Budget 2013 Debate: Day 2

S'pore wage model better: Swee Say

Labour chief says it is more than a minimum wage system

By Robin Chan, The Straits Times, 7 Mar 2013

SINGAPORE has its own wage model to help low-wage workers, said labour chief Lim Swee Say yesterday as he rejected renewed calls for a minimum wage system.

He called on employers to make the most of the new Wage Credit Scheme, the centrepiece of this year's Budget, to boost productivity, and share the gains with workers. This would lead to sustained wage rises, he said.

Speaking on the second day of the Budget debate, he said Singapore's wage model of the combined Workfare Income Supplement (WIS), the Workfare Training Support (WTS) scheme and a progressive wage system, works better than a minimum wage, and is "taking shape quite nicely".

The WIS gives wage subsidies to low-wage workers earning up to a monthly income of $1,900, a recently raised limit. It is supplemented by the WTS for skills upgrading of older workers.

And last year, the progressive wage model was introduced to set benchmarks for pay rises in different low-wage sectors such as cleaning, security and landscaping, depending on training, job redesign, and productivity gains.

"With the WIS, WTS and the progressive wage model, we believe we have now a minimum wage model - in fact, it is more than a minimum wage model - whereby we can actually maximise the upside for the low-wage workers, and at the same time, minimise the downside," he said.

While acknowledging Singapore is in the minority compared to the 90 per cent of countries with a minimum wage, he said that system has too many downsides. He also noted that there are many ways to implement a minimum wage, as studied elsewhere.

The perennial call for a minimum wage was made again in the House over the past two days by MPs such as Mr Inderjit Singh (Ang Mo Kio GRC) and Nominated MP Laurence Lien.

Yesterday, speaking before Mr Lim, Mr Singh proposed a five- year transition to a $1,500 minimum wage, with the Government assisting through top-ups of decreasing amounts. This is higher than the recommended basic monthly wage for cleaning jobs in offices and commercial buildings which is $1,000, under the Government's progressive wage model, which allows for wages to rise to $1,600 as a worker progresses up the skills ladder. In comparison, Malaysia has set a minimum wage of RM900 (S$360) a month.

Mr Singh argued that his proposal would provide a clearer road map and more manageable pace for companies to restructure and help raise wages at the bottom more aggressively.

On Tuesday, labour MP Zainal Sapari (Pasir Ris-Punggol GRC) expressed concern that low-wage workers would not gain from the new Wage Credit Scheme.

Under the scheme, the Government co-funds 40 per cent of the pay rises of all Singaporean workers for the next three years up to a gross monthly salary of $4,000.

But some low-wage worker contracts are already fixed for the next two to three years, Mr Zainal said. He suggested requiring firms to be licensed to operate in predominantly low-wage sectors, only if they adopt the progressive wage model. Currently, they need to get accredited, not a licence, to land government contracts.

Responding, Mr Lim said if companies were licensed, it would effectively be putting in place a minimum wage system, sector by sector, but then adding to that the WIS, WTS, and a progressive wage increase. With this, a cleaner would not be stuck at the minimum wage of $1,000, but could move up to a salary of $1,200, then to $1,400 and to $1,600.

Instead, he urged firms to continue the push to restructure and get the momentum for productivity gains. He also reiterated the importance of keeping a Singaporean core. Even though foreign workers will continue to be needed, the tap is being tightened, he noted.

Predicting a productivity breakthrough that had eluded the low- wage sectors in the past, he said: "Today I feel a lot more confident that this time round, it will happen."

More ideas for productivity push
MPs want more to be done to boost incentive scheme, raise staff morale
By Leonard Lim And Janice Heng, The Straits Times, 7 Mar 2013

SINGAPORE'S ongoing push for higher productivity was under the spotlight in Parliament for the second day running as MPs offered more ideas on what else could be done to help companies.

In particular, several MPs asked for changes to the Productivity and Innovation Credit (PIC) scheme, which dangles the carrot of tax or cash rebates to firms which spend money on productivity measures and technology.

Mr Ong Teng Koon (Sembawang GRC) wanted less bureaucracy and faster processing of claims for a scheme that has seen about a fifth of the 165,000 small and medium-sized enterprises (SMEs) applying for benefits.

Business owners, he said, cannot receive a claim if they put in an electronic receipt instead of a paper one. They also have to wait more than half a year to receive their money, which may lead to cash-flow problems. "I believe this Government has the ability to solve these teething problems."

Introduced in 2010, the PIC was expanded in this year's Budget. The Government will now give a dollar-for-dollar matching cash bonus when firms which fulfil certain requirements spend money to raise productivity. The cash handouts will be capped at $15,000 over three years till 2015.

Non-Constituency MP Lina Chiam called for the quantum to be raised, while Ms Lee Bee Wah (Nee Soon GRC) urged the Government to consider extending the scheme beyond 2015.

But productivity is not just about buying better and faster machinery, added Ms Lee, who was one of at least 10 MPs who spoke on productivity yesterday.

Firms can also be guided to improve management and company practices to boost employee morale. "Motivated and grateful workers are more productive than disgruntled workers," she said.

The quality of manpower amid the push for better productivity was also on the mind of Dr Teo Ho Pin (Bukit Panjang). He suggested support to help SMEs retain good staff through a work performance support scheme.

For instance, the Government could fund half of the annual variable bonuses for workers earning up to a gross monthly wage of $4,000, he said.

The Wage Credit Scheme announced in the Budget currently subsidises salary increments but not bonuses.

And while several MPs noted that productivity growth still lags despite being on the agenda for years, Minister in the Prime Minister's Office and labour chief Lim Swee Say was optimistic that the productivity improvements will take place this time.

"With manpower as the bottleneck, I am a lot more confident now that more and more companies will take this transformation towards a productivity-driven, innovation-driven economy a lot more seriously."

Ms Lee sounded a sombre warning though: She feared the pace of productivity improvements may not match the deep cuts in foreign manpower.

Workers and supervisors need time to learn and adopt new technology, so productivity is likely to dip during this transition stage before it picks up, she said.

In the construction industry, for instance, she feared manpower cuts would lead to poorer workmanship or projects left in limbo.

"Certainly we don't want to see another Rivervale Plaza incident," she said, referring to the mall in Punggol East, where upgrading works were delayed.

Co-payment mooted to spur hiring of ex-PMEs
Liang Eng Hwa suggests that Govt helps pay salaries of such employees
By Yasmine Yahya, The Straits Times, 7 Mar 2013

DURING the financial crisis in 2009, the Government launched a programme that co-paid the salaries of fresh graduates for a period of time to encourage firms to recruit these young talents.

Perhaps a similar scheme could be considered to help former professionals, managers and executives (PMEs) find new jobs today, said Holland-Bukit Timah GRC MP Liang Eng Hwa.

Speaking on the second day of the Budget debate yesterday, he noted that Singapore has a group of senior-level PMEs who have retired early or are under-employed. They face difficulties in getting suitable jobs.

"They get the sense that companies tend to favour the younger ones or foreigners. They also feel stereotyped as being less energetic or 'over the peak'," he said.

The Government could help these Singaporeans re-enter the workforce, he said, through skills conversions and customised career counselling, or by providing incentives to firms to hire these middle-aged former PMEs.

Mr Liang added that he agreed with suggestions by other MPs that companies be required to show they tried to hire a local before they can take on a foreign professional.

"While it may not always lead to a Singaporean hire, at least it will make the employers more conscious in their hiring process and give our local PMEs a chance," he said.

He pointed to the development of Singapore's real estate investment trust (Reit) industry as evidence of the rich pool of professional talent. It is a sophisticated market and requires specialised skills in real estate, finance, management and competitive value propositions, and has been predominantly led and driven by local talents, he said.

Bishan-Toa Payoh GRC MP Zainudin Nordin suggested that whenever a foreign company sets up operations in Singapore, it should be required to set out a "localisation" plan, to transfer systematically knowledge and skills to its Singaporean workers.

This would oil social mobility among Singaporeans and address concerns that locals face a glass ceiling in foreign firms, he said.

Nominated MP Tan Su Shan, meanwhile, called on the Government to ensure that Singapore remains a business hub by keeping its doors open to young international talent, so as to succeed in innovation and productivity.

"Singapore has typically been seen as a safe and predictable base for companies to create a gateway to Asia, but if our policies start chopping and changing with many U-turns, we will lose that transparency and predictability that make us attractive," she said.

Give locals fair shot at white-collar jobs: MPs
Some feel firms are needlessly hiring foreigners; others want talent inflows to continue
By Teh Shi Ning, The Business Times, 7 Mar 2013

The government's latest moves to ensure Singaporeans get a fair chance at higher-skilled jobs continued to win MPs' approval on day two of the Budget debate in Parliament. But MPs also stressed the need for Singapore to stay open to talent inflows if it is to retain economic competitiveness and vibrancy.

In his Budget speech, Deputy Prime Minister Tharman Shanmugaratnam announced two changes to the framework for employment passes, which high-skilled foreigners require to work in Singapore. Eligibility criteria will be tightened, especially for young graduates earning at least $3,000 a month, while the government will also study other countries' work pass policies and consult stakeholders to put in place a framework "to ensure firms give fair consideration to Singaporeans in their hiring practices".

Yesterday, People's Action Party MP Liang Eng Hwa said these would address concerns about unfair employment practices that rob Singaporeans of fair opportunities.

"There are clearly still a number of firms that visibly hire a large proportion of foreigners, particularly in the managerial level. You can't help but think whether it is really that difficult to find Singaporeans to fill those managerial positions," he said.

These include roles in HR, finance, compliance, auditing and general administration, said Mr Liang, a managing director at DBS Bank.

Singapore's real estate investment trust (Reit) sector is an example of one that has flourished under the leadership and work of local talent, he added.

"The CEOs, CIOs and CFOs of the large market-cap Reits are mostly our home-bred talents. And with these local senior executives at the helm, they help develop and nurture even more local talents below them to grow the sector and expand beyond Singapore," he said, echoing the views of other MPs such as Lim Biow Chuan, Foo Mee Har and Patrick Tay, who spoke on the matter on Tuesday.

Mr Tay, who is part of the labour movement, shared an anecdote of a senior manager in a large multinational company who felt his organisation had hired a foreign PME for an administrative and support role a local PME could have easily assumed. He also reiterated his call for labour market testing, to require employers to prove that they have advertised and were unable to fill the post with a Singaporean, before being allowed to employ a foreigner.

Hri Kumar Nair thinks that there can be "simple ways" of doing this. "For example, the CDCs (Community Development Councils) and NTUC (National Trades Union Congress) can help by offering a comprehensive job-matching service, not just for low-income workers, but for PMETs as well. To make sure that efforts are sincere, we can have them certify that job matching has failed before an employer can make an application for a foreign worker," he said.

Allegations that some employers favour foreigners at the expense of Singaporeans need to be dealt with, said the Drew & Napier lawyer.

But on a broader level, the government also has to explain better the importance of keeping Singapore open. "'Singaporeans first' does not, and cannot, mean 'Singaporeans regardless'," he said.

Describing the aspiration of local workers to remain at the core of the workforce, labour chief and Minister in the Prime Minister's Office Lim Swee Say said: "Singaporean workers recognise that 'Singaporean core' does not equal to 'Singaporean only'. In fact, we should welcome foreign manpower as our partners and friends, but we must remain at the core."

However, as these conversations unfold, the international community is watching, nominated MP Tan Su Shan reminded the House. "When the BBC and boards of international companies start asking if Singapore is becoming xenophobic, we need to ask why," she said.

She cautioned against "the continued measures to excessively curb the flow of talent". Singapore should be proud of its international reputation as a good place to live and work, and accept that this will attract people.

"While it's healthy to slow down, rebuild, be more selective in our immigration process, we need to tell the world that Singapore is not afraid to welcome good talent," said Ms Tan, who is also managing director and group head of wealth management at DBS Bank.

The need to keep and attract younger talent is especially crucial as Singapore's workforce ages, she said.

That demographic was one that labour MP Alex Yam devoted his speech to. Apart from ensuring that young job entrants get a fair deal and fair employment, more needs to be done to equip young Singaporeans with the skills for new growth sectors identified, rather than relying on skilled foreigners as new industries have done in the past, he said.

The debate continues today.

Call to legislate flexi-work practices

By Yasmine Yahya, The Straits Times, 7 Mar 2013

THE Government should legislate flexi-work, giving eligible employees the right to ask for such work arrangements and making it a duty for employers to consider their requests, Ms Irene Ng (Tampines GRC) suggested yesterday.

She said such a move would force companies to hurry and offer flexible working arrangements.

"Unless the right to apply to work flexibly is enshrined in law, companies will continue to resist the request to provide flexible work arrangements," she noted.

And helping people achieve good work-life balance is key to boosting the birth rate, making the country more liveable and giving Singaporeans a greater sense of belonging, she said.

"We have often spoken about the importance of helping our workers to enjoy a work-life balance but the reality on the ground is that the demand for productivity, to meet growth targets, to cut costs, to take on multiple tasks, is incessant and is being translated to longer hours and more stress for our workers."

She also said the Government will be injecting even more stress into society if it continues to encourage Singaporeans to marry early, have more children and work hard, but then fails to create a strong and consistent work culture which supports families.

Ms Ng supported the call by Dr Janil Puthucheary (Pasir Ris-Punggol GRC) for free travel on public transport before peak hours.

But the move will need to be accompanied by flexi-work, because if people were to go to work at 7.30am, they should be able to leave by 3.30pm, she said.

Her sentiments were shared by Workers' Party MP Lee Li Lian (Punggol East), who said many workers worried that their bosses would lose confidence in their ability to do the job if they asked for flexi-work arrangements.

"We need to support a shift in mindsets, which can be brought about if the Government takes meaningful steps to institutionalise better flexible work practices," she said.

Ms Lee reiterated her call for an independent commission to be set up to look into work-life balance practices.

The aim would be for the commission to lead public discussions on family-friendly work practices, develop research and promote global best practices on work-life balance, she said.

The commission should also help to develop resources to help businesses create a more pro-family environment, she added.

Playing Robin Hood 'may cause class wars'
NMP Eugene Tan says redistribution programmes should be minimised
By Leonard Lim, The Straits Times, 7 Mar 2013

PLAYING Robin Hood too much to tackle inequality may lead to a hardening of class distinctions, Nominated MP Eugene Tan warned the Government yesterday.

"A class war between the haves and the have-nots is debilitating," he added in his speech during the Budget debate.

His speech was in contrast to those from MPs who called for a more progressive income tax structure in the wake of "wealth" taxes on luxury cars and property announced in last week's Budget.

Assistant Professor Tan hoped that such redistribution programmes would be minimised, and asked Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam to elaborate on the development of this progressive tax system.

"In the context of today's political climate, does the increasing progressivity of our tax system also signal the rise of redistribution as a means of managing the inequalities in our society?" he asked, questioning if these moves were "appeasement tendencies". Noting that income transfers have risen over the years, he cautioned such moves could unintentionally give rise to a crutch mentality.

He suggested making non-income support a central feature of the social support system instead.

Mr Ong Teng Koon (Sembawang GRC) also warned against making the tax structure more progressive as it might cause some to leave the country.

"The marginal increase in taxes from a higher rate might not be more than the marginal decrease from an exodus. We might end up with a smaller tax pie instead. And in the process, also succeed in decreasing the incentive to work," he said.

These warnings came as Ms Denise Phua (Moulmein-Kallang GRC) added her voice to the call for increasing income tax rates on wealthiest Singaporeans.

"The value that those of us who do well must also do good is worth anchoring and applying throughout Singapore," she said.

The highest income tax rate for a taxable income of over $320,000 now is 20 per cent, below that for top earners in Australia and the United States.

Under Ms Phua's "Do Good Tax" proposal, those earning more than $500,000 and up to $1 million will contribute 1 per cent more in income tax. Every additional $500,000 beyond that will attract another 1 per cent tax, up to a maximum of 25 per cent.

Urgent need to fix integration woes: Nair
Govt has failed to explain open policy well, says MP
By Aaron Low, The Straits Times, 7 Mar 2013

SINGAPORE has lost its way somewhat in its integration efforts, and there is an urgent need to fix the problem, said Mr Hri Kumar Nair (Bishan-Toa Payoh GRC).

He came to this conclusion after a debate erupted over his proposal to levy a national defence tax on non-citizens as a way of helping to sharpen the differences between foreigners and Singaporeans.

Some liked the idea, others criticised it and some even suggested that he was giving foreigners a means to pay their way out of national service, a charge he rejected as untrue.

"But one thing most appeared to agree on: Something needs to be done. The status quo will not do," he said.

In a hard-hitting speech about the Government's approach to integration so far, Mr Nair said that it has not done a good enough job of explaining why Singapore needs to stay open.

"Singapore first" cannot mean "Singaporeans regardless" as it is important that the economy stays open.

But even as they welcome foreigners, Singaporeans must remain central to the nation's future.

He urged the Government to focus its attention on families who need more help. This year's Budget has taken a step in the right direction in this regard, he said.

At the same time, the Government should make it clear that there are distinct privileges in being a citizen, such as securing places in primary schools or property ownership, he argued.

"Some have said that such a move would be xenophobic. By that definition, any privilege given to a citizen is xenophobic. Of course it is not," he said.

New citizens and permanent residents should perform some form of compulsory service, similar to how Singaporean men have reservist obligations every year.

This is to emphasise that they have a stake in the country, he said.

"Give them a chance. They may surprise us," he added.

And to deter PRs who try to avoid having their sons do national service, Mr Nair wanted a robust and effective response, to clamp down on such behaviour.

"It is not too late to get back on the right road. The Government must lead the national debate on immigration and integration," he said.

"It should come up with a comprehensive package which Singaporeans, PRs and foreigners can accept as sound, compulsory community service, monetary and non-monetary measures, carrots and sticks. We should not avoid this sensitive topic but embrace it as part of the evolution of our young country."

SPEECH OF THE DAY: SITOH YIH PIN. AN EXCERPT:

Government must also tell people the bad news

WE ARE all in the business of trust.Trust is based on experience and, in turn, experience has two elements. Firstly, there is the aspect of performance that we are all familiar with - I trust you because you have worked and delivered in the past. Secondly, there is the element of expectation. This is something we have not discussed much recently.

Our Government has tried very hard in the past to enunciate what it will deliver for the people. Health care will remain affordable, schools will give good education, people will have jobs, etc. The recently announced White Paper and Land Paper are two such examples. The annual Budget debates are also examples of these efforts to manage and calibrate expectations. I would like to urge our Government to go one step further. In the management of expectations, we need to tell the people the bad news.

This is not pleasant, but it is necessary. It requires courage, and fans of the BBC comedy Yes Minister will remember that Sir Humphrey described "courage" as a dirty word in politics.

Such bad news includes:

1. We will increase the number of places in universities and polytechnics and 60 per cent of Singaporeans will become PMETs, but some graduates will never stay in private housing or own a car. This is because 85 per cent of housing are HDB flats and only one-third of families have a car presently and these numbers will not change drastically.

2. This country needs to continue to be run as a meritocracy. There is no other feasible alternative. The best will get more. One may rightly question the norms of meritocracy, as in what makes a person more meritorious? One may even ask why there are so many brand-name schools in the more affluent areas in Singapore and not in the new HDB estates. And in the harsh reality of meritocracy, we also expect the meritorious to do what is necessary for meritocracy to remain relevant - they must contribute more than others to the betterment of the society and maximise welfare for everyone living and working in Singapore. Meritocracy cannot be "take and take" by the best and the ablest without any obligation to serve and contribute.

3. Even if we increase our total fertility rate to 2.1 in 2013 suddenly, we will need to import labour to care for the elderly over the next 20 years. The babies born now or in the near future will not be ready to look after the 900,000 baby boomers retiring over the next 20 years.

4. Our public hospitals will continue to give good care that is accessible and affordable to all. But we will have to continue to have waiting times and the latest high-tech expensive care options will not be available to all.

Ultimately, health care is a trade-off between affordability, accessibility and quality. Usually, quality in terms of expensive care is of a lower priority, although we will not compromise patient safety. This is true for most developed countries in the world.

5. We will make our public transport reliable again and increase capacity. But COEs may never go back to the days of old again. There are limits to our car population just as there are limits to our human population.

6. We will limit the influx of foreign labour to Singapore, but we cannot shield our workers from competition. The reality is that our workers will still be competing day and night, 24/7 with workers in China, India or Indonesia.

I can go on with many more examples of such harsh realities but I will stop here. The currency of politics is trust. While we must strive to improve on our performance, we also need to get down to the difficult business of managing expectations.

We are now at the crossroads and Singaporeans are questioning what the Singapore core is and where the country is heading. I urge our Government to listen to the people, to labour for the people and to lead the people.

More targeted productivity measures needed, says veteran MP Inderjit Singh
By Ng Jing Yng, TODAY, 6 Mar 2013

Veteran backbencher Inderjit Singh today urged the Government to consider implementing more targeted productivity measures to aid companies here.

In his parliamentary speech during the budget debate, he suggested, among other things, controlling rental costs to help businesses, while rolling out a minimum wage system to help low-wage workers. He also felt that there should be better support for smaller companies to undergo the restructuring process.

Among his suggestions, he proposed to combine measures such as GST rebates and wage credit into one scheme over a five-year period, so that “people don’t have to feel that they can only survive because of handouts that they get from the Government”.

“In Singapore, I am suggesting that the minimum wage could be something around S$1,500, something less than what the US practices,” said the Ang Mo Kio GRC Member of Parliament (MP).

“This will allow Singaporeans and their families to have the basic decent quality of life based on the current cost structures that we have. If we pay people more, they will do the job.”

To help companies to manage business costs, he also asked to combine all related initiatives into one, instead of implementing the wage credit scheme as a “blunt tool”. The wage credit scheme was rolled out by the Government in this year’s budget, helping companies to co-fund wage increases of their employees.

Mr Singh felt that the Government’s wage credit scheme should be more targeted, asking companies to apply for it and justify why they should be given support.

The veteran People’s Action Party MP also suggested that the Government look at a five-year road map as companies undergo restructuring. He felt that smaller companies should be better supported during this journey and asked for more resources to be given to public agencies, such as SPRING Singapore.

Two MPs seek freeze on transport fares
Operators, LTA must deliver quality standards before raising fares, they say
By Goh Chin Lian, The Straits Times, 7 Mar 2013

FARE increases on public transport should be frozen until operators and the Land Transport Authority (LTA) deliver the quality standards that commuters deserve, said two MPs yesterday.

This was one of several suggestions MPs made on improving public transport, which was a key theme on the second day of the Budget debate.

Other proposals include engaging private bus operators to boost public bus services which, MPs say, the current operators seem unable to do, and granting seniors free travel during off-peak hours.

Ms Lee Bee Wah (Nee Soon GRC) fired the first salvo on fares by asking public transport operators to respond to the Government's call to raise productivity and innovate, to cut costs.

"Increasing fares may seem to be a quick way to fix the problem of rising costs, but it is not a convincing solution, as the cost is simply passed on to the consumers," she said in Mandarin.

Mr Liang Eng Hwa (Holland- Bukit Timah GRC) charged that the LTA and the public transport operators have to "restore public confidence before we can even talk about fare increase".

Their demands come amid worries that fares may go up after a moratorium last year.

Asked about it last month by reporters, Transport Minister Lui Tuck Yew said to wait for a report by a high-level committee relooking the way fares are set.

Mr Liang also suggested relying on private operators, whom he praised as entrepreneurial and resourceful, to speed up plans to ramp up the public bus fleet.

Last month, the Government had announced that it was exploring with private operators to run more morning-peak express services and shorter bus routes feeding into MRT stations.

Mr Liang said: "If the two public transport operators are incapable of increasing the bus capacity fast enough, we should not waste time with them and quickly look to other private operators to do the job."

Agreeing, Ms Irene Ng (Tampines GRC) said that with private operators, the LTA can experiment having mini-buses run shorter and more frequent loops at peak hours in a town, starting with her Tampines constituency.

Non-Constituency MP Lina Chiam hoped the involvement of the private operators would not be a stop-gap measure.

MPs also expressed frustration in getting public transport operators to improve services in their constituencies.

Mr Liang said each request to improve bus services often ends up in a drawn-out discussion with the operators saying they have no drivers for more services.

He supported the call by Dr Janil Puthucheary (Pasir Ris- Punggol GRC) to let commuters travel free on public transport before the peak-hour crush, to spark a change in travel patterns.

He suggested that Singapore study Melbourne's free train travel scheme before 7am on weekdays. Such free travel could be funded by government revenues from certificates of entitlement (COEs), vehicle taxes and Electronic Road Pricing, he said.

Ms Denise Phua (Moulmein- Kallang GRC) asked for free public transport for Singaporeans older than 65 during off-peak hours. Many seniors may not easily understand the present system of discounted fares for them, she said.

They get a full-day 25 per cent discount and pay a flat 87 to 91 cents for most journeys beyond 7.2km.

Mr Sitoh Yih Pin (Potong Pasir) was optimistic that public transport would be made reliable again, but warned motorists that given the limits on car population, COE premiums "may never go back to the days of old again".

Listen better to the ground: Zainudin
By Goh Chin Lian, The Straits Times, 7 Mar 2013

THE Government has to do a better job in communicating its policies and listening to the ground, or it risks losing the support and goodwill of the people, Mr Zainudin Nordin (Bishan-Toa Payoh GRC) warned yesterday.

He said the Government is "still some way away from restoring the trust" of Singaporeans, despite the many steps taken to address issues such as cost of living, housing and transport.

This is because many Singaporeans still feel that their concerns are falling on deaf ears and policy- makers are too isolated from the ground situation.

"We have lost the art of explaining policies in a way that makes sense to the common man. We have lost the pulse of the ground...

"Once we completely lose our residents' trust, we will no longer be able to call on them to support difficult, yet necessary steps, accept painful policies, to ensure Singapore's long-term survival."

Then, he cautioned, Singapore will go the way of many countries whose governments make populist policies to win the day, but whose people suffer the long-term effects.

In his speech in English and Malay, Mr Zainudin reiterated his call on the Housing Board to regulate the sale and purchase of three- and four-room flats to ensure affordable housing. He also called on those in the Malay community who have done well to take a personal interest in helping others who are worse off, to advance in life.

But while domestic concerns are important, Senior Parliamentary Secretary for Foreign Affairs and Culture, Community and Youth Sam Tan (Radin Mas) urged Singaporeans to consider how the country could tackle external challenges.

In a Chinese speech replete with ancient sayings, Mr Tan said Singaporeans should remain prepared for economic, political and environmental uncertainties in the world.

He also suggested that future Budgets show how each measure deals with the external challenges so that Singaporeans understand them better.

Time for reality check amid calls to spend more
By Chua Mui Hoong, The Straits Tmes, 7 Mar 2013

JUST what does Budget 2013 say about the People's Action Party Government's philosophy towards welfare?

For PAP MP Denise Phua, it marked a coming of age of the Government when it "crossed the chasm of the fear of welfarism" and became aggressive in providing direct help to the vulnerable.

But NMP Eugene Tan found it to have "appeasement" tendencies. Has the Government veered towards giving too much to individuals via income transfers and to companies via productivity grants, he wondered.

He asked: "Let's be cautious about our goal of an inclusive society becoming a slippery slope or a back door to a welfare regime that takes away the dignity of work and the appreciation of self-reliance."

One theme in the speeches of many of the 27 MPs who spoke on Day 2 of debate on Budget 2013 was the shift in social policy discernible in this year's Budget, which sees a rise in social spending, expansion of Workfare Income Supplement benefits to the low-income earners, and higher taxes on luxury cars and property.

Workers' Party MP Pritam Singh counted seven areas the Government promised to "do more" in, such as in helping retirees and older workers, in pre-school education and in tackling rising inequality.

He added tartly: "Whatever the reasons for this shift to the left, they're in line with the long-held belief of the WP and many Singaporeans that for a country with a per capita income of about US$45,000 (S$56,000), the Government can do much more on the social front for Singaporeans."

When it comes to what more the Government can give away, MPs were united across party lines in their long wish list.

PAP MP Vikram Nair thought pre-school subsidies - which will come down from several hundred dollars to as low as $10 a month for low-income households - can be "socialised" even more. Oh, and build subsidised flats with four or five bedrooms, since it would be "awkward" for a sister and brother to share rooms after a certain age.

Not to be outdone, Non-Constituency MP Lina Chiam (Singapore People's Party) thought every family should have a car: "A COE for a car should be guaranteed for every family nucleus at an affordable rate."

The car population is about 520,000. There are about 1.15 million resident households. Mrs Chiam did not go into the impact on road congestion of doubling the car population overnight.

The WP's Lee Li Lian argued that a domestic helper is a necessity for families with young children, elderly parents and disabled relatives, and wanted the Government to waive the foreign domestic worker levy for such families.

On Day 1 of the debate, another MP - the PAP's Dr Intan Azura Mokhtar wanted the Government not only to waive the levy, but also to subsidise the salary of maids employed by families with members who need "special care and attention".

It used to be that a job, a roof over one's head and schools for one's children were enough to satisfy citizens. These days, if these MPs' calls are reflective of citizens' desires, a family wants a subsidised flat where the kids can have a room each, free childcare, a cheap car, plus a cheap maid - to help look after the kids, and to clean the car presumably.

Every family, of course, wants to have a good life. But real life involves struggle and effort.

It is only recently that people started to talk as though it was the Government's job to assure them of one.

How is all this to be financed?

Mr Nair had the good grace to say it would be responsible to address how to raise tax revenue, given his list of ideas on how the Government should spend more. Spend more from the investment returns from past reserves, he said. Half is now spent; there's scope to spend a lot more, but he didn't specify how much more.

To be sure, calls to raise social spending and to use more of the net returns from reserves have been made by many Singaporeans in the last few years as wages at the bottom have fallen, living costs have gone up and rising income inequality alarms many.

But it's quite different hearing similar calls from MPs in Parliament, especially MPs from the party that long viewed welfarism as a dirty word.

Some MPs - a distinct minority - thought otherwise.

PAP MP Ong Teng Koon warned against over-taxing the very rich and urged caution as the Government restructures the tax system to be even more progressive. Already, only 20 per cent of top earners paid income tax, so the current system is already progressive, he pointed out.

"There is always a cost to increasing taxes. Nothing is free... The marginal increase in taxes from a higher rate might not be more than the marginal decrease from an exodus (of people). We might end up with a smaller tax pie instead."

The move to raise social spending springs from all the right motives: to tackle rising inequality, help the elderly and poor with medical costs, and ease social mobility. But the pressure to do more will continue, now that the sluice gates have been edged open.

When he wraps up the debate today, Finance and Deputy Prime Minister Tharman Shanmugaratnam will hopefully respond to MPs' Oliver Twist calls for more.

A dose of reality is in order.

Wage share of GDP up slightly

By Janice Heng, The Straits Times, 7 Mar 2013

WAGES made up some 42.5 per cent of Singapore's gross domestic product (GDP) between 2000 and 2009, up slightly from 41.8 per cent in the 1980s and 41.9 per cent in the 1990s.

The figures, which indicate how much workers benefit from economic activity here, were revealed by Minister for Trade and Industry Lim Hng Kiang in Parliament yesterday.

He was responding to a question from Nominated MP Eugene Tan. Mr Lim also gave the ratio of wages to all the profits earned by firms.

It averaged 0.83 in the 1980s, 0.86 in the 1990s, and 0.85 between 2000 and 2009.

Mr Tan's question came after Workers' Party MP Gerald Giam noted, in the debate on the Government's White Paper on Population last month, that Singapore's wage share of GDP was relatively small compared with that of other developed countries.

In 2011, wages accounted for 47.5 per cent of GDP in Australia, 49.2 per cent in the European Union, and 52.3 per cent in Canada. Mr Giam said the difference was due to cheap foreign labour in Singapore, which forced local workers to accept lower wages and thus allowed GDP growth to go to profits instead of wages.

Govt to continue studying options on population issues: DPM Teo

Channel NewsAsia, 6 Mar 2013

Deputy Prime Minister Teo Chee Hean said Singapore's ageing population issue is a one-off problem that resulted from having a very large baby boomer generation from the early 1950s to mid-60s.

He said it is necessary to make preparations for the future to ensure Singapore's seniors are able to look after themselves and are well looked after by their children and by the nation in the coming two decades.

Nominated MP Assistant Professor Eugene Tan asked Mr Teo in Parliament how the government is planning to get Singaporeans' buy-in for the Population White Paper and land use plan.

Prof Tan also asked whether the government will provide regular updates on its progress in addressing Singapore's demographic challenge.

Mr Teo responded: "We will continue to study options and engage Singaporeans on population and its related issues on multiple fronts, including through Our Singapore Conversation and other forums. 

"As we continue to engage Singaporeans and work together on policies, address and overcome the specific and practical problems we face and deliver programmes to benefit Singaporeans, we hope to strengthen trust and consensus among Singaporeans on the future that we must build together. The government will continue to provide regular updates on the progress of proposals in the Population White Paper and land use plan through the release of studies, reports and announcements. We're also working towards a medium term review before 2020."

Car ownership curbs too drastic: MPs
By Robin Chan, The Straits Times, 7 Mar 2013

THE recent drastic curbs on car ownership continued to come under fire from some Members of Parliament yesterday.

They were concerned that the changes would benefit the well-off rather than those who really need cars, and also severely hurt car dealers.

They have called for more clarity on the actual intent of the recent measures, and also for more help to tide people over the changes.

The Budget speech announcement of a new higher tiered Additional Registration Fee for luxury cars "appears to continue with the theme of progressive taxation", said Workers' Party MP Pritam Singh (Aljunied GRC).

The Government has also moved of late to cap car loan tenures at five years, down from 10 years. Loan amounts were lowered to 60 per cent of the car's cost, and to 50 per cent for luxury cars.

That means buyers will have to fork out a larger down payment.

Taking the two announcements together, said Mr Singh, led him to conclude instead "that the rich will benefit from the latest changes to our car ownership policies as the latest changes do not address the high disposable income of the rich".

The changes are likely to hit families with two or more children, or with elderly or disabled members, as they need the mobility provided by a car, but are unable to afford the down payment, he said.

That is because a larger household "necessarily entails a lower disposable income set aside for the higher down payment required".

The raft of measures were announced as certificate of entitlement prices rose to near $100,000, heightening public concerns that cars were becoming unaffordable.

Ms Lee Bee Wah (Nee Soon GRC) and Nominated MP Teo Siong Seng also raised the plight of used car dealers.

"Is this cut so critical and so market sensitive that the Government cannot give any advance notice?" Ms Lee said.

Mr Teo, president of the Singapore Chinese Chamber of Commerce and Industry, said that if banks reacted to these curbs by raising interest rates, some 1,000 car dealers "would suffer heavy financial burdens". He asked if the Government would consider applying the financial restrictions to only new cars and not used cars, and waiving them for car importers.

He also asked for assistance schemes to support them, and for a six- to-12-month grace period for firms to adapt.

He also wondered what would happen to the newly leased and renovated Mackenzie Used Car Centre, as some car dealers are now pulling out.

"The entire industry has entered a crisis situation," he said.