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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“Like Mr Sam Tan, we are all saddened to hear about the Wong family in Lorong Ah Soo, where the mother has dementia. Perhaps, a closer knit community of neighbors can help reduce such incidents in future. We will train the grassroots volunteers to enable them to identify those who need help. There is a programme called the Community Psychogeriatric Programme – a bit mouthful – which was launched last year, but VWO members and hopefully our grassroots leaders will also be trained to identify this kind of problems within the community. Social services, including the Elder Protection Team under Transcentre, a VWO, also play an important role in providing assistance. Another VWO, the Alzheimer's Disease Association, will pilot an initiative to identify seniors with dementia, if they lose their way or are found wandering. Called "Safe-Return", these seniors will be issued an identification card, which contains the contact information of their next-of-kin. To answer Mr Ong Ah Heng, the Seniors Helpline (1800-555-5555), managed by SAGE Counselling Centre, provides counselling, information and referral services for older persons and their caregivers. Very often, we say that people do not know where to go for help. Earlier, Mrs Yu-Foo Yee Shoon gave one call number; here is another one. 5.00 pm Dr Lily Neo and Mr Wee Siew Kim spoke on legislation to protect the elderly. We believe that existing legislation is sufficient for now. The Women's Charter and Penal Code protect the elderly against physical and emotional abuse. The Maintenance of Parents Act protects against financial neglect. The Mental Capacity Act, when passed in Parliament, makes ill treatment and wilful neglect of people with mental incapacity a criminal offence.”
“In Choa Chu Kang, Mr Ravindran Kathergamathamby, a PA staff, started out by organising parties involving families living on his floor. This year, he decided to organise a bigger get-together for Chinese New Year cum the children's birthday. Some 120 neighbours from eight floors and even their relatives attended the event. They are now organising outings and overseas trips. By tutoring each other's children, they save on tuition fees. In Sembawang, Dr Lim Wee Kiak challenged his grassroots organisations to host a 100 floor parties in order to reach out to his residents. As an incentive, the residents get to take a group photograph with Dr Lim. To date, a total of 55 floors from 30 different blocks have been covered by the five RCs in Canberra. These floor parties help neighbours foster a "kampung spirit". I understand Dr Lim Wee Kiak is hoping that this initiative will lead to people organising floor parties on their own, and not waiting for the RC to do so. This is how we foster a community spirit. Seletar Hills is a private landed housing estate. In late 2006, Mrs Chew Swee Liang, a grassroots leader, convinced 38 households to turn their pavements into a mini-garden. She had support from the authorities. From one street, three more streets have been added. 150 households are now involved. From swapping gardening tips, they have gone on to having breakfast and potluck parties. So another community that is reviving the old kampung spirit. HDB residents know on average 10 neighbours, according to a survey. However, most of these are "Hello-Good Bye" relationships. Interest groups and parties provide the platforms for neighbours to know each other. When bonds strengthen, they will provide each other with mutual support, so essential for the care of the elderly.”
“It is how the community is organised. For the single elderly without family support, social bonds become even more important. Neighbours and friends can look out for each other, and help one achieve a good life. We are familiar with the Chinese saying, "yan chin bu ru gin ling". Mr Sam Tan's call is for the celebration of life. To achieve it, we need a vibrant and connected neighbourhood. The one million dollar question then is how do we promote social bonds in the community? Mr Heng Chee How asks: in our changing social environment, how does our grassroots morph to meet the current and future needs of the people? Mr Wee Siew Kim asks for activity centres for the elderly in convenient locations. Notwithstanding my remarks that the physical facilities may not be the answer, PA is studying both the physical infrastructure, such as community clubs of the future, and the organisational support for grassroots organisations. So these will take sometime before we come up with concrete plans. Our grassroots organisations, especially the RCs, can and should play a key role in promoting social bonds. PA has embarked on a recruitment campaign for volunteers, targeting the better educated. This year, the People's Association has decided to focus on "Neighbourliness". Over the next year, the PA will work with the RCs to establish a register of interest groups within their vicinity, not just those formed by the RCs, but also other casual groups. This register will enable the RCs to support these groups and organise platforms for different groups to get together. Collectively, they widen the resident's social networks. I would like to share three examples of social bonding in action.”
“Therapists will be engaged to introduce "maintenance exercises" at daycare centres. To make it easier for low-income seniors to visit these centres, a means-tested transport subsidy will be introduced this year. MCYS has also recently launched a Silver Community Test-bed Programme to encourage companies to develop products that help seniors age-in-place. Themes being pursued include home monitoring and enhancing home safety. The physical and even service aspects of ageing-in-place are relatively easy to achieve. The social aspects, including community self-help, are harder to achieve. I will take these matters under Active Ageing. Apart from good health, sufficient money and a familiar roof over their heads, happiness also requires our seniors to connect, care and contribute to others. The most natural setting is within the community. Mdm Cynthia Phua and Mr Wee Siew Kim referred to it. What matters is not how many people you know, but the quality of relationships that are formed. This requires people to meet together regularly, more so in small groups than at large events. Physical facilities may not be the solution. The software for getting people to come together is far more important. Mr Wee Siew Kim might want to know there is a Senior's Lounge in Ang Mo Kio Hub, his constituency. But the problem of bringing people to that centre is not the centre itself, but the programmes and the software of bringing people there. Likewise, for Mdm Cynthia Phua, neighbourhood links have been useful. However, we take a pause to evaluate its effectiveness as compared to other programmes. And there is, as far as I am aware, a daycare centre in her area in Lorong Ah Soo run by St Luke's. So it is not for lack of physical facilities that the old seem to be left on their own.”
“I will speak next about our efforts to promote ageing-in-place. The elderly prefer to live in their own homes, within the community. They want to be independent, not institutionalised. They want to live among friends and family. We have upgraded the environment to enable them to do so. All our public housing estates are on target to achieve Barrier-Free Accessibility by 2011. All new HDB housing will have Universal Design features, friendly to all ages. Forty percent of the bus fleet will be wheelchair-accessible by 2010. Starting this year, all developments will also have to comply with the enhanced Code on Accessibility in the Built Environment. It will cover facilities such as parks, open spaces, transport stations and bus shelters. Connectivity between buildings and these facilities will be improved. Over the last few years, the HDB has also built studio apartments for seniors who want to monetise their property but still stay within the community. The HDB has made it even easier for lower-income seniors to age-in-place, by introducing the Lease Buy-Back Scheme. We will also encourage families to stay near each other. HDB already provides a higher-tier CPF Housing Grant to a first-timer family buying a resale flat, if the family opts to live in the same flat or close to their parents. The HDB will introduce a similar incentive to singles who buy a resale flat and live with their parents. Eligible singles will now get an additional $9,000, or a total of $20,000, if they choose to buy a resale flat to live together with their parents. We will also improve the software to support ageing-in-place. Together with the Ministry of Health, MCYS is looking to enhance the quality and integration of care in the community and home.”
“Although adult children are less likely to stay with their parents compared to 10 years ago, it is encouraging that the frequency and level of interaction are still strong. Instead of a comprehensive insurance system that pays for care for the elderly by for-profit private sector operators in nursing homes, we should study how we can improve our ElderShield plan to support the family to take care of the old. The Ministry of Health has indeed enhanced ElderShield payouts, in the event of severe disability, and is 60% higher now, with a slight increase in premiums. The principles underlying ElderShield are sound: pooling of risks, self-reliance and choice by the individual and family on the type of care, preferably at home. Dr Lam Pin Min and Mr Christopher de Souza asked for the Government to provide a caregiver allowance. As our population ages and family size becomes smaller, the burden of caregiving will indeed increase. Caregivers contribute to society by caring for our elderly. But putting a price tag on what is traditionally a family duty should be considered very carefully. It monetises obligations and responsibilities within the family. Both Members have spoken eloquently for caregiver allowance. What is the solution? Or should we say, “What are the solutions?” We are studying the matter, including whether there could be further improvements to ElderShield. So, sorry, this year, despite your pleas, there will be no caregiver allowance yet. But we are looking at what we could do for the future. We are also developing a caregiving support framework that includes community-based care and home care. This means that family as first line of care and support is not a mere slogan – we will help it remain a reality.”
“The committee will also look at ways to enhance the physical environment, so that seniors are motivated to exercise. The Ministry of Health’s plans to introduce nationwide health screening and nurse educators will also empower seniors to look after their health. Listening to Members who spoke just now about whether we have adequate support services for seniors, if we look at what has been announced by the various Ministries, including the Ministry of Health, in the COS debate, there are indeed elements that are being put in place. This way, we can look forward not only to a happy life, but also a healthy and long one. We also need to ensure that healthcare and long-term care are accessible and affordable when they are needed. Improvements to healthcare financing have been progressively introduced. MediShield has been modified to return it to its original purpose, covering the insured for higher hospital bills. Means-testing will be introduced so that more help can be given to the lower-income. As a proportion of the elderly population will need varying degrees of long-term care, I led a team last year to study the comprehensive Japanese long-term care insurance system. We came back strongly convinced that we cannot go down the same path. And Mr Khaw Boon Wan mentioned that the demand was not according to plan and the claims simply ballooned. So, five or six years after they have introduced it, I think there is a sense of crisis of that system. 4.45 pm Families have been, and should continue to be, the first line of support for the elderly. This is what most seniors want. This is what we will probably want for ourselves when we grow old. Family ties are still strong in Singapore.”
“In the ideal world, we live a long and healthy life, followed by a swift and peaceful end. One of my colleagues joked that a way to achieve a “rectangular” life is to live unhealthily – eat char kway teow everyday, smoke, drink, do not exercise – so that we can die quickly. This seems an appealing thought. But it does not always work out this way. Thanks to good healthcare, many of us can survive a stroke, heart attack or cancer. Instead of having a “rectangular” life, we may face a “triangular” life. The good news is that, everywhere in the developed world, the number of years that a senior spends in illness and disability is falling. This is called a “compression of morbidity”. Good sanitation, modern medicine and healthy lifestyles are the identified key reasons. We will do more to promote a healthy lifestyle in Singapore. Science tells us that regular exercise is vital not only for physical health and to reduce the risks of chronic illnesses, but even mental health. Many popular exercises involve social bonding. Yet, three in four Singaporeans, including seniors - or maybe especially seniors – are not exercising regularly. The Straits Times recently reported about Mr Kor Hong Fatt, who completed his ninth marathon at the age of 76. Remarkably, he only started running at 70, after a heart attack. If we have not started early to exercise, it is better late than never. It will improve the quality of life. This year, Mr Heng Chee How will chair a committee to promote physical activity for seniors. This is a public-people-private sector initiative to make recommendations, promote and set targets on physical activity for our seniors.”
“Most important of all, we have encouraged people to work as long as they can, and for as long as they want. With income, there will be more money to spend. We target to raise the employment rate of those in the 55-64 age group to 65% by 2012, from around 56% today. Public discussions have led people to realise, and accept, that they have to work longer. Recently, a relative told me she hopes to retire at 50, but wistfully says she cannot afford to do so. She is a typical Singaporean. AXA, an insurer, has been conducting international retirement surveys for several years. AXA’s most recent finding is that Singaporeans hope to retire earlier than in other developed countries. However, AXA also found that three out of four working Singaporeans would like to hold a paid job after retirement. What it suggests is that Singaporeans want control over what they do, such as doing a different job with flexible hours or fixed shorter hours. Several MPs have commented on the need to enhance the dignity of seniors through work. I agree. Apart from money, seniors find friends, meaning and purpose at their workplace. These are essential ingredients of happiness. Finding employment for those who are willing and able to work, especially the lower-educated, is vital. Mr Sam Tan has spoken about the CDAC’s Silver Talent Programme. I hope to see similar initiatives being launched this year. This morning, I read that three job-related co-operatives are being set up, two by our CDCs. As important as having enough money, is having good health. In recent years, the concept of a “rectangular” life has emerged. The Okinawans prefer the balloon analogy, but let us stick to the rectangular life concept.”
“Six years ago, a book titled “Authentic Happiness” was published in the US. This is not a typical self-help book. It was written by Dr Martin Seligman, who served as President of the American Psychological Association in the 1990s. He was known then for his work on depression. But when his young daughter accused him of being a grouch, he decided to focus on “what made life worth living”. Today, his book has been translated into 20 languages. Seligman defines “Happiness” in three ways: First, enjoy a pleasurable life – shopping, eating out, travelling and other pursuits; Second, enjoy a good life – being totally absorbed in work or hobby, enjoying time with family and friends; Third, enjoy a meaningful life – to pursue a cause that goes beyond the self, such as community work, raising a family, teaching, and even politics. The pursuit of happiness is fundamental to our existence. With an ageing society, our Government’s objective is to help seniors live a happy, healthy and active life. [Mdm Deputy Speaker (Ms Indranee Rajah) in the Chair] 4.40 pm To do this, we need to be free from financial worry – food on the table, and maybe a little more to enjoy the finer things in life. This is why the Government has devoted a lot of attention to financial security for seniors. Last year, the Workfare Income Supplement Scheme was introduced to help lower-income workers save for old age. We will help more Singaporeans, especially self-employed and informal workers, to contribute and benefit from the scheme. And we have had a debate yesterday and today on this. More recently, the CPF LIFE Scheme was introduced, providing CPF members with a steady, basic level of income for the rest of their lives.”
“The centre for seniors is a VWO set up by NTUC Eldercare with five other partners and its focus would be on providing general counselling, a helpline, as well as counselling for work, ie, helping senior Singaporeans who want to find employment. Also, we will be looking at working with some partners on how to provide some programmes to keep the seniors actively engaged. There is obviously some duplication with the Centre for Third Age because the Centre for Third Age would be overseen by a Council that would actively work with different organisations to provide more activities for seniors. So you would regard the Centre for Third Age (C3A), which I announced yesterday, as the organisation that would be working with the different organisations that we have on how to do various things for seniors whereas the centre for seniors has got very limited and definite areas of interest.”
“Perhaps, in the months ahead and the next COS, we will be able to give a more comprehensive report about what the Committee has done through the various Ministries. Social Enterprise”
“Reputable educational institutes, such as the Harvard University, offer the Summer School Programme for seniors. Our education institutes do some of these, but can do more. From 2001 to 2005, 16% of tourists coming to Singapore are 55 years old and above. As the other silver industry sectors take off, most seniors could come to enjoy a wide range of services and amenities here. Our seniors here will benefit. The larger regional market ensures that there is a critical mass so that more goods and services can be offered. A developed silver industry would generate considerable economic multiplier effects for Singapore's economy and create jobs for Singaporeans. For instance, retailers would want older service staff who can understand the requirements and psyche of seniors. When the baby boomers enter their 70s, there will be increasing demand for care products and services. Jobs suitable for seniors will be created and fueled by the demands of the silver market. Employers will find an age-diverse workforce makes business sense as this will reflect their customer base. We can now look forward to ageing in a vibrant environment in Singapore. Over the next five years, policies and programmes will be put in place to ensure that ageing in Singapore will be exciting, that more jobs will be created for seniors, age-specific products and services made accessible and affordable, to meet the demands and aspirations of seniors. Our seniors will lead healthy, active and productive lives and have strong family ties. For those who are frail, families will be supported to care for them in their own homes and in the community. Just as Singapore is a good place to bring up families, Singapore will be a good place to grow old in. As pointed out by Mr Sin Boon Ann, it is early days yet.”
“Greater participation by seniors to develop and plan programmes for other seniors will improve the perception by others towards ageing and the aged. On healthcare, I think that is being well covered by Minister Khaw Boon Wan. So I shall not touch on that. I think we are proceeding in the right direction. In five to 10 years, seniors will be a large consumer group. In the US, Japan, Korea and Europe, businesses have tailored their products and services for seniors fueling the growth of a "silver industry". While Singapore as well as Asia experiences rapid ageing, the same phenomenon will occur in our region. The baby boomers have had the benefit of good jobs as Singapore's economy took off, and we would have a substantial savings and a reasonable level of disposable income, especially if they continue to work. Future seniors will spend on pursuing interests like travel, learning, sports and fashion. I have also provided a handout that indicates some of these things. The Silver Industry Committee chaired by Mr Philip Yeo, Chairman of A*STAR, will heighten awareness of the business potential of the silver market in Singapore and Asia and facilitate the growth of the private sector in developing a variety of products and services. The sectors that we can grow are healthcare and wellness, travel and leisure, financial learning and assistive technology. I have circulated some photographs to illustrate exciting possibilities which ride on the use of technology. In Japan, an elderly can do basic medical measurements at home and transmit them to the local doctor. Nintendo has developed a Brain Training Game to keep seniors mentally agile. Learning, travel and leisure are also growing sectors.”
“The NTUC has established, what it called, the "Silver Collar Dragon Boat" which means the pooling of resources of its constituent organisations, to provide more services and activities for seniors to reach out to more of them. As an idea of what these two organisations already reached out to, 150,000 older adults aged 50 and above are members of PA's Passion Card and there are over 400 Senior Citizens' Clubs in the PA network. The NTUC itself has nearly 10,000 retirees in its third chapter organisation. So the C3A would reach out to more seniors through PA and NTUC networks. The lifestyle of our seniors is getting more sedentary. The C3A will work with the Sports Council to customise exercise programmes for seniors and motivate passive older people to adopt a healthier lifestyle. Sports, like PA's programmes, alleviate loneliness, get seniors together and build social networks among them. The challenge for the Council for Third Age is to reach out to the unconverted. The C3A will administer the Golden Opportunity!, or GO! Fund, and seed new programmes, especially targeted at the unconverted. The GO! Fund will also support programmes that promote inter-generational bonds and extended family ties to ensure that seniors' well-being is embedded on strong family values. The Council will consult seniors through regular dialogues. I agree with Ms Eunice Olsen's suggestion that we should get feedback from seniors. The Council will work with REACH on its first public consultation with seniors. We will focus on garnering ideas on active ageing and building social networks. Selected seniors from the public consultation process will form seniors workgroups to develop potential ideas further.”
“Of course, the seniors who are poor and without family will be taken care of by the state and the community. On that, Dr Vivian Balakrishnan has already given his assurance about what MCYS has been doing. But we need more volunteers. We need to set up more Seniors Activity Centres and Befrienders to organise social activities for seniors and ensure their well-being. We also agree with Mr Yeo Guat Kwang that preparing for the ageing population involves enriching social and family life. So one of our thrusts is to keep the seniors healthy, physically and emotionally well and to be as independent for as long as possible. So to focus on active ageing, we will form the Council of Third Age by June this year. The Council will harness the wealth of experience that seniors possess. The Council will champion active ageing and imbue positive perception of ageing and the elderly. The Council will be supported by a Centre for Third Age, or C3A for short, its operational arm. The C3A will catalyse innovative programmes, including sustained inter-generational programmes, play an aggregator role, work with corporates to provide better value packages of products and services for seniors; and provide the platform for seniors to network and form new friendship. The C3A would reach out to seniors in the heartlands too. The C3A would work with organisations like the People's Association and the NTUC to create more opportunities and engage seniors in active ageing. The People's Association offers a comprehensive range of programmes at the Community Clubs and Residents' Committees, from healthy living to lifelong learning, social, recreational and cultural pursuits, to meet the various needs and interests of seniors.”
“And I must stress that we also need to train the family members. On Mr Ong Ah Heng's idea of using professionals as a professional network to promote hobbies among the seniors is an interesting one and I will ask MCYS to study it further as it is complementary to the efforts to enskill and professionalise the Eldercare sector. 5.00 pm Several Members have asked for more financial assistance for things like daycare centres and sheltered homes, particularly Mr Ong Ah Heng, who had operated the NTUC ElderCare for a few years, and I myself am very familiar with it because I chair the Cooperative. But for this, the MCYS has a subsidy ranging from 50% to 75% of the costs for the families at the bottom 30th household income percentiles, and it is the lowest 30% of households. And if you need somebody to be sent to such a place, then the subsidy level, depending on the family income, varies between 50% and 75%. So this already shows that the Government is committed to help the needy seniors and their families. But help must also come from the community as well. So the VWOs operating the eldercare services do assist the families by waiving part, or even all, of the fees in exceptional cases. So this many-helping-hands approach serves us well. As Mr Ong Ah Heng pointed out, there is still quite a substantial amount to meet. We can lower the cost of such services by getting the service providers to work together, encouraging them to share experiences and resources. Perhaps, too many of them are actually operating on the sub-optimal mode. And we should try to bring them together so that we can reap the economy of scale, lower the cost of operation and therefore lower the charges that these centres need to levy on those who use the services.”
“The second key task for the Ministerial Committee is to support the family in its care for the elderly and two strategic thrusts - ageing-in-place and affordable healthcare and eldercare - aim to allow seniors to live with their families and within the community for as long as possible. Work on accessibility has been progressing well and the physical environment to support ageing-in-place will be a reality given time. And, on this, Ms Grace Fu mentioned about what the BCA and LTA have been doing to make accessibility a reality within a few years. On affordable eldercare services, I would like to first say that we need to strengthen support services within the community. The delivery of step-down care services, like nursing homes, rehabilitation services and day-care centres, can be improved. We would put in place the infrastructure for services to ensure they are accessible and affordable. We want to attract more private sector players to provide a wider range of care services and options to meet varying needs and circumstances of families. It is equally important to establish community networks of mutual support and this will lower the cost of care for the elderly. On ageing-in-place, the physical aspect is only one part of the solution. The other part of the solution is the community support that is provided to enable the family to look after the old. Appropriate training will be provided to staff in the elderly sector to ensure better programmes for seniors. Currently, this is a nascent part of the work but the Social Service Training Institute has some courses already for caring for the elderly. But we will need to develop a systematic training framework for eldercare staff so that they can develop and deliver better quality programmes and services.”
“So a new target of 65% employment rate for those between the age of 55 and 64 is being set for the medium term. I would also like to highlight another point to support what has been said and that is, women on average live longer than men. So there is naturally concern about financial security of women in their senior years. We must again maintain family support for them. We would need to increase the opportunities for employment for women so that they will be able to achieve greater financial security in their old age. Our problem today is that the current cohort of women have much poorer education compared to men and, therefore, the types of work which they will be able to do would be of the low skill kind. Therefore, I urge Members not to regard the increase in employment of jobs that are of the low skill type as something wrong. I think these are jobs that such people would be able to do and, if they can find employment, I think it is a good thing. The WDA, NTUC and SNEF will work to promote age-friendly employment practices, the training of older workers to make the necessary adjustments to continue working longer and changing public perceptions towards older workers. The more progressive firms will rework their HR packages to retain employees beyond retirement age. Indeed, retirement should become a thing of the past as more of us continue to work well into our golden years. We should work as long as we can and as long as we want, and that is why our focus should be on the employment rate and not on the retirement age.”
“Mdm Cynthia Phua, Dr Lily Neo and Dr Maliki have said that the elderly should remain close to the family and children be encouraged to look after their elderly parents. I agree. Our housing grants encourage children to live close to their parents. Prof. Kalyani Mehta, Mr Seah Kian Peng and Dr Lim Wee Kiak have asked for some financial assistance, even possibly a 'golden' bonus, for children to support their aged parents. While we will see how to help needy families cope with the added costs of supporting aged parents, our major thrust would be to have programmes that strengthen family ties, and better services to support the family to care for their seniors. Having said that, we must also note that there is a growing number of singles who will need the support of the extended family and the community and for them, we will explore other solutions. The major function of the Committee is to coordinate our national response to ageing. Relevant Ministers are in the Committee and we will invite resource persons, including Members of Parliament, to join workgroups to develop specific issues. The Committee will benefit from a wide cross section of views and experiences, including learning from the experiences of other countries. The first key thrust is to enhance employability and financial security and on this, there has been quite an extensive debate during the past few days and including the debate on the Ministry of Manpower's budget, so I shall not repeat. I am glad that many Members have expressed their concern for the continual employment of older persons. But, as pointed out, we have made progress in the past year. Because of the booming economy, the target of the Tripartite Committee on Employment of the Elderly was met in a year.”
“Mdm Chairman, many Members have spoken about the ageing population and I think the facts are quite well known already. So I shall not repeat, except to point out that the baby boomers, whom we are going to deal with, will be better educated, more affluent and have better health when they hit 65 years old in the Year 2012. With longer life expectancy, the baby boomers have more time, more money and would want to be meaningfully occupied and enjoy life. So how do we meet the needs of the current cohort of seniors as well as the aspirations of the baby boomers? How do we face up to the challenges of this demographic shift and harness the opportunities of the Silver Revolution? Mr Sin Boon Ann asked about the Ministerial Committee on Ageing. The Committee will build on the work of past committees on ageing issues. The three basic pillars for successful ageing are: participation, health and security. To achieve this, the Committee will pursue four strategic thrusts - employability and financial security, holistic and affordable healthcare and eldercare, ageing-in-place and active ageing. The work that we will do will be premised on the family as the foundation of society because from the older person's perspective, having close family bonds is vital to their emotional well-being and family bonds remain strong in Singapore. A survey on the frequency of contact between adult children and their parents shows that 70% have contact on a daily basis and 20% have contact at least once a week, which was in Handout 1, but as Mr Ong Ah Heng alluded to, we cannot be complacent. Several other MPs have also noted some weakening of family ties during the debate on the Budget Statement.”
“But if we do not revitalise the tourism industry, and we continue to concentrate only on the higher end electronics, chemicals, pharmaceuticals, life sciences, nanotechnology, finance, education and healthcare, then we would not have enough jobs for the lower-skilled Singaporeans, many of whom are in the older age group. As it is, those in the lower-income group, their wages are stagnating. In fact, for many of them, they suffer a loss in real income, while the cost of living goes up for them. So they need good jobs, and better paying jobs. I wish we can have integrated resorts without casinos. Casinos come with social costs, and there will be some broken families. But there are also social costs with high unemployment. There are 35,000 jobs to be had. Cabinet decided not to let it pass. But the social costs are real, and we have to pay enough attention to this. Only last night, I was reminded that the social costs of gambling are already with us. One young woman came to ask me for help. She and her mother wanted to buy a new HDB flat. Why? They have been harassed by loan sharks. Her mother wanted to divorce the father. And she looked me squarely in the face and said, "All because of gambling." So this is not an easy decision, but when there are 35,000 jobs, I cannot say no.”
“To keep Downtown East and other facilities fresh, NTUC Club invested $100 million in the past seven years refurbishing facilities and adding new ones. The investments include the Escape Theme Park and the Wild Wild Wet for which it derives no surplus. Wild Wild Wet is hugely popular, but the collection is just enough currently to meet operating expenses. NTUC Club will invest another $110 million in the next three years to keep itself fresh and appealing. Is it worth it? When the NTUC Club started in 1987, it entertained 100,000 visitors in one year. When the Pasir Ris Resort opened in 1989, the number shot up to over one million a year. Last year, the NTUC Club received six million visitors. The patrons are a cross-section of Singapore society, both young and old. NTUC Club is particularly happy that it is able to serve lower income families who can mix with the higher income at its facilities. But investors in an integrated resort will not think like us. They want a return on their investments. They will need many multiples of the six million visitors that NTUC Club attracts annually, if they are to keep their pricing attractive enough, even with a casino licence. If they succeed, yes, the retail and restaurant sectors will come back to life, and many more taxis will be required. They are putting the money on it. And I know they will need multiples of six million visitors to their facilities. So, it is 12 to 24 million visitors we are talking about. Many of them would have to come from overseas. So if they are putting their money on it and they can attract this volume of visitors, then there would be buzz in Singapore and there would be true benefits to the economy.”
“It operates Downtown East in Pasir Ris (which includes the Escape Theme Park and Wild Wild Wet), six social club lounges (two in the city and four in the HDB heartlands), chalets at Pasir Ris, East Coast Park and on Sentosa, a retirees club with 5,000 members, a children's club, and a sports and wellness club. NTUC Club and its subsidiaries employ about 800 staff, both full-time and part-time (about 630 full-time staff and 170 part-time staff). NTUC Club employs Singaporeans and permanent residents. Its subcontractors (for ground and landscaping and technical servicing) employ another 75 persons. The lessees of the shops and restaurants employ probably another 200. Of all these more than 1,000 jobs, only 78 are employed for the jackpot operations. So, if you look at integrated resorts, the employment that they generated, be it the 10,000 directly or the 35,000 jobs, if you count the spin-offs, only a small number would be involved in the jackpot and casino operations. As the Prime Minister mentioned yesterday, without the jackpot operations, NTUC Club would have to close shop. NTUC Club is almost the only provider of chalets for Singaporeans who want a short holiday with their families here in Singapore. The annual subsidy is $400,000. Seven years ago, the annual subsidy for the six social club lounges was almost $13 million per year. With concerted efforts to raise productivity, this annual subsidy came down to $6 million last year - so still almost $1 million a year for each social club lounge. NTUC Club will open at the former Embassy at the Esplanade in two weeks. The annual subsidy will be about $1 million. Why can we continue to operate? It is because of the subsidy from the jackpot operations. And that is why Embassy failed. It did not have a jackpot room.”
“Therefore, business risks of mega projects are high. Even Disney Europe outside Paris struggled for years, even though it drew its customers from a base of 250 million who could reach it by car and it also had special incentives provided by the government. Miyazaki is a city in south Japan. Its mild climate made it the favourite honeymoon location for young Japanese couples in the past. But with air travel, younger Japanese couples prefer Hawaii and other overseas locations. So Miyazaki lost out. They tried to reinvent itself. A mega resort, called Segaia, was built with an indoor wave surfing lagoon complete with a sandy beach, and it had also top class golf courses, including the one that hosts the annual Phoenix Open. It did not attract enough visitors. The developer went bankrupt. It has been bought over by an American businessman. Both Disney Europe and Miyazaki did not go for a casino. The approach that our Government has taken is to put the development of integrated resorts to the market test. The test is whether potential developers will do so without subsidy. Many are keen to invest big money - $4 billion to $5 billion - if they are given a casino licence. These projects are for MICE activities, family entertainment, mega shows, and the like. I estimated that 10,000 jobs will be created directly by these integrated resorts. MTI believes that with the spin-offs, there will be 35,000 jobs. The inflow of tourists will benefit other hotels, shops and taxi-drivers. Some people have asked me what kind of jobs there will be. Let me use NTUC Club to illustrate. It is not a casino, but it does operate jackpot machines.”
“To create enough jobs for low-skilled Singaporeans, we would need a lot more investments and a lot more skilled manpower to generate enough low-skilled jobs. There is a need for us to develop our services sector. Whilst trade in manufactured goods is fairly liberal and open, the same cannot be said of services. Many others want to take away from us what we have been good at, being an air hub and a sea hub. Many others also aspire to be one of the top two or three financial centres in our time zone. We will defend our share of this, and aim for more in these areas. But we also have to diversify. The tourism and hospitality sector had contributed a significant share of our economy in the past. We used to be the shopping paradise with pockets of the third world for tourists to see. Today, we are not a shopping paradise, and the pockets of the third world are gone. We have lost out for lack of re-investment. Investments in tourism projects have to be big to be attractive. We failed to agree to terms with Disney - they went to Hong Kong. The Hong Kong government gave them a huge subsidy. Small theme parks are not viable. They are not good enough to attract the large numbers of customers needed to sustain operations. Yet to remain attractive, they have to refresh themselves. From the NTUC Club's experience, a facility has to be refreshed every two or three years. The small theme parks do not earn enough to do so. That is why Haw Par Villa, Tang Dynasty Village, Fantasy Island and the Asian Village failed. They were not world class attractions good enough to attract the tourists. They were not good enough to attract repeat visitors from among Singaporeans. Mega projects have the critical mass, but they also require a bigger mass market.”
“But, at the same time, I realise that Singapore is not competing to be the Las Vegas of the East if we are talking about one or two casinos, when there are already 17 casinos in Macau, and more are being built there. But it is not only about whether we should allow a casino. It is about what kind of economy we will have in the future. It is about an economy that will generate enough jobs for Singaporeans. As other countries open up to foreign investments, we lost competitiveness because our costs have risen. As the old lines of work relocated overseas, we moved up the ladder. We chased higher value-added activities. So now, a company that used to employ 12,000 production workers only employs 5,000 today, but they are 5,000 engineers and not production workers. They still have 600 production workers in order to set up the prototype production line, perfect it, before moving it overseas for mass production. We moved into other sectors - chemical, pharmaceutical, life sciences, education, medical, tourism. These sectors offer jobs for those with higher education and higher skills. For some years already, the EDB has said that the new investments that they bring in will need more skilled workers and less less-skilled workers, in the ratio of 2 to 1. So, two skilled workers against one less-skilled worker. The Ministry of Manpower recently told the NTUC Central Committee that it projects a shortage of skilled manpower with tertiary education, over the next five years or so, but a surplus of low-skilled workers. We are trying to reclaim some jobs through job redesign. We aim to recreate 10,000 jobs over the next 12 to 18 months. It is difficult. Even if we succeed, it is not going to be enough.”
“I asked what percentage of the gamblers were Macau residents and how long did the non-residents stay in Macau on each trip. I was told that 55% of the patrons came by bus from mainland China and 45% of the patrons came from Hong Kong by ferry. They were essentially day-trippers. There was a sprinkling of patrons from Taiwan, Korea and Japan. But Sands is building another complex, much bigger, on the Cotai strip and there would be 11,000 rooms for patrons who will come from further afield, mostly from mainland China. I next visited the Lisboa. Unlike Sands, it was garish, like what one would imagine a casino to be, like what one sees in the movies. It was congested. Every space was used for gambling. On that Saturday afternoon, hopeful gamblers packed the main gambling hall almost shoulder to shoulder. One could hardly move around without bumping into someone else. There were private rooms also for the high-rollers. The Lisboa, too, appeared very successful. What were the social problems? Our tour guide told us that loan sharks lurk in the casinos. They identify the gamblers who had become desperate and offer them loans. We asked how do they collect the debts when the gamblers lose it all again and left. We were told that the loan sharks beat up the borrowers until they reveal the names and addresses of their relatives. Were there suicides too? Yes, our tour guide told us that since the Sands Casino opened, there had been three suicides. Was there vice? Certainly, but the residents in Macau are used to it. So I came away from Macau troubled and deeply concerned about the social problems that a casino would bring to Singapore.”
“That was how he built up his fortune. If the debate is only on whether we should have a casino in Singapore, like these Singaporeans, my answer would be a clear "No". In the discussions of the past few months, there had been suggestions that we could become the Las Vegas of the East, and we could be left behind by Macau and others if we did not move quickly. I wondered what being a Las Vegas would mean. I have never been to Las Vegas. I decided to visit Macau last month, immediately after the Budget debate. There are 17 casinos already in Macau. I visited two of them - the Sands and the Lisboa. I was told that the newly-built Sands Casino cost US$280 million. Huge queues formed on opening day as punters heard rumours that there would be free chips for the first customers. It turned out there were no free chips, but still the crowds poured in. The ambience is grand. On the groundfloor is a "No smoking" gambling hall, tried out as a first for a casino, and it turned out to be a huge success. On the second level is a huge gambling hall of 160,000 sq ft. The tables and jackpot machines were packed. At higher levels, there were more exclusive rooms for the high-rollers. The Sands Casino had the world's biggest chandelier and the world's biggest video wall. Stage shows run throughout the day to entertain the gamblers. Top class restaurants offered the best steak, the best Japanese cuisine and the best Cantonese cuisine. 5,000 workers kept the casino operating day and night. On Chinese New Year's Day, the takings at this one casino were more than the takings of all the casinos in Las Vegas on their busiest day, New Year's Eve. Little wonder that Sands Casino recouped its US$280 million of investment in 10 months.”
“Mr Speaker, Sir, my parents taught me that gambling is a vice. Each Chinese New Year we were allowed to keep part of the "ang pow" that we received. When I was about 6 or 7 years old, I lost it all in a card game in the kampong. When my parents came to know, I was duly punished. "Gambling leads to broken families", my parents sternly told me. I went to a Catholic school. There I was also taught that gambling is wrong. There was competition among the ice-cream vendors who came by the school. The enterprising ones made themselves more popular by running a "tikam-tikam". Buy a piece of ice-cream between two wafers for 5 cents, one got a chance to try one's luck to win up to 30 cents. But the school chased the vendors away. I grew up to know that many people gamble on 4-D and Toto. But many among those who do so think that it is still wrong to bet on horses or in the casinos. In the past few months, I have discussed the subject with quite a few Singaporeans of all walks of life. Some of them are clearly against having a casino. They hold dear the fundamental values of honesty, integrity, diligence and thrift. That is why we have a wholesome living environment where people can move about in the streets all the time, any time of the day, feeling safe. I have met a young man in his early 30s, recently married, who spoke passionately that he identifies this with Singapore. That is what sets us apart from others. He wants Singapore the way it is. He did not want our home corrupted by what may come with the casino. I met also a businessman who had to start from scratch because his father gambled away the earnings from several lines of business. He too was strongly against having a casino in Singapore. For him, we should continue to earn our living by honest hard work.”
“When we looked at the labour force participation rate, we were disappointed that many people below the age of 62 are not working. Our effective retirement age is therefore well below 62. It is the same for many OECD countries, but some countries stand out with effective retirement ages above the official retirement age. How did they do so? Japan is one such country. Those of us who travelled to Japan over the years, as Mr Wee Siew Kim obviously has done, would have noticed that the people who man the highway toll booths are senior citizens, though they are now being replaced by automated systems. Mr Wee Siew Kim mentioned about the traffic light controllers. Sometimes, when we visit Japan, we encounter, say, road works and there is a need for a temporary set of lights, and the people who man the temporary light system are senior citizens. In Singapore, they are foreign workers. So, I asked myself, was there a national consensus in Japan, as they discussed raising their retirement age, to 'reserve' some jobs for older workers? Should we have such a national consensus? Retrieving the luggage trolleys at Changi Airport is being done by senior citizens. I do not know whether it is the policy of the CAAS to do so, but I think that is a good example of what we have in Singapore. This is something that can be done. It is a job that can be done satisfactorily by older workers. We need not waste the energy of young people to do that same job. Sir, what other jobs should be reserved for older workers? Pump attendants at petrol kiosks? Guides at our museums? If we want to raise the effective retirement age, then we need to forge a national consensus to provide the older workers with job opportunities. Then, we will be truly an inclusive society, with opportunities for everyone.”
“Private management of such funds is also subject to investment risks and poor management. In most countries where retirement plans are privatised, the participation rate is typically 20%. So it did not cover the bulk of the workforce as intended. Chile, another country where this has been held out as a model, has the best outcome but, even then, the participation rate is only 50%. Studying all the experiences of other countries has led me to the conclusion that the ideal of pension plans to fully fund the needs of retirees is not achievable for most people. The old system of family support is still the most enduring. Pension plans or CPF-type plans support the family to look after the elderly, to lighten the load, but cannot replace the family. We should remember this and more of our policies should be aimed at keeping the family ties strong. Having said all that, since some countries with pension plans are moving towards CPF plans to supplement, should we supplement our CPF system with a limited pension plan, as some people suggest? We, in a sense, already have such a plan in the annuity stream that we can draw on through the Minimum Sum. So I think it is better to build on what we have than to try something new, and ending up with problems that other countries have encountered. Why travel the road when we know the pitfalls that road leads us to? As people live longer, we should save more, if we can. As I said, the truth is that for the lower income, it is difficult for them to save. As they stay healthy, they can continue to work. Today, as most MPs find, more and more of our senior citizens are looking for work and asking for help to find work.”
“Spurred by stock market declines, poor investment plans, the beast is beginning to inflame the political process." Governments are doing two thing - raise the age of drawing down pensions, and cutting the pension pay-out. Even Norway, that has put aside the revenue from its oil exports to fund pensions, finds it necessary to make changes because the oil revenues are enough for only a quarter of the pension liabilities. The rest has to come from the people, meaning contributions and taxes. So one proposal now is to raise the age when people can draw on the pension from 62 to 67. We do not have oil to fund such a pension. Sir, some governments are taking a third step to supplement the trimmed down pensions with individual savings schemes similar to our CPF. Sweden, the welfare state that is often quoted as the model state, implemented a compulsory contribution scheme. The idea was to keep pension payments where they were. If you cannot trim, then do not increase the liability of the fund - start individual savings accounts for the employees. The experience is interesting. Individuals were allowed to decide on how to invest their savings, something which sometime ago, many Singaporeans asked of their CPF. By default, the state will invest the savings for those who did not choose to invest the funds themselves. The result: those who invested their savings which were, by and large, the upper end of the workforce, lost. Those who left it to the state, gained. I think the experience is quite similar to ours. Some countries have privatised pensions, be it company pensions or defined contribution plans. A World Bank study has concluded that privatisation has not brought about the much vaunted benefits.”
“Each employee, armed with these three pieces of a social safety net, should therefore be able to face the volatile economy with greater confidence. But where are the jobs? Both Members for Hong Kah GRC, Dr Amy Khor and Dr John Chen, were absolutely right when they said yesterday that the issue is still about jobs. Job creation is a key priority of Government. Jobs come from new investments. Hence, we do all that we can to secure new investments, be it political stability, good infrastructure, a friendly tax regime or a flexible labour force. But are these jobs suitable for the long-term unemployed, many of whom have low skills? We have to find them somewhere else, in existing jobs in the domestic services, for example. We have had some successes in cleansing, in textiles, in patient care. More can be done, and more must be done. I am glad that some Members have urged that more be done. For the NTUC, we target 10,000 such jobs in the coming year. Sir, there is a growing concern about financial security in retirement. Often, our people are described as asset rich but cash poor. Our compulsory savings system, the Central Provident Fund, is considered inadequate. Some have surfaced the possibility of a pension system. The proposal is for a limited pension. But that is how most pensions started. When the pension system developed in Europe, it worked like a dream. Then more demands were put on the system and, today, pension systems the world over are in trouble - from Japan to the United States to Europe, all need serious revamp. On 1st June last year, the Business Times carried an article on this, and I quote: "Pension plan funding across the world is much like a dragon that has just begun to emerge from its cave.”
“We are conscious that other countries have tried, eg, the United Kingdom, and quickly closed it because of abuse. That is why we think we should first start a pilot project, address all the issues, before suggesting it for wider application in our economy. The second piece of the social security net would be funds for living expenses when an employee is in between jobs. Today, employees rely on retrenchment benefits, but this is not reliable. Some companies retrench when they are so broke that they could not pay retrenchment benefits. A better way is to save for the rainy day. Not everyone saves, when it is voluntary. In most societies, the lower 40% of wage earners are unable to save. If you look at our own statistics, our lower 40% do not have voluntary discretionary savings. But we are not unique. It is the same in the societies I have looked at. As such, employees should be assisted to save. Some employers have already programmes to help their employees to save. We urge more to do so. The same three NTUC cooperatives that are setting up individual learning accounts are also setting up individual savings accounts for their employees. The third piece of the social safety net would be cover for medical expenses, when one is unemployed. The cost of outpatient treatment would not worry most people. It is the cost of hospital treatment that is the concern. Here, we already have a system that is centred on the employee - the Medisave and MediShield plans. MediShield has degenerated and it now no longer fulfils its original objective of saving people from worrying about large hospital bills. So a review is underway. Mdm Halimah mentioned yesterday some of the desired outcomes of such a review.”
“How could they feel that Singapore is a land of opportunity? If we have a social safety net that helps us through the economic cycles, then each of us would be self-confident. The key word is employability. If an employee stays employable, he could move from one job to another. It would not be a big problem to lose a job because he could find another one. To stay employable, he must have the relevant skills. Therefore, the answer is regular training and retraining. Therefore, the first piece of a good social safety net would be the availability of training and the means of paying for such training. We have put in place the framework for both. I need not recount what we have. However, we must not continue to think that training is the responsibility of the employer and/or the Government. I think this is one piece which is still very much missing in the mindset of ourselves, that we think it is the responsibility of our employer to train or, if not the employer, then the Government. I think we have to begin to think that it is our personal responsibility. It is as much the responsibility of the individual for his own upgrading, as it is of either the employer or Government. How could we make the individual take responsibility for his training and retraining? Mere exhortation would not go far. One way is to establish individual learning accounts. As the name implies, the funds could only be used for training. This year, three cooperatives, linked with the NTUC, would start a pilot project. Each employee would have an individual training account. It would be real money, with co-contributions from employer and employee. If the pilot programme works, then the concept could be adopted by other employers.”
“Mr Speaker, Sir, I rise to support the motion. What I am going to say would be in sharp contrast to what Dr Geh Min has spoken. Mine would be fairly down-to-earth, to the constituency that I know best, which is the workers of Singapore. Our economy has been very volatile for the past seven years, since the Asian financial crises. The swings in fortunes have led to many retrenchments. While the manufacturing sector had constantly restructured over the past three decades, this time round the services and public sectors also restructured. Significantly, many executives were also affected. Those who lost their jobs had to make painful adjustments. Employees, therefore, feel insecure about jobs and income. This sense of insecurity is only beginning to be assuaged as the economy recovers. The news that employers are hiring, that unemployment has dropped, and that employers are paying higher bonuses, is slowly restoring confidence. However, as some Members have spoken, the "feel good" factor is missing, and missing for those who lost their jobs. Those who have found new jobs suffered big pay cuts. Others have yet to find stable jobs, and are classified as a long-term unemployed, or structurally unemployed. Even those who were not affected by retrenchments have been apprehensive. Each retrenchment that is reported, especially in areas that previously seem secure, that seem to offer lifelong employment, renews this sense of insecurity. The truth is that we must expect greater volatility in the economy. As global competition intensifies, we should expect to change jobs several times in our working career. Does this mean that we would be constantly on edge, feeling insecure? How could employees regain their self-confidence in a more volatile economy?”
“But we need to do a lot more and workers will feel a lot more comforted if they can see not just Government, unions and workers playing their part but also employers doing a lot more to show that they are bringing in the business, and raising the productivity of each sector, be it manufacturing or in services. In services, by making ourselves competitive, the business will come. And for that, the CPF changes play an important part - a signal that in the long term, Singapore, its workers and its unions are prepared to make sure that the wage levels are commensurate with the level of economic activity. Then they will come. Then there will be more revenue. And if the employers also show their part to be seen bringing in business, then Singapore will thrive. In the meantime, what we do is to stem the outflow of jobs in both manufacturing and services by tackling our costs. Sir, on this note, I support the measures.”
“The IMD World Competitiveness Yearbook 2003 shows that the annual wages of a department manager are $37,100 for Singapore, $38,600 for Australia, $34,200 for New Zealand, and $44,900 for Ireland. All these, again, in US dollars. So, our wage level for a department manager is of a similar level as some of these developed countries. Those in the US at US$69,000 and the United Kingdom at US$47,000, they earn more. But our productivity level in services is significantly lower. Our productivity per person in services is only US$36,100. It is comparable to those of Australia at about US$39,300, but it is much lower than the United States at US$73,900 or the United Kingdom at US$50,300. So, clearly, if we hope to grow the services sector, we will have to improve our productivity. There are many factors in productivity, but the key factor is a higher volume of business. In other words, we have to look at the revenue part of the equation. That is what the economic strategy of Government addresses. There is a lot more outlined in the Economic Review Committee's recommendations that many commentators have given credit for. It is now for the employers to show that they are doing their part. As Heng Chee How said yesterday, employers have a lot to do, and workers want to see them doing it. They want to see, for example, the Singapore Business Federation and business Chambers going out to get business, and bringing in more investments. As Raymond Lim says, there are some signals that what the CPF changes are meant for are working. Because some companies say that they will stay in Singapore, some companies say that they will expand their business in Singapore, and some companies say that there will be new investments in Singapore.”
“To do that, we will need to do many other things, and there must be more reasons for them to find it worth their while to invest here in Singapore. But, at the same time, we have to recognise that our wages cannot be so out of line and that is why if the CPF changes appear to fall harder on the higher middle income, this is one good reason why it should be so, because we cannot price ourselves out of the world market. I do not know how the PERC obtained its figures. But looking at the data that was provided by the IMD World Competitiveness Yearbook 2003, I think, perhaps, PERC was looking at the types of activities that they think Singapore is most suited for, and where do we stand in global competition to attract them here to Singapore. Let me now turn to services. This sector has been growing faster than manufacturing. But we have to contend with at least two factors - competition from the region and competition from developed countries. It is quite clear that back-end work will increasingly be outsourced. Let me cite an example. On 17th December 2002, Neptune Orient Lines announced an eight-year contract with Accenture Consulting. Accenture Consulting would take over responsibility for the NOL Group's accounts payable, accounts receivable and accounts reconciliation processes. Accenture has a sizeable practice in Singapore. Now comes the interesting part. What they would do for NOL would not be done in Singapore, but in Shanghai. So, for lower level work in services, we cannot compete with China, India or the Philippines. So we have to go up to higher value added services. It means that we will have to do the kind of services that developed countries do. Here, our wage levels are similar to Australia, New Zealand and Ireland. I am talking about wages in services.”
“The NTUC and the Ministry of Manpower are doing so. I would urge Members of this House, if they can play their part to match these retrenched workers into jobs, they would be doing them a far greater service than by arguing against any cuts or adjustments in CPF. When we move up in manufacturing, we compete against the developed countries. How does the cost of our engineers here compare with engineers in developed countries? According to the IMD World Competitiveness Yearbook 2003, annual wages of our engineers are higher than many developed countries. Let me cite just a few: Singapore, US$80,000; Australia, US$55,000; France, US$77,000; Netherlands, US$67,000; United Kingdom, US$75,000; and United States, US$92,000. Ours is US$80,000. So the wages of our engineers are higher than most developed countries. Not only are they well within the top 20% of wage earners in Singapore, they are drawing first world wages. I think it would take some time for people to absorb this fact because many people, including Members of Parliament, were wondering whether the 80th percentile wage in Singapore of $3,700 per month is correct. Those who asked me, I referred them to the CPF's annual report. They made their calculations and they found that the Prime Minister's figure was indeed correct, and that many people who thought themselves poor belonged to the top 20% of Singaporeans. Many Singaporeans, who can relate to these wages, will now know that they are not earning third world wages - they are earning first world wages! Today, with this kind of wages, we have to compete with the first world, as well as the third world. But the message here is: we have to attract higher value added activities here.”
“They are our older workers. There are two ways. One, move up the ladder. Two, move sideways into another job. The CPF cut will keep the factories here a little longer, giving us more time to adjust. When we move up to higher value added activities, we need more skilled workers. You take, for example, Philips. Philips used to employ thousands of production workers in Toa Payoh. Today, Philips still employs thousands, but the production workers are mostly in Batam. At Toa Payoh, the majority are engineers. Can our workers retrenched from the manufacturing sector be converted to engineers? The sad truth is, no, most of them cannot. So we buy some time, through trimming our wage costs, and all other costs. And we have to retrain them for other jobs. That is why retraining is so important. As my colleague, Mr Raymond Lim, said earlier, this is something that we have been stressing on year after year, and have been doing more and more each year. So far from being asleep, we have been very much awake, alive to the dangers that our workers face. Many of the jobs that retrenched workers will have to take will be those that are occupied currently by foreign workers. I hope that our workers will consider them. Other jobs will come from new manufacturing investments, because one-third of those jobs require lower skills. But in order to match those looking for work and employers looking for workers, we have to bridge a gap of expectations. On the one hand, workers have certain expectations of wages. They also have family needs that have to be taken into account. On the other hand, the employers expect workers to fit into production patterns. I think that the gap really is in these specific areas. So, we have to make a special effort to bridge this gap.”
“Our GDP per capita matches those of developed countries, indicating that our wage levels are at or near their levels. I have also circulated a chart on the per capita GDP of different countries. You would see from the chart that we rank among the developed countries. But our wage costs in manufacturing are not high compared to the United States and Australia. According to the IMD World Competitiveness Yearbook 2003, the total hourly compensation for manufacturing workers is US$20.32 for the US and US$13.82 for Australia. Ours is only US$7.78. So for manufacturing, our wage costs are lower than United States and Australia. However, the US and Australia do different kinds of manufacturing. They are of higher value added. Much of our manufacturing work is lower value added compared to theirs. Because of their own high cost environment, they shifted these factories to other countries that are cheaper, including Singapore, and we have been doing those. But just as we do lower value added manufacturing activities compared to US, so do our neighbouring countries, those that are lower value added, compared to ours, because their wage costs are lower. For example, in Malaysia, the hourly rate is US$2.78 and in China, it is US$0.59. But one thing that has happened, in recent years, is that our neighbours have been catching up on skills and ability and, therefore, they attract lower value added manufacturing from us far more quickly. They can do it efficiently and at lower cost. Hence, the relocations. We cannot compete with Malaysia or China in lower wage costs, nor do we wish to. We do not want to earn those kinds of wages. But we do have workers now in relatively low value added manufacturing jobs. If these factories relocate, what would our workers do?”
“We become uncompetitive in lower-end manufacturing and these are relocated. But the pace of relocation has gone up. Until recently, most of the relocations were to neighbouring countries, especially Malaysia. From the data obtained from unionised companies, in 1999, out of 7,635 jobs lost, 21% or 1,636 were due to relocation. This is taken purely from our unions. 36 of these jobs went to China, but 1,392 went to Malaysia. So in 1999, when companies relocated, they went to neighbouring countries, particularly Malaysia. The picture changed dramatically in 2002. Job losses due to relocation rose to 30%, from 21% up to 30%. Out of 2,343 jobs lost due to relocation, 1,060 went to China and only 221 to Malaysia. Therefore, the preferred location now is China because of the more competitive operating environment there due to lower wage costs and lower land costs. In recent years, retrenchments in services have risen. This is most marked in the financial services sector. Jobs were lost because of mergers and acquisitions, deletion of jobs through the use of technology, and outsourcing of work to cheaper locations. The mergers arose from consolidation of our banks in preparation for the liberalisation of the financial services sector because of global multi-lateral discussions. Recently, there has also been a significant increase in retrenchment of professional, managerial, executive and technical staff. About 20% of those retrenched in the past five years are diploma or degree holders. The proportion is much higher in recent quarters, as highlighted by the Prime Minister yesterday, as much as 43%. What do we make of these separate pieces of information? Are our wages too high?”
“Sir, the CPF changes are fundamental and have long-term impact and benefits. They affect every employee, which means almost everybody in Singapore. Sir, trade unions have been bearing the heaviest duty of explaining the changes to the ground. After the Prime Minister's National Day Rally speech, 38 of our 64 unions have held discussions by yesterday. My colleagues from the unions have mentioned the ground feedback in Parliament yesterday, and more will do so. I will not repeat what they say. Rather, I will address the question whether our wages are out of line. In the short term, two groups of people would appear to feel the impact more. They would say they are hit harder. One group are the employees in the 50-55 years age group. The other are the middle-income employees. Yet the changes are aimed at helping them. Let me explain. I have watched retrenchments carefully over 22 years. My conclusion is that older workers are more vulnerable to retrenchments. They take longer to find a new job. When they do, they took substantial cuts in pay. Data from the Ministry of Manpower clearly shows this. I have asked the Clerk of Parliament to circulate some tables and charts, which I believe Members now have before them. [Copies of tables and charts distributed to hon. Members.] From the Labour Force Survey of June 2002, those in the 50-59 years age group have the highest rate of retrenchment at about 29 per 1,000. They took almost 22 weeks to find a new job, and three-quarters of them took pay cuts. The charts clearly show that this group is the hardest hit of all the groups that suffered retrenchment. Throughout the years, manufacturing has borne the brunt of retrenchments. The restructuring is still on-going and it will continue in the future in any dynamic economy.”
“What is the solution? An MP's letter may bring respite. Power Supply may agree to reconnect. But after a few months, when the bills continue to be unpaid, they will disconnect again. Do I write another letter? Is this not a problem of over-housing? Should this woman not be staying with one of her other sons, so that household expenses can be kept down? There is a life-cycle - what happens to old flats when their parents go to the next world? Can all young Singaporeans, married or single, expect to buy a new HDB flat indefinitely? Are we prepared to face up to this truth and have our expectations move in line with those of the young people in other countries where the purchase of a property, not necessarily a new one, is the norm? So what should we do? Apportion more of the CPF into the Special Account so that there is less spending on housing and more savings for retirement? So I would like some views from the new Members of Parliament on this important issue. Mr Speaker, Sir, I am an old Member of this House. I am no revolutionary. The problems before us are big ones. My purpose is merely to highlight some unpalatable truths. On this note, Sir, I support the motion which I must, because we have proved it in Cabinet. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the business set down on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Mah Bow Tan]. PRESIDENT'S ADDRESS (Debate on the Address) Debate resumed.”
“We want to do so against the odds, because we want to create higher value-added jobs that pay well for Singaporeans, and we have succeeded in specific areas, and well known in the world as leading best in the field. And we must remember that with all these new industries that we try to bring in, there will be low-skilled jobs that are created. For example, in precision engineering, about one-third of the jobs will be low-skilled ones and suitable alternative jobs for the workers that are now retrenched. Sir, unless we can persuade Singaporeans of the need to absorb foreign skilled workers, the solution to employment for our low-skilled workers is to return to developing country status. Next, I turn to an often discussed topic. We have one of the highest saving rates in the world, and yet many do not have enough cash for retirement. Why? Is there too much invested in property? Today, every young person expects to get a new HDB flat after he or she starts working. It is not just young couples who are getting married, but increasingly the singles too, as the Member for Tanjong Pagar, Indranee Rajah, so eloquently argued on Monday. I believe this is unique in this world. Are we not already over-housed? I, too, conduct meet-the-people sessions like all other MPs. I get my share of heart-tugging cases. One woman came to see me because her electricity supply was disconnected. Why? She owed Power Supply more than $3,300. Her husband died more than two years ago. With no income, she had not been paying her utility bills. Furthermore, she is staying with a retarded son. I asked another of her sons who accompanied her, who supports her household. He said the siblings do, but because each one has his or her own family to look after, they can only contribute a little each.”
“And because of these top local talents, the shipyard industry, which is a very competitive one, has survived and still earns good money. So will there be younger and able Singaporeans, and some of our best, entering this industry? Or are we going to see the old breed die out, and the shipyards closed, and the foreign workers leave when they do? Then there are other jobs, paying $800 to $1,200 per month. But there are few takers. Why? The job applicants say that the wages are too low. So the employers appeal for more foreign workers. To many workers from surrounding countries, such wages mean comfortable middle-class living for their families. For Singaporeans, it is a tough low-income life. What should we do? Compete on wages? How can we do that when many workers in countries near us would be quite happy to get a job paying about S$100? The solution lies in attracting higher value-added industries here - knowledge-based industries. To start, we need a critical mass of skilled manpower. We do not have enough from our population pool. So we recruit foreigners. But then, some Members say that it makes Singaporeans feel second-class in their own homes. So, the question to new Members is: How do we build up a knowledge-based industry if we cannot persuade Singaporeans to welcome foreign skilled workers for the start-up phase, at least? With respect to Mr Inderjit Singh's comment about investments in biopolis, he advocated that instead of spending that kind of money, we should invest elsewhere. My point to him is: If we do that, where are the jobs for Singaporeans? We are doing so not because we do not want a good return on our money.”
“Almost 40% of the retrenched were professionals and executives. It has been a painful adjustment for those who found new jobs. They took big pay cuts. Part of the problem is our seniority-based wage system. So my question is: Should we move to rate for the job? That does not guarantee there will be no retrenchments. But it gives older workers an even chance with younger workers in competition for jobs. If our new Members of Parliament were working for the unions, what would they do? And what about now, since restructuring the wage system cannot be done overnight. What should we do? Lower the cost of employing older workers? Should we cut the employers' contribution to CPF for older workers? If you are advocating this course of action, how would you explain it to the rank-and-file workers and also to the professionals and executives who have to find re-employment? About 100,000 workers are unemployed. The CDCs all have job-matching services. So I believe most MPs now have an idea of the problem of matching people with jobs. There are jobs that go a-begging. The shipyards are enjoying a mini-boom just now. They have been taking in workers and recently wanted 5,000 more. I am told they managed to recruit 300, but I am not sure how many of these will stay on the job. Jobs in our shipyards are not unskilled jobs. They are skilled jobs. Yet, many foreign workers come here unskilled. They leave well-trained, and much sought after. When they leave, they join shipyards elsewhere competing with ours. How can we convince more Singaporeans to take up those jobs? Our shipyards have done well over the years. Why? Because our shipyards were set up in the 60s and 70s, and we placed some of our top local talents in those jobs, learning the ropes from foreign expatriates.”
“Managers with stock options see the value of their options fall. Can we fight this trend? Look at Europe. Western Europeans have a different philosophy. They are more egalitarian, feel that the community should carry the less fortunate. So their laws make it difficult for companies to retrench. They pay high taxes and social security contributions. But when Western European companies have to compete in the world market against companies operating in a free market environment, they have to react. So companies stop hiring full time workers. There are more part-timers. But the greater problem is: they shift operations overseas. So there is high unemployment. What survive are high value-added activities and domestic services. For example, Germany has 4 million unemployed but are short of skilled workers for high value-added work. A paradox - shortage of skilled workers when 4 million are unemployed. And they are trying to amend their laws to allow more foreign skilled workers to enter Germany. Germany's example is a warning to us. In global competition, no country can fight this trend when there are other countries willing to be more flexible, or are hungrier. Companies in Singapore are reacting to this new competitive environment. For example, our banks may be profitable, but if they are to be competitive, they have to lower expense ratios, use technology, and eliminate many jobs. The Asian financial crisis and the global downturn hit our workers hard. More were retrenched because of restructuring. Many of those who were retrenched still think the jobs will come back when the recovery comes. They won't. This time round it is not just the rank-and-file workers who are affected, but also the professionals and executives.”