Lim Swee Say
Singapore
“The number of reports received via the Snap@MOM app, number of valid reports and number of companies issued with enforcement actions between 2015 and 2017 are shown in the table below: All valid reports have resulted in warnings or enforcement actions.”
“In the case of students from ITE, polytechnics or autonomous universities, employers do not need to contribute CPF if the student is employed by them for training that is approved by their institutions.”
“Together with our tripartite partners at the national and sector levels, we have to do our best to transform across all sectors, for our economy to transform and grow, pervasively, as One Singapore Unlimited.”
“Between April and December 2017, the Tripartite Alliance for Dispute Management (TADM) and the Employment Claims Tribunal (ECT) concluded 3,750 employee salary claims where the employer was ordered to make payment to the worker. Salaries were fully recovered in about 92% of these orders. The remaining claims involved 139 employers.”
“The number of employed residents aged 62 and over, and 67 and over has increased over the last five years (see Table 1 below). Of all employed residents aged 67 and over in 2017, 64% were males; 80% held secondary and below qualifications, 9% had post-secondary qualifications, while 11% were tertiary-educated; 52% of this group of older w…”
“The proportion of full-time resident employees earning below $2,000 who received bonuses, including the Annual Wage Supplement, has remained stable at about 50% over the last decade. Employers and unions share the flexibility in structuring staff remuneration together under our Flexible and Performance Based wage systems.”
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“It is my hope that, in the implementation of this year's financial policy, we will send a very clear signal to all Singaporeans and the business community that only by constantly reinventing our economy, our society and our civil service, can we become even more competitive as a knowledge economy, more cohesive as an information society and more united as a developed nation in the 21st century. Mrs Lim Hwee Hua (Marine Parade): Mr Speaker, Sir, for those of us who have visited New York City, we may have come across the display of "The National Debt Clock" on a wall near 42nd Street in midtown. Amongst other things, it tells the American people how big the country's interest burden is. Apparently, this clock serves as a stern warning against wasteful Government spending. Over here in Singapore, the Government is expecting to record a budget deficit of some $5 billion for the financial year beginning 1st April 1999 which is almost 11 times the projected deficit of $466 million for the current financial year. The last time Singapore recorded a budget deficit was during the downturn in the mid-80s. Since then, we have booked in a surplus averaging more than $4 billion a year, reaping the full benefits of the boom cycle between 1994 and 1996. This has enabled us to take a definitive step forward towards further development of capabilities. Sir, the two successive years of budget deficits should not be taken lightly. And we note that they are not the result of wasteful Government spending. Neither are they the result of a bailing out of the corporate or banking sector but of carefully planned expenditure to help position Singapore for further growth beyond the crisis.”
“Take, for example, this year, we are going to give a 10% tax rebate to all taxpayers. My question is: why not just give 5% rebate to everyone? For the other 5% equivalent, we can return it to the taxpayer, for example, in the form of higher tax relief for parents and dependants. So, hopefully, this will help to send across the message that the family is a very important building block of society. Another example. We want to encourage people to continue to contribute to charity and community projects. Why not give them tax allowance just like the way we give investment allowance to companies who invest in capital equipment? The difference between a company investing in capital equipment versus somebody who gives money to charity is, in my view, that one is investing for economic return, whereas when giving to charity, we are investing for social return, ie, social cohesion. I think both are worth supporting. Sir, these are just some of the suggestions. My point basically is that we can think about how to use all these taxation incentives, rebates, and so on, to also help reshape the mindset of Singaporeans so that they will be more aware of the need to take on a greater sense of social responsibility as we move ahead. Sir, in conclusion, 1999 is a golden opportunity for us to inculcate a new mindset in all the three "P" sectors - the Public sector, the People sector and the Private sector. We need to inculcate this new mindset because, for Singapore to succeed, we need to have many more new change agents in the Government, the business community and the people sector, so that the pace of change will be faster.”
“Sir, let me move on to the third area, which is the people sector. Likewise, we need to find ways to inculcate a new mindset in the people sector as well. We are going to face a lot of new challenges in the area of social cohesion as we move ahead. In the past, when we talked about social cohesion, we focused on areas like, for example, racial harmony, wealth sharing, and so on. But, in future, there will be new issues that would challenge us in terms of social cohesion. Take, for example, the potential widening of social gap between the young and the old; the widening of wage gap between the knowledge workers and the unskilled workers; and the widening of communication gap between the connected and the unconnected in the population. The greater inflow of foreign talents and the increasing number of structurally unemployable Singaporeans will add to social tension as well. Sir, the question is: what can we do to further strengthen this greater sense of caring and sharing in the age of globalisation and technology? I remember that in the past, when we wanted to change the mindset of Singaporeans towards family planning, when we wanted them to go beyond two, to go for three or four if they could afford it, what did we do? We offered them a whole host of incentives like priority in school registration. We even offered them tax rebate amounting to $20,000. In fact, many people said that you could actually start a bigger family to enjoy pioneer status for four to five years, and so on. Now the question is: at a time like this, when we are going to encounter many more social challenges, why not consider to provide some kind of incentives to encourage and reinforce some of these social values which will help us to strengthen our social cohesion in the future?”
“The second area, in promoting the change of mindset in the private sector is that, for knowledge-based companies to succeed, for them to have this total capability, obviously they have to invest more in manpower development. If I were to be objective about this, today, there are three ways at least a knowledge-based company can develop their manpower. The first is by retraining their existing workforce. The second is by getting rid of those who cannot fit in and recruit young Singaporeans who are better educated. The third is to recruit foreign talents. I think all three approaches are equally relevant. But my point is that, from the company's point of view, the cost of redeveloping the existing workforce is most time-consuming and, in fact, can be most expensive. Therefore, it is very important that we do something to help them to balance the cost equation so that it will make business sense for companies to reinvest in manpower rather than to displace them with younger or foreign talents. Sir, I feel that what we have to do is to set up a manpower development assistance scheme. When we decided to promote R&D, we have the Research Development Assistance Scheme (RDAS). When we promote innovation, we have the Information Development Scheme (IDS). When we want to promote market development, we have the Market Development Assistance Scheme (MDAS). Today, we want to promote manpower development, why not set up a Manpower Development Assistance Scheme so that all companies will find it to their commercial interest to invest in manpower development. Hopefully, over time, the training and development of knowledge workers will become a joint responsibility of not just the Government and the union but all companies as well.”
“In each of these areas, obviously we have to encourage them to deepen their capabilities. But what is even more important is to encourage them to nurture their capabilities in all these five areas so that they will be able to function truly as knowledge-based companies to be able to respond quickly to market changes and conditions. Sir, I feel that the existing incentive schemes in Singapore today are basically targeted at individual capabilities. Maybe it is about time that the Ministry of Finance reviewed the need on whether we should repackage all these incentive schemes so that, while on the one hand, we achieve the deepening of capability objective but, at the same time, we achieve the broadening capability objective. Maybe we should also look into whether there is a need to reorganise the duties and responsibilities of various economic agencies because it is no longer possible for each of the economic agencies to promote their own areas of interest in isolation. Take, for example, for any company which wants to be a knowledge-based company, henceforth, when they want to deepen their R&D capability, they talk to NSTB. When they want to enhance their innovation capability, they talk to NCB and EDB. When they want to go into mass customisation, they talk to EDB and JTC. When they want to go to market development, they talk to TDB. When they want to go to organisation development, they talk to MOM. Over time, if we continue to let this develop, we are going to lose our capability in offering one-stop service to these leading investors of the world, whether they are MNCs or local enterprises. So I hope that this is something that the Government would think about.”
“It is quite clear that innovation and adaptability are really the key if we want to sustain our growth in a knowledge-based economy. But we have to recognise that process towards a knowledge-based economy is going to be an evolutionary approach and the process will take time. The change management expert will tell us that any change process would go through at least five stages. We start with the pioneers, the early adopters, the early majority, followed by the late majority and then the laggard. The challenge for Singapore is not to try to achieve the change overnight but rather how we can speed up this evolutionary approach. How can we help the early adopters and pioneers to succeed in setting the pace so that, hopefully, they will give encouragement to many more others to come along? In this regard, I feel that the off-Budget measures last year and the Budget this year have sent a very clear message only to the financial community. The feedback from the business community is that they are not hearing the same strong message being sent to all the other sectors, whether it is manufacturing or retail or communication, and so on. So my suggestion is this. Why not revise all the incentive packages managed by all the economic agencies to encourage companies to move towards knowledge-based companies? In this regard, I have two suggestions. For companies to be knowledge-based companies, firstly, they must be able to develop total capabilities, hopefully base their operations in Singapore. We have to encourage them to deepen their capabilities in individual areas, whether it is technology development, market development, innovation development, organisation development or mass customisation.”
“Again, many Ministries have to be involved if we want to truly make a quantum leap in strengthening the heartware in the population. Sir, my point here is that be it knowledge-based economy or information society or aged population or strengthening the heartware of Singaporeans, all these are multi-dimensional issues requiring inter-Ministry collaboration, over a sustained period of time. If we want to really achieve the kind of outcome we are looking for, we will need to set clear targets, assign clear responsibility and support them with adequate resources. In other words, we may have to look into ways of creating a separate budget for such inter-Ministry projects and, hopefully, this new budget will not be created at the expense of increasing our budget deficit. My suggestion is to reduce all Ministries' budget by 10%. With that, we will be able to create a fund of about $3 billion. Put this fund under the direct charge of the Ministry of Finance and use it to support inter-Ministry projects and collaboration so that, over time, the issue of knowledge economy, information society, and so on, can really be addressed in a concerted effort by all Ministries and all civil servants. Secondly, I feel that there is also a need to strengthen the new mindset in the private sector. Up till now, we have often heard the business community complaining that the cost of doing business in Singapore is too high and that we need to lower cost. But how low can we go? At the end of the day, what is the purpose of economic progress if we keep on talking about cost cutting, wage cutting, and so on? Over time, I am not too sure how we can sustain our competitiveness through cost cutting.”
“Better still, why not set cost standards and challenge the Ministries to try to achieve saving over the next few years? At the same time, we have to challenge the Ministries to set clear targets on how they can improve on software capability. Today we already have the Budgeting For Results system in place. Why not we require all Ministries now to clearly spell out exactly what kind of software capability targets they are going to achieve over the next few years. Hopefully, by re-orientating our focus on software capability, making a check on hardware spending, we would be able to offer better public services at lower cost. My second suggestion is that in the coming years, can we not do something to encourage inter-Ministry collaboration and innovation in the public sector? We are going to face many new economic and social challenges in the coming years and many of them will be very different from the kind of challenges we had faced in the past. Take, for example, from an economic angle, our challenge to move towards a knowledge-based economy. So many Ministries will have to be involved, whether it is MTI, MOM, Education, and so on and so forth. On the social front, our challenge is to overcome such issues as aging population and the emergence of an information society. Again, many Ministries will have to be involved in order to make sure that the social need, economic issues and so on of an aging population are addressed. The Inter-Ministry Committee on the Aged is a step in the right direction. We have to do likewise for the information society. From the nation-building point of view, we also have new challenges, like the one being addressed by the Singapore 21 Committee, chaired by RAdm Teo Chee Hean, regarding the strengthening of the heartware of Singaporeans.”
“If we are able to achieve a 5% improvement in cost optimisation, the total saving will come to $1.5 billion, which is about 30% of the budget deficit. Sir, my main point here is this. I am actually very comfortable with the $5.1 billion budget deficit, but my point is that I am not convinced that every civil servant is putting every dollar to the best use. We are putting the money to good use but not necessarily to the best use. My suggestion is why not send a clear message to all civil servants to take this year as a beginning of the new year to challenge ourselves on how we can, as a public sector, achieve better outcomes with lesser resources. And here I have two suggestions on how this can be done. Firstly, send a clear guideline to all Ministries to cut down on the "nice-to-have" spending on hardware facilities. Because I feel that over time, our hardware facilities, like the schools, hospitals, including bus stops, are getting better-looking year after year. There is a danger that we may have gone over board. Choosing between a public institution of a 5-star hardware facility and a 3-star software capability versus one with 5-star software capability and 3-star hardware facility, I think any time I will go for the one that is able to offer 5-star software capability because this software capability is what will make a difference in the quality of public services to the members of the public. By making a constant check on cost control on hardware spending, hopefully, we would be able to reduce the cost of public services to the members of the public. My suggestion is that as far as the hardware design and hardware spending are concerned, let us remind ourselves that we must continue to focus on functionality, buildability, maintainability, and so on.”
“And now this mindset of Singaporeans is de-freezing under the heat of the regional crisis. In a way, I think our challenge is to capitalise on this opportunity now to reshape the mindset of Singaporeans before this mindset is being re-frozen again. The next two to three years is really a window of opportunity for us to do so. Even though the cyclical recovery of the Singapore economy is likely to happen, maybe over the next six months to a year, structural recovery is not likely to take place until after a period of a few years of concerted effort by all parties. Therefore, it is very important that over this period of two to three years, we make full use of the financial policies to spur all Singaporeans, business community, civil servants towards a new mindset, so that we can move together in one force, in one united direction. In this regard, Sir, I feel that there are three areas we can do with more emphasis in the implementation of the financial policy this coming year. These three areas are the public sector, the private sector and the people sector. Firstly, in the public sector, I feel that 1999-2000 is a good time for us to forge a new mindset in the public sector among the civil servants. In the past, we have always looked at unspent budget as something bad because it adds further to budget surplus. But this year is different. We are going to have a budget deficit, which means any Ministry that is able to save on the annual budget is, in fact, going to help us to reduce the budget deficit. So any unspent budget should be viewed as something good rather than bad. In fact, if the civil service can improve spending or achieve a saving of 1% alone, it will amount to about $292 million. It is a lot of money.”
“If you were to look at the two off-Budget measures announced by the Minister and the Budget announced this year, if you look at the three Budgets in totality, it is quite clear that, firstly, this Government does know how to run the economy and the kind of difficulties the business community is facing. Hence these various cost-cutting measures. But more importantly, it also clearly demonstrated that the Government does care for the people knowing the kind of pain the people are going through as a result of wage reductions and so on. Therefore, the Government has introduced a total rebate amounting to about $485 million. It is a clear concrete action on the part of the Government to demonstrate that it knows how to run the economy and it cares for the people. Speaking as a labour MP, I fully support the financial policy announced by the Minister. Sir, this Budget 1999-2000 is a very significant one for two reasons, at least. Firstly, this will be the first time that we are going to run into a significant operating deficit. Secondly, this is the Budget that will take us into the next century. I feel it is very important that we make full use of this Budget to spur Singaporeans to embrace a new mindset in preparation for the new millennium. To transform the mindset of the population, I think it is very much like trying to change the shape of a block of solid ice. One way to do it is, firstly, "de-freeze" the ice, because a solid block of ice is very hard to reshape. But if you can de-freeze the ice and reshape the water and then re-freeze the water, we can end up with a new mindset, like a new block of ice with a new shape, without losing too much water. Looking at the mindset of Singaporeans, over the last 33 years, we do form a certain mindset after all these years.”
“Mr Speaker, Sir, I rise to support the motion standing in the name of Dr Richard Hu, Minister for Finance. Sir, the economic crisis we are going through today is the worst the world has seen in 50 years. Every economy is being put to a real test and they will come out with different responses. Take, for example, Hong Kong and Singapore. Even though both of us are among the world's freest economies, yet we come out with very different responses. Just last week, the Hong Kong Secretary for Trade and Industry explained the different responses between Singapore and Hong Kong by saying that it was because the Singapore Government controls the people, the trade unions, and so on, whereas the Hong Kong people are more creative, more innovative. I have a different explanation. I think the core issue is that for the last 100 years, Hong Kong has been busy building a competitive economy, whereas in the case of Singapore, in the last 33 years, we have been busy building a nation. There is a big difference between building an economy and building a nation. In the case of Hong Kong, the focus is purely on competitiveness. In the case of Singapore, we adopt a balanced approach between competitiveness and cohesion. Because of this equal emphasis on competitiveness and cohesion, we are able to achieve unity in purpose, have a cohesive people and one united people. That is why we are able to move together in one force. Sir, there is a saying that people do not care how much the government knows until they know how much the government cares.”
“As we extend the retirement age, why not take the lead to move into the base-up wage system in a big way, in a concerted way, so as to encourage the private sector to follow suit. The third point is that with the extension of retirement age, even though it will give Singapore workers the right to work, it does not guarantee that Singaporeans will be able to exercise the right. For example, in this particular crisis, many companies are now talking about renewing their workforce so as to gear up for a knowledge-based economy of the future. Some of them are talking about retrenching the older workers and re-hiring the younger workers. So their way of renewing workforce is by retrenching the older workers. If this were to continue in a big way, then obviously, many Singaporeans are not going to be able to exercise their right to work beyond 60 years old under the extension of retirement age. We hope the tripartite partners, namely, the unions, Government and employers, can work together to arrest this particular trend. We need to encourage as many companies and employers as possible to work together to help our Singapore workforce to remain healthy, employable and productive, so that as many Singaporeans as possible can really exercise their right to work beyond 60 under the extension of retirement age. On that, I support the amendment Bill, Sir. EXEMPTED BUSINESS (Motion) Resolved, That the proceedings on the remaining items on the Order Paper for today be exempted at this day's sitting from the provisions of Standing Order No. 1. - [Mr Wong Kan Seng]. RETIREMENT AGE (AMENDMENT) BILL Debate resumed.”
“Mr Speaker, Sir, the average lifespan of Singaporeans today is 76 and the current retirement age is 60. What this means is that, on average, Singaporeans would spend about 70% of their adult life working and 30% in retirement. With the raising of the retirement age to 62, this will increase from 70% to about 75% and eventually, if we do raise the retirement age to 67, it will go up to 85%. I therefore support the extension of the retirement age because I believe this will enable Singaporeans to live a more fulfilling life. However, in supporting this extension of retirement age, I would like to raise three points for the consideration of the Minister. Firstly, the purpose of extending retirement age is to secure the right for Singaporeans to work beyond 60. However, we should continue to leave it to the individual Singaporeans to decide whether they want to exercise the right beyond the age of 60. So from that angle, in determining the pension arrangement for civil servants, I hope the Government will not penalise civil servants who are on the pensionable service and who decide to work beyond 60 under this extension of retirement age. Secondly, as we extend the retirement age, we are endorsing pay cut of up to 10%. As the Minister mentioned, this is because of the seniority-based wage system in Singapore. From the union's perspective, we hope that this is only a temporary arrangement because the long-term solution is to move away from the seniority-based wage system towards a base-up wage system. Sir, in this regard, we hope that the civil service can take the lead to move into the base-up wage system because today, the civil service likewise depends very much on the seniority-based wage system. We hope the civil service can respond.”
“Likewise from the angle of the national economy, all Government agencies have to speed up their effort to reposition the economy. Basically, we are down to these three points: skill redevelopment for the workers, business re-engineering for the business enterprises and re-positioning of the economy towards a knowledge economy. If we can do that, then I think all of us can work together to create a better future, one that all Singaporeans can be proud of in the 21st century.”
“As employers, do not ask whether 15% cut is enough, but rather ask yourself what more can we do so that we can be more productive, we can be more competitive. As it is today, there is already some sign of social tension between the local workers and the foreign workers, between young Singaporeans and older Singaporeans. There is even talk that maybe we should defer the extension of retirement age, so that the older Singaporeans can retire next year, instead of working beyond 60 so that their jobs can be taken by young Singaporeans. There is also talk about stopping foreign workers from coming so that the retrenched Singaporean workers can fill these jobs. Sir, if we allow these issues to be taken out of context, we are going to end up worse off all round, because two years from now, three years from now, yes, we may be able to regain our cost competitiveness, but in terms of social cohesion, we may have created the social tension that will take a long time for us to mend. Sir, the issue now must be to recognise that we are in a much better position than anybody else, but we do not wait for things to turn worse before we take action. There are enough opportunities for everyone. What is more important at a time like this is for us to work together, be consistent, send a clear message to all Singaporeans that there is no painless solution today. The severity of the crisis is that it is not possible now to look for painless solutions. So employers, give up the idea of a painless solution. No way can we cut wages by 30%, CPF by 25%. No way. Just accept it and let us put our minds together and move on. Likewise, our workers, do not pretend that life can go on as usual. As we move towards a knowledge economy, we must upgrade our skills.”
“Now, they have to live with whatever mistakes or lousy workmanship that they have put in. This is exactly the point here. We are talking about building Singapore as our home. When we talk about economic development and social cohesion, we must always remember that we are not building this home for anybody else. We are building this home for ourselves and our children. Therefore, it is with great disappointment, speaking as a Member of this House, to see some Members here adopting a partisan approach in debating this motion. This CSC Report is not a PAP report. It is a report formulated by Singaporeans and friends of Singapore. There are many foreigners who are not Singaporeans but they share the commitment and contributed their ideas and efforts. Why? Because as friends of Singapore, they want to see Singapore well. Many people work together very hard to come out with this Report. And to see a Member coming to this House to talk about PAP Government versus Workers' Party and so on, I think it is with great sadness that I have to hear what he has said. Sir, as Singaporeans, let us be aware that it is important for us to work together to sustain our economic competitiveness. But equally, if not more important, is that as we implement the recommendations of this Report, let us not weaken social cohesion. Therefore, as a Labour MP, I call on the employers to stop calling for more cuts, because a 15% cut in business costs is already a significant achievement that Singapore can achieve. Ask a businessman, in all the other countries, are they able to secure the support of Government of the labour movement to go for a 15% cut? Are they able to secure the to lower business costs by 15%? So be thankful for what we are able to achieve as a nation. Let us move on.”
“It is important that as we pursue economic competitiveness, we do not achieve it at the expense of social cohesion. If I may relate another story. A group of people come together to build a housing estate and the leader told them, "Let us make this the best housing estate we have ever built. Give it our very best and make it an estate we can all be proud of." The workers were excited and everyone started to work. But along the way, a small group of people in the team decided that things were going too nicely and they should have some excitement. So they went around talking to the workers. They asked, "Why do you work so hard? We can build this to be the best housing estate. At the end of the day, it will fetch higher prices and the people who move in would enjoy a beautiful home. But what will happen to us? We will just move on to build another housing estate." Over time, the workers lost heart. The carpenter started to take it easy on the carpentry work. The one who laid the tiles took it easy and as a result, workmanship became very shoddy. By the time the housing estate was completed, the workers packed up and were ready to move on to the next housing estate project. The leader came with a bunch of keys in his hands. He asked the workers to line up and he gave each and everyone a key. The workers asked, "Boss, what is this all about?" The leader said, "Remember, when we first started this project, I urged you to give your very best to build the best housing estate that we have ever built. Why? Because this is going to be our home and everyone of you would be given a unit for free." It came as a shock to the workers. How they wished they had put in their very best in building this housing estate.”
“Let us accept that we want to run because we want to run faster than all other competitors so that we will be able to return to full employment in the nearest future and all our workers who are able and willing to work can continue to enjoy good employment. Having said that, I want to emphasise the point that the CSC Report is not just about cost-cutting. In the last few weeks, if you had listened to radio talkshows, it is not surprising that quite a number of the callers who called up the radio talkshows referred to the CSC as the "Cost Committee". In fact, CSC is being referred by many people as a "Cost Committee". It is not. The CSC is not a Cost Committee. It is a Committee on Competitiveness. The key word is "competitiveness". The CSC is not about making Singapore cheaper all the time. It is about making Singapore better all the time. Mr Jeyaretnam said that this Report is not bold enough. He says that we need to have more social reforms. Yesterday, Mr Chiam See Tong said that we should have political reform. The CSC is not about political or social reform, but about economic reform. Here we are talking about moving towards a knowledge economy. For anybody who knows something about economic development, he will recognise the boldness contained in this Report. In fact, many countries are amazed that Singapore is able to look 5 to 10 years ahead even at a time of economic downturn and aim to come up stronger and more competitive. In that regard, as Singaporeans, we can all be proud of this bold vision in the CSC report. But having said that CSC is a bold report on economic reform, I would like to highlight that we must be aware that we must not pursue economic competitiveness as an end in itself.”
“Therefore, there is no need for anyone of us to come up to claim credit should the Ministers decide to take a deeper pay cut because the recognition should be given to the Ministers for their leadership by example. On the point that Ministers have not been doing their job in looking ahead into the future, as a result, we have to take a wage cut today. The message seems to imply that the Government has not been doing the job well. Speaking as a member of the labour movement, we do not think so. Just think about it. Singapore's economy is one of the most open in the world. About 70% of our demand here is externally driven. By right, at a time like this, the Singapore economy should be worst hit than many other economies because we are so externally driven. And yet look at what has happened in Hong Kong -5% GDP (contraction), Malaysia, -5%; Korea, -6%; Thailand, -8%; and Indonesia, -13%. What about Singapore? This year, we are still talking about 0.5% to 1% growth. The reason why Singapore is able to be in such a good position today relative to all the other economies is because our Government has been able to look ahead and make sure good governance and public policies are always in place. As a result, our workers today do not have to suffer the kind of pain that many of our fellow workers in other countries and economies are suffering today. Therefore, as far as the labour movement is concerned, we believe that there is nothing fundamentally wrong in Singapore. There is nothing fundamentally wrong with our workers, companies or the Government.”
“" Worse still, they say, "This Government, how come they did not have the foresight to tell us in advance that there are tigers in the jungle." Let us put it this way. This is the worst crisis that this world has seen in the last 50 years. The world economic experts, up to today, no one dares to say that they could foresee the arrival of this recession. When the NCMP mentioned that a private banker told him in 1996 that he saw exactly what was coming, I was shocked. Perhaps the banker should come to the open to explain to the world how did he in 1996 foresee the regional crisis was coming and that Singapore was heading for recession in 1998. Because that could win him a Nobel Prize. Some would say that, "If we have to run, why not you run first because I am not convinced that we have to run." For example, if the Ministers do not take a pay cut, how can you expect us to take a pay cut? Again, we forget that the Ministers have been leading by example all these years. We forget that in 1997 when all of us were enjoying pay increase, the Ministers took a pay cut of 2.5%. We forget that in the first half of 1998, when the situation was still all right, when we were talking about wage restraint, when workers were getting 2% to 4% of wage increase, the Ministers took the lead for a wage freeze. Sir, none of us in the labour movement has stood up to urge the political leaders to take pay cut first because we have full faith and trust in this Government. We know that the Ministers would take the lead in taking a bigger pay cut, not because the opposition MPs have asked for it nor the labour movement has pressed for it but because our leaders know what to do. They always believe in doing the right things and we know they will never disappoint us.”
“Mr Speaker, Sir, thank you for this opportunity to participate in this debate. I support the motion standing in the name of the Minister for Trade and Industry. Firstly, I would like to touch on the point on what this CSC Report is all about. Put in a very simple language, imagine two persons walking in a jungle and all of a sudden, they heard that the tiger is coming up on them. One of them bent down to tighten his shoelace. The other person says, "What are you trying to do?" He says, "Obvious. I am getting ready to run." This other person says, "You must be crazy. You think you can outrun the tiger?" The guy says, "No, I do not think so. But all I need to do is to outrun you." Mr Speaker, Sir, the point here is that we live in a world of jungle. Competition is everywhere and in this jungle, there are many tigers - the tiger of recession, the tiger of unemployment, and the tiger of retrenchment, and so on. Basically, what the CSC Report is all about is to get Singapore running faster than our competitors so that we do not have to be beaten up by these tigers around us. But it is not easy to start running because it is painful and stressful. Some would say, "Why run? I do not see any tiger, I do not see unemployment in Singapore." Then some will say, "Before we start running, we need to start fighting among ourselves first. Let us go for political reform so that we will all loosen up and could run even faster." It is obvious that all these suggestions are not constructive. Some would even ask, "Before we start running, we should ask ourselves how come we end up in the jungle. I think the Government is wrong because they should not have led us into the jungle.”
“At the upper secondary level, pupils learn about post-war constitutional developments in Singapore till the formation of Malaysia in 1963. Pre-university students study political developments till the achievement of self-government in 1959. The History and Social Studies are currently being revised to give greater emphasis to Singapore's struggles against colonialism, communism and communalism. The content will also include the achievements and constraints Singapore experienced in the early years of nation-building. These revised syllabuses will be implemented from year 2000 onwards. WRITTEN ANSWER TO QUESTION APPLICATIONS APROVED BY REGISTRAR OF SOCIETIES 1. Mr Simon S C Tay asked the Minister for Home Affairs whether from June 1997 to June 1998, the Registrar of Societies has refused registration to any applicants or delayed approval of applications in any case for six months or more, and if so, the number of cases refused or delayed and the reasons for such refusal or delay.”
“RAdm Teo Chee Hean: Dr Aline Wong announced in Parliament in January 1998 that NUS had found it feasible to start the South Asian Studies Programme (SASP) from the Academic Year 1999/2000. NUS is making good progress in the preparations and will be ready to launch the SASP from July 1999. Let me update Members on the key steps in the preparations. First, the curriculum. A committee comprising historians, economists, political scientists and sociologists started developing the curriculum from late 1997. They have sought the advice and inputs from local and international experts on South Asia. The draft curriculum is now ready and will be finalised by the end of this year, after getting feedback, including feedback from potential students. Second, the recruitment of staff. The Programme has provisions for five full time academic staff. NUS is currently in the process of identifying and attracting good scholars to take up these teaching positions. Advertisements have been placed in leading journals and academic magazines in South Asia, UK, USA and Australia. NUS intends to hold recruitment visits to these regions later this year. It expects these posts to be filled by early 1999. Third, marketing. NUS will be conducting a series of publicity activities, including seminars and public talks, to promote the Programme from January and June 1999. HISTORY SYLLABUS OF SCHOOLS 18. Mr Shriniwas Rai asked the Minister for Education if he will consider reviewing the History syllabus of schools to give greater emphasis to post-war history of Singapore. RAdm Teo Chee Hean: Presently, pupils at the lower secondary level are taught Singapore's history from the colonial era till our achievement of nationhood in 1965.”
“But to survive in more dangerous places, we better be stronger and better, and that is the only reason why I proposed this motion because I think at a time like this, instead of being bogged down by short-term problems, we should cast our mind, our vision, ahead or beyond this crisis, and ask ourselves what can we do now over this year, the next two years or three years, what can we do to make Singapore stronger and better. So that by the time the crisis is over, when we have to venture into more dangerous places, we will be ready and we will succeed. Sir, let me in conclusion, as the Minister BG George Yeo has mentioned, at a time like this, there is a lot of stress, a lot of ya li [ ]. There is a Chinese saying, we must ba ya li, ding wei dong li [ ], meaning you must turn the stress, the pressure, into forward thrust so that we can run even faster. Sir, on this note, let me thank again the House for the support of this motion and I look forward to your approval. Resolved, That, in view of the economic downturn, the Government should rally the support of the entire nation to minimise unemployment in the short term and strengthen economic competitiveness and social cohesion for the long term so that Singapore will emerge from this regional crisis even more competitive and resilient. ADJOURNMENT Resolved, "That Parliament do now adjourn to a date to be fixed." - [Mr Wong Kan Seng]. Adjourned accordingly at Twenty Six minutes past Six o'clock pm to a date to be fixed. WRITTEN ANSWERS TO QUESTIONS FOR ORAL ANSWER NOT ANSWERED BY 1.30 PM SOUTH ASIAN STUDIES PROGRAMME 17. Mr S Iswaran asked the Minister for Education what progress has been made on the introduction of a South Asian Studies programme at the National University of Singapore.”
“So in the end there is no winner, because they all undercut each other. What he did was he went to places where nobody dared to be there, because it was known to be dangerous. This is dangerous from a business point of view, not in terms of physical safety. Basically, he was a pioneer. He looked around China. He looked at the provinces, the cities and places that he thought there were investment opportunities. But before anybody else moved in, he moved in first. Because of that, he was able to basically make a good business out of that venture. I think for Singapore, in terms of the national economy, it is the same thing. I think we have been taking risks all these 35 years since independence and that is the reason why our economy has been successful. We went to foreign direct investment (FDI) when many people, many countries, thought FDI is no good for the country. They say it will enable the multi-national companies to come in to exploit our people and our resources. But we said, no. We say that it is dangerous but also the safest. So we went to FDI. Today's situation has changed. Looking ahead, in the future, as I mentioned, I think the Minister has also mentioned about the realignment of the regional currencies. The economic space that we are in today is going to be very crowded in the future, by the time the crisis is over. Therefore, we have to look for new space, space that is even more dangerous and has fewer players so that we can continue to succeed. Yes, it is very easy for our regional economies to copy us. They can copy our strategies on paper but it is very difficult for them to duplicate the implementation on the ground if we are prepared not to shy away from greater and difficult challenges and, in a way, more dangerous places.”
“And, first but not least, Mrs Lim Hwee Hua and Mr Seng Han Thong talked about the older workers, skills upgrading, cost cutting, job matching, unity and so on. And I thank all the MPs for their contribution. I also want to thank the Second Minister for Trade and Industry, BG George Yeo, for his very spirited and inspiring response. I am very glad that he talked about the need for employment, employability, competitiveness and national unity. I am most impressed by his pak buay see kind of reply and I guess some of the MPs here are also the pak buay see type of MPs. So if your proposal has not been responded by the Minister, please continue to bring them up on a future occasion until some response comes out with a yes or no, whatever way. Mr Deputy Speaker, Sir, I would like to summarise my motion in this way. I think Mr Low Thia Khiang also asked this question about moving this motion at a time like this. Is it because the PAP Government admits making mistakes and so on? I want to explain. The one and only reason why I proposed this particular motion at a time like this is because I remember what a Chinese businessman told me about five years ago. The Chinese businessman was very successful in China. I hope he still is because I have not been in touch with him for quite a while now. I asked him, "How did you manage to be so successful? Somehow everywhere you went, you made money, when other people may be losing money." He said, "Very simple. Zui wei xian de di fang, ye shi zui an quan de di fang [ ], meaning that the most dangerous place is also the safest place. Why? Very simple. If the place is very safe, everybody rushes in. The place will be so crowded and the market is not enough to go round everyone.”
“Mr Deputy Speaker, Sir, first of all, I would like to thank all the Members who have spoken up on this motion. I would like to acknowledge their contribution and key points. Sir, I will go in the reverse order. Mr Chiam See Tong and Mr Low Thia Khiang, basically, called on the Government to treat everybody fairly and equally so as to strengthen social cohesion, and we have heard the response from the Minister. NMP Mr Chuang talked about the over investment in the property market and the need to divert this investment in the future to human capital. NMP Mr Rai talked about the need to upgrade workers so that they can take on better paying jobs and he called on the people to save more. Mdm Claire Chiang talked about the importance of the people services sector and the need to strengthen the social safety net, and to set up a Singapore misery index. Mr Inderjit Singh talked about the need to have a vibrant business environment for technology and innovation-based economy. I like that very much. Dr Vasoo talked about the need to have a fighting spirit and the need to do long-term manpower planning, if possible, for the next 20 years. I thought that was excellent too. NMP Mr Zulkifli talked about the need to match the VWOs, the social workers, to the needs of the people at a time like this. Mr Ang Mong Seng talked about the need to set up an employment network linking MOM, CDCs, CCs and so on. NMP Mr Tay talked about the need to give more support to the SMEs and to have a stronger process of consultation with the private sector. Mr Sinnakaruppan proposed the earlier release of the report on CET 21. NMP Dr Lee Tsao Yuan talked about the need for early and big enough off-Budget measures.”
“At a time like this, why do we not encourage the people of Singapore to come forward with their creative and constructive ideas on how we, as a nation, can go through this crisis and come out stronger? If we were to make use of this opportunity in the right way, the Government can make use of this opportunity to encourage active citizenship from the people sector and the private sector, which is what Singapore 21 was set up to do. At the same time, the people sector and the private sector, by being responsible and constructive, can also gain the confidence of the Government that effective participation of the 3Ps (people, public and private sectors) can actually lead to a greater trust, greater respect and, most importantly, greater sense of ownership of all the national policies and issues. At the end of the day, I think it can be done because we have Singapore 21, where the message is very clear. What we have to do is to quickly seize this opportunity so that we can stay united at a time of crisis. In conclusion, I would like to say that we have got to where we are here today since 1965 from a no-hope situation. But today, we are getting to Singapore 21, not only not from a no-hope situation, but actually we are getting there from the best-hope situation. After all these 30 years of nation building, now we have a competitive economy and a cohesive society. Our challenge is - if we can do it right, not only will we be able to minimise unemployment in the short term, maximise our competitiveness and employability for the long term, but more importantly, we should be able to strengthen the emotional stakes of Singaporeans in Singapore 21. On that note, I beg to move the motion. Question proposed.”
“The question is: how can we make use of this opportunity as a way for us to strengthen heartware and nurture an active people sector? Take, for example, between the private sector and the public sector. We often have this public debate - the private sector will say the public sector does not understand that the rain is really pouring, and the public sector will say the private sector does not understand that government cannot bail out companies. So there is a lot of debate and disagreement. My own observation is that in a way we have to recognise and accept that different business sectors have different cost structures. So one solution which may be relevant to some sectors may not be relevant to the other sectors. Up till now, what we have been trying to do is to come out with a common solution which will be common to all sectors. As a result, there is this mismatch between the solution and the needs. Maybe one possibility as a way of strengthening this active partnership between the public sector and the private sector is for the private sector to do a proper analysis. Can they analyse better what is their cost structure, put out a stronger case to explain their position better, and in what way certain measures can help them more than what is being done today? If we can go through a process of consultation and collaboration, exchange of views and debate the views, then hopefully the public sector and the private sector can come closer together. At the same time, how about the people sector? Again, we talk about the active citizenship of the people sector. This can be done.”
“If we are not able to have early information on where these job opportunities are coming from, it is very difficult for us to retrain the workers, because by the time we retrain them, again they are going to miss the boat. So my point here is that, as a strategic intent, I should say it is a national challenge, to systematically migrate workers from the declining sector into the new growth sectors. If we can do that, and do that in sufficient numbers, then I am confident that Singapore can be one of the first countries in the world to avoid structural unemployment. Again, I am hopeful because today we have Manpower 21 and we have the Committee on Singapore's Competitiveness. What we have to do is to link up the two into something more tangible and actionable. Thirdly, for the long term, besides strengthening competitiveness and employability, we need to strengthen our national unity. The crisis is something we did not wish for, but it has happened. It is actually a very rare opportunity if we look at it positively. Earlier, I talked about competitiveness and employability, which basically is to strengthen and enhance the economic stakes of Singaporeans in the Singapore of the future. The question is this: is this also a great opportunity for us to enhance and strengthen the emotional stakes of Singaporeans in the Singapore of the future? We have been talking about this in the last one year or so, since the launch of the Singapore 21 Committee chaired by Minister Teo Chee Hean. There is a lot of discussion about the people sector. In fact, Minister Teo coined the term "people sector" as against the private sector and public sector, which I thought was a very exciting idea.”
“It will take quite some time for us to retrain not necessarily all of them but, hopefully, as many of them as possible. As I say, we believe that we, in Singapore, are in the best position to address this, because the direction is clear, the resources are there and the tripartism spirit is very strong. However, even if we were to strengthen our competitiveness and enhance our employability, that still does not mean that we can have full employment. Because, at the end of the day, it all depends on how we are able to link up the two efforts, how we are able to synchronise and derive synergy from the two efforts. In the OECD countries, in the case of USA, for example, they discovered that even though the economy is competitive, even though they are doing a lot to retrain the workers, yet, they cannot escape from structural unemployment. The conclusion is that the linkage between the two efforts is not strong enough. Sir, my suggestion is that the manpower agencies and the economic agencies have to work very closely together. Take one example. Today, we have workers who are now prepared to go for retraining because of the crisis, because of rising unemployment. They are prepared to go for three months, six months or one year of retraining in order to secure new and better jobs in the new growth sectors. But our challenge is that, if tomorrow, 5,000 workers are prepared to go through the process of retraining, do we know in what area do we train them for? My point here is that we need the economic agencies to be more specific in identifying employment opportunities over the next 1-3 years and be able to, as far as possible, give an early projection. This is because retraining of workers has a long lead time, at least six months, if not one to two years.”
“We have to expand our capacity in CET. In this regard, we are very happy that the Government has decided to set up the first full-time training centre for continuing education by converting the ITE at Bukit Merah into a full-time training centre. I think this is something very strategic. It is something that would pave the way for the evolution of a new national training infrastructure for CET. I would like to suggest that we do not stop at the Institute of Higher Learning (IHL). We should encourage the private sector to take on that shared responsibility. Take, for example, in the electronic sector, they have a training centre co-funded by the Government and the industry known as the Electronic Industry Training Centre. This Training Centre is performing a very important role in the present process of retraining our workers, and we believe that the same concept, the same idea, can be expanded to all the other sectors, whether they are in manufacturing or in services. And if we can do that, then over time we may be able to set up a training infrastructure, a training network, linking up both the IHL as well as the training centre in the industry and, in some cases, for the larger employers who may even have in-house training centres. I hope the Government will consider setting up a formal mechanism to co-fund this kind of training centres in the industry and in the companies. Sir, we can have the facilities, we can have the certification in place, but at the end of the day, we have to mobilise the workers for this training. I think the NTUC and the employers' federation can play an important role. Overall, we estimated that there are 580,000 unskilled workers in Singapore.”
“This is because we have always believed in in-employment training. We set up the Skills Development Fund way back in 1979, almost 20 years ago. And because of the SDF mechanism, we have been retraining/upgrading our workers all these years and that is the reason why today we have one of the most cost competitive workforce in the world. What we have to recognise now is that the future will be so different from the past and therefore we have to recognise that the present system of continuing education through SDF may not be enough for us to tackle the issue of structural unemployment. And what we need is to set up a new national system for continuing education and training. For example, we need to set up a new national framework for skills certification. Companies today are coming to Singapore to set up new operations. So they want to train their workers. They want to skill certify their workers. But some of them found out that the skill courses that they want to certify their workers are either not available in Singapore or the skills system is not well defined in Singapore yet. As a result, they are not able to proceed in a systematic way of training the workforce. So there are gaps in the skills certification system. In that regard, the Government's announcement on the national skills recognition system is a most timely move. We hope that quicker progress can be made and we hope that the Government will set some specific timeframe for the expansion of this national skills recognition system. Having a national skills recognition system is not enough because what we have is a system on paper. We have to turn this system on paper into reality, which means we have to set up a nation-wide training infrastructure. We have to upgrade our capabilities in CET.”
“And together, we would have created what we call a global information infrastructure (GII), the information infrastructure of the future, to support broadband multi-media interactive applications and yet cut across the world, North America, Europe, Asia Pacific. And when that happens, Singapore will be a very key node and integral hub in the GII of the future. So by the time the region is ready to go for electronic commerce and so on, they can then, like in the old days, link through this GII through Singapore. In this way, we will be able to continue to perform our role as a global hub in the Asia Pacific by helping the region to link up with the information economy of the future. Sir, in the area of competitiveness, if I may summarise, I am basically saying that we have to move our mindset from competing on the basis of cost competitiveness to a new basis of capability competitiveness, and there is a big difference. Being cost competitive means that I do not have to be as good as you, but as long as I am so much cheaper than you, I am still more cost competitive. But to be capability competitive means that we must aspire to be as good as the best in the world, and that is what I am talking about. At a time like this, we should really think about how we can make use of this lull period, this spare capacity that we have in the economy, turn it into an investment for the future, so that we can come out as the best in the world. The must-do at a time like this is to maximise employability. I think enough has been said about the issue of structural unemployment. So I do not intend to repeat the whole issue again, but all I want to say is that in Singapore, we are in the best position to tackle the issue of structural unemployment, better than most other countries.”
“For the simple reason, in the competitive world of the future, the strength of any economy is not what you are able to do within a country. It is not the strength of the location that really counts. In the future, what will really make the difference to the competitiveness of any location is your ability to strengthen the network capability, whether you have the network of resources, expertise, markets, that will make the difference, meaning that in the future world, we are going to compete on a network basis. Sir, in the case of Singapore, we have come this far in becoming a global hub in the industrialisation age. I think our next target, our next challenge, must be to become a global hub in the information economy of the future. And how can this be done? I am optimistic that this can be done. Take, for example, in the area of IT. Today, Singapore is one of the best computerised nations in the world. Our infrastructure like Singapore One, for example, is one of the best in the world, one of the most leading infrastructures in the world. In terms of our legal framework, we have the Electronic Transactions Act in place. What we have to do is to capitalise on this infrastructure, this capability, which we have built over the last 17-20 years and then to link ourselves to the rest of the world. Just think for a moment, if today we can find 10 leading cities of the world which are very advanced in the area of IT, whether they are in the US, Europe, Japan or Asia Pacific. If each one of them were to contribute, let us say, 100,000 users of broadband multi-media services, then what can be done will be for Singapore to link up with these 10 leading cities of the world.”
“I think what we have to do, looking ahead in the future, is to move away from a cost containment strategy to a revenue generation strategy. Revenue generation means: can we try to create value out of technology, out of ideas, out of markets, for the global players? It means: can we offer a platform in Singapore which will have the integrated capabilities in technology development through R&D, in innovation development, being able to design new products, new processes, new applications, new services, be able to do market development, help them to create markets in Asia or in cyberspace, the new market that we talk about in the future? If we are able to do so, then I think the future for Singapore will continue to be a bright one, because we will be able to differentiate ourselves and become an integrated hub in the knowledge-based economy of the future. This is the second area where I think we can do a lot more and a lot faster. The third area is to strengthen our position as a global hub in the Asia Pacific. The idea of a global hub is not new. In fact, in Singapore, we started off as a global hub in the 60s and 70s. What we did was to become a global hub in the industrialisation age, eg, airport, seaport, for the transportation and distribution of goods. In that sense, we helped to link the region (ASEAN) to the global economy. We became the gateway and, as a result, it was win-win. But the unfortunate thing is this. After so many years of win-win, instead of thanking us for contributing to this linkage to the global hub, we are accused of stealing things away from our neighbour. But it does not matter what other people say about us. I think at the end of the day, what we have to continue to pursue is the strategy of global linkage.”
“Two or three years from now when the market is back, if they look at the cost structure in Singapore vis-a-vis the region, we are going to be so much more expensive, as I mentioned earlier, due to the realignment of the regional currencies. So what we have to do is to look for new growth sectors and areas where we can compete based on our new capabilities. For example, analogue consumer electronics is going down. But that does not mean we should give up consumer electronics, because after analogue consumer electronics, there is this thing called digital consumer electronics. Since we are not competitive in analogue, why not go for digital? Why not start building the infrastructure, the capability and go for this new product and new services in the future? How about building new capabilities? In the 60s and 70s, when we went through the process of industrialisation, we did not have any market in Singapore. We did not have any technology in Singapore. What did we do? What we did not have, we borrowed. So we went to the MNCs and we brought them in. We did not have a market. We borrowed their market. As a result, MNCs exported out of Singapore. In a way, we borrowed their global market. We did not have technology. So we brought in their know-how in processes, products and applications into Singapore. So by borrowing their technology, borrowing their market and by creating a conducive environment for mass volume production, we were able to earn a living. But the question is, in the future, given the five global trends which I mentioned earlier, is it possible for us to continue to earn a living by borrowing technology and borrowing markets from the global players? I do not think so.”
“It is not quite true. In New York city, if you are prepared to drive half an hour out of the city to Queens and so on, you will be able to find many factory outlets. The factory outlets sell the same goods that you can find in the city but maybe 30-40% cheaper. That is why they call them factory outlets. Yet, many people, whether local or tourists, are still prepared to pay a premium and shop in the city. Why is this so? It is because they have managed to restructure and upgrade. They have managed to change mindsets, from quantity to quality. Macys used to be the largest shopping mall in the world. They are successful because they are big. Anything a person wants to buy, he can find it there. But today, in New York city, they cannot operate on the basis of just having more stock items on the shelf. This does not bring them customers. It is the value added service that they talk about. Sir, the point here is this. When can we start to get some of our domestic retailers to change their mindset? Things are going to be difficult over the next few years. Just to sit there, sit tight and do nothing is not going to do them any good. Can we find ways of helping the domestic retail sector to upgrade and to grow again, help them to shift their mindset, from quantity to quality, from hardware to software? Hardware means just more goods and more people and software is value added services. The second area is to create new jobs in new growth sectors. Many of the jobs which we are losing today will not come back to Singapore forever. For example, the consumer electronics sector has been downsizing and the jobs that are going away will not come back. Why should they come back?”
“Because of all this, it was very clear to me that many of our new growth sectors in Singapore will increasingly depend on foreign skilled workers, foreign talents. If you look at the wafer fabrication plants, tomorrow if we were to stop foreign talents and foreign workers from coming in, all our plants would have to close shop. It is good in a way. It is good that we are hit by this slowdown. Because with this slowdown, it gives us a chance to reflect on what has happened to the Singapore economy over the last five to 10 years and where are the dangers and pitfalls that we may be trapped in and, therefore, what action we can take at a time like this to correct these mistakes and, hopefully, come out of this slowdown stronger and better. Sir, there are three areas I would like to propose as must-do for discussion - competitiveness, employability and national unity. The first must-do for the long term is to enhance the competitiveness of Singapore. We have many domestic sectors that, over the years, have continued to enjoy very low productivity. Take, for example, the retail sector. Everybody knows that the retail sector is not doing well and everybody knows that there is a surplus of players. Too many players in the market which is not growing fast enough. And, yet, at the same time, the pace of restructure and upgrading, for example, in the retail sector is way too slow. I would like to quote an example of New York city. New York city was in a hard time in 1990/1991 because of the recession. In fact, companies were closing, workers were retrenched and the retail sector almost came to a standstill. On Christmas week, the whole shopping mall was empty. But today, if you go to New York city, things have changed. Is it because they have no more competition?”
“The good news is that, with faster change in technology, it means we have more room to move ahead. But the bad news is that we can only continue to ride the wave of technology provided we are able to quicken the pace of change in Singapore as well to be able to learn new knowledge faster and sooner. The last trend is more domestic, the issue of an aging population. With a longer lifespan of people and shorter lifespan of technology, the issue of employability will become more acute in the future. So given this new environment that we are already in which will only get more intense, in terms of competition, pace of change, and so on, there are basically three scenarios for Singapore in the future. The first scenario is one of unemployment. The second scenario is one of structural unemployment, and the third scenario is full employment. If we are not able to remain competitive in this new economic reality, then obviously we will be heading for unemployment forever. If we are competitive, but we are not able to upgrade the workforce, retrain the workforce fast enough, then we are heading towards structural unemployment. But if we are able to do both, to be competitive and at the same time ensure the employability of the workforce, then of course we have a chance to head towards full employment. In fact, before the crisis, I was very sure that we were moving from full employment to structural unemployment because we could observe that we were beginning to have many bad habits, whether it was in the economy or in the society. Workers did not take training seriously and employers had no time to worry about how to train the workforce for the future.”
“By the time the crisis is over, we are going to see a complete realignment of the regional currencies. What it means is that these countries vis-a-vis Singapore will be about two to five times more cost competitive. So that is the first trend we have to accept. It is already happening and there is nothing we can do to stop it. The second trend is the potential threat of rising protectionism in the region. In the last couple of years in particular, we are beginning to see very intense competition within the region, within ASEAN, for example. We have our airport, we have our seaport. They also want to have their airport and seaport. Ours is big. They want to be bigger, and so on. But competition is not what I am talking about. What I am talking about is, that the competition is turning into unhealthy competition, and unhealthy competition leads to all kinds of protectionistic measures. This is something we have to be concerned about. When the countries in the region forget how to think win-win and start to think win-lose, at the end of the day, it is going to end up lose-lose for all of us. And we have to think about what should be our response. The other two trends are more global. Firstly, it is the whole issue of globalisation. With globalisation of technology and market, and so on, companies are now moving towards a horizontal division of labour, meaning that they will start to deploy their complete value chain all across Europe, US, North America and Asia. What this means is that there will be more opportunities for us to strengthen our economic strength. But yet, at the same time, it also means that there will be stronger and keener competition for these opportunities. The other global trend is technology. Technology is moving faster and faster.”
“But at a time like this, and looking to the next few years, every dollar we can help them to save, we should do our very best. I hope the Government agencies can really think about adopting a new mindset like moving away from a cost-plus towards the price-minus mindset, and ask the business community what it can bear and what they can do to achieve that kind of price target. Sir, when I talk about all these issues, I look at them in a very positive sense. I believe that we in Singapore are in the best position to contain rising unemployment. The reason why we are in the best position is that Singapore is not a low cost location. If today we are a low cost location, how low can we go? But since we are not a low cost location, there is still a lot of room for us to adjust lower the cost of doing business in Singapore. At the end of the day, the extent to which we will be able to contain unemployment depends a lot on whether the workers are able to change their mindset towards jobs, the employers towards older workers and Government towards the cost structure in Singapore. Having talked about minimising unemployment in the short term, I think that is only the short-term measure and that, in itself, will not be sufficient to see Singapore through this crisis. Because by the time the crisis is over, we are going to find ourselves in a very different environment. I would just like to highlight five trends which are unstoppable. Like it or not, they are already happening and they will continue to evolve. Of these five trends, two are within the region. The first is the realignment of the regional currencies. Because of the crisis, the Singapore currency dropped by 15% to 17%, while the regional currencies dropped by 35% to 84% in the case of Indonesia.”
“For the first tier, anybody who employs less than 20% of the workforce, in terms of foreign workers, will pay a very low foreign worker levy, and for the next 20%, he has to pay much more, and the next 10%, from 40% to 50%, he will have to pay a lot more. In this way, we help to lower the cost for the businesses and, yet, at the same time, we do not encourage companies to replace Singaporean workers with foreign workers. In the case of land and buildings, again, we have discussed several times before in this House whether it is possible for the Government to review land pricing policy and make it more predictable because, today, it is not predictable. Companies are told that their land lease can be revised up to 7.6% a year. Up to 7.6%, it is very difficult for any company to plan their business. They will never know whether they will be charged 1% increase or 7.6% increase. So they are asking for something more predictable. Is it 3%? Is it 4%? It should be something more predictable. How about something more responsive too? Their view is that when the market is good, the rental goes up very fast. When the market is down, the rental comes down very slowly, because Government agencies say that the rental today is still below market rate and therefore they are not entitled to any adjustment. Thirdly, intensive use of industrial land. We talk about how we can encourage companies to intensify the use of industrial lands which are very expensive in Singapore. We talk about reviewing the differential premiums, and so on, but to the best of my knowledge, nothing has been done. Sir, my point here is that, in the past, when the economy was doing well, the business sector could afford to bear some of these higher costs.”
“Look at the marketplace and the competition we are facing and ask what kind of prices, what kind of cost level can the business community and members of the public bear, and is there any way the various Government agencies can offer the service without compromising on the quality of service and, yet, at the same time, be able to meet the pricing target. Another area which the Government may want to think about is this. When we talk about the CPF cut being the last resort, the question which many people ask is: what does it mean by "as a last resort"? We have asked companies, for example, in the manufacturing sector, what are their major cost items. They said, "Yes, wages are important. But foreign worker levy is another major cost item. Industrial land, factory rentals, and so on, are all major cost items." Sir, is it not possible that, before we talk about the CPF cut, the Government could think about whether there is any way it can lower non-wage cost in terms of foreign worker levy? I understand of course that, on the one hand, if we were to lower the foreign worker levy too much, it may actually make the Singaporean workers less attractive compared to the foreign workers. But, yet, at the same time, if we do not lower the foreign worker levy, employers will keep on looking at the CPF cut and other wage cuts to make their operations more viable. Therefore, is it not possible for us to think through this issue ? If we assume that every factory will have some foreign workers because of shortage of workers in Singapore and, in order not to encourage employers to retrench Singaporean workers and replace them with foreign workers, why can't we have, for example, a three-tier foreign worker levy?”
“But if you look ahead in the future, we should not take it for granted that workers will always have jobs, not because there are not enough jobs to go around, but because of the mismatch either in terms of skills, age or location. I think it is important for the Government to give this whole idea of employment placement services higher priority and to think in what way we can strengthen and enhance the system. The second area I hope the Government agencies will consider to change their mindset is an issue which I discussed at the last Budget debate. In the business world, competition is so keen that companies have changed over the years from a cost-plus mentality to a price-minus mentality. Instead of looking at what is the cost of production of goods and services, add a profit margin and become the selling price, companies basically look at the market and customers and see what they can afford to bear. From there, they work backwards to see how much they need to lower their cost of production so that they can meet the price set by the market and at the same time be profitable. This is an area I hope the various Government agencies will seriously think about because, in the next few years, wage increase will be fairly moderated. Some workers may become jobless, and I think they will be concerned about the cost of living, and so on. At the same time, many companies are also concerned about the cost of doing business. Sir, I hope Government agencies can think about how they can also adopt a price-minus mentality.”
“It is at a time like this that we must bite the bullet and ask ourselves: have we done enough all these years to improve the TFP in Singapore and, if not, what more can we do? Deferring the problem is not the solution because the environment of the future will change, and become even more competitive. Sir, on the part of the unions, we need to change our mindset too. We have to change our mindset to one of to be pro-worker, we have to be pro-business. If we are not pro-business, companies cannot grow and cannot be profitable. Eventually, workers will suffer because either they do not get good wage increase or they may even lose their jobs. In this regard, I am pleased to say that the labour movement in Singapore takes pride in being one of the first in the world to adopt such a progressive view. In fact, the NTUC has formulated NTUC 21 in April 1997, and that was before we were hit by the slow growth. Under NTUC 21, we have made a formal declaration that we do take shared responsibility towards the competitiveness of the companies and enhancing the life-long employability of the workers. Right now, the unions affiliated to NTUC are formulating their Union 21 plan to see how the labour movement can add value, not just to the workers, but also to the economy and the employers. This is something we will continue to do. Sir, how about on the part of the Government? The Government should also think about changing the mindset in at least two areas. The first area is in the area of employment assistance. For many years, employment assistance has never been an issue because we have full employment.”
“They are stopped at the factory gates. The security guards say that they have received instructions not to let anybody who is more than 40 years old to come in for job interviews, not even to fill up the job application forms, because the company is not interested in them. Sir, in Singapore, what we are going through is an aging population. The workforce is aging. If every employer were to think that anybody who is more than 40 years old is too old for employment, then we are going in for a very serious social problem. I think it is important for the employers to change their mindset. The second area the employers should also change their mindset is the concept of wage versus productivity. For a few years now, at the National Wages Council, we often debate about this issue of whether wage cost in Singapore is rising too fast. The very favourite line adopted is that, if you look at the real wage of Singapore over the last few years, it has exceeded productivity gain. Therefore, we are becoming less competitive. But I think there is another way to look at this. The problem is not because our wage cost is going up too fast but rather our productivity is not going up fast enough. For many years, we have been riding the wave of high growth. When the growth is high, it does not matter what we do, just put in more equipment, more people, we achieve high productivity. But at a time like this and looking ahead in the future, I think the challenge for Singapore is how to be able to produce more with less, ie, produce more output with less equipment, less technology, less workers. The concept is known as the Total Factor Productivity (TFP).”
“All in all, I think a lot has been done, and is being done. However, if we were to look ahead to the future, a lot more needs to be done, because the slow growth that is coming our way is likely to be a prolonged one. And to what extent we are able to keep unemployment low, I think, depends on whether we are able to change our mindset. When I said "we", I refer again to the whole nation, not just the Government, not just the unions, but also the employers and the workers. Let me explain. Firstly, on the part of the workers, it is important for our workers in Singapore to change their mindset towards jobs. We should never take full employment for granted; we should never take jobs for granted. At this moment, even though we talk about unemployment and slow growth, there are still many jobs in Singapore where employers are looking for workers. But what they are looking for will be workers who are prepared to work in shifts, prepared to travel the distance to the factory location and be prepared to upgrade to have the skills to do the job. Therefore, for the Singaporean workers, it is important that at a time like this, we should learn to value jobs and learn to change our mindset. It is all right to travel a little bit further to the factory; it is all right to go on a shift job; it is all right to go for retraining. But at the same time, it is important for the employers to change their mindset too. We have come to notice that many employers are still preferring to employ younger workers. Any Singaporean worker who is more than 40 years old is considered as old. As a result, in the course of job placement, we have come across many situations whereby older workers who are more than 40 years old are not even able to secure interviews.”
“The workers will say, "No hurry to find jobs because the State will take care of me." If that is the case, eventually, we are going to go down the tube. Sir, whether spending money, sending back foreign workers or setting up an unemployment fund, in my view, I feel very strongly that this should not be the three to five things that we should be worrying and thinking about at a time like this. At a time like this, the most important thing is to think about how we can preserve jobs, how we can upgrade the skills of workers. Sir, let me move on to talk about what are the three to five things I think we can do. The first thing we need to do is to see in what way we can minimise unemployment in the short term. There are four ways we can minimise unemployment in the short term. Firstly, keep costs low; secondly, keep productivity high; thirdly, retrain rather than retrench workers; and lastly, offer job placement services, employment assistance to the retrenched workers so that we can help them find jobs. If you think about it, this is precisely what the tripartite partners are doing - the Government, the unions and employers. These are what we have been doing over the last few months. In the area of cost competitiveness, the tripartite partners have agreed to go on a wage restraint. The Government has also introduced various cost-cutting measures to reduce the non-wage costs. The tripartite panel on retrenched workers is now working on things like retrenchment advisory, encouraging companies to go for retraining of workers rather than to retrench workers, to go for a shorter work week rather than to downsize companies. And at the same time, through initiatives like the Labour Net and Back-to-Work programme, and so on, we are helping retrenched workers to find jobs.”