HEAD S - MINISTRY OF MANPOWER

Head S – Ministry of Manpower

Building a first class continuing education and training system

Mdm Halimah Yacob (Jurong): Sir, I beg to move,

That the total sum to be allocated for Head S of the Estimates be reduced by $100.

Sir, as we shift gear into productivity-driven growth, continuing education and training will become even more critical. Companies with a skilled and productive workforce will be able to compete much better globally. Workers with the relevant skills can stay employed and enjoy a better life. However, the training environment cannot remain static. It is dynamic and will have to take into account changing business and workforce needs.

Our Continuing Education and Training (CET) system must continue to focus on helping rank-and-file workers upgrade their skills, especially the more vulnerable low-wage, low-skilled workers. At the same time, our workforce profile is changing as more than 50% are now PMETs and their needs, too, cannot be ignored. PMETs are the key drivers of value creation in our enterprises, but they are also at risk of having their skills become obsolete. Hence, I would like to ask the Minister to give a progress update on our CET system, including our two new CET centres. Would the Minister also give details on how MOM intends to expand the CET coverage to meet the training needs of the growing number of PMETs?

An effective CET system also requires good training providers, but the quality of the training providers that we have today differs considerably and there is no consistency in the standards. We need to build up and strengthen the local industry and also attract many more world-class training providers to operate here. I would like to ask the Minister what measures are in place to improve the quality of adult educators in Singapore.

Sir, I also have a number of suggestions to make. First, our CET system is still very rooted to the idea of public-based CET centres. It is difficult for companies to get the training facilities funded in CET centres or get their training programmes WSQ-certified. This is a real pity as many of these company-based training facilities are world class and use leading edge technology. They could strongly complement the current public-based CET centres to give Singapore a uniquely enviable position where workers can acquire unique skills and get WSQ even through company-based training. Such company-based training facilities could help to churn out future-ready workers who are exposed to new materials, technology and processes.

Recently, we just launched Rolls Royce WSQ and, in 2009, we launched WSQ for the wafer fabrication plants, which is a good start but we need many more of such examples. Could I ask the Minister to support the development of more such world-class company-based training facilities as CET centres and accredited WSQ?

Second, last year, the Government launched the Workfare Training Support (WTS) scheme. WTS encourages low-wage workers to upgrade their skills through training, so that they can improve their employability and upgrade to better jobs. This is a good scheme but there are several challenges. Despite the higher funding, it is difficult to motivate low-wage workers to go for training. Inertia is only part of the problem as another challenge is lack of awareness and an effective way to reach out to them. Companies continue to be reluctant to send their low-wage workers, most of whom work in small companies, for training. Although the cost fees are heavily subsidised, some of the low-wage workers who live from hand to mouth continue to face difficulty in paying for the 5%-10% course fees. So this acts as a disincentive for training after work hours. Many continue to find the lure of overtime work or a second job too strong for them to resist. Language is a big challenge too as most of the WSQ programmes are conducted in English, whereas the low-wage workers are more comfortable in their own vernacular languages.

The Workfare Skill-Up Programme is meant to give low-wage workers a stronger foundation in basic literacy, so that they can continue with workplace skills training and enhance their ability to take on better jobs. But workers find the process rather long and tedious. For example, after taking the CAT or pre-emptive computer test, workers have to wait for about two weeks for the results. After that, there will be further waiting for their milestone award to be processed by the CDC or e2i. The time and effort can be a real struggle for low-income workers who have to juggle with their work and family needs. To make the WTS more meaningful, I suggest the following:

(i) Provide 100% funding to motivate low-wage workers;

(ii) Ensure that service contracts require companies to send their low-skilled workers for training. For a start, maybe the public sector can take the lead for cleaning or other service-related contracts; and

(iii) Simplify the process for claiming the training allowance under the Workfare Skill-Up Programme.

My third point, Sir, is the Employment Credit. I applaud the Government for introducing this scheme, but I urge the Government to convert this to a permanent scheme. I am really concerned that whatever good intentions the Government aims to achieve will be wiped out after three years when the scheme runs out. Worse still, the Government could be giving the wrong signal that older workers should be treated as a temporary resource not worthy of long-term investment and retention. There will be a cost to the Government but this will be more than offset by the benefit of keeping older workers productive and employed longer.

Sir, my fourth point is my pet subject but a serious request of workers to the Minister. Please exclude the overtime and bonus payments for eligibility to WIS. I have raised this so many times but this is the repeated appeal of workers. I am putting it again to the Minister for Manpower. By including overtime, we are certainly penalising those who are hardworking, and we weaken, not strengthen, people's resolve to work.

Update on the National Productivity and

Continuing Education Council

Sir, on the issue of productivity, it is important to emphasise not just labour productivity but also total productivity, which includes land, raw materials, capital, utilities among others. If we focus only on labour productivity, we will not be able to make the 30% quantum leap. No matter how brilliant a skilled worker is, if there is poor management, lousy tools and high cost in other areas, his productivity will be affected. But what we hear in the debate in this House is also the constant refrain and focus only on labour productivity. So I think this is a point worth mentioning and I would really like to hear the Minister's comments on that as well as how we will want to take a total productivity approach in achieving the quantum leap of 2.3% productivity improvement over the next decade.

In conclusion, Sir, we need to keep the training momentum high. During the recession in 2009, a lot of workers were sent for training because workers were idle, there were not enough orders and companies were more than happy to send their workers for training, particularly since they were getting very high funding under SPUR. And workers were prepared to go for training because they were very scared that they would lose their jobs because of the uncertainties at that time. But now that the economy has picked up, particularly we saw in 2010 as well as parts of 2009, there is greater reluctance on the part of the employers to send workers for training because there is also a very tight labour market. Orders are coming and they are trying very much to meet their orders. So there is a reluctance to send workers for training. Workers on their part also, because of the number of jobs that are available, there is less pressure that they feel in terms of the fear of losing their jobs and going for training. And also because of the better labour market, workers usually make use of their time in order to earn overtime. One really cannot blame them for that as well. But I think it is important that we keep up this momentum because, if we do not, then I think we will have a problem when the time comes and we need skilled workers, we may not have them, and the workers' employability will be affected as well.

I urge the Minister to examine ways to keep up the momentum and even to review the current funding level so as to incentivise more companies and workers to give a stronger priority to training. What are the issues? Is it because the funding was better during bad times under SPUR, that was why more were sent? Or are there other issues involved? If it is funding, then I urge the Minister to look into it.

Productivity growth

Mr Low Thia Khiang (Hougang): Mr Chairman, Sir, Singapore's economy has grown by an average of 5% a year over the last 10 years. But productivity growth from 1999 to 2009 has only averaged 1% a year. The bulk of the contribution to the low productivity rate is probably linked to the Government's policy of allowing too many cheap, low-skilled foreign workers into the workforce to generate economic growth. Singapore lags behind Hong Kong in terms of both labour productivity growth and real wage growth over the same period. I understand that MOM-MTI Joint Taskforce on Productivity was set up in February 2009 to examine the problem of declining productivity in the service sector.

Last Tuesday, Deputy Prime Minister Teo gave a rosy update on the progress of the National Productivity and Continuing Education Council and its efforts to spur productivity growth. He highlighted a few companies that had done well in their productivity drive. One of the companies mentioned was Tan Seng Kee Foods Pte Ltd, a small home-grown company that started as a sole proprietorship but now employs about 30 employees. Deputy Prime Minister Teo also mentioned that about half of the first $1 billion put into the National Productivity Fund has been opened up to fund productivity initiatives last year. I would like the Minister to provide an update on the number and percentage of small SMEs, like Tan Seng Kee Foods Pte Ltd, that have benefited from the National Productivity Fund last year, the percentage share of the Fund used by the majority local-owned and majority foreign-owned SMEs, and the number of foreign workers hired by the SMEs before and after initiating their productivity drives using the National Productivity Fund.

2.30 pm

Labour market

Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, much has been said about the increase of the foreign worker levy and the impact on businesses. With the recent announcement to further raise the levy, the message is clear to companies, that they need to upgrade their operations, train the workers and reduce dependency on foreign workers.

Businesses in Singapore do have high dependency on foreign labour with about 80,000 to 100,000 inflow of foreign workers every year. With the increase in the levy for foreign workers, which was introduced in July 2010, I would like to ask the Minister to share on the impact it has had on managing the high dependency on foreign labour. Has there been an effect on the quality of the foreign workforce in Singapore and what is the impact on the resident workforce? With the levy increase and focus on productivity and higher skills, has MOM seen the mix of foreign labour change? Has the profile of the foreign labour changed and are they of higher skills? Can the Minister share any early insights on businesses or sectors that have been able to manage the dependency on foreign workers while still being able to grow and capture the market opportunities through attracting local talent or successful measures to improve productivity for their businesses?

As Mdm Halimah Yacob has talked about earlier, with the concept of total productivity – have we seen that from companies rather than just a focus on labour? Recently, at the Budget debate that I did with residents in our constituency, one of our residents actually said to me it is good that there is focus on raising the foreign worker levy because his company has finally decided to invest in machinery to help – he is in a printing company. He said that they used to just use the simple printing machines but because now the focus on productivity, the message is clear, he has actually bought a duplex machine. Now, at least for the same number of workers he has, he can do more printing and faster. But he also, in the same breath, shared with me that what he also saw was a decrease in the use of foreign workers, which is a good thing. But in that short time frame, to train the local workers or to be able to find local workers willing to do the kind of work was difficult. The strain then became on the local workers to work longer hours to produce the same amount of work. So, yes, their real income would increase with more overtime chalked up but there is an impact on the quality of life as well. We need to look at the balance of both in the short term. I think in the long term, this company is trying to move into that direction but in the short term, the impact is being felt.

Hence, what measures does the Minister see as effective in addressing the challenges of the tight labour market whilst still being able to capture the opportunities for growth in the labour-intensive industries like F&B and hospitality?

The overall dependency ratio for all categories of foreign workers, as we understand, will remain unchanged. Has MOM seen companies continue to hire to the dependency ratio or have they now reduced their numbers because of the higher costs?

Quality of foreign workers

Mr Yeo Guat Kwang (Aljunied): Sir, while Singaporeans generally accept that migrant workers are needed to augment our small local workforce, little is done towards assimilation of our migrant workers at our workplaces. Harmonious co-existence amongst staff of all nationalities and qualifications is essential to ensure that our economic machinery is well-oiled and churn effectively as a whole in building a bigger pie for everyone to share from. We call it inclusive growth.

We need to make employers see the need to go beyond recruiting masses of low-skill or unskilled foreign workers to carry out routine and manual work. Sir, our drive towards higher productivity will require the participation of a more sophisticated, better-skilled group of foreign workers. Employers need to play their part to ensure that the qualifications, training and skills required of local workers are also the same as what they require of the foreign workers as well. Employment and recruitment must be skill-based and not just headcount-based.

Sir, I request that MOM consider a stronger encouragement or requirement for employers to bring in better-skilled, more adaptable foreign workers. One way could be to adapt the current WSQ system to migrant workers a pre-requisite to renewal of their work permits. In time, if results are promising, the Ministry might also consider WSQ as a condition to the entry of new foreign workers. Such a system would ensure only the right workers, with the right skills and the desire to work and consistently upgrade themselves to be here to contribute to the economy. Employers must do more to ensure that they also do their part to minimise social costs and maximise the economic contributions of the foreign workers.

Sir, ultimately, skill-based foreign workers recruitment will not only buck our trend of heavy reliance on migrant workers but also lead to a skilling-up of our migrant workforce and alleviating many of the social problems that accompany with low and unskilled workers in Singapore. In my view, a better-skilled and better-qualified foreign workforce naturally will translate to a more adaptable, more easily integrated and more productive foreign workforce.

Employment pass

Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, Employment Pass (EP) covers jobs that pay more than $2,500 in monthly salary. These are the jobs that we want more Singaporeans to take up as we grow their incomes. Currently, as I understand, there is almost unrestricted access to foreigners taking up Employment Pass as long as the company is prepared to hire them and there is no dependency ceiling or levy.

There has been feedback that, for example, NS liability for Singaporean males and longer maternity leave for Singaporean females may actually put them in a disadvantaged position compared to cheaper foreign professionals and managers who have no such NS requirements or maternity benefits. Employers of EP holders also do not need to contribute to CPF. Would the Ministry look into streamlining the Employment Pass very much like what we did for the Work Permits?

We need more concerted effort to help Singaporeans take up better paying jobs and achieve the target of increasing their income by 30% in 10 years. Similar to the principle we have taken for the Work Permits where we increase the levies to manage foreign labour inflow to increase productivity, we should not have easy access of foreign EP holders in this space of better paying jobs. In a letter to Straits Times Forum by Mr James Ang on 1st March 2011, he wrote that there must be a delicate balance to reap the optimum benefits of combining local and foreign talents and he urged the Government to have a process of checks to manage the quantity and quality of white-collar foreign talents and I share his sentiments.

In the MOM website, a Strategic and Skills-in-Demand List was drawn up for those interested in applying for EP. The list is a compilation of occupations that is key to supporting the growth of key economic sectors in Singapore. The compilation, which consists of six sectors and 88 occupations, also lists the skill-sets that are expected to be in strong demand by industries in the coming years. These occupations, in my opinion, are jobs that we want Singaporeans to take up and to grow their income. Sir, we should channel more training resources to help Singaporeans upgrade productivity and increase income in these sectors.

Unemployment

Mr Ang Mong Seng (Hong Kah): ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] According to MOM’s employment data, Singapore’s unemployment rate is 2.2%. By international standards, any rate below 3% is considered full employment. However, during my Meet-the-People sessions, older Singaporeans, especially those aged between 50 and 60, complained to me that they could not find a job. I would like to ask the Minister: what is the unemployment rate for Singaporeans aged 50-60, and how many are there? Did MOM draw up plans to help these older, unemployed Singaporeans find a job?

I would like to suggest that MOM distribute the information on these unemployed people to the grassroots organisations. We can use the information to make home visits and understand their situation. We can then help them find a job through CDC’s computer job-matching system. We can solve the unemployment problem directly and more effectively by providing such services.

According to the new Re-employment Act, people over 62 years can work until they turn 65. In other words, when the retirement age is extended to 65, the drawdown age for CPF will also be 65. However, some Singaporeans cannot work till 65 due to special circumstances such as illness. May I ask the Minister if these people are allowed to take their CPF savings out early?

*Cols. 4531-4532.

Employment of older workers

Mr Low Thia Khiang: The Government has progressively delayed CPF drawdown age from 62 to 65. Older workers will need to stay employed for as long as possible until they can access their CPF funds. Therefore, it is important for our senior workers to have ample employment opportunities when they age so that they can enjoy a happy and dignified working life in their silver years. Unfortunately, age discrimination could be a stumbling block for older job seekers.

In a Straits Times report last year, age discrimination complaints received by the Tripartite Alliance for Fair Employment Practices have risen. The article also noted that most complaints to the Committee cited discrimination at the pre-employment stage. In this respect, I agree with what MP Ang Mong Seng has said. I received the same complaints as well. Sir, I believe the number of such complaints is relatively small since the Committee is not well known to workers. Older job seekers who are discriminated against because of their age may not know where to go to lodge their complaints. Hence, the number of complaints received by the Committee could be just the tip of the iceberg.

The Government's measure of encouraging the employment of older low-wage workers is through the Special Employment Credit. Although employers will receive a special credit of 50% to 80% of the employers' CPF contribution for workers age 55 and above, Sir, the scheme is only temporary as it is called "special and one-off".

Sir, I would like to ask, first, whether the Government will make the Employment Credit scheme for older low-wage worker permanent? Secondly, what is the Government's overall strategy in ensuring older workers be just as competitive as their younger counterparts? Would MOM consider establishing a unit under its Ministry to look into issues related to the employment of older workers and, more importantly, to review and deal with age discrimination against older workers by employers?

Ms Sylvia Lim: Sir, the retirement age and re-employment provisions passed in January provide opportunities for Singaporeans to be re-employed from 62 to 65. However, to worker, the Act gives the employers flexibility on several counts: to challenge the medical fitness of the employee, to say that there are no vacancies and to reduce employment terms. Employers can also use the employment assistance payment instead offering re-employment.

This has led to insecurity among older employees especially since the Government had already pushed back the age at which members can draw their CPF savings from 62 to 65. As the retirement age remains at 62 years, workers will only be able to draw down their CPF monies three years after retirement.

The employment rate among workers aged 55 to 64 was about 59% in 2010. This figure tells us that these workers are employed but not whether there is under-employment. The Minister had previously noted that the recent recession had impeded progress towards achieving the target employment rate for these workers to 65% by 2012. Will more be done to improve employability of older workers?

Secondly, the current mechanism to resolve re-employment disputes relies on workers to complain against their employers. This may not be a practical option to the worker who may risk souring relations with his employer or even losing his job. Will the Ministry consider a proactive approach to protect older workers from exploitation, for example, random audits of re-employment contracts?

The Chairman: Mr Seng Han Thong. Take your two cuts together, please.

Self-employed persons' Medisave accounts

Mr Seng Han Thong (Yio Chu Kang): Mr Chairman, how do we build a social safety net for taxi drivers and such self-employed persons? This is an issue that is close to the hearts of leaders and staff of the National Taxi Association (NTA). It took us several years to explore several options and we achieved a breakthrough last year with the implementation of the Drive and Save scheme. There are three key lessons we have learnt.

One, self-employed persons such as the taxi drivers must consider the cost of building their social safety as part of their operating costs of the services provided by them. Two, the business partner or employer who works with the self-employed persons should recognise that. They incurred such a cost by their service as required by the business partner or employer. Three, the Government can play an important facilitating role and even chip in to promote CPF contributions by self-employed persons and employers who work with them.

Sir, we are grateful that MOM and CPF Board have solidly provided administrative support to formulate and implement the Drive and Save scheme. We have also suggested that the Government should chip in to strengthen the Drive and Save scheme which is voluntary in nature. The NTA leaders and staff are delighted that the Government has responded solidly by giving tax exemptions to the self-employed, taxi drivers included, and tax deductions to employers who work them, taxi companies included, on the Medisave contributions made under the Drive and Save scheme or other programmes of similar nature. I would like to ask the Manpower Minister if there is any action plan to extend similar programmes to other sectors of the economy where other groups of self-employed persons can also build their safety nets as the taxi drivers.

Older workers and public perception

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Chairman, at airports, food centres and other public places, we see more and more old folks working. Next year, when the retirement age is raised and the Re-employment Act kicks in, there will be even more older workers. Do these elderly folks need to work because their children are unfilial? Some people have this perception. Not too long ago, a man in his 60s came to see me at the Meet-the-People Session, he was carrying a baby. I congratulated him for becoming a grandfather, but he said the child is his own and he needs to work. If a man becomes a grandfather, I am happy for him. But if he becomes a father when he is in his 60s and needs to work, I think I would be worried.

2.45 pm

Old folks who work can be classified into a few types. One group of such workers has always worked in low-paying jobs. They have no savings and their children are low-income workers, so they have no choice but to work to survive. This group of older workers does face difficulty in finding jobs. In addition, employers are also biased against them. Mr Ang Mong Seng and Mr Low Thia Khiang are correct. Hence, in this aspect, e2i has done a lot of work. Last year, we helped 5,000 Singaporeans aged 55 years and above to find jobs. Their jobs range from retail, transport, cleaning, administrative to services sectors. These workers are paid more than $1,000 dollars and considered low-income workers. They still need our help.

The second group of workers is whom we will describe as " jia pa bui bao " (after they are full, they still want to buy a bun). These workers have reached retirement age and their children do not require them to work. But they want to carry on their usual lives, so they continue working. The third group actually lives a good life. They are healthy, their children are doing well, but they want to give back to society, so they become volunteers. The fourth group does not do anything, they stay at home to be " Ah Kong " (grandfathers).

The Ministry of Manpower should try all means to correct people’s misconception of old folks who continue to work. I suggest that MOM use the method they tried out recently when they launched the "Banana Sisters" Musical. Why not get them to perform a musical about "Ah Gong At Work"?

*Cols. 4533-4534.

Re-employment – special employment credit

Mr Heng Chee How: Sir, with Singapore's population ageing, it is imperative that we find ways to enable Singaporeans to work more years, so that they may build up resources to safeguard their standard of living in old age.

The passing of Re-employment legislation in January this year is an important step in this direction. The new law will take effect from January next year, giving all parties – employers, workers, unions, the Ministry of Manpower – one final year to get ready. On the ground, the attitude of companies toward preparedness for re-employment varies. Some are not only enlightened, but are actually business-smart and have taken the initiative to integrate the operations and human resource dimensions of re-employment, so that their re-employed workers are fully prepared to contribute to the bottomline and not become a cost or tax that the company has to grudgingly bear. Unfortunately, there are others who still choose to take a "the law has not kicked in yet" or "we will wait and see what others do in 2012" attitude.

Sir, during the second reading of the law in January this year, I asked MOM if it had the necessary machinery, resources and powers to shepherd in the legislation in this final year of notice. I was told that workers and unions can seek help from MOM if they are not able to settle their disputes on re-employment. I am concerned that not all companies are taking the necessary steps to ready themselves for effective and smooth implementation of the re-employment requirements in this final year. I would, therefore, like to once again ask the Ministry whether it has enough teeth to ensure progress and compliance with the forthcoming re-employment legislation.

Sir, this year's Budget also saw the introduction of a Special Employment Credit aimed at subsidising the employers' CPF contributions for older workers on Workfare. This grant works like a mini Jobs Credit, and effectively lowers the net cost of employing such older workers, and helps maximise their employment chances. At the same time, the grant is applied toward the workers' CPF, thus helping them save more for retirement. I welcome it.

However, I do not understand why it is on a one-off basis, paid over three years, as ageing is a structural rather than cyclical matter. Hence, I would like to ask the MOM to monitor the impact of this grant, and be open to prolonging it if it proves to be effective in keeping more older low-wage workers in work, while we concurrently upgrade their jobs and their skills.

Sir, I would also like to lend my voice to the call by Mdm Halimah to exclude overtime pay in the computation of the Workfare Income Supplement (WIS), when deciding on eligibility of workers for the claims. This has been a call by many workers and also by many unionists.

The Chairman: Mdm Ho Geok Choo, take all your three cuts together, please.

Older employees

Mdm Ho Geok Choo (West Coast): Mr Chairman, it is gratifying that the Government has announced the Special Employment Credit to help employers hire older workers. However, this credit is proposed only for employees already covered by the Workfare programme.

There is a group of middle-aged or older citizens who would like to work but have difficulty finding for a job. They feel disenfranchised. Several blame age discrimination. Solutions to the underlying problems of hiring older workers need to be explored. For instance, for the older PMETs, the problem could also be academic over-qualification. Most potential employers feel that the better qualified candidates would not stay long in junior positions but they are also unable or unwilling to offer more senior positions to these candidates.

The Government could promote coaching clinics to teach employers how to restructure jobs for older employees and manage an older workforce. Apart from this, perhaps a tax credit may be given to motivate employers to hire older employees whose pay would not qualify them for Workfare. Their skills and experience would be relevant, particularly now when manpower is tight. At the same time, there must be recognition that helping older Singaporeans look for a job requires more targeted effort. It is no longer a mass recruitment exercise, such as through staging a job fair. It would be a shame to let such talents stay unemployed.

Financial education

Mr Chairman, with the global financial crisis over, it is time to consider what needs to be done to ensure that situations like the Lehman Brothers mini-bond fiasco do not recur.

Prior to the crisis erupting in 2008, many investors had bought structured notes which offered higher interest rates than ordinary bank deposits, but which later turned toxic. What plans does the Ministry have for financial education for the public, making them aware that higher returns are associated with higher risks?

Mr Chairman, I wish also to ask about the Ministry’s plans for public education on retirement funding. Less than half of those who turned 55 last year, met the required CPF Minimum Sum requirement after including a property pledge. How many Singaporeans meet this requirement without having to rely on a property pledge? Mr Chairman, a small number has worrying implications for asset monetisation as the population ages.

PMETs

Mr Chairman, I would like to know whether the Working Group which the Government has formed to review the existing CET system has looked into the feasibility of a Skills Account for every Singaporean. The Skills Account was an idea that I had mooted last year to encourage PMETs to take responsibility for their own training. How far has the Ministry progressed in its review of establishing this account?

In addition, I believe training has to be guided on an integrated approach adopted for it to enhance a person’s employability. Some older PMETs have dropped out of the workforce because they are unable to clinch a job despite the retraining they have undergone. I know of a 48-year-old lady who attended a WDA professional conversion programme for hospitality managers, which involved a 15-month course leading to an executive master’s degree in hospitality administration, with a concurrent full-time internship. However, most managerial positions in the hotel industry require at most a diploma, but more importantly five to 10 years of industry experience. She has been unable to land even a formal interview despite the numerous job application letters she has sent.

This is an example of mismatch. First, it highlights the need for course counselling for the individual to ensure that the training to be pursued is relevant. Second, it shows that employers in certain sectors are not ready or willing to accept PMETs who have formal management training. In this regard, what is the progress of the WDA’s online self-service portal for individuals to help them monitor and plan their own training, to obtain information on demand in the various professions, and to ascertain the right type of training courses for themselves?

What about employers? Take the hotel sector as an example. Deputy Prime Minister Teo also said that the Singapore Hotels Association’s Productivity Steering Committee had published recommendations on best practices and solutions related to systems, work processes, automation and technology. Sadly missing on this list are recommendations on improving the industry mindset. What is being done in this respect?

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Chairman, Sir, among college graduates in the United States, unemployment peaked at 5% in February last year. This compares to the previous peaks of 3.2% for the recession beginning 2001, and 3.4% for the 1991 recession. Over in the United Kingdom, during the depths of the recession in March 2009, those who previously held skilled middle-class jobs but had started collecting unemployment benefits grew by 120% from a year ago. By comparison, those in unskilled work categories had risen a much lower 54%. This has led analysts to point out that the most recent recession affected white-collar workers at least as much as, if not more than less-skilled workers. It appears that white-collar jobs, many of which are filled by college-educated workers, have steadily become more vulnerable to economic downturns.

This has been largely been attributed to the phenomenon of offshoring, which is when companies export white-collar work to lower-cost countries much like they used to export blue-collar manual work through "outsourcing". It is believed that the next major wave of offshoring is going to hit white-collar professional jobs in the US and Europe. Moreover, it is not just routine work like "data inputting" that is being offshored, but "knowledge work" like analysing X-rays, drawing up legal contracts and researching bank clients. Apparently, a North London primary school even hired mathematicians in India to provide one-to-one tutoring over the Internet.

As the supply of graduate workers increase in developing countries, employers will be drawn by the offer of quality and lower cost. A recent Guardian article notes that, "The export of knowledge work requires only the transmission of electronic information, not factories and machinery." In fact, Princeton University Professors Alan Blinder and Alan Krueger suggest that high-wage jobs performed by highly-educated workers are more "offshoreable" than jobs done by low-paid, less-educated workers. This suggests that white-collar jobs performed by well-educated workers are now very much at risk in the advanced economies.

What about Singapore? Today, 46% of our resident workforce holds at least diploma qualifications. PMETs comprise more than half of our resident workforce and number more than a million. On the one hand, we need to ensure that future growth is productivity-driven, and this may include offshoring by Singapore-based companies. On the other, we must ensure that there is continued job creation – not just any jobs but quality jobs.

Having prepared rank-and-file workers to deal with structural unemployment in the mid-1990s, do we now need to prepare PMETs to deal with the offshoring trend? Can MOM please share the plans to better support PMETs, particularly in Continuing Education and Training?

* *The Chairman: Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: I suspend the Sitting and will take the Chair again at 3.15 pm.

Sitting accordingly suspended at

2.56 pm until 3.15 pm.

Sitting resumed at 3.15 pm

[Mr Speaker in the Chair]:

[Mr Speaker in the Chair]: Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

**** Head S – ( cont .)

The Chairman: Mr Gan Kim Yong, Mr Chiam did not speak just now. Would you let him speak now?

The Minister for Manpower (Mr Gan Kim Yong): Yes.

Interest rates

Mr Chiam See Tong: Sir, Singapore's sovereign wealth fund companies, Temasek Holdings and GIC, returned 17% and 9.5% yearly respectively, using largely Singaporeans' CPF money.

Why is CPF returning 2.5% on the Ordinary Account and 4% on the Special Account only? Sir, I would propose that the Government add a variable interest component of 2% more to the Ordinary and Special Accounts as pegged to the investment returns of the two sovereign wealth fund companies. This will ensure that Singaporeans get higher returns in their CPF which are in better preparation for retirement and ensure that they will not be short-changed for the already unfair mandatory CPF lock-up of people's money.

Mr Gan Kim Yong: Mr Chairman, Sir, when I made this speech last year, we were just coming off one of the worst global recessions which we had ever seen and there were significant uncertainties then. However, 2010 turned out to be a good year for the labour market. Overall employment increased by 3.8% as 112,500 jobs were added, with about half going to locals. Consequently, the proportion of residents aged 25 to 64 in employment reached a new high of 77.1% from 75.8% in the previous year. In a nutshell, more Singaporeans are employed today than ever before.

Our employment rate for older residents aged 55 to 64 also rose to a new high of 59.0% in 2010, after holding steady at 57.2% over the last two years.

Overall unemployment rate improved to 2.2%, as compared to 3.0% in 2009. This chart* [ as shown on the screen ] shows that our unemployment rate is significantly lower than regions like the US and EU, which suffer from unemployment rates of more than 9%. It is also lower than Asian countries such as China and Japan which posted unemployment rates of over 4%.

Our ability to bounce back from the recession so quickly was more than just sheer luck. It was because we implemented the right policies and tripartite partners worked together to save jobs and prepare for the recovery.

The Skills Programme for Upgrading and Resilience (SPUR), introduced in December 2008, played a key role. The Government invested a total of $635 million on SPUR to benefit 334,000 workers. More than 80,000 job seekers found jobs through SPUR. Madam Halimah will be pleased to know that training efforts have not slackened despite strong economic recovery. Our training participation rate improved to 29% in 2010 from 27.9% a year ago.

The economic outlook for 2011 remains positive and we expect to see a stable labour market and healthy employment growth, especially in the services sector.

With robust economic growth and a tight labour market, there is even greater urgency for us to raise productivity. We must step up our efforts on skills training and innovation while, at the same time, further moderate demand for foreign workers.

Let me first elaborate on moderating demand for foreign workers. Sir, the strong economic growth last year had spurred the demand for foreign workers and about 53,000 foreigners were added to our workforce. While we need foreign workers to complement and supplement our local workforce, we have to further moderate their demand if we want to keep the foreign share of the total workforce to around one-third in the long term and encourage our employers to invest in productivity.

As the Finance Minister announced earlier, my Ministry will further increase foreign worker levies in six-monthly intervals up to July 2013. The schedule has been released earlier and I will not go into the details. I would like to stress that the foreign worker levy changes should not be taken in isolation. They are part of the package of measures and initiatives introduced by the Government to encourage companies to embark on productivity efforts. Let me highlight a few issues relating to levy changes.

First, we will increase the levies for Work Permit holders (WPHs) in all sectors but the increases for the services and construction sectors will be more significant. This is because there is greater scope for productivity improvements in these two sectors. Senior Minister of State Grace Fu already talked about the construction sector. Let me just touch on the services sector. The productivity of our services sector is about 75% of that of Hong Kong and about half that of the US and Japan. In the retail industry, for example, the value-add per worker in Singapore is only S$37,000 compared with S$56,000 and S$84,000 in Hong Kong and New York. This means that with the same number of workers, retail companies in Hong Kong are producing 50% more than Singapore companies, while those in New York produce more than double as much as us.

This gives us a sense of how much productivity improvement is possible. But as Madam Halimah pointed out, this is not just about getting our retail workers to work harder and work longer. It is about how we can generate more revenue, create more value-add, how we can bring in more customers into our retail outlets, how we can streamline their workflow to be more efficient and reduce wastage of manpower resources.

Some have asked why we are raising the levy so soon after the last round of adjustments. We need to make these painful adjustments now rather than later. There are several reasons.

First, we must realise that the rest of the world will not wait for us. Some of us have watched the reality show called "Amazing Race" and in this show, there are teams of competitors racing to the final destination in order to receive a big prize. We are like one of the teams being stuck in the traffic in a taxi. While ahead of us, we are seeing some of the other teams racing ahead on an MRT train. And in our rear view mirror, we are seeing another team behind us on their motorbikes weaving in and out of traffic getting closer and closer to us. So, what do we do?

If we do not catch up quickly on productivity, the gap with our competitors, the team ahead of us, will widen and we will lose our competitiveness over time. Even countries which are behind us today in terms of productivity, those in our rear view mirrors, they are on motorbikes but they can weave in and out, they are very nimble and they will catch up with us over time. We must, therefore, push ahead with our efforts to reduce reliance on foreign manpower and create the necessary impetus for employers to turn to productivity improvement instead. Secondly, it is better for us to do this when the economy is growing strongly and when companies are in a stronger position to make the necessary adjustments rather than to do so in a recession when companies are facing more challenges.

Let me turn to S Pass. The levy for S Pass will be increased quite significantly by between $190 and $300. This is necessary because the S Pass stock has more than doubled since 2007. This growth rate is clearly not sustainable. S Pass holders are mid-skilled and they form part of the overall foreign manpower landscape. Therefore, we will also need to moderate the demand for S Pass holders to avoid an over dependence on S Pass workers.

I agree with Mr Yeo Guat Kwang and Ms Jessica Tan that we need better skilled workers. Our work pass framework is, in fact, designed to encourage employers to hire skilled workers. Employers will pay lower levies if they hire Work Permit holders who possess recognised trade tests relevant to their occupations or industries, including those from the Institute of Technical Education as well as from the Singapore Workforce Skills Qualifications (WSQ) system, as suggested by Mr Yeo. We have also recalibrated the S Pass entry criteria earlier so that only better qualified foreign workers will be eligible for S Pass.

Ms Jessica Tan asked whether companies will still be able to capture growth opportunities in the current tight labour market. The answer is definitely "yes" but provided they make sustained efforts to raise productivity. As Ms Jessica Tan pointed out, there will be no change in the Dependency Ratio Ceilings. Companies that require foreign workers to grow and capture new opportunities will continue to be able to hire them as long as they are able to remain competitive with the higher levy rates and have the requisite number of local workers.

Sir, the levy increases will be spaced out until 2013 but I urge companies to push immediately towards innovation and productivity to reap maximum benefits. The impact of all the impending levy increases will be about 1.7% of total labour cost when they are fully implemented in 2013. If businesses tap on the funding from the various Government schemes to embark on productivity improvements and save on foreign manpower, the cost impact will be significantly lower. Let me illustrate.

*Cols. 4525-4526.

The average levy increase for a services Work Permit holder is about $260. If a company improves its productivity and hires just one fewer Work Permit holder, the savings in wages, levy, accommodation and other costs from this one worker will more than offset the levy increases for the other four to five other Work Permit holders in its employment. This excludes the additional funding that the company may get from the Productivity and Innovation Credit and the National Productivity Fund. This applies similarly to a company with S Pass holders.

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Some have said that their businesses and challenges are different and it is not possible to improve productivity further. We should not underestimate the potential of every business to improve and upgrade. Ms Jessica Tan has asked for examples of businesses which managed to do this. Let me give Members an example from the F&B industry. Some F&B employers said that they have no choice but to pass the increased costs onto their customers. Well, we can understand that F&B outlets have to maintain a certain level of personal service and interaction with customers and this cannot be done by robots. There is still much scope for productivity improvements, especially at the back end. Some of you may have read about Minister Lim Swee Say's visit to Ruyi restaurant, where he saw an automatic wok frying rice. Some may think that this is just a showpiece and not for real. Well, Ruyi is not alone. Let me show Members this particular slide [ as shown on the screen ]. Like Ruyi, Lerk Thai, a restaurant which serves Thai cuisine, similarly uses automatic frying woks, and not just woks, automatic boilers as well and deep fryers in its kitchen, and it has also standardised its work flow. All this innovation will save Lerk Thai 20%-30% in manpower costs. Also, now that food can be served faster, Lerk Thai's table turnaround time is shorter and sales have increased by an estimated 20%-30%. The chef also has more time to create new menus. The food prepared is also of higher consistency. Now, this is what every business should be aiming to do.

Sir, in conjunction with levy increases, my Ministry will also be making administrative refinements so that the companies' monthly levy bill will be more reflective and responsive to changes in its workforce profile. We have also reviewed the various salary benchmarks in the Work Pass framework. This is necessary, given that local salaries have increased over time. The company needs to have the requisite number of full-time local workers under our Dependency Ratio framework to qualify for foreign workers. To ensure that local workers are employed meaningfully, rather than being employed on a token salary just to allow the employer access to foreign workers, we adopt a threshold salary of $650 today, below which local workers are deemed to be working part-time. And employers will need two such part-time workers to be counted as one full-time worker. Given the increases in locals' wages, we will increase the threshold salary from $650 to $850. This will take effect from July this year.

Mr Liang Eng Hwa was concerned about Employment Pass (EP) holders competing with local Professionals, Managers, Executives and Technicians (PMETs). The strong economic growth last year had added to the strong demand for PMETs. This means that there are many opportunities for local PMETs and this includes occupations in the Strategic and Skills-in-Demand List which Mr Liang has mentioned. These jobs are available to locals as well and we will encourage locals to consider taking up these jobs. Given the tight labour market for PMETs, salaries of local PMETs have also moved up in recent years. We need to raise the qualifying salary thresholds for EP and S Pass applicants accordingly, to keep pace with the local PMETs labour market and to encourage companies to be more selective in hiring foreign talent who can contribute to our economy.

Therefore, from 1st July 2011, to qualify for S Pass, applicants' monthly salaries will have to be $2,000 or more, up from $1,800. Similarly, the qualifying salary thresholds for Q1, P2 and P1 Passes will be raised to $2,800, $4,000 and $8,000 respectively. Employers of existing EP and S Pass holders will be given a one-time renewal of up to two years to meet the salary thresholds. Further renewals thereafter will be subjected to the new salary criteria. Existing EP and S Pass holders who cannot meet the new salary threshold may also apply for lower pass types, if they are eligible.

I would like to also add that we cannot close our doors to foreign talent. Foreign talent continues to be critical for our economic growth. These talents will help to grow the economic pie, so that everyone will have a bigger pie to share. Otherwise, we will lose our attractiveness as an investment destination and we will not be able to create good jobs for our locals. Let me assure Mr Liang that what we will do is to tilt the balance in favour of our local PMETs, by helping them upgrade and become more productive. For this, we will roll out a comprehensive programme for the local PMETs, which I will talk about in the next segment.

Sir, moderating foreign labour demand alone will not raise productivity. We will need a second strategy of skills training and upgrading. DPM Teo Chee Hean has already provided an update on the progress of National Productivity and Continuing Education Council (NPCEC). Mr Low Thia Khiang has asked about the beneficiaries of the progress of the National Productivity Fund. As DPM Teo had already elaborated earlier, the NPCEC has endorsed the sectoral blueprints for seven out of their 12 priority sectors and allocated half of the first $1 billion. The various champion agencies are in the process of finalising their roadmaps. The funds will be progressively utilised as these plans are being rolled out.

Mr Low will understand that productivity is a long journey. We are in the initial stages of implementation and at the appropriate time, the Council will provide an update on the beneficiaries and the impact of the fund. And I would like to also point out that productivity improvement involves everyone – local workers, foreign workers, all have to upgrade. Local companies, foreign companies, SMEs and multinationals all have to be part of this effort to raise productivity. And I hope Mr Low will understand and not just ask the local workers to make the effort to upgrade, and not the foreign workers. So productivity involves everyone.

One of the core strategies of NPCEC is to develop a first-class Continuing Education and Training (CET) system. Sir, let me share my Ministry's vision for the CET with the House. Our vision is to nurture a culture of lifelong learning among our workforce and our enterprises: companies eager to acquire new capabilities, integrating CET as part of their business strategy and rewarding their workers for better skills and higher productivity; workers, on the other hand, are always seeking to constantly improving themselves, learning new skills, keeping abreast of the latest knowledge and taking personal responsibility for their own upgrading. We see CET developing into a major competitive advantage for our economy and our workforce. To do this, we will build our CET system on four fronts.

First, we will develop high quality and relevant training programmes – relevant not just to today's skill needs but also future-oriented and outcome-based. Second, we will improve on the accessibility of these programmes and build more CET pathways and linkages so that workers from all levels, from all sectors, will have access to good quality CET programmes. Third, we will raise the quality of our CET institutions by developing the capabilities of local CET providers, as well as bringing in international best-in-class institutions so that they are innovative and responsive to the needs of the industries and adult learners. We will also be developing two national CET campuses as catalysts for the development of the CET industry. My Minister of State will talk more about the two campuses later. Fourth, we will enhance the quality of our CET professionals by raising the bar so that we can deliver high quality CET programmes effectively.

To achieve this vision, the Government will continue to leverage on our tripartite partners to reach out to our employers, workers and unions. Last year, we announced that we are investing $2.5 billion in CET over five years, in support of this vision and also to ensure that CET remains affordable and accessible to all Singaporeans.

Sir, the pursuit of our CET vision is an ongoing journey. My immediate task this year will focus on three key thrusts. I will describe our broad policy rationale, and the Minister of State and Senior Parliamentary Secretary will elaborate on the details.

For our first key thrust, we will provide greater training support for PMETs. Our CET system has traditionally provided strong support for our rank-and-file workers. We will continue to do so, but we need to expand and increase our attention on PMETs as they now form 52% of our local workforce. PMETs are key drivers of value creation in enterprises. They are highly skilled and extremely proficient in their current jobs. But as Mrs Josephine Teo rightly pointed out, when the global economy becomes more dynamic and volatile, the pace of economic restructuring will become faster and skills will become obsolete sooner. PMETs whose skills are highly specialised will paradoxically need to be more mobile and adaptable so that they are less vulnerable. To address PMETs' needs, the Government has already increased the number of subsidised PMET courses available.

Some MPs, like Mrs Josephine Teo, asked whether the Government will do more to help Singaporeans stay ahead. We will introduce a new comprehensive programme for PMETs, the Skills Training for Excellence Programme (STEP) to provide a sharper focus for our efforts to help PMETs. The aims of STEP are four fold: first, STEP will allow PMETs to deepen their industry and occupational-specific knowledge and skills so that they can be more proficient in their jobs. Second, STEP will allow PMETs to broaden their skills through developing relevant horizontal skill sets such as human resource, marketing, management and finance. Third, there will be courses for PMETs to refresh their skills and update their knowledge to stay abreast with the new trends and developments in their sectors. Lastly, STEP will develop a talent and leadership core for key industries through scholarships and customised training roadmaps for PMETs in the various sectors.

The Government will invest $150 million over the next three years under STEP. Many of our training programmes are delivered through small bite-sized modules to meet the needs of working PMETs. Nevertheless, attaining a full qualification, through the completion of a requisite set of modules, gives trainees a more comprehensive repertoire of skills. Therefore, we will introduce a CET Qualification Award (CQA) to encourage workers to complete a full qualification. This will also help PMETs to finance the costs of their training.

Our second key thrust is to enhance the quality of our CET professionals and CET courses. As we grow and expand our CET system, we need to continually raise the quality of WSQ training providers and programmes so that they are able to deliver positive training outcomes. Today, we have about 4,000 WSQ trainers, assessors and curriculum developers. Less than half of them possess a formal qualification in competency-based training and assessment. Many are freelancers whom training providers engage on a project basis. In order to grow, support and professionalise the CET community, we must now take the next step.

From 1st April 2011, we will introduce mandatory qualification requirements for trainers, assessors and curriculum developers engaged by WSQ training providers. This will improve the quality and outcomes of our CET programmes and benefit both the employers and workers. My Minister of State will elaborate further on these new requirements.

For our third key thrust, we will adopt a targeted sectoral approach to help industries address their different needs as we strengthen CET. We will collaborate with industry partners to develop and implement CET-related initiatives to raise the skill levels of workers to meet their unique challenges. The Minister of State will give more details.

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On the whole, our message for continuous training and skills upgrading has reached many employers and workers, especially the older ones. In 2010, 277,000 workers have upgraded their skills through WSQ, and I am encouraged that about 45% of them were older workers aged 40 and above.

Sir, we can no longer grow by blindly following our old economic blueprint of importing cheap foreign labour. Instead, productivity improvement must become the key driver of growth. In his Budget speech, Minister Tharman has laid out the challenge to improve our productivity by 30% over 10 years. No doubt, our journey towards this target will be a challenging one and involve painful transformations. The Government has already committed significant resources to help companies and workers push ahead in the right direction. But for us to succeed, we will need everyone's cooperation and hard work – workers, unions, Government and employers alike. This is the tripartite way, the Singapore way to succeed. I am confident that we can, we will and we must achieve our goal.

Strategic thrust

Mr Zainudin Nordin (Bishan-Toa Payoh): Mr Chairman, Sir, it is heartening to see the Government address several concerns in the Budget 2011, one of them being the issue of foreign workforce in Singapore. It is a well-known fact that Singapore is facing a shortage of workers. Many companies rely on foreign workers. This is not sustainable as productivity will remain low. The high influx of foreign workers may also cause social problems but if we are to continue growing our economy, we need to strike a balance between the inflow of foreign workforce and the deployment of our own workforce. Therefore, it is inevitable that Singapore will always require immigrants to reinforce our ranks. The challenge is how to manage the foreign workers. We must ensure that those who come to Singapore are skilful and can value-add to our local workforce. Similarly, we should also help them to understand our local culture. They must respect and comply with the framework of our social values and laws; otherwise, Singaporeans may find themselves being put in an uncomfortable position of having to accommodate others' values and also see an encroachment of their lifestyles.

Sir, please do not get me wrong. We appreciate the hard work and contributions from the foreign workers and the foreign talents. We also acknowledge their helping us in our economic progress. If you get to know some of these workers on a one-to-one basis, they are just like anyone of us, hardworking people with hopes and aspirations to raise their families. The difference is that they come with their own set of cultural values and practices. In order to address this growing concern among some Singaporeans, we need to maximise the potential abilities of our own local workforce. In that regard, Sir, can the Minister share with the House what measures are being taken to address the perennial problems of indigenous workforce shortfall? Secondly, what is MOM's strategic thrust in supporting sustainable economic growth and helping Singaporeans remain meaningfully employed in our own country?

Future workforce

Ms Denise Phua Lay Peng (Jalan Besar): Sir, it has been said that the work of the future will be increasingly bipolar with jobs sorting out into two clusters: (i) Lower-skilled routine work for the less educated; and (ii) A higher-skilled cluster which requires not just technical expertise but also critical thinking and problem solving skills. In this higher-skilled cluster, those who possess stronger people skills such as collaboration and clear communication will command even higher wages.

A global education movement, often called the "21st Century Skills" movement, is helping move schools to design learning that prepare students for success in the future. Countries like the United States, United Kingdom and Singapore are participants of this movement.

Sir, I urge MOM to similarly look into identifying and communicating a set of "21st Century Mindsets and Skills" to ensure a 21st century workforce in Singapore that is relevant. One of the most important 21st Century mindsets, I feel, is for every Singaporean in the workforce to take ownership of one’s career. This is especially so for the PMETs and senior workers.

Sir, I recently heard of an engineer who lost his job because his company which serviced film-processing machines became obsolete due to the advent of digital cameras. When asked why he did not upgrade himself while he was an engineer, he said he had no time and he was not the "studying kind". He then became an unhappy taxi driver, working long hours and complaining about his less than perfect passengers. When asked again why he did not do anything to get out of the situation, he remarked once again that he was too busy driving the taxi. He remains today – an unhappy taxi driver.

Sir, Singapore emerged from the last economic downturn almost unscathed. Many in the workforce kept their jobs due to state interventions such as the Job Credits Scheme and the subsidised SPUR training courses. Before we knew it, the economy has recovered and full employment is back or almost full. Sir, I worry if our workers and PMETs have emerged stronger and if they are ready for the next economic downturn. Would we develop what is called "learned helplessness" – a term that is often used in the disability sector – expecting that the Government will definitely step in to do the same rescue work everytime? I ask this because I was at a discussion on upgrading Singapore’s workforce for the future and someone asked if the Government can help ensure that workers or PMETs who attend training are guaranteed salary increases and/or promotions. Sir, as a young officer in the private sector many years ago, I was taught that when I attend training, I was not doing a favour to my employer but the knowledge that I acquired would become my personal asset and training is one way to update my skills and to keep my current job.

As a HR consultant in the private sector during my younger days, again, I had to counsel PMETs, including senior managers, some with young children, young families, who found themselves retrenched. Many could not find jobs because they never expected to be obsolete or replaced by equally capable, if not more capable, younger and lower-cost colleagues. It was very heartbreaking counselling them.

Sir, the mindset of taking charge of one’s career development, whilst seizing resources offered by one’s employer and one's government – this mindset of taking ownership of one's career is key to survival in the 21st century economy. True economic security lies not in our current job or wealth, but in our ability to produce wealth. This ability to produce wealth can only start by first taking ownership, having a good Government and an employer are additional blessings.

I feel strongly, therefore, Sir, that this mindset must be inculcated more seriously in the Singapore workforce. I ask MOM to include this in a 21st Century Skills Framework which, I hope, it will develop.

Next, Sir, on the workforce of the future, including the elderly and the disabled. In an increasingly globalised world and a domestic setting where a limit on foreign labour is now a standard feature, Singapore must tap on any local citizen who can potentially join our workforce. We should assume that there is no expendable manpower and maximise the potential of every adult Singaporean.

I believe that the workforce of the future is an inclusive one – for economic, social and political reasons. For sustained economic growth, we need to increase the size of the workforce to support the strategies of the ESC. Beyond economics, work is dignity and offers the opportunity for people to lead more fulfilling lives. There are social and political costs to pay when segments of people are excluded from work, especially not by their own choice. I therefore seek MOM to work actively with the many helping hands like the unions and voluntary welfare organisations to maximise the participation of, one, the elderly and, two, the disabled Singaporeans who are less educated or skilled.

I have observed from my work on the ground that work agencies have been fairly unimaginative when trying to place lower-educated elderly and/or disabled into jobs. Most of the jobs found for these groups are cleaner or security guard jobs. Sir, in this regard, I believe we can borrow some best practices from Japan where many helping hands work together in the country to operate Job Centres for the elderly and the disabled. The mission of the Japan Organisation for Employment of the Elderly and Persons with Disabilities (JEED) is this: to create a "Society for All" in which everyone has a chance to contribute through work. A full system of services to identify, train and support both the employers and their employees had been set up. I do not think nor advise that this full system from Japan be adopted in Singapore as it is funded by a personal income tax regime that is much higher than Singapore's. However, I believe MOM, the union and the VWOs can all join forces to extract the practical and good practices – and ensure a higher and more meaningful participation of Singapore’s elderly and the disabled in the workforce.

With this, Sir, I thank the Manpower Minister and his team for their diligent and excellent work in steering Singapore’s workforce ably in the last economic downturn. I look forward to his facilitation to help Singapore develop a 21st century workforce which is relevant, resilient and inclusive.

Continuing Education and Training

Mr Ong Ah Heng: ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Chairman, Singaporeans are living longer, with many living beyond 80 years old. If we retire at the current retirement age of 62 and live to 72, there is still a good 10 years of our life. We must make good use of the time after our retirement at age 62. I believe our senior citizens can continue to be productive and live an active and meaningful life. To stay productive, our senior citizens must be equipped with the right skills that are suitable for them, so that they can continue to contribute to the Singapore economy.

I would like to hear from the Manpower Minister if there is a concrete plan under the CET framework to help our senior citizens, especially those with low skills, to continue to stay employable beyond their retirement age.

*Cols. 4535-4536.

Workforce Development Agency

Mr Charles Chong (Pasir Ris-Punggol): Mr Chairman, Sir, the data in the Budget Book indicates that 15,000 jobseekers had been successfully placed and assisted in calendar year 2010 by WDA. However, the success placement rate has remained at only around 40%. Could the Minister tell us what is the average cost incurred by WDA and its partners for each successful job placement and what measures are being planned to improve the placement rate? Of the 15,000 jobseekers who were assisted and placed, how many were provided with training and skills upgrading before they found employment? What new measures are being planned by WDA to encourage the unemployed, the lower-skilled to go for skills upgrading and, therefore, enhance their employability? And what measures are being taken to encourage employers to send their lower-skilled workers for training?

Singapore as a regional HR training centre

Mdm Ho Geok Choo: Mr Chairman, Deputy Prime Minister Teo Chee Hean announced on Tuesday that MOM is driving the push to establish Singapore as the HR centre of excellence in Asia, together with the EDB and the Singapore Management University (SMU).

In addition to the Human Capital Leadership Institute which MOM is establishing, we should build a repository of Asian case studies in human resource management. In fact, through the Asian Human Capital Award organised by MOM, HR practices can be documented and kept in this repository. This collection can serve as a rich source for courseware development and made accessible to CET Centres dealing with HR training. This would be one more feather in Singapore’s cap. The Asian Human Capital Award competition has been running for the last two years and amassed a good number of HRM cases which, if put to good use, will benefit Singaporean companies. To grow this repository we need resources to manage it and I would like to urge WDA to champion industry partners to take on this project.

Mr Chairman, establishing an HR Outsourcing Hub for SMEs is another prong in the strategy to help build Singapore into a regional HR centre. SMEs are too small to have their own HR departments and a central agency to help them with HR functions which will allow them to focus on other aspects of their business. The Government said last year that it was contemplating such an entity. What is the progress on this to date?

Mr Chairman, I declare my interests as President of Singapore Human Resources Institute (SHRI) and Chief Executive of Human Capital Singapore.

The Chairman: Mr Yeo Guat Kwang and Mr Laurence Wee are not here. Mr Charles Chong.

Foreign domestic workers

Mr Charles Chong: Mr Chairman, Sir, we have witnessed the shortage of foreign domestic workers in some countries as a result of source countries restricting the supply for various reasons. Could the Minister tell us if there is a likelihood of Singapore facing a similar situation? Is MOM reviewing the existing sources of foreign domestic workers with the view of including new sources to meet increasing demand. What are the other measures, introduced over the years by MOM, to enhance the well-being of foreign domestic workers, raise the quality of such workers and improve the accountability in the recruitment process? Could the Minister also provide an update of his Ministry's investigations on possible anti-competitive practices by employment agencies in fixing charges and salaries of foreign domestic workers?

Entry ban

Ms Indranee Rajah (Tanjong Pagar): Mr Chairman, under our current rules, a foreigner who is a work permit holder is not permitted to marry a Singaporean without obtaining prior approval from MOM. Sometimes, this rule is breached and in that event, MOM imposes an entry ban on the foreign spouse from entering Singapore. I understand the rationale for the rule and I also understand the rationale for the penalty; hence, the imposition of the ban.

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However, what I want to raise is the duration of the ban. Under the current policy, when the ban is imposed, MOM does not tell the couple at the outset how long the ban is for. It is indefinite. And whilst there are sham marriages, there are also many cases where the relationship is genuine but the couple have either breached the rule unwittingly, or have mistaken belief that if they marry outside Singapore, it is all right; or, as is often the case, they know the rule but breach it, simply because they love each other and are willing to take the risk of being caught because their feelings for each other outweigh that risk.

Love is a difficult thing to legislate. However, where the rule has been breached, then even if the relationship is genuine, they must pay the penalty and be subject to the ban. But I would ask the Minister to consider imposing a ban of a finite duration because in cases where the relationship is genuine, it causes a lot of hardship and difficulties to the couple because, effectively, their lives are in limbo.

I have cases of residents approaching me to appeal for their spouses to be allowed to re-enter Singapore because they do not know what to do with their lives; they cannot make plans. It is especially difficult for the children. Yes, they were wrong to breach the rule; yes, they must pay the penalty but the penalty, while serving a punitive purpose, must also be proportionate.

Consider this: for the offence of voluntarily causing hurt under the Penal Code, there is a maximum sentence of two years. When you commit robbery under the Penal Code, it is between two years and seven years. At least, the people who commit those offences do know what the duration of the penalty is, whereas for those who committed the offence of falling in love with and marrying the wrong person without permission, they do not know how long the penalty will last.

I would ask the Minister to consider imposing a finite ban.

Inclusive growth programme and low-wage workers

Mr Seng Han Thong: Mr Chairman, retail sector is one of the six sectors which the Government has identified for action, to aim for inclusive growth.

One group of old, low-wage workers from the retail sector is the pump attendants. There are about 200 petrol pump stations in Singapore and about 1,500 attendants servicing the 945,000 motor vehicles on the road, 24 hours a day and seven days a week.

Recently, NTUC initiated a pilot project with 15 pump attendants from one of the major petrol companies to equip them with conversational English. It is hoped that they will be equipped with a set of minimum skills in the end so that their productivity can increase and they can gain a share. The course started after much operational changes like shortage of manpower, re-scheduling and replacement costs.

To help low-wage workers, the approach by the labour movement is to equip our workers with a minimum skill and standard of performance. And secondly, we work together with the employers to set and recognise this minimum skill. We believe that if a pump attendant can acquire basic level skills, trained in offering good customer services and knowledge of fuel products, he will become a better worker. As petrol refuel work involves hazardous risk to inflammable items, the safety knowledge and general cleanliness would also be an asset. So this skill set would help the employers improve operational efficiency and reduce labour costs indirectly. It also provides a practical pathway for employers to recognise their skill set and upgrade them.

We need more collective efforts like this from all stakeholders to persistently work sector by sector, sub-sector by sub-sector; and, ultimately, we want to be inclusive, to enable the low-wage workers like pump attendants to share the gain of productivity.

Older workers and low-wage workers

Ms Irene Ng Phek Hoong (Tampines): Sir, last year, in an effort to improve the image of cleaners, my constituency Tampines Changkat gave out the Model Cleaner award.

One of the five awarded is my resident Ong Hoo Yee, who is 56. He was voted by grassroots leaders for his dedication to the job. His salary is higher than previously, thanks to the PAP Town Councils’ implementation of the Best Sourcing Initiative.

It sometimes strikes me as perverse that, while cleaners do one of the most important jobs in society, they are one of the least valued. We can immediately feel the effects when they do not do their job properly – dirty estates, unhygienic environment, angry residents.

Their wages do not reflect their contribution to the community and its well-being. Their market pay generally ranges between $650 and about $1,000 a month. By paying them such low wages, we are storing up problems that will be paid for by society at large. They need financial assistance to support their family. They do not have enough CPF for retirement.

We often hear cleaning contractors complain that not enough Singaporeans want to do the job. But Economics 101 tells us that when the demand for workers outstrips supply, salaries would rise. In the case of cleaners, the salaries for most somehow stay put stubbornly.

There are a slew of initiatives funded by the taxpayers money to encourage companies to send their workers for training, to redesign jobs and to improve their productivity. These include the enhanced $2 billion National Productivity Fund, the $40 million Inclusive Growth Programme, and the Productivity and Innovation Credit which will cost the Government $520 million per year.

The ultimate goal of these initiatives must not be to fatten the bottomline for the companies, although this may be one happy result as well. The goal must be to provide quality jobs for workers and raise their salaries to a decent level, especially for those at the bottom end. But how do we make sure that the job created pays better and is not just another low-paying job?

It is time that we tightened the link further between business subsidies on the one hand, and jobs and wages on the other. In some cities in the developed world, the link is spelt out in black and white. In Minneapolis in the US, for example, any business that receives subsidies from the city may be asked to sign a Job Linkage agreement.

Job Linkage agreements encourage businesses to establish five-year job hiring and retention goals, hire Minneapolis residents and pay living wages. An integral part of this agreement involves a partnership between the business and neighbourhood workforce development organisation to assist in identifying, training and placing new employees. Businesses which sign on see the benefits – higher staff morale, higher retention of workers and better service delivery, with marginal increase in costs.

I know job redesign and best sourcing are work in progress in Singapore, and I commend the valiant people in NTUC who are working hard at this. But there must be greater accountability from companies who receive Government subsidies, to ensure sustained progress for our low-income and older workers. So the low-wage workers feel a greater need to work beyond 62 and even 65, because they have not been able to save enough to retire with peace of mind. Some say they are still healthy to carry on but their companies prefer younger workers. Others fear that their low pay will be cut even further upon reaching re-employment age.

I would like to ask the Minister for an assurance that their concerns will be addressed.

Training subsidies for low-wage workers

Mr Zainudin Nordin: Mr Chairman, Sir, within the labour movement, we are clear about the need for Government intervention to help low-wage workers do better. The Government has responded vigorously through initiatives such as the Workfare Training Support scheme to complement the existing Workfare Income Supplement (WIS). Therefore the issue here is not if the Government should act but rather the manner of the intervention for it to be really effective.

Low-wage workers are often faced with challenges of opportunity cost for training versus staying on the job to earn more. It is a dilemma for these workers because if they stay away from work and go for training, they will incur a short-term loss of income. To go for training is like telling them that there are two birds in a bush. Moreover, these workers are also having problems to pay even a portion of the course fees for training which is about 5% to 10% of the training costs. I think the Ministry should consider doing more to assist these workers. They should be treated differently to benefit from full subsidies for training. Can MOM highlight the efforts and programmes to get more of such workers on the WTS and WIS schemes?

Sir, these workers need special attention and support for such schemes so that they can climb up the income ladder through skills training and upgrading. Training for low-wage workers can be particularly challenging as they usually hold more than one job and depend a great deal on overtime to boost their monthly income. Often, they are the key breadwinners in the family. So for any training programme to succeed, there will have to be an income subsidy to encourage, to train and compensate for the loss of income. I would like to ask the Minister how are the resources allocated in support for all workers and their different needs and aspirations.

Sir, I spoke in this House in January to appeal to our Government to take the lead by making the best sourcing initiative (BSI) a norm and practice in all Government procurement. In this regard, can the Minister update this House on the progress of BSI and the impact of MOM advisory on the possible outsourcing that was issued a few years ago?

Work-life harmony

Mr Ong Ah Heng: ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Chairman, industries such as shipbuilding, construction and food and beverage (F&B) are heavily dependent on foreign workers. The working hours in these industries are usually very demanding on family time. Working hours are long and odd. Spending time with the family or ferrying children to and back from school becomes a challenge. It is a big contrast to workers who work in sectors where five-and-a-half day week is the norm.

How do we attract locals to these industries which are highly dependent on foreign workers? Is there a way where we can drive innovation to improve both the working conditions and productivity at the same time in these industries? If we can, we might attract local workers to join these industries.

I understand that the Manpower Ministry provides a Work-Life Works! Fund to encourage companies to implement work-life harmony programmes in companies. I wish to know if MOM has a plan or programme to encourage foreign worker dependent companies to achieve better work-life harmony for their workers and at the same time improve their productivity. This, in turn, will help these companies attract local workers to join them.

*Cols. 4537-4538.

Tracking work hours

Assoc. Prof. Paulin Tay Straughan (Nominated Member): Sir, the evidence is quite clear – Singaporeans work very hard.

A recent Business Times' article, which was titled "Singapore sweats away the hours – and productivity", notes that we worked the highest number of hours per year globally. We have even beaten the South Koreans. However, our productivity figures were poor. Clocking long hours at the workplace not only hurt social relations, it also takes a toll on productivity measures.

I urge the Ministry of Manpower to come up with a system to systematically monitor work hours – both formal as well as informal hours.

We must have reliable data on overtime work – especially unpaid overtime. With available data, we can then investigate why Singaporeans overwork.

In cases where job scope and expectations exceed the reasonable output for a full-time post, employers must correct their KPIs and set realistic and fair goals for their employees. In cases where job demands are reasonable but productivity is the issue, then retraining and skills upgrading are important.

We must certainly work co-actively towards correcting a dysfunctional organisational culture where mere clocking hours is internalised as demonstrating commitment. In the interest of our nation's future, we must strive towards a society where paid work does not overflow into time set aside for nurturing social relationships.

Home-based work

Mdm Halimah Yacob: Sir, we have gone some way to help retain more women in the workforce and attract more homemakers to re-join the workforce but we need to do much more.

What puzzles me is the fact that we have extensive Internet use in Singapore but leveraging on Information and Communications Technology (ICT) to work at home is so low. Only 1.3% of companies have put in place telecommuting arrangements. This very low figure reflects a lack of seriousness to create a more flexible work environment; yet many companies continue to complain vehemently about a lack of workers. Our low figure also compares unfavourably to the Nordic countries where the women employment rate is closer to 80%. This high participation rate is largely fuelled by flexible work.

Sir, last year, the Minister announced the establishment of a tripartite workgroup to promote ICT-enabled home-based work. Could I ask the Minister what is the progress of this workgroup? Could I also ask the Minister what kind of funding support will be given to companies to encourage them to provide more home-based work using ICT? Also, when would this scheme be rolled out? The funding is important because otherwise it would be difficult for many companies to start without the expertise nor the capability, particularly the technology.

Sir, we have also done a fair bit to promote inclusive and harmonious workplaces. We have a National Integration Workgroup on Workplaces to promote it. Could I ask the Minister what progress has been achieved in promoting harmony and inclusivity? How do we really measure progress? Are there any indicators that we use? Given the great diversity of our workforce, what are the challenges to achieve this ideal?

4.15 pm

The Chairman: Mr Yeo Guat Kwang, you can take your earlier cut on foreign manpower also. Take both cuts together.

Foreign manpower management

Mr Yeo Guat Kwang: Sir, our need to maintain a global competitive advantage requires us to continue to attract good and right migrant talent to complement our local workforce. It is important that we continue to safeguard the basic labour rights of all the migrant workers in Singapore.

Sad to say, chairing the bipartite Migrant Workers Centre has given me the opportunity to witness the number of abuses. While the Ministry has taken commendable steps to rectify some of these malpractices, including tightening the work permit conditions and employment agency laws, our experiences with distressed migrant workers show that we need to continue to do more to safeguard their rights.

Sir, I would like the Ministry to consider more proactive intervention in four key areas: first, MOM should stop employers to profit from kickbacks when hiring migrant workers on a work permit and exploit any ambiguity in our kickback regulations. For employers who do not fulfil obligations to their workers, some as basic as providing acceptable accommodation, upkeep and maintenance, they should be dealt with firmly. And I ask the Ministry to step up its enforcement and prosecution of all these malpractices.

Second, with the amendments passed for the Employment Agencies (Amendment) Act in January, I also hope that the Ministry will react swiftly and forcefully against all the errant employment agencies to send a strong signal.

Third, we must ensure adequate supply of foreign worker dormitory space in Singapore. I would like to ask the Ministry and its partners to consider how we can liberalise some of the sectoral controls that currently prevent the housing of workers from certain industries at some commercially-run dormitories. Over and above this, I also want to ask the Ministry and its partner agencies to release more land and space for building of the foreign worker dormitories. According to the list provided by the Ministry's website, today, we have only a total of 31 dormitories in Singapore. Today, almost all the dormitories are operating at its maximum capacity for much of the time. As a result, the foreign worker dormitory prices have doubled in the last two years. The major contributing factor to the price increases has simply been the fact that the supply has so much lagged behind the demand. Further downstream, the increased cost of managing one's foreign workers has resulted in a growing number of employers who actually can no longer afford to do so when their companies are in hard times. Sir, I would like to ask the Ministry to seriously consider to do more in this area.

Sir, the working and living conditions we provide for our migrant workers are a reflection of how our society values their contribution. Given our traditional reliance on them, I think it is only fitting that we regularly take steps to update and improve these conditions, not only to recognise their importance but also, at the same time, ensure that Singapore continues to attract good foreign workers to contribute to our economy.

Fourth, I have found on my visits to the foreign workers' dormitories recently that many of the dormitories provide mass self-cooking facilities for their workers. In many cases, these facilities are less than sanitary, and not very safe. I would like the Ministry to very seriously consider how they can work with BCA to further enhance and control the requirement of providing self-cooking facilities in dormitories and doing more for the workers in this area.

Sir, I will take my next cut.

Workplace safety and health

One of the key objectives that the labour movement would like to achieve is safety at work. What we hope to achieve is that every worker will be able to return home safe and sound at the end of every work day. To achieve this, the labour movement has collaborated with many of our tripartite partners to be more effective in inculcating a safety culture and mindset at our workplace. The aim is to position Singapore as a centre of excellence for workplace safety and health.

I am pleased that from 1st September 2011, the Workplace Safety and Health Act will cover all workplaces. I think it is important that MOM strengthens the general awareness of workplace safety and health amongst the workers and helps the workplaces, not previously covered by the Act, to quickly put in place some measures and, more importantly, to build up their capability and set up safety management systems.

A 2002 survey findings by an American insurer, Liberty Mutual, revealed that there will be at least US$3 savings for every dollar that invests in workplace safety. But I believe that many SMEs are not investing enough in workplace safety and health. In fact, the sense is that the industry sector, which will be newly covered by the Act, is actually not aware and not sure what they can do to enhance their workplace safety and health. Other challenges – a tight labour market, increasing cost of labour and levy – will actually end up with the employers now giving more excuses not to place priority on workplace safety and health.

I would like to urge MOM to roll out more incentives and training support to the unions and the companies to achieve their workplace safety and health (WSH) targets. As we widen the coverage of the Act, so too should we enhance the Workplace Injury Compensation Act (WICA). This Act is designed to provide a low-cost alternative to common law for workers to settle their workplace injury compensation claims. I hope the Ministry of Manpower can review this Act to facilitate and expedite all the settlement for such claims so that the workers who have suffered from the injury will be able to get something faster.

Mr Ong Ah Heng: ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Chairman, in 2010, there were 54 deaths due to workplace accidents, down from 70 deaths in 2009. This is despite a 14% surge in construction projects worth close to $26 billion. Death at the worksite is a painful incident. Even one death is one death too many. Death of workers at worksite usually involves foreign workers. These foreign workers leave their loved ones behind in search of a better livelihood. If they die here in Singapore, their dependants back home not only suffer grief but also lose their source of income. I think every worksite death is avoidable. Some of these accidents could be due to negligence of the employers or the workers lacking proper nutrition, over worked or need rest.

I note that the BizSAFE programme was introduced in 2007, and some 6,000 companies had since signed up. Life is precious, be it foreign or local workers. I wish to ask the Manpower Minister for an update on this programme and how it can be enhanced to further reduce worksite deaths.

*Cols. 4539-4540.

Workplace safety

Mr Charles Chong: Mr Chairman, workplace fatalities have decreased significantly over the last few years, falling from an average of four per 100,000 workers in 2005 to 2.2 per 100,000 workers last year.

However, the number of fatalities in the construction industry, unlike the other sectors, has not seen any significant improvement over the last three years. Could the Minister tell us what measures have been taken to improve safety in the construction industry and how effective have these measures been?

With the current efforts to reduce foreign manpower and to raise productivity, especially in the construction industry, would there be a need to have more additional safeguards to ensure that such productivity improvement in the construction industry is not achieved at the expense of safety?

The Chairman: Mr Laurence Wee, you can take your cut now which you missed earlier.

Maid levy

Mr Laurence Wee Yoke Thong (Nominated Member): Mr Chairman, would the Government reconsider the issue of waiver of the maid levy put up by me in this House at last year's Budget debate? The main consideration then for not approving the matter, besides the subsidies and support given by the Government to help families to manage their elderly at home, was the presence of a large number of foreign domestic workers, more than 100,000, and the need to manage that number. That number has decreased, I presume, in line with the current policy.

Sir, there is both the financial and physical stress for family caregivers when they employ maids to take care of their aged parents. Besides the employment expenses, medical fee, agency fee, return flight fee, etc, there are added expenses for the upkeep in the home as well as medical fee of the aged. Also, there is physical stress involved in the hands-on training and close supervision to prevent elder abuse by the maid. Doing away with the levy of $170 will provide great relief to the family caregivers financially as well as a boost to their flagging morale. Employing a maid now is not a bed of roses.

Mr Gan Kim Yong: While we strive for increased productivity and sustainable economic growth, it is paramount that this growth is inclusive. All Singaporeans should share in this growth.

In January, we had a full debate in this House on the Motion on Inclusive Growth. Many Members shared their views on the subject and there was general consensus that Workfare was the right approach to helping low-wage workers. Ms Irene Ng suggested tying Government incentives and subsidies to the outcomes of wage improvement of low-wage workers and improving the working conditions of low-wage workers. Sir, we need to be very mindful that each Government scheme, incentive or subsidy, has specific objectives and we should not undermine these objectives by tying to additional conditions to help low-wage workers. It is better for us to continue to focus on enhancing our Workfare scheme to reach out and help the low-wage workers and also to work on the Inclusive Growth Programme, administered by NTUC, to help low-wage workers.

Mr Gan Kim Yong: Many Members offered many suggestions on how to strengthen Workfare, including some suggestions made today. We will consider these suggestions when we next review the Workfare scheme, including the serious suggestions made by Mdm Halimah which we will consider seriously.

Madam, do allow me to talk about Workfare and the Workfare Special Bonus scheme in Mandarin.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Madam, the Minister for Finance had previously explained at length on why we are able to have this Workfare Special Bonus (WSB) scheme. This is because we had very good growth in the last economic year. Therefore, we can actually share the fruits with our low-income workers.

If you look at this WSB scheme, as long as the workers worked last year or continue to work this year, they will be able to receive a sum of $2,800 special bonus. In January this year, Mrs Josephine Teo had suggested that we raised the amount of this WSB subsidy. And this time, we will give them cash at one time. For this one, they will get half in cash and the other half is going to be put into their CPF. Apart from this, we will also spread out the time when the bonuses are given out, which means that we can allow our workers to actually receive these bonuses at different times to help them manage their daily needs, ie, this special bonus scheme can help our low-income workers face the daily necessities in life. However, these low-wage workers must also upgrade their skills so that they can get better jobs to get better pay.

In order to help these people to achieve this aim, last year, the Government had provided some training programmes for them. If you look at it, we have programmes under the CET scheme to allow ordinary workers to undergo training as well as to obtain certificates at the end of it. Here, we will continue to push for more such courses. My Senior Parliamentary Secretary, Mr Hawazi, will talk about this in detail later.

*Cols. 4541-4542.

4.30 pm

( In English ): Madam, what do all these schemes – Workfare Special Bonus and Workfare Income Supplement – mean to our low-wage workers? Let me take an example of a 55-year-old worker, Mr Tan, who is earning $1,000 a month and he stays in a 3-room flat. First, Mr Tan will receive $2,100 in Workfare Income Supplement. He will also receive a further $1,050 from Workfare Special Bonus for work done in 2010. This is a total of $3,150 for working and staying employed. As Mr Tan is a keen learner, he tapped on Workfare Training Scheme (WTS) to complete WSQ literacy and generic skills training, and even moved on to attain a WSQ Certificate. In the course of his training, Mr Tan would have received an additional $300 in training allowance under the Workfare-Skill Up programme. Further, he would have received a total of $800 from various awards for completing skills upgrading. In total, he will receive a benefit of $4,250 this year, and this does not include the generous 95% funding support in course fee subsidy and absentee payroll which enables his employer to send him for training.

Let me now turn to re-employment and retirement adequacy of Singaporeans. Mr Ang Mong Seng asked about the employment outlook and opportunities for older workers. Re-employment is the best way to create more opportunities for our older workers to work longer and save more for retirement. At the same time, the economy and the society stand to benefit from the valuable experience and contributions of our older workforce. This is especially true in the current tight labour market. Tapping on older workers will also help employers reduce their dependence on foreign workforce.

The Retirement and Re-employment Act (RRA) introduced earlier this year will take effect in January 2012. The RRA spells out the key obligations and conditions for re-employment. To complement the law, the tripartite partners also updated the Tripartite Guidelines on Re-employment of Older Employees to provide more details on how re-employment should be implemented.

In designing jobs and remuneration for older employees, employers should exercise fairness and take into account reasonable factors when making adjustments to terms and conditions of re-employment, such as wages, medical benefits and leave benefits. Similarly, employees are encouraged to exercise flexibility and be ready to accept the necessary adjustments for re-employment. This includes accepting a salary that is commensurate with job worth rather than seniority, and going for training to take on new job responsibilities. Employers and employees who encounter re-employment disputes may approach my Ministry for assistance.

Although the law will only come into effect on 1st January 2012, our survey in 2010 shows that the majority of the employers are able and willing to re-employ eligible workers. Seventy-seven per cent of companies surveyed already allow their employees to work past age 62, either on existing contracts or through re-employment. This is a significant improvement from 64% in 2009. Ninety-four per cent of employees reaching the age of 62 were also allowed to continue working beyond 62, up from 92% a year ago.

Madam, as we can see, many employers have already adopted the tripartite guidelines and implemented re-employment ahead of legislation. One example is VDL Enabling Technologies Group (S) Pte Ltd, a contract manufacturing partner that supplies high-tech equipment to leading OEM manufacturers. This company employs 215 employees, of which 17 are above 55 years of age. Since last year, VDL has formalised their re-employment policies and have communicated these policies to all their employees. Line supervisors will be informed of their retiring employees six months before retirement and are required to initiate discussions on re-employment with these employees. Employees who are re-employed will be deployed according to their skill sets, work performance and the organisational needs. Where there are still seniority-based elements in their wage structure, some wage adjustments will be made. The first beneficiary of the scheme is Mr Tan Eng Kem, who reached age 62 last year. He is now re-employed as a Senior Associate Engineer in charge of quality. Now, he supervises a team of Quality Assurance Engineering Specialists as well as performs incoming and final inspection of machinery parts and modules of semiconductor equipment. In line with VDL's re-employment policy, Mr Tan's basic wages have been adjusted to reflect the productivity, but all other terms and conditions remain the same. VDL is already engaging another employee retiring this year in re-employment discussions. VDL also continues to provide them with training opportunities to upskill and stay relevant in the workforce.

I urge all employers to follow the example of VDL and implement fair re-employment practices. I am confident that with the strong support from our tripartite partners, we will be able to implement re-employment smoothly.

Ms Sylvia Lim asked earlier about the employment rate target for older workers. Our tripartite efforts have produced positive results with the employment rate for residents aged 55-64 rising steadily from 2005 to 2008. This has since risen to a new high of 59% in 2010 after two years of stagnation due to the downturn. The unemployment rate for older residents aged 50 and above is also comparable to the unemployment rate for all residents.

We need to make up for the momentum lost due to the downturn. We have reassessed our target and will now aim to achieve an employment rate of 65% for older workers aged 55 to 64 by 2015 instead. This should be achievable with the concerted measures we are taking to improve the employability of older workers, and if the economic and employment conditions remain positive.

My Senior Parliamentary Secretary will give Members more details on our tripartite partners' efforts to help employers implement re-employment and improve the employment landscape for older workers in the year ahead of us.

Besides re-employment, we also enhance our retirement adequacy through the changes in the CPF. Mdm Ho Geok Choo expressed concern about the retirement adequacy of CPF members and asked about the Minimum Sum (MS) attainment rate. For the cohort turning 55 in 2010, over 40% of active CPF members, or about 12,600 members, attained their cohort MS set at $123,000 after lump sum withdrawals. Of these members, more than half have set aside the full cohort MS in cash.

The Minimum Sum represents only part of a member's retirement savings. Almost half of CPF savings are invested in housing. If we were to add back the amounts withdrawn for housing, the average savings of active members turning 55 in 2010 would be about $226,000, with the MS attainment rate rising to about 60%. The use of CPF for housing has helped nine in 10 Singaporeans own their own homes. The flat is a valuable asset which members can monetise through an array of options if they so choose, such as the Lease Buyback Scheme or subletting part of their flat to earn regular rental income.

Mr Seng Han Thong also called for more to be done to help self-employed persons save through the Medisave. He cited the Drive-and-Save Scheme as a positive example of efforts to encourage self-employed taxi drivers to make Medisave contributions. Such contributions by taxi companies will now be tax deductible. Since the implementation of the Drive-and-Save Scheme in January 2011, just two months ago, about 12,500 drivers have qualified to receive co-contributions from their taxi companies totalling almost $190,000.

Saving for healthcare needs is a personal responsibility, but the Government helps through the WIS and Medisave top-ups. In fact, now that self-employed persons will receive cash through the Workfare Special Bonus, there is even more reason for self-employed persons to contribute to their own CPF.

I agree with Mr Seng that business partners of self-employed persons should also play a role. MOM and CPF Board will work with industry associations, unions and companies to develop similar schemes in other sectors.

Mr Ang Mong Seng recognised that older workers may have health conditions that prevent them from working. He was worried that such members will not be able to withdraw their CPF because they have not reached the drawdown age. I would like to assure members that they can make early withdrawals from their CPF on medical grounds if they are suffering from any medical conditions that have rendered them permanently unfit for any employment. The application for such withdrawals would have to be certified by the CPF Board's doctors and approved by the Board.

Mdm Ho suggested that we should educate the public on the importance of retirement planning, and I agree. The CPF Board actively reaches out to members with retirement planning messages through various channels, such as the Internet and community events. The CPF Board also enlists the help of grassroots leaders to educate members from all the Community Development Council (CDC) districts. I also want to take this opportunity to thank Mr Seng Han Thong for mentioning the Banana sisters. They have, indeed, done a great job. I wished I have more Banana sisters, Watermelon sisters or other sisters. But they are volunteers, they work for CPF, they are full-time employees and they do this part-time, because they have the passion and they believe that they can make a difference in helping the low-wage workers understand CPF, understand WIS and understand the importance of retirement planning. In addition, CPF Board also participates in national financial education programmes, like MoneySENSE, which spreads financial literacy messages through many platforms, such as info-advertorials, monthly features in the NTUC Lifestyle magazine and radio programmes. We will continue to do more to help members understand financial planning better.

Mr Chiam asked whether we can peg our CPF returns to sovereign wealth funds like Temasek. Sir, we should recognise that Temasek invests in higher risk assets and businesses and the returns are not guaranteed. Even the principal is not guaranteed. On the other hand, CPF monies are shielded from such short-term market volatility. Members will remember in the recent economic recession, Temasek's investments were adversely affected. Most Singaporeans would not wish to expose their hard-earned money and hard-earned retirement savings to such volatility and potential losses. Instead, for CPF, the savings in the Ordinary Account will receive a guaranteed interest rate of 2.5% at the minimum. Savings in the Special, Medisave and Retirement Accounts will receive an interest of 4% this year. This ensures that the balances of CPF members continue to grow, even in today's low interest rate environment. To improve the overall returns of CPF monies, the Government also pays an extra 1% interest on the first $60,000 of CPF savings. Those who wish to invest part of their CPF savings in other instruments with potentially higher returns can already do so through the CPF Investment Scheme.

Besides the CPF interest rate framework, recent initiatives announced in the Budget Statement, such as the 0.5% increase in CPF contribution rates and raising the CPF salary ceiling to $5,000, will also help CPF members build up their savings faster. Taken together, these two changes will help a 45-year-old person earning $5,000 a month increase his CPF savings by $22,200 by age 55. We are phasing in these changes gradually to give employers more time to adjust.

From time to time, the Government also tops up CPF savings, such as the Medisave top-up announced in this Budget Statement. This year, 1.3 million Singaporeans will receive a total of $500 million top-ups in Medisave. Those aged 45 and above will receive Medisave top-ups of between $300 and $800.

4.45 pm

Many of our policies and programmes were implemented effectively because of our strong tripartite partnership which is the "special sauce" that has powered our economic growth and ensured our workers benefit from the growth. Tripartite efforts played an important part in helping us weather the recession in 2009 and allowed us to recover strongly. The partnership has been instrumental in preparing employers and workers for re-employment. They also contributed to the employment dispute resolution mechanism for PMEs which was launched in February 2011 and the Tripartite Alliance for Fair Employment Practices (TAFEP) in promoting fair and responsible employment practices.

Going forward, our tripartite partnership will continue to be an integral part of our strategy to push for productivity improvement, encourage training for workers and ensure inclusive growth. The Employment and Employability Institute (e2i), which administers the $40 million Inclusive Growth Programme – that Members like Mdm Halimah and Mr Heng Chee How talked about – is a key platform of this tripartite effort.

Madam, we must capitalise on our strong economic fundamentals and recovery momentum to create more and better employment opportunities for all Singaporeans, including those who are older or earning lower wages so that they too can have a better future.

Our strong tripartite alliance has enabled us to weather the global economic crisis and to emerge from it even stronger than before. We must build upon the progress we achieved to propel us towards a more productive and more inclusive Singapore in 2011 and beyond.

The Minister of State for Manpower (Mr Lee Yi Shyan): Madam, amongst the many accolades bestowed upon Singapore, our workforce stands out as one being the most competitive in the world. While this is a great achievement, this leadership may be eroded if we slacken and competition catches up.

With the hastened pace of product development, technological obsolescence and globalisation, what our workforce learnt yesterday can become out-dated tomorrow. Ms Denise Phua used the term "21st Century Workforce" to denote the new knowledge and skill sets of tomorrow that differentiates the workforce of today.

The only way we can future-proof our workforce is to create an infrastructure of lifelong learning; that on a continual basis, every willing worker has the opportunity to upgrade himself, acquire new skills, and take on new jobs that will come along in his lifetime. We call this infrastructure our Continuing Education and Training (CET) system.

Mr Zainudin Nordin asked how we are helping Singaporeans to remain meaningfully employed. Since we announced the CET Masterplan in 2008, we have made good progress in building our CET system. This is a very strategic infrastructure that will enable our workforce to stay relevant. Our CET has the following key building blocks.

Over the past five years, we have built up a set of comprehensive channels to deliver CET programmes. Today, these channels are made up of three National CET Institutes, 50 CET Centres and 500 Approved Training Organisations (ATOs). Together, more than 600,000 workers have been trained in WSQ courses since 2005. We now have a training capacity of about 240,000 persons per year.

Mdm Halimah Yacob asked about the progress of our national CET campuses. While building mass delivery channels and training places, we are also building Centres of Excellence in these two national campuses. To be ready by end of 2013, they will deliver 150,000 training places and train up to 50,000 workers annually. The campus at Paya Lebar Central will focus on Tourism and Hospitality while the campus at Jurong Lake District will emphasise on manufacturing and some selected professional services. Both campuses will provide certain horizontal programmes, such as employability skills, business management and productivity development. The two campuses will also serve as a training and job hub, offering employment services to both employers and trainees. Construction of the two campuses is expected to commence later this year.

Mdm Halimah also spoke about bringing in new providers and contents by leveraging on good companies. We agree with her that while buildings and hardware are indispensable, content and the quality of training are even more important. One way to raise the quality and relevance of CET training is indeed to work with leading companies. To date, we have already given 500 such companies ATO status. Last year, for example, WDA worked with the Renewable Energy Corporation (REC) to align 20 of its in-house training modules to WSQ standards. As a result, REC's employees are trained and certified under our Environmental Technology WSQ framework. We welcome companies who wish to align their in-house training programmes to WSQ standards to approach WDA.

WDA has also worked with other companies to open up their inhouse WSQ training to benefit the entire industry. For instance, WDA collaborated with Ascott Limited to set up the Ascott Centre of Excellence for the hospitality industry. We have also made good progress for CET content. Although the WSQ was only launched in 2005, we already have 26 WSQ frameworks, and about 14,000 courses available. Most major industries have been covered, including almost all of the 12 priority sectors under the National Productivity and Continuing Education Council (NPCEC). The next phase of our CET content-building sees us working closely with the NPCEC to develop sector-specific CET strategies to address the productivity challenges and the CET needs of each sector. This builds upon the foundation we have and places priority on areas, both old and new, to support each productivity roadmap. The sector-specific CET details are still being finalised and will be released by the respective champion agencies in due course.

But let me provide an illustration. Today, the hospitality sector has WSQ frameworks and courses in Service Excellence, Food and Beverage, Hotel and Accommodation Services, and Spa, amongst others. There are many courses available in a wide range of areas, and for different skills levels. However, only some will feature in the hospitality productivity roadmap, while other new courses will have to be brought in.

In this regard, WDA has appointed the William Angliss Institute from Australia to provide integrated CET for the hospitality and tourism sector. The William Angliss Institute will not replace existing training providers, but supplement them. A core strength of this new Centre is in the Integrated-training, which means equipping the worker with relevant cross-functional training. For instance, the hotel concierge can be trained in hotel front desk skills, as well as tour guiding and travel services skills. In this way, our workers in the hospitality sector can be multi-skilled and provide better service and more comprehensive service. Ultimately, it means raising overall customer satisfaction, value-add and higher wages.

A world-class workforce requires the support of world-class managers and leaders. Let me now turn to best practices in leadership, HR and management. Mdm Ho Geok Choo advocated the building up of case studies on Asian best practices in HR and leadership. I agree. The Asian Human Capital Award recognises exemplary and innovative people practices. The annual Singapore Human Capital Summit also provides the platform for companies to learn these best practices.

Beyond this, MOM and WDA have established communities of practice via the Human Capital (Singapore). MOM also regularly organises Executive Roundtables to bring together CEOs, chief HROs and thought- and practice-leaders to share their experiences and strategies. All these add to a vibrant landscape for learning and exchange of ideas. Mdm Ho also asked about an HR Outsourcing Hub for SMEs. SPRING is currently reviewing the potential HR service providers and studying the different types of HR services that SMEs might need.

I would also like to assure Ms Denise Phua that we are preparing for the future. MOM is currently leading a FutureSkills Needs study to identify areas where new manpower capabilities are needed beyond 2020, and develop strategies to address any gaps. Preliminary findings show that future workers will need to equip themselves with a combination of soft, some people call it "horizontal", and hard, some people say it is "vertical" skills. The currency of these skills must be renewed. Most importantly, future workers must be life-long learners.

An efficient labour market is characterised by good matches between job seekers and employers. Through the career centres at the CDCs and e2i, we placed about six in 10 job seekers in jobs in 2010. This translates to some 17,000 successful job seekers, better than the 40% we estimated in the Budget Book, as observed by Mr Charles Chong. About 4,000 of these received training before they were being placed.

Moving forward, the job placement rate by our career centres may come in lower, say around 40%. Given the healthy job market, many job seekers should be able to find jobs on their own. Among the users of our career centres, we expect a higher proportion of those who face greater barriers in their job search, including the long-term unemployed.

Our CET system has helped to open up new opportunities for Singaporeans. It has helped them take on better jobs and earn better wages. Let me share one such story. Mr Mohd Salleh Bin Mohd Nordin is 57 years old. Mr Salleh had worked in the Advertising industry for more than 30 years before he was retrenched. Motivated by a sense of professionalism to do his job better and to improve his own career prospects, Mr Salleh took up training under the Landscape WSQ Advanced Certificate course. He subsequently rose through the ranks and became a Senior Supervisor, managing a team of 18 Landscape Technicians. He is currently pursuing a WSQ Diploma in Horticulture. Mr Salleh aspires to become an ecologist and in his own words, "learning never stops". We need more workers to think and act like Mr Salleh. We especially want to encourage all our workers to complete a full CET qualification, as it gives them a more comprehensive repertoire of skills.

The Minister for Finance announced that we will introduce a CET Qualification Award. The award recognises trainees who persevere and attain a full CET qualification. From 1st March 2011, Singaporeans who complete their first WSQ Diploma will receive $1,000 and those who complete their first WSQ Certificate will receive $200. This scheme will cost the Government about $12 million over the next three years.

As we invest more in CET and expand the WSQ system, the demands on training providers and professionals will also increase, as observed by Mdm Halimah. To ensure quality, my Ministry will introduce mandatory qualification requirements for CET trainers, assessors and curriculum developers engaged by WSQ training providers. By 1st October 2014, we will require that at least 80% of these trainers and assessors have a full Advanced Certificate in Training and Assessment (ACTA) or equivalent.

For curriculum developers, we will require all WSQ curriculum developers who provide external training to have a Diploma in Adult and Continuing Education (DACE) or equivalent by 1st October 2015. To provide time for WSQ Approved Organisations to adjust, the changes will be implemented in phases. WDA will release more details in due course. To help training providers and professionals meet the new requirements, we are increasing the training capacity at the Institute for Adult Learning, our polytechnics and other private sector training providers. WDA is also offering substantial funding for trainees.

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Madam, these are our efforts to build up a first-class national CET system. As my Minister shared earlier, CET must be accessible, relevant and each individual must also have the desire to continuously learn and upgrade. Today, individuals are able and are encouraged to take charge of their own training, as strongly advocated by Ms Denise Phua. They can independently sign up for many Government-funded CET courses at the CET Centres, polytechnics and ITEs. We have also made CET affordable through direct course fee subsidies. Hence, in response to Mdm Ho Geok Choo’s query on establishing individual skills accounts, MOM believes our current approach is working well and is efficient. We will also continue to look at new initiatives, such as a self-service skills portal to encourage Singaporeans to take more responsibility for their training. WDA will release more details about the portal in due course.

Madam, our CET system has helped us produce a world-class workforce. But our local workforce is only part of the equation. To be precise, two-thirds of the equation. Foreign talents and workers have to raise their contributions too.

To ensure that our foreign workers contribute to the overall quality of our workforce, we need to continue to improve the way we recruit, manage and develop our foreign workers. They ought to be respected and treated fairly, as capable members of our scoring teams.

Providing an updated framework on the management of employment agencies, my Ministry recently revised the Employment Agencies Act which will take effect on 1st April this year. We are sending a clear and strong signal that we want to improve the standards and professionalism of the industry and will not tolerate any errant employment agencies or shady employment services.

Beyond regulations and enforcement, we would like to encourage a change in the mindset of employers to be more responsible.

My Ministry is developing an advisory to educate employers on responsible practices that they should adopt when recruiting foreign workers. Employers who subscribe to these practices are likely to get higher-quality workers who are less burdened by debt, less likely to create employment disputes and more motivated.

The advisory will touch on areas, such as raising workers’ awareness of their rights and obligations before they arrive in Singapore, and helping workers settle in after their arrival. It will also highlight case studies that employers can learn from. MOM will pilot the adoption of these measures with some companies in a few months’ time.

The advisory will be practical. In fact, some of our employers are already practising it. Consider, for instance, Keppel Offshore & Marine. The company conducts competency tests and interviews for potential foreign workers in the source countries, such as India, Bangladesh and China. It organises pre-departure briefings for successful candidates to inform them about the organisation, as well as the terms and conditions of their employment. During the briefing, foreign workers are also informed about the agency fees that they should expect to pay. With this process in place, the company’s foreign workers know what to expect when they come to Singapore to work, and this minimises employment disputes.

Next, on management: we concur with Mr Yeo Guat Kwang that effective enforcement is important to deter employers from adopting errant practices, such as kickbacks. In 2010, MOM charged and convicted 212 employers for failing to comply with their obligations under the Employment of Foreign Manpower Act, upholding the rights of 1,151 foreign workers. Nine of these employers were convicted of kickback offences.

Mr Yeo has also raised some concerns regarding foreign worker housing. Let me clarify that there are a variety of housing options for foreign workers apart from dormitories, such as housing workers on-site. The Government has been increasing the number of purpose-built dormitory bed spaces since 2007. Over the past year alone, the Government has rolled out dormitory sites that can supply about 50,000 additional beds. Operators of dormitories are also required to provide sufficient amenities for their residents. However, the speed at which new dormitory sites are released also depends on a number of factors, such as the time taken to prepare the land. In addition, the Ministerial Steering Committee on Foreign Workers takes care to engage stakeholders in the community and to ensure that dormitories minimise disamenities to their neighbours. My Ministry also conducts regular inspections to ensure that employers house their foreign workers in acceptable conditions.

Beyond enforcement, my Ministry intends to review the Employment of Foreign Manpower Act (EFMA). We will review the adequacy of existing offences and penalties to ensure accountability of employers and other stakeholders. We target to complete the review by 2012. The EFMA also prescribes the conditions that employers and foreign employees must adhere to under their work pass.

Ms Indranee Rajah asked if my Ministry could revise the current marriage restrictions on work permit holders. One of the work permit conditions that work permit holders agree to before they are allowed to work here is that they are not allowed to marry a Singaporean citizen or Permanent Resident without prior approval. Work permit holders who contravene this condition will be repatriated and placed on an entry ban. This ban might seem long but it is not permanent, and those affected can appeal to MOM. MOM will consider each case on its own merit, taking into consideration factors, such as the ability of the couple to maintain a family.

Madam, Mr Charles Chong asked what my Ministry has done for foreign domestic workers (FDWs). MOM has put in place a robust framework over the years to ensure the well-being and quality of FDWs.

First, FDWs must meet our minimum age requirements and pass an entry test before working in Singapore. These requirements aim to identify FDWs that are likely to face fewer problems adapting in Singapore’s urban environment, by ensuring that they are sufficiently mature and have the basic numeracy and literacy skills. Second, MOM sets out and enforces minimum working conditions, such as acceptable accommodation and safety standards. All first-time FDWs are required to attend a half-day safety awareness course to learn about safe ways of working in our urban domestic settings. All foreign workers, including FDWs, must also be covered by medical insurance of at least $15,000. Third, we put in place measures to help FDWs adjust to Singapore’s work environment. We conduct random interviews with first-time FDWs to determine if they are facing problems when adjusting. To help with the adjustment process, we piloted the FDW Settling-In Programme last year, covering topics such as Singapore’s culture, and norms and stress management. About 1,300 FDWs attended at least one module of the programme, and MOM has received positive feedback from them. MOM also has a dedicated helpline for distressed FDWs who require assistance. MOM does not hesitate to undertake strong enforcement action against employers who commit offences against FDWs.

Our strong regulatory framework and good employment terms have made Singapore an attractive destination for FDWs. Interviews with over 900 FDWs last year indicate that they are highly satisfied with working in Singapore, with a mean satisfaction level of 8.7 out of 10. Seven in 10 FDWs intend to continue working in Singapore after their contracts expire. Almost 90% of FDWs were also aware of their employment rights and obligations.

Indeed, the total population of FDWs in Singapore has increased over the years. As of December 2010, there were 201,000 FDWs, compared to just 196,000 in 2009. This translates to a relatively high proportion of 175 FDWs per 1,000 households. It is even higher than Hong Kong at 122 per 1,000.

Mr Charles Chong has suggested increasing the number of source countries for FDWs to ensure supply. Decent treatment of FDWs has helped to ensure that we have not been targeted by any measures by source countries seeking to reduce supply to Singapore. The growing population of FDWs and increasing penetration rate of FDWs also suggest that the addition of new source countries to raise supply is not necessary at this stage. FDWs now come from more than 10 approved sources, including India, Indonesia, the Philippines, Sri Lanka and Thailand. Nevertheless, MOM periodically reviews the adequacy of existing sources, considers alternative sources and conducts pilots, where necessary.

Mr Laurence Wee has suggested waiving the FDW levy for families with elderly or young children to care for. Madam, the FDW levy is intended primarily to moderate the demand for FDWs, so that only families who really need them will hire them. Families with elderly, young children or disabled family members already enjoy a concessionary FDW levy of $170, compared to the regular $265. This is, of course, a significant saving for those families.

But FDWs cannot be the sole solution for eldercare and childcare. MOM needs to address this holistically, rather than tweaking the FDW levy. For example, families can tap on the Centre of Enabled Living’s Caregiver Training grant which supports training in basic caregiving skills to our informal caregivers and subsidises home-help services for elderly who prefer to stay at home.

A survey recently conducted with FDW employers also indicates that employers are generally satisfied with their current FDWs, with the majority intending to continue employing their current FDWs after their existing contracts expire.

My Ministry has introduced additional measures to help employers. To help FDW employers make an even more informed decision when engaging an employment agency, MOM has revamped the online employment agency directory on MOM’s website. The directory allows employers to look at an employment agency’s track record, such as retention rates – retention rate refers to the percentage of placements who stayed at least one year with the same employer – and the passing rates on entry test. Feedback from employers has been positive and they found the directory useful.

To facilitate better matching between employers and FDWs, employers are also able to put a request through the EA to see FDWs’ employment history in Singapore. Employers can also subscribe to MOM’s six monthly electronic newsletter called InFOCUS, for tips on fostering a harmonious relationship with their FDWs and updates on new policies.

Regarding the actions of employment agencies jointly raising the salaries of FDWs, the Competition Commission of Singapore is looking into the matter to see if there is any breach of the Competition Act. My Ministry’s position on wages remains unchanged, that is FDW wages are to be determined by market forces, and based on mutual agreements between the employer and employee.

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Madam, let me conclude. As a small country with limited resources, we have done well. Our human resources, including our openness to foreign talent, have enabled us to achieve what many other countries could not have. To sustain this competitiveness, we have started to architect the workforce of the future. Our goal is to empower our workers with the skills they need to lead a better life.

The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi): Madam, Minister Gan has given the House an overview of our Ministry's approach to fostering inclusive growth. I will now elaborate on the specific measures we have put in place to help different groups of Singaporeans to enjoy our economic growth, namely, low-wage workers, older workers and economically inactive residents.

First, the low-wage workers: helping low-wage workers do better and earn more is a multi-faceted challenge. The Inclusive Growth Programme (IGP) was set up to ensure that they can also gain from productivity. Deputy Prime Minister Teo Chee Hean gave an update on the progress of the IGP, which is administered by NTUC, last week during the Budget debate. Mr Seng Han Thong has shared some examples of how the labour movement is helping low-wage workers. We applaud all these efforts, and I agree with him that we must work together and continue with our efforts.

Ms Irene Ng asked how we intend to help low-wage workers and older workers improve their wages. The Tripartite Committee for Low-Wage Workers and Inclusive Growth, which I chair, was established last year to assist low-wage workers in a range of areas. One of our priorities is promoting training for low-wage workers, which will enable them to become more productive and take on higher value jobs over time.

The Government has made a major commitment to the upgrading of low-wage workers with the launch of the Workfare Training Support (WTS) Scheme in July last year. WTS consists of three components to support training of low-wage workers. First, the "Employer Grant" provides up to 95% of course fees and absentee payroll support to encourage employers to send workers for training. Second, the "Training Commitment Award" rewards workers up to $400 a year to encourage them to complete their training as they work. Third, the "Workfare-Skill Up" programme provides a holistic training roadmap with customised classes to help low-wage workers overcome training barriers, attain literacy and workplace skills and find suitable jobs.

Mdm Halimah has asked for an update and made suggestions on the WTS. As of February 2011, more than 34,000 workers have benefited from the scheme. Specifically, over 11,000 workers and 1,300 employers have benefited from the WTS-Employer Grant. More than 24,000 workers received the Training Commitment Award. A total of 5,000 workers have also signed up for the Workfare-Skill Up. Of the 2,800 workers who have already benefited and/or attended the Skill Up motivational workshops, one in five continued on to literacy training. So we think that it is working. We can encourage more workers to take up the various range of skills upgrading possibilities and I think all sectors can work together to do this.

The WTS responds to Mr Ong Ah Heng's concern that it is important for older workers to go for skills training to remain productive and employable. Here, I would like to highlight the example of Ms Parwathy. Members can see her photograph on the screen [ indicating ]. Ms Parwathy upgraded her skills with the support of WTS and switched her occupation at the age of 50. Some of us may think it is late, but she has proven that it is possible to change a profession or a career at the age of 50. After working for seven years as a machine operator in an automotive company, Ms Parwathy took up a six-month, full-time nursing care training course under the WSQ Healthcare Support framework. She is now employed at a restructured hospital as a healthcare assistant. Not only does she enjoy her new job, she also draws a 20% higher salary.

I would also like to assure Mr Zainudin Nordin and Mdm Halimah that the Government will continue to ensure that training courses remain affordable. However, we will still continue and require some co-payment from trainees. This is in line with the basic principle that each individual is responsible for his own upgrading, and ensures that workers go for training that is relevant to their needs. Workers who face difficulties can approach the career centres at the Community Development Councils or the Employment and Employability Institute (e2i) for training advice and assistance. WTS is a new scheme, and we will take Mdm Halimah's suggestions into account when we continue to improve on it.

Mr Charles Chong asked what more the Singapore Workforce Development Agency (WDA) will do to encourage low-wage workers to take up training courses. I am glad to inform Mr Chong and Mr Zainudin that we have set up a WTS Promotion Working Group under my Tripartite Committee to enhance our outreach to eligible employers and workers. Chaired by WDA, the Workgroup will better coordinate the promotion of WTS among the tripartite partners and address training obstacles faced by low-wage workers.

The group had organised two roadshows to promote WTS. And at the roadshow in Clementi, which I had the opportunity to attend, the response from workers was encouraging. Many of them came forward to ask career counsellors on skills training possibilities so that they can improve their skills, get better jobs and earn better income.

One key obstacle that we are aware of is training accessibility. WDA, HDB and the Singapore Institute of Retail Studies have thus come together to roll out an on-site, bite-sized training programme for retail small-medium enterprises (SMEs) in HDB estates since October 2010. Mr Puan Soo Hong, the 65-year-old owner of Hong Sheng Goldsmith, is one employer who has benefited from this programme. Again, Members can see Mr Puan's photo there. Of his 12 employees, Mr Puan was able to send all eight frontline staff for training courses, as they were conducted before opening hours at a community centre near his shop. When Mr Puan noticed that his staff offered better customer service after the course, he introduced uniforms to enhance their professional image and instil a sense of pride in them.

Building on the success of on-site training, I am pleased to announce the launch of a new scheme, English@Workplace. Under this scheme, employers can engage CET Centres to design customised curriculum and conduct in-house training for their staff. Employers who have the capability to be in-house WSQ-Approved Training Organisations may also deliver their own Workplace Literacy training. This will enhance training accessibility for low-wage workers who may not be able to attend training due to their work schedules.

Mr Zainudin Nordin would be pleased to know that we put emphasis on responsible outsourcing, which is the second priority area of my Committee. Many low-wage workers are employed in sectors where outsourcing is a common practice. How service buyers outsource can therefore have a powerful impact and effect on the well-being of low-wage workers.

In 2008, the tripartite partners introduced the Tripartite Advisory on Responsible Outsourcing Practices. Based on a survey last year, we found that more than 50% of companies that outsourced cleaning, security and landscaping services adopted three or more of the six responsible outsourcing practices listed in the Advisory. With a few years of experience, we now have a better sense of which practices are the most effective. The tripartite partners will be gathering more feedback on the Advisory and issue an updated version, and we will take note of Mdm Halimah's suggestion to include training. To further increase the adoption of responsible outsourcing practices, we plan to develop more resources for companies to tap on, such as handbooks to guide procurement managers.

MOM will also provide information for buyers of services, employees and customers on individual companies that have infringed employment-related laws. We will start by publishing online a list of employers convicted under the Employment Act and Workplace Safety and Health Act from April this year. In due course, we will expand to cover other employment-related legislation, such as the Central Provident Fund Act.

Madam, now I would like to talk about the second group of workers – the older workers. Among low-wage workers, those who are older would benefit from even more targeted assistance. As the Minister for Finance announced in his Budget Statement, the Government will provide employers with a one-off Special Employment Credit (SEC) for older low-wage Singaporean workers. This will benefit workers by raising their employability and also help employers prepare for the new re-employment legislation that will take effect next year.

For each Singaporean employee aged 55 to 59 on the employer's payroll in a given month, employers will receive an SEC of up to 50% of the employer CPF contributions for that month. For each employee aged 60 and above, employers will receive a higher SEC of up to 80% of the employer CPF contributions for that month. In other words, employers can receive up to $420 a year for each qualifying employee.

The SEC will be paid twice a year for three years, beginning with employees on the payroll from January 2011. The first payment for employees on the payroll for the first six months of this year will be made by 30th September 2011. The SEC is expected to be paid to about 43,000 employers employing 125,000 old low-wage Singaporean workers. It will cost the Government about $100 million. Let me assure Mdm Halimah Yacob, Mr Low Thia Khiang and Mr Heng Chee How that we will review the SEC after its implementation to assess whether there are merits to extend it.

Mr Seng Han Thong rightly pointed out that public perception of older employees is important. Last year, we launched the Re-employment Ready Campaign, which featured employees who were past the age of 62 and still making valuable contributions at work. This year, we will focus on helping employers to implement re-employment.

I would like to share with Mdm Ho Geok Choo, Mr Ang Mong Seng and Ms Sylvia Lim the measures we have introduced to help companies recruit, retain and re-employ older employees. We will build on our existing programmes, such as the ADVANTAGE! Scheme that was introduced in 2005. A total of $13.6 million has been disbursed since its launch. We enhanced the scheme last year to encourage more companies to be re-employment ready ahead of 2012, and to provide additional support and help to SMEs. I am glad to update that 187 companies have signed up for the revised ADVANTAGE! Scheme since April last year. Companies that take action to improve the productivity of older workers can also benefit from the Productivity and Innovation Credit if their initiatives qualify for the scheme.

Mdm Ho Geok Choo further suggested having coaching clinics for employers. The tripartite partners have implemented the Programme for Re-employment Practices: A Roadmap for Employers (PREPARE) and the "4R" (Recruitment, Retention, Re-employment and Re-career) Programme. These training programmes provide general guidance to companies on re-employment and how to better manage an older workforce. Employers can tap on ADVANTAGE! funds to send their staff for these courses.

Our tripartite partners will also be leading the ACCELErating Re-Employment through Tripartite Efforts – quite a mouthful but we call it ACCELERETE programme to provide targeted assistance for companies seeking to implement re-employment.

Teams will help companies assess whether they have policies and processes in place to facilitate re-employment, and follow up on the gaps identified.

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Mr Low Thia Khiang raised concerns about discrimination against older employees. Through the Tripartite Alliance for Fair Employment Practices (TAFEP), the tripartite partners have been working to promote fair and responsible employment practices, including age-neutral human resource policies. For example, employers are encouraged and assisted to use merit-based criteria when hiring. To date, over 1,500 employers who hire more than 650,000 employees have signed the Employers’ Pledge of Fair Employment Practices. To address Ms Sylvia Lim’s concerns, the tripartite partners are working hard to raise awareness of TAFEP and its work to address workplace discrimination. MOM and the tripartite partners also work closely with industries, employers and unions to help ensure that older workers continue to be gainfully employed.

Mr Low also suggested setting up a unit within MOM to look at older worker issues. With the passing of re-employment legislation, MOM has already allocated dedicated resources to work proactively with our tripartite partners to help companies get re-employment ready.

I agree with Ms Denise Phua that we must continue our efforts to build an inclusive workforce for elderly employees. We will learn from the best practices of countries like Japan. In the long run, we want to look beyond re-employment to provide more holistic support to companies in managing mature workforce. We urge employers to be more receptive towards mature workers and be creative in devising solutions to make their work and workplaces more age-friendly.

Seng Choon Farm, which produces fresh eggs, is one local enterprise that has tapped on the ADVANTAGE! Scheme to facilitate re-employment and raise productivity in the process. By introducing Auto Egg Inspection Equipment, Seng Choon Farm was able to re-deploy eight older egg inspection workers to production line and other duties. Seng Choon Farm also introduced automated scrubbers and mechanical stackers to reduce physical strain on their workers.

Our tripartite partners have laid the groundwork for re-employment over the past five years, including the issuing of the Tripartite Guidelines. Most employers and unions have adopted the recommendations in the guidelines. I would like to assure Mr Heng Chee How that my Ministry is well prepared to provide advice and assistance to employers, unions and employees to help them resolve re-employment disputes amicably. We urge all employers to implement re-employment early, even before the new legislation and its remedies take effect in January 2012.

The third group I would like to talk about is the economically inactive residents. Ms Jessica Tan asked about measures to address the challenges of a tight labour market. On top of keeping older workers employed, my Ministry seeks to bring economically inactive residents into the labour force. In 2010, there were 270,400 economically inactive residents in the prime working age of 25 to 54, of which 87% were women. To encourage these residents to join the workforce, MOM has been actively promoting progressive work-life strategies. I am heartened to note that in 2010, 35% of establishments offered at least one form of flexible work arrangement, up from 25% in 2007. I would like to assure Mdm Halimah that we will continue to improve the promotion of flexible work arrangements. This year, MOM will re-examine the obstacles faced by economically inactive residents when returning to work so as to put in place measures that cater to their needs.

Here, I would like to commend the members of the Tripartite Committee on Work-Life Strategy which I chair, for their efforts in promoting work-life initiatives. Last year, the Committee received over 200 applications for the third Work-Life Excellence Awards, an increase of 50% over 2008. This demonstrates the growing interest in work-life initiatives among employers. Seventy successful employers, including 13 SMEs, were recognised for their innovative and effective work-life strategies.

In addition, the Employer Alliance, a group of companies led by Ms Claire Chiang has aimed to make work-life integration part of Singapore’s corporate landscape. It saw its membership of the Employer Alliance increased significantly from 766 to 916 last year. Over the years, the Employer Alliance has promoted best practices, conducted research and assisted employers in implementing work-life initiatives. I encourage interested companies to join the Alliance to benefit from its work.

Mr Ong Ah Heng suggested promoting work-life harmony in foreign worker-dependent sectors in order to encourage more local workers to join these sectors. Our work-life promotion efforts are targeted at all employers, including these sectors. Companies are encouraged to tap on these initiatives, including the Work-Life Works! (WoW!) Fund. Over 760 companies, mostly SMEs, have benefited from the WoW! Fund since it was launched in 2004.

Another initiative to support companies in offering flexible work arrangements is the Flexi-Works! scheme, which MOM introduced together with WDA and our tripartite partners in 2007. As of December 2010, 250 companies have committed to recruit 6,000 workers on flexible work arrangements under the scheme. One company that has readily offered flexible work arrangements is childcare centre Cherie Hearts. Drawing on the WOW! Fund and the Flexi-Works! Fund, Cherie Hearts customised work arrangements to suit staff’s needs. Ms Zuraini Abdul Rahim, for instance, worked from home on a half-day basis from October 2009 to December 2009 to help her son prepare for examinations. I think this sounds very familiar. Many parents take leave when their children sit for major examinations, like the PSLE and GCE "O" levels. Ms Zuraini, an employee of Cherie Hearts, was assisted by her employers to meet her needs, to be with her child when the child sat for the examinations. Motivated by the company’s support and flexibility, Ms Zuraini has excelled in her work. She has since been promoted to Vice President of the IT department and has been given an additional portfolio of Estate Management.

Ms Zuraini’s example shows that there need not be a trade-off between work and relationships, as mentioned by Assoc. Prof. Paulin Straughan. To her point on the need to monitor overtime work, my Ministry regularly collects and publishes data on paid hours worked per employee, as well as paid overtime hours worked. However, employees who engage in informal overtime work are usually given the flexibility to take unrecorded leave or "time-off", which is difficult to keep track. While we do not collect data on the reasons for regular overtime work, they are likely to be dependent on the individual company and industry situation. Sometimes it is also seasonal.

To further help employees meet their work-life needs, the tripartite partners are exploring how to leverage Singapore’s excellent Information and Communications Technology (ICT) infrastructure to offer home-based jobs. Mdm Halimah Yacob asked for an update on the Tripartite Workgroup on ICT-enabled home-based jobs, which was established under the Tripartite Committee on Work-Life Strategy last year. Led by NMP Mrs Mildred Tan, the workgroup has studied best practices in countries where home-based work is more widespread. The workgroup has tabled its recommendations to the Tripartite Committee. We would like to thank the workgroup for their hard work and assure them that the committee is looking seriously into the recommendations.

Madam, let me now move on to the issue of workplace safety and health. Workplace safety and health (WSH) is another important facet of MOM’s work. Despite the ramp-up in business and construction activities last year, I am pleased to note that Singapore’s workplace fatality rate fell from 2.9 per 100,000 employed persons in 2009 to a low of 2.2 in 2010, a point raised by Mr Charles Chong earlier. The absolute number of workplace fatalities dropped from 70 in 2009 to 55 last year. MOM and the WSH Council are mindful, however, that there is still a lot to be done to achieve our national target of less than 1.8 workplace fatalities per 100,000 workers by 2018.

In the coming year, we will continue to roll out the initiatives under our WSH2018 national strategy, with the construction sector remaining a priority. This is a concern raised by Mr Ong Ah Heng and Mr Charles Chong. Last year, MOM and the WSH Council launched a WSH sectoral plan for the construction sector, which sets an ambitious target of bringing the workplace fatality rate in the sector to below 1.8 by 2018, with an interim target of less than 3.4 by 2013. I would like to assure Mr Charles Chong that we will not pursue productivity at the expense of safety. In fact, we view that a good safety record is critical to a high-productivity workplace.

Mr Chong and Mr Ong have asked about efforts to improve safety in the construction sector. One of the leading causes of fatalities is falls from heights. In December 2009, the National Work at Height Taskforce led by Sembcorp Marine Ltd President and CEO, Mr Wong Weng Sun, launched an Approved Code of Practice for Working Safely at Height. The Code of Practice includes a recommendation for worksites and shipyards to implement a Fall Prevention Plan. This will be made a requirement by the end of this year. Already, in the past eight months, more than 1,100 supervisors have been trained on how to implement a Fall Prevention Plan.

The Taskforce also spearheaded the Safety Compliance Assistance Visits programme in March 2010, in which WSH professionals visit small construction worksites to provide them with advice on WSH management. This is an industry-led initiative, working with colleagues in the same sector and industry; and it would be a powerful way to encourage each other to do better. The programme has seen positive results, with most worksites showing improvements during subsequent visits. The Taskforce has more than a thousand visits planned for this year. Overall, the Taskforce’s initiatives have borne fruit, with fatalities and injuries falling by 20% in 2010.

Mr Yeo Guat Kwang asked about the support we will give to companies and workers in preparation for the extension of the Workplace Safety and Health Act to all workplaces later this year. MOM and the WSH Council have been holding WSH Clinics since September last year to educate employers, particularly SMEs, on their roles and obligations. The clinics also provide employers with one-on-one advisory services from experienced WSH professionals and service providers. We will be organising customised sessions for specific sectors, including heartland retailers, in the coming months. Members may have seen the advertisements on workplace safety and health at bus stops and MRT stations reaching out to all workers.

Mr Yeo also raised concerns about SMEs’ capability to invest in WSH. A key programme we have introduced to help SMEs build their risk management capabilities is the bizSAFE programme. We recently enhanced the Risk Management Assistance Fund to allow SMEs to tap on the fund for the risk management audits required under the bizSAFE programme. This will further help companies defray the cost of joining the bizSAFE programme.

Mr Yeo may be pleased to know that we are also enhancing the Work Injury Compensation Act (WICA). We recently completed the public consultation process and are reviewing feedback received. We are targeting for the amendments to take effect in the second half of this year.

Madam, as Singapore’s workforce becomes more diverse, there is an increasing need to encourage employers to foster inclusive and harmonious workplaces, as Mr Yeo has observed.

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Mdm Halimah asked about the progress of our efforts on this front. Last year, the National Integration Working Group on Workplaces (NIWG-W) commissioned a study on workplace diversity management across gender, age and nationality. While 90% of the companies agreed that workplace inclusiveness and harmony were important to business outcomes, 27% responded that they faced challenges in managing a diverse workforce. For large companies, line managers and supervisors often lack skills and knowledge in this regard. SMEs, on the other hand, lacked resources to raise awareness and put systemic processes in place.

Based on these findings, MOM has developed a Workplace Diversity Management Toolkit. It will help employers to assess the state of inclusiveness and harmony in their workplaces, and offers examples of initiatives they can adopt. The toolkit is a first step to give employers some idea what workplace diversity management entails and reduce the proportion of companies who face challenges. In the year ahead, we will continue to work with our tripartite partners to encourage employers to adopt inclusive workplace practices.

One example of the powerful impact that passionate employers have in creating inclusive workplaces is the creation of the Enabling Employers Network (EEN) to enhance employment opportunities for persons with disabilities. Ms Denise Phua may be pleased to know that on top of hiring persons with disabilities, the Network has been proactive in advocating their employment amongst their industry peers. One initiative driven by the Network is the development of Centres for Training and Integration, which enable persons with disabilities to acquire new skills to improve their job prospects.

MOM and WDA will continue to do our part in making training accessible to persons with disabilities in collaboration with the MCYS and National Council of Social Service. Ultimately, helping persons with disabilities requires efforts from all parties, including the Government, voluntary welfare organisations and employers. For this, MOM will continue to raise employers' capabilities to respond to the diversity of our workforce.

Madam, through targeted measures to meet the needs of different workers, my Ministry will strive to ensure that all Singaporeans share the benefits of economic growth. Above and beyond ensuring that minimum standards are in place, we will continue to make our workplaces welcoming to employees with diverse backgrounds and needs. In the long run, these efforts will maintain Singapore's attractiveness as a talent capital, and ensure that all citizens have the support to develop their capabilities to the fullest.

The Chairman: Clarifications. Mdm Halimah.

Mdm Halimah Yacob: Madam, I want to thank the Minister, Minister of State and Senior Parliamentary Secretary for answering the questions, but there is a couple of clarifications I want to seek.

Obviously, the WTS is seen as a major plan in order to achieve inclusive growth and help our low-wage and low-skilled workers upskill to better jobs. But out of 400,000 low-skilled workers, only 34,000 have benefited from the programme. This is, in fact, somewhat a very low number, compared to the large number of low-wage workers that we have. Does that indicate that there are really issues with regard to WTS that need to be addressed?

On the various points I raised in my speech, which the Senior Parliamentary Secretary has said that they will be given attention to when the scheme is up for review, I would like to urge the Ministry not to wait until a certain time after implementation in order to review the scheme, but to do it now to see where there are ways to improve the WTS, which should be improved, in particular the 5%-10% course fees that the low-wage worker has to pay is indeed a disincentive. One may think that it is necessary to co-pay before one gets the training, but for the low-wage worker, working on a daily basis, earning his wages, that is indeed a disincentive. I hope that will be given priority in terms of review as well as priority in processing the applications for the award, for instance, to make it faster.

The Chairman: Clarifications should be in the form of clarifications, Mdm Halimah.

Mdm Halimah Yacob: It is a clarification, Madam. I would like to ask whether the Ministry is satisfied with 34,000 low-wage workers out of 400,000 workers only benefiting from the Workfare Training Scheme (WTS). Does the Ministry feel that there is scope to improve and could it then look at the suggestions I have made, in particular, making it such that the worker does not have to pay any course fees at all?

My second question, Madam, is quite related to –

The Chairman: Perhaps, it could be a little shorter than the first one.

Mdm Halimah Yacob: Yes, Madam, I will bear that in mind. But we have very lengthy replies and I do need a little bit more time to digest some of the very long replies.

The other point I want to raise is about employment credits. Again, do we need to wait another three years when the scheme runs out before the scheme is reviewed? Does the Ministry not want to give a very strong signal to employers that it cares about the long-term employment of older workers and that the Government wants to give a long-term commitment by making their scheme permanent, instead of just for three years?

My third question is this: as I have said, the CET centre should not be just a public-based CET centre. It should be more of a company-based CET centre, recognising the excellent training programmes some of them have. We sound as if it is really heavily guarded. Could the Ministry give information as to how many company-based facilities have been recognised and funded at CET centres, and how many of their training programmes have been given WSQ qualifications? This is for the benefit of our workers, so that there is a transfer of real good knowledge, skills and capabilities that these training facilities through the companies provide.

Mr Hawazi Daipi: That is a very long clarification sought by the Member. On WTS, whether we should make it free. I have said earlier that we should instil a sense of responsibility on the part of everyone in Singapore that he, too, must take charge of his training needs. Therefore, we require everyone to pay when he goes for training under WTS. For workers sent by the companies, it is likely that the employers would pay on behalf of the workers. For workers who take up WTS courses on their own, if they have problems paying their share of the course fees, they may seek help from the CDCs or other organisations in the community. I think it is possible to find that help and network. I think we have the capability of helping such workers who are motivated to improve themselves to do so with the help of community organisations.

Are we happy with the fact that only 34,000 workers have taken up WTS? No. Of course, we need to improve, but it cannot be just the job of the Government. It has to be a concerted effort by the whole community. The individuals must want to improve themselves through training programmes, but the unions, employers, Government and community sector must also chip in to ensure that these individuals – Singaporeans and low-wage workers – can be more independent, as a result of gaining better employment after taking up skills courses.

On employment credit, Madam, I think it is a very new programme. We will have to see some of the teething problems that we may face. But I think it is an encouraging start. It will run for three years. We would not want to have any programme run permanently because we may need to improve on the programmes that we have just rolled out. So I would say, let us give the opportunity to progress and see the teething problems and hiccups that we may need to overcome.

On CET centres, I think the Minister of State may be able to elaborate.

Mr Lee Yi Shyan: Madam, on Mdm Halimah's question on the CET centres, specifically working with companies to bring in the leading edge contents and training programmes, in principle, I think this is what we are doing. But I think Mdm Halimah would appreciate that in the last three years or so, we have been scaling up the entire CET infrastructure, not just building up the approved training organisations that can deliver training contents of certain standards, but we are also using public institutions like the polytechnics and the very specialised training centres to deliver some of these contents.

Of course, when we come to certain niche areas in some of the industry verticals, there will be a leading edge content that is residing with the companies. Our approach is to work with them to certify them. But all this takes time and resources. It also depends on how receptive they are. If these companies are willing to open up their contents and training for the industry, in a way, some of the more progressive organisations will see it as benefiting the industry and themselves, whereas others will see it as a competitive issue. But, nevertheless, our approach is to work with them and provide more of such high quality content training as part of the CET infrastructure landscape. I do not have the numbers at the moment.

Ms Irene Ng Phek Hoong: Madam, the Government has stated its goal of raising the salaries of workers by 30% in 10 years. Can I ask how this can be achieved for low-wage workers in a systematic and sustained way, given that the wages at the bottom end move very slowly, if at all, year after year? And despite the slew of initiatives that the Government is funding with taxpayers' money, the effort so far seems largely ad hoc , depending on how socially responsible their employers are and how proactive and persistent the unions are. Would the Minister not agree that the Government should do more to hold companies accountable to ensure that the funds used for productivity will translate into better jobs, better pay, better wages, especially for those at the lower end? In this context, I suggest that the Government look at some form of job linkage agreement, through some initiatives, to promote productivity. If I may just use his example of mechanisation and how some companies are using their productivity fund to improve their work processes by mechanising, such as restaurants using auto-wok. To be honest, I find it hard to share the same enthusiasm as the Minister. One is that you are not sure about the quality of the food served but, more importantly, you worry about the jobs being displaced. The story would have been more complete if the Government says, you take money from our productivity fund, you mechanise, but the jobs are being displaced, so the workers have now lost these jobs. There must be an agreement that you improve their skills, give them better jobs with better pay. Then, the story would have been complete with a circle focused on the worker.

My second point is on Workfare. The Minister said that the way to help lower-wage workers is through Workfare, and that is an important prong. But given all the reservations and questions raised by Members in this House, including the fact that Workfare is only paid once in six months, it is not permanent, depending on surplus. Given the fact that many of the low-wage workers are not caught in this Workfare net, because they work overtime, they have year-end bonuses, some of them take extra part-time jobs, and that the Minister insists that it is a key prong in improving the lot of low-wage workers, would the Minister not agree that the Workfare needs to be reviewed more quickly and not wait for two years?

Mr Gan Kim Yong: Madam, in response to Ms Irene Ng's question on how we can ensure that low-wage workers' wages will improve over time, the key strategy in improving wages, whether it is low-wage workers or all workers, is to focus on how we can improve the productivity. Productivity comes from many angles. Worker productivity is only one aspect of it. Changing the way business is run, changing the products that you produce, changing the service that you provide, are part and parcel of raising productivity. If you take a retail shop, for example, if you are able to bring in more sales by channelling more traffic through your shops, or moving into higher-value products, branded goods, rather than one-dollar shops, you will be able to raise productivity and revenue. And with a higher productivity, you can then share with the workers.

6.00 pm

I understand Ms Irene Ng's point. Can we somehow tie that productivity improvement, through the Government schemes, to insist that part of the productivity improvement is shared with the workers, so that their wages can improve?

I do understand but my point is that many of the Government's schemes, whether it is Workfare, whether it is other productivity schemes, there are very clear objectives and deliverables and we must not undermine these deliverables and objectives. And to increase the wages of low-wage workers, there are also specific schemes targeted at that objective and those schemes are undertaken by the various Ministries and agencies. One such scheme is the Inclusive Growth Programme (IGP) which is under the National Trades Union Congress. This is a $40 million programme. And within this Inclusive Growth Programme, the union and the tripartite partners are working with companies individually, sector by sector, industry by industry, company by company, to look at how we can help them restructure their business and part of that process also involves how the companies must make a commitment to raise the productivity of the workers, raise the skills of the workers, send them for training and also have a formula to share the benefits with the workers. So we are doing what she is saying without having to hardwire these requirements into every Government's scheme.

I just want to clarify that the Workfare programme (WIS) has been entrenched as a permanent scheme. It is the Workfare Special Bonus that is a three-year scheme, and we will review it at the end of the three years. Ms Irene Ng also asked about overtime issue, which Mdm Halimah has made a special request, and I have explained that we will indeed look at all the requests and recommendations in our review. As to how frequent we should make the review, we had just made the review last year. So it is not as if it has been a long time and we are going to wait for another few years. This year, we have introduced the Workfare Special Bonus and Special Employment Credit. These schemes have just been put in place. We want to allow these schemes to work through, for us to have a chance to assess the impact of these schemes and whether there is a need for fine-tuning. It is also important for us to make sure that we do not change the scheme too often because employers and workers will be very confused if there are too many changes. So sometimes we make a little bit of adjustment, fine-tuning here and there. But for fundamental changes like overtime pay and so on, we will have to wait for the overall review to make sure that we do a comprehensive job in reviewing the scheme.

Mr Low Thia Khiang: Madam, the Minister earlier said that the employment target of older workers is set at 65%. I would like the Minister to clarify why it is set at 65%, why not higher, and whether the target being set is realisable.

Mr Gan Kim Yong: Madam, this target was set five years ago and when we set the target we explained that that was, in fact, one of the highest employment rates that had been achieved. In fact, it was pegged to the Japanese employment rate of older workers. So this is one of the highest achieved in the world. I think it is a stretch target. When we set a target, and I mentioned it in Parliament, I did say it was a stretch target. It was not easy to achieve and, in fact, because of the recession in 2009, we were set back by two or three years.

So now we have set a new timing that we think that we can achieve it by 2015. It is still a difficult target because it requires all our stakeholders – the workers, employers, the Government – to work together to push this employment rate. It is not just the employers alone. We also need to encourage older workers to continue to work. As I mentioned earlier, the unemployment rate of older workers is, in fact, quite close to our national rate for resident workers. Those are the workers who want to work but unable to find work. So we also have to encourage our older workers to want to work and encourage our employers to want to employ them. So the Re-employment Act that we had introduced in January, which would come into effect next year, will go to a large extent in helping us achieve this employment rate of older workers.

Mrs Josephine Teo: Madam, I would like to seek a clarification in Mandarin, please.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] I am very happy to hear that the Ministry of Manpower will be allocating $150 million for the training of PMETs. The experience of the US and several European countries showed that many white-collar jobs will be affected by offshore outsourcing or what is commonly known as "offshoring". These jobs include finance, IT, human resource management, law and medicine. Some of these jobs are traditionally held by highly educated professionals. In Singapore, such white-collar jobs make up more than half of our available jobs. Hence, I would like to ask the Ministry whether the "Future Skills Needs Survey" can focus on analysing in-depth the offshoring trend and its impact on our white-collar workers. We can then find suitable measures to deal with the problem.

*Cols. 4543-4544.

Mr Gan Kim Yong: In response to Mrs Teo's question, we do intend to include this as part of our studies in determining the future needs of our manpower. We will also be looking at how we can help these PMETs enhance their mobility, adaptability, and that is why one of our key strategies is to introduce a T-shape PMET training programme. Our STEP programme that I have just mentioned in my earlier response is actually focused on helping these PMETs to develop not only depth in their skills and knowledge but also breadth of their knowledge, so that they are able to manage human resource and finance flexibly, so that they will be able to move from industry to industry. This is in recognition of the fact that, going forward, more and more of our workers are going to be PMETs and PMETs will continue to be vulnerable, and increasingly so, in the face of global changes and when the pace of restructuring picks up. So I think this is a key area of concern for the Ministry, and STEP is one of the programmes that we have put in place to address this issue. In our future skills study, we will also be looking at how we can overcome some of these challenges.

Mr Terry Lee (Nominated Member): Madam, the word "productivity" was mentioned by the Minister more than 10 times. I fully agree with him that we have to increase our productivity to enhance growth, jobs and sustain better wages for our workers. There are two clarifications I would like to ask the Minister: one, how do we measure and manage our progress, and what are the deliverables for unions and employers to achieve this and raise wages by 30% in the next 10 years? Two, since the labour movement is Singapore's core competitive advantage, what resources are we investing into strengthening bipartism at individual industry level to help achieve this?

Mr Gan Kim Yong: Madam, for us to achieve productivity growth of between 2% and 3% requires the collective efforts of all parties involved. The unions would play a very important role by mobilising the workers to go for training and upgrading; employers will have to play their role in upgrading their businesses, restructuring their businesses, looking at new products and businesses, looking at developing new markets that can bring in higher value, looking at training of their staff, improving their work processes to make sure that they are efficient, productive and minimise wastage of manpower and resources. These are ways to go about enhancing productivity. Under the National Productivity and Continuing Education Council, we have identified 12 sectors and we are defining sectoral programmes for each of the sectors. With their agency championing each of the sectors, and within each sector, we develop productivity roadmaps, together with identifiable KPIs and deliverables, for each of the sectors as we provide the funding for them. So this is how we go about defining our KPIs and deliverables in our journey towards higher productivity. This is a collective effort, as I said, which includes the Government, employers and workers.

On the issue of bipartisan, tripartism, union movements, labour movements – how do we support them? As I mentioned in my speech earlier, tripartism plays a very important part in our move towards productivity, and it is part of our collective effort. The Government will continue to support the labour movement. In particular, I think I mentioned earlier the IGP programme, which is also administered by NTUC, as part of our tripartite effort to reach out to the low-wage workers, low-skilled workers, and help to uplift them in terms of their skills, capability and, eventually, productivity and incomes.

Assoc. Prof. Paulin Tay Straughan: Madam, I am glad to note that MOM is documenting work hours but my question really is: what are we doing about it? If we are serious about improving fertility and increasing the marriage rate, we have to do something about it because there are only 24 hours in a day, and if they are spending 12 hours at work, there is very little time left for anything else.

Mr Hawazi Daipi: I do not know how to respond to that.

The Chairman: Make a brave attempt, Mr Hawazi.

Mr Hawazi Daipi: Yes, Madam. People work overtime for many reasons. Sometimes people like to work, and they also need income. So we leave it to the individuals to manage that. Yes, we will try to facilitate that by encouraging employers to be friendly to the needs of their workers, and that is why the Tripartite Committee that I chair tries to promote flexible work arrangement where workers' needs need to be met, and employers should try to facilitate.

The example of Ms Zuraini that I cited earlier is a very powerful one. For a period of three months or so, she needed to be with her child at home to help him prepare for his examinations. But she worked from home and she was allowed. She was not penalised, instead she was promoted because she did very well.

So I think what we need to do is, in a tripartite way, try to encourage as many employers as possible to meet the aspirations of their workers so that they become more engaged and loyal. Not just to make the workers happy, employers have their own needs to make sure that production does not stop, service is extended to clients efficiently and without any stoppages. So where we need to marry the two needs, I think the Tripartite Committee and all the stakeholders must come together and see how we can facilitate both without compromising the needs of the other. So I would say, yes, we can collect a lot of figures but, ultimately, what we want to encourage is really for people to enjoy work and to get fair protection at work and enjoy even better income.

Ms Jessica Tan Soon Neo: I would like to ask a clarification centering around PMET training. I think more needs to be done in that space with regard to making Singapore a place where companies will, because of the talent base and the skills of PMETs, want to operate out of Singapore, whether large or small. And I think that is something we did not hear much about. Yes, there are more funds for PMET training, and there is more focus on it. But what exactly is being done to ensure that we are up-levelling the large base of skilled Singapore employees that we have, so that they stay relevant and can participate, and also be an attractor of companies to operate here?

Mr Lee Yi Shyan: Madam, I think the topic of PMET training has been raised in this House a number of times. I did actually explain before the initial ramp-up on the CET infrastructure that it really has to take care of masses of the workers on their basic skills and see how to upgrade them. But, over time, we have begun to work on PMETs because of several reasons that are quite well explained by now. One is that they account for half of the workforce and, second, PMETs are, likewise, vulnerable to changes in industry structure and economic climate. So what we have done is to identify more courses in the CET infrastructure, ie, looking at the CET centres and the ATOs to see how many of the courses, usually at the higher levels, such as advanced certificate or even diploma level, are suitable for PMETs.

Some of the courses are identified in terms of the industry verticals they are in. When there are gaps, for instance, if they complete the diploma and they want to go on to advance diploma, degree or post graduate, we want to build up the upgrading path, so that some of the PMETs can go for these courses and upgrade themselves.

6.15 pm

There are also the PMETs who have to face the prospect of changing jobs because of retrenchment or industry changes. We have programmes to help them to convert. Some of the conversion programmes that we rolled out, especially since the financial crisis in 2008/2009, provide incentives in terms of training allowance and to incentivise some of the PMETs to switch course and go into a new industry. Some of these new industries are in manufacturing and some of them are in the services. For instance, we need a lot of PMET workers in healthcare.

That kind of shift is happening, and we are diverting resources and focusing on them but it will take time. As we have said before, we are building up the number of training places. So far, we are quite happy with the progress.

Mr Zaqy Mohamad (Hong Kah): Madam, a response to the Minister of State's reply. The strategy I have heard so far from the Minister and Minister of State is that it is very supply-side driven in terms of getting workers trained and we hope that with the training, they get to the market and the market employs them.

May I know what is the Ministry's approach on the demand-side of things – engage the employers and try to get them to accept the workers, for example, the people who are changing industries? Also in the last downturn, what I noticed was that many PMETs and even workers above 40 had difficulty finding jobs once they were displaced. That is an issue. Will we, as a result, end up getting a bunch of disillusioned workers whom we may lose to other markets?

Mr Lee Yi Shyan: Madam, we appreciate Mr Zaqy Mohamed's point. We really want to make sure that when PMETs go for training, they do not waste their time and resources in that particular training, especially if the courses are long and intensive in nature. So, what we have done is to work with the employers. And in some of the programmes, we call it train-and-place. We have an understanding with employers on how many workers they need, what kind of workers they need. There will be a joint selection process to look at some of the candidates. In the healthcare industry, for instance, for the training of healthcare workers and nurses, we indeed look at that, then we conduct the training, and thereafter they will be placed in this industry.

I want to assure the Member that making sure that the trained workers find a meaningful placement subsequently is also in our target.

The Chairman: We have time for two more concise clarifications. Mdm Halimah.

Mdm Halimah Yacob: Madam, I have two concise clarifications. My first concise clarification is to ask the Minister about the very low unemployment rate. Given this very low unemployment rate, does MOM have strategies in place to help people who want to find jobs, not just those who are already displaced but those who are currently employed? Because there is some sense of under-employment even among those who are employed.

My second concise clarification, Madam, is directed at the Senior Parliamentary Secretary in response to his reply that the 5% to 10% course fee will be paid by the worker. For low-wage workers, this is important in order to ensure personal responsibility. My point is, if the worker does not even have that 5% to 10% of the fee, it is not that he does not want to assume personal responsibility but he does not have that money. So, he should not be treated the same like for a social assistance programme where he has to go to the CDC or other places to ask for sponsorship because that becomes a deterrent. Therefore, could this be considered differently from a social assistance programme?

Mr Gan Kim Yong: Madam, I will try to give a concise answer. First, the workers who are employed at the moment and hoping to improve their employment, we continue to help them through our career centres as well as our CET centres. If they are able to approach our CET centres, these centres will then be able to work with them on their training pathways and on the schemes that they need. If they want to switch courses, there are quite a few other programmes, like professional conversion programmes, that allow them to switch their career pathways, so that they can pursue jobs that are of higher value and better pay. We do continue to help them. This is part of our efforts to raise productivity.

I may as well answer her second question. Her concern is about the 5% to 10% of the course fee that low-wage workers may not be able to afford. The answer is that we will look at them on a case-by-case basis. If indeed they are not able to afford these fees, we will look for ways to help them, so long as they are responsible for the outcome of the training. If they try their best to put in the effort, I am sure we will be able to find ways to help these workers access the training programmes.

The Chairman: Mr Hawazi, would you like to add to that? No? Last clarification, Ms Irene Ng.

Ms Irene Ng Phek Hoong: Madam, if I may ask about the foreign maid levy relief for single caregivers. The singles who take care of their parents and disabled siblings. Married women now enjoy such foreign maid levy relief so that they can go to work. Can the same relief be extended to singles who take care of their family? This has been asked under the PMO cut by some of us and also in the Budget debate but we were told to direct it to the Minister for Manpower, and so we are doing it now.

Mr Gan Kim Yong: Is the Member's question with regard to tax relief or concessionary maid levy?

Ms Irene Ng Phek Hoong: Tax relief.

Mr Gan Kim Yong: Tax relief for maid levy is an Inland Revenue issue. So, it is actually a MOF cut, but I will convey her request and we will ask the Minister for Finance to consider it, perhaps, next time.

The Chairman: Mdm Halimah, do wish to withdraw your amendment?

Mdm Halimah Yacob: Madam, on behalf of the House, I would like to thank the Minister, the Minister of State and the Senior Parliamentary Secretary for the very comprehensive and detailed responses given. This year, the Ministry of Manpower did not have the highest number of cuts. That honour went to the Ministry of National Development. But, nonetheless, the work of the Ministry really has been cut out, very complex, very challenging, as we move ahead trying to improve the lives of our particularly low-wage workers, improve wages by 30% and increase productivity by 2% to 3% per year. On that note, we certainly want to thank them once again.

I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

The sum of $853,833,100 for Head S ordered to stand part of the Main Estimates.

The sum of $68,489,200 for Head S ordered to stand part of the Development Estimates.