Tuesday, 10 March 2015

Parliament Highlights - 9 Mar 2015

Committee of Supply Debate: Ministry of Manpower

Squeeze to get tighter as workforce growth shrinks
Firms must leverage technology, do more with fewer workers: Tan Chuan-Jin
By Charissa Yong, The Straits Times, 10 Mar 2015

AS THIS decade comes to a close in 2019, the number of locals entering the workforce each year will shrink by up to 80 per cent to around 20,000 - a decline that will significantly tighten the squeeze in the Singapore labour market.

This picture, however, is just part of the struggle businesses will face.

The other is fast-changing technology that "will change the way we work, the way we communicate and the way we do business", Manpower Minister Tan Chuan-Jin said yesterday.

Together, the two forces will compel companies to learn to do more with fewer workers and leverage new technology, if they want to be successful, he added.

"If businesses do not become more manpower-lean, if they do not become more productive, they will have great difficulties in finding manpower - be they local or foreign - to run their operations," he warned.

Mr Tan painted this daunting picture for companies during yesterday's debate on the Manpower Ministry's annual budget.

Workers, too, must upgrade their skills so that they can stay relevant and seize opportunities in the new economy, he said.

This is why the time has come for the Government to encourage Singaporeans to master skills relevant to their work or pick up new ones under the SkillsFuture programme, he said, referring to the new initiative that will give grants and study awards as well as provide on-the-job training.

The plunge in local employment growth in a few years' time is due to baby boomers gradually leaving the workforce and smaller cohorts entering the workforce.

Mr Tan sees the number plunging from 95,000 last year to just 20,000 a year.

He made clear that the Government will keep the foreign workforce growth at its current pace. Last year, it grew by 26,000, down from 80,000 in 2011.

On technology, he pinpointed DBS Bank's use of a supercomputer named IBM Watson to crunch data and churn out around 700 to 800 reports for clients each quarter, an unthinkable speed before.

He urged other businesses to similarly embrace technology to keep ahead of the curve.

Mr Tan also outlined how the Government is helping workers keep abreast of these changes.

Courses offered under SkillsFuture, for instance, will be diverse and of high quality, he said.

The five-hour debate drew questions from 28 MPs and among the main issues they raised were the Central Provident Fund system, help to boost the pay of low-wage earners and ways to coax companies to re-employ older workers.

Mr Heng Chee How (Whampoa), Ms Jessica Tan (East Coast GRC) and Mr Sam Tan (Radin Mas) want the Government to do more for professionals, managers, executives and technicians (PMETs).

This group has been facing the pressures of economic restructuring, with the older ones struggling to get a new job at the same pay.

Replying, Mr Tan pointed to the higher subsidies in this year's Budget for older PMETs, and grants for companies to groom Singaporeans for leadership roles.

"We want to work towards creating even better jobs, higher incomes, and a more secure retirement for all Singaporeans," said Mr Tan.

CPF members won't have to pick annuity plan at 55
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 10 Mar 2015

FROM next year, Central Provident Fund (CPF) members do not have to make a decision at age 55 on which of two CPF Life annuity plans they want.

They can delay it until the time when they want to start receiving the monthly payouts - which is from age 65.

In addition, they can start getting their payouts any time between age 65 and 70, without having to wait until the date of their birthday.

The changes are part of a broader review of the system by a panel, whose recommendations on CPF withdrawals were accepted by the Government last month. Its recommendations on CPF returns are expected in the middle of this year.

Mr Tan also said that from the later half of this year, members will get one-to-one financial counselling at CPF to help them plan for their retirement.

He noted that the CPF is "an important pillar in the overall retirement support framework for the majority of Singaporeans who work and contribute to their CPF accounts".

The other three pillars are home ownership, providing affordable health care and government help for vulnerable seniors.

Mr Tan, however, turned down suggestions from MPs Foo Mee Har (West Coast GRC) and Lee Li Lian (Punggol East) to let CPF members use their Retirement Account savings for mortgages after they turn 55. But, he said, the CPF Board will highlight to members turning 55 that they can choose not to transfer their Ordinary Account savings to the Retirement Account so that they can continue to service their mortgages.

Such a move will eat into their retirement nest egg, he warned. "Members should bear in mind that further expenditure and use of these monies will deplete their CPF savings for retirement."

Mr Tan also rejected calls to raise the CPF rates for workers older than 55, saying that hiking their rates too fast will hurt their chances of being employed.

Last month, the Government announced that CPF rates for workers aged above 50 to 55 will go up by 2 percentage points from next January. Those older than 55 will get smaller hikes.

In his hour-long speech, Mr Tan also refuted the idea that letting CPF members top up their retirement savings up to $241,500 benefits only the wealthy.

About one in three members who turned 55 in 2013 have more than $161,000 in their CPF savings and will benefit from the top up. About half will be able to do so by 2020.

'Younger workers can save enough to retire'
They must keep working, buy HDB flat within their means, says minister
By Toh Yong Chuan, Manpower Correspondent, The Straits Times, 10 Mar 2015

YOUNGER workers do not have to worry about not saving enough for their retirement, as long as they keep working and buy Housing Board flats within their means, said Manpower Minister Tan Chuan-Jin yesterday.

To illustrate the point, the minister used a hypothetical case of a polytechnic graduate with a monthly starting pay of $2,200.

He would save enough in his Central Provident Fund (CPF) accounts to receive a monthly payout of about 60 per cent to 70 per cent of his last drawn pay from age 65 for the rest of his life, according to projections by the Manpower Ministry (MOM) to dispel worries young people have about retirement savings.

This is even assuming that his monthly salary never rises from $2,200 and that he works only 32 instead of 40 years between age 25 and 65. In MOM's projection, the $2,200 monthly pay is also lower than the median monthly starting pay of $2,400 for polytechnic graduates. The calculations assume that the person buys a four-room HDB Build-to-Order flat with a spouse and they have paid off the mortgage by age 50 with CPF savings.

At age 25, he will start saving about $130 each month in his CPF Special Account (SA). The monthly SA contribution gradually rises to $250 for the 50-to-55 age band, and falls to $50 for age 60 to 65.

Despite the fluctuations, the 25-year-old would still accumulate about $165,000 in his SA by age 65 because CPF interest rates are compounded, said Mr Tan.

Without the compounding interest, he would save only about $55,000 if he stashed away the cash in a biscuit tin. "This is not magic, it is just basic mathematics," said Mr Tan. He noted that the projection was conservative and did not factor in wage growth and CPF Ordinary Account balances. "And if you add those, clearly, he would have even more."

"The retirement picture for younger Singaporeans is relatively healthy," he said. "Most Singaporeans who work regularly, and make prudent housing options, should have no worries building up a comfortable retirement nest egg within the CPF system."

The polytechnic graduate scenario was one of two examples he cited in Parliament yesterday.

The other concerned a hypothetical example of a breadwinner who earns $3,500 each month and turns 55 next year. This was to illustrate the decisions he has to make at 55 on how much to set aside for retirement, and then at age 65 on whether to make a lumpsum withdrawal or defer it to get higher permanent payouts later.

The minister acknowledged that having more options could make the CPF system more complex. "We can't run away from that," said Mr Tan.

But he pledged that the MOM and CPF Board would ramp up their public education drive: "We will scale up and intensify our efforts to first raise awareness and understanding of the CPF system and the new changes."

Auto family CPF top-ups would be 'intrusive'
By Charissa Yong, The Straits Times, 10 Mar 2015

WOMEN who do not work and have little retirement savings are supported by the Government in two ways, said Manpower Minister Tan Chuan-Jin yesterday.

First, these housewives and retirees are encouraged to start working again if they can do so.

Second, their family members have been given more incentives to top up their Central Provident Fund (CPF) savings, said Mr Tan during yesterday's debate on the Manpower Ministry's budget.

But Mr Tan rejected a suggestion from Ms Foo Mee Har (West Coast GRC) to make such CPF transfers from family members automatic, as "it would be intrusive for the Government to intervene".

"These are very personal decisions, and we believe at this stage, it is best left to couples to decide," he said in Parliament.

Mr Tan was responding to recent calls for more to be done to help non-working women have enough to live on in their old age.

Such women may not have much CPF savings because they stopped working after their children were born, or earned low wages while they were working, or were unable to work due to medical reasons.

To help them, the Government encourages them to rejoin the workforce so they can build up their own nest eggs.

This is done through schemes like WorkPro, which funds companies so that they can help older workers and mothers get back to work.

Even before WorkPro, which began in April 2013, more women were already participating in the labour force, and the difference in average CPF balances between men and women has been narrowing, he noted.

At the same time, "family remains an important pillar of support for women", he added, highlighting recent changes that encourage CPF members to transfer funds to their spouses' accounts.

That means monies in a person's Special, Retirement or Medisave account can attract interest rates of up to 6 per cent.

But "the Government and the CPF system alone will not be able to solve all problems", he said, calling on families to step in and assist vulnerable groups.

"I urge all Singaporeans to consider how to maximise the CPF system to boos

Accreditation criteria update for training course providers
By Joanna Seow, The Straits Times, 10 Mar 2015

THE criteria for training course providers seeking government accreditation will be updated, in a move to ensure training remains rigorous and relevant.

Manpower Minister Tan Chuan-Jin, however, did not give details yesterday when he made the announcement.

But he stressed that the quality of training needs to remain high, otherwise the push to deepen the skills of Singapore's workers under the new SkillsFuture drive will be a waste of time, he told the House.

The various SkillsFuture programmes will also be implemented in stages, to give the training industry time to adapt to demand, he added.

"We need to avoid a case where training institutions face a sudden surge in demand and resort to offering substandard programmes or expanding class sizes and compromising on quality.

"This will lead to wastage of both individuals' time and public monies," said Mr Tan.

Employers, individuals and training providers all have a role to play for the SkillsFuture initiatives to be effective, he stressed during the debate on his ministry's budget.

"In this tight labour market, employers have to shift away from this 'plug and play' mindset to one which proactively develops every one of their workers," he said.

"If you do not develop those pathways, if you do not develop a fair remuneration scheme, Skills- Future, for all its rhetoric, cannot take off."

Bosses, along with trade associations, training institutions and unions, will have their say in the development of Sectoral Manpower Plans for key sectors. These will lay out the skills needed for the future and the education and career pathways for each sector.

Mr Tan also reiterated the objective of the new SkillsFuture Credit - the $500 training grant to be given to all Singaporeans aged 25 and older.

"Let me be very clear that the credits are meant to support training initiated by individuals, not to fund training which employers send them for," he said, responding to Mr Zaqy Mohamad (Chua Chu Kang GRC) on whether employers could ask workers to pay for part of the course fees of work-related training.

Some MPs want a wider range of courses to be eligible for SkillsFuture Credit. Mr Ang Hin Kee (Ang Mo Kio GRC) suggested courses like a Class 3 driving licence that may be useful for property agents or those who want to be deliverymen. Currently, the credits are only for government- supported courses, from aerospace and information technology to languages and culinary skills.

Non-Constituency MP Lina Chiam said some may abuse the SkillsFuture subsidies by, say, disguising personal enrichment courses like swimming lessons as staff training.

Mr Tan warned that his ministry will blacklist these abusers.

The audit and feedback trail is important in weeding out such companies, he added.

But a balance has to be struck between regulation and flexibility.

A zero-abuse system may end up being "very laborious and difficult to administer".

"But if you've one that's too lax, you will have people taking advantage of it."

Displaced mid-career PMETs to get more help
By Joanna Seow, The Straits Times, 10 Mar 2015

MORE job matching and training for mid-career professionals are in the works, as the Government moves to help those who may have been caught out by the changing economy.

Those looking to switch their jobs mid-career will get more help through a programme that will match job seekers with small and medium-sized firms, said Manpower Minister Tan Chuan-Jin.

Mr Tan said professionals, managers, executives and technicians (PMETs) are generally doing well. Unemployment for these Singaporeans is low at 2.9 per cent and salaries have risen about 2 per cent a year over the past five years after taking inflation into account.

Although displaced PMETs are not a large group, "the pressures of a rapidly changing economy have caused some, especially mature PMETs, to feel anxious about their job security", said Mr Tan.

For those retrenched or looking to switch careers, the Government will introduce a place-and- train programme called P-Max that will work towards matching 3,000 PMETs with small and medium-sized enterprises (SMEs). It builds on the Max Talent Programme which has placed 1,000 workers in SMEs since 2012. Over eight in 10 of them stay in the job for six months, said Mr Tan.

The Singapore Workforce Development Agency (WDA) will also work with private placement firms to identify more job opportunities for PMETs, he said.

By 2030, some two in three Singaporeans in the workforce are expected to be PMETs.

Several MPs, including Mr Heng Chee How (Whampoa) and Ms Jessica Tan (East Coast GRC), raised concerns about the difficulties older PMETs face when wanting to go for training. Mr Sam Tan (Radin Mas) said the opportunity cost is higher for them as they have substantial personal commitments: "Some of those who have been retrenched are afraid of investing time and money on a full-time course as their topmost priority is to find a job quickly."

The minister acknowledged that some PMETs may face challenges in finding the time to upgrade themselves. But he said that is why the new approach to have bite-size modules will help them.

Subsidies have also been enhanced for older workers. All Singaporeans aged 40 and above will need to fork out at most 10 per cent of training costs for courses funded by the Education Ministry and the WDA.

Stiffer penalties for contractors who flout worksite safety rules
They also face ban on hiring new foreign workers
By Lim Yan Liang, The Straits Times, 10 Mar 2015

CONTRACTORS who flout safety rules will be barred from hiring any new foreign workers under a new stiffer demerit point system.

This ban will be imposed on the company when it accumulates a specified number of points.

Currently, the punishment is confined to specific worksites.

Other changes include errant companies having to carry the demerit points for 18 months, instead of 12 months now.

The penalties will also kick in earlier, and more demerit points will be given to serious offences.

Announcing this in Parliament yesterday, Senior Parliamentary Secretary for Manpower Hawazi Daipi said: "We hope the enhanced (system) will help drive companies to put in greater coherent effort to address systemic safety lapses."

These four changes to the scheme came after workplace deaths for the construction sector remained stubbornly high in recent years, despite efforts to bring it down.

The construction industry accounted for 27 of 60 workplace fatalities last year, and 33 of 73 fatalities the year before.

This was despite measures, such as the requirement from the Ministry of Manpower (MOM) for developers to identify risks and hazards at worksites before a tender is awarded.

The Workplace Safety and Health Council also made 1,600 visits to worksites to conduct safety compliance audits last year, double the 800 visits in 2013.

Overall, though, workplace deaths across all industries fell to a record low of 60 last year, said Mr Hawazi.

As a result, the MOM met its target of 1.8 workplace fatalities per 100,000 workers four years ahead of schedule.

But the number of non-fatal injury cases at workplaces has gone up over the last three years, from 10,060 in 2011 to about 13,000 last year.

Said Mr Hawazi: "We need to continue to press on and do more in order to achieve sustainable improvements in our workplace safety and health performance."

Yesterday, he also announced that the Government will enhance the regulatory framework for Major Hazard Installations (MHI), such as oil refineries.

This is following recommendations by an inter-agency task force set up to review the framework. Asked by Nominated MP K. Karthikeyan about the Government's efforts in this area, Mr Hawazi said that several recommendations would be adopted, including the setting up of a National MHI Regulatory Office to work with MHIs on safety, health and environment matters.

Mr Hawazi was also asked by Mr Patrick Tay (Nee Soon GRC) about compensation limits for workers who die from workplace incidents or are permanently incapacitated.

He said the MOM will be reviewing the limits to bring them in line with the rise in nominal median wages.

The limits were last revised in 2012.

To address the increase in industrial accident medical bills, MOM will also be raising the cap for medical expenses claims to ensure that the Work Injury Compensation Act continues to fully cover more than 95 per cent of claims where hospitalisation is required, said Mr Hawazi. Currently, coverage is capped at $30,000 per accident or for a period of one year from the accident, whichever is reached first.

The Act imposes a duty on employers to compensate their employees who are injured as a result of work.

As such, Mr Hawazi said, it does not cover freelancers who are considered their own employers.

"We encourage self-employed persons to take responsibility for their own well-being and purchase adequate insurance to ensure some financial certainty in the event that they are injured while at work," he added.

More incentive for process firms to hire skilled foreign workers
By Amelia Tan, The Straits Times, 10 Mar 2015

FIRMS in the petrochemical and pharmaceutical manufacturing sectors will have more incentive to train and retain their skilled foreign workers.

The Government will introduce new ways for firms in the process sector, which employs about 30,000 foreign workers mostly from India and Bangladesh, to get a special skilled worker status for their workers, called R1.

Firms with workers under the R1 criteria pay lower levies, as the scheme is meant to encourage firms to hire skilled workers, said Manpower Minister Tan Chuan- Jin yesterday.

Currently, firms can get the R1 status for workers if they have skills qualifications such as a high school diploma or a Nitec certificate from the Institute of Technical Education.

But by 2017, the worker must earn at least $1,200 a month, up from the current average pay of $800 to $1,000 - on top of the qualifications criteria - for firms to get the R1 status.

At the same time, firms with workers who have at least two years of experience and earn $1,200 can also apply for the R1 status, said Mr Tan.

"In fact, the enhanced criteria will be a more reliable way of identifying workers who are genuinely skilled and productive," said Mr Tan, who added that the initial changes will take two years to allow companies to adjust.

From 2019, the Government will tighten the criteria for companies to get the R1 status by raising the salary and experience level to three years for workers eligible for the status.

The workers must also undergo Singapore Workforce Skills Qualifications programmes to properly certify their skills before they can qualify for the R1 status.

Currently, firms need to pay only $300 in basic tier levies for R1 workers, and this will remain the case until next year.

But firms will have to pay $500 in levies for the lower-skilled R2 workers, up from the current $450.

Mr Charles Quek, president of the Association of Process Industry, said that process firms will be motivated to train their foreign workers.

"To justify the higher pay, firms will have to invest in training workers and machinery," he added.

Mr Tan said the Manpower Ministry will also make it easier for sector firms to employ experienced foreign workers.

Currently, firms that want to hire foreign workers who are already working here have to get the workers to leave Singapore first. This is because foreign workers cannot be in Singapore while their work permits are issued.

But from June 2017, experienced workers can remain in Singapore while their new work passes are being issued.

Mr Tan also announced that foreign workers in the construction, process and marine sectors will be allowed to take on additional duties as drivers. This will help companies reduce the cost of hiring additional drivers.

Fewer complaints of bosses hiring foreigners over locals
By Walter Sim, The Straits Times, 10 Mar 2015

THERE were fewer complaints about employers hiring foreigners over locals last year than a year ago, said Senior Minister of State for Manpower Amy Khor yesterday.

Even so, the Ministry of Manpower (MOM) remains focused on wiping out the scourge, she said during an update in Parliament on measures like the Jobs Bank and Fair Consideration Framework (FCF) that aim to ensure fair employment for locals.

The number of complaints dropped to 230 last year from 310 in 2013, Dr Khor said. Of the 230 complaints, about 40 per cent were unsubstantiated, she added.

"We have pursued every single one of these cases to establish if they adopted discriminatory practices. When we find proof, MOM will not hesitate to take action."

Action ranges from advising firms on how to plug human resource gaps to issuing warnings and having curbs on work pass privileges for more serious infringements.

For example, maritime firm Prime Gold International was banned from hiring foreign workers for two years after it was found to have retrenched 13 Singaporeans and replaced them with foreigners.

The locals were working as ship captains, officers, engineers and seamen.

The FCF allows the ministry to proactively identify and engage with employers who are found to have room for improvement in hiring practices, Dr Khor said.

It requires firms to first advertise on the national jobs bank for 14 days for locals to fill vacancies, before they are allowed to seek foreign professionals.

Dr Khor described a "positive start" for the Jobs Bank since its launch last July. As of Feb 1, some 16,000 employers and 76,000 individuals have registered.

On average, there are 68,000 live job vacancies, with more than 70 per cent targeted at professionals, managers and executives (PMEs), she said, adding that 20,000 of the jobs offer a monthly salary of at least $5,000.

Three MPs - Mr Patrick Tay (Nee Soon GRC), Non-Constituency MP Gerald Giam and Nominated MP Randolph Tan - suggested extending the FCF to firms wanting to apply for 'S' Pass holders.

Dr Khor said that the Government has not done so because it uses other tools, like levies, to spur firms to turn to locals for their vacancies - although MOM is monitoring the situation.

She asked MPs not to evaluate the Jobs Bank and the FCF "in isolation" because they are parts of a broader labour market ecosystem which has largely served Singaporeans well.

Re-employment age could be extended to 67 'in 2 to 3 years': Dr Amy Khor
Channel NewsAsia, 9 Mar 2015

The Government will look at extending the re-employment age to 67 in "two to three years' time", said Dr Amy Khor, Senior Minister of State for Manpower.

Budget 2015 included the announcement of the additional Special Employment Credit (SEC) to incentivise employers to hire workers aged 65 above. For Singaporean workers aged 65 and above who earn up to S$4,000 a month, the additional SEC will help employers offset up to 3 per cent of monthly wages in 2015 - meaning a total SEC of 11.5 per cent.

"We hope that this will encourage more employers to retain their older workers even after they reach 65 years and continue to benefit from their experience and expertise," said Dr Khor, speaking at the Committee of Supply 2015 debate on Monday (Mar 9).

"We will monitor the outcome and look at extending the re-employment age to 67 in two to three years’ time.

"Our experience has shown that adopting re-employment as an approach to raising the employment rate of older individuals beyond the age of 62 works for Singapore. This puts us in good stead to eventually move the re-employment age to 67."

This possibility was deliberated last year by the Tripartite Committee on Employability of Older Workers (Tricom), chaired by Dr Khor.

On Monday, she noted that feedback and data had shown that both employers and employees are increasingly open to the possibility of raising the re-employment age.

Citing the findings of a "Lifelong Employability" focus group discussion, Dr Khor said that the majority of respondents believed that work would help them to remain physically and mentally active and maintain their social networks. Meanwhile, employers in the study said they appreciated the experience and reliability of older workers, especially given the tight labour market.

The employment rate of Singaporeans aged 55 to 64 hit a record high last year, at 66 per cent, up from 65 per cent in 2013, Dr Khor said. "Even though the employment rate for this group of Singaporeans is high, we should continue to invest in our efforts to ensure older Singaporeans can continue working," she added.

Preliminary data showed that nearly all - 99 per cent - of private sector local employees who turned 62 in the year ending June 2014 were offered re-employment, Dr Khor said, while more than 9 in 10 eligible public officers who retired at age 62 were re-employed in the year ending 2013. The current minimum statutory retirement age of 62 protects workers from below 62 from being dismissed on the grounds of age.

Panel to help low-wage workers in SMEs
It will also look at redesigning their jobs
By Nur Asyiqin Mohamad Salleh, The Straits Times, 10 Mar 2015

A COMMITTEE tasked with improving the lot of low-wage workers will focus on the challenges facing such workers in small and medium-sized enterprises (SMEs) as well as those doing casual work.

It will also look at redesigning and raising productivity in jobs held by many low-wage workers, such as in retail and logistics, and encourage companies to look at quality rather than price when they source for contracts.

This focus of the Tripartite Committee on Low-wage Workers and Inclusive Growth (TriCom) in its new two-year term was announced by Senior Parliamentary Secretary for Manpower Hawazi Daipi in Parliament.

"While there are ongoing broader efforts to raise productivity, the TriCom aims to provide specific recommendations on how we can do so for jobs commonly undertaken by low-wage workers," he said. "This can yield tangible and meaningful benefits for all."

TriCom was formed in 2010 and consists of representatives from the unions, employers and the Government.

Speaking during the debate on his ministry's budget, Mr Hawazi said the Government will also continue to work with the National Trades Union Congress (NTUC) to reach out to vulnerable low- wage workers and raise awareness of the help they can get.

This includes workplace advice and job referral services provided by the U Care Centre at the Devan Nair Institute for Employment and Employability in Jurong East.

The centre also regularly organises seminars to increase workers' awareness of their employment rights, and NTUC plans to increase access to its services in the heartland, he added.

The lot of low-wage workers has long been a concern of the labour movement, and yesterday, several MPs, including Mr Zainal Sapari (Pasir Ris-Punggol GRC), asked for an update on efforts to help such workers.

Mr Hawazi outlined several key steps the Government had taken since a ministerial committee was set up in 2005 to address the challenges low-wage workers face.

These include the Workfare Income Supplement to boost their pay, Workfare Training Support to encourage them to upgrade their skills, and WorkRight to ensure bosses comply with employment laws. "With the various policies and programmes we have in place, our low-wage workers today are better supported than they were 10 years ago," he said.

The Government also supported NTUC's efforts to develop a progressive wage model (PWM), to help workers negotiate pay rises as productivity improves and they undergo skills training.

The Government agreed to enforce the wage model in three sectors - cleaning, security and landscaping. The PWM for the first two sectors have been announced, with that for landscaping due to be released this year.

Non-Constituency MP Gerald Giam and Nominated MP K. Karthikeyan asked if the PWM could be extended to other areas. Mr Hawazi said unions had been working on negotiating PWMs with employers in sectors like hotels, food and beverage and retail.

But the Government, he added, has no plans to extend the mandatory progressive wage model beyond the initial three sectors yet.

"We should allow the market to determine a suitable trajectory of wages based on productivity improvements over time," he said.

A delicate task balancing interests of all groups
By Lydia Lim, Associate Opinion Editor, The Straits Times, 10 Mar 2015

WAGE growth slowed last year as compared to the year before, and that has workers worried, said Nominated MP K. Karthikeyan, pointing out that many Singaporeans still earn low wages of under $1,000 a month.

They fear wages will stagnate and even deteriorate unless more is done to boost productivity.

Those in the manufacturing sector also fear losing their jobs as the industry hollows out.

Last year, eight manufacturing firms from the unionised sector relocated, Mr Karthikeyan said.

The unionist's speech was emblematic of a theme at yesterday's sitting: that of how Singapore can stay together as it strives to remake its economy and workforce.

Several MPs who spoke during scrutiny of the budgets for the trade and industry, manpower and finance ministries championed groups at risk of being left behind - low-wage workers, retrenched middle-aged professionals, managers, executives (PMEs) and small business owners.

To tackle low wages, Workers' Party Non-Constituency MP Gerald Giam called for a minimum wage in sectors other than cleaning, security and landscaping, where this is being effected through a combination of regulation and productivity measures.

Three MPs spoke up for older PMEs displaced by economic restructuring.

Said Ms Jessica Tan (East Coast GRC): "Many residents who are mid-career PMEs have come to seek assistance at meet-the-people sessions. They share the challenges they have putting in many job applications but not even getting a response or an opportunity for interview."

She and senior ministers of state Heng Chee How (Whampoa) and Sam Tan (Radin Mas) asked for more targeted help so that such workers can secure replacement jobs quickly, as most of them have families to support.

Among businesses, too, there are those that struggle to stay afloat. Nominated MP and Singapore Chinese Chamber of Commerce and Industry president Thomas Chua appealed for more help for small and medium-sized enterprises and their trade associations.

Mr Inderjit Singh (Ang Mo Kio GRC) said data on the top 1,000 SMEs showed that the hospitality and F&B sector contracted by as much 7.7 per cent in each of the past five years.

Assurances from the front bench came in the form of reminders about the abundance of schemes to help vulnerable workers and businesses re-skill, upgrade, compete and find their place in the sun.

Low-wage earners, for example, benefit from the Workfare Income Supplement, Progressive Wage Model and Inclusive Growth Programme. PMEs have the Max Talent place-and-train programme and Professional Conversion Programme, and those above age 40 enjoy 90 per cent subsidies on training course fees.

SMEs have the Capability and Innovation Voucher, Productivity and Innovation Credit and Capability Development Grant.

Yes, the transformation of the economy and workforce is a work-in-progress but "we are making steady progress towards our goals", said Manpower Minister Tan Chuan-jin.

He held out statistics such as the 129,000 jobs created last year, one of the lowest citizen unemployment rates in the world at 2.9 per cent, and real median income growth of 1.4 per cent.

"Between 2009 and 2014, real incomes have grown by 2.1 per cent each year at the median, and 1.5 per cent per annum at the 20th percentile. We have managed to... avoid the wage stagnation that many developed economies are facing," he said.

He and other office-holders stood firm on balancing the interests of the haves and have-nots, with Mr Tan saying that "our shared vision must be expansive enough to reflect these differing aspirations, and our society must be inclusive enough so everyone has a stake in our future".

In other words, Singapore must strike a fine balance between supporting the economically vulnerable and remaining attractive to the fit and entrepreneurial.

Senior Minister of State (Finance) Josephine Teo spelt it out when replying to a question on a planned hike in the top personal income tax rate. The main risk was not tax evasion by top earners, she said, but that "our economy loses its entrepreneurial dynamism".

"If that happens, it will be difficult to grow incomes not just for the top end but also the broad majority of our population. That is why our income tax regime must remain competitive overall, to reward work and encourage entrepreneurship," she said.

To Mr Giam's question on wealth inequality, she said wealth taxes remained an important part of the system. The Government scrapped estate duty and shifted to higher taxes on luxury investment property as the latter "cannot be tax-planned away easily" and "does not reduce incentives to work or engage in entrepreneurial activity".

While it is right that individual MPs speak up for the weak, those who make national policies have the harder task of balancing interests of all groups, including - perhaps especially - the middle class, so as to hold society together.

Retrenched at 54, he finds better-paying job
By Aw Cheng Wei, The Straits Times, 10 Mar 2015

WHEN he found out he was about to lose his job assembling hard disks last November, Mr Dharmarajan Dharnaraj, 54, was afraid he would not be able to support his family of four.

"We don't have a lot of savings," said the sole breadwinner, who lives with his wife and daughter in a five-room flat in Bukit Batok. His son is studying law in India.

Frantic, he turned to the Singapore Workforce Development Agency (WDA). It referred him to the Jobs Bank, where he quickly found another job - with a $500 pay rise over the $3,000 he was getting at his old firm.

"I was afraid I would lose out in the job hunt because of my age," he said. "Many companies will prefer hiring someone younger, and I can understand why."

But his worries were allayed when he received a job offer from metal recovery firm Remex Minerals Singapore in December.

His new employers told him to start work on Feb 2 as the company was in the midst of setting up operations here.

"At first, I didn't want to take a break because I couldn't afford to," said Mr Dharnaraj, who had been with his previous firm for six years. "But I could relax, knowing that I could still take care of my children."

He added: "I'm really happy I found a job so quickly after being retrenched. The WDA really came through for me."

Training adds $400 to cleaner's pay
By Nur Asyiqin Mohamad Salleh, The Straits Times, 10 Mar 2015

CLEANING supervisor Kamaruddin Syed Ibrahim, 54, has over 30 years of experience in the cleaning industry under his belt.

But two years ago, the old hand turned student, heading back to school to learn more about how to clean more safely and efficiently.

He received a Workforce Skills Qualifications certificate in environmental cleaning and a $400 award for completing the course.

His employer, AG Maintenance, acknowledged his efforts to improve himself: Mr Kamaruddin now pockets $400 more each month, bringing his pay up to $1,600.

"This was my first time going for official training," he said in Malay. "For 30 years, I learnt everything on the job. But going for these classes is good.

"I'm happy my company gave me the chance. You can't get left behind. There's still so much to learn."

Mr Kamaruddin said the course taught him how to better clean hard-to-reach surfaces like ceilings, using specialised equipment. He also learnt more about maintaining his cleaning tools.

"I know what I'm doing, but you need (certificates) to let everyone else know that too," he said.

2,000 pizzas in two hours, with just four pairs of hands
By Nur Asyiqin Mohamad Salleh, The Straits Times, 10 Mar 2015

IT USED to take eight pairs of hands eight hours to make 2,000 pizzas.

But now, after turning to automation two years back, local company Baker's Heaven can churn out 2,000 pizzas in two hours, with just four pairs of hands.

Its managing director Simon Tay said the new machines, which have automated about 80 per cent of the pastry production process, have whittled down production time and eased manpower needs.

"Our machines help us work faster, better and cleaner. It helps standardise our products, and we can do more in half the time," said Mr Tay, 55.

"And, most important, it's good for my workers. They don't have to come back for overtime any more."

Senior Parliamentary Secretary for Manpower Hawazi Daipi yesterday held Baker's Heaven up as a company that turned to innovation and delivered results.

He was speaking about ways to boost productivity in sectors where low-wage workers are common, like in food and beverage.

Mr Tay said that with the company's higher productivity, he has also raised his workers' pay. Those who used to earn about $1,500 a month now make at least $150 more. And the raises are well-deserved.

"They put in a lot of effort to learn, so I'm happy to reward them. About 10 of my workers are seniors, so it's hard for them to adapt," he said. "But they do, and it's done the company a lot of good."

Committee of Supply Debate: Ministry of Finance

Taxman to watch out for those who avoid paying higher taxes
By Chia Yan Min, The Straits Times, 10 Mar 2015

THE taxman will step up surveillance to detect individuals who try to avoid paying the new higher rates of personal income tax, said Senior Minister of State for Finance Josephine Teo in Parliament yesterday.

She was responding to MPs who were concerned that rich people might try to get around the higher income tax rates by setting up companies and shifting part of their wealth there.

The Government announced in last month's Budget that it would raise taxes on high income earners by up to 2 percentage points starting from 2017. The top personal tax rate will rise to 22 per cent, compared with 17 per cent for companies.

But the Inland Revenue Authority of Singapore (Iras) will closely monitor any attempt to avoid paying the higher taxes, said Mrs Teo during the debate on her ministry's budget.

It will step up its audit programmes to detect and deter tax avoidance and evasion, she said, adding: "We take the evasion of tax seriously."

Nominated MP Randolph Tan had welcomed the increase in tax rates for those in the top income bracket, but asked if there was a risk that tax receipts might come in lower than expected.

"The main risk is that our economy loses its entrepreneurial dynamism," said Mrs Teo.

"If that happens, it will be difficult to grow incomes not just for the top end but also the broad majority of our population."

Singapore's income tax regime must therefore remain competitive to reward work and encourage entrepreneurship, she added.

She also fielded questions from Non-Constituency MP Gerald Giam, who had asked how the Government tracks wealth inequality and its likely negative effects on social mobility.

In response, Mrs Teo said Singapore's system of taxes and benefits is a progressive one, where the higher-income households contribute the bulk of taxes, and the lower-income households receive the majority of benefits.

Taxes on wealth - in particular property taxes - remain an important part of the tax system, the minister added.

Mrs Teo also rejected calls, including by Ms Penny Low (Pasir Ris-Punggol GRC), to raise tax incentives for top-ups to Central Provident Fund (CPF) accounts and to grant tax incentives to more non-profit organisations.

The Government already provides tax reliefs for individuals topping up their family members' Special and Retirement Accounts, or their own Medisave accounts, said the minister.

For non-profit organisations, Mrs Teo said the Government supports them in various ways, and a forthcoming one-stop centre for social enterprises will also seek to deliver a wider range of help.

Auto-fill forms on portal for electronic transactions
By Marissa Lee, The Straits Times, 10 Mar 2015

TO MAKE Government e-services easier to use, the Government will add a new auto-fill form mechanism to its citizen portal, so users need not fill in their personal information each time they make an electronic transaction.

This "MyInfo" feature will be ready early next year, starting with services such as Housing Board flat applications and the Baby Bonus Scheme, said Senior Minister of State for Finance and Transport Josephine Teo in Parliament yesterday.

Users who choose to use the feature need not provide different agencies with information that the Government already has, such as their date of birth, registered address and marital status.

"In the next phase, our Smart Nation initiatives will also open up new opportunities for further breakthroughs in public service delivery," Mrs Teo added.

Two out of nine MPs who spoke during the debate on the Ministry of Finance's budget wanted to know how the public sector planned to meet demand for public services, given its manpower constraints. Mrs Teo said it would be impossible for the Government to fulfil every demand for services. "We may need to shed services that are no longer critical, and carefully evaluate proposals for service expansions that are well-intentioned but manpower intensive."

But the Government is also looking at "new ways" to improve services, with the use of technology, as well as through partnerships with the community.

For example, it has trained 1,500 volunteer Pioneer Generation (PG) ambassadors to reach out to pioneers and share the benefits of the PG Package. Their success has prompted the Government to deploy them for more engagement drives, such as the MediShield Life scheme.

Mrs Teo also responded to a question by Ms Jessica Tan (East Coast GRC), who asked if smaller firms and start-ups have been able to win Government tenders.

She said that over the past year, smaller firms with an annual turnover of less than $10 million had won more than a third of all Government tenders.

Committee of Supply Debate: Ministry of Trade and Industry

Helping SMEs in e-commerce and HR
Common platforms to let them share resources, lower costs in these areas
By Chia Yan Min, The Straits Times, 10 Mar 2015

SMALLER firms will soon get help with developing their own e-commerce services or carrying out human resource (HR) activities.

Enterprise development agency SPRING Singapore, together with other government bodies, will be creating common platforms in these two areas for small and medium-sized enterprises (SMEs), Minister of State for Trade and Industry Teo Ser Luck said in Parliament yesterday.

This is aimed at allowing SMEs to share resources to lower their costs, and to catch up with the likes of South Korea, China and Japan in the field of online retailing, he added.

Internet sales make up only 3 per cent of total retail sales in Singapore, compared with 12 per cent in South Korea.

The common e-commerce platform, which is meant to be a springboard for Singapore SMEs into online retailing, will allow companies to carry out activities across various online marketplaces, Mr Teo said during the debate on the ministry's budget.

It will include integrated functions for warehousing, managing inventories and fulfilling orders. It hopes to benefit SMEs that want to adopt e-commerce but are unable to afford the initial outlay, Mr Teo said.

He added that SMEs can cut down on the time taken to process and manage orders by up to 45 per cent, due to the streamlined logistics chain.

SPRING will also set up a common pool of HR solution providers, which micro enterprises and SMEs can tap for HR systems and services.

SMEs can benefit by outsourcing their administrative HR activities, which will allow them to focus their limited manpower on core functions.

The moves are part of ongoing efforts to encourage collaboration among SMEs, Mr Teo said.

"Collaboration helps our SMEs build track records, pool resources, share best practices and create new business opportunities."

SPRING aims to enrol 50 companies in each of the two platforms, which firms will be able to use from April 1.

Besides companies, trade associations and chambers (TACs) are also being encouraged to work together across different industries in areas such as skills upgrading.

While larger TACs have strong secretariat teams, sizeable membership bases and are well- positioned to roll out initiatives to benefit the industry, "there are many smaller TACs that are not able to provide similar services due to resource constraints", Mr Teo said.

He was responding to Nominated MP Thomas Chua, who had asked for more support for TACs. Mr Chua is also the president of the Singapore Chinese Chamber of Commerce and Industry.

To help TACs, industrial landlord JTC will set up a trade association hub to gather different TACs under one roof.

It will be located at JTC's iHUB, which used to be Jurong Town Hall.

"This is where Singapore's early industrialisation policies took shape... We hope that this will serve as inspiration to our local industry, and especially our SMEs, to continue to transform and raise productivity," Mr Teo said.

The facility will help TACs reduce operating costs and optimise resources through the sharing of facilities and amenities.

Larger TACs will be able to provide their smaller counterparts with expertise in secretariat support and organisation needs.

New online portal to help firms seeking govt grants
By Marissa Lee, The Straits Times, 10 Mar 2015

A NEW online portal will be set up to make it easier for firms to apply for government grants, Minister of State for Trade and Industry Teo Ser Luck said in Parliament yesterday.

The project will streamline about 20 existing business grants across 10 government agencies into a single site that will advise firms about what help they might be entitled to and guide them through the application process.

The first phase, which will involve agencies such as SPRING Singapore, IE Singapore and the Singapore Workforce Development Agency, will be rolled out over the next year.

Mr Teo said the new portal will help firms "reduce the time required to search and apply for grants", which will be categorised by their areas of focus rather than their agency or name.

The portal's three general focus areas will be capability development, internationalisation and training.

His remarks were made in response to comments from Mr Inderjit Singh (Ang Mo Kio GRC) during the debate on the ministry's budget.

Mr Singh said many small and medium-sized enterprises (SMEs) are "confused by the number of assistance schemes (and) are unhappy that they have to be passed from one agency to another for different needs and, sometimes, fall through the cracks without help".

MPs were also concerned about the difficulties that SMEs face when trying to claim grants for productivity efforts that are "low-tech" or difficult to measure.

Mr Zaqy Mohamad (Chua Chu Kang GRC) asked if technology experts or scientists would be more suited to front the scheme than "tax officers", given that only 1 per cent of all claims made under the Inland Revenue Authority of Singapore's Productivity and Innovation Credit went to research and development.

Ms Foo Mee Har (West Coast GRC) cited an SME that had its Capability Development Grant (CDG) application rejected because the racking system it proposed was "sort of low-tech or 'no-tech'".

She pointed out that not all productivity efforts will involve "breakthrough technology or automation", adding: "How will the CDG be enhanced to enable a broader definition and interpretation of innovation, to support such ground-up productivity initiatives that improve workflow in incremental steps?"

Mr Teo clarified that the CDG application process would be simplified for projects below $30,000.

This will mean firms will not have to submit detailed project reports, but merely describe their projects briefly, with the help of five easy-to-answer guiding questions.

Also, firms will no longer have to submit detailed projections on the impact of such projects.

"We will also put in more resources to scale up the teams managing the CDG to reach out to more SMEs, so that more companies can benefit from this programme," Mr Teo added.

Mr Teo also told the House that SMEs will have a place in the smart nation initiative.

He said: "SPRING, with support from partners such as the Action Community for Entrepreneurs, trade associations and chambers, will work with the Smart Nation Project Office to identify opportunities for our start-ups and SMEs to contribute."

Ice cream maker edges ahead, thanks to SPRING
By Marissa Lee, The Straits Times, 10 Mar 2015

WHEN ice cream manufacturer Foodedge Gourmet set out to build a new production line in 2013, it received funding support every step of the way.

The firm, which sells ice cream under the Melvados brand, tapped the Government's Capability Development Grant (CDG).

The grant covered about 70 per cent of Foodedge's qualifying costs, said Minister of State for Trade and Industry Teo Ser Luck in Parliament yesterday.

The costs that qualified under the CDG, explained chief executive Manmeet Singh, extend much further than the cost of new equipment at its plant in Woodlands.

"The CDG paid for the consultants to do the sizing up and setting up of the plant, training for our workers to use the new machines, research and development to get our new flavours right, and even some of the salaries of the employees running the whole project," said Mr Singh yesterday.

"SPRING Singapore tailored funding to suit my requirements."

It took about nine months before production at the new plant got started in the middle of last year.

Enterprise development agency SPRING supported Foodedge "from the start to the end", said Mr Singh.

In fact, he had first found out about the CDG through a food line liason officer from SPRING.

Today, Foodedge boasts a menu of new ice cream flavours such as salted caramel almond and pistachio, as well as locally-inspired sorbets such as soursop and lychee.

The firm can also churn out up to 400 litres of ice cream per hour with just two men running the machines.

Two years ago, production was 60 litres an hour, using three to five men.

Do more against dishonest retailers
By Jessica Lim, Consumer Correspondent, The Straits Times, 10 Mar 2015

STIFFER measures against dishonest retailers must be considered in order to better protect consumers, urged Mr Lim Biow Chuan (Mountbatten) in Parliament yesterday.

Speaking during the debate on the Ministry of Trade and Industry's budget, he suggested making it an offence for a firm to continue collecting money from customers when it is on the brink of closure and is unable to deliver its services.

Mr Lim, who is also the president of the Consumers Association of Singapore, proposed introducing criminal sanctions against dishonest traders or contractors.

In addition, he called for a new rule: that prepayments or deposits for transactions worth above a certain amount should be paid into a trust bank account or insured, rather than being paid directly to the retailer.

Dishonest retailing practices have been under scrutiny since October last year, after several incidents involving questionable sales tactics - particularly in Sim Lim Square - made the headlines.

In response, Minister of State for Trade and Industry Teo Ser Luck said that malls have worked with the Government to publicise information on retailers who are the subject of a high number of customer complaints.

As for Mr Lim's suggested changes, he said: "What we do not want is to discourage retailers from doing their business, especially the good ones.

Committee of Supply Debate: Ministry of Communications and Information

MPs call for service accountability, network resilience from telcos
By Irene Tham, Technology Correspondent, The Straits Times, 10 Mar 2015

AS SINGAPOREANS become more reliant on telco networks, there is a need to ensure greater service accountability and network resilience, several MPs said yesterday.

They called for this during the debate in Parliament over the Ministry of Communications and Information's spending plans, which will continue today.

The ministry is also expected to respond to their questions and comments today.

Mr Vikram Nair (Sembawang GRC) raised concerns about poor 3G mobile coverage indoors even though more advanced 4G services have already been rolled out extensively here.

For instance, some people still cannot receive 3G signals in their own homes or in underground carparks, he pointed out.

He asked what the ministry is doing to improve the resilience and reliability of telco infrastructure, so as to "ensure that the mobile operators provide consumers with quality mobile services".

He also asked if any minimum standards would be set for 4G services.

Currently, industry regulator Infocomm Development Authority requires at least 85 per cent 3G mobile coverage on all floors in buildings, including carparks on basement one. But these standards have yet to be applied to 4G services.

Workers' Party (WP) MP Png Eng Huat (Hougang) also asked if more could be done to make telcos more accountable for wrongful billing.

This includes billing by third-party mobile content providers, which send unsolicited premium-rate text messages and those that peddle ringtones and games that attract premium charges.

More than one MP also asked for greater clarity on Singapore's cyber security efforts to counter rising threats.

Mr Zaqy Mohamad (Chua Chu Kang GRC) cited the high-profile digital attack on United States- based Sony Pictures last Novemberas an example of a cross-border incursion that could threaten Singapore's infrastructure.

Singapore has had its share of cyber woes, too, including attempts to bring down government websites and the defacement of the Prime Minister's Office and Istana webpages in November 2013.

"How have we progressed since these incidents?" asked Mr Zaqy.

WP chief Low Thia Khiang (Aljunied GRC) applauded the new Cyber Security Agency (CSA), which will be set up next month to coordinate public- and private-sector efforts to protect national systems, such as those in the energy and banking sectors.

But implementation details have been lacking so far. Of interest to Mr Low is how the CSA will work with the existing security set-up, such as the National Security Coordination Secretariat within the Defence Ministry, to coordinate countermeasures against threats.

Another issue raised in Parliament yesterday involved the public-sector telco network, which the Government plans to build for its smart nation initiative.

But Non-Constituency MP Gerald Giam from the WP asked if the Government really needed to incur the cost of owning key parts of such a network, and if smart nation applications can be built on existing telco infrastructure.

Noting that a Government-owned network is not necessarily more secure, he added: "How will the Government ensure that its dedicated network does not end up with excess capacity, while the public networks become increasingly clogged?"

Support for local cultural goods to win over the world
By Chong Zi Liang, The Straits Times, 10 Mar 2015

BUDDING local fashion designers could get a leg up, and made-in-Singapore short films could be screened on prime-time TV to help build a reputation for Singapore abroad and affection for local products at home.

Nominated MP Kuik Shiao-Yin raised these ideas in Parliament yesterday to make the case for greater state support for our "cultural goods", which she feels will help build up Singapore's international reputation.

The Government can consider new funding mechanisms as creative enterprises lack the capital, cashflow and headcount to make use of existing grants, she said.

"Today's top La Salle fashion student could be the next Charles & Keith. So how about we explore making micro loans available for a designer wanting to buy a 3D printer to prototype a new jewellery line, or a SkillsFuture scholarship for the photographer who wants to understudy a Magnum photographer?" said Ms Kuik, referring to the top photo agency.

Radio and TV stations could have quotas for local content so as to nurture demand at home.

Ms Kuik added that funding "cannot be judged just on quantitative but qualitative aspects as well", such as the number of positive mentions that the cultural product garners for Singapore in the international press.

Pointing to South Korea's success in branding itself, she said: "In the 1990s, when South Korea saw that box office revenue of Jurassic Park equalled their total earnings from the sale of 1.5 million South Korean cars, they made big policy changes to coordinate and scale their culture-making industries. Two decades later, they became a cultural giant in Asia, and we could be too."

Ms Penny Low (Pasir Ris-Punggol GRC) suggested the Ministry of Communications and Information spearhead a design festival that will help social enterprises and charities create better products and services for social good.

She also asked if the DesignSingapore Council can enhance "quality of architecture, the environment, public services and ultimately improve life for everyone".

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