Zaqy Mohamad
Singapore
“Deputy Speaker, may I seek your consent and the general assent of Members present to move that the Question Time at this day's Sitting be exempted from Standing Order No 22(1) so as to enable questions for oral answer to continue until the completion of Question Nos 7 to 29, including relevant supplementary questions, until 12.45 pm?”
“Mr Speaker, may I seek your consent and the general assent of Members present to move that the proceedings on the item under discussion be exempted from the provisions of Standing Order No 48(8) to remove the time limit in respect of the Minister Tan See Leng's speech, please?”
“I think on the hawker front, we keep our rentals as low as possible to sustain our hawkers. But for food prices, we continue to monitor. My colleague, Minister of State Gan mentioned about how we are monitoring food supply of food prices, and I think that we will continue to do so.”
“I thank the Member for his question. On seafood specifically, we do not see immediate risk. We have diversified our food imports. We have also got local production of seafood readily available. At this point, as both the Deputy Prime Minister and Coordinating Minister have shared, our main risk for agriculture lies in fertiliser.”
“Mr Speaker, as I shared, we are monitoring the situation. The Government is monitoring at this point. There is no need at this juncture, because we have not seen the price hikes hit the hawkers in the same way as yet. There will be downstream impact. I think that is quite sure.”
“For us to also look into buying local produce, that helps our farms to increase capacity at this point, helps them build resilience over time and should there be disruptions or should there be a need for us to divert supplies or look to ramp up local production, I think they would be in a better position if we do what we can today to supp…”
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“Using comparable measures, Singapore's Gini, prior to taxes and transfers, actually compares favourably to many major developed economies, including those of famously egalitarian Scandinavian nations such as Denmark, Sweden and Norway. However, after taking redistribution into account, Singapore's inequality metric jumps to the top of the range, comparable to that of the United Kingdom and the United States. Moreover, Singapore's post-tax Gini also fell significantly to 0.375 from 0.398 during the COVID-19 crisis, even as pre-tax Gini remains unchanged. This implies that pandemic-related assistance and tax relief, which surged in 2020, was responsible for the improvement in equality outcomes rather than any disproportionate drop in income from the rich. Other metrics of income inequality tell a similar story. Similarly, despite the massive drop of close to 6% of gross domestic product (GDP) growth last year, household wealth actually went in the opposite direction, expanding by around 15%. As a consequence, the share of total wealth held by the top 1% grew to around 34% and the number of those with assets of $40 million or more rose by 10% to more than 3,700 ultra-high net worth individuals. Notably, this wealth Gini at 0.783 by one estimate is much higher than that of comparable neighbouring economies such as Japan, Korea or Taiwan. Taken together, these facts suggest that inequality is a real and pressing issue and our nation's effort at redistribution has been far more restrained than in other advanced economies, including that of our immediate neighbours. We can do more to address our inequality problem. Sir, it turns out Singapore is no stranger to taxes on capital and wealth. Between 1929 and 2008, Singapore taxed inheritance via an estate duty.”
“The recently concluded OECD-led agreement for Global Minimum Tax could weaken our nation's attractiveness as a location for siting headquarter operations, which in turn could erode the incomes we currently receive from the corporate sector. This is where wealth taxes come into play. Such taxes will shore up the diversity of our revenue sources, especially the contribution from capital. Wealth taxes also help fulfill additional objectives of lowering regressivity, as I mentioned, in our current revenue mix since they are progressive by design. Wealth taxes also offer an additional potential benefit. It is a tool that can help reduce the overall level of inequality in society. Why should we care about disparities in income and wealth? Mr Deputy Speaker, a sizeable academic literature points to how rising inequality undermines economic growth, worsens health outcomes, conditions divergence in educational attainment and even alters political stability. For economic, social and moral reasons, therefore, countries cannot afford to allow inequality to continue its inexorable rise. That said, is inequality in income and wealth a problem in Singapore? Many measures suggest that it is. The most popular measure of inequality is known as the Gini coefficient. This metric captures in a single number the extent to which existing distribution of income or wealth departs from the theoretical ideal of perfect equality. The higher the number, the more unequal the distribution. Because different countries scale this coefficient differently, a direct comparison between countries is challenging but not impossible.”
“To a significant extent, this is correct. In a typical year, MOF draws around a quarter of revenue from taxes on corporations, another quarter from those imposed on consumers, another quarter from fee and investment income and the rest from various other sources. Such a broad range of contributions is important because it ensures that Government spending needs are not threatened by declines in any single source. In that sense, the revenue mix has a certain robustness and resilience built into it. From another perspective, however, this revenue mix is rather imbalanced. While our overall tax system may be progressive – that is, the effects are felt more keenly by the rich than the poor – a quarter of our taxes remain regressive, even with the current Voucher Scheme. The Goods and Services Tax (GST), for instance, affects lower-middle- and middle-income families disproportionately more than the wealthy while only contributing around 11% of revenue. Moreover, fees and charges, especially the fines that our little red dot is so infamous for, also hit the poor disproportionately harder than the rich. To be clear, there is no correct revenue mix when it comes to financing Government expenditure. Even so, we can aim for objectives that go beyond efficient collection and diverse sources. In particular, one laudable objective is that we should seek to minimise, as much as possible, the number of regressive components in the tax regime rather than just being content that the system happens to be progressive overall. Recent global developments also make the case that the time is ripe to re-examine our traditional tax mix.”
“Truth be told, discussion on capital taxes seldom focus on these routine forms, which are widespread and uncontentious. Rather, they centre either on capital gains taxes, which are applied to receipts through the ownership or sale of financial property, or intangible assets, along with wealth taxes, which are charged to the outstanding value of an individual's assets. While the issue of capital gains is important, it is best left for another day. Today, I will only focus on wealth taxes. The most common objection to capital taxes in general is that this entails a double taxation of income, since capital holdings typically result from saved income, which had already been taxed previously. As such, it could discourage savings behaviour. But we can still make the case for a separate taxation of capital if we accept that taxes are always due whenever they are productive gains. In such instances, taxes reflect a host of indirect benefits, such as a well-functioning legal system and financial infrastructure or initial tax breaks the individuals and firms receive when they first invest. Since the risks of providing such benefits are borne by society, it is reasonable to recoup these after gains are realised. Another common objection is that taxes applied to wealth may be excessive because by eroding the principal, it could kill the very goose that laid the golden eggs. However, there is actually little difference in principle between taxes on the flow of profits versus the stock of wealth so long as the latter also generates income. Indeed, for an asset that generates 5% returns, an entirely pedestrian capital gains tax of 20% is fully equivalent to a wealth tax of 1%. MOF has often stated that it maintains a diverse revenue mix to finance its Budget.”
“Mr Deputy Speaker, I beg to move, "That Parliament do now adjourn." [(proc text) Question proposed. (proc text)] Taxation for a Dynamic and Fair 21st Century Economy 7.15 pm Assoc Prof Jamus Jerome Lim (Sengkang): Mr Deputy Speaker, I am keenly aware that seven o'clock in the evening, or seven o'clock in the morning or, for that matter, anytime really, is hardly an opportune time for a dry lecture on economic matters. But I will speak on the issue of taxes on capital because such taxes matter not only for the sustainability of our public purse, but also because their just application could reshape the landscape of rising inequality in income and wealth, matters which matter enormously to the common man and woman. My speech will first lay out the case for and against taxes on capital. I will then explain why our Government's revenue mix can potentially benefit from attention to a richer slate of objectives and how wealth taxes can play a role in meeting those expanded objectives. I will then discuss a menu of possible taxes on capital, before closing with a specific proposal for wealth taxation in the modern world. I will begin by declaring that I am the Chief Economist (Emeritus) of Thirdrock Group, a homegrown asset and wealth management advisory, and am still occasionally invited to speak at various academic and industry events to audiences that serve high networth individuals. It is useful to clarify, first, what I mean when I speak of taxes on capital. This is a tax applied to any form of productive assets. The most common form is the corporate income tax levied on profits for a company. Another common form are allowances for expenditure on plant and machinery; and since these are write-offs, they are negative capital taxes.”
“Mr Deputy Speaker, I beg to move, "That the debate be now adjourned." [(proc text) Resolved, "That the debate be now adjourned." – [Mr Zaqy Mohamad] (proc text)]”
“Mr Speaker, may I seek your consent and the general assent of Members to move that the proceedings on the item under discussion be exempted from the provisions of Standing Order No 48(8) to remove the time limit in respect of Dr Tan See Leng's speech?”
“Mr Speaker, I beg to move, "That the Petition on ‘Seeking Further Consultation and Scrutiny of the Foreign Interference (Countermeasures) Bill’ presented by the Non-Constituency Member be referred to Parliament for consideration at the Second Reading of the Foreign Interference (Countermeasures) Bill."”
“Therefore, by the time it goes to the Public Petitions Committee for consideration and the Committee makes its recommendations to Parliament, today's Second Reading would have been completed and the issue of the Bill will no longer be before this House. By enabling the Petition to be considered by Parliament during the debate on the Second Reading of the Bill, this Motion will facilitate and not avoid debate on matters raised in the Petition. Secondly, Mr Speaker, the matters in the Petition are going to be addressed in the debate of the Second Reading of the Bill in any event. I say this because insofar as the substantive allegations are concerned, I note there appears to be substantial overlap between the points raised in the Petition and those raised by the Workers' Party in the Notice of Amendments to the Bill set out in the Order Paper Supplement. This means that those substantive points are going to be raised and debated during today's proceedings. Sir, if this Motion is moved and agreed to, Members will be able to fully debate the issues in the Foreign Interference (Countermeasures) Bill and the Petition together. Hence, I seek your consent to move this Motion.”
“Mr Speaker, this Petition relates to the Foreign Interference (Countermeasures) Bill, the Second Reading of which has been set down for Second Reading on the Order Paper today. In substance, the Petition makes several substantive criticisms about the Bill. Consequently, it calls for the Parliamentary passage of the Bill to be slowed down, in particular, by sending the Bill to a Select Committee for further consideration of the matters alleged. This being the case, I wish to seek your permission to move a Motion under Standing Order 18(6) proviso for the Petition to be considered during and together with the Second Reading of the Foreign Interference (Countermeasures) Bill. Standing Order 18(6) provides two alternative procedures for a public petition to be dealt with: one, it can be referred to the Public Petitions Committee without any debate; two, when the petition relates to a Bill which is considered before Parliament, as is the case here, it can be considered by Parliament together with the Bill. In this case, it would make more sense for the Petition to be considered by this House, together with the Bill, rather than be referred to the Public Petitions Committee. Mr Speaker, Sir, the reasons are as follows. First, if the Petition is referred to the Public Petitions Committee rather than be considered by the House today, the Petition could effectively be rendered nugatory. This is because, so far as the Parliamentary passage of the Bill is concerned, the Second Reading debate is already fixed for today. The Petition cannot affect the order of the business that is already set down for today's proceedings.”
“Mr Speaker, the Non-Constituency Member Mr Leong Mun Wai, has just presented to this House a Petition on seeking further consultation and scrutiny of the Foreign Interference (Countermeasures) Bill, under Standing Order 18(6). While the hon Member has given a brief statement on the material allegations and prayers of the petitioners, I think it would be helpful if the terms and contents of the Petition could be made available to Members. May I ask that copies of the Petition be distributed to Members now.”
“I thank the Member for the question. The short answer is that, as I have shared, the Government is studying the transition support that we will provide employers for wage increases in the next few years. One, we understand there will be some firms who are locked into contracts. Secondly, we are also recovering from the COVID-19 pandemic and, therefore, firms do need time to recover and the transition support will, hopefully, help them in the short term as we balance the needs of our low-wage workers, as well as the businesses which need to recover and still cover these additional salaries. But overall, that is why it is also important for our PWMs to be negotiated with our employees, and, a lot of times, if you look at our PWMs, we announce them years in advance. For cleaning, security and landscape, for example, these are also contracts that run three to five years ahead. Therefore, we announce it today for a new PWM ladder that starts in 2023, for example. This is one way in which we help firms prepare and we give them advance notice. The sector also understands this, that we, typically, give them advance headway to do this. For the short term, as I have said, look out for our announcements on the transition support before the new LQS requirements and PWMs kick in next year.”
“We also have to manage over time and that is why we also take guidance for our Progressive Wages from the National Wages Council moving forward as well, largely because we want to make sure that it is sustainable and not open to political auction. The last thing you want is to have a political auction on what the wage level should be. But let us pick a fair one, where a committee looks at available data projections and see what is sustainable, and the impact to inflation because that too, is a concern for many Singaporeans – cost of living over time. These are quite complex matters which we need to give assurance, not just to the workers but to the employers and the consumers at large too, to create a fair system. At the same time, as I have shared, it also gives us a release valve for many of our microbusinesses who are not currently part of the LQS because they are, typically, your heartland shops and many of these micro-businesses recruit less than 10 workers.”
“To answer the Member's question, maybe it is by coincidence that the numbers are looking the same. But as I have shared, we have adjusted it four times in the last five years, from $1,000 in 2016 to $1,400 in 2020. Maybe it is by coincidence, or not. But it has been adjusted because we have got various wage benchmarks that we work on. The main goal of the LQS was also to ensure that Singaporeans' wages were not depressed as we hire foreign workers. Therefore, as we hire foreign workers using a Singaporean for the quota, we did not want the Singaporean worker to be left out and be depressed because you, typically, would have access to cheaper foreign labour out there. Of course, we have other obligations made on the employer, such as taking care of the worker, giving him food if he is in a dormitory and so forth, and medical expenses. But overall, I think, net-net, the objective was not to have Singaporeans lose out, as firms access foreign workers. Unlike minimum wage laws around the world, there is the International Labour Convention where you cannot have laws that discriminate between locals and foreigners. Therefore, for most legislation around the world, you will find minimum wages covering both local and foreign workers. This enables us to make a differentiation, but the overall concept still applies, whereby as you hire foreign workers in your firm, you want to ensure that not just those that are being counted have a fair wage, but every Singaporean worker in your firm has a fair wage too. On balance, maybe, perhaps, it is coincidental, but the wage levels for the LQS have been adjusted over time to ensure that we meet certain benchmarks that we manage and it has been a fair one.”
“This is one way in which when you look at productivity gains, in terms of wages, it should not just be on the basis of the worker level productivity but this is where the Government continues to support through our Productivity Solutions Grant and Industry Transformation Maps to make sure that our companies are able to transform and redesign the jobs to be more productive and pay our workers better salaries and give them better careers too.”
“If you just train him that way, there is only so much productivity you can gain with him as a jaga at the gate. But I have to commend the security sector. Through PWM and working with the unions in the sector, I am quite heartened today that they are using CCTVs, technologies, and you see, suddenly, the firm level productivity jumps. Therefore, if you look at the wage levels of our security officers, they have also jumped in the last five years. Therefore, that justifies productivity, not just at the worker level, but because businesses also push on with the transformation. I think if you look at many other sectors, including cleaning and landscape, we are seeing them make those changes, making efforts towards job redesign and transformation. That is also why firms were agreeable to the wage increases that we have seen in terms of the wage ladders in the years ahead. Because they also bear in mind how contracts will be in the near future and how we are moving towards outcome-based contracting. These are ways in which they can offer more, use better technologies, look at how we can redesign jobs to make them more attractive. We have seen entry rates of locals into these jobs increase. Many of us have also seen appeals at Meet-the-People Sessions where there are more locals today asking for security licences because they know that the wages are much better today and, therefore, worth considering.”
“I thank Mr Chia for his questions. Two things: one, let me just start with the LQS. I think I have shared earlier that the Government's approach is that we will start with reaching out to firms and getting them familiar with this new LQS requirement. With this change, I think it affects many of our businesses, so it is important that we give them time to run in. Rest assured that while the LQS requirement may have kicked in, we are going to work on advising and seeing how we can get companies to comply rather than enforcement straightaway. That is why we have also given the announcement and heads up now, so that firms will be ready by 1 September next year to implement the new LQS approach. It will be a light touch up front. But I am quite sure firms are already quite familiar with this LQS mechanism. That is why this was an ideal framework to leverage on, because it is not something new that firms have not complied with in the past. It is just that the framework has been modified and tweaked. On the second question on firm level productivity and workers' productivity, that is a very good question. To some extent, the narrative with many of our firms today and the approach so far with PWM has been that workers have to upskill and improve productivity. Therefore, they have to justify productivity gains against wage gains. But moving forward, we also have to think about productivity gains very differently, too. There is the worker level productivity as you train and upskill him, but there is also that level of productivity leap that you can get when firms make the effort to transform, do job redesigns. I will give an example. Like the securities sector, for example, when you think of a security guard in the old days, you think of a "jaga" at the gate.”
“I thank Ms Hazel Poa for her query. In fact, in response, I did share that 23% of the remainder would be in businesses that do not hire foreign workers. So, it is a minority left: 23% out of your 103,000 full-time employees. So, it is about 20%, or 20,000 or thereabouts. And as I have shared, with progressive wages, you will end up, hopefully, covering up to 94% of our lower-wage workers. You will see the long-term impact in terms of how their wages will grow over time. Also, bear in mind that the remainder that is left are typically those in microbusinesses. Like I have shared, in heartland shops, they are people you are very familiar with and the last thing you want is to have them collapse in the short term because they do not have the scale. And many of them are uncles and aunties running stalls and I am not even sure whether the uncle pays the auntie full wages. But these are areas in which I think we have to correct over time, but you do not want to collapse them in the short term. So, this is something we are very mindful not to disrupt the whole system in such a way. On the Member's second question on part-timers, if you look at the new LQS mechanism today, we do have a rate for part-timers, which is $9 per hour. We also give you half a count for DRC if you employ at least half of the LQS rate, that is, $700 a month for part-timers. So, this is one way in which we still maintain the current system but, at the same time, provide some flexibility for part-time workers, for many of our employees. That one, employers do not have to worry too much because they are familiar with the system and the part-time mechanism still continues. It is just that we now set a $9 rate per hour for part-time workers.”
“So, we have seen many of them having their income drop. This is where we think, in the long term, this PWM will help them over time and in a sustainable manner because the employers are all on board with us on this. So, look forward to some of the upcoming PWMs – food services, retail, waste management – which will come on from next year onwards. The tripartite clusters are negotiating the wage benchmarks. They will come up to share what these new benchmarks will be. And occupational progressive wages across sectors for administrators as well as the drivers are also key to us and something that we are now still negotiating and we will come up with the benchmarks soon, too. So, looking at all these wage benchmarks and wage ladders ahead, I am quite confident that the PWMs will continue to drive wage growth. But at the same time, it is important that we assure employers that these moves are sustainable. I am glad that most are on board and supporting us on this, despite the challenging times today.”
“I thank the Member for her question. In fact, as I have shared earlier, the main driver of wage growth in the next decade or so will really be your PWMs. It has been heartening to see how employers have come on board despite the last one year being a challenging year with COVID-19. And if you look at the PWMs that were renewed for the next six, eight years, you will see in the cleaning and landscape sectors how employers have supported us through this and grown the wage ladders at a pace that is faster than the median, in what we call the median-plus approach. If you look at the end state in 2028, where cleaning and landscape sectors will end up at about $2,400 per month, and moving on to, say, lift-and-escalator PWMs, too, going up to $3,000 a month. These are ways in which we support them and these will drive market forces, too. Speaking to employers, I know some are also concerned that if a cleaner, for example, earns $2,400 a month in 2028, then the rest in the firm will also seek to ask, "Why not the tea lady?" and the tea lady asking "Why am I not earning the same as a cleaner?" and administrators, for example, doing so. So, these are areas in which I think will be game changers in the years ahead. But at the same time, the concern of some parts of society is whether this will also increase costs for businesses. So, that is also the other part where we will see how to balance this. On LQS, this is a measure that most employers are already quite familiar with. Most workers today who are in firms hiring foreign workers are already paid beyond LQS. We are down to the last 5% of workers and, actually, would have been much less, but the numbers were because of last year when we were down with the COVID-19 pandemic.”
“One reason why the Workgroup recommended that the National Wages Council help to provide guidance on wage growth is to enable the tripartite partners to carefully weigh the impact of wage growth, inflation and general economic conditions every year, before finalising their guidance. Because the growth of Progressive Wages is negotiated through tripartite consensus, rest assured we have more assurance that wage increases will be sustainable for workers, employers as well as consumers. Mr Speaker, Sir, the effort to uplift our lower-wage workers is a massive undertaking, spanning the next decade and beyond. To do this well, we will need to go beyond a whole-of-Government approach, or even a whole-of-tripartite sector approach. We will need the whole of society – workers, consumers, employers, unions, the Government, members of the public – to come behind and support this effort. The Government has committed to providing transitional support and increasing spending on Workfare. Tripartite partners have agreed on a roadmap to chart the progress of our lower-wage workers over the next decade. And many businesses and consumers already recognise that they will need to do their part by paying a little more for goods and services. There has been heartening support from society at large since the Prime Minister spoke at the National Day Rally. I would also like to thank the tripartite partners for helping chart this roadmap ahead. So, let us continue on this course, to bring society together behind the goal of supporting our lower-wage workers.”
“Miss Rachel Ong asked why we are lowering the Workfare qualifying age to 30 years old and whether we will lower it further below the age of 30. Below the age of 30, most workers would have just started work and earning starting salaries. Most will have greater potential for future income growth. Therefore, it will be too premature to consider them for Workfare. They could be better supported through training and upskilling efforts, such as SkillsFuture, to help them access better jobs and grow their wages in a sustainable way. For workers aged 30 to 34, however, some continued to remain in the lower-wage range despite the upskilling efforts. At this age, they are just starting their own families or are looking to buy their first home. We believe that Workfare will help them better cope with their current expenses and to start saving for their retirement. Miss Cheng Li Hui and other Members asked if businesses will unfairly raise prices. I can certainly understand why this is a big concern for many of us. In the Food Services and Retail sectors, where there are many firms competing and barriers to entry are not high, firms will be expected to think carefully about cost increases. It is also fair to say that we have to expect some degree of cost increase to accommodate higher salaries for our lower-wage workers. This is where we, as consumers, have to do our part in support of our lower-wage workers. I, therefore, hope that Singaporeans will not accuse firms unfairly of profiteering, but let us also work together to address any unreasonable price increases or practices.”
“As the support of private sector buyers is also essential, the tripartite partners will also work with the various trade associations and chambers to raise awareness of the PW Mark, promote its adoption and encourage businesses to purchase from other businesses with the PW Mark. Mr Speaker, Sir, uplifting lower-wage workers is a whole-of-society responsibility, and the cost of raising their wages will have to be shared. So, workers will have to adopt the right mindset and be ready to adapt and learn new skills to be more productive. Employers will need to increase productivity at the firm-level, which would help them better absorb the additional wage costs. The Government will do its part, too. With respect to employers, the Government recognises that employers will need some time to adjust their operations, especially as the economy is still recovering from COVID-19. As such, to the queries of Ms Jessica Tan and other Members, the Government has accepted the recommendation of the Workgroup to provide transition support and is carefully studying the details of that support. This will be announced in due course and, certainly, I want to provide the assurance that this will come before the implementation of the first moves in September 2022. With respect to workers, I have already touched on the Government’s commitment to expanding Workfare. So, to Miss Rachel Ong’s question on whether there will be a shift away from Workfare to employers paying for the wages of our lower-wage workers, the answer is no. The Government is committed to Workfare as a permanent scheme; at the same time, employers do their part by offering progressive wages.”
“In other words, I can assure employers that MOM will not jump straight into strict enforcement, but it will initially focus on improving awareness and compliance, because we are all moving towards a new system. This is the same approach that was adopted when new Employment Act obligations were introduced in 2016. In designing the system to support the new moves, we will make the compliance process as smooth as possible. To Miss Rachel Ong’s query, we will keep additional reporting requirements minimal by tapping on existing processes such as CPF salary declarations and returns to MOM’s Business Census. Employers will also be able to refer to MOM’s website to check the job descriptions of workers eligible for Progressive Wages and the required wages. We will also explore ways to allow employees to check that they are paid the Progressive Wages due to them. So, employees also have a chance to get used to the new system. We note that the Singapore Business Federation has acknowledged that the Report of the Workgroup has taken into consideration their feedback on minimising the burden of compliance for firms. To Mr Liang Eng Hwa’s query on how the PW Mark will be administered, we will tap on the same systems that I have just described, to ensure that only firms that pay Progressive Wages are awarded the PW Mark. This will assure companies and consumers that when they purchase from firms with the PW Mark, they are directly supporting the lower-wage workers in these firms. The public sector will take the lead and require its suppliers to obtain the Mark.”
“So, eight in 10 and moving up to 94%, I think we are quite confident that market forces will probably lift the remainder up over time. Some Members, including Mr Yip Hon Weng, asked about how the LQS is currently being determined, and under what circumstances would it be reviewed. As the Workgroup’s Report explains, the LQS is a stable benchmark that has been in place for many years. It has been revised four times in the last five years. We recognise that the new LQS requirement in 2022 will have a significant impact on employers. We are also mindful and sensitive to the fact that many of our companies are still recovering from the effects of COVID-19 on our economy. Hence, we have no plans to further increase the LQS for now, but will focus on the implementation of the new LQS rules and also for the other Sectoral and Occupational Progressive Wages to establish their relevant wage benchmarks. I urge Members not to look at each measure in isolation but to bear in mind the overall and holistic impact on not just the workers but also the employers. Members have also asked about the implementation details. I would like to give the assurance that the intent of MOM is for firms to be well-informed of the moves and to have adequate time to adjust before the implementation. To Mr Edward Chia’s query, firms that hire foreign workers are already familiar with the concept of LQS for many years. Together with tripartite partners, the Government will continue to reach out to firms before the new LQS requirement and other new Progressive Wages kick in on 1 September 2022. The initial period beyond its introduction will be a run-in period, for which MOM will focus on educating employers on the various Progressive Wage and LQS requirements that they will need to adhere to.”
“This was also why the Government provided special support of $3,000 to this segment of workers through the Workfare Special Payment and other social support schemes. With the new LQS requirement, an estimated 77% of these employees should see their wages rise to at least $1,400 a month. Many in this group would also see their wages further uplifted beyond LQS, by the Sectoral and Occupational Progressive Wages. The Workgroup expects the PWMs to continue to set the pace on wage growth, with Progressive Wage levels expected to rise beyond the LQS. For example, workers in the Cleaning and Landscape sectors can potentially earn at least about $2,400 a month by 2028. To Ms Hazel Poa’s query, the remaining 23%, who are not covered, would be in businesses that do not hire foreign workers. The vast majority of these businesses are very small, hiring fewer than 10 workers and include small family operations, such as hawker stalls and heartland shops. We are all familiar with these microbusinesses; they are familiar faces in our neighbourhoods and typically having family members who are spouses, children or relatives helping out. They do not have the business scale or reach, and we are mindful that sudden wage shifts to these microbusinesses can result in business failure. So, the last thing we want is for job losses for these family businesses. While not formally covered by the LQS requirement, these workers here should still see meaningful increases in their wages over time due to market forces. The Progressive Wages will cover eight in 10 full-time lower-wage workers, and the PW Mark is expected to bring the coverage of Progressive Wages up to 94% of full-time lower-wage workers.”
“If wage growth of our lower-wage workers outpace productivity growth in the medium term, the sustainable response is for businesses to use this period to urgently enhance their firm-level productivity to better support wage increases for our workers. To Mr Sharael Taha’s query, the Government will continue to support firms through the Productivity Solutions Grant, as well as more specific efforts enabled by the Industry Transformation Maps. For many years, firms hiring foreign workers have been required to pay at least the LQS to the local workers that they need to count towards their foreign worker quota, or Dependency Ratio Ceiling (DRC). This is a policy that our businesses are already familiar with. The Workgroup studied this carefully and decided to leverage on the LQS to broaden our coverage of Progressive Wages. From September next year, firms hiring foreign workers will have to pay all local workers the LQS. This builds upon regular increases in the LQS level over the years, such as from $1,000 in 2016 to $1,400 in 2020. To Ms He Ting Ru’s query, there are 103,000 full-time resident employees earning a gross monthly income of below $1,400 in 2020, which is about 5.3% of the full-time employed resident workforce. But I would also like to take the opportunity to highlight that in 2020, many of our lower-wage workers were also impacted by the economic impact of COVID-19 and faced reduced work-hours and allowances. These employees work in a wide range of industries, from Food Services to Administrative and Support Services, and occupy a diverse range of jobs, from cleaners to office clerks to shop sales assistants, and we can imagine the impact of COVID-19 on these jobs in the last year or year plus.”
“However, it recognised that there was a case for wage growth of lower-wage workers to outpace productivity. This is because the productivity of frontline workers is not due solely to the industriousness of the worker, but it is also dependent on the firm’s operations and methods of work. The Workgroup also recommended that for the next decade, the wages of our lower-wage workers should continue to grow faster than the median, or what we call the "median-plus" approach. However, when wages at the 20th percentile have gained sufficiently on median wage levels, this would no longer be necessary. We can reflect on other strategies beyond that. Mr Edward Chia and Mr Sharael Taha asked about the sustainability of these wage increases. These are very important questions. One important way we will do this is to continue the Progressive Wage approach, whereby wage increases are secured by tripartite consensus, that is, the agreement between the employers and the unions remain very important. These will be done by sectoral Tripartite Clusters for the Sectoral Progressive Wages, and the National Wages Council for the Occupational Progressive Wages. I know for a fact, and especially during these times, that tripartite negotiations are never easy, and for good reason, as the concerns of different parties, of the employers and workers, need to be balanced. Tripartism is our strength, and some say our secret sauce, to make Progressive Wages work for the foreseeable future. I am confident that through such robust discussions, these established tripartite bodies will arrive at common ground that is sustainable and benefits all stakeholders.”
“From 2009 to 2019, real income at the 20th percentile of our resident workforce grew 39% cumulatively, faster than the median worker at 33%. To address Ms Ng Ling Ling’s and Mr Desmond Choo’s questions, I want to stress that these are real income gains; in other words, 39% cumulative income gains, even after subtracting the effects of inflation. Low-income households would, therefore, benefit from our Progressive Wage and Workfare policies. I am sure many Members are aware that there are dedicated efforts to support our low-income households through various schemes, such as subsidies in education, healthcare, housing, as well as financial assistance. Households facing financial difficulties can approach MSF’s Social Service Offices (SSOs), which will look into ways to support them through schemes, such as ComCare assistance. MSF regularly reviews ComCare to ensure that support remains adequate. The Workgroup achieved tripartite consensus on 18 recommendations, including significantly widening the coverage of Progressive Wages. First, we will expand Progressive Wages to new sectors like Food Services, Retail and Waste Management, as well as occupations like Administrators and Drivers. We will also extend PWMs to in-house cleaners, security officers as well as landscape workers. Second, we will introduce a new Local Qualifying Salary (LQS) requirement where employers will need to pay all its local workers at least the LQS, in order to access any foreign worker. Third, we will introduce the Progressive Wage Mark, or PW Mark, to encourage firms that pay progressive wages. The Workgroup has not deviated from the broad principle that wages should grow in tandem with productivity over the long term, so as to be sustainable.”
“I thank Members for their interest in the recent recommendations of the Tripartite Workgroup on Lower-Wage Workers which the Government has accepted. Apart from my reply today, I would also like to encourage them to read the 88-page report of the Workgroup where the reasoning and intent of many of the proposals are laid out in greater detail. The Workgroup's vision is for a strengthened social compact where everyone enjoys Singapore's fruits of growth. We want to enable our lower-wage workers to progress along with other workers. At the same time, society, employers and the Government stand in solidarity with them. We must also recognise that, for our lower-wage workers’ progress to be sustainable, Singapore must maintain a dynamic economy, where businesses can thrive and create good jobs and good careers for our workers. Uplifting lower-wage workers has been a priority for the Government over the years. Workfare is the foundation of the Government’s support for our lower-wage workers. We currently spend about $850 million a year on Workfare. The Prime Minister has announced that Workfare spending is expected to increase to $1.1 billion by 2023. This is a clear commitment that Workfare will continue to be a foundation of our policy response. The Government will release more details next year. Mr Speaker, building on the foundation of Workfare, the Progressive Wage Model (PWM) provides job and training progression pathways for our lower-wage workers and grows their wages as they improve their skills and productivity. Workfare and Progressive Wages work in tandem and are, therefore, mutually reinforcing. Over the last decade, our policies to support lower-wage workers have made a difference in uplifting them to enjoy good wage growth.”
“Mr Speaker, with your permission, I would like to take Question Nos 28 to 41 together, as well as another related Parliamentary Question by Member Yip Hon Weng1 scheduled for a Sitting tomorrow.”
“Mr Speaker, Sir, I beg to move, "That Parliament do now adjourn." [(proc text) Question proposed. (proc text)] Using Deterrence to Tackle Second-hand Smoke in Homes”
“Mr Speaker, on behalf of the Leader, I beg to move, "That the debate be now adjourned." [(proc text) Resolved, "That the debate be now adjourned." – [Mr Zaqy Mohamad]. (proc text)]”
“I thank the Member for his question. In fact, these are valid concerns, given the current conditions. As I shared in the Ministry of Manpower, we are quite flexible because the SEP has two years to make MediSave contributions and within that, we can provide monthly instalments, or in some cases, as we mentioned, we will put temporary deferment if required. The difference between the Workfare and CRG, or some of the other assistance schemes, is that, this is more an income top-up supplement as opposed to direct financial assistance that one might get out of SSO or CRG. So, these are slightly different schemes, and therefore, the focus is slightly different too. For most SEPs, the MediSave contribution is far lower than that of normal employees. For example, most employees are paying about 20% CPF contributions, while the SEPs' payable is 10.5% on average. For lower-income workers, I think it goes even lower than that. To some extent, it is already a low bar and we are giving a long two-year period for SEPs to contribute to MediSave. I think that is generally quite reasonable and certainly, we can give flexibility, where required.”
“Once the SEP makes the required MediSave contributions in full, they will receive their Workfare payout. We recognise that this is a difficult period. SEPs who are facing significant income loss and require urgent financial assistance may apply for MSF's COVID-19 Recovery Grant (CRG) or COVID-19 Recovery Grant – Temporary . Taxi and private hire car drivers are also receiving additional financial support from the Land Transport Authority's COVID-19 Driver Relief Fund.”
“Mdm Deputy Speaker, the Workfare Income Supplement Scheme tops up the incomes of our lower-wage workers, both employees and self-employed persons (SEPs). Eligible SEPs receive up to $2,667 in Workfare payouts a year. All lower-wage employees and SEPs are required to contribute to the Central Provident Fund (CPF) to benefit from Workfare. This is because Workfare is a permanent scheme. The need to meet CPF obligations is part of Workfare's eligibility criteria and is consistently applied to both employees and SEPs. This ensures that workers continue to take personal responsibility in saving for their long-term retirement and healthcare needs, while receiving Government support via Workfare. SEPs are only required to contribute to their MediSave accounts after declaring their incomes at the end of the Work Year. They have up to two years to do so. Based on latest available data, among SEPs who met all other Workfare criteria for Work Year 2018, nine in 10 fulfilled the required MediSave contributions and received their Workfare payouts. Complete data on WIS SEP recipients for Work Year 2019 and 2020 are not available, as SEPs have up till 31 December 2021 and 31 December 2022, respectively to make their required MediSave contributions to receive Workfare. Within the two-year period, SEPs can also choose the mode of payment that best suits their circumstances. SEPs can either pay as a lump-sum or via monthly GIRO instalments. CPF Board also exercises flexibility to help SEPs who are facing financial difficulties, such as reducing monthly instalments by extending the GIRO arrangement, or temporarily deferring monthly instalments. We also consider exceptional appeals on a case-by-case basis.”
“But, ultimately, it is a fine balance that we are trying to also achieve. This is where MOM comes in. Because what we are trying to do, is to make sure that the worker is not denied appropriate treatment, despite the fact that the employer may not be able to afford the full medical bill as well. So, on one hand, as I have shared earlier, we are reviewing the medical insurance scheme to see how best we can help more employers tackle issues with regard to medical bills related to their employees. But at the same time, in cases like this, rest assured we will do our best to help your resident. I will take the case up separately with you offline.”
“I thank the Member for sharing her resident's plight. Indeed, I can fully understand the challenges that she faced and perhaps that feeling that it was not equitable, that this was not the fault of the employer. But let me start with this. I recognise that employers generally depend on their Migrant Domestic Workers for a variety of reasons, whether it is help for cleaning, whether it is caregiving for the elders or children. When we employ a Migrant Domestic Worker, one thing we have to note is that we are not just hiring an employee. We are also having a person, a human. So, there is a benefit that we get from the work; there is also the risk of indiscretion, just like any humans, just like us. Under the current framework, employers are liable for the Migrant Domestic Workers' medical bills as it is a more reasonable approach than to externalise such costs and impose them onto taxpayers, for example. We understand that due to the MDW's varying financial situations, we know that they are paid above several hundred dollars a month. Therefore, in terms of affordability, it is certainly very difficult. Therefore, we also have a medical insurance scheme today. This medical insurance scheme covers up to 95% of most medical bills. Of course, there are extenuating circumstances in cases like the one the Member highlighted. So, employers who face many difficulties, as the Member shared, MOM will try to help them out and there are schemes and funds. Minister Tan See Leng shared in a Parliamentary Question earlier this year, that hospitals administer on our behalf, to help the outlier cases, such as this. Rest assured, whether they are work-related or not work-related, we will try to help employers as much as we can.”
“Mr Deputy Speaker, employers are responsible for their Migrant Domestic Workers' (MDW) medical bills in Singapore, including medical bills incurred due to illnesses and accidents that are not work-related. Employers may repatriate their MDWs after their MDWs are certified fit for discharge and/or fit for flight. To help employers manage their MDWs' medical expenses, they are required to purchase medical insurance plans of at least $15,000 a year to pay for inpatient care and day surgery. This is sufficient to cover about 95% of hospital bills incurred by MDWs. Beyond the mandated coverage, employers can opt for higher coverage from their insurers to better protect themselves against large bills. The Ministry of Manpower (MOM) is reviewing the minimum insurance coverage amount. Employers who face financial difficulties in paying for their MDWs' medical bills can also approach medical social workers at the hospitals for assistance. MOM has stepped in to help some MDW employers who face genuine financial difficulty, so that their MDWs could receive appropriate treatment even if their employers were not able to meet their obligations.”
“The employment agency industry, through the Association of Employment Agencies Singapore (AEAS), has begun a pilot which we announced on 14 July 2021. And this is to implement additional safe management measures in the MDW's home country before they enter Singapore. MOM is monitoring the effectiveness. If the pilot proves successful in lowering the number of imported COVID-19-positive individuals, we can progressively allow for more MDWs to enter under this arrangement. Our priority is to ensure that the risk of COVID-19 importation is well managed so as to protect our public health as well as the safety of families where the MDWs are deployed to. Not every employer will be able to get entry approval for their MDW before the end of the year. But MOM will continue to prioritise those with urgent care-giving needs. Some prospective MDW employers may have to consider other arrangements until the regional COVID-19 situation improves. Employers may also wish to consider if using the cleaning services of providers under the Household Services Scheme may be of some help. We will continue to monitor the situation closely but rest assured we will do our best to facilitate the entry of MDWs in a safe manner. 3.00 pm”
“Mr Deputy Speaker, from January to April this year, the Ministry of Manpower (MOM) was able to schedule a larger number of migrant domestic workers (MDWs) to enter Singapore as the regional COVID-19 situation was much calmer. From May, due to the resurgence of COVID-19 cases locally and globally, the Government tightened the entry approvals given to MDWs as well as other travellers from countries with higher incidence of COVID-19, so as to manage the risk of COVID-19 importation and local transmission. Among the travellers and MDWs coming from these countries, we found a significant number who were COVID-19-positive when they arrived. They posed a transmission risk to our frontline workers at our checkpoints and at Stay-Home Notice (SHN) facilities and had to be cared for under our healthcare system. Hence, the Government has had to restrict the numbers entering from high incidence countries. Since May, MOM could only approve a small number of MDWs for entry every week. MOM has also had to postpone the entry of about 1,800 MDWs who had previously received approval to enter Singapore. With a much smaller number allowed to enter, MOM prioritised the entry of MDWs for families with very challenging caregiving needs. Of those who had their dates postponed earlier, we have rescheduled one-third so far to enter Singapore. Barring any further tightening of entry approvals by the Government, we hope to progressively schedule the entry of the remaining two-thirds by the end of the year. But there are also more employers who are still waiting to submit their entry applications and we hope that the COVID-19 situation in the region improves so that we can approve more to enter. In the meantime, we are not waiting passively for the regional situation to improve.”
“I thank the Member for her question. Indeed, this is why close conversations that we have with employers are important, to look at where the blind spots are. As a whole, as I have shared, many of the employers are very supportive of our PWM moves. I think they are also in line with us in our ambition to expand progressive wages and, at the same time, to try to grow this closer to median or to increase wages past the median. This is something that we want to work on with the employers. But, at the same time as well, it is inevitable that even without PWM, you might find, because of industry transformation, certain jobs going obsolete. That is where the whole training and skills element becomes very important. We have to work with the unions, the trade associations and all our stakeholders to see how we can better improve the job scope as well as the job re-design to help workers transition. More importantly, as wages go up, workers must also do their part to train, upskill, become relevant and address some of these new opportunities that come by. Yes, with or without PWM, there may be transformations within each sector. We have got to look at it quite closely. Ultimately, we will do our best to be the catch-all too. If there are any displaced, to try to match them and move them into sectors that will absorb them. Overall, for as long as we keep our labour policies tight or keep our economy growing, we can then continue to create more jobs and more opportunities for everyone. 1.02 pm”
“I do not have the figures for productivity with me. But I think it is important to also look at productivity from the fact that we did not see disemployment in the years where PWM has been implemented. I think it is key. We have also seen how companies have transformed to put in place more mechanisation, different ways of cleaning, more clean technology being put in place, and more being explored. I know NTUC and the cleaning sector are also working to see how they can improve not just the conditions of work, but also the methods in which we re-design our cleaning sector. I think most importantly is this, that productivity level is not just viewed from the workers' angle. At the end of the day, there is only so much floor you can clean and so many roads you can sweep. But I think, ultimately, for many companies involved, not just the cleaning sector, but others, that you have to look at productivity at both the employee level and the enterprise level. That is why the whole enterprise transformation, job re-design becomes an important factor in this because then you can see the multiples in terms of productivity increases over time. The security sector has done very well with this: moving into technology, sensors, CCTVs and so forth. And that is where we want to move many more of our sectors into, so that we can target better wage increases. It becomes more sustainable because productivity as a whole, for the whole sector, improves over time.”
“Mr Speaker, I thank Mr Choo for his question. In fact, that is the uniqueness of Singapore's system in that our safeguard is the tripartite consensus, with the employers on board, the employees agreeing, knowing what the projections look like and what they can agree to, and what they see as the market conditions coming forward. I think that is one way in which we ensure that our workers are not left behind or disemployed, fully understanding the risk that for many of our low-wage workers, the profile of this group is really the older groups, the less skilled. We know that these are also the ones who are most at risk with disemployment effects. On one hand, I think this is where tripartite consensus will have to move ahead as we embark on putting more sectors on board. And that is why we have been talking to companies, employers to see how this would impact them, and how their views are in the way forward and the years ahead, whether they can absorb some of these wage increases and how much we can pass on to consumers. I also want to say that consumers, too, have their part to play, in terms of supporting these initiatives and efforts, to pay more for services and products to support our low-wage workers.”
“Mr Speaker, I thank the Member for his question. In fact, this is a very important aspect of our PWM negotiations because one of the key considerations we also had was both the survivability of our companies, as well as, at the same time, the employment outcomes of our workers. On the one hand, you want wages to go up but you do not want workers to lose their jobs either if the company closes down or the company says, "I cannot afford this", and they have to let go of workers. So, two things. One, over time, this is why we find it very important, and I support the NTUC's work in this too, with the Company Training Committees, because these are important aspects which we want to help companies to look at – job re-design, productivity enhancements – and how they can leverage Government schemes with Enterprise Singapore providing the Productivity Solutions Grant and other development grants that they can use. These are areas in which the Government intends to provide support. We also understand that in the current market, some sectors are a bit challenged and, therefore, these may require further support. This is where the Tripartite Workgroup will study and roll out the recommendations soon to see how can we can layer on added support to help companies transition into some of these new PWM wage structures as well as for new sectors coming into PWM.”
“This is why the tripartite movement believe that the Progressive Wage Model is better than a blunt minimum wage. Each PWM implemented is agreed by a tripartite process, which gives greater confidence that such wage increases can be supported by the market, by the society and will not put employment at risk. Finally, Members including Mr Liang Eng Hwa have asked whether Government support for firms and workers will be provided. This is something that the Tripartite Workgroup is looking at as part of its deliberations. The Ministry of Manpower has been reviewing and enhancing Workfare with significant improvements made recently in 2017 and 2020. At each review, the wage growth of our low-wage workers has been taken into consideration and qualifying criteria adjusted accordingly. The Government will continue to review Workfare regularly to ensure that low-wage workers remain adequately supported. The Government and tripartite partners are working closely together to make progressive wages a reality for all sectors of our economy sooner rather than later. I urge this House and all Singaporeans to support our low-wage workers.”
“Notwithstanding the challenging economic conditions, they are committed to submitting their recommendations before the end of the year. The cleaning PWM is also not pursuing wage increases without considering skills, productivity and industry transformation. To Ms Yeo's question on re-skilling, the TCC has upgraded the training requirements for cleaners. This ensures that our workers continue to be upskilled and helps reduce the sector's reliance on low value-added manpower, including foreign manpower as raised by Mr Yip. Members have raised questions on how businesses and consumers will handle the additional costs and also how productivity in the sector can be increased. Indeed, if we as a society would like to see low-wage workers make good progress sustainably, all of us have a role to play in this. Employers have to drive productivity improvements in their firms through better technology and processes as raised by Mr Don Wee. They may also have to explore new business models or services to value-add to their customers. Service buyers have to embrace outcome-based contracting and contract durations that encourage investments in new technology. These are indeed directions that the industry has articulated in the Industry Transformation Map for the environmental services sector. Consumers will also contribute by sharing the cost of wage increases and have to pay slightly more for services and products as the sector implements the PWM. Mr Gerald Giam asked about how the Government will increase productivity in the cleaning sector. The Government cannot legislate productivity. Productivity growth is a result of workers and firms working together to grow the business and then fairly redistribute the fruits of growth.”
“Cleaning companies recognise that Singapore's resident workforce is ageing. And that in addition to better wages, they needed to re-design the jobs to better retain and attract workers to the sector. Their support also assures us that the wage increases are sustainable. Through negotiation, the PWM allows stakeholders to take sector-specific circumstances into account. One example is the six-year wage schedule as highlighted by Ms Yeo Wan Ling. The TCC did so to provide employees and service providers with clarity for long-term planning. Cleaning firms can price in the wage increases in their multi-year contracts with service buyers. There is also a midpoint review so that the TCC can ensure that the wage increases remain sustainable. This pandemic has showed us how the PWM approach is superior to a blunt minimum wage. The sectoral approach has enabled us to advance PWM for cleaners as well as other sectors that are able to adjust to PWM progression in the short term. A blunt minimum wage may not have been able to achieve consensus or as ambitious a wage growth. Sectors such as tourism, aviation, hospitality and others that were severely impacted by COVID-19 would not have been able to agree to such a move. So, our targeted approach enabled the tripartite movement to advance PWM at a pace depending on how different sectors perform in the market. The tripartite clusters for the new sectors such as food services and retail will similarly take into account market conditions and what each sector can manage as they recover from the economic impact of the COVID-19 pandemic. Mr Yip Hon Weng would be happy to know that these sectors are making good headway in developing their PWMs.”
“Nonetheless, if we want to achieve more broad-based progress for more low-wage workers, more of them would have to be brought in directly into our Progressive Wage system. Hence, the Tripartite Workgroup's discussion to include more sectors. Some Members, including Mr Gan Thiam Poh, wanted more information of how future wage increases for the cleaning sector were determined. Mr Speaker, the essence of the Progressive Wage Model is tripartite negotiation and consensus. Hence, the representatives from the cleaning sector are part of the Tripartite Cluster for Cleaners (TCC), which negotiated the wage increases. The TCC, which oversees the cleaning PWM, consists of representatives from the unions, employers, service buyers, as well as the Government. The TCC consulted widely with the industry and had numerous vigorous discussions amongst its members to find common ground that benefits all stakeholders. The TCC was clear in its collective desire to raise the wages of our cleaners in a sustained manner and revalue the work of our cleaners who have been integral in our fight against COVID-19. This is the uniqueness of Singapore's approach because PWM progression is brought about with tripartite consensus. Mr Edward Chia and Mr Sharael Taha asked about the lessons drawn from our experience with the cleaning PWM. A key takeaway is that the negotiated approach of the PWM helps address concerns and allows the sector to raise wages at a pace that is suitable for them. The robust wage increases for the cleaning PWM are fruits of almost a decade of close tripartite collaboration and consistent efforts of the TCC. The TCC has learned over time to harness the PWM design to benefit their workers and the sector.”
“It will also bring in-house cleaning, security and landscaping workers into the Progressive Wage system. These moves will significantly expand coverage to up to 218,000 workers. The Workgroup is also looking at introducing Progressive Wages to other low-wage occupations that straddle multiple sectors, as raised by Miss Rachel Ong. Agreeing which sector should start the PWM is just the first step. The hard work of making sure that it achieves its objective of progress for low-wage workers and sustaining high employment is in the details. These are carefully negotiated by the tripartite partners. When it was first introduced in 2012, the mindsets of employers and service buyers were different. Much effort went into getting their support and their buy-in. There were concerns whether wage increases were sustainable, whether they would lead to higher costs for essential services in our daily lives. But today, all our PWM stakeholders buy into the same vision and work together to support our low-wage workers. Employers now better understand the benefits of PWM to them and to their workers. This win-win outcome is why the cleaning sector has been able to agree to a much more ambitious rate of growth in its most recently concluded run of review. To Ms Hany Soh's question, cleaners' wages have risen by 26% cumulatively from 2014 to 2019 and we have seen local employment rise by 3%. Overall, while businesses have had to adjust to the wage increases, they have had been able to do so without adverse effect. Mr Desmond Choo asked how they will impact wages of other low-wage workers. For related jobs, there could potentially be some positive spillover effects.”