 45% of a firm's total workforce.”
“As Mr Goh has pointed out, foreign workers coming from low-wage country depress the wages of Singaporean workers, particularly the lower educated and the lower skilled workers. Our levy mechanism, dependency ratio, and dependency ceiling requirements have so far been effective in dampening the demand for foreign workers. We will continue to rely on these mechanisms to regulate the demand for foreign workers, in particular, the foreign workers' levy must remain in place to protect low skilled, low income Singaporeans and to ensure that they can also enjoy higher incomes with economic growth. Sir, as our economy matures, the solution is not to generate more economic growth by admitting more and more foreign workers. There is a high social cost to admitting more and more foreign workers. Our social and security infrastructures do not have unlimited capacity. We cannot accommodate as many foreign workers as the employers would wish to have. For example, we are already encountering difficulties finding accommodation for the large number of foreign construction workers, in particular, and other foreign workers in the various sectors. In the longer term, we will have to be satisfied with the rate of economic growth that can be sustained without an ever increasing pool of foreign workers in Singapore. The Ministry of Trade and Industry has projected that this long-term sustainable growth rate will be about 4-6% per annum. Of this, 1-2% is attributable to indigenous labour supply growth, including migration. We are trying to attract more and more skilled foreigners to come to Singapore. So immigration will help to augment our indigenous labour growth and also through measures to increase the indigenous labour force participation rate.”
“With this constraint, we cannot expect to continue with the double-digit economic growth of the 70s and the early 80s. I share the Member's concern and I do not believe that we should have uncontrolled entry of foreign workers into Singapore. Nevertheless, our foreign worker policy must be sufficiently flexible to cope with changing economic circumstances. We have from time to time liberalised the work permit policy to meet the needs of the various sectors of the economy. For instance, in November 1992, the dependency ratio for the construction sector was increased from one local for three foreign workers to one local for five foreign workers. We have to make the change in order to accommodate the more than expected growth of the construction industry. The manufacturing sector was also allowed to employ foreign workers up to the 45% dependency level from 40% in January 1992. The reason is we need to help employers who need to get additional workers provided they are able to pay a higher levy. In addition, the foreign worker policy was relaxed for the service sector in November 1990 to allow companies to increase their foreign workers from 10% to 20%. This was necessary to cope with the growing demand for workers from this sector. The Ministry also exercises flexibility in applying the 20% dependency ceiling on companies with 10 or fewer workers. This is to ensure that small companies facing difficulties in a tight labour market situation can continue to operate. Sir, while we have benefited from foreign workers coming to Singapore to work, we cannot be over-dependent on foreign workers to generate high economic growth rates. Owing to the social cost of employing foreign workers, the number of foreign workers in Singapore cannot be allowed to grow without limits.”
“Nevertheless, my Ministry offers a conciliation service to help such people resolve their disputes with employers whenever we are requested to do so. Over the years, there have been very few cases of secretaries being denied paid maternity leave appealing to the Ministry for assistance. When we come across a case of an uncaring employer who is found to have denied paid maternity leave to an employee who is actually not performing confidential duty, we will direct such employers to grant the benefit. Even if the employee is, in fact, performing confidential duties, we have been able to resolve these disputes through conciliation. 1.15 pm Sir, there is nothing to stop persons taking on the job of confidential secretary to negotiate for their terms of employment, including the provision of paid maternity leave. Our experience in labour relation is that in the terms and conditions of employment of many confidential secretaries it is stated quite clearly, and it includes paid maternity leave. Sir, I shall now turn to the comments made by Members on foreign workers and labour supply. First, may I reply to the Member for Boon Lay. Mr Goh has spoken on the danger of allowing too many foreign workers into Singapore. I thank him and Dr Ow Chin Hock for their support of the foreign worker policy, including the policy of imposing a foreign workers' levy on such foreigners. Mr Goh is right in noting that labour shortage is a problem, unlike other countries where the problem is unemployment. Ours is a problem of a tight labour market. Labour shortage is and will continue to be a crucial constraint on our economic growth. Our indigenous labour supply growth has slowed down to about 1.5%.”
“We should ask ourselves whether, in the context of our tight labour market, it is appropriate for Government to regulate for such benefits. Even the Japanese childcare leave law exists merely as a piece of advisory legislation. There is no penalty for an employer who refuses to grant his employee such childcare leave. The Japanese also do not provide for paid childcare leave. Sir, in practice, we are not very different from the Japanese. We should continue to leave it to unions and their workers to negotiate with their employers for childcare leave benefits. We should leave it to unions and companies to settle such matters on the basis of the company's circumstances. Sir, next I turn to the Nominated Member, Dr Soin. She asked whether confidential secretaries could be provided with paid maternity leave under the Employment Act. Sir, the Employment Act stipulates the minimum terms and conditions of employment. As the Nominated Member pointed out, it covers all workmen and employees except seamen, domestic servants, managers, executives and confidential personnel, whose nature of work makes it impractical for the law to be applicable to them. For example, the restriction on the maximum daily and weekly working hours and the need for payment for work on rest day, public holiday or over-time as stipulated in the Employment Act, cannot apply to this group of employees who have been exempted. In the case of confidential secretaries, they work closely with the executives and managers. They regularly come in contact with confidential information concerning subordinate employees. Hence, they are also excluded from the Employment Act coverage.”
“As the Member himself pointed out also, in fact, there is no child labour in Singapore at the moment. So there is no need for us to be concerned on this issue. Nevertheless, I will ask my Ministry to look into this particular regulation. We will see whether there is still a need to retain it or not. Next, I come to the hon. Member for Yuhua. She asks whether the Ministry of Labour or the Ministry of Community Development could look into the possibility of providing some kind of guidelines or regulations to require the private sector employers to provide childcare leave. Although there is no requirement for employers in the private sector to provide for childcare leave for their employees, some employers do actually provide such childcare leave to their married employees. They give it because they appreciate that the working mother, who has just given birth, may need to spend more time to take care of their new-born children. In fact, a number of collective agreements negotiated by several unions do already provide for such unpaid childcare leave. Let me mention just a few examples: companies like Ben Foods, Maybank Finance, Hotel Miramar, Sime Darby Edible Product, Hotel Grand Central, Hotel Royal and statutory boards like the HDB and Singapore Science Centre. Employees of these companies and statutory boards are already granted childcare leave by their employers as a result of union negotiations. Sir, therefore, there is really nothing to prevent unions or workers from persuading their employers to provide childcare leave, if they believe that the company is in a position to do so. While countries such as Japan may have introduced childcare leave law, we should not just follow the examples of other countries.”
“Many Singaporeans, in fact, will receive benefits ranging from $74,000 to $104,000, excluding the discount for HDB shops and shares under the CPF Top-Up Scheme. The $20,000 tax that he pays over his life time is only a fraction of the direct financial subsidies that he receives. Sir, our present political, social and economic system has made this possible. I urge the SDP not to undermine this system and to stop practising the politics of envy to win votes. The SDP said it wants to help the poor. But is it only a pretence? Because by carrying on with its distortion, the SDP will divide our society and the poor whom it purports trying to help will be worse off. There will not be enough natural resources to subsidise the poor in housing, education and health. Certainly, Sir, there will be no CPF Top-Up Scheme. Since Mr Chiam is honourable enough to admit in this House that he supports the CPF Top-Up Scheme, then my reply to the hon. Member for Boon Lay is that there will be no need to print the opt-out forms. I hope that Members of the SDP who are in this House, unfortunately Mr Chiam is not here right now, will also be honourable enough to refrain from practising the politics of envy from now on. Sir, the Member for Boon Lay has also asked for the repealing of a particular provision in our employment regulations which enables the Commissioner for Labour to grant approval to children under the age of 14 to be employed in an industrial undertaking. I am pleased to note that in making his appeal the Member has pointed out that although there is such a provision, approval has, in practice, never been given. In fact, over the years, let me assure this House, there have been very, very few such applications to the Commissioner for Labour.”
“Sir, I agree fully with the Prime Minister when he chastised the Singapore Democratic Party for arousing resentment among poorer Singaporeans in the election campaigns. I am adding my voice to this because Mr Chiam and his two SDP colleagues have not said in this House whether they will not continue to do so. There is no need to attack the rich and the successful to do more for the poor. Why must we take away the independent schools and the golf courses? How have they depressed the living standards of the poor? What have they taken away from the working class and the poor? Why should we grudge those who have done well? By doing so, the SDP is attempting to level down. Those who have worked harder, done better for themselves, will be brought down. That will be the result of the SDP's politics of envy. That will be the result of their approach if they succeed. The Prime Minister has explained how a typical Singaporean, owning a 3-room flat, receives a sum total of $70,000 direct subsidy from the Government, $50,000 more than the taxes that he pays in his life time. Sir, may I add that this figure will be increased by $4,000 in Edusave for future adult Singaporeans and from now on, there will be regular CPF top-ups. Furthermore, some of the shares which will be sold at a discount from the Government will add to this amount of direct subsidy. The top-ups and the discounts could easily add up to several thousand dollars over an average citizen's life time. Sir, if a Singaporean had his flat upgraded under the HDB Upgrading Programme, that is another $20,000 to $30,000 of direct subsidy. If he is a HDB shop tenant, he may save up to $90,000 when he buys his shop at a discount. Sir, I think the Prime Minister's estimate of $70,000 of direct subsidy is in fact conservative.”
“Sir, up till now there has only been one such link, ie, the size of the workers' pay increase. When the economy does well, when his company makes a good profit, the worker gets a bigger pay increase. With the CPF Top-Up Scheme, we will introduce an additional linkage between the workers and the nation's economic performance. Sir, this is an important point which was missed by a Straits Times columnist writing in last Saturday's edition. The CPF Top-Up Scheme is not meant to replace the existing reward system for workers, nor the virtues that the journalist wrote about. It is intended to help all Singaporeans have an additional stake in the country's prosperity. The normal reward system in the free market has benefited a vast majority of Singaporeans. They can already buy shares, and many do, to benefit from a strong economy. To this group of Singaporeans, the $200 CPF top-up may not be a big deal. However, the scheme is also intended to help the vast majority who now do not own shares. For this group, the Top-Up Scheme, together with the scheme for them to buy blue chip stocks at a discounted price, would be their first opportunity to directly own a share of the Singapore economy. They have taken part in the economic marathon and deserve a prize too. The CPF Top-Up Scheme awards this group of less well-off Singaporeans a prize for participating. Over the years, as their holding of shares increase, they will support sound, long term economic and social policies and eschew unproductive welfare programme, as it is in their own personal interest to do so. The CPF Top-Up Scheme will stimulate greater commitment and participation in building a strong and competitive economy.”
“Sir, yesterday Mr Goh Chee Wee, the hon. Member for Boon Lay, asked what are the long term plans for the CPF Top-Up Scheme, and whether the CPF Board would print opt-out forms now that Mr Chiam has supported the CPF Top-Up Scheme. As the Prime Minister has said in this House on Tuesday, 9th March 1993, during the Budget debate, the CPF Top-Up Scheme is a major programme to ensure that every adult citizen gets a stake in the economy. Mr Goh Chee Wee had asked how often the Government would make such top-ups. The Prime Minister has assured this House that it is not a one-off effort. There will be periodic top-ups as long as the economy does well. When there is good economic growth, the Government has a healthy budget surplus, coupled with an occasional conversion of statutory boards into public listed companies, then the Government would consider topping-up. In the longer term, this programme will help to make Singaporeans feel more committed to the country's economic performance. When the economy does well and there is sustained strong budgetary surplus, as I said earlier on, every citizen can receive a dividend. If the economy does not do well, if the Government does not end up with a budget surplus, and instead goes into a deficit, then the citizens are unlikely to get any dividend. Sir, the CPF Top-Up Scheme aims to turn all workers, all Singapore citizens, into owners of blue chip shares in selected profitable Singapore enterprises, such as Singapore Telecom. They will soon see the link between the performance of the Singapore economy and the value of their shares. Over the years, they will learn to appreciate the connection between stable politics, working together for economic growth and their own personal wealth.”
“Mr Deputy Speaker, Sir, I beg to report that the Committee of Supply has made further progress on the Estimates for the financial year 1993/1994, and ask leave to sit again tomorrow.”
“Mr Speaker, Sir, I agree with Dr Soin that there is always an element of risk when you make an investment. I think the result of this liberalisation will contribute to the educational process of getting Singaporeans to better learn how to manage their savings, how to improve the rate of return from their savings, and they must learn. In the course of learning, yes, some people may inadvertently make the wrong decision and they may be hurt. But we have structured the Basic Investment Scheme and the Enhanced Investment Scheme to ensure that their minimum requirement on retirement will be met. That is why there is this, at the first tier, Minimum Sum and also we only allow up to 80% of the surplus savings to be invested, not 100%. Likewise, in the Enhanced Investment Scheme, there is a requirement to keep $50,000 cash savings in the member's account, and again an 80% limit, which means that at any one time there will still be a 20% over and above the requirement of $50,000. I think this helps to minimise the risk exposure of CPF members.”
“All withdrawals from investment schemes will be according to the CPF rules. In other words, whatever you sell, the money goes back into your CPF account. If you made a profit, except under the Basic Investment Scheme and the Enhanced Investment Scheme, where your profits exceed the CPF amount withdrawn and also the interest which you have accumulated, then you are allowed to withdraw the balance. In the case of those who sell their shares at a loss, we do not require any member, whether under the Basic Investment Scheme or the Enhanced Investment Scheme, to top up with their own cash to make up for the losses.”
“Mr Speaker, Sir, Mr Chiam would like to know how much more funds will be invested. I am unable to tell because how much funds will actually be invested is entirely dependent on the CPF members themselves. What I can tell Mr Chiam is that with the liberalisation of the scheme, and with the introduction of the Basic Investment Scheme and the Enhanced Investment Scheme, a lot more funds will now be made available potentially, to be invested in the various instruments that I have outlined earlier on. In fact, under the Basic Investment Scheme, 740,000 CPF members will be eligible, as I mentioned earlier on. They will together have about $22 billion worth of investible savings. Exactly how much of the $22 billion will be invested, that is a decision only the CPF members themselves can make. In the case of the Enhanced Investment Scheme, 235,000 CPF members currently qualify. Together, they will have available $9 billion of investible savings. Mr Low has asked on what grounds the CPF exempts the purchase of Telecom shares under the CPF Top-Up Scheme from the Minimum Sum requirement. The answer is that Telecom shares are a special category, in the sense that Telecom is a very established statutory board which has an excellent track record and the shares will be sold to the citizens at a discount, on top of which Government is going to give each citizen a $200 direct subsidy to purchase the shares. Therefore, there is very little risk of any citizen losing out in the course of purchasing Telecom shares. Therefore, we have thought it in order to exempt them from the requirement of the minimum sum. He also asked whether later on when CPF members sell the Telecom shares, they will be able to withdraw the proceeds or should they sell it at a loss, will they have to top it up.”
“With the Basic Investment Scheme and the Enhanced Investment Scheme, CPF members will have many opportunities to invest their savings using tax exempt CPF contributions. Sir, I think this approach better serves the individual's interest as well as the national interest of ensuring that every worker retires with sufficient funds to meet his old age needs. Sir, I believe I have answered the points raised by Members.”
“However, savings in the Special Account cannot be withdrawn until the member reaches the age of 55. For investment purposes, whether under the Basic Investment Scheme or Enhanced Investment Scheme, members will be restricted to using their savings in the ordinary account. Finally, Sir, Mr Othman also asked why we require CPF members to continue contributing to CPF if they have a saving of $50,000. The current CPF contribution rate of 40% is based on the objective of enabling workers to retire with sufficient savings to generate post-retirement income ranging from between 20% and 40% of their last take-home pay, after they have paid for their home and set aside money for Medisave. Any reduction of this contribution rate of 40% will affect a worker's ability to generate that level of post-retirement income and also affects his ability to purchase a home which is commensurate with his income level. Hon Members in this House should bear in mind that a high income earner may be able to accumulate $50,000 in his CPF account in less than two years. Therefore, if we use that as a benchmark and say that above $50,000 no further contribution will be required, there is a danger that he may not receive all those CPF contributions which will now not be required in the form of take-home pay. He may well end up with a very severe pay cut. Even if we just reduce or just cut off the employer's contribution, then he may still end up with a severe pay cut of 18%. At the same time, we should bear in mind that all CPF contributions are tax exempt. Therefore, even if we reduce the employee's contribution to CPF, then his taxable income will go up. It is far better that the CPF contribution rate continues at our long-term target of 20% plus 20%.”
“Sir, I urge Members to bear in mind that the purpose of this liberalisation is to allow CPF members a wider scope to invest their savings, so that they can build up their retirement fund. This is in line with the Prime Minister's declared objective of helping Singaporeans to enlarge their assets. Both the Basic Investment Scheme and the Enhanced Investment Scheme will be able to achieve this objective better than releasing CPF savings for business ventures. Sir, Mr Goh also asked whether we will allow CPF members to purchase land from the Government for the purpose of building their own residential unit. In principle, I have no objection to allowing CPF members to use CPF savings for financing the purchase of land to build their own homes. However, this will require an amendment to the CPF Act, because presently this is not allowed. I will ask the CPF Board to study how this can be done. Sir, Prof. Low Seow Chay asked whether the new conditions for withdrawals for the payment of interest or to service mortgage loans beyond the 100% limit will apply to previous applicants, people who have already taken out mortgage loans and who have already been withdrawing from their CPF accounts. The answer is yes. It will apply to them provided they meet the conditions required. That means they can set aside the Minimum Sum and then they can use up to 80% to continue to service their mortgage loan repayments. Sir, Mr Othman Haron Eusofe asked whether, under the Enhanced Investment Scheme, the $50,000 requirement will include the balance in the member's Special Account. The answer is yes. In computing the $50,000 net savings, the CPF Board will include the balance in the member's Special Account.”
“Mr Speaker, Sir, first, let me thank the Members who supported the liberalisation of the CPF Investment Scheme. I will take up the point raised by Mr Low Thia Khiang. He asked whether the recently announced CPF Top-Up Scheme will be subjected to the same restrictions and conditions which I have announced shortly. The answer is no. In the case of the CPF Top-Up Scheme for the purchase of Telecom shares, we are exempting all CPF members from the requirement to set aside a minimum sum or the $50,000 reserve amount. Mr Goh Chee Wee asked whether we will allow CPF savings to be used for starting business or for business ventures. We will not be allowing CPF savings to be withdrawn for business ventures. Business ventures are far more risky than all the new instruments for investments under the Enhanced Investment Scheme. Savings withdrawn for business ventures may be completely lost when the business fails. A CPF member who has invested his savings in a business venture may find that he is unable to liquidate his savings to pull out of the business venture, even if he feels that the business is not doing well. By the time he does so, he may not only have lost all his CPF savings but he could well end up in debt at the same time. In the case of the allowed investments under the Enhanced Investment Scheme, it is quite unlikely for such total losses to happen. There is also the problem of how to assess business ventures which can be financed out of CPF savings. Some business ventures could be genuine. Others could result in consumption of CPF savings with very little real gain. And it is very difficult for the CPF Board to monitor such business ventures.”
“However, should there be any losses from previous investments, members will have to make good the principal amount plus interest at the CPF rate on these losses before they can withdraw the surplus capital gains and dividends. Sir, the Government will also liberalise the use of CPF for housing. Presently, under the CPF Residential Properties Scheme, CPF members may use CPF savings to finance up to 100% of the property's purchase price or its value at the time of purchase, whichever is lower. Beyond this limit, members will have to repay their housing loan with their own funds. The Government will now allow CPF members to use their CPF savings to fund property purchases beyond the 100% limit on the same terms as the Basic Investment Scheme. Members may use up to 80% of their gross CPF savings in excess of the Minimum Sum to pay their outstanding housing loan. It is thus up to members to choose whether to invest their savings in houses or in other assets. Sir, the Minister of State for National Development recently announced new limits for HDB mortgage loans for purchases of resale HDB flats. The new withdrawal rules under the Residential Properties Scheme will also apply to HDB resale flats. In other words, purchasers of HDB resale flats will also be able to use their CPF savings to continue paying mortgage loans beyond the 100% limit. Sir, the CPF Board will work out the implementation procedures and amend various Regulations over the next six months or so. The Basic Investment Scheme, the Enhanced Investment Scheme and the new rules for withdrawals for housing will be implemented once the procedures and regulations are finalised.”
“Sir, the Government will liberalise the rules of the CPF Investment Scheme. The current scheme will become the CPF Basic Investment Scheme. We will introduce a second tier CPF Enhanced Investment Scheme for members who have accumulated more savings. I will now briefly outline the CPF Basic Investment Scheme. Under the CPF Basic Investment Scheme, members may invest 80% of their gross savings in excess of the Minimum Sum instead of the present 40% limit. Members may now also invest in non-trustee stocks of Singapore incorporated companies listed on the Stock Exchange of Singapore. However, investments in non-trustee stocks and gold cannot exceed the existing 10% sub-limit. Next, on the CPF Enhanced Investment Scheme. To qualify for the Enhanced Investment Scheme, members must set aside $50,000 in cash savings, not including amounts withdrawn for homes, previous investments and educational loans. They can then withdraw 80% of their savings above $50,000 for investment in the following eight approved instruments: (1) Shares of all Singapore incorporated companies listed on the Stock Exchange of Singapore (SES) and Sesdaq; (2) Unsecured loan stock of listed Singapore incorporated companies on SES and Sesdaq; (3) Gold (up to the 10% limit); (4) Unit trusts, including those investing in non-trustee stocks of Singapore incorporated companies; (5) Government bonds; (6) Bank deposits; (7) Fund management accounts; and (8) Endowment insurance policies. Sir, to encourage CPF members to make use of the investment schemes, the Government will allow members to retain the capital gains and dividends from investments beyond what the sum would have earned in the CPF under both the Basic Investment Scheme and the Enhanced Investment Scheme.”
“Mr Speaker, Sir, my Ministry has completed a review of the use of CPF for investment. The aim is to give CPF members a wider choice of ways to invest their savings while maintaining the longer term objective of ensuring their financial security in old age. Sir, the CPF Investment Scheme was introduced in 1986. It allows members to use up to 40% of the gross savings in excess of the Minimum Sum for investments. Allowed investments include trustee stocks, convertible loan stocks, approved unit trusts and gold. Gross savings include amount previously withdrawn for housing, investments and educational loans. The actual amount which can be used for investment is restricted to the member's ordinary account balance. Sir, the requirement of a Minimum Sum is to ensure that members keep part of their portfolio in cash or property instead of investing their entire CPF savings in stocks and gold. Home owners may include their investment in properties as part of their Minimum Sum requirement, so that in practice many of them can participate in the Investment Scheme. Sir, as at the end of February 1993, 104,000 CPF members have withdrawn savings for investment. This represented only 14% of the 740,000 members who qualified for the Investment Scheme. The amount invested was $2.1 billion or only 15% of the $14 billion available to be invested. We have had seven years of experience with the Investment Scheme. CPF members have generally managed their savings prudently. It is timely to widen the 2options open to members to invest their CPF savings. Wider options will encourage more Singaporeans to make business assessments and investment choices for themselves. They will then learn to trade off risks and returns, and live with the consequences of their decisions.”
“The Civil Service cannot afford to be complacent despite improvements that have been made. We must not let the momentum tail off. I would like to urge people who use the public service, our customers, in effect, to help us to further improve the service quality by sending us suggestions and comments. This will support SIU and the Quality Service Managers' effort to review procedures so as to provide more timely and responsive service to the people. 1.15 pm”
“The CPF Board has introduced a service called CPF Line for employers to pay their employee CPF contribution by electronic means. Employers are able to carry out the transaction in a matter of minutes from the convenience of their offices with minimal effort. The Immigration Department has introduced a toll-free Immi-link phone enquiry service which provides round the clock information on procedural requirement for passport, entry permit and other immigration permits. Similarly, the Inland Revenue Authority of Singapore, the Labour Relations Department of the Ministry of Labour and MINDEF have also introduced auto-response telephone system to provide more comprehensive service to the public beyond office hours. Other measures initiated by the SIU include review of forms, rules and regulations and GIRO promotion. Ministries and statutory boards were asked to review and stop the practice of having multiple copies of forms that require the public to fill and sign. They were also asked to review all rules and regulations and to remove those found to be unnecessarily stifling or obtrusive or obsolete. To raise productivity and reduce unfruitful labour, Ministries and statutory boards have made many improvements to their GIRO procedures to encourage the public to pay their bills by GIRO. With more people joining the GIRO system, long queues to pay bills will be a thing of the past. Sir, the public has supported SIU's request for feedback and suggestions on improving Government service. Quality Service Managers received a total of 12,766 calls and letters from the public in the period from inception in April 1991 up till November 1992. Over 2,051 suggestions were received, of which many were found feasible and implemented. Service improvement must be a continuing effort, Sir.”
“Sir, the Service Improvement Unit (SIU) was set up in April 1991 under the Prime Minister's Office to help raise the standard of service provided by Government agencies to the public. The SIU has institutionalised the concept of service quality in all Government Ministries and Departments. All Ministries and statutory boards have appointed Quality Service Managers and Quality Steering Committees to ensure commitment and constant effort to improve service quality. Sir, the level of awareness of service quality is being raised throughout the public sector. Civil servants are more conscious of the need to satisfy the service expectation of the public. This has been achieved through a combination of staff training, setting of targets for quality service, streamlining systems and procedures and close monitoring of both performance and public feedback by the departments and statutory boards. Ministries and statutory boards have made many improvements in their services and facilities for the benefit of the public. Let me quickly highlight some examples of this improvement. HDB has revamped operation at its branch offices to provide faster and more effective services to the members of the public. The Registry of Vehicles has set up multi-transaction counters so that members of the public can carry out all their transactions at a single counter instead of shuttling from one counter to another. The Work Permit and Employment Department has introduced the electronic work permit application system, known as EASY, to enable employers to apply for work permit from their offices using personal computers. This service is being extended to more and more companies. Employers save labour and time in not having to send staff to the Work Permit Office to apply for work permit.”
“The proposal to set up Government Service Centre is part of the Service Improvement Unit's (SIU) long term strategy to encourage different Government agencies to examine interagency efficiency from the customer's point of view. It is still in its initial planning stage. SIU has appointed a Working Committee to study the concept. Ministries will be requested to consider setting up Government Service Centres by co-locating several different agencies for the convenience of the public. SIU considers the Regional (Town) Centres, conceived under the Concept Plan review undertaken by the Ministry of National Development, the ideal locations for the Government Service Centres. The Regional (Town) Centres are being developed to enable both public and private sector organisations to decentralise and bring their services closer to thier customers. In the case of the Jurong East Regional Centre, the Urban Redevelopment Authority (URA) is currently working on the design parameters to guide developments. URA will take into consideration the requirements of a government service centre. The establishment of such a service centre will only be possible when URA launch the development for the Jurong East Regional Town Centre. REASONS FOR INTRODUCING `Q' PLATE CARS 20. Mr Chia Shi Teck asked the Minister for Communications what were the reasons for introducing the registration of company `Q' plate cars, whether the reasons are still valid and, if not, whether he will scrap the classification.”
“Mr Speaker, Sir, my Ministry does allow companies venturing overseas to bring in foreign workers for training before posting them back to the overseas subsidiaries. Employers have to apply for work permits for their trainees. The number of foreign trainees will be included in working out the employers' foreign workers' dependency ratio. There is no restriction on the type of training that employers can provide to their overseas employees. Employers are, however, required to pay fore6gin workers levy for their work permit trainees. Sir, in view of the need for Singapore entrepreneurs to step up their regionalisation efforts, my Ministry, together with the Ministry of Trade and Industry, is reviewing the work permit training scheme to make it easier for compaines with overseas operations to train their essential foreign staff in Singapore. The improvements will be announced when the review is completed. MANUFACTURERS INVESTING ABROAD (Incentives) 7. Mr Robert Chua Teck Chew asked the Minister for Finance whether any tax, fiscal or other incentives will be given to help Singapore manufacturers invest abroad as they regionalise or globalise their operations.”
“Mr Speaker, I am afraid I am not able to comment on the anonymous reports of large numbers of illegal foreign workers in Singapore. Let me assure the Member that my Ministry is monitoring closely this problem of illegal workers in Singapore. We do from time to time come across cases of employers employing foreigners without work permits and, in all cases, they are dealt with according to the law, either by prosecution in court for some of the offences or a heavy compound fine is levied against the employer. We do not think the situation is out of control. The numbers, I believe, are not as large as had been suggested by this anonymous source quoted by the Member. As to how many people have been prosecuted under the amended Immigration Act, may I suggest that the Member direct a question on this detail to the Minister for Home Affairs. SINGAPORE COMPANIES VENTURING OVERSEAS (Recruitment of overseas staff for local training and attachment) 6. Mr Chia Shi Teck asked the Minister for Labour (a) how Singapore companies venturing overseas can recruit staff from overseas for training and attachment in Singapore before eventual posting to their overseas subsidiaries; (b) what will be the restrictions; and (c) what kind of workers will be allowed.”
“Mr Speaker, Sir, my Ministry is aware of the difficulty of some employers with a large number of foreign workers face in providing them with proper accommodation. In fact, my Ministry has been in discussion with the Ministry of National Development for some time and we are looking for a solution to this problem. In due course, we will be reporting on the progress made on how to provide adequate accommodation for this large number of foreign workers. But the problem is not one of surveillance or control on the foreign workers or lack of such control. If you have such a large number of foreign workers in Singapore, whether they are living in their own accommodation on the work site or in any accommodation provided through any Ministry or department, there will always be the possiblity of criminal elements or drug traffickers getting involved. What is required is continuous surveillance by the CNB to ensure that the problem does not arise, and if it does appear, it should be nipped in the bud immediately.”
“Before work permits are issued, Sir, the Ministry checks applicants against the Police's database to sieve out foreigners with known criminal records. This procedure has helped to minimise the risk of admitting criminals into Singapore. Furthermore, the Ministry revokes the work permits of those who commit criminal offences and rejects future applications.”
“Mr Speaker, Sir, my Ministry conducts safety orientation courses for foreign construction workers. These courses are conducted in the foreign workers' own languages to ensure that they understand the importance of work safety. The Ministry has sufficient training capacity to cope with the expected increase in foreign construction workers. In November 1992, the Ministry announced the intention to make attendance of the safety orientation course a condition for the issue and renewal of work permits for foreign construction workers. We hope to see greater safety awareness among work permit holders with the implementation of this scheme from 1st April this year. Sir, any increase in foreign workers will pose an additional strain on our social infrastructure. Hence, we have been very cautious in allowing more foreign workers to enter Singapore. The recent relaxation for the construction industry is the result of high growth and demand in this industry. We will run the risk of stifling the construction industry if we do not allow more foreign workers for the time being. By restricting the period of employment and charging a realistic foreign workers levy, we will encourage employers to repatriate their workers as soon as they are not needed. This will help to minimise the social problems caused by the foreign workers. Sir, foreign construction workers, like all work permit applicants, must undergo medical examination by Singapore-registered doctors before the issue of work permit.Those who have signs or a history of contagious diseases or drug addiction are not given work permits. Our medical practitioners are able to cope with the increase in the number of foreign construction workers.”
“The foreign worker levy is a pricing mechanism to regulate the demand for foreign workers. In the past 12 months, the demand for foreign workers is still strong. The number has increased by about 10% despite slower economic growth. There is therefore no plan to reduce the foreign worker levy. WRITTEN ANSWERS TO QUESTIONS PAYMENT OF PUB BILLS THROUGH POST OFFICES 1. Mrs Yu-Foo Yee Shoon asked the Minister for Trade and Industry whether the Public Utilities Board will allow payment of its bills through the post offices.”
“Sir, the ability to attract more people to join the part-time work force is not just the CPF contribution rate alone. There are many other factors such as the terms and condition of employment for part-time workers, the kind of benefits offered by the employers to part-time workers, and also the scheduling of the part-time work for the convenience, in particular, of the housewives. So I disagree with the Member in his viewpoint that lowering the CPF contribution rate for part-time workers will make a significant difference. MEDICAL BENEFITS TO FEMALE CIVIL SERVANTS 13. Dr Kanwaljit Soin asked the Minister for Finance if he will consider giving equal medical benefits to the spouses and families of all female civil servants as presently accorded to male civil servants. The Minister for Finance (Dr Richard Hu Tsu Tau): Mr Speaker, Sir, the question of extending medical benefits to dependants of women officers has been raised in this House since 1976. I would like to reiterate the principle that medical benefits are granted to dependants of main breadwinners. Traditionally, these are men. However, women officers who are divorced, widowed or granted a decree of judicial separation are granted dependant benefits also. Similarly, such benefits are also granted to dependants of women whose husbands are too ill to work. As I have said earlier this year in response to a similar question from the MP for Yuhua, medical benefits is one aspect which will be considered when we review the whole remuneration package of the civil service.”
“Mr Speaker, Sir, the Member says he is concerned with those who are taking on a second job as a part-time work. But he has to bear in mind that if they are taking on part-time employment to supplement their income, then this necessity to lower CPF to increase their take-home pay becomes even less relevant because they already have a principal source of income.”
“Mr Speaker, Sir, during this year's debate in the Committee of Supply, I did explain that my Ministry is in favour of encouraging more part-time employment in Singapore. But this must be done in a proper manner without jeopardising the principle of CPF, which is that all working Singaporeans should set aside a certain portion of their income to meet their old age retirement needs.”
“Mr Speaker, Sir, the main reason to revise the floor wage requiring CPF contribution by the employee is that such workers are experiencing difficulties in making ends meet and you want to increase their take-home pay by setting aside less money in the CPF. The situation may not be as bad as it appears, because employees in this lower income group, those earning $200 and below, are mainly young people and the majority of them are still single. Such low wages in many cases are transitionary. It has been estimated that only about 2,000-3,000, ie, about 8% of those earning between $200 and $400, are sole breadwinners of their families. Therefore, if you raise this minimum wage, you are not going to benefit a great number of people. On the other hand, even those who are earning a low income need to be encouraged to save some of their income for their future retirement needs. I think it would be contrary to this basic and important principle of CPF to exempt even a small number of people from having to contribute to their old age requirement.”
“Nevertheless, I would like to add that the CPF Board does exempt students working during school vacations from having to contribute to CPF.”
“Mr Speaker, Sir, my Ministry is against reducing CPF contribution rates for part-time workers. Under the CPF system, the employee's contribution to his CPF savings is proportional to his earnings. Currently, workers earning less than $200 per month are exempted from contributing to CPF. Only their employers are required to contribute 18% on their behalf. For those earning between $200 and $363, they contribute from 7% to 22% over and above their employer's 18% contribution. Only those earning more than $363 are required to contribute a flat rate of 22%. Whether a worker earns the amount working full-time or part-time does not affect how much he should put aside. The CPF is thus neutral in its treatment of both full-time and part-time workers. This is the right policy. Part-time workers need to save for retirement and Medisave as much as full-time workers need to do. The CPF scheme, as presently structured, helps them to do so. Sir, to lower the CPF rate for part-timers would create anomalies. A person working part-time but earning more may end up paying less CPF than another person working full-time but earning less. This could encourage employers to break up full-time jobs into part-time jobs and may even give rise to collusion between employers and employees to declare full-time workers as part-timers. Sir, there is also no need for a special lower CPF rate for students who are not yet ready for full-time employment. The graduated scale of CPF contribution already ensures that part-time workers with low incomes take home a larger portion of their salaries. About 3,000 students work part-time, small compared to the 46,000 part-timers in Singapore. Requiring students to contribute to CPF also helps to inculcate the habit of saving from young.”
“Mr Speaker, Sir, as I understand it, the Industrial Arbitration Court is the highest authority on matters of industrial disputes. And unless there are points of law that need to be raised, there is no other higher Court of Appeal. CENTRAL PROVIDENT FUND CONTRIBUTIONS (Reduced rates for part-time workers) 12. Mr Chia Shi Teck asked the Minister for Labour if he will consider reducing the Central Provident Fund contribution rates for part-time workers, particularly students who are not yet ready for full-time employment, so that take-home pay of part-time workers will be more attractive.”
“Mr Speaker, Sir, let me reiterate that despite its public comment, despite its unhappiness or concern with the decision of the IAC, SNEF has not at any point challenged the decision of the IAC. It had merely urged employers and unions to view the decisions as "decisions specific to the complex issue in the dispute between two parties, namely, SIA and its unions." And it urged all parties not to quote this award as a precedent. Sir, under the circumstances, SNEF's comment cannot be said to be disrespectful to the IAC, nor can it be said to be in contempt of the IAC. The Attorney-General has also advised my Ministry that the statement issued by SNEF does not amount to contempt of the IAC, nor did it violate the Industrial Relations Act. Therefore, the Member's call to censure SNEF is unnecessary and uncalled for.”
“Mr Speaker, Sir, the Singapore National Employers Federation (SNEF) had made a comment on the IAC's decision. I do not see the SNEF's comment as having set a dangerous precedent for employers or unions in responding to future IAC's decisions. Sir, as I see it, SNEF has not urged SIA to disregard the decision or the award made by the IAC. It reiterated that the NWC's recommendation to link wage increase to productivity gain should be supported and that employers and unions should continue to pay attention to this particular recommendation. This recommendation to link wage increase to productivity growth also has the full support of the unions. Sir, the SIA case has demonstrated that our good industrial relations are quite a fragile thing. We have enjoyed harmonious industrial relations for many years and we should take care not to cause any stress or strain. The cooperation and trust which exist now between unions and employers should not be treated lightly. Although I disagree with the view that SNEF had set a dangerous precedent by commenting on the Industrial Arbitration Court's decision, I would urge all employers and unions to abide by the spirit of the Industrial Relations Act and to refrain from unnecessary comments which may result in an atmosphere of mistrust or, worse still, cause damage to the climate of industrial harmony.”
“Mr Speaker, Sir, the Industrial Arbitration Court is an important component of our industrial relations system. The decisions of the IAC are binding on the parties concerned. This is provided for in section 39 of the Industrial Relations Act. Since the setting up of the IAC in 1960, employers, unions and the Government have always complied with the Court's decisions. Sir, given the high level of tripartite cooperation and the over-riding importance of maintaining industrial harmony, I am confident that the IAC will continue to command respect and that all employers and unions will comply with its rulings.”
“Mr Speaker, Sir, the recent Industrial Arbitration Court's (IAC) decision on the SIA case has given rise to some concern that the IAC might have delinked wage increase from productivity gains. In giving its award, the IAC had reiterated "parties adopting a flexible wage system should bear in mind the NWC's recommendation that built-in wage increases must lag behind productivity growth." This shows that the IAC did not abandon the principle of flexible wage system. In the SIA case, the court was of the view that the annual increment of SIA employees should not be linked to a minimum productivity increase to be achieved by the company because of "exceptional circumstances". Sir, the IAC ruling should be accepted as a specific decision on the appropriate quantum of annual increment for certain employees of SIA. The IAC ruled that the quantum which SIA had already decided on earlier was fair and should not be reduced by subjecting it to a minimum productivity growth. The IAC decision in the SIA case, therefore, cannot be viewed as a deviation from the principle of linking overall wage increase to productivity growth and to the profitability of the company. In my view, the IAC ruling will not impede the implementation of flexible wage system. If it were to do so, the Government will have to re-establish the principle in a more formal and legally binding manner. RULINGS OF INDUSTRIAL ARBITRATION COURT 11. Mr Tong Kok Yeo asked the Minister for Labour, in view of the importance of the Industrial Arbitration Court as an institution for the maintenance of labour-management relations and industrial peace in Singapore, if he will take steps to ensure that the rulings of the IAC are respected by all parties involved including unions, employers and the government.”