National Day Rally 2015 Special with Lim Swee Say

Breaking down that two-thirds Singaporean core: Lim Swee Say
The Manpower Minister clarifies the number of locals to foreigners in the workforce, and tackles questions on the CPF payout eligibility age and minimum wage.

Channel NewsAsia, 26 Aug 2015

Some have asked if the goal of a two-thirds Singaporean core in the workforce is a realistic one, since Manpower Minister Lim Swee Say said in a recent interview that the Government would hold fast to it.

Currently, residents make up about 62 per cent of the workforce. But this figure includes the construction workforce, where the ratio is one local for every seven foreigners, said Mr Lim.

Clarifying this on Tuesday (Aug 25) in a one-hour live show on MediaCorp's Channel 5, he said that taking only the manufacturing and services sectors into account, the ratio was in fact three locals to every one foreigner.

Of this three-quarters who are residents, he said, "the majority are Singaporeans - so in other words, if you look at these sectors outside of construction and foreign domestic maids, we are about there, at two-thirds," he said.

Helping to maintain this 2:1 ratio has been the tightening of foreign worker quotas and impact of levies. Mr Lim noted the "sharp drop" in Employment Passes since 2012 and in S-Passes since 2014. "Our challenge is, how do we maintain this and yet without running into problems of slow economic growth and high unemployment?”

In the past, a 3-per-cent growth in workforce plus 1-per-cent productivity growth made for 4-per-cent GDP growth. With foreign labour growth slowed to 1 per cent, "if we are not able to increase productivity, 1-plus-1 will only give us 2-per-cent growth every year,” he noted.

And small and medium enterprises - who employ 70 per cent of the workforce - would be most affected. The way out is to help these SMEs through the transition and to grow by becoming lean enterprises, added Mr Lim.

During the forum, Mr Lim fielded wide-ranging questions from members of the public on issues raised in the Prime Minister's National Day Rally speech on Sunday.

VOLUNTARY OPTIONS FOR CPF PAYOUT AGE

Prime Minister Lee Hsien Loong had announced that the re-employment age would be raised from 65 to 67 by 2017.

Some Singaporeans had raised concerns about whether this would lead to changes in the Central Provident Fund (CPF) drawdown age, recently renamed the 'payout eligibility age’. This is the age at which CPF members can start drawing monthly payouts, and will be 65 from the year 2018 onwards.

Mr Lim explained that members would have the option of deferring their payouts, which would see them rising each year they are deferred.

"Starting from next year we are going to offer CPF members the option,” said Mr Lim. “They can exercise, at any age between 65 and 70, when they want to start drawing down their CPF. The longer the delay, the higher the monthly payout.

“Under this framework, Singaporeans today can have the best of both worlds. On one hand they can continue to work for as long as (they like) until 67 and beyond. At the same time, they can defer their CPF drawdown age on a voluntary basis."

"MINIMUM LADDER" VS MINIMUM WAGE

Mr Lim also spoke about the benefits of Singapore's progressive wage model aimed at helping low wage workers upgrade themselves and earn higher incomes. He championed this model and said it is more comprehensive and effective than a minimum wage system that other countries have adopted.

Said Mr Lim: "In Singapore, what we have done was come up with a concept. Instead of having a minimum wage, we have a minimum ladder. In other words, there are various levels of minimum wage. "

For example, "if you're an indoor cleaner, the minimum wage today is S$1,000. If you are doing outdoor cleaning, it's S$1,200. If you are doing machine operations, it's S$1,400. If you are a team leader, it's S$1,600. What we have put in place is progression for low wage workers to move up. At the same time ... through our training or skill upgrading scheme, we will help them progress from one level to another."

ENSURE OPPORTUNITIES FOR THE YOUNG

Mr Lim added that the upcoming General Election – which is set for Sep 11 - will be especially important with looming challenges facing Singapore, such as the country's economy, which is in transition, as well as an ageing population.

He said that an important priority in the future would be for Singapore to create opportunities for young people that appeal to their passions and interests - especially with their increasingly high job expectations.

“More and more of them are driven by passion. If we’re not able to create an environment where there are opportunities in many exciting areas that will appeal to them, then they will go somewhere else,” he said. “These are the kind of things that I worry about. Therefore, I think it’s really important to make sure that there is a leadership team in place to lead us forward in the next 15 to 20 years.”

"I hope my grandchildren will grow up in a Singapore where the people, the Government all come together and are able to continue to create the kind of Singapore that we want for Singaporeans,” added Mr Lim.

“Because at the end of the day, Singapore today did not happen by chance. SG50 did not happen by chance. We actually consciously created a Singapore for today. And I hope that generations after generations of Singaporeans will continue that kind of spirit - a spirit of being able to create something out of nothing."