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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“Suppose he decides to retire at 65 years of age, and his employer agrees to continue employing him, how will his situation improve? If he has no cash savings now, he will have to set aside 52% of his monthly income until retirement. If he has $12,000 in cash savings, he needs to put aside 44% for the next 15 years. If he has $60,000 in cash savings, then he will need only to set aside 11% each month. By working longer, low income workers will have a reasonable chance of financial security in old age. Therefore the thrust of our policy should be to raise the retirement age, and to help our workers to save. When we look at it rationally, the logical thing to do is to raise the withdrawal age of CPF from 55 years to 60 years. When I asked union leaders whether we can do this, one union leader very quickly spoke for all when he said: "Don't touch the withdrawal age! It is a bomb! If the withdrawal age is to be raised, we will have to quit and run into hiding!" It is sad that the withdrawal age has become such an emotional issue. Can we get Singaporeans to understand? Can we get the people to release the Government from its pledge to leave the withdrawal age of CPF at 55 years of age? I hope one day it will be possible. In the meantime, the next best thing we can do is to raise the Minimum Sum. The Minimum Sum, we must remember, is only sufficient so that retirees will not starve. It is insufficient to lead a comfortable life in retirement. Let us remember that. Knowing now how much we need to live on in retirement, and if workers are to have a roof over their heads, then the Minimum Sum should be set aside in cash, and not in the form of a property. Younger workers are in a more fortunate position.”
“NTUC Income tells me that when a person retires at the age of 60 years, a man can expect to live another 20 years while a woman 25 years. That is the average life expectancy at 60. Some live longer than that. What would he expect to have to spend each month, as a proportion of his last drawn salary? For a low income worker with a monthly salary of $1,000, I think 70% of his last income is not too much, and may even be insufficient. Suppose he is now 50 years old. If he has no cash savings, what must he put aside each month now in order to be able to live on 70% of his salary each month for 25 years when he retires? The answer is a staggering 98%! If he does that now, he has nothing to live on between now and retiring ten years later. What if he has $12,000, or one year's wages in cash savings? He will still need to set aside 87% of his wages. This is also not possible. What if he has five times his annual income now in cash, ie, $60,000? He will still need to put aside 41% of his wages for the next 10 years. But few will have such savings of the order of $60,000. This example shows that premature use of CPF funds will put retired elderly persons in serious financial difficulty if they are not supported by their children when they retire. When I suggested that this is the solution that the elderly would have to be supported by their children, there was an almost unanimous "No, we cannot expect them to support us!". Why? Because their children will be supporting their own families and paying their own mortgages. What should a 50 year old worker earning $1,000 a month do then to secure a reasonable life in retirement? The best option is to work longer.”
“Do they realise how much they require when they retire to see them through? To gauge this, I have been asking union leaders what people do when they withdraw their CPF savings at the age of 55 years. These are some of their answers. Some use the CPF savings to pay off all or part of the remaining mortgage on their HDB flats. Others took the opportunity to renovate their homes. For yet others, the cost of the children's education is highest at that age, since their children are at junior colleges or the tertiary institutions. Indian parents use their CPF savings for their daughters' weddings. For Muslims, some of them are finally able to perform the haj. For low income daily-rated employees, the ownership of a Rolex watch is a sign of having arrived, so they indulge themselves with buying one. Others took the opportunity to holiday overseas with their families, and it seems that there is considerable pressure from family members for this. For those who have money left over, they place the balance in the bank, invest in shares, or property overseas. I am afraid there are also some who squander their money. I am told that a few frittered away their CPF savings by gambling. Others set up second homes in Batam or Hatyai, returning after they have been fleeced dry. I am told now China. Fortunately, the union leaders tell me such numbers are small. With all these demands on the use of CPF savings, will the balance be enough to see workers through their retirement? Union leaders know it is not enough. How much is required? Hardly anyone in the lower income groups knows. I asked NTUC Income to do a calculation for me. It is similar to a calculation published in the Asian Wall Street Journal recently, but the assumptions have been changed for our own local situation.”
“It will require more creative means of presentation in the printed media, over radio and on television. In the unions, it means that it is insufficient to explain to union leaders only and rely on the media to do the rest. Grassroots union leaders in turn must explain to members. So the current "confusion" or "utter chaos" in the public sector on the revised medical benefits scheme can only be cleared up by department heads and union leaders explaining to all civil servants what those options are. The union leaders are already working on this and they are willing to work with the various Ministries and agencies of Government. The Singapore Teachers Union, for example, has given a detailed explanation to teachers through its publication The Mentor, and has commenced meeting union members by going to the ground. There is no substitute for face to face dialogue with the people if we expect them to be able to understand these complex policies. For other Government policies, it will require MPs to explain policies both to grassroots leaders, as well as directly to the people in constituency functions. Sir, I now turn next to the CPF Minimum Sum Scheme. We are in the midst of making an important policy on the adjustment of the CPF Minimum Sum. I am afraid that the debate has progressed too fast and too far. Before the public can understand why the Minimum Sum has to be adjusted, there is so much focus on the reverse mortgage proposal. We have to get the public first to understand why the Minimum Sum has to be adjusted, before we discuss the quantum of adjustment, or a reverse mortgage. Why should the Minimum Sum be adjusted? Do members of the public understand that they are living longer, and their CPF savings may not be enough to see them through their retirement?”
“Yet 99% of Singaporeans do not understand what MediShield does for them. I think even this 99% figure is an underestimate! NTUC leaders have explained how MediShield works with the revised medical benefits options for civil servants. Yet each time I meet groups of union leaders in the public sector, I have to explain how they are covered for hospitalisation, and each time when they hear this and they are told that they may even pay absolutely nothing for this cost, their eyes roll over in surprise. Dr Aline Wong has explained the scheme in this House earlier this afternoon. Members will appreciate how complex the scheme is. If we conduct a quiz now among the Members of Parliament, I am not sure how many would be able to answer the questions correctly. So given the complexity of these kinds of programmes and policies, how should the Government reach out to the people to explain public policy? Though proceedings of Parliament are widely reported in the newspapers, few seem to have read or understood. Perhaps they may not be able to understand, even though they read. Perhaps more can be done through television, as suggested by Mr Bernard Chen, even though the proceedings in Parliament have been aired. I am afraid that using television will only work if the person doing the explaining is a captivating speaker and presenter. Serious programmes on television reach only a small audience. With an increasing number of channels to choose from, and more to come, a viewing public which looks more for entertainment than for education will simply switch channels with the remote controller, without getting up from their armchairs. The task of reaching out to the public is therefore a difficult one.”
“Mr Speaker, Sir, I rise to support the motion. Some Members last week spoke of the need to ensure social cohesion, and on the need for the Government to reach out to the people to explain its policies. Dr Ho Tat Kin has just echoed the refrain. Otherwise, the long term goals of the Government, while good for the people, will be derailed by short term dissatisfaction. I agree with the Members that this has to be done. The question is: how can it be done? Major policies have been debated in Parliament, scrutinised by Select Committees, and widely reported in the media. Yet many, if not most people, have not understood. For example, it had been explained that import taxes on cars will be adjusted to offset the 3% GST, yet newspapers had on more than one occasion reported people attributing the rise in COE prices to the impending GST, without the newspapers attempting to correct the misconception. Currently, newspapers report the increases in prices, such as hawker food prices, with the blame being put on the GST, which has not yet been implemented. Apart from the New Paper which is trying to highlight those taking advantage of the situation, I see no effort on the part of the media as a whole to put pressure to bear on such hawkers. The expectation seems to be that Government should do something. Yet, surely one must know that it is the consumer whose behaviour will have the greater influence on prices. Let me cite another example of how little the public understands a public programme in spite of debate in Parliament and Government's attempts to explain it to the people. It is MediShield. MediShield was introduced only after debate in Parliament. The CPF Board sent to each individual CPF account holder a brochure in four languages.”
“Even O-level now. So if there are more people going for cars than the supply, then the price must go up, is it not? What is Mr Chiam's point about economics that we have done wrong? Mr Heng Chiang Meng (Cheng San GRC) rose ---”
“Mr Deputy Speaker, Sir, I know Mr Chiam has got some problems with doing sums. And this particular issue is going to be very difficult because it involves the computation of the CPI. Unless a person is mathematically sound, it is very difficult for him to understand why the weightage of things like hospital charges is less than food. I really regret very much that he did not sit in the Committee. I could have found some way of explaining this to him. But if he still persists that the CPI is wrong, I must emphasise that it is calculated according to international standards and nobody else has found it to be wrong, not even Mr Low Thia Khiang has found it wrong. If it is wrong, and this is a serious allegation, can you prove it to us that it is wrong and show us how it should be calculated? He has had a whole year. Where is his calculation? That is the first clarification I want to ask. The second clarification I want to ask Mr Chiam is this. He talks about economics. There is one fundamental law of economics and that is the law of supply and demand. If there is more demand for one commodity, the price must go up. Any economist, even at A-level, will tell you that. An hon. Member: Even at O-level now.”
“Sir, may I seek clarification from Mr Chiam?”
“And she said this: "I suppose most people would tend to use friends as a reference point". Comparison, that is why people feel unhappy. To those who feel unhappy when they compare themselves with friends, let me commend the good advice in the piece of writing entitled "Desiderata": "If you compare yourself with others, you may become vain and bitter; for always there will be greater and lesser persons than yourself." The same passage also had this: "... whatever your labours and aspirations, in the noisy confusion of life keep peace with your soul. With all its sham, drudgery and broken dreams, it is still a beautiful world. Be careful. Strive to be happy." [Applause].”
“And it is true Japanese expatriates "cry" when they are recalled home. They will not enjoy the space we have in our homes, nor the access to golf courses that Singaporeans today enjoy. Even so, if there are things which the Japanese enjoy which we do not, we can also create and bring them to Singaporeans. Singaporeans may not realise that they are today enjoying first world standards of living, without paying first world prices. Certainly our graduates have nothing to complain about wages. They already command first world rates of pay. Not true? Then why do Australians, New Zealanders and Britishers come here to work on local terms? Why are they willing to forgo expatriate terms? It may not seem fair to tell people to aspire to life in a developed country, and then tell them to scale down their expectations. But surely it is fair to tell them that they have arrived. Yes, not everything is here. But if we define clearly what we want, there is no reason why our people cannot enjoy those also. And in order to arrive and enjoy all those things, we must focus our minds on the fundamentals that make it possible. As Mr Robert Chua has said, we must maintain Singapore as a competitive place for doing business where business can thrive, that we have high value-added industries that can pay workers higher wages to enjoy those things. I am reassured that our young graduates, while aiming high, are realistic about expectations of the good life, as reported in the Sunday Times. And they also say they are willing to work hard. However, notwithstanding all that we do and how much we put in, not all will make it to achieve their dreams; some will be disappointed. Vivian Lim made a point which explains why people feel disgruntled. This is reported again in the Sunday Times.”
“Just as the CRC tells Singaporeans that our resource constraints will remain, "... cannot be wished away, and will force upon society difficult and unpleasant choices as how these should be allocated", I would like to ask Singaporeans to face up to what life is like in Singapore, compared to life in developed countries. I have lived in Europe, and in Japan. I know that life here, while not equal to the best in Europe, is not far behind. Our school education is better than in England; our children come out better educated. We enjoy equal, if not better standards of health care, while as a nation, we pay less. We clearly have a higher rate of home ownership here. What is it that we lack? Cheap cars? Yes, but can you still drive in the big cities like Paris and London? Cheap houses? I am not sure apartments in the big cities are much cheaper than in Singapore. As the Cost Review Committee has exhaustively explained, these are two prized possessions which not all Singaporeans will realise. Many dream, but only some will achieve. But apart from these two items, certainly we should identify the things which make for a higher standard of living. And provided we are willing to work hard for them, certainly we can have them. A livelier cultural scene? Yes, if we compare ourselves with the big cities, we are lacking in this area. But London and Paris have much larger populations and a wider audience base. If we compare ourselves to the smaller cities, we may not be so far behind. But if it is a livelier cultural scene that we want, we can certainly bring those facilities to Singaporeans. I have lived in Japan also, for two years. I know we have a better quality of life. Already, many years ago, our living conditions far surpassed the Japanese.”
“Not as easily as our young people today think, but after hard work, they have. Today, I repeat, 60% of each cohort is going to be tertiary-trained and they will compete for that 30% of housing stock, which is private property, and they will compete for it not only among themselves but also some of the other 40% who will make it. So should not the CRC be honest and tell them that not all will fulfil their dreams? This is what the CRC had decided to do, and I think we had been honest about it. Many people have talked about life in a developed country? What is life in a developed country? Each with a summer house, as Mr Chng Hee Kok said yesterday? I worked in Oslo in 1972/73. Yes, I envied my Norwegian colleague from the same university his access to a summer house. Let me stress: access to a summer house, not ownership of a summer house. In case Singaporeans get the idea that every Norwegian has a summer house of his own, I have to correct the impression. A minority have access to summer houses, and some of them do own those houses. Just a few months ago, this same Norwegian friend of mine spent Christmas here. Now it is his turn to be envious. And he remarked: "Singapore must have the highest ownership of Mercedes cars in the world!" That is his observation. He compares it with what he sees in his own country and Europe. He is not saying that all Singaporeans go around in Mercedes cars, but he was remarking that there did not seem to be any lack of money, if there are so many such cars, even though the prices are so high. This leads me to ask: what is life in a developed country? But there are many Singaporeans who travel each year. They have been to developed countries. So what is the good life they have, which we are deprived of?”
“If it is the Government that is to be responsible for taking care of the old, then surely the tax rates must be commensurate with the cost. Again, this is a point, I hope the young, in particular, will consider seriously. Next, Sir, I turn to the subject of expectations, and I quote, firstly, Sunday Times of 3rd October 1993, a statement by Mr Michael Fernandez. He said: "I think it is not fair to tell people to aspire to life in a developed country, and then to tell them to scale down their expectations." For the record, all members of the CRC agreed that there is nothing wrong with having aspirations. And I quote Chapter 13, paragraph 56 of the Report: "The CRC was of the view that there is nothing wrong with such aspirations of the younger generation. Having high aspirations motivates Singaporeans to work hard." But what must you tell Singaporeans when there are resource constraints? Certainly, there is nothing wrong with dreaming of a private property. But when we have land for 30% of the housing stock to be of private property, what can you say to the 60% of each cohort who will be tertiary-trained and who will want for themselves what they think graduates before them obtained easily and cheaply? In 1970, I do not know what the figure was for each cohort who went on to university, but I know in 1980, and this is in the Report, 13% of the cohort were tertiary trained, ie, polytechnic as well as university. In 1992, this rose to 45%. So one must conclude that maybe it was only 5% in 1970; it must be lower. So if one was a graduate from the 1970s and early 1980s, then one belonged to the cream of society. There was an exclusiveness about being a graduate in that context. They can, and they have, owned private property.”
“But finally we must decide, we must agree on what level of subsidy. The CRC listed seven measures on how to keep inflation low. These include keeping a free trading environment, sound financial and economic policies, and raising productivity levels. There is one other measure, not discussed by the CRC, which Singaporeans should consider. This is the question of family support. In this particular instance, I want to refer to discussions in this House generating from Mr Ling How Doong's speech. There is an unhealthy trend for greater State support. That is reflected by what Mr Ling How Doong said. There are examples of this in our daily life. For example, when child care is a problem, people look to the Government to provide the solution, and people look to Government to subsidise child care. In the years to come, when there is an older population, the care of the elderly will be of greater concern. In most European countries, the burden has shifted on to the State. The cost is tremendous, and unbearable, as their governments now find. Studies have confirmed the obvious. Family care of the elderly is the lowest cost solution, and in most cases, the most meaningful one for the elderly. We will have to decide whether we will go the Western European way of caring for the elderly, or maintain traditional family support, while we still can. The seeds of our problem have already been sown, and taken root. Families have dispersed in different housing estates. There are hardly any extended families. If we cannot reverse the trend, if we cannot preserve the values of filial piety, then surely in 20 or 30 years time, the cost for our country will be high.”
“Expenditures in other areas should properly be classified as consumption. None of the CRC members advocated that we become a welfare state. Why does the subject of subsidies come up for discussion in public and in Parliament? I believe no one in this House wants a welfare state. Then what is the reason? I believe the subject crops up only because Government has healthy surpluses. If we have a deficit, this Parliament would be discussing how to reduce the deficit, not whether Government should subsidise more. And you know the problem in the US. Government has to decide how much it should subsidise. The Prime Minister has, in his reply to me on the Report, stated that Government "will keep the cost of the services it provides as low as possible, and continue to subsidise education, public housing, and basic health care heavily." Because we continue to chalk up healthy surpluses, there will be calls for Government to subsidise more. Singaporeans, especially young Singaporeans, should consider this matter most carefully. We are a young nation, at the peak of our dynamism now. Thirty years from now, when the population has aged, and has less dynamism, there may not be such healthy surpluses. So, is it wrong to save while the going is good, so that the savings can be used to support an older population to continue to enjoy the high standard of living 30 years from now? Spending to raise the productive capacity of the people, or so that people can enhance their assets, these can be done. Indeed, the Government is doing so. However, to subsidise consumption, such as health care more heavily now, when we already enjoy first world standards of health care, is unwise. Parliament can, and should discuss whether Government's subsidy levels are appropriate.”
“" And in Chapter 3, paragraph 16, the CRC said this: "... lower-income households do have a sense of being left behind. Their living standards are better than before but those who remain in this group are still disappointed to find that they have not improved their position relative to others. One major way of improving their standards of living is to improve their earning capacities, which requires investment in training and skills upgrading. In addition, society must be prepared to provide a certain amount of support to this group like subsidised rental for flats, subsidised health care and education, and financial assistance to the destitute, as is the case at present." It is clear, therefore, that the CRC is well aware of the problem of how the poor feel. So the question to Mr Chua really is this: Mr Chua is not poor. What role should he, as an upper income member of the community, play to help the poor he sympathises with? Some may say that the Government should subsidise more. In fact, points were raised this afternoon. Did the Cost Review Committee discuss how much Government subsidies should be? Apart from calling on Government to keep the subsidy level for university fees where they are now, ie, 79%, instead of reducing it to 75%, the CRC examined subsidies only in relation to the impact the adjustment of subsidies to target subsidy rates had on the rise in the cost of living. It is outside the terms of reference of the CRC to consider how much Government should subsidise. This is the prerogative of the Government. So I hope that Mr Chandra Das would raise this subject in this House, which is the appropriate forum. In making an exception for education, the CRC wished to distinguish it from other areas. Education is a form of investment in human resources.”
“Mr Koh, being an analyst, surely understands that if a position is right, facts and figures cannot be bent or twisted to show that the position is wrong. Since rationality is the hallmark of a good analyst, Mr Koh must ask how his own assumptions should be squared with the conclusions of 16 independent-minded persons in the CRC. Does he now still doubt the conclusions of the Cost Review Committee? Another person interviewed by the Sunday Times of the same date, and here I quote again: "Sociologist Chua Beng Huat said that while the CRC explained cost increases at the same macro-level, its report lacked "flesh and blood". The Government would have to bridge an apparent contradiction between cost of living statistics and "everyday reality", he said." "If I am poor, and you tell me that I am no worse off today, that I am better off today than 10 years ago, do you think I will believe that?" Unfortunately, the Sunday Times' report did not make clear whether Mr Chua agreed with the macro view or not. Probably he did not. The report indicated that Mr Chua was one of 17 persons interviewed, and they had mostly not read the Report. As a sociologist in our university, he should read the Report before he passes judgment. Then he should tell us what is "everyday reality", and how it differs from that of the CRC. For the record, the CRC members are quite well aware of "everyday reality". In its Report, the CRC noted, and I quote: [Chapter 13, paragraph 96] "... the needs of the less well-off members of society have to be addressed. Although almost all Singaporeans have enjoyed rising standards of living, some have experienced a relatively larger increase. This had given rise to fears among those who have not done as well that they might be left behind as others move ahead.”
“Mr Speaker, Sir, the press had reported and this has, in some cases, been reflected in the speeches in this House about what was said by a certain research analyst, Mr Koh Su Haw. I quote the Sunday Times of 3rd October 1993: `Research analyst Koh Su Haw, 26, said that the CRC failed to shed new light on the problem: "They came to the conclusion that the CPI was accurate and that the problem was with people's perception. This was the same conclusion they started out with."' Mr Koh's reaction may be typical of a group of Singaporeans. He accuses the CRC of having started with a preconceived idea, and implies that the CRC set about proving this notion. Mr Koh is unfair to the members of the CRC. I can testify. The members of the CRC, far from going into their work believing that the problem was with the people's perception, went in to try to prove the Government wrong. If Mr Koh had read the full Report, he would know that the CRC cited four sources of inflation. They are: 1. Scarce resources. Singapore faces shortages of land and labour. 2. Timing of fee increases. Several fee increases were carried out around the same time in recent years. 3. Reduction in subsidy rates. This came about as the Government set the levels of subsidy. 4. The "expectations" factor. With many years of prosperity, there is an expectation that standards of living will continue to rise rapidly. In other words, while the CRC did not find the Government wrong, it did throw light on why people feel the cost of living has gone up. Although Mr Chandra Das felt that we went about the job trying to do too much justification, I think it is important to find reasons why people feel the way they do.”
“The CRC then went beyond, to determine what troubles the people most, and examined in detail these questions on education, health care, transport and housing. Fundamentally, there was nothing very much wrong. Minor improvements can be made including better coordination of price increases in so far as the public sector is concerned. Even Mr Low Thia Khiang, a Member of the Opposition, did not differ substantially from the rest of the Committee. I hope that he now has a better picture and will try to reconcile what he said during the General Elections and what he knows now. It is, of course, a matter of regret to me and I think to many Members of this House that the Members of the SDP failed to participate in this Committee. They were given every opportunity. They declined. Among the reasons which I remember them saying was that they did not have time. I have always wondered what they were elected for if they did not have time for a problem they profess to be of utmost importance and troubling the people so much. The Cost Review Committee has done a year's work. We assume that the SDP has also looked at the subject. But today, all that we were told by Mr Ling How Doong was that they held a forum and there is no report. Yet, in the 1991 General Elections, the SDP made this one of their main issues. So if what Mr Ling How Doong said today is all that they have to say, then surely they must have blown an anthill into a mountain. It also indicates how much interest he has in the subject. There is still some hope. There are two other Members of the SDP, although belonging to different factions. I hope they will enlighten the House about the SDP's view on this subject. Otherwise, as they say, forever maintain your peace.”
“Mr Speaker, Sir, everyone has a view on the cost of living. And the views expressed so far by Members of this House testify to this fact. It is not my intention to reply to points raised by Members of this House, except to say that many of the suggestions that came up in the debate so far were, in fact, also aired during the process of discussions of the Cost Review Committee. Some of the suggestions were rejected. Others were not agreed to. But there have also been a few new suggestions which, I suppose, the appropriate Ministries would have to consider and, if they are practical, to implement. I want to take this opportunity to set the House on track as to what it is that the Cost Review Committee set out to do and what it has concluded. The first question which the Cost Review Committee dealt with was: Is the Government wrong, and the people right on the subject? Does the CPI tell the wrong story? Sir, after a year's discussion, the CRC came to the conclusion that the CPI is sound. The CRC did not come to this conclusion hastily. It dissected the problem, and looked at it from different angles. It examined how the CPI was computed. It examined the impact if some of the inputs, such as the rental index, or the weights in the basket, were wrong. The CRC examined the impact on different income groups, by expenditure groups and by the types of housing people lived in. The CRC also examined the impact by age of the main family earner. Those who have read the Report thoroughly know how thoroughly the Committee had looked at the problem. And it came to the conclusion that the CPI is sound. Inflation has indeed been low. What was heartening was that the impact on the lower income had been lesser than for the rich. Overall, wages have risen faster than prices.”
“It is currently collecting about $15 million a year and spending about $65 million. It has $264 million of uncommitted funds. So in two or three years' time, at this rate, the SDF funds would be exhausted. So a review would be necessary.”
“Sir, as the Nominated Member rightly pointed out, individuals can benefit from SDF in two ways. Firstly, through sponsorships by the NTUC for a range of general courses and, secondly, individuals can enrol for FAST FORWARD, BEST and WISE programmes. On the second area, these are basic upgrading programmes and useful to a wide spectrum of workers. So the SDF subsidises up to 90% of their cost development and operating cost. The fees for these programmes are, therefore, net of SDF subsidies and are generally affordable to most workers, because the fees range from $15 to $160 per module. And this method of subsidy front-end through the trainer reduces the administration work involved for catering to individuals who take up these courses. But for the more specialised courses, employers should organise and sponsor the training. The employer should be involved in sponsoring this training because he is in the best position to determine what kind of training the employee needs and whether the employee would be able to complete the course successfully. This is particularly important for the higher level courses that Mr Tong mentions. But if an individual wants to take up, say, for example, a polytechnic course, we must not forget there is already a very heavy front-end subsidy from the state because the polytechnic courses are already subsidised through the grants which are received by the polytechnics. And encouragement has already been given to the employee in tax relief that he may claim in his annual income tax return. I would also take the opportunity to inform Members that the SDF has got to make the most effective use of its money. And contrary to public belief, the SDF does not have a lot of funds.”
“As far as the awareness of training is concerned, this is something which we will ask the NPB to look at. Every year we are trying to promote productivity and, of course, training is one of the critical areas and certainly something more can be done in this area.”
“At the same time, the NPB and the SDF are looking at stepping up support for on-the-job training. And, here, I would take up the point brought up by Mr Robert Chua about the German and Swiss system of apprenticeship. We should not discount the importance of training received at work, even if it is non-formal. For example, if we visit some of our electronics factories, especially those which have been set up longer here in Singapore, you will find that the workers who were employed, say, 15 or 20 years ago, to do simple assembly operations, today are manning the up-to-date automated production lines. So because of the training which they receive whilst at work, even if it is small and incremental from year to year, it has resulted in their ability to adjust to high technology production processes. So the NPB would be looking at how to help employers to formalise this kind of training programmes, because it is the most effective way of providing a skill to the worker. As a comparison, if we send a person for off-the-job training for NTC-3 course qualification, the cost to the employer varies between $6,000 and $10,000 per worker. And that, I think, for the smaller employers it would be a lot of money to invest in one employee. The problem would be compounded if the employee should decide to change job and go to another factory, and the skills in the process could be lost. For on-the-job training to succeed, it is also important for our workers to realise that staying with the employer on a longer term basis makes it possible and, in the end, would be beneficial to the worker as well as to the company. The subject of on-the-job training is now being actively pursued by the NPB and the SDF.”
“Sir, Mdm Foo has brought up a very important subject. The training of older workers will be one of the key areas of concern of the SDF and the NPB in the years ahead. And she has rightly pointed out that up to now, the training of older workers is under-represented. To encourage the training of older workers who are also lower paid, the SDF will, first of all, make fuller use of the existing training schemes such as the TIME programme, and to encourage the employers to train the workers during working hours. At the present moment, it is not only 800 workers who have gone through this programme. We have already 6,000 workers who have undergone this programme. And as far as the subsidy level is concerned, the SDF provides 100% funding of the training course fees to the employers to encourage them to do more in this area. Whether the problem of overtime pay and others could be overcome or not, I think that is something which perhaps employers would want to consider if they want to give incentives to their employees for sacrificing the overtime. This is something which they could do. But at the same time, I think we must remind our workers that the training which they receive will stand them in good stead. Because it would make their skills relevant to changing technology and make them employable in the longer term and, therefore, they will benefit from it, and some short-term sacrifices would be necessary. To take into account the problem of time, the NPB has developed Fast Forward programmes. These are video-based programmes which would allow the worker to view the video tapes at a time convenient to him or her, and this should overcome some of the problems of release from work to take up these courses.”
“He asked that the Department of Statistics collate data on TFP. This is already done by NPB and published in the annual productivity statement. Mr Chay Wai Chuen mentioned about CPF contributions for younger workers to take into account the lower productivity level. Currently, we have a seniority-based wage system, which already reflects the productivity level of workers. Therefore, I think that the system already takes care of the contributions based on productivity performance. Dr Soin asked about women and training. Although the number of places of COSEC is only 15,000 per year, already 118,000 workers from all sectors have undergone the COSEC programme, and slightly more than half are female workers. But if the pace is still too slow, we can always increase it by farming out the programme through private training institutions. Female workers are not only enroled in these softer-type service related courses, but also in technical programmes such as computer training, industrial automation, and electronics. And most courses are open to all workers, and not only to male workers. We did a spot check on training in the electronics industry. And since 1989 the Electronics Industry Training Centre data show that 51% of the trainees are female workers. And 38% of those who take NTC and apprenticeship courses are females.”
“The Government has already set up various programmes to help workers acquire skills and upgrade themselves, for example, BEST, MOST and WISE programmes. To help our working adults to learn at their own pace, new programmes like Fast Forward and TIME have also been started. It is equally important, if not more important, to increase productivity through better and smarter ways of doing things. We should not have the mistaken impression that it is only workers' productivity which is a factor in raising productivity. So we should find ways of doing things smarter and therefore to make better use of capital. One example is NPB's franchising schemes for small local retailers, which help our small retailers to come together, upgrade their operations and raise their productivity. Retailers participating in these schemes are able to benefit from the management expertise and systems of the franchiser. Some of these shops have since reported year-on-year sales increases of 50% to 100%, whilst others have been able to attract new and younger customers to buy from them. Other examples include automation, computerisation, just-in-time production, lean production, and also the relocation of some operations overseas to take advantage of cheaper labour and land cost. Then we should strive to produce higher value-added goods and services. And this can be done through R&D and attracting new investments. For example, the investments that are currently being attracted into Singapore in the manufacturing sector have value added per worker of 240,000 workers compared to $60,000 per worker currently. Dr Ow also mentioned about the importance of Total Factor Productivity (TFP), doing things smarter, that is, raising our TFP performance.”
“This, I think, is a matter of concern which we should all take note of -- that whilst the other NIEs are keeping their wage growth in line with productivity growth, ours has been outstripping productivity growth. Chart 2 & Table 1 - WAGE SHARE OF NOMINAL GDP 1980-92, PRODUCTIVITY-WAGE GAP IN NIEs (Cols. 951 - 956) But in a tight labour market, strong upward pressure on wages is inevitable. High real wage increases benefit our workers and allow them to enjoy the fruits of strong economic growth. However, we could be careful, and we should be careful, that wage growth does not exceed our productivity growth year after year, or we will find that our competitive position will be continuously eroded. And Singapore is facing competition not only from the NIEs but also from other Asian countries around us which have significantly lower labour cost. But at the same time, we still have a long way to catch up with the developed countries in terms of productivity level. Our productivity level is only about 40% to 50% of the developed countries. The Government will do its best to promote productivity so that we can continue to have high real wage growth. Since our people are the most important resource, developing our human resources would be a key strategy. We are doing this through our education system, our skills training programmes and import of talent from overseas. Skills upgrading would be especially important for the older and less educated workers. 55% of our workers in the 40 to 49 age group have below secondary education. And the proportion rises to 71% for the 50 to 59 age group, and 87% for those workers 60 years and above.”
“Sir, most Singaporeans recognise that raising our productivity growth is the key to achieving a higher standard of living. So far, we have done quite well. Our productivity growth averaged 4.3% in the 1970s and 4.7% in the 1980s. Although the growth fell to only 1.5% in 1991, it has since recovered to 3.1% in 1992. We should not be overly concerned with this year-to-year fluctuation in productivity performance as it reflects cyclical factors related to the slowdown in our economy and sluggish external conditions. Similarly, the 10% productivity growth, mentioned by Dr Ow, in the construction industry last year reflects the buoyant construction cycle rather than an increase in usage of capital. Because during the last construction boom in 1983/1984, construction productivity also grew by 9% to 10%. Some Members are concerned that real wage growth has outstripped productivity growth, thus, pushing up unit labour cost. Real wages have indeed risen faster than productivity since 1989, though the gap, as mentioned by Dr Ow, has narrowed from 5.5 percentage points in 1991 to 3.4 percentage points in 1992, and this is reflected in Chart 1 (Cols. 949 - 950) which was earlier circulated. Chart 1 - CHANGES IN REAL AVERAGE MONTHLY EARNINGS AND PRODUCTIVITY (Cols. 949 - 950) The gap also shows the rising wage share in total GDP (again in Chart 2 (Cols. 951 - 952) circulated earlier). The gap between real wage growth and productivity growth is one factor in the continued deterioration in our relative competitiveness, as measured by the relative unit labour cost index, vis-a-vis the other Asian NIEs. In the other NIEs, real wage increase has been equal to, or even below, productivity increase in recent years and that is shown in Table 1 (Cols. 955 - 956).”
“The water rates are priced on a household basis, per account, and the tax is riding on top of the structure of water rates. To go otherwise, we would have to unwind the structure, and find out who is living in which house, when a new baby is born, as he is entitled to his quota of water and so on. It becomes too complicated. The amounts are not huge. Going by household is a rough approximation. From the economic point of view, the solution to this anomaly is to tax even the first 20 cubic metres of water. That would be the right thing to do, because water is one product, so it should be sold at one price. If I give to you the first 20 cubic metres tax free, and you give it to your neighbour who may have exceeded his quota, why should you have it tax free? Whether we do that is another matter, we will take our time to think about it.”
“When you run into that brick wall, every additional gallon of water is going to cost you a lot more than it does to pump now. Either we wait until we run into that brick wall and then start doing something in a hurry, or alternatively long before we reach the crunch, we should take steps now to conserve water and to hold down consumption. This means progressively tightening up on water consumption, so that the economy can grow without using so much water. Last year, we introduced the water conservation tax as part of this strategy. We cannot solve this problem by giving money away -- with rebates, as one of the MPs suggested. I do not think that is viable. Despite the water conservation tax last year, the demand for water continues to increase. Last year, domestic demand grew by 5.8%, much higher than our average increase of 3.8% over the last five years. Therefore, this year the Finance Minister has to raise the tax. In the longer tem, I should warn you that the PUB is making large investments to assure our water supplies. We are building a dam across the Linggui River in Johore. We are exploring and developing alternative sources of water supply, eg, in Bintan. These are very costly investments and they will inevitably entail further increases in water rates. The specific question from Encik Harun Ghani was whether we should not make the concession on a per capita basis rather than on a family basis. He is right in pointing out that we are giving every family 20 cubic metres of water tax free, and taxing the balance. Why not give per person, because this penalises big families? I sympathise with this, but I do not think it is going to be easy to do, because our whole structure is worked around the household.”
“Our own estimate, which I have confidence in, is that this year the inflation rate will be about 2 1/2%, lower than last year. Slower economic growth should take some pressure off wages and prices, and that will be a good trend. Mr Harun Ghani asked about the water conservation tax. Firstly, in general, the water demand follows economic growth very closely. Every time the economy grows, industries need more water, construction sites need more water, restaurants, commercial establishments need more water. Then commercial demand for water goes up. Even in the homes, people move into new houses, bigger houses, bigger flats, they have more bathrooms, more fish tanks, so consumption of water in the homes also goes up. And the correlation with GDP is just as close as for commercial usage. So every year, as our GDP goes up, water consumption goes up. And because water is a scarce resource, we must decouple this. We cannot allow this trend to continue. We must be able to generate more GDP without consuming so much more water. Most of our water comes from overseas. The Johore water agreement of 1961 entitles us to draw up to 250 million gallons per day (mgd) of water from the Johore River. To go beyond 250 mgd, we have to depend on the new water agreement which was signed with Johore in 1990, but that will be processed water, not raw water, and it will be at a different price, much higher. Today, we already draw from the Johore River about 120 million gallons a day. We are entitled to draw 250 mgd. Our total consumption is about 200 mgd. At the present rate of growth in water consumption, within 20 years we will need the full 250 mgd from the Johore River.”
“As you can see from the first chart, Singapore's graph of inflation just over the last two years is right at the bottom, lower than Malaysia in recent times, lower than Taiwan most of the time, lower than the OECD countries, much lower than Hong Kong and much lower than South Korea, which Mr Chiam said the day before is a very good example to follow. tables - INFLATION RATES OF SELECTED COUNTRIES, INFLATION, VARIOUS COUNTRIES, 1989-91 (Cols. 821 - 824) The figures are also given in the next table which confirm in more detail that our inflation record is a very good one. 3.00 pm The best way for us to keep inflation down in a free market economy is to make sure that goods and services are sufficiently available, that there is free competition, and that cartels and monopolies are not cornering the market. It has worked with oil and petrol in the retail business, and this should be the approach across the board. The macro-economic factors matter. In other words, if we have a balance of payments surplus, a strong Singapore dollar, a budget surplus, no excessive wage increases, no huge increase in money supply, with more money chasing less goods, we are more likely to have stable prices than if we go for deficit financing, the government printing money to pay for its debts, and quietly shifting the burden on to wage earners who find their dollar worth less. Therefore, the private sector can help to keep inflation down by keeping wage increases realistic and productivity growth up, so that we do not get into a wage price spiral. Mr Leong quoted a private report that this year our inflation rate will be high. I do not know whether to believe the private report because it also said that this year our growth rate will be high, although Mr Leong did not quote that part.”
“In areas where we have an established track record, the private companies can take the lead, but in areas of emerging technology, where the projects are risky and payoffs are uncertain, the public sector will have to go in. The problem now is not so much to find exactly the right areas to go into, nor is it money. The problem is to get enough activities launched and the right attitude of research imbued in our people, in our scientists and engineers, so that there will be a wide range of activities and then we can afford to be more selective and more directed. Sony spends $1 1/2 billion on R&D. They have a few thousand people, and they produce four new products a day. I read the Fortune magazine article about them. It was very impressive. But they have culled people from all over the world, talent spotted individuals; people who are unconventional in mould, people who do not quite fit in to the standard thinking. They bring them into Sony, fit them into teams, let them free, and yet channel their energies. No other company in the world has been quite as successful as Sony so far. Sony illustrates what is possible, but it will be some time before we begin to approach a fraction of that. Thirdly, inflation, a question raised every year by Encik Othman Haron and Mr Leong Horn Kee and a question answered every year by me. I circulated some tables (Cols. 821 - 824) which, I think, tell the story. They are correct that inflation has been slightly higher in Singapore for the last two years than previously. But if you compare Singapore with the other countries, our track record is an extremely good one.”
“To people who object that it is better to fly to London through KL rather than to go direct, well, I say good luck to them, they should take the extra stop along the way. If enough people do that, then the airlines will have to change their pricing policies. It is not within our powers to regulate their prices. Mr Koo Tsai Kee asked about research and development expenditures and asked us to focus on R&D expenditures which would have a market orientation and practical result. I agree with him. The focus of the Government's R&D spending is on areas that promise to generate economic spin-offs. These include developing broad-based technological and manpower capabilities which are relevant to the needs of industry, for example the Joint Industry Masters Programme which is a scholarship programme. The Government provides the bulk of the financial support for post-graduate training for researchers who are already working for companies, and they go and get their Master's degrees. For example, we are helping to develop more specialised capabilities in a few key technologies, like bio-technology, material technology, micro electronics. We are providing help to the private sector in their development and commercialisation efforts, eg, patent advisory services and bridging financing. Finally, we are also developing general technology infrastructure to support R&D efforts by both the public and private sectors, like Technet, a computer network which links academics, researchers and industrialists together, gives them access to the international research and academic networks and enables them to disseminate information instantaneously. These are projects which we have been supporting. They are investments in the long-term future.”
“So by making use of the many assistance schemes available to them and by linking up with the MNCs and GLCs, our local firms can hope to maintain and improve their performance. BG Lee Hsien Loong: Sir, Mr Chng Hee Kok asked what we are doing about cartel groupings. He quoted a statement I made back in 1990, which I think is still valid, that it is best to depend on open competition and let the market forces drive down prices. That applies in general, and also to the airline business. The Intra-Orient Marketing Programme (IMP), which Mr Chng referred to, I understand, is an informal grouping of airlines, not a comprehensive one, and only 21 out of the 58 airlines which are flying to Singapore are members of the IMP. They have set airfares which apply only to themselves, to members of the IMP. The fares they have set are lower than the published rates of the International Air Transport Association (IATA). So if you look at the surface of it, consumers are not penalised. I concede readily that the airline industry is not a perfect market. It has all sorts of distortions and restrictive practices, eg, air rights are subject to negotiations between countries, all kinds of bargaining and side issues come in; and there are strange anomalies, like it is cheaper for people to fly from KL to London via Singapore than to fly from Singapore to London without going through KL. This is a problem all over the world. Singapore cannot, on our own, remove these structural impediments in the airline industry. It is just beyond our power. What we can do is to encourage as many airlines as possible to service Singapore. Competition and market forces will push down airfares. We keep an open sky policy to make it difficult for any cartel to fix high prices for long.”
“Sir, Encik Yatiman Yusof has asked about our strategy for developing local businesses. He pointed out the difference between South Korea and Singapore. There are significant differences between Korea and Singapore. South Korea has a population of 43 million, which is 14 times that of Singapore. They also have a land area 150 times ours. Their large domestic market provides the opportunity for the development of sizeable indigenous companies which can take advantage of their economies of scale. Singapore, on the other hand, with a small population has had to look overseas for investors in the first step of our industrialisation. We brought in foreign capital and multi-national companies that have world-class technology and know-how and have linkages with foreign markets where they export to. And Singapore has benefited from the participation of multi-national companies in our economic development. Our local industries have benefited from the technological transfers, new markets and business partnerships with them. As far as the local businesses are concerned, the array of assistance schemes has already been repeated many times. So I would just like to stress one particular initiative and, that is, the formation of linkages or economic groupings. Here, we encourage our local SMEs to form linkages with multi-national companies and with the Government linked companies for mutual benefit. This, I hope, would be taken up by the small and medium-sized enterprises. I would like to conclude by pointing out that our small and medium-sized enterprises have not been doing too badly. Since 1986, their value-added per worker in manufacturing has improved by about 9% a year, which is better than the industry average of 7%.”
“Under this scheme, the MNC would appoint one person as a liaison to assist the supporting industry to upgrade their operations and to help them to plan out their work, organise their systems of production in order to service the multi-nationals more efficiently. This scheme has to-date benefitted 120 companies. Of course, there is also the other question of technology transfer. There is the SISIR Incubator Scheme. There is also assistance available from the university and the polytechnics for any of our small businesses that want to do product development. I think that there already exists a wide array of different methods in which local businesses can benefit and grow. With respect to the question of GLCs linking up with local entrepreneurs, this would come under the Local Industry Upgrading Scheme or the Local Industry Globalisation Programme.”
“There is no need, in my opinion, to go for a vote of the residents on the development of a commercial centre if the development does not impinge upon the residents directly. In the case of the upgrading of HDB flats, the residents are directly affected because their flats are being upgraded. But in the neighbourhood centre or commercial centre, the residents are not directly affected and therefore there would be no need to conduct a vote. Nevertheless, it is necessary to establish, firstly, whether there is general consent among all the retailers in the precinct and there must be general assent before we can proceed. Otherwise, it will be very difficult. Secondly, any upgrading that is done should take into account the inconvenience that it may pose to the residents and that it should be carried out in phases as far as possible. And of course the normal planning requirements would apply in such cases. Sir, Dr Ow also asked the question about Government's assistance to entrepreneurs. He has, as he mentioned, accompanied me on visits to local enterprises and he quoted the example of lecturers from the university setting up business. If there are any persons willing and wanting to become an entrepreneur, there is a whole range of assistance schemes which they can benefit from. I have mentioned this before that there is in fact a book on all the existing schemes that are available to entrepreneurs. This publication is available in all the bookshops. He asked a question about venture capital. There is a venture capital industry in Singapore and the EDB has set up a venture capital club. The venture capital fund to this date has benefitted 100 local companies. Then there is the Local Industry Upgrading Programme which links the MNCs with local supporting industries.”
“I would like to inform the Member that the National Productivity Council already has a committee on continuing education and training. And this committee which was started just one and a half years ago will oversee the moves that we take towards the training of older workers and to make recommendations on what needs to be done. Sir, now I move on to the retail sector. The Retail Sector Development Plan was announced last week. This plan is meant to help our local entrepreneurs, especially those in the HDB estates. Whilst the concern at this present moment may be over the price of the shops but, nevertheless, there are different aspects of the plan which can be taken advantage of by the retailers, eg, the franchise development scheme, the cooperative scheme. If they wish to group together for greater economic leverage, then they can take advantage of these schemes as well as approach the EDB which will be setting up a Retail Sector Enterprise Promotion Centre. So there is no need for retailers to wait, but if they can get together and they want assistance from the different agencies, they can do so immediately. When the retailers are able to get together and want to redevelop their neighbourhood centre, then the question arises, as Dr Ow asked, what sort of assistance the Government can give to them, and whether they will require the agreement of the residents through the form of voting. What I would like to say here is that so long as the retailers are able to come to an agreement among themselves that they wish to upgrade, then the full array of financial assistance which they may need, whether it is the Local Enterprise Financing Scheme, Business Development Scheme, can be undertaken through the existing schemes operated by the EDB.”
“It is not easy just using the package to develop such a system. We need a coordinated effort to get on-the-job training actually successfully implemented, and this would be one of the thrusts of the National Productivity Board. The point here is that whilst the costs of doing business have gone up, wages may have gone up, rentals may have gone up, employers and management must play their part to overcome this problem. Here, we must learn from the strategies which have been employed by the Japanese. Dr Ow asked a specific question about what we are doing in terms of training our workforce using their mother tongue. While the National Productivity Board has conducted courses in Mandarin, it has addressed the needs of Chief Executive Officers who are conversant primarily in Mandarin and, therefore, has organised breakfast talks, round table discussions and also even held a productivity lecture in Mandarin for the benefit of this group. In addition, the NPB has organised Quality Control Conventions and it ensures that at least two sessions would be conducted in Mandarin. Then there is the Section Leader Certificate course which trains Mandarin-speaking foremen. Since this course was started in 1982, 2,144 participants have been trained. Then there is the National Certificate in Supervision course, which was started in 1986, and 386 participants have been trained. And, of course, at the end of last year, the NPB, together with the National Trades Union Congress, launched the scheme to train older workers called the "Training Initiative for Mature Employees". This scheme will also conduct courses in the mother tongue of the workers concerned. 1.45 pm The Member for Yuhua has suggested that there should be a national committee on skills training.”
“What is this concept? This concept means designing the product in half the time, using half the number of people, get the product to the market in half the time that is required normally. This is an idea which was first initiated by Toyota. But during the Yen appreciation period, when the Japanese faced the problem of high Yen, they used this method very effectively to lower their cost of production. For example, when I led a study mission to Japan, I was told that the Japanese companies that were producing video cassette recorders (VCRs) suddenly found that their prices were so much more, as compared to producers elsewhere, so they have to reduce the cost. What they did was to try to design the same VCR by using half the number of parts, and the Japanese succeeded. So today, the Japanese have moved on to lean production. Underlining all this is also the quality of the workforce which has been mentioned by Members. The cost of training workers is very expensive, especially when they are already out in the workforce. I will give you our own figures. To train a worker, as an adult who is already working, to get an NTC-3 certificate, costs between $6,000 and $10,000. The company may not pay this amount. It may be borne partly by the VITB and partly also by the Skills Development Fund. But the actual cost of training one such worker is between $6,000 and $10,000. So we have to find more cost-effective ways of upgrading the skills of our workers, and here the Japanese have used on-the-job training, a point which some Members have mentioned that we should encourage our companies to do. Sir, the National Productivity Board has developed an on-the-job training package with Seiko, and this package is available to our local companies.”
“Furthermore, employment growth last year was the strongest in those sectors with low productivity -- construction, commerce, community, social and personal services. So this pulled down the average productivity growth for the whole economy. Questions have been asked as to what steps can we take to improve our productivity. Here we can learn from the Japanese. The National Productivity Board has, over the last few months, been studying the strategies which have been employed by the Japanese to increase their productivity. And we have identified, firstly, the strategy of teamwork which they express through quality control circles (QCCs). The first stage of Japanese development in their competitiveness was to harness the entire workforce within their companies to compete as a team. So they have promoted quality control circles because it is a term which the workers can understand, it is a tool which the workers can use, but really the term "QCC" symbolises teamwork in the enterprise. We have also been promoting quality control circles here in Singapore and we must continue to promote this scheme. The second strategy which the Japanese have used is what they call "just in time production". The Japanese have got this very seemingly peculiar term which they use. But the term "just in time production" does not just simply relate to the production of anything on time, every time, but really to look at the overall cost of financing enterprise. It is not just that you produce parts within a chain of production to reduce the amount of buffer stock in an inventory that you need for the next stage of production, but really to look at it overall. This term "just in time production" has been developed by the Japanese one stage further into what they call "lean production".”
“Mr Chairman, Sir, several Members have raised questions on productivity and its relation with wages, and I will address these issues here. The first point is: has wage growth been higher than productivity growth? Wages are essentially determined by the tight labour market. The Singapore economy has been growing rapidly at an average of 9% per annum for the past five years. This is way above our potential growth rate. Wages have, therefore, been pushed up as employers bid with one another for a limited pool of workers. The two main causes of low productivity growth last year were: first, the business cycle. The economic downturn in the industrialised countries affected the demand for our goods and services and, in particular, our internationalised sectors - manufacturing and financial services - were the hardest hit. This dampened productivity growth. Similarly, in 1982 and 1985 when economic growth was weak, productivity growth, in terms of number of workers, also slowed to 1.6% and 3.1%, respectively. The second reason is that the slower economic growth was not accompanied by a cut back in employment. In fact, more new jobs were created in 1991 than in 1990, 64,000 as against 61,500. Companies continued to recruit heavily or retain workers in excess of their current needs, either because they were expecting business to improve, or they were afraid that it would be more difficult or costly to recruit new workers in future because of the tight labour market. This is supported by an NPB survey in 1989, which showed that 99% of companies were not willing to release employees in excess of their operational requirements.”
“Half of the 14,000 workers enroled on the Fast Forward programme have not attended any previous post-employment training. Compared to other training courses, Fast Forward has relatively more older workers enroled on it, and many of them are of primary education level. Training schemes such as Fast Forward, BEST and WISE are reaching out to a broad base of workers. Training places allocated by NPB to lower-income workers have increased five-fold from 39,000 in 1989 to 186,000 in 1990. MOSQUITO BREEDING IN SINGAPORE 3. Encik Harun bin A. Ghani asked the Minister for the Environment how serious is the problem of mosquito breeding in Singapore; what steps have been taken to eradicate it; and how effective are they.”
“Mr Speaker, Sir, efforts to upgrade our workforce through training have produced encouraging results. The response from workers and their companies to training opportunities is good. The 'Fast Forward' training programme organised by the National Productivity Board (NPB) has attracted more than 700 companies. To date, about 14,000 of their employees have signed up for 'Fast Forward' courses. Worker training has paid off for both workers and their companies. Training and upgrading of our workers have raised their productivity. For the economy as a whole, productivity has grown by an average of 3.6% a year over the period from 1987 to 1991. This increase has translated into real wage increase of 5.5% a year over the same period. To ensure that these benefits of training are available to a wide spectrum of workers, the Government has implemented broad-based training programmes as well as a more specialised skills training. Examples of broad-based training programmes are BEST and WISE. These programmes provide workers with the basic foundation for skills training. To date, 114,500 Singaporeans have attended at least one module of BEST, and more than one third of them have passed module 4, which is equivalent to primary school standard. This upgrading process has enabled 13,000 workers to proceed to WISE and other basic skills training programmes. Since 1980, 40,000 workers have attended at least one module of VITB's part-time skills training programme under the modular skills training programme. 8,200 of them have successfully obtained the full National Trade Certificate. The Fast Forward training programme provides less qualified workers an opportunity to upgrade themselves.”
“Mr Speaker, Sir, new section 15A(n) specifically says that the formation of such companies is for the specific purpose of this Act, and the mission of SISIR has been redefined, which is very clear. The discussion today makes it very clear that it is not the intention of SISIR to compete with industries. Question put, and agreed to. Bill accordingly read a Second time and committed to a Committee of the whole House. The House immediately resolved itself into a Committee on the Bill. - [Mr Lim Boon Heng]. Bill considered in Committee; reported without amendment; read a Third time and passed. SMOKING (PROHIBITION IN CERTAIN PLACES) BILL Order for Second Reading read. 1.31 pm”
“If they have to purchase expensive equipment, then I think the cost for entering into new private development would be exorbitant, if not prohibitive. I think the fears expressed about the high costs of SISIR may be unfounded. But should companies find that they require additional financial assistance, apart from the lowering of cost by using SISIR's schemes, then they can apply for other forms of assistance. There are many schemes which are administered by the Economic Development Board. And in Mr Chiam's case, it is up to his contractors to see whether the particular project would have fallen under any of these schemes. With regard to the question of possible conflict of interest, it is not SISIR's primary goal to enter into business. It does so in order to assist industries, and, as I mentioned in my speech, SISIR enters into this in order to set up new industries and to spin them off into the private sector. In fact, SISIR has got what is called the "incubator scheme" whereby promising entrepreneurs can take advantage of this scheme, ie, do the R&D in SISIR and once the project gets underway, goes out on its own; and indeed one such case, which I may quote, is Eutech Cybernetics which is a team of lecturers from the NUS who saw a market niche for themselves, took advantage of SISIR's "incubator scheme", got SISIR to participate in the equity and after the product is successfully launched, the company is financially viable, the company bought back the equity from SISIR. So the Member can be assured that it is not the intention of SISIR to compete with industries but to assist industries.”
“Mr Speaker, Sir, on the first point raised by the Member for Thomson GRC which is on SISIR's efforts in promoting quality, this is an on-going effort. It is not something which SISIR will do as and when it feels the need. But right now, every month, SISIR meets different industry sectors. They are invited by SISIR and they are given an explanation of what SISIR does and especially on the importance of ISO 9000 Certification Scheme. In addition to this, SISIR also produces brochures and pamphlets and these are distributed to industries - some of them through the Singapore Manufacturers' Association (SMA), some through the Association of Small and Medium-sized Enterprises (ASME). SISIR also conducts courses on quality and these are open to public application. Additionally, SISIR also undertakes consultancy work for any company that requires expert advice or work on quality improvement. As part of its work to promote quality consciousness among the industries in Singapore, SISIR will be organising a Global Quality Congress in June this year and I hope that Mr Leong, in his capacity as Chairman of SQI, would also encourage his members to take part in this Congress. On the second question, which is also Mr Chiam's first question, on the self-financing principle of SISIR, I must say that SISIR's work is still very much subsidised in respect of quality and quality-promotion. The $10 million annual grant which SISIR gets from the Government is spent in this area. But for industrial research, which is meant for commercial application, the fact that SISIR has all this equipment actually lowers the cost to the individual company. So this is, in fact, a great help to the small and medium-sized enterprises in Singapore.”