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.”
The complete record
Every one of 715 lines we hold for Lim Boon Heng, in date order, each linked to its source. Free to read, in full, without an account. Page 5 of 15.
“I believe in getting things done, either by ourselves or with Government and the establishment. If it helps to get things done by working with Government, I see no objection to it. The satisfaction is in getting things done, not in the exclusion of Government. Rooting Singaporeans also means getting Singaporeans to feel that this is the land of opportunity. Some Singaporeans migrate because there are better or more exciting opportunities elsewhere. These are Singaporeans who apparently have the self-confidence to compete as foreign talent elsewhere. On the other hand, we have Singaporeans - mostly descendants of migrants or foreign talent - who object to foreign talent competing here. If we are to be a land of opportunity, we need the talent mass here for it to happen. So the vision of Singapore 21 means we Singaporeans developing the self-confidence to compete with foreign talent on our own turf, absorbing foreign talent, and moulding them into Singaporeans, and if not possible, pro- Singaporeans. It is this critical mass of talent that will enlarge that sphere of opportunity for our younger generation. If we are able to bring the best and brightest in the world like a magnet here, then our own will be able to compete with them and derive the satisfaction of competing with the best. Just as some of our top talent right now feel they want to compete with the world's best elsewhere. So I think it is for us to bring talent here to Singapore and not to exclude them. Having said this, I think, to me, it is quite clear that the Prime Minister is right. It will be a long road to S21, and we must persevere in this effort, for our good, for our children's good, and for our grandchildren.”
“The three of them did not wait for others to act. They took the initiative, and even now each year, they organise the get-together. So my point is, if we feel strongly about something and are prepared to do it, we can, and we can make a difference, and we enjoy doing the things that matter to us. Sir, I said developing roots also mean the bonds we develop through school. Here, I believe that there are considerable merits in the old school system, when a child can study from primary one right through to `A' levels. I went to one such school. Twelve years in the same school must surely allow stronger bonds to develop than a six, four or two years stay in different schools. And it is not just bonds of friendship of students in the same year, but inter-generational as well. So should we review our systems and do those things which would allow Singaporeans themselves to develop such bonds? Sir, I said the sense of belonging to Singapore means doing things ourselves. It depends on each of us. And there are many things to do. If anyone is looking for ideas of what to get involved in, let me point out one - the support system for the elderly, in view of the ageing population. It is an area where Government has not got itself too deeply involved as yet. It is an excellent area to be left for those who want to see the development of a civil society. There are already some practising the spirit of civil society. They are the grassroots organisations, the unions, the co-operatives and the voluntary welfare organisations. There are many who sacrifice a lot of time to do things for the good of others. My definition of civil society may be different from others. Some think civil society excludes government or the establishment. I have no such qualms.”
“We have to create that sense among Singaporeans that they play a part actively in our society. Never mind what priorities Government may have, so long as we are able to contribute what we think is meaningful to ourselves. There is a group of Singaporeans who participate in this way, through community groups and voluntary welfare organisations. They go beyond discussing issues and expecting Government to do something about it, to make things happen themselves. And they do not wait to be invited. If we want something done, will we shake out of our inertia, and do something about it? The older generation of Singaporeans had no choice but to do things for themselves, be it to set up funds for the needy, or to build schools. If a poorer educated group of Singaporeans could do so, there is absolutely no reason why a better educated group now cannot. It all depends on whether we are prepared to make the effort. Sir, let me cite a simple example. You might even regard it as trivial. 26 of my primary one classmates meet once a year, with our form teacher. We are a real mixed group of people - workers, shopkeepers and one politician! How did it happen? Was it started by the school principal, or by the teacher? No, we were brought together by three close friends from the class. They had met regularly every Sunday since they left school. One day one of them thought it would be a good idea to organise a class get-together. So from the names in an old school magazine, they set about contacting the class. They called up people with the same name in the telephone directory, sometimes getting scolded for their trouble! There are more than one person with the same name, and those with the name "Lim Boon Heng" in the directory are not mine.”
“Our roots are our families, our friends, the networks we form through churches, mosques or temples, the networks we form through other community organisations, and the bonds we develop through friendship struck in school. It is also about getting Singaporeans to feel they too have created a piece of Singapore. Sir, by any account, the S21 Committee has reached out to a very large number of Singaporeans. Yes, the Committee practised "consultation" and distilled what 6,000 Singaporeans have contributed into one document. But there will be the balance of the 3.1 million Singaporeans, who are not among the 6,000, who will feel that they have not been consulted. Indeed, Mr Chiam reflected this the day before yesterday, when he said his party had no part in it! There will be some among the 6,000 who are left dissatisfied because their pet ideas are not included in the final document. There will be expectations of greater consultation as part of public policy formulation. So we have to understand what is possible, and what is not. Those of us who work in the trade unions engage union leaders and workers in numerous dialogue sessions, as many as our diaries would permit us. Yet we cannot avoid the comment from time to time from some union leaders that there was a lack of consultation! So let us be quite clear that consultation does not mean every citizen is to be consulted, and that every point each citizen brings up will be included, because it is impossible. Yet every citizen wants to participate and feel part of Singapore. But participation does not only mean being directly consulted. Participation also means doing things ourselves, for our benefit, and for society. I think this is far more important.”
“So, it taught me that whilst we have enshrined equality of race, language and religion as the cornerstone of our nation, we disregard the fault lines at our peril. Then, last year, as part of our May Day celebrations, we put up a live TV programme. As we did not have the money to put up separate programmes in the four languages, we insisted that TCS 8 agree that we have items in English, Tamil and Malay, in addition to Chinese. Of course, everybody knows that TCS 8 is a Chinese channel. We thought we were being sensitive to the minority races in making sure that it was a multi-lingual programme, but we got a very negative reaction from a Berita Harian journalist! If we need a more recent example to remind us, it is the emotion with which Members spoke in this House on the subject of SAP schools and the nurturing of a Chinese elite. If we use the Prime Minister's imagery of the four interlocking circles, the emotions raised over SAP schools pose us a very pertinent question: How much non-overlapping space will each circle allow the others? We should all be very pleased if the primordial forces the Prime Minister referred to have mutated to benign forms, like spent volcanoes. But the Prime Minister reminded us very clearly yesterday that dormant volcanoes can erupt, and with great force. This is why we must set realistic expectations about Singapore 21. We must start with the correct assessment of what we are, and build from here. Singapore 21 is about building a nation with hearts that beat as one. It means citizens feeling they belong here so deeply they will defend it. It is about developing roots, a thick web of roots, so that the tree will stand even when the storm is fierce. What does this mean in practical terms?”
“Mr Speaker, Sir, a Straits Times journalist, after hearing the Prime Minister yesterday, wrote in her column this morning: "why the sobering message?" She reflected not only her views but those of some of her colleagues as well. This, after what I thought was a very clear message from the Prime Minister, supplemented by personal accounts from other Members, that our society is one with many fault lines. These fault lines are fundamentals as we continue with nation building. The journalist said that the Prime Minister did not give examples to explain why he delivered his sobering message. Yet, I thought he gave many, from other parts of the world, to remind us that our fault lines can give way as disastrously. At least one Member, Mr Zainul Abidin, gave the example of Malays in the SAF as one indicator of our fault lines. Sir, is there a gap between those above 50 years of age, and those a generation younger in their 30s? Have we so succeeded in blurring ethnic lines that the younger generation already accepts race as a non-issue? As a Backbencher in the 80s, I attended several clan functions. For one who is English-educated, it meant hard work preparing to speak in Mandarin, and there was always not enough time. There was only one Lim in the Backbench, me. How I wished there were more, so that the load could be shared. At one of these functions, I said I wished there were more Lims in Parliament. I did not get to finish my sentence to express my sentiment, because I was drowned out by the applause! All I could do after that was to meekly say that I wished in future there would be more Lims. And, again, big applause.”
“Sir, this has also been explained by the Minister for Manpower. The focus is on reducing costs to the employer. That is why we cut the employer's CPF contribution, and not the employee's. Give money back to the employees by cutting the employee's contribution and give them more disposable income, I think that would only be necessary if we have a far severe recession than now. What workers are now facing is a reduction of disposable income, not 15%, but somewhere in the region of 7%. So I think this is at the moment still bearable. If more companies were to pass back savings which they get from the various cost cutting measures to the consumer, then, in fact, the effect is less than the 7% cut in disposable income.”
“Sir, what happens if a non-unionised employer takes advantage? I think a non-unionised employer has to act responsibly. While there may be no effective monitoring system to prevent such abuse, if such employers are shortsighted and take advantage, what would be the cost? I think unhappiness within their companies and a breakdown of trust between employee and employer. When the recovery comes, people will vote with their feet. So whilst we may not have an effective check on such employers, I think it is prudent to sound out a warning to them that if they do so, it is to their own cost in the future. As regards why it is necessary to mandate a 10% CPF cut, if we want to touch the CPF, it is a blunt instrument. If we do not want to mandate a cut across the board, then we have to rely on cuts purely on the wage system. I think that burden will be too high for our workers to bear. So if we have to cut part of it from the CPF, then we have to mandate this 10% cut in the CPF.”
“So I hope that they too will be given a chance. Sir, it is natural that the focus of Members has been on restoring our competitiveness. Most Members have focused on the current business cost problem. Few have touched on the future, except perhaps the speakers earlier today. But that forms an important part of the CSC Report. The CSC recommendations also map out the future we want. It is a future based on the knowledge economy, of creating higher value, which in turn provides workers with higher pay and not lower pay. Our future does not lie in keeping our wage costs down to the same level as our neighbours. Our ambition has always been to create more wealth per person, to give our people a better life than our neighbours. That is why our wage levels are now higher. If we succeed in moving into a knowledge economy, let us not be surprised that our wages will be even higher, compared with our neighbors. But the important thing is this higher wage level must be supported by the higher wealth we create; in other words, by higher productivity overall and that is what we aim to do. Unfortunately, because of the pressing problems of the downturn, there has not been adequate discussion and debate in this House on the other recommendations of the CSC Report. Mr Speaker, Sir, I hope that over the next few months, we will have more opportunity in this House to debate on the various recommendations that have been set out. Now that we have settled what we should do, let us go forward, implement the wage cuts, pull together as one nation and come out of this as quickly as possible and then move forward into the knowledge economy. Sir, on that note, I support the motion.”
“Though unemployment has risen, we are fortunate that there are still jobs available and still adequate. Although the Employment Service Department of the Ministry of Manpower has more workers seeking jobs than vacancies, it is not truly reflective of the employment market. The service provided is purely voluntary. Not all employers register their vacancies with the Ministry of Manpower, notwithstanding the proactive efforts of the Ministry to seek out those employers that have jobs. Not all the unemployed register either. We know there are companies still complaining that they cannot get enough Singaporean workers, and many sectors have large numbers of foreign workers. In fact, in my meet-the-people sessions, I still get employers coming to me saying that they cannot get workers and asking the Ministry of Manpower to approve the work permits. Provided workers are flexible in their choice of jobs, they can find a job. Of course, the performance of the job-matching efforts can be improved. And we will do so through tripartite effort. Having said that, I must point out that older workers find it harder to find a job. Some say that older workers expect higher pay. Yes, this is one reason. They have more commitments, but they will adjust. What I think is an equally difficult problem is the attitude of employers towards older workers. A mindset change is needed. So I call on employers to give older workers a chance, and I hope the employers' organisations will do more to persuade their members to give older workers a chance. I know that many have expressed concern over low income workers out of work. But I think, today, there is also a very significant problem of the better educated executives who lose their jobs and who find it difficult to find re-employment.”
“The NTUC is pleased that two employer groups - the Singapore National Employers Federation and the Singapore Federation of Chambers of Commerce and Industry - have come out with a five-point action plan to explore new markets, develop new capabilities, boost productivity, help the unemployed and implement the wage cuts fairly. Some economists have commented that the cost-cutting package does not address the demand side of the equation. As two-thirds of demand is external, what we can do is to lower our costs, so that our exports are competitive. This is precisely what we have done. What more can we do? Both the SNEF and SFCCI have said they will be more active in exploring new markets. If we can improve on our export performance, then we will recover. This, in turn, will pull up the domestic sector which seems to be a focus of speakers earlier this afternoon. When we recover, there will be more demand for offices, factories and homes, and help the construction sector. I hope that NMP, Mr Chuang, understands that the measures help him downstream. Some of the measures help construction companies immediately but the full effect comes downstream when we have recovered. So, also the retail sector. When we recover, and the people have more money to spend, then the recovery comes. And I hope the present difficulties will spur the construction industry and the retail industry to finally do something about the appalling low productivity in both sectors and in the case of the construction industry, its heavy reliance on unskilled foreign workers. Sir, as my colleague, Mr Lim Swee Say, said yesterday, let us forget about painless solutions. There will be pain. It is not only poor company bottom lines, it is also unemployment.”
“Some were guarded in their reaction, but others almost condemned it! I hope they will now study closely how the public sector has managed its wage system, and understand how they too can build flexibility into their wage systems. Just as we learnt from the last recession and put in place a flexi wage system, so too must we learn from this recession and refine our wage system so as to better meet a future recession. I hope it will not happen but as business cycles go, we know that it will come sooner or later. Sir, the welfare of workers and their families depends on employment. Employment, however, depends on companies remaining viable. Therefore, the top priority of any Government or union in an economic downturn must be to ensure that workers stay employed. If that requires wages to be cut, we will cut. We have done so in 1985/86 and we are doing it again. This shows how flexible and responsible unions are in Singapore. This tripartite understanding we have developed is a valuable asset which we must maintain. It depends on trust. Each party must play its part to maintain that trust. The objective of this cost cutting package is to keep companies viable, restore their competitiveness, so that they will continue to provide jobs for their workers. Labour is playing its part by agreeing to wage cost cuts. Now employers must play theirs. No doubt some retrenchments are unavoidable - even in boom times some companies have to retrench. However, we expect the numbers to be reduced. I am glad that some companies have shelved retrenchment plans, because of the cost-cutting package. We have got this information privately. We respect the wish of these companies to remain anonymous, but we are glad that they are acting responsibly.”
“Naming the figure of 15% is thus necessary to serve as the benchmark for all, and remember we have the figure of 30% mentioned once again in this House in the past two days even after we have reached a national consensus in the National Wages Council! As we move to implementing the wage cuts company by company, let us not forget to maintain fairness. The public sector has shown the way. The cuts in public sector pay that Deputy Prime Minister announced yesterday was reached through discussions between the Public Service Division and the public sector unions. The final figures were agreed to only yesterday morning. I hope private sector employers will follow the example of the public sector - cutting more at the top and minimising the cuts to low income workers. It cannot have escaped the attention of employers that higher income civil servants are taking a cut in monthly pay, through the monthly variable component. Since the last recession, the public sector has consciously developed a flexible wage system, which includes a monthly variable component. It is made up of unconsolidated NWC wage increases. If the private sector had been as attentive in wage administration as the public sector has been, they too would have a substantial monthly variable component by now. It would not have increased wage costs, since the monthly variable component is taken out of a total amount of wage increase agreed to under the ambit of the NWC, as a consequence of NWC recommendations. When I suggested recently that we should build up a variable monthly component in private sector pay systems, the reaction from employers showed a singular lack of understanding. It shows how poorly they have paid attention to wage administration.”
“The figures they provided have allowed us to gauge whether the macro figures were largely correct. I do not raise this now to re-open the exchange. Rather, we should learn from this experience. Employers must appreciate that we have a better-educated, more discerning workforce. They expect greater transparency from employers. So we need to establish a number, one which, to the best of our ability, we think is right. It then becomes the guide for actual settlements at the workplace. We should expect negotiations at the workplace - so some cuts will be more, others less than 15%. There will be negotiations at the workplace and employers cannot take it for granted that just because we have reached this national consensus, that this is something that will be effected without further discussion. Where a company is unionised, I am confident that union leaders will settle with management rationally, and they will see to it that the cuts are fair to the workers. In the last few months, we have had a lot of discussions within the union movement. After several rounds of discussions, I reported to the Prime Minister and DPM that they need not worry about the unionised sector, but they should be concerned with the non-unionised sector. If we do not have a figure, which we make public now, how are non-unionised workers to know whether the wage cut their employers are asking for is fair? Granted management in non-unionised companies can effect any cuts they deem necessary as their employees have little choice, but what about the social discontent generated? To face this downturn, social cohesion is important, as many Members of this House have said.”
“Sir, a question was asked yesterday: why is it necessary to state how much we should cut wage cost? Mr Low asked that question. It is a matter of fairness. Workers are prepared to do their part, accept wage cuts to restore our competitiveness, but they need to know how much is really needed. So first, we have to know how much we have lost in competitiveness. If we assess that we need to cut costs by 15%, then workers would be prepared to accept a 15% cut in wage costs. If we do not have such a figure, how are our workers to know that what an employer wants to cut is fair? This round, we have had to depend largely on figures provided by the Government. One indicator has been the relative unit labour cost, a comparison of our wage cost with selected Asian competitors. Another indicator has been the weighted change in currency realignments, or effective exchange rate. Both pointed to something close to 15% to 20% range. Sadly, figures provided by employers have been grossly inadequate. When I mentioned this publicly, some employers reacted indignantly, saying that for over a year already, they have said that Singapore has lost competitiveness, and cost cuts were needed. They protested that they have even raised the matter in Parliament. Yes, employers have mostly asked for cuts, ranging from 5% to 30%, but without providing cross-country comparisons on cost items. This is an example of what unionists mean when they complain of a lack of information sharing. Fortunately, some employers have provided information of cost differentials from their factories in different locations, but privately. Some of them provided the figures to us at NTUC, some to EDB and MTI. And these were individual employers.”
“Mr Speaker, Sir, consensus building requires trust and patience. To foreign observers, the package of cost cutting measures recommended by the CSC and the reconvened NWC is remarkable, because we are able to reach a consensus on cutting wage costs - no less than $7.5 billion of it. And we have reached this consensus so smoothly, it seems. Is reaching this consensus an easy matter? Well, just look at Hong Kong. You cannot find a better example of a market economy than Hong Kong. The employers know what to do, but can they effect it? Hong Kong Telecom has been unable to make its bonus payment flexible, linking payment to earnings, let alone implement a wage cut. Ours is not a command economy, as some Hong Kong officials seem to think, as reported in Asiaweek. Ours is a system where political and trade union leaders have to face their constituents in election by secret ballot at regular intervals. We have been fortunate in this downturn to have leaders in the NTUC and the unions who went through the 1985/86 recession. From that experience, they know that effective medicine for a severe illness tastes bitter. They are therefore psychologically prepared for tough measures in this downturn and this time, the measures are in fact more severe. In 1985/86, we cut wage costs from the employers' contribution to CPF. It was a cut in savings for the future. For the vast majority, disposable income was not cut - as we adopted a wage freeze, and not a wage cut. This time, we have gone beyond cutting savings for the future. Not only are we cutting employers' contribution to CPF, but we are also cutting disposable income. Fortunately, we have, since the last recession, put in place a flexible wage system. It allows us to cut wage costs by cutting bonuses, which is less painful.”
“Therefore, we welcome the Prime Minister's suggestion on Sunday that joint seminars for the PAP be held with the NTUC. It is as much an opportunity for the PAP to better understand the workers as it is for union leaders to influence PAP leaders who form the Government so that national policies remain pro-worker. Strengthen the links, and we can be assured that the working relationship, which has been one of our unique strengths as a country, will continue well into the next century. For now, quite clearly the key concern of everyone is how soon the current economic problems in the region will be resolved. These problems are external but they affect us. To solve this problem, international cooperation is critical. Let us hope that there will be close cooperation and the will to accept the remedies however painful they may be. Our response internally, in our country, must be to follow what we have done before. We have weathered different crises before, through everyone pulling together. We overcame the 1985-86 recession through the practice of tripartite cooperation. Now is the time to reinforce this.”
“But this is one reason why we do not have people sleeping on the sidewalks, as the jobless do in the cities of the developed nations. For Singaporeans who have been prudent with their home buying decisions, they need not fear being turned out into the streets through unemployment. You see in the developed countries, a high proportion of rent accommodation. When they lose their jobs and cannot pay the rent, the landlord who is from the private sector will demand the keys back to their apartments. That is why every winter you have photographs of people sleeping on the sidewalks in New York. We should build on what we have built up so far and try to narrow the wealth gap further. So, in this, we will have to be more creative to ensure that the asset enhancement programme benefits the lower income. Unions can play a role and add value to society with the continued support of employers and Government. But will this close partnership built up over the past 20 years last - a question which Mr Sinnakaruppan asked. Will it grow stronger? This will depend on what each of the social partners does. The partnership between the NTUC and the PAP Government is built on personal relationships, on trust, on shared beliefs and shared goals. However, at each general election, there is leadership renewal in the PAP Government. We also have leadership renewal in the unions through periodic elections. Personal relationships cannot be handed from one generation to another. It has to be forged anew by the successors. Therefore, to keep tripartism strong, the interaction among leaders of the PAP Government and the NTUC and the unions has to be managed. It takes time for trust to develop.”
“When the companies are profitable, then jobs are secure, and the economy as a whole benefits. In what other ways can unions add value to society? In the past 30 years, the labour movement had embarked on two major programmes. The first is the development of the cooperative movement, which has benefited consumers, especially the consumers from the working class. The second is in bringing social and recreational facilities previously enjoyed only by the higher income within the means of the lower income. In the years ahead, there are two areas where our unions can play a social role. The first concerns the aging population. This will create new needs, such as the care for the elderly. With smaller families and nuclear families, the lower income will require help most, because both husband and wife have got to go to work. Such assistance will fall outside the scope of volunteer welfare organisations. The labour movement can, and should, play a part, with support from the other two social partners. The second area is the effects of globalisation. Globalisation means that the labour market becomes more competitive, indeed a global one. High end wages will be set by the world-wide shortage of such talent, whilst the low-skilled wages will be depressed by the overwhelming surplus of this group of workers. This widening of the wage gap can create social problems. It can create social tensions. So far, we avoided those problems. Why? Because our education, health and housing policies have kept the real net gap narrower than if let to pure market forces. You take housing - a perennial subject of debate in this House. Our home ownership policy has given each one a roof over their heads, and nine out of 10 own their homes they live in. We take this for granted now.”
“We cannot assume that what we put in place in the past are still right today. We cannot assume that they have not become rigidities that make our labour market less flexible than other economies. It will not be easy to discard these hard-won terms of employment. Some of these may have been regarded in the past as essential to prevent employers from exploiting workers. So how can such terms be varied or modified without allowing abuse? That is a question together we must address. Trade unions can also add value to employers through helping to implement programmes to raise productivity - skills upgrading, promotion of Quality Circles, setting up Total Quality Management Programmes, 5S programmes, and suggestions schemes. When we do this, we will not be the only union movement which helps management, although conventional wisdom may think otherwise. Toyota, for example, acknowledged in the 1980s that it was union support that helped them to develop what they called the Toyota Production System, a highly regarded system which other car manufacturers wanted to also put in place. Toyota knows that it is through the years of close working relationship between management and unions and workers that makes the system possible. So it is not easy for any other company to replicate. So Toyota welcomes GM and the like to look at their system. This shows how at least in one company, management regards cooperation with the union as a critical factor for success. Under our present circumstances, union support for management is most important today in the area of reducing unit costs, to enhance competitiveness and then it will make a difference to how well we weather the storm ahead. The NTUC and the unions aim to be a valued partner of employers.”
“But when a company has to retrench, it should retain the best team, to be competitive. So when it comes to deciding who should go, we should adopt the following: Between two persons, the one who is clearly better than the other stays while the weaker one is retrenched. If the better worker is a foreigner, the Singaporean is retrenched. If the better worker is Singaporean, then the foreign worker goes. If both are equally good, then the Singaporean stays and the foreign worker goes. This is a sound basis to protect the jobs remaining. Most of these jobs will be held by Singaporeans. Retrenchment, we hope, will be a short term problem. The well-being of our workers depends on our ability to attract new investments. It has to be knowledge intensive, and high value-added investments. We have to be more productive to overcome our lack of a large domestic market and lack of natural resources. That is why closer cooperation among the three social partners will be more important. Our past success in attracting investments is not something we can take for granted. The competition today is much more intense than it has ever been. We are competing with developed countries for high end investments. We have to make Singapore a profitable place to do business despite our lack of a large domestic market and our lack of natural resources. To be a valued partner of employers, our unions must continue to do what they have done well in the past: working with employers to foster a harmonious industrial relations climate, and ensuring that the labour market remains flexible and workers employable, as my colleagues have said. Maintaining a flexible labour market means the critical re-examination of hard-won terms of employment.”
“What is more, we have also put in place systems which should allow us to face downturns with less human cost. Companies should thus be better prepared to cope with the downturn. We did this through the practice of tripartism. Let us not forget that. What did we put in place, as a result of the last recession? We wanted a system which should allow employers to reduce wage cost without having to resort to retrenchment as a first measure. We have put in place the flexi-wage system. What is this flexi-wage system? In the flexi-wage system, there are two basic components: the monthly wage and the variable bonuses. The variable bonuses should make up about 20% of the total annual wage. So in a downturn the company can reduce annual wage cost by up to 20% and still pay their workers the full monthly wage. Employers should therefore trim wage cost by reducing the variable bonus before they consider retrenchment. We put in place a flexi-wage system, not a flexi-worker system, to allow companies to cope with downturns. It is cut wage cost first, not cut workers first. Unions accept that retrenchment is a management prerogative. But if after working with employers to implement the flexi-wage system, employers do not use it, but resort to retrenchment when the company shows losses for the first time in one quarter, it will not be fair to workers and the unions who represent them. If in making use of the flexi-wage system and other cost cutting measures are still not enough, then we can accept retrenchment to keep the company viable and to save jobs. So I urge all employers not to resort to retrenchment at the first sign of trouble. If we have to accept retrenchment, who goes first? It is popular to say that in a downturn, the foreigners should be retrenched first.”
“So on the one hand, we need to explain to Singaporeans what to expect, and at the same time monitor to ensure that competent Singaporeans are also given the chance. We should also be aware of social problems when large numbers of foreign workers from the same source country are concentrated in one place. I am not referring only to Orchard Road or Serangoon Road, but also in the factories. They tend to stick together as a social group. This leads to friction between foreign workers and Singaporean workers, in the same factory. Fortunately, these problems are not serious so far. But we should be mindful. In view of the turbulence in the East Asian economies, there is some fear among Singaporeans of lay-offs. Yesterday morning, as Mr Sinnakaruppan said, for the first time one of our papers reported, in a long while, that the key concern of our employees is now job security. Little wonder. We read in the newspapers that over two million Indonesians have lost their jobs as a result of the current crisis. They may be joined by another million whom Malaysia intends to send home. Unemployment in Malaysia itself among Malaysians is also expected to rise. There are already more than a million unemployed in Thailand. Another million jobs will be lost in Korea through the restructuring required to restore its economy back to health. When our workers read or hear of such problems, naturally they are a little bit worried. Quite naturally, employers are concerned about prospects in the coming months. Management will be thinking of strategies for survival. How to weather the next year or two and cost will have to be trimmed. One option is to retrench workers. We have faced such situations before. We have worked together to overcome problems.”
“Workers will know that there is a Ministry looking after the development of our own workers. It will be a clear focal point. Continuing education and training will then be coordinated. Our workers' skills will be upgraded continuously, so they will remain employed as we bring in new investments. Otherwise, some may think the policies we are putting in place to attract new growth sectors are for the benefit of foreign workers. Yes, as we move more and more into the knowledge-based economy, we need more knowledge workers. What is more, we need a critical mass of skilled workers in a sector before it can take off. So we need foreign talent. Take, for example, the financial services sector. If we are to grow the business in new financial services, we must build up a critical mass of expertise, with a heavy injection of foreign talent. It is one thing to look at this from the macro view. What is the impact, seen from the perspective of the individual Singaporean? Let me cite an example from the financial services sector. Just a few days ago, a couple of employees in this sector told me that some Singaporeans feel marginalised, or sidelined. A foreign boss will recruit more foreigners, and Singaporeans are shut out. There does not seem to be a transfer of expertise. We should expect such problems. A critical mass of talent versed in new areas has to be built up from recruiting foreigners. The volume of business at the start is not large, so they do not employ so many Singaporeans. Singaporeans do not seem to be given a role. They have yet to be trained in the skills. It is only when the business volume grows big enough that Singaporeans will be brought into the business.”
“It is the quality of the workforce that will give you the cutting edge in competition. And one more point: It is not enough to train only the young. You need to train the not-so-young and also the old. Training has to be a national effort, a shared responsibility. We need to find more effective ways of upgrading and channeling workers from the declining sectors (for example, consumer electronics) to new growth sectors like wafer fabrication. If not, Singaporean workers will become under-employed while new growth sectors will be overly dependent on foreign skilled workers. This is not desirable. It is also not sustainable. Look at the structural unemployment in Europe. New jobs have been created, but large numbers of workers do not have the skills that these jobs require. Each government knows that retraining has to be done, if structural unemployment is to be overcome. But money is scarce. And even the billions of dollars they squeeze out of tight budgets will make only a small difference. This is the price they pay for the past thinking that the upgrading of skills is the responsibility of the individual and the employers. It is now a problem for the Government, and there is just not enough money. If we take care of the continuous retraining of workers now, whilst we can afford it, then the development of new sectors in our economy will be successful, because our workers will truly feel that it has all been done for their benefit. Therefore, I welcome the proposal to expand the functions of the Ministry of Labour into a Ministry of Manpower. When there is a lead agency to deal with the matter, then the individual efforts of different agencies will move forward in the right direction.”
“Thereafter, further education, or upgrading of skills is the responsibility of the individual, or his employer. With faster technological change, is this still valid? Each worker now has to re-learn skills three to five times in his working life. The cost of keeping workers employable with relevant skills throughout their working lives has gone up. Just now, Mr Sinnakaruppan mentioned that the Government through the SDF spent only $47 million in 1996. That is not the full story. For every dollar which the SDF funds, another $10 is paid for either by the employer or the individual. So our total spending on continuing education and training today is more of the order of $400 million to $500 million. And yet this is not enough. Therefore, the cost of upgrading the skills of our workers in the light of the changes around us will be very, very high. So this means that we cannot rely on old thinking about how we deal with continuing education and training. There should be a central agency to plan the manpower needs of the economy, coordinate a national infrastructure for skills upgrading, and to devise programmes to support the individual and the employers. Without this, we will be trapped in the rut. Workers will say that they do not know what courses to take up, or that they have no time for training, since they have to earn a living. On the other hand, the employers will say that they cannot afford to train if the worker will leave for some other employer at the end of the training. In this period of uncertainty, there will be a natural tendency to cut back on spending. To the employers, I say, "Don't cut back on training." If you do so, you will be making a big mistake. Of course, you can make training more cost effective, but we should not stop training and upgrading.”
“Mr Speaker, Sir, I rise to support the motion. The first concern of the NTUC, as Mr Cyrille Tan put it, is: how can trade unions add value to their members and to the tripartite partners? Really, the fundamental question is: how can trade unions remain relevant? To remain relevant, trade unions will have to add value to workers, employers and to society at large. It cannot keep on doing what it used to do, but to do what is useful today and in the years ahead. The success of any movement depends on the quality of its leaders. We have been fortunate that our unions have thrown up good leaders. In the past, unions could draw from more than 90% of the workforce for members, and hence leaders. In 1970, 84% of all workers at best had primary school education. Today, that same group of workers with that kind of qualification has shrunk to 39%, which means the rest have better education. That has been the success story of Singapore. And drawing from that, if the traditional way in which we think about union membership remains the same, then unions must draw from a poorer pool of members or grassroots leaders. So the difference between the past leaders who still continue today and what we may draw on in the future would be the quality. If we are going to have the same balanced relationship that we have had all these years, then we should re-examine the scope of union representation. The biggest worry today, as Mr Cyrille Tan and Mr Sinnakaruppan said, is whether our workers will remain employed throughout their active working life. This is the second key concern mentioned by Mr Cyrille Tan. Conventional thinking is that it is the duty of the State to educate the young to the best of their ability, until they go to work.”
“Mr Deputy Speaker, Sir, I would like to make a clarification. My colleague told me that he heard me saying that when I referred to the SDP New Democrat which claimed that there are 300,000 foreign workers in HDB construction sites, I mentioned that there are 29,000 foreign workers in the construction industry. The SDP did claim that there are 300,000 foreign workers in HDB construction sites in their report. But the total number of both foreign and local workers on HDB sites is only 29,000. Therefore, the SDP had inflated the figure by more than 10 times.”
“This margin of increase appears to be on the high side. Recently, some people have topped up their CPF accounts with cash in order to purchase Telecom shares. Some self-employed people, such as taxi drivers, who are above the age of 55 were not happy with the CPF Board over the issue of withdrawal. A 67-year old taxi driver complained to me that after selling the Telecom shares to earn some profits, he was told by a CPF Board officer that he could only withdraw the profit from the sale, but the cash portion amounting to $1,250, which he had deposited with the Board to top-up his account, could not be withdrawn until three years later. When he told the officer that he was already 67 years old and might not survive another three years to get his money back, the officer told him that even if he was 100 years old, he would still have to wait for three years. I feel that we should reconsider this policy, especially for those who are above 60. Do they need to wait for three years before they can withdraw the amount which they had actually topped up with cash? I hope that the Minister for Labour would consider this matter. Our policies have been drawn up with the long term interest and welfare of the people in mind. But for those who are facing financial difficulty at present, we should try our best to help them.”
“Most residents of HDB flats would need to have more space when their children grow up, especially those families with daughters where additional rooms are a necessity rather than a luxury. I hope that the relevant authority would seriously look into the feasibility of building more 5-room flats. If the prices of HDB flats can be increased gradually rather than drastically, I believe young couples will not rush into purchasing bigger units. They can work for a few years, wait for their incomes to rise before applying to upgrade to bigger flats. Just now, Mr Low Thia Khiang mentioned that Singaporeans were struggling with a heavy burden in life, so how could they be bothered with the building up of a more gracious society. I think this is a lopsided view. He has neglected the fact that many community organisations, Government departments, community centres and schools have put in a considerable effort to promote cultural, educational and recreational activities in Singapore. A heavy burden in life is a common phenomenon in any urbanized society, and high consumption is not peculiar to Singapore. All successful urbanized societies, such as Hong Kong, Taipei and the major cities in some countries in South East Asia are facing similar problems. So this is not a problem that is found only in Singapore. This is a common phenomenon in societies with rising incomes and affluence. To say that the Government is blaming the people for indulging in costly lifestyles and contributing to the rise in the cost of living, is a lopsided and misleading argument. I agree with Dr Lee Tsao Yuan that Government should exercise more care before increasing levies and charges. For example, the fees for a restricted passport for travel to West Malaysia have been increased from $10 to $40.”
“For example, last year in Ang Mo Kio, the HDB price for a 5-room flat was $268,000, and that for an Executive apartment was more than $300,000. Another reason was the re-sale of old HDB flats in the open market. A 5-room flat could be sold for as much as half a million dollars. An Executive apartment in Bishan could be sold for more than $700,000. These prices would have given the public an impression that all the HDB flats have reached such a price level. In fact, these were partly due to extensive renovations which had enhanced their values. During the first half of this year, the restraints on the property market of the Government have yielded positive results, and the prices are more stabilised. However, many people are concerned that prices may go higher in future and some could not afford to wait in the long queue for a flat to be allocated. So I support the recommendation of the Committee, in urging the Government to maintain its level of subsidy for the 5-room HDB flats. I urge the Government to build 5-room flats in mature estates. For example, I hope that the vacant land near the Ang Mo Kio Library can be developed for the construction of 5-room flats. If this plot of land is to be handed over to URA for tender by private developers, it would be used for building a private condominium. Many residents in this estate, including the grassroots leaders, will only be able to admire it at a distance, with a tinge of envy. Our long-term target is to have private property making up 25% of the total residential property in Singapore by the year 2010. I think we should re-examine the time-frame for achieving this target.”
“The success of our housing programme is well known throughout the world, and our Housing and Development Board has been receiving delegation after delegation from countries all over the world. We all know that the facilities in our HDB estates are excellent, and the living environment is pleasant. However, the escalating prices of HDB flats have given rise to concern. The Cost Review Committee Report has given an in-depth analysis of the problem. On page 58, paragraphs 5 and 6 of the Report, it is stated that although the prices have increased, with the rise in the incomes of our people, the flats are still affordable. For example, between 1992 and 1995, the price of a 4-room Model A flat has increased by 5.4%, that of a 5-room flat by 10%, and the Executive flat by 11%. On the other hand, the average wages of a worker have increased by 7.1%. Some people feel that the price increase of HDB flats is substantial. I believe there are a number of reasons for this. First, on page 58, Table 4.1 of the Report, between 1994 and 1995, the price of a 4-room Model A flat increased by about 10%, a 5-room flat by 18.8% and the Executive apartment by 18.9%. From 1991, the selling price of a 4-room flat increased from $88,000 to $120,000; a 5-room flat from $114,000 to $190,000, an Executive apartment from $168,800 to $309,800. The main reason for this increase was that in 1991, after the Gulf War, the property market in Singapore began to take off and land prices escalated rapidly. As a result, all property prices went up. The other reason was that the figures in this Report are taken from non-mature new town prices. While in the other mature estates, the 5-room flats and Executive apartments are selling at much higher prices.”
“Like in the 1980s, there was a property slump and many people lost a lot of money. That is a good example. Other expenditure such as the buying of motorcars and the type of ward in the hospital, we should also spend within our means. Mr Deputy Speaker, Sir, Mr Low Thia Khiang said just now that in Singapore, Mercedes Benzes are selling very well, but these are very expensive goods. Usually, the manufacturers and the agents target at the rich people when they advertise. I do not think an ordinary citizen could afford a Mercedes. Our country belongs to all of us. Whether you are in the ruling party or the opposition party, you have to look at the matter in a responsible manner. We have to put in a joint effort to change the consumption behaviour and patterns of our people. We should not distort the facts like what the SDP and PKMS did to mislead the people. I think what they are doing has undermined the reputation of the Department of Statistics as well as the reputation of Singapore. Now, at this important debate, Members of the SDP are not present. They are not responsible. Only irresponsible politicians would use such a means to attain their political purpose. Sir, I am very happy that the Government would accept the recommendations to help the poor and the aged. I am also very glad that the Prime Minister has also urged upon the various departments to look at the recommendations. Sir, I support the motion. Mr Lau Ping Sum (Ang Mo Kio GRC)( In Mandarin): Mr Deputy Speaker, Sir, the Cost Review Committee Report is a very comprehensive report, with far-reaching effects. Singaporeans have been very concerned about the rising cost of living in recent years.”
“So, when the harvest for apples or oranges in the foreign countries is poor, and the imported fruits are expensive, we should tell our people accordingly and encourage them to eat more local fruits, such as water melon, papaya and banana which are equally nutritious. At the same time, it will lighten our burden on household expenditure. In this aspect, I hope that CASE will be able to provide more guidance to the consumers. Spend within our means. I notice that in recent years, the hongbao for wedding dinner is getting bigger and bigger. In the good old days, if you gave $20, it was considered very good, but now it has risen to $60, $80 and even $100. For those wedding dinners held in the major hotels, usually the host will make a lot of money out of these hongbaos. Nowadays, when young people get married, they want to hold their wedding receptions at the hotels. The bigger the hotel, the bigger the hongbao will be. For those who are wealthy, they can well afford to give a big hongbao, but for those who are less well-to-do, they will also have to cough out a big hongbao to "save face". This is another expenditure that jacks up our household expenses. Some Singaporeans whose incomes and savings are enough to support the purchase of a 4-room flat and live comfortably are not contented with it. They force themselves to buy a bigger and more expensive 5-room flat, resulting in expenditure beyond their means, and they have to tighten their belts just to make ends meet. Even members of the family have to suffer for that. Some say this is a form of investment, but as Minister Lim Boon Heng said just now, when you invest in property, it is not necessarily a hundred per cent win situation. Sometimes, you make a profit, sometimes you lose your fortune.”
“Some people feel that things are cheaper during a sale, and they simply buy up a lot of cheap T-shirts, shoes, handbags, etc. But, in fact, they have already had lots and lots of these things at home. Just because there is a special offer, people are seen buying drinks and canned food by the cartons. These food items are perishable. Even in canned form, they have a certain storage life, and after some time they become unfit for consumption. Buying large quantities of such items will eventually lead to wastage of money. Such consumption behaviour will virtually lead to higher household expenditure. Avoid buying branded goods. If you buy branded goods, you are paying for the brand and not so much the product itself. Nowadays, most of our children know what are the famous brands. Very often, parents would buy these branded products for their children out of love for them. By so doing, they are invariably cultivating the children's habit of high spending, and leading to higher household expenditure. I think CASE should take upon itself to educate the consumers on the proper consumption behaviour. Consumption Pattern The people of Singapore should realize the fact that Singapore is a small country with no natural resources, and we should accordingly adjust our consumption pattern to check the rise in our cost of living. In Singapore, whatever we eat, wear or use are all imported. Any variation in the supply situation will bring about fluctuation in the prices. For example, last year, when durian was in short supply, the fruit was sold for as high as $5 a kilogram. This year, there was a bumper harvest, and supply was so plentiful that we could buy durian for as low as 50 cents a kilogram or even at 50 cents per fruit.”
“Let me give a few true-life experiences to illustrate my points: Consumption Behaviour More expensive does not necessarily mean better products. I have a friend who sells ladies' handbags in a shopping centre in Orchard Road. Initially, he priced his handbags at $20 each. But a lot of customers asked a lot of questions. They were sceptical about the quality of the handbags, saying that they were so cheap and hence could not be good. As a result, these handbags were not saleable. Subsequently, this friend of mine relentlessly jacked up the price of these handbags and sold them at $80 a piece. Suddenly, his shop became the most patronized in the shopping centre. His handbags were selling like hot cakes, and no customer complained that the handbags were no good or doubted whether they were durable or not. Naturally, my businessman friend made a fortune out of it. Prices went up by 300%, and this was indirectly caused by inappropriate consumption behaviour. I discover that Singaporeans have the mentality of "what you buy, I must buy too". For example, during the pre-Chinese New Year period, the giant prawns and the travella ("white belly fish") can be sold at prices between $20 and $40 per kilogram, and there is always a long queue for them. This is because everybody feels that if you buy, I must buy also, no matter how expensive they are! Once the festive season is over, the same giant prawns and travella can be bought at just a few dollars per kilogram. It is just a difference of one or two weeks and there is a vast difference in prices. By such consumption behaviour, you are just forcing your money into the pockets of the fishmongers, indirectly causing a momentary price increase. We should not buy unnecessary things just because there is a sale or "special offer".”
“With the continuous increase in the average annual income of our people, their pattern of consumption has become more demanding. Moreover, nowadays bank loans and other forms of credit facilities are easily available. Advertisements in the newspapers and over the television make the goods and services look so tempting and attractive. This has resulted in big changes in the consumption habits and patterns of our people. Mr Deputy Speaker, Sir, if a country is ruled by a good government and hence enjoys good economic growth, it will become prosperous and its people will live a life of plenty. As such, they will want to buy better goods, wear better clothes and use better appliances to satisfy themselves and members of their families. It is quite natural and normal. However, from statistics, I have discovered that within a short period of six years, household expenditure has increased by 76%, but only 14 percentage points were due to price increases. These 14 percentage points can easily be offset by the higher earnings of our people. Yet, we cannot neglect the fact that our household expenditure has risen substantially. I feel that as Members of Parliament, whether from the ruling party or the opposition party, we have the duty to look squarely at this substantial rise in our cost of living. We should not merely try to find fault with the Government, confounding right and wrong, or running away from the problem. This is a very irresponsible behaviour. I believe that the key to this problem is on the consumption behaviour and pattern of our people. Therefore, we have the duty to educate our people and change their unhealthy consumption behaviour and pattern, in order to check the rise in our cost of living.”
“For me personally, this second session of the Cost Review Committee has taken the better part of my time in the last four months. I would have preferred spending the time dealing with competitiveness, productivity improvement and skills upgrading because these would ensure our workers' future. I know the members of the Committee feel the same way. Sir, on Dr Soin's proposal to have periodic reconvening of the Cost Review Committee, I am not sure that it will be a popular suggestion as far as the members are concerned. But I am happy to say that the members have given of their time to serve the public interest. Staff of the various Ministries, the universities and some private organisations have also contributed their time and appeared before our Committee. Mr Deputy Speaker, Sir, I wish to thank them all for their contributions and I would like to ask this House to thank them as well. [Applause.] Mr Peh Chin Hua (Jalan Besar GRC)( In Mandarin): Mr Deputy Speaker, Sir, I support the motion standing in the name of Mr Loh Meng See and Mrs Yu-Foo Yee Shoon. I hope that while endorsing the recommendations of the Cost Review Committee, we would also accept its recommendations to control the rise in the cost of living and to help the poor and the aged people. I agree with the Department of Statistics that while the average household expenditure of Singaporeans rose by 76% between 1987 and 1993, only 14 percentage points were the result of higher prices or inflation. Therefore, to a very large extent, the rise in cost of living was due to other factors, mainly because Singaporeans are now moving towards the pursuit of "better but more expensive" lifestyles.”
“It is quite natural for most people, when discussing the cost of living, to turn attention to the poor. Our Committee has done the same. However, the plight of the poor is not so much a cost of living problem, but a social problem which is there, whether the cost of living is high or low. Each time, the cost of living goes up, the people's attention turns to the poor. But it is a problem which exists all the time and deserves our constant attention. The Cost Review Committee has explained the reasons why people are spending more, why people feel the pressures of the cost of living, and it is satisfied that things are generally under control. It has found the systems we have in place to be sound and help people improve their standard of living. But costs will continue to rise. The Committee has recommended measures to moderate such increases. Today, in this debate, several Members have made other suggestions and recommendations. And I urge my colleagues in the Cabinet to take these suggestions seriously and implement them wherever they are feasible. But the greater task, as my colleague, Mr Yeo Cheow Tong, earlier mentioned, is how do we ensure Singapore's future growth. Wage increases will only be possible when there is growth. The task is to ensure that incomes rise faster than price increases. Only then will there be better standards of living. So our focus should really be on how to ensure our growth and raise our productivity. I hope we will not have to spend inordinate amounts of time trying to establish the truth on the cost of living. I hope we can spend more time on the development of the economy and on the development of the social aspects of life in Singapore.”
“So a person who rents in Switzerland and who unfortunately is retrenched in a recession has got to worry about the rent. In Singapore, if people use the CPF system and buy the right type of flats, they need not worry about the rent. Our wage system has a bonus system, and this has helped most families, including the lower income families, to buy consumer durables that are usually found in typical middle class households. And as I have mentioned earlier, and so have several Members, we have got the Medisave, MediShield and Medifund schemes for our health care needs. All these schemes provide Singaporeans with the means to a better life and with safety nets. The basic philosophy of governing Singapore is: provide a good quality of basic services, let those who want better work, to pay for it, but provide a safety net for those who do not make it on their own. And this philosophy has helped us to preserve our work ethic. It is a political philosophy which explains why Singapore succeeds. This is why most Singaporeans have seen their lives improve. But that is not to say that there are no poor people in Singapore. The Committee studied this extensively, and noted that there are about 7,000 households deserving of help. A significant number are the elderly. There is a range of assistance programmes. The poor are assisted, and the sums given to them by Government and voluntary welfare organisations are substantial and growing. But, again, there is a basic philosophy: Government assistance is the last resort, after help is first sought from the family, Government's help is kept at a minimum and the community chips in the rest. Perhaps, this comes across as being harsh and hard. But it is one way of ensuring that the work ethic in Singapore is maintained.”
“Or how much it used to cost to get their hair done. But these are wage driven increases. The prices of such services will follow general wage increases, a point which Singaporeans will have to learn and understand. We have to understand that our hawker food business is labour intensive. So long as the methods of serving hawker food remain the same, hawker food price increases will keep pace with wage increases. The more successful our economy, and the higher our wage levels rise, the higher will be the price of hawker food. Unless there is a restructuring of the hawker food business, a change from the labour-intensive methods currently employed, very soon our hawker food will cost more than the Western import, hamburgers. I am glad to say that restructuring of the hawker food business has been going on, though a bit slowly, over the last few years. These, in simple terms, are some of the main findings that explain why people feel that the cost of living has gone up. But our investigations reveal much more: that we have a system in place which motivates people to perform, which raises their productivity so that they can earn more, and so enjoy a better life, and at the same time there are safety nets for those who do not make it. Our CPF savings system allows the vast majority of our people to own their own homes, so that accommodation is not a consumption item. Instead, their homes are their assets. If they purchase homes within their means, they are much better off as compared with people who rent, should there be a disruption in their incomes. We take the 90% home ownership in Singapore for granted. We aspire to the Swiss standard of living. Home ownership in Switzerland is only 60%.”
“The basic reasons for the rise in medical expenses are wage costs, advance in medical knowledge, and a shift to higher class wards, or to private hospitals. The Government has anticipated this rise, and has therefore devised the Medisave, MediShield and Medifund schemes. Unfortunately, there is a general lack of understanding by the people, so people worry more than they need to. More so, when procedures in hospitals give the impression that money comes first. People do not understand various Government policies. This is a point which Dr Soin mentioned. Is it due to the loss of the art of communication or is it due to people not listening? I do not know the true reasons, but I know that when it comes to medical treatment, people will not bother with MediShield or Medifund until they go to hospital and find that there are high bills to pay. It is only then that they will try to find out how the expenses can be met. Having said that, I think it is true today that we have many policies which are for the benefit of the people which are complex and even, if I may say so, Members of Parliament will find difficulty to explain. So it is useful for us from time to time to review our policies. I say that a simple solution usually covers 90% of the problem. To try to cover the next 10% is difficult. In fact, you have to weave a very complex policy to cover the next 5% and you cannot cover the balance of 5% anyway. Perhaps we should consider implementing policies which are simpler which people can easily understand and be satisfied with 90% of the result. For the working class, whose monthly budgets are tighter, it is the everyday type of expenses which cause them concern. They will remember prices of domestic services, such as how much a plate of chao guo tiao used to cost.”
“As some people made quick money on the property market, more people jumped in. In such a situation, if credit is not tightened, then the only other lever to pull is supply. For quite some time the Ministry of National Development regularly announced that supply was coming and that it would be increased if there was demand. But there is a time-lag between announcement of supply and actual supply coming on to the market. Finally, the lever which had an immediate impact, the tightening of credit, was pulled. This was the 14th May measures. Clearly, they are effective because demand has shrunk. We should be careful in future when controlling the levers on credit. You loosen the controls too much, the prices will rise sharply. You tighten the controls too much, there will be a crash in prices. So whoever is controlling the lever has got to move very cautiously and carefully. As you can see from the information provided in the Committee's Report, it is not HDB raising prices or the tender system, which has caused housing prices to shoot up. It was easy credit. The Cost Review Committee has urged Singaporeans to be prudent in their spending. A house is a desirable item, but one should spend within one's means. We should not assume that housing prices are on a one-way upward escalator. It is a roller-coaster as well. There was a crash in housing prices in the 1970s. I was one of those caught in it. There was another crash in the 1980s. These experiences should teach us to be prudent and to beware the trap of easy credit. Each time I see or hear a bank advertising easy credit, I wonder why there is not a law against it. The other sensitive cost item is hospital expenses.”
“But the Report accounts for why people feel that the cost of living has risen even sharply. This feeling is fueled particularly by the rise of high profile items - housing, health care and certain domestic services. These high profile items mask the general rise in the standard of living. On housing, the CRC found that HDB selling prices are still affordable. More people are buying bigger flats, which means that purchasing power has, in fact, risen because wages have risen. At a public hearing, the HDB reaffirmed that HDB flats will be kept affordable. The resale market prices of HDB flats, however, had gone up. We found that it was not due to HDB raising prices and so pushing up prices on the resale market. Instead, it was due to other factors, such as infrastructure improvements or the Main Upgrading Programme. The major factor in the past few years, however, has been "easy credit". The HDB had liberalised, usually in response to public requests, including requests from Members of Parliament, but each time credit was eased, the resale prices went up! Liberalisation caused an increase in demand, but without a similar increase in supply, the prices rose. It is a demonstration of the fundamental law of economics! In the Report on page 69, Chart 4-2, this is clearly shown. This easy credit, coupled with what Dr Lee Tsao Yuan described earlier about the booming economy and the rise in incomes, has made the cost of housing the way they were in the last few years. As the HDB resale prices rose, some cashed in, and used the capital gains to buy private property. Some cashed in and bought, again from the HDB, and pocketed the cash. Others used it to upgrade to private property. This, plus easy credit again, led to the rise in private property prices.”
“I think Mr Low Thia Khiang had learnt from the previous sitting of the Cost Review Committee and he knows how difficult it is to argue against the full facts and therefore also declined to participate in the Committee this time. He probably prefers the more comfortable position of asking questions rather than to be involved in getting to the root of the issues. Again, today, of course, he has taken the opportunity to ask some questions. He tries to imply that the Cost Review Committee's explanation about people buying better goods and employing maids as blaming the people for the rise in the cost of living. I think this is unfair and my colleague, Dr Ow Chin Hock, had rightfully rebutted the point immediately. We in the Committee had been trying to establish what had caused the increase in spending and to explain to the people who do not understand why the expenditures have gone up. We are not blaming anybody. We are not blaming the public for the rise in the cost of living. I think it is a pity that Mr Low did not participate in the Committee, because he would have learnt a lot more in this second session of the Cost Review Committee. If he wishes to continue to play a constructive role in political debate in Singapore, he would have gained a better understanding of the issues at hand. I dare say that he would have learnt a few lessons in economics. He would also have learnt what are the factors underpinning Singapore's growth over the years. He missed the opportunity. After 10 meetings spanning over 50 hours, the Cost Review Committee's conclusions and recommendations are contained in the Report. Our findings are there. Members have referred to them and commented on them and I would not repeat.”
“Then in the SDP's New Democrat, they claimed that the Government is collecting a lot of money from the foreign workers levy in the construction industry and said that there are 300,000 workers. There are no 300,000 workers in the construction industry. There are 29,000, which is less than one-tenth of what the SDP claimed. They also reproduced the cost of secondary school and junior college education over a few years. Without comment, they produced the charts and from the charts, you will know that the cost of secondary school education and junior college education has risen over the years by several thousand dollars per year per child, and increasing over time. The impression of such a publication without comment is to convey the impression that parents are paying more for sending their children to secondary school or to junior college. But the truth is that the fees have not been changed for the last few years. So the parents continue to pay a nominal sum, not the thousands of dollars which the New Democrat tries to purvey. These are examples in one issue of the New Democrat. Mr John De Payva has mentioned something else, that of Ministers' pay. All these are clear examples of misinformation. The SDP continues to sell the New Democrat freely in Singapore. Mr John De Payva asked a question: why is it that publications which contain errors and misinformation are still being allowed to be sold in Singapore? In case anybody in Singapore or anywhere else in the world thinks there is no freedom of expression in Singapore, why is this still continuing in Singapore?”
“His party says that the cost of living is a big issue, but he has no time for it! And today, he is not present in the House even. The SDP-PKMS panel was nevertheless called to meet the Cost Review Committee, to discuss their submission. The sorry exchange on 6th August speaks for itself. Notwithstanding that, the Cost Review Committee proceeded to examine various issues. And notwithstanding the volumes of information given out and extensively reported in all our newspapers, on television and on radio, the SDP continues to purvey misinformation. We have seen, as Mr John De Payva said, in the proceedings of the Select Committee on Health Care Subsidy how the SDP had repeatedly misinformed the public. The phrase "typographical error" has already claimed its place in the annals of political debate in Singapore. Mr John De Payva mentioned about the price of HDB flats and how the SDP-PKMS panel had inflated the figures, and he asked the question whether this was out of inability to look at the figures or was there some other intent. In case Members may not be too clear as to how they had inflated it, basically, it is quite straightforward. They took the prices of 4-room new generation flats for the base year and then used the subsequent prices of 4-room Model A HDB flats, and they used, not the base price, but the average price. And that was how they had inflated the rate of increase of HDB flat prices over those few years. One can only surmise why it was done this way, because they were not able to understand the figures or because of malice. This I leave to you to form your opinions.”
“Mr Deputy Speaker, Sir, three years ago, we debated this issue in this House. Today, we are debating it again. One thing I am sure - this will not be the last time. As long as we live in this world, reward comes only from effort. We have to work for anything and everything that we want. Some things come easier than others, but the most desirable things require much more effort. And not everyone attains them. This was the lesson which my parents and my teachers taught me. In life, there will be many occasions when we feel that we have to work very, very hard to get by. There will be many occasions when we cannot get what we want in spite of our best efforts. Therefore, from time to time, many will be dissatisfied about the cost of living. So from time to time, this will be debated also in this House. One key question which has emerged in this current debate is: how should the debate be joined? Do we want the debate to be based on facts and figures? More than that, do we want the debate to be based on the full facts, on as complete a set of information as possible? Or do we want to descend to gutter politics and allow political aspirants to misinform? In 1992, when we set up the Cost Review Committee comprising a cross-section of people from all walks of life, we invited the opposition parties which have MPs in Parliament to join the Committee. The Singapore Democratic Party declined. We proceeded with one opposition party, the Workers' Party, represented in the Committee. When we reconvened the Committee again this year, the SDP made great play about how serious they were in wanting to participate and to get to the bottom of things, but they twisted and turned and, eventually, chickened out. Mr Ling How Doong said that he did not have the time. Incredulous!”
“When investments are done wisely for the long term, then workers will see their assets grow in real terms. And the more assets they have, the better off they will be in retirement.”
“If their CPF savings are managed properly, they will be fairly comfortable, if they do not expect rapid upgrading of their homes, and/or ownership of a car. But even they will have to consider building up their assets, which they can liquidate when they retire. One way is by investing wisely. If they invest in stocks, over the long term they are likely to get better returns than from leaving the cash in fixed deposits. But investing is not the same thing as punting. Mr Chiam See Tong said last week that even the NTUC is fuelling the stock market by encouraging union members to play the stock market. Unfortunately, he either distorts, or he does not understand English. Since he is a lawyer, I assume that he chooses to distort. The very reason why NTUC is studying how to help union members invest wisely in shares is because they understand little of the stock market, and are the ones most likely to get burnt. And this is what the Straits Times of 11th October 1993, before the latest surge, quoted me as saying: 'The workers are those who understand the stock market least, and they can become caught up with stock market fever. We have a role to help them invest wisely, and not to treat the stock market as a casino.' Unfortunately, Mr Chiam is not here. But if he had read the New Paper of 6th January 1994 - and the New Paper's English cannot be any simpler - he would have understood NTUC's concern over workers punting on the stock market. NTUC's advice to union members is not to play the stock market, but to invest for the long term. Better still, get experts to do the investing for them. This means investing in unit trusts or NTUC Income's Investment Bond Policy or similar policies offered by other organisations.”