Lim Boon Heng
Singapore
“On the first question on foreign domestic worker levy relief for single women who are looking after their aged parents, I think that question should be addressed to the Minister for Manpower and the Ministry of Finance.”
“I shall address the second point first. When it is clearly an item for a Ministry, a Member should address that question to that Ministry because that Ministry is also responsible for that even if it is related to ageing.”
“For those who wonder what the Fourth Age is, it is basically the last couple of years of your life when you are afflicted by, perhaps, chronic illnesses and therefore need to be cared for.”
“The Wellness Programme applies to all estates. In the pilot project, we deliberately chose 12 pilot sites to reflect different mixes. For example, we chose Ulu Pandan, which has a lot of private estates.”
“Maybe MCYS and the PMO could really look into these RC centres to see whether they could incorporate some of the needs of the elderly in these centres as well, like an extra area for karaoke or even mahjong. This area should be quiet and enclosed because the elderly sing loudly as they cannot hear very well.”
“The process has already started. We are already debating this issue in Parliament. The unions have taken up the issue with the management. I know and I am aware of that. So, let the process take its course.”
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“So could the Minister consider allowing retrenched workers to be considered on all the other criteria that they must fulfil to get a taxi driver's licence, and then to grant them a licence to be valid, let us say, for a year. And during that one year they must take the necessary measures to get themselves proficient enough in the English language, otherwise on the expiry of that one year the licence could be suspended. I say this because for a person to be proficient in another language, he has got to use it day to day and unless he is placed in that position, it is very difficult to ask him to learn a language. If a variation of the present rules can be made, I think our older retrenched workers would have a better opportunity to compete for a higher paying job and, that is, a taxi driver's licence. I hope the Minister will consider that favourably. Now I would turn to my next point, which is the registration of ships in Singapore. The rules for the registration of ships in Singapore have been tightened since 1981. The Minister knows very well that we have always had a problem with certain countries concerning the open registry that we have adopted in the past. From time to time, Singapore registered ships have come under boycott or threat of boycott by unions in certain countries. In the past, the open registry policy that we have adopted has been criticized for maintaining substandard ships. But in the last two or three years, whenever we have this problem of threat of boycott or actual boycott, the reasons being advanced are no longer that the standard applied on our ships is substandard. Therefore, safety is no longer a criticism levelled at the Singapore registry.”
“I have also travelled on Japan Airlines from time to time when the schedule requires it. When I arrived at Tokyo Airport, Japan Airlines provide the same service telling me as a passenger how much money would be required if I take a bus from the airport to the city and if I prefer to travel by taxi, how much money I should pay or expect to pay when I travel from Tokyo Airport to the city. Does that imply that Japan Airlines is telling all arrivals in Japan that taxi drivers in Japan are dishonest? Sir, let me turn to the points which I intend to raise on this Head. First is the Registry of Vehicles. The rules in respect of applications for taxi licences have been well established and are quite clear to most people in Singapore. One of the requirements is for the person who is applying for a taxi driver's licence to make sure that he is proficient enough in the English language so that he will be able to communicate with foreign tourists in the English language. While these rules are clear, I think at this moment when we have retrenchments, when the older retrenched workers are at a disadvantage when they compete for jobs with younger workers, I would like to make an appeal to the Minister to vary the present regulations or rules to help those retrenched workers. Retrenched workers aged 40 and above did not expect to be retrenched. As such, if in their previous jobs they were not required to be proficient in the English language, then they are not prepared to face the examination which is required of them in order to qualify for a taxi driver's licence.”
“The purpose is, as I had explained, to provide a service to the tourist so that he knows how much money he has to prepare himself for because he may have to change money at the airport. An hon. Member: He has to thank SIA for it.”
“Mr Speaker, Sir, as a Singaporean, I am proud that we have an airline called Singapore Airlines. I believe all Singaporeans are proud of the fact that we have Singapore Airlines. We are proud of Singapore Airlines because it has been successful and it has provided a standard of service which other airlines try to match. As far as possible, when I fly I would like to travel on Singapore Airlines. Because Singapore Airlines provide the service which a traveller requires. When I arrive in a foreign country, I would like to know how much it will cost me from the airport to the hotel where I am staying and I would be grateful if the airline tells me how much money I should prepare myself to spend for that passage of time. I think it is highly improper of the Member for Potong Pasir to say that SIA's information service to travellers to Singapore about taxi fares to hotels is to imply that our taxi drivers are dishonest. I think he owes all Singaporeans an apology for this kind of statement.”
“Hai Sing Girls' High School, one of the outstanding Chinese secondary schools in Hougang in Punggol Constituency, is also participating in this project and will merge with Montfort. While I am involved in the project, I have no personal pecuniary interest in it. And I am raising this subject not because of the project I am involved in but in the wider interest of all aided schools. Being a participant in the project, I am aware of the difficulties that the aided schools are facing. The main problem is financial. At present, the Government gives an 80% grant towards the cost rebuilding a school if it has consistently performed better than the national average. Otherwise, the grant is only 50%. Sir, I think Government should review this grant. To give Members an idea of the magnitude of the financial responsibility the community has to undertake, the building of one primary and one secondary school costs about $16 million. 20% of this is $3.2 million. On top of that, one must add about $1 million for the land. The lease is only for 30 years. We should not make it more difficult than is necessary for the community to participate in the affairs of our schools. So we should not impose too high a financial responsibility on the community. I would strongly urge the Government to review the level of grants so as to reduce the community's burden to 10% and to lease the land for a nominal fee.”
“We should tap the energies and talents of the community to enhance the quality of our schools. Sir, at this juncture, I must declare my interest. I am working with a group of former students of Montfort School to rebuild two schools, a primary and a secondary school. Montfort School has four old boys who are now serving in this House.”
“Mr Speaker, Sir, I have two amendments. If I may, I would like to take both at the same time. Sir, I beg to move, That the sum to be allocated for Head L be reduced by $10 in respect of Subhead LA-01 Object Group 1100 of the Main Estimates. In moving this amendment, I wish to express my support for the Government's plan to spend an additional $3 billion over the next 10 years towards education, ie, over and above the normal expenditure. Although an outline of how this money will be spent has already been given by the Minister for Education, perhaps the Minister could elaborate on it in this House. At the same time, I would like to make a special appeal for greater attention to be given to those now in the workforce. They need to upgrade their knowledge to keep pace with technological change. But in order for such an effort to succeed, it must be well coordinated and pushed. We must not only provide places in our institutions for continuing education but we must also make it convenient and affordable. On the workers' part, they must make the effort and sacrifices to upgrade themselves. I now turn to my next amendment which is on capital grants to aided schools. Sir, the contribution of aided schools run by missionaries and community organizations to education in our country is significantly acknowledged. In fact, we have only to look around in this House to note that many Members have been educated in aided schools. A number of aided schools which were established many years ago are now deficient in facilities. Some of these schools are being rebuilt. The character of these aided schools ought to be preserved. In this connection, the participation of the community in the affairs of our schools must be encouraged.”
“Sir, can the Senior Parliamentary Secretary tell us what is the rate of hawkers who give up their stalls for all hawkers, rather than just for the new cases that were granted? Could he give us an approximate figure or percentage of those who are giving up their trade as hawkers? Mr Eugene Yap Giau Cheng: If the Member for Kebun Baru could frame another question for Oral Answer, I would be too willing to give it to him.”
“I beg to withdraw my amendment. Amendment, by leave, withdrawn. The sum of $2,079,200,000 for Head K ordered to stand part of the Main Estimates. The sum of $160,000,000 for Head K ordered to stand part of the Development Estimates. 5.00 pm Head T -”
“At the same time, let us remember that the recession means we can spend proportionately less on defence, and we have to make the most of our funds. Sir, the concept of Total Defence has yet to be fully understood. All citizens must understand it and fully imbibe its spirit. I wish to ask the Minister to what extent does the public understand the concept and what programmes are being planned to help the public to understand this concept.”
“Prolonged recession will erode social cohesion. There are enough examples, even in developed countries, to remind us of this. All too frequently, on our TV screens, we see the damage that can be caused as the unemployed vent their frustration and bitterness. That is why we must collectively exercise our resolve to get out of the recession as quickly as possible. It means painful sacrifices, belt tightening, wage restraint. It means regaining our competitiveness by raising our productivity. It means fostering good labour-management relations. We must be single-minded to act to protect jobs and attract investments to create jobs. We must guard against eroding the will to work. When there are the unemployed, it is appealing to propose unemployment benefits. The state welfare tune is a seductive siren song because it appears compassionate and caring. But apart from the truly needy and indigent, is it in our interest to launch into state welfarism? All welfare programmes started with good intentions. Invariably, they lead to unbridled demand and an erosion of the work ethic. Let us be aware that there are those in our country who, like sirens, sing the seductive song of state welfare. And worse, who try to play the lower income against the higher income. Listen to them, and we will end up on the rocks. Sir, the next component of Total Defence is Civil Defence. The hotel disaster in Serangoon Road is a painful reminder of the importance of Civil Defence. Our Civil Defence capability is only beginning. Let this tragedy spur us on to develop this fledgling capability. The final component of Total Defence is military defence. When the world is uncertain, we must have a strong SAF and maintain a credible military deterrence.”
“Sir, I beg to move, That the sum to be allocated for Head K be reduced by $10 in respect of Subhead KA-01 Object Group 1100 of the Main Estimates. Sir, in moving this amendment, I wish to speak on the subject of Total Defence. Our defence capability depends critically on our collective will and determination as a people to resist any external threat. It depends on the commitment that we, as individuals, have to our nation and to one another. If we engage in divisive internal strife, we weaken our collective strength and expose ourselves to exploitation by those who may harbour harmful intentions towards us. There is no better time than now to remind ourselves of the importance of Total Defence. We are in the midst of a recession. There is instability and strife in neighbouring countries. How should we, as a people, respond to these factors? How can we protect our right to live here in peace, to tackle our economic problems and after we have overcome them, to progress and to prosper? It is our duty, as citizens, to be aware of the factors that have a direct bearing on our well-being, to understand how they affect us. We must be ready to act to miti- gate the effects of adverse factors. We must be quick to exploit favourable factors to maximum advantage. So we have to be psychologically prepared to meet whatever comes our way. We cannot afford to be self-centred. We must have social cohesion. Recent events - in Baling, in Sabah and unexplained fires in Indonesia - serve to remind us of the importance of one fundamental of our society, racial harmony. We are all citizens of Singapore, irrespective of race, language or religion. No one should be allowed to play on emotions linked to such issues. The recession reminds us of the need for economic defence.”
“The Economic Com- mittee's Report said that it will take several years to set up the infrastructure to collect indirect taxes whose introduction must be carefully timed. The First Deputy Prime Minister used the term "selective" and he said it would not be implemented soon and that it will be low. The Finance Minister himself has said that every effort to ensure that the less desirable side effects are mitigated. What I am seeking from the Minister for Finance is a clear assurance along the lines that have in fact been taken by different Ministers. The last thing we need as we face the recession is for the people to be unsettled by a new tax. Yet it is not a new tax as it may have been made out to be. We have had consumption taxes in the following areas: on tobacco and liquor, on petroleum products, on cars, on PUB bills, on restaurant bills, on entertainment, such as cinemas. These taxes are paid only if the item or service is consumed. Thus, Government has, in fact, selectively imposed consumption taxes in the past. What is cause for concern is: on what items will consumption taxes be further levied? On retail sales, as suggested by the Economic Committee? Which essential items will be excluded and will, having an exemption list, be unwieldy? Finally, will the setting up of the machinery for consumption tax collection lead to an increase in staffing requirements in the public sector? Or will it cause private companies to have to spend more on manpower to cater for this new method of tax assessment? Sir, apart from these reservations, I support the motion. 12.33 pm”
“I know that Table 2 may not reflect accurately the employment situation in the public sector because certain staff have been transferred to newly created statutory boards. However, the fact remains that there has been a proportionately higher increase in senior positions in the public sector. Finally, I would urge the Government to examine rules, regulations and practices that may actually result in inefficient systems and inefficient use of manpower. An example is the system of refuse collection and disposal that we have. It is highly labour-intensive because of a number of factors, including rules and regulations that restrict mechanization. We should be concerned that there are policies that are making it necessary for certain Ministries to employ large numbers of employees. We should question whether these rules, regulations and practices are really necessary. So perhaps they could be included in the terms of reference of the Committee that is looking into manpower requirements in the civil service. Sir, next I turn to consumption tax. There is considerable apprehension over the proposed consumption tax. Workers are afraid with the free use of the term "broad based". If it is to be broad based, then it may be that the lower income who make up the broad base will be the hardest hit. Unfortunately the statements so far made are brief and offer little explanation. The subject was dealt with in two paragraphs in the Economic Committee's Report. It was also briefly stated in the First Deputy Prime Minister's Speech to this House. The Minister for Finance was equally brief when he spoke the other day. What we need is an assurance from the Minister to allay the public's apprehension. I take solace in some key phrases that have been used.”
“8:1, and the universities 8.8:1. The Technical and Vocational Institutes also have a very comfortable ratio of 10.2:1. Clearly, if there is to be any trimming of manpower, these are the areas to be looked at. However, it may well be that there are other compelling factors that may not allow further trimming. Quality of education is one. I trust this cursory examination of education is sufficient to illustrate the complexity of the exercise. We can expect an increase in employment in education rather than a decrease. The move towards full-day schools or one-session schools and the extension of pre-primary classes to all schools will add to rather than subtract from manpower requirements. Let me return to manpower costs incurred by the public sector. The sharp increase since 1980 is due to three factors: high wage increases aggravated by the method by which the public sector implemented NWC guidelines, increase in 10,000 posts as stated by the Minister and an increase in the number of higher posts. Let me elaborate on this third factor. Table 2 shows that the various Ministries have, in fact, been fairly successful in trimming staff levels in Divisions 3 and 4. For Division 3, there has been a fall of 2,641 posts between 1980 and 1984. There has also been a fall of 943 posts for Division 4 between 1980 and 1984. However, for Division 1 there has been an increase of 1,751 posts between 1980 and 1984. And there is a marginal increase of 50 for Division 2. So clearly, while there has been a trimming of staff at the lower levels, there has been an increase of employment for officers at the higher level. Quite obviously, if there is a higher proportion of senior officers, there will be a correspondingly higher wage bill.”
“It is sufficient to look at Education to show what limitations there are in trimming manpower. In 1984 there were 23,697 persons employed in our educational institutions. Figures released by the Finance Ministry show that we have the highest ratio of public employees per 100 population when compared to Hong Kong and South Korea. Ours, like Japan, is 0.9. It is 0.1 for Hong Kong, and 0.6 for South Korea. While the public employee population ratio is a useful indicator, it is insufficient. I cannot see us trimming down the ratio for Education. We are committed to higher expenditure on Education to raise the educational level of our workforce and until we have caught up with the developed countries we will have to spend a proportionately higher amount on Education, and in the process we will be employing more on teachers. We must also not forget that demographic characteristics differ from country to country. So while we may have the same public employee/population ratio as Japan, we have a younger population. As such, the more accurate indicator will be public employee/population ratio for those in the student age group. If this is used, I think the figure would show that even now we will be deploying proportionately fewer people in education than Japan. From figures contained in the Year Book of Statistics, in June 1984, we have one teacher for every 22.8 students. How does this compare with other countries. That is what the working group on public manpower would have to look at. Figures can be broken down to different levels, from primary schools to universities. The higher the level, the lower is the student/teacher ratio. This is shown on Table 1. It would appear that we have a very liberal student/staff ratio at the Institute of Education - 4.”
“Sir, while both the Minister for Finance and his Permanent Secretary have been careful to assure employees that the proposed 10% reduction will be achieved through natural attrition and retrenchment is to be avoided, this trimming exercise is causing restlessness, if not nervousness, among public employees. Public employees are wondering which one of them out of 10 will be affected, especially if there are none in their section who is due for retirement. In order not to demoralize the entire civil service, the exercise will have to be carried out with tact and consideration. While there should not be precipitate haste, yet the sooner the issue is setled the quicker stability will return. So while it is essential that public expenditure be scrutinized, we must be careful when we compare ratios, particularly on broad indicators with those of other countries. We must be sure that we are comparing like with like. Here in Singapore the public sector provides a number of services that in other countries are provided by the private sector. Telecoms and HDB are two examples, and between them they account for over 20% of public employees. We can trim the public sector employment to population ratio drastically if the two statutory boards are privatized. However, such a move would be merely transferring a big chunk of public employees to the private sector and may not necessarily result in more efficient utilization of manpower. So clearly, objective criteria will have to be established to determine whether each Ministry is efficient in its utilization of manpower. Among the Government Ministries, three of the larger employers are Education, Health and Home Affairs. I do not intend to go into each of these key areas.”
“As such, the budget is a welcome painless budget. Sir, as there are many of my colleagues who wish to speak, I shall now confine myself to only two aspects of the Budget statement that may cause some pain in the future to a large number of workers. These two aspects have caused worry and concern. They are the proposal to trim staffing levels in the public sector by 10% over the next five years and the intention to impose the consumption tax. First, the proposal to cut staffing levels in the public sector. Sir, I have requested the Clerk of Parliament to circulate two tables to which I shall refer to in this discussion on the permanent establishment of the public sector. [Copies distributed to Members] In his Budget statement the Minister for Finance has highlighted the public sector employment to population ratio as relatively high. Our public sector employment population ratio was 5.3% as compared to 3% in Japan, 1.6% in South Korea and 3.4% in Hong Kong. He declared that Government has decided that the permanent staff complement of Ministries and statutory boards should be reduced by 10% over the next five years. Last Friday, in a press interview, the Permanent Secretary in the Ministry of Finance pointed out that while the number of public employees grew by 10.3% in the last five years the total expenditure on manpower almost doubled, rising from $1.62 billion in 1980 to $3.07 billion in 1984. These figures certainly indicate that steps must be taken to trim public sector employment and to reduce manpower cost. The Permanent Secretary has announced the appointment of a working group who are set to come up with their findings in July.”
“Mr Speaker, Sir, I rise to support the motion standing in the name of the Minister for Finance. Sir, events in the past year have together driven home one important message: nothing can be taken for granted. We have to be prepared to face the unexpected at any time. How we fare depends on how wisely we respond to events. The severity of the economic downturn was not quite expected. Last year the Minister who was then holding the Ministry of Trade and Industry portfolio assured this House during the Budget debate that things were not as bad as it was made out to be. We are all perhaps a little wiser now considering the plunge that the economy took. The Budget this year is a budget to counter the recession. As such, it is commonly referred to as the pro-business budget. Quite rightly so. If businesses are in trouble, it is necessary to provide assistance. It is only when businesses are able to continue that jobs are preserved. And it is only when new businesses are set up that new jobs are created. So while the budget may be pro-business, it is also pro-worker in job preservation and job creation. The problem is that it is not an instant cure. As such, there is no guarantee that there will be no further retrenchments or that there will be no rise in unemployment. There may be more pain before us before a recovery takes place. The Minister for Finance has literally given billions away to businessmen, with some for the taxpayer. It is an unusual situation. In most situations when Governments are faced with recession, Governments would have to make up for falling revenues by new taxes. We have been fortunate that there are enough accumulated surpluses for Government to give away so much without having to impose immediately new or higher taxes.”
“Mr Speaker, Sir, I beg your indulgence. If the Member for Alexandra should ask of the Skills Development Fund: how much money has been committed to training? You need to have funds to pay those companies that are providing the training, because the programme stretches over two to three years and the money must be there. If he were to find this out from the Skills Development Fund, he will know that there is only an uncommitted amount of just about $100 million left.”
“Mr Speaker, Sir, if I may be allowed to respond. I think the workers have made a lot of sacrifices. With the proposed 15% cut in the CPF, I think the levy on the SDF should continue unless calculations show otherwise. The onus of proof to the unions would have to be on the employers to show that it is necessary to reduce the contribution to the SDF.”
“I think we should all pull together and face this recession resolutely and let us come out the better for it in as a short a time as possible. Thank you, Sir. [Applause]. 12.30 pm”
“The Member for Alexandra was mistaken, I think, when he read the newspapers this morning. He said that the contributions to the SDF has not fallen despite the suspension of the 2% contribution to the SDF in March or April last year. The Report that came out published in the newspapers today refer to accounts for the fiscal year ending 31st March 1985. Of course, the reduction had not yet taken effect. But when the next report comes out, I am sure he will see a substantial reduction in the contributions to the Skills Development Fund. I would like to commend the emphasis given by the Economic Committee on education, on retraining of workers. The Ministry of Education has announced a $3 billion programme over the next 10 years to provide better facilities to train the future workforce to be better qualified, more productive and more competitive in the international market. I think we ought to have a similar programme either using the Skills Development Fund's levies or through other Government grants, a parallel programme aimed at the existing work force. We need to train, as was mentioned, for doctors to refresh their knowledge in view of increasing knowledge in medical science. We need to give training to our teachers who are teaching the new generation. We need to retrain workers in all the skills which they require for us to achieve our goal as a developed nation by the end of this century. Finally, Mr Speaker, Sir, I share the view expressed in the President's Address that at this time when we face a common problem, the recession, it is incumbent on all of us, all Singapore citizens, to pull together, and not to waste time over strife, apportioning blame, making political capital out of people's misery.”
“My apologies to the Member for Changkat if I have misunderstood her intentions. But there was a view expressed in this House of the shock over this 600,000 figure in the last couple of days. For those older workers who are not able to benefit from the BEST programme because they found it difficult to take advantage of the programme or they could not find themselves the time to enrol in these courses, there has been one other scheme that has been very much maligned which was meant to benefit this category of workers and that is the Skills Development Fund. The Skills Development Fund's objective is to provide training for workers including those who are older, who are unable to take up courses which require a basic education. And where companies were able to channel such workers into these courses, our workers have benefited. What we should now, at this moment, stress is that we redouble our efforts to find practical ways of giving these workers the skills which they require to earn a decent living. I would like to take the point which was raised by the Member for Alexandra who spoke before me, ie, his call, I believe, of suspending further the 2% contribution to the Skills Development Fund. I think we should take that step after very careful consideration because we need the money to provide the skills training for those members of the work force without the required skills.”
“Sir, on Monday, when the Member for Changat expressed her views in this House on education and training, she mentioned that we have forgotten a certain category of workers. Some have expressed that they were very disturbed, that there were so many members of our workforce, no less than 600,000 who have less than primary school education. My gentle advice to my fellow colleagues would be that these figures were, in fact, known years ago. Every year, the Ministry of Labour provides us with statistics on the profile of the workforce. And every new Member of Parliament making the first speeches in this House would inevitably draw attention to this fact. For the 1984 batch, we did so. They pointed out that 600,000 workers had failed to benefit from educational services provided by the State. But we know that these 600,000 is the result of deficient facilities during the period prior to independence and due, to some extent, to the dropout rate thereafter because of the need to expand the facilities to some extent at the expense of quality. So what was done for these 600,000 workers without a basic education? The NTUC took this up, worked together with the VITB and came out with the BEST programme which is now implemented. I think it is wrong now to say that this programme is of no use to those workers. It provides a very useful purpose for those in their 20s, for those even in their 30s. Perhaps it is more difficult for those in their 40s to take advantage of this scheme.”
“Profit levels do fluctuate even at the best of times and reduced profits may not necessarily imply that the performance of the company is deteriorating. On the other hand, it is also possible that reduced profits may indeed be a sign of impending trouble for the company. Where the company is open, is able to communicate, is able to share information with the union and workers, there will be understanding for the need for moderation, there will be understanding for the need for wage restraint. And there will be acceptance whatever unpleasant measures in terms of wage increase reductions, even a wage freeze or adjustments to annual bonuses and other forms of payment. Workers would be prepared to make the sacrifices. Where the reduced profits are not a sign of further deterioration in the affairs of the company, then a reduction in the annual increments or a wage freeze may not be justified. There is no reason, however, why unions and management should not take the opportunity now to start gearing themselves for the future and to commence discussions on wage reform, to channel surpluses, to form the basis of variable bonues or other profit sharing schemes. For companies which are making increasing profits, employees ought to be given annual increments due to them. But here too there is no reason why management and unions should not also take the opportunity to start gearing themselves for slower growth and lower annual increments in the future provided there are adjustable wage payments that can be made year to year. There is no reason why managements and unions should not commence discussions on wage reform. Mr Speaker, Sir, I would now like to turn to education and training.”
“Mr Speaker, Sir, let me now turn to wage restraint and wage reform. The need for wage restraint is not in dispute. If the experts forecast that it would take up to two years to get out of the recession, we have no reason to think otherwise. So wage restraint will be exercised for two years or for as long as it is necessary. Wage restraint and wage reform, however, should take into account the individual performance and circumstances of each company. For this purpose, we can divide companies into three categories. Firstly, companies that are making losses. Secondly, companies that are making profits, but reduced profits. Thirdly, companies which are making increasing profits. And there should not be a blanket wage freeze. It is unfair to ask workers in companies that are making profits to accept a wage freeze on top of the proposed cut in employer's contribution to CPF. The market ought to be allowed to find its own level with the overall guidance of moderation. Where it is clear that the companies are making losses, I do not think there would be any disputes. I do not doubt that unions would agreee to freeze annual increments or even take reductions in their overall pay packet in such circumstances. But the situation should be reviewed at the end of the year and the extent of the severe restraint to be examined. The onus must, however, be on the employers to convince the employees and the union leaders that their companies are making losses and that such sacrifices on the workers part are necessary to help the company recover. Where the relations between management and labour are good, there would not be much difficulty. So this call for greater openness on the part of the management and receptiveness on the part of workers. For those companies making reduced profits.”
“I say, "Look again, Member for Anson!" But there is none so blind who will not see.”
“You have to pray harder, I am afraid. For those of my constituents who come to me for assistance to find jobs at my Meet-the-People sessions, when I refer these cases to the Ministry of Labour, the Ministry of Labour has found them jobs, unless they were able to find jobs before the Ministry of Labour does. I have a high rate of success and I wish to place on record in this House the thanks of my constituents to the Ministry of Labour for this service which they have provided. Job placement is matching people with jobs. If there is difficulty in finding re-employment, it is largely because of mis-matching. The jobs are there, as the Member for Whampoa said yesterday. As an example, one company operating in Kallang has vacancies for over 1,000 operators in the third shift. But there are few takers. So the jobs are there if Singaporeans are prepared to accept them, if there is a proper match of people with jobs. The Report of the Economic Committee has also been criticized for not showing concern for workers. Those who have read it fully know that this view is erroneous. Let me quote again Chapter 12, paragraph 13, page 125: 'To maintain productivity, and prevent misallocation of human resources, skilled retrenched workers should be redeployed in new jobs with a minimum of skills wastage. The Government, in conjunction with the NTUC, should set up a service to redeploy such workers so that their skills will not be wasted. Unskilled retrenched workers should be encouraged to acquire basic skills.' So don't we have it there? Don't we have the sentiment, the feeling for retrenched workers expressed in the Economic Committee's Report so clearly and succinctly? So the Economic Committee is accused of having forgotten the plight of the retrenched.”
“It is always the Government's responsibility. It is never the responsibility of the Opposition.”
“You look after them. If you cannot help them, we will. I must add, at this juncture, that I found the Ministry of Labour's Employment Service to be extremely helpful. When the Senior Parliamentary Secretary, Ministry of Labour, said yesterday in this House that his unit could fix the unemployed with new jobs, it was no idle boast.”
“This unit liaises closely with the Ministry of Labour's Employment Service, and the Singapore Manufacturers' Association's employment unit.”
“Yes, what has the NTUC done, we are asked. We have set up a job placement unit.”
“At this moment, the over-riding concern of workers is security of employment. Sacrifices make sense if they prevent retrenchments. If there are surpluses, or increased profits as a result of workers' sacrifices, it would be grossly unfair if these are given away as dividends to shareholders. Surpluses should be spent on measures to enhance job security. Surpluses should be ploughed back, reinvested to enhance efficiency, to improve the workers' productivity. These steps will enhance the viability of the company, and enhance job security for those working in the company. It will bolster morale, if these common sense logical steps are taken by managements. Now, for those who are out of work, the immediate priority must be to find new jobs. This was extensively debated yesterday. We believe in helping workers to find re-employment because it helps workers best; financially and spiritually help him best. The Opposition's classic response is, of course, to set up a welfare state, to provide unemployment benefits. How much should these benefits be, and for how long? According to needs, one of them said. Is that not how all welfare states start off? What has state welfarism done to the American budget or to the British budget? If we follow their course of action, we will end up, before long, with a debt of $25 billion, instead of enjoying reserves of $25 billion. For us, no welfare scheme can be better than giving the jobless fresh employment.”
“If I were an employee in his company, I will not sacrifice those peanuts since it does not help him much. It is no wonder that he cannot find local workers willing to work for him! How is he going to motivate workers if he has that kind of attitude? He goes on to say that all the other measures, together with the proposed reduction of 15% of employers' contribution to CPF, give him only a 7.5% reduction in cost. Only a 7.5% reduction in cost! Now, anyone who has done any business calculations on investments return on capital will know that a 7.5% reduction in overall cost must add up to a substantial return on investments on capital. He says, and I quote: 'We have to reduce more, or else we have to increase productivity. In Singapore, productivity is high only in November, the month before bonuses and increments are given.' This is a telling statement indeed. He expects to pay peanuts for productive work! And productivity, it appears, means workers' working harder! But where in his statement is there any mention of management productivity? I hope that this sample of management opinion lies with a minority. But let us remember at this time of recession what the Member for Bo Wen expressed on Monday over the possible demoralization of workers. They have been asked to forgo the 1985 NWC adjustments. They have been asked to cut annual increments, annual bonuses, incentive payments, and accept a cut in employers' contribution to CPF. What do they receive in return? First, they would expect that sacrifices are made across the board in the company. A principle of equal misery. Management staff as well as workers must equally share in these sacrifices. It is unfair if executives continue to receive increases while workers are asked to tighten their belts.”
“Hotel room rates, which are incurred by visiting businessmen and tourists, are now half the rates prevailing two years ago. They are lower than those applying in Hong Kong. A regional news magazine which surveyed the prices of certain goods in Singapore found that the prices in Singapore are lower than those of Hong Kong's. In addition to these, the reductions in rates of telexes and international telephone calls must help to lower the cost base for companies carrying out overseas business. We all know recently petrol prices have also dropped, thereby lowering transportation costs. Utility costs have also been reduced. So there has been an all round reduction of costs, labour costs, charges by statutory boards and Government departments, and downward adjustments of prices of rentals and rates because of market conditons. These all add up to substantial savings to the businessmen. The ball is now in the employers' court. Workers have made their fair share of sacrifices. Trade unions agree to exercise wage restraint for as long as it is necessary. This is a pledge that trade unions and workers will play their part. It is now for the employers to play theirs by finding the markets and increasing market share. Managements must not take the sacrifices of workers for granted. Sadly, even now, we find the attitude of some managers to be totally insensitive. Let me quote an example from the Sunday Times of 23 February 1986. The Chairman and Managing Director of a die-casting company was quoted as saying: 'I do not think the CPF cut for employers is good enough. The cut gives us only about 4 per cent savings in costs, which is peanuts.' Peanuts? The workers' sacrifice of 12% of his total wage is dismissed as peanuts!”
“It is understood to be a temporary sacrifice. It is meant to provide relief to employers to tide over the recession. It is also meant to pare our costs down so that our goods and services will be more competitive. In other words, it is meant to maintain and stimulate external demand for our goods and services. Cutting costs does not mean cutting wages alone. Other costs have also to be pared, so that the cumulative effect makes a real difference. Is the proposed 15 percentage points cut in employers' contribution to CPF sufficient? Certainly it would narrow the gap between our wage level and those of Hong Kong, Taiwan and South Korea. In terms of hourly compensation, our wage level would still be higher than these three competitors. We are not returning, as one Member of the Opposition said, to the sweat shops of Hong Kong. Our wage levels are still higher than those of Hong Kong, even with a reduction of 15 percentage points to employers' contribution to CPF. But if we talk in terms of unit labour costs, taking into account productivity, this proposed 15 percentage points cut will bring us on par with unit labour costs in Hong Kong and Taiwan. And if we can improve in productivity, we will have an advantage. So for those who say it is not enough, particularly some employers, I say, "Look again." This measure must be viewed together with other cost reductions. Office rentals have fallen by an estimated 56% from the peak in mid-1981, a halving of rentals. Office rentals are now lower than Hong Kong's. For those foreign investors who incur costs of expatriate staff, residential rentals here continue to be lower than Hong Kong's and now estimated to be only one-third that of Hong Kong.”
“Were they concerned with the hardship that such a cut may cause? Were they concerned if the proposal would adversely affect home owners still paying off mortgages? Not until it was pointed out to them by, among others, the Member for Toa Payoh. Now one of them say that the proposed cut in employer's contribution to CPF is unacceptable. This was said in this House yesterday. He even ask now how it would affect, he said, 299,000 home owners. He has now the audacity of acting like a people's champion, demanding to know what Government is doing about this. Is this sincerity or is this sham? A cut in the employer's contribution to CPF is a wage cut. Trade unions could not agree to this cut before, because it is cutting workers' wages and no one should tamper with cutting workers' wages lightly. We will now agree to a cut, only because the full extent of the recession is now known through the Economic Committee's Report and other figures suplied by the Ministry of Trade and Industry. We agree to it only because it will help to prevent further job loss and help create employment. The welfare of workers is best protected by keeping workers in employment. This acceptance of the cut in the employer's contribution to CPF was not easily given. The First Deputy Prime Minister had to meet unions and explain the situation to them in no less than three meetings within the space of one month. Two of these meetings were with the assembly of representatives of all 70 unions affiliated to the NTUC. These meetings were in addition to those held by the unions themselves. That is the extent of consultation that takes place over such an important issue as a reduction in the employer's contribution to CPF. The proposed cut in the employer's contribution to CPF is not a small sacrifice.”
“We compiled retrenchment figures from our affiliates month by month but we noted that it was the electronics sector that dominated retrenchment figures. This tended to support the view that the recession hit some sectors like electronics and also shipbuilding and ship- repairing most whereas other sectors remain relatively unaffected. Nevertheless, we set up a Job Placement Unit. But there were few takers. Most workers appeared to be able to find alternative employment. That is why there was no undue concern at the time. It was only after the Ministry of Trade and Industry released the second quarter figures that it was realized that the downturn was indeed a recession. Our unions acted swiftly - in a voluntary action to forgo the 1985 National Wages Council's wage adjustments. This was a sign of the practicalness and realism of the trade unions. But more than that, trade unions also exercised wage restraint. Nothwitstanding the fact that annual increments and annual wages supplements were protected by contractually binding collective agreements, trade unions in many companies agreed to downward adjustments. They could have sat still and refused to budge but our unions have been cooperative, practical, realistic and they have agreed to these adjustments. Last year, there were calls for a cut in CPF contributions. Who were in the forefront clamouring for this? Were the two Members of the Opposition not prominent among them? Did they not say then that it was necessary to cut costs? But they failed to say at that time that they were calling for a cut in workers' wages.”
“To achieve business efficiency, managements must be competent in all the following areas: (i) Market awareness; (ii) Sales promotion; (iii) Product design and development; (iv) Up-to-date and properly-run plant; (v) Up-to-date management systems; and (vi) Human resource management.' This is what the Secretary-General of the NTUC sought to remind the public in his address to a union conference a few days ago. So I would urge those who perceive that there is a conflict of interest, a conflict of opinion, between the NTUC and the Economic Committee's Report, to look again at both the statements of the Economic Committee as well as the statements of the NTUC. Sir, let me now state what the concerns of the trade union movement are during this period of recession. The trade union movement has four primary concerns: (i) To stem the tide of massive retrenchments; (ii) To help create an environment conducive to job creation; (iii) To assist retrenched workers to find jobs; and (iv) To take steps to secure long-term stability of employment. The extent of this current recession was not realized until after mid-1985. While some may claim to have known it months or even years earlier, the fact is that in the first half of 1985, the common view was that there was an economic downturn, affecting the various sectors of the economy differently and that there was not a general recession. During the meetings of the National Wages Council between March and May last year, figures supplied by various Government departments and even employers did not show that this commonly-held view was wrong, that it was an underestimate of the severity of the recession. At the NTUC, we watched the trends in retrenchment with increasing concern.”
“What has happened, unfortunately, is that there has been a strong impression created over the proposed CPF cut and severe wage restraint. It has given the public the misconception that it is wage cost that is the primary culprit. Labour cost is an important consideration but it is not the primary cause of the recession. The recession is created by a congruence of external and internal factors. Anyone who reads the Report from page 1 would know that straightaway in its summary, in point form, that was given in the Economic Committee's Report. In order to correct this unfortunate public misconception, for which I think the Straits Times must be made partly responsible, the Secretary-General of the NTUC a few days ago, spoke out to point out that entrepreneurship, correct or wise business decisions, correct and wise investment decisions are far more important. It has been made out that this has been overlooked by the Economic Committee. I would refer those who doubt that this point has been covered by the Economic Committee to turn to Chapter 12, paragraph 7, on page 124, which has the heading Overall Business Efficiency, and I quote: 'Good management must be the starting point of any productivity improvement programme. However, it is not enough for management to take the lead in promoting productivity consciousness. Indeed, management's role must be to ensure that their businesses are run efficiently. A business that improves its efficiency will automatically achieve higher productivity but the converse is not necessarily true.”
“Mr Speaker, Sir, I am glad that we finally return to the main motion of thanks to the President for his Address to Parliament. I think it is appropriate at this stage to put our bearings right in the direction that we want to go rather than to be deviated from the main objective of the President's Address. The Economic Committee, whose Report has been accepted in principle by the Government, is a worthy, commendable and thorough piece of work. The Economic Committee has gone to great extent to make it easily understandable to the readers of the Report, businessmen, union leaders and the man-in-the-street. It has provided not only an executive summary in its Report but also summaries for each of the chapters in this Report. Yet unfortunately there seems to be a lot of misconception over the whole thrust of the Report - what the Committee set out to do, what it has analysed, and what policy changes it recommends to help our economy. There is, for example, a perception among some quarters that there is a difference of view between the Economic Committee's recommendations and those of the views of the NUTC. In particular, in the past two weeks, the only English daily morning newspaper, the Straits Times, has given great play to what it perceives as a conflict of opinion between the NTUC and the Economic Committee. There is no such conflict. On the contrary, there is a congruence of views and a common desire to want to turn the economy around so that the welfare of workers would be protected. Anyone who bothers to read the Economic Committee's Report in its entirety will see that the underlying purpose of this Report is for the good of Singapore, for the good of the people of Singapore, for the good of the workers of Singapore.”
“Another supplementary question, Sir. Will the Minister of State expedite the process in view of the congestion at the Ang Mo Kio library?”
“Sir, will the Minister of State inform this House when the vacancies will be filled?”
“For those of you who are interested to know what I mean, refer to the Business Times of 29th August 1985. It is time for both the Board and the local contractors to get down to the serious task of upgrading the industry. In concluding, let me state that our economic problems arise from a number of factors, as outlined by the Member for Leng Kee: fall in demand, structural adjustments and failure to absorb tech- nology fast enough. Wage restraint, reduction in cost of services provided by statutory boards, reduction in fees payable to Government - these measures merely buy us time. Long-term solutions depend on developing entrepreneurship, enterprise and raising productivity, not merely of workers, but more critically, of management. Mr Speaker, Sir, I support the motion moved by the Member for Leng Kee. 11.53 am”
“Local business can absorb management expertise and effect technology transfer through tie-ups with foreign firms. Such tie-ups should be entered into carefully, bearing in mind that there is a price to pay. We can minimize that cost somewhat if we play our strengths and advantages to the maximum. Let me briefly illustrate with the example of the construction industry. We have one of the largest housing programmes, if not the largest in the world, for a city. It should have been an excellent opportunity for local contractors to develop their expertise. Yet, generally speaking, methods of construction remain conventional. It reflects on an overly conservative, if not archaic attitude of mind. Why is it so? Perhaps local contractors have been too accustomed to the quick profits to be made in each successive building boom. The Housing and Development Board had the unenviable task of trying to make local contractors to upgrade. It introduced pre-fabrication and industrialized methods of construction. We have the largest prefab housing construction programme in the world. The opportunity is there for local contractors to learn from the programme, develop their expertise. I am afraid that, except for one or two local contractors, our contractors are not picking up the skills. It is ironical that a Japanese firm, starting with a lower level of knowledge of concrete technology, has been able to build up its expertise so quickly that it is now the best performer in Singapore. Can our local contractors afford to waste the opportunity? Can it allow more foreign contractors to use Singapore as the learning ground? It will be an opportunity lost if contractors and the Construction Industry Development Board continue to engage in a battle of brickbats.”
“It is not that there are no schemes to assist local business, particularly the small businesses. It is that they are even at a loss as to how to take advantage of the schemes offered to them. Take the case of the retail trade once again. If wage costs form only 4.4% of total costs, then obviously other factors of costs are more important. It cannot be that retail outlets cannot be profitable. Otherwise, why would a foreign department store chain want to expand into neighbourhood shops? What advantages does it have? Among the advantages, as pointed out by the Member for Leng Kee, must be economies of scale, exploitation of central stores, efficient inventory control. If local retailers are to compete successfully against such competition, it is time to shed the tendency to be individualists. Local business ought to get together to realize the same economies of scale. Within this, there can still be room for some individualism. But getting local business together and to agree to help each other is going to be a very difficult task. But it has to be done. Giving local business more concessions, apart from stemming the bleeding, is not going to solve their long-term problems. Helping them to rationalize and upgrade will yield greater dividends. What local business really lacks is management expertise, knowledge and ability to use technology. There is an urgent need for technology transfer. However, let us not delude ourselves that technology transfer will be offered for free. We have to fight every inch of the way to get it. No nation, however altruistic its pronouncements, willingly transfer technology for free and no company is going to give to a potential competitor its trade secrets for free.”
“True, it is necessary to raise productivity consciousness. When all other things are equal, the workers' efficiency makes a difference against competition, But if we want to stay ahead of the competition, it is management productivity that makes the difference. And that difference can be dramatic. Wage costs would not be reduced by fractions. They can be reduced by factors, complete whole numbers. It is not merely automation and skills upgrading. What makes the difference is the expertise, the initiative, the innovativeness of the management. For example, not much automation was implemented by SBS in reverting to one-man-operations. The problem seems to be that the way in which local businesses operate has not changed substantially over the years. There was little incentive to do so, so long as the economy kept on growing at a fast pace. But it is more telling when we are hit by a recession. The economic restructuring policy was initiated in 1979. It is now six years. How much has changed? For those who have not changed, it is six years wasted. We are now adopting a policy of wage restraint. We may do so for two, even three years. We cannot afford to waste also this breathing space. If we do, we are condemning ourselves to low-cost, low-value added operations. This is not what Singaporeans want. We have to wean employers off their dependence on low-cost labour. We had assumed, at the outset of the economic restructuring policy, that entrepreneurship and enterprise will flower. Perhaps we over-estimated the capability of local businesses to do so. Now, after six years, we find that only a minority have upgraded. Government policy, at least over the next two to three years, must be directed at helping local business to help themselves.”
“I think that is a point for the management to consider. In the retail trade, the ratio of remuneration to operating costs is an incredibly low 4.4%. How much does it take in wage cuts to make a difference to profitability, when wages formed only 4.4% of the operating cost? And mind you, this 4.4% includes CPF, SDF, and it used to include payroll tax. Any cut in the CPF is not going to make much difference. In the area of labour costs, would it not be more sensible to review the way in which sales are made, to review the way in which labour is utilized? It is heartening to note, however, that some sectors have made substantial savings in labour costs without resorting to wage cuts. In the transport, storage and communications sector, the ratio of remuneration to operating expenditure fell from 23.6% in 1974 to 16.2% in 1982. That was done surely without transport workers lowering wages. Statistics may not tell the full story. During this period, fuel costs went up and helped depress the proportion of labour costs to total costs. But it would be interesting to see what savings SBS, for example, managed through rationalizing their operations. SBS could not have maintained bus fares at such levels if they had not improved operating efficiency. Another sector that has successfully reduced wage costs, without wage freezes or wage cuts, is the finance and insurance services sector. The ratio of remuneration to operating expenditure fell from 6.0% in 1974 to 2.3% in 1982. We cannot attribute this to fuel costs, so something else must be responsible. During this period also, workers in this sector continued to enjoy wage increases. To me, the statistics paint a telling story. We have approached productivity perhaps from the wrong end of the workforce.”
“We must also be clear in our minds that wage restraint is only a temporary solution. It gives us breathing space. It buys us time. It allows us to make adjustments to weather the recession. In the long-term, wages must rise, especially so for the lower income group if they are to enjoy a better standard of living. In a recession, every cent counts. Wages, of course, is the most visible of costs. It helps our industries if we moderate wage increases. But it is not a long term solution. We must view wage costs in proper perspective. It was revealed in a survey by the School of Management of the National University of Singapore that direct labour costs in Singapore accounted for 14.2% of the cost of production, compared with Japan's 14.6%, North America's 15% and Europe's 18.7%. So we do not compare unfavourably. Obviously, there are other areas of costs that need to be addressed. Government has reduced costs, It is now for management to take a critical look at the way they operate. Our Yearbook of Statistics published by the Department of Statistics gives us some interesting figures, to place wage cost in perspective. For the manufacturing sector, the ratio of remuneration to output value has hovered between 7.7% and 9.8%. Obviously, there is not that much that can be gained in attacking wages alone. Yes, a 2% difference in cost is not insubstantial when times are bad. But it is not the road to profitability. However, there is a case for the local firms, whose wage costs to total costs run at 21% against 7% for MNC's. There is substantial gain to be made. But let us remember, local firms or MNC's, both operate with the same pool of labour, and I think same levels of wages. Why is there that substantial difference between the wage cost of local firms and MNC's?”