INCLUSIVE GROWTH

INCLUSIVE GROWTH:

(Motion):

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Speaker, Sir, thank you for the opportunity to move this motion*. I beg to move,

That this House reaffirms its commitment to inclusive economic growth and calls on the Government to continue doing more to support low-skilled and low-wage workers so that all Singaporeans may share the fruits of our prosperity through better skills, better jobs and better incomes.

Sir, in November 2006, President Nathan addressed this House at the opening of the 11th Parliament. He spoke on the overall theme of Singapore as a competitive economy and an inclusive society.

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Today's motion is not about why we need to build an inclusive society. This is already a well-recognised national imperative. Neither is this motion to highlight the challenges faced by low-income families and to call the Government into action. The challenges are well known and the measures to tackle them well in place.

Rather, today's motion examines the progress of efforts to bring about inclusive growth, whether we should persist or change course, and what needs greater attention.

Several Members will be speaking on this motion. It is my hope that we will have an energetic, focused and constructive debate on the current efforts to promote inclusive growth.

Firstly, how effective they have been? Secondly, what should be the way forward? And, thirdly, what more could be done?

To answer the first question of how effective we have been, we have to ask what inclusive growth means.

There are many ways for Government to share the fruits of prosperity. For example, it can build better homes, transport networks, schools and hospitals. It can also increase financial assistance to the needy. All of these are important ways of sharing.

As a labour MP, I think inclusivity must be seen in employment. To be meaningful to working people, growth must provide three things: (i) opportunities for the large majority to enjoy higher incomes and quality of life, (ii) jobs for those who do not have one; and (iii) improved incomes and prospects for low-wage workers.

Sir, I will focus on the second and third groups, that is, the no-wage and the

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low-wage workers as they are at greater risk of being left behind. Mr Speaker, Sir, unemployed Singaporeans tend to fall within three categories: (i) those without educational qualifications or skills; (ii) mature workers who are retrenched as their companies restructure; and (iii) women who left the workforce for a period of time to care for their families. How have they fared in the last few years? Did the growing economy create new jobs for them?

Sir, a few months ago, 59-year-old Mdm Goh Guek Choo lost her job as a production operator. She has only primary school education and faced the prospect of long-term unemployment. Though she has not stepped into a classroom for more than 21 years, which was when she started work as a production operator, she signed up for several courses at e2i through an outreach event to build up her confidence and to pick up new skills. To e2i's pleasant surprise, even before she finished the training programme, she had plucked up the courage, walked into a store at the newly opened Nex Mall in Serangoon to ask for an interview. Her determination got her successfully placed as a sales-cum-cashier assistant. She started work last week.

Mdm Goh is an example of the 32,000 job seekers that e2i has helped to get jobs in the last two years, many in growth sectors such as the integrated resorts, retail and healthcare sectors. More than 3,000 of those placed have primary education or below. Thirty-five per cent are 50 years or older and 10% are 60 years or older.

The transition for workers like Mdm Goh is never easy. They have to confront their fears and insecurities. In the case of Mdm Goh, she had no experience in the sales line or in the retail industry. But she was willing to ask for help, willing to learn a new skill, and move into a new sector.

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And there are many workers like her who have benefited from the new jobs created by growth.

Efforts by the e2i and others, such as the CDCs and the self-help groups help vulnerable workers, including older and less-educated workers, get new skills to take up these jobs. As a result, resident unemployment has gone down to 3.1% from 4.8% a year ago. More importantly, the employment rate of workers aged 55 to 64 has gone up from 47% in 2005 to 59% today, a 12% improvement over the course of five years. Brother Heng Chee How and Brother Terry Lee from the labour movement, who are both closely involved in promoting re-employment, will speak on this too.

Sir, the employment rate of women aged 25 to 64 and above has also improved, from 59% in 2005 to 66% in 2010. So that is an improvement that is quite significant too. My fellow MP Mdm Halimah Yacob, who heads NTUC's Women's Development Secretariat, will elaborate on the back-to-work initiatives that have made such a positive impact on so many families.

Sir, if you ask Ang Hin Kee, the CEO of e2i, what keeps his team of 100 going, he will tell you it is the satisfaction of knowing that e2i not only places vulnerable workers in new jobs but equips them with skills to help them stay employable. This is what inclusive growth should look like – giving vulnerable workers the means to take up jobs created by a growing economy, and helping them to stay employable.

But that is not all. To be inclusive, growth must also benefit workers who are somehow caught in low-wage jobs. These are workers with poor skills who often get stuck in low-wage jobs. The jobs may pay poor salaries for two reasons.

The first is that they are easily cheap-sourced with

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little consideration for quality. When service buyers award contracts based on price alone, service providers have no incentive to upgrade the skills of their workers or the quality of their services. Cleaning jobs fall into this category. Wages remain depressed unless buyers move from cheap-sourcing to best-sourcing.

Mdm Wong Mee Lan, another 59-year-old cleaner was one such worker who experienced the difference in wages because of the shift from cheap-sourcing to best-sourcing. She worked for cleaning contractor Gallant Sanitary Works and was deployed to PSA Corp.

In 2010, e2i approached PSA Corp to tell them about the Best Sourcing Initiatives (BSI), particularly the Early Adopters Scheme (BSI-EAS). The Best Sourcing Initiative Early Adopters Scheme encourages service buyers to award contracts based on quality and performance standards, in addition to price considerations. PSA agreed to come on board the programme.

Gallant Sanitary's greater emphasis on quality during the bidding process gave it an edge. With a fresh contract in hand, it sent staff for in-house training and Workforce Skills Qualifications (WSQ) training. It invested in new machinery to improve productivity. After the training, Mdm Wong was given additional responsibility, this time to coach her newer colleagues in their jobs so that they can do them better. And the company, to recognise her better skills and enlarged job scope, gave her a pay rise from $800 a month to $1,050 per month. On top of that, she receives Workfare Income Supplement of $2,100 per year.

Since the Best Sourcing Initiative was launched in 2006, more than 4,000 low-wage workers like Mdm Wong have benefited. My colleague Mayor Zainudin who heads the NTUC's Unit for Casual

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and Contract Workers which has been spearheading the BSI will say more about the progress they have made.

Sir, besides cheap-sourcing, another reason for some jobs paying persistently low wages is stagnant productivity. There are many contributing factors such as poorly-designed work processes and outdated equipment. Sometimes, businesses expand by simply adding new headcounts instead of investing in multi-skilling or re-skilling of their workforce.

The Economic Strategies Committee (ESC) recognised that productivity gains were necessary for workers to enjoy sustained wage growth. As a result of the ESC’s recommendations, the National Productivity and Continuing Education Council (NPCEC) was set up, chaired by Deputy Prime Minister Teo Chee Hean. To support the work of the NPCEC, NTUC launched the $40 million programme – Inclusive Growth Programme (IGP).

The push for productivity is not entirely new. As a result, some ask if the IGP will deliver. Can it reach diverse sectors? Can it impact SMEs, which collectively employ 60% of the workforce? I challenged my colleague Ong Ye Kung, who chairs the e2i and is personally championing the IGP, to give me a few examples of IGP projects.

Ye Kung provided a long list, one of which is Seiko Instruments, a Japanese multi-national with over 30 years' history in Singapore. Seiko Instruments manufactures and assembles mechanical and quartz watch movements. Today, the Singapore plant is the global leader in the production of small parts. So very high-precision work.

Business is expanding and manpower is stretched. The company decided it must raise productivity. Each of its 55

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injection mould machines has 24 cavities.

*The motion also stood in the name of Mr Zainudin Nordin.

If it can bring in a more advanced process with new machines, each with 42 cavities, it can double the output per cycle and increase monthly output by 23% with the same manpower.

The company is committed to share its productivity gains with the workers who will be trained to operate the new machines. As a result of this IGP-supported project, 368 local workers can expect, on average, an increase of 16% in annual wages, through a mix of built-in pay and bonuses.

One unexpected project involves an SME operating a spa business. Located in the heartlands, Epi Treatz Pte Ltd employs about 15 Singaporeans at any one time. As the customer base grows and sales increase, existing manual processes to manage customer information, inventory and even commissions to sales staff are no longer adequate. The IGP supported Epi Treatz to implement a salon management system. After training, the same administrative staff can handle a higher sales volume efficiently. As a result, staff can expect an annual wage increase of 13%. Epi Treatz is located in the East Coast GRC. If Members would like to have the company's address, I can give it to them.

Sir, Seiko Instruments and Epi Treatz are good examples of inclusive growth. As the economy expands, there is more output from production lines and more consumption of services of all kinds. Companies across many sectors – large and small, local and foreign – achieve business growth, and workers gain through better skills, higher productivity and higher wages.

IGP is only five months into its implementation. Already, 166 projects have been lined up. They include projects in manufacturing, hospitality, food and beverage, retail, logistics, aerospace and

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many more. As the projects are implemented, more than 15,000 workers will benefit.

What is even more encouraging is that the vast majority of the workers, 86% to be exact, will experience wage increases of more than 10%. In fact, seven in 10 or 10,500 Singaporeans will see wage gains of 16% or more. These are real Singaporeans in real jobs, getting a real lift. And this is what inclusive growth is all about.

Against this backdrop, my colleagues and the labour movement have kept a close watch over the debate on the minimum wage. Several people have spoken up in favour of it. They argue that it will "boost wages and morale" and encourage lower-skilled Singaporeans to seek out work. Another argues that the minimum wage is less draining on the national Budget than Workfare Income Supplement.

Because it concerns the livelihoods of low-wage Singaporeans, the proposal of a minimum wage should not be dismissed too lightly. The supporters of minimum wage are well-intentioned and the idea certainly looks attractive. With a stroke of a pen, we can dictate to employers a minimum salary to pay their low-wage workers. Why are we so reluctant?

Within the labour movement, we are clear that Government intervention is needed to help low-wage workers do better. The Government has responded vigorously through Workfare, Best Sourcing Initiatives (BSI) , Inclusive Growth Programme (IGP) and others. So the issue is not whether the Government should act but rather, how it should intervene to be effective. The real question is: Would minimum wage work better than all the other programmes already in place?

Sir, to be meaningful, a minimum wage must force some employers to pay

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more than the market rate for labour. As a result, it will have the same effect as a tax on employment. In fact, if this is the minimum wage, and this is the market clearing rate for labour [ indicating ], the lowest-wage worker attracts the highest "tax". Will this help previously unemployed Singaporeans like Mdm Goh get jobs at minimum wage? I am not so sure. To survive, some of these workers will choose to work illegally below the minimum wage, just as some choose to forgo CPF today. Are we to blame them for doing so?

Companies that do not wish to engage in the illegal practice of paying below minimum wage and find it too costly in Singapore will close shop or relocate. Restructuring and relocation is already happening. It has to. Introducing a minimum wage will accelerate the pace without sharpening our competitiveness. Local SMEs, and we must remember local SMEs employ 60% of the entire workforce which may be too small to move out, will face even greater pressure. If they close, more Singaporeans will be thrown out of work. Will these workers find new jobs at the minimum wage? From whom? I am not sure about this at all.

Does this mean then that we are satisfied with the low wages of some workers today? Of course, the answer is "not"! We are not satisfied. We can and must do more to help them get better pay. But if wages move ahead of productivity gains, our unit labour costs will go up. When that happens in Singapore faster than elsewhere, we will lose competitiveness. This will put at risk the jobs of all Singaporeans, not just the low-wage workers whom we are trying to help.

So, this is why, Sir, to top up the incomes of low-wage workers, it is better to have Workfare, which the Government pays for. Instead of burdening businesses

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with minimum wage, let us get them to help by training their workers, improving productivity and sharing the gains.

Let us be pro-worker in a pro-business way. To be effective, our measures must involve the tripartite partners – the Labour Movement, the employers and the Government. There is simply no shortcut to achieving sustained and inclusive wage growth.

Sir, to summarise, we are on the right track to achieving inclusive growth. We should persist and not rest until all low-wage workers have been helped.

I have five suggestions for the Government to consider so that we can further strengthen inclusivity.

The first is to increase the WIS payout when the economy does well. One way to do so is to pay a WIS GDP bonus when GDP growth is good. By doing so, low-wage workers also have something to look forward to when they see others doing well. Let us reward Singaporean workers who have kept faith with the Government. Show them that Workfare works for Singapore and for them.

My second suggestion is to increase the cash to CPF ratio. The current ratio of cash to CPF in the Workfare payout is 1:2.5. A 50-year-old worker drawing $1,000 monthly will get $1,400 from Workfare annually and $400 will come in the form of cash, $1,000 will go into his CPF. This means that he gets $33 in cash every month. I think the Government should raise the cash component to provide a stronger incentive for the workers to stay in work.

My third suggestion is to introduce a Workfare Family bonus. A WIS Family bonus can be considered if two or more family members in the same household

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receive Workfare in the same period. This encourages families to work together to improve their circumstances.

The fourth suggestion is to promote best-sourcing and minimum skills. To raise the pay of low-wage workers, there must be a much higher expectation on quality and insistence on minimum skills. We need to reduce tolerance for shoddy service, poor workmanship, sub-standard delivery. The Government, through its procurement practices and regulation, can help to tilt the balance in favour of best-sourcing and minimum skills in sectors where cheap-sourcing is rampant.

The fifth and the final suggestion from me is to leverage on the Inclusive Growth Programme (IGP) to benefit more. The IGP was initially conceived as a pilot programme to target the bottom 20% of wage earners. With the momentum built up, it is worthwhile for the Government to commit more resources. Funding support today allows for up to 25,000 low-workers to benefit at the end of two years. We should extend the IGP to at least 100,000 low-wage workers within five years.

Mr Speaker, Sir, from the perspective of the labour movement, growth in the last few years has been inclusive. Our tripartite approach works. More vulnerable Singaporeans have found jobs. Many low-wage workers are getting better wages.

Now is the time to stay on course. As the economy grows, now is the best time to catch the wind and help low-wage Singaporeans do better and for Singapore to become even more inclusive.

Sir, when my children were younger, our family used to solve picture puzzles together. Starting from 20 pieces, 50 pieces, progressing to 100, 200 pieces and so on. The more the pieces, the bigger the effort. Over one weekend, we may at best complete a small segment – a

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corner here, a small patch there. We do not get discouraged because we bond over the challenge and the finished work is always worth the while.

Building an inclusive society is also a family effort, an effort for all of us in the Singapore family – the workers, unions, the employers and the Government. There are many parts to the future we want to create together. We have to coordinate our efforts and work towards a common vision. We have to put pieces together one by one, let everybody play a part and also not to give up easily. Most important of all, we keep building, building and building until the picture is done.

Therefore, Mr Speaker, I urge Members of this House to strongly support the motion.

Question proposed.

1.58 pm

Mr Zainudin Nordin (Bishan-Toa Payoh): Mr Speaker, Sir, thank you very much for allowing me to join in this debate. I am here standing to support the motion moved by my colleague, Mrs Josephine Teo.

First, I would like to start with a simple story. Sir, while walking on a beach, an elderly gentleman saw someone in the distance, leaning down, picking something up and throwing it into the ocean. As he gets closer, he noticed that the figure was a young man picking up starfish one by one, tossing each one gently back into the water. He came closer still and called out, "Good morning. May I ask what is it that you are doing?" The young man paused, looked up and replied, "Throwing starfish into the ocean." The old man smiled and said, "I must ask then, why are you throwing starfish into the ocean?" To this, the young man replied, "The sun is up and the tide is going out. If I don't throw them,

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they will die." The elderly observer commented, "But young man, do you realise that there are miles and miles of beach and there are starfish along every mile. You can't possibly make a difference." The young man listened politely, then he bent down, picked up another starfish, threw it back into the ocean, passed the breaking wave and said, "It made a difference to that one."

Sir, according to the latest workforce report, the number and share of resident employees on term contracts decreased to 186,300 or 15.5% in 2010 from 197,200 or 12.7% in 2009, reversing the up-trend which started in 2006. However, the number of resident short-term contract employees had increased from 105,000 in 2009 to 108,000 in 2010. This short-term employees work on a fixed-term contract of employment that is under a year as well those on casual or on core contract. These low-wage contract and casual workers form the lowest, yet, increasingly large stratum of our labour force. In line with the Labour Movement's vision to be an inclusive movement that takes care of working people of all collars, the Unit for Casual and Contract Workers (UCCW) that I am heading aims to provide protection and welfare to the contract and casual workers enjoyed by workers on a permanent position. This unit was set up in June 2006 following the call by union leaders at the NTUC Ordinary Delegates' Conference in 2005 to look into helping these workers specifically. We work to enhance the economic and social well-being of the vulnerable low-wage workers which are on contract and casual employment. These workers now enjoy similar workplace benefits as their permanent counterparts. At the unit, we address concerns in the different areas such as providing employment advice, Workfare Training Support scheme, Workfare Income Supplement advice and employment and tuition programmes and to also monitor the personal achievements of these workers. Ultimately, what we

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hope is to help the contract and casual workers to attain permanent employment with better wages by upgrading their employability skills by working with various partners. Where permanent employment is not available as an option, we will advocate the application of fair employment terms and other benefits, especially in the areas of medical insurance needs and other support programmes.

Now, if you recall the starfish story that I started this debate with, the UCCW has over 180,000 starfish out there. While not all of them are stuck on the beach, whenever a big storm comes such as an economic downturn, there are many starfish that get stranded. Let me tell you a story about Mr Tay Thiat Hock. He is currently 61 years old and stopped schooling at Secondary 2. Mr Tay used to work as a casual worker as a packer in a factory for five years earning an average of about $500 a month after being retrenched from a previous job. As a casual work, he received, unfortunately, no CPF and no statutory benefits. In May 2009, he found a job as a school cleaner on contract, earning about $650. Subsequently, our unit referred him to work in another company called Succedo Maintenance Pte Ltd and he was employed as a full-time staff cleaner earning $750 in August 2010. But that is not enough, Sir. What we do is we upgrade him, we improve his situation. Mr Tay attended the Workplace Literacy and Numeracy course for beginners. He has also completed two WSQ Environmental Cleaning courses with another two coming. He will become a certified cleaning crew with proper qualifications. He will receive $800 after collecting the certificate as a reward from the company to recognise his better skills and better productivity in March 2011. As a full-time staff with full CPF benefits, Mr Tay now enjoys the benefit from WIS. In addition,

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the company has also decided to pay to be a union member with the Building Construction and Timber Industries' Employees Union (BATU). Now, just like the starfish that was placed back into the sea, we hope that the work that we do at the unit has made a difference to Mr Tay and we believe so.

Let me speak also on the side of the employer. We found out that the employer, Succedo Maintenance Pte Ltd, way back in 2008, had some difficulties in managing the CPF contributions of their workers. We stepped in and we wanted to work closely with them to ensure that the company continues to improve and practise their work properly. At the same time, we work with the union to ensure that this company picks up good human resource practices and the company became unionised. As a result of that, the employees now receive proper employment contracts with stipulated benefits. Now, they also receive the WIS, their employees are sent for training and they are able to benefit from the programme that is launched by MOM under the WTS. The company even pays for the union subscription for the outstanding workers which they believe is a motivation for them.

According to the company's managing director, being unionised by BATU has shed more light on issues like best-sourcing and the tripartite guidelines on fair employment practices. With the help of the union, the company has access to clear information on industry standards and practices as outlined in our Employment Act. He added that the workers benefited in the two-fold partnership by the company and, with this, the workers are more protected and they are able to earn even more.

On average, Sir, the unit handles about 10 cases daily, mostly about issues of CPF, medical benefits and annual leave. These employees, unfortunately, could be

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mistreated or misguided and have decided to bring the issues to us. There are many more who may not complain officially because sometimes they do fear for their jobs. Many of these contract workers are uneducated and illiterate and they cannot read their employment contracts. Unfortunately, because of that it results in them not being aware of their own rights. We know that we have done a lot of good work and we are able to make a difference in the lives of these workers. But for every successful case there are also many cases out there. That is why we are actively reaching out to the community through our roadshows to raise awareness so that more low-wage contract and casual workers can benefit from the entire range of programmes that we have. This will be intensified for us to be able to communicate in all the different languages and to make them understand in their vernacular languages.

Last year alone, we opened our centre for contract and casual workers which is a one-stop centre for them to be able to access some of these services. The centre is housed in e2i and made it even easier for them not only to get advice but for us to serve them immediately through upgrading and training services. Looking forward to the future, we believe that with the efforts that we have put in, we will be able to make more impact in the lives of our workers through the efforts of engagement, education and enhancing them through skills and upgrading and hoping they will fully benefit from the WIS and WTS.

But, Sir, it is not a walk in the park for us. We do face challenges in getting workers to attend training sessions because sometimes the moment they get a job, the workers fall into complacency and they feel comfortable that this is sufficient for them. Some workers do not realise the benefits of training and would rather spend the time working and earning

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more. Furthermore, most workers are comfortable in their own languages and, unfortunately, some of our courses are conducted only in English. We are currently looking at options and solutions to address some of these issues. Another hurdle is the fee that the workers need to pay which is between 5% and 10%, and although this may not sound a lot, it is significant for the workers who earn low wage and this is on a monthly basis. To overcome these challenges, we need to have more workers to be helped to grow the success story. We need to make the workers and employers see that this is a win-win situation for both us and them: to make them more skilful, more productive and, at the end, to earn more wages, enhancing not only the workers' employability but also the company's competitiveness.

We strongly believe that productivity-driven growth will deliver sustainable and inclusive economic growth for all, even for the people at the lower end. The investment in human capital is critical to economies to capitalise on the next wave of growth and ensure the continued creation of employment opportunities for our people. We need to continue our focus on economic growth and development to raise the incomes and the standard of living of everyone. No one should be left out. In line with this, the UCCW hopes to continue this effort by making ourselves more relevant not just to one starfish but to everyone. That is why, Sir, we will do more. We will widen our reach to even more sectors – sectors like the F&B and logistics, which employ a lot of contract and casual workers. We intend make this an effort in 2011.

Beyond that, we are also hoping to make practices of the Best-Sourcing Initiative (BSI) more pervasive in the whole of Singapore because, Sir, the BSI to me, is an important move towards us being a more responsible country with proper procurement procedures.

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Mr Speaker, Sir, in Malay.

( In Malay ): [For vernacular speech, please refer to Appendix A.] In 2010, our economy achieved a very good recovery. There are reports to show that the number of millionaires in Singapore has increased by 30% within two years. Compared to 2009, the number of people who sought help from us at the Central CDC has also declined. Our progress was due to three factors: hardworking Singaporeans, sound Government policies and our strong economic fundamentals.

But we still have to ask ourselves whether the gains from our economic success are being enjoyed by every Singaporean or does it only benefit a small section of society? We do not want to see Singapore becoming a tale of two cities – a country with a small minority who is very prosperous but is separated from the needy and does not care about them. I think this is what compelled Senior Minister Mr Goh Chok Tong to set up the Community Development Councils (CDCs) in 1997 so that we can develop our society together. In order to achieve this objective, I feel that all the five CDCs have focused their efforts in three thrusts that we call the ABCs of the community, that is, Assist the Needy, Bond the People, and Connect the Community.

We, at the Central CDC, have adopted a special theme "Towards An Inclusive Future". This theme is the vision that shapes all our community programmes. In the last financial year, we helped almost 11,000 needy people. Under the ComCare framework, $26 million have been disbursed in the form of temporary financial assistance and also long-term help, which includes childcare grants and education grants. The bulk of the help that we provided aims to encourage the community by equipping them with the ability to be self-sufficient.

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About 7,000 residents came to us to seek employment and training opportunities. We managed to get 3,000 of them placed in jobs, while others received training and upgrading opportunities.

I would like to give the example of Madam Maisarah. Madam Maisarah is 20 years old and she lives with her husband, who is 29 years old, and their two children, who are one and two years old, in a 2-room rental flat. Madam Maisarah's family was chosen to participate in the Home Ownership Plus Education (HOPE) scheme in November 2009. At that time, she was a housewife. Her husband was working as a cleaner and earned only $600 per month. Soon after participating in the HOPE scheme, some changes came about. Madam Maisarah's husband used the training grant that was provided under the scheme – the grant which I feel is very important – to obtain a Class 3 and Class 4 driving licence. The following year, he was able to obtain a better paying job as a driver and delivery man. His salary increased from $600 to $1,500 per month. Madam Maisarah also got a job as an admissions host at Sentosa. She now earns $1,000 per month. She also has plans to join a make-up artistry course and become a make-up artist. This showed that they have the aspiration to succeed. This will be done by continuing to use the training grants provided by the HOPE scheme.

This couple is an example that portrays how the assistance provided by the Government and all the other schemes to upgrade the individuals, can change the community. And through her own efforts as well – the husband and wife working together with officials – she showed that if we desire to succeed, we should work together and upgrade ourselves. This is what I hope will continue to happen in our community, and with our combined efforts, we will continue to progress.

( In English) : Mr Speaker, Sir, what I have said today illustrates that if we work

*Cols. 2481-2484.

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together with the community, with the Government agencies and the Labour Movement, there is a lot that we can achieve. The successes have shown that the efforts that we have put in so far have borne fruit but we need to continue this effort strongly and start to put in place systems that allow for more changes to take place. In one of the examples, highlighted by my colleague, where we want to push for the Best Sourcing Initiative to ensure that procurement processes practised by our Government agencies and subsequently in industries, are carried out in a responsible way so that when we employ these workers, we give them the remuneration in line with the kind of work that they do and the due respect to the effort that they have put in, in terms of performance and quality.

2.17 pm

Assoc. Prof. Paulin Tay Straughan (Nominated Member): I would like to thank the hon. Members, Mrs Teo and Mr Zainudin for tabling this important and timely motion.

Thank God it has been a good year for us in 2010. I take this opportunity to also thank the Government for putting sound policies in place and for making bold decisions that took us out of the last downturn.

As many Singaporeans celebrate the much-welcomed bonuses that have been announced, it is critical that we remember fellow Singaporeans who are at the bottom 20% of our income hierarchy.

Mr Speaker, Sir, may I focus my concerns on three areas: remuneration for low-wage workers, perceived disparities between the affluent and low-income households, and strengthening the family through enhancing positive values in our society.

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I believe that remuneration for a full-time job, even at the lowest level of skills requirement, must be sufficient to raise a family. Otherwise, as a nation, we will be in serious trouble.

There was an active debate recently on the relevance of a minimum wage for Singapore. As I follow the debate, several thoughts came to mind. First, concerns that without a minimum wage guideline, how do we ensure that our low-wage workers are not exploited? I understand the Government’s rationale for avoiding a minimum wage and why we choose to work instead through the tripartite negotiations. I have also learned to appreciate the generous and ingenious role of the Workfare scheme.

On the surface, the options taken by the Government seem to address the concerns that arise from the lack of a minimum wage requirement. Nonetheless, I still have several queries.

How do we ensure that employers do not take advantage of the generosity of Government initiatives that are supported by public funds? For firms where employees invoke Workfare to augment income, do we track their business performance? It will not be right for us to support organisations that enjoy a healthy profit with augments from public funds. We must ensure that businesses that are functioning within a healthy profit margin pay their employees a fair wage.

My second concern is our reliance on foreign workers and foreign talent. I have always stood firmly in support of our policy to invite foreign friends to come and help augment our labour needs. However, I think we must be cognisant that when employers turn to foreign labour, it must be only because they cannot find enough locals to fill the labour demands and not because it is cheaper for them to hire a foreign worker compared to

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a Singaporean. Therefore, while we may not have a minimum wage criterion, I think we should have in place a robust review system that alerts us to the work conditions of remuneration and hours worked in the jobs that are filled mainly by foreign workers.

It is not fair that we should hear allegations that certain sectors require augmentation by foreign workers because Singaporeans are demanding and would not take up these jobs. We must look at the work conditions to understand why Singaporeans may find it hard to accept these positions.

Yesterday, we debated on the Retirement Age (Amendment) Bill. I am very proud of our Government for taking this pro-elderly initiative. Moving ahead, as a nation we must ensure that employers will continue to invest in skills upgrading for older Singaporeans to facilitate re-employment on fair terms.

As Singapore continues on our development trajectory, we will expect the income gap to widen. Singapore is a very small nation – there is only the city-state. As noted in a very well-written commentary by a Straits Times journalist recently, if Singaporeans wanted out of the competition, they have no where to retreat to in order to live a simple life. In short, because of our spatial and geographical constraints, we are all subject to the impact of keen competition and rising prices.

When a high-end luxurious housing project is launched in Sentosa, for example, inevitably, housing prices will be affected on the rest of the island. This means that as the proportion of the wealthy increases in Singapore, we must be mindful that their buying power will have direct and indirect implications on the rest of us, especially on the low-

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income families. Therefore, a critical challenge for our leadership is to ensure that we have sound policies in place to address the growing income gap. Of significant concern is the rise in prices of basic necessities and essentials which affect low-income households more.

One of my favourite spots in Singapore on Sundays is along the Singapore River called Robertson Quay where there are a couple of really nice condominiums. And you can look into their swimming pools and enjoy watching people sunbathe. It is across a colourful bridge. Across the road from there, I think it is Havelock Road, we see several blocks of rental flats. As a sociologist, I often stand on the bridge and look, and say, "Wow, this is new Singapore. This is really nice – private housing, aspirations where dreams are focused." And then across the road, we have several blocks of rental homes. One of these afternoons, when I was watching people, as usual, there was an older gentleman who was on his rusty old bike. He was dressed in singlet and shorts. He was biking along slowly and then he stopped in front of the condominium. He got off, he leaned his bike against the railing and he looked in at the condo facilities, at the people sunbathing. My guess is – I am sure I am guilty of stereotyping – that he must be a resident of the flats across the road. As I watched him watched others, I wonder what he must be thinking.

This recollection reminds me that we must ensure that as we grow as world-class cosmopolitan city landscape, it will remain a Singapore for all Singaporeans, not just for those who can afford it; because the disparities are so visible to all of us living here.

On this note, I would like to congratulate Minister Mah and the HDB. The new flats that he has come up with are quite awesome. I was in Chinatown last year and when I looked up, I saw the

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Pinnacle. I was in awe so I asked the storekeepers, "Wow, what is that? Is that the Pinnacle?" And they said, "We don't know. We are from Malaysia." [ Laughter. ]

HDB has done a wonderful job. Now, we must ensure that these new flats will remain affordable to all.

Finally, as we focus our attention on economic concerns in this debate, we must also erect safeguards around the most important social institution – the Family. We often rely on economic indicators to alert us to the health of the nation. While a strong GDP and high employment rate are important to us, just as important are tags on marriage rates, fertility rate, and the overall well-being of the Singapore Family. It is in the interest of the State and all employers that we continue to have strong families.

As we move this motion today to commit to inclusive economic growth, let us also affirm that economic growth must be in tandem with strengthening the family. We must protect family time. As we focus on economic growth, we must also keep a watchful eye on time spent at work and time spent with the family. We must ensure that paid work demands do not push family responsibilities to the background. To achieve a healthy work-life balance, we cannot just simply leave it up to sensible personal choices for we must acknowledge that for many workers, particularly low-income workers, the power of paid work renders all personal needs ineffective.

Therefore, as a society, we must ensure that we stand together to protect family life. First, there must be a systematic documentation of hours worked and overtime work, both formal paid overtime as well as informal extended hours. We must question the need for overtime. Why do Singapore workers clock so many hours? Is it

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because we are inefficient and cannot complete our day’s work within eight hours? I do not think so.

Are the demands on the individual worker fair? If so, the employee should be able to complete his or her work responsibilities within the regular official hours. Every additional hour spent at work is an hour spent away from the family.

If I may respond to Mr Zainudin’s observations about low-income workers’ commitment to training – I think that whilst it is important that we shape positive attitude towards training, we must also be cognisant of the constraints that low-income households may face when it comes to investing time in training. We need to look holistically into the needs of the family because training also means that it takes the worker away from his or her family responsibilities.

I urge that as we continue to advance our growth trajectory, we must strive towards the growth of a healthy pursuit of happiness that is derived from investment in relationships rather than just economic success.

2.29 pm

Mr Viswa Sadasivan (Nominated Member): Mr Speaker, Sir, I rise in support of the motion, essentially because it seeks to address one of the most pressing challenges we have been facing and will continue to face. The reality is that even as we are recovering from the recession, the cost of living is going up and inflation was 3.8% in November and is expected to hit 4.5% or more in December last year. The increase in real income of low-skilled and low-wage workers has not been significant over the past decade. According to Singstat, between 1995 and 2007, the top 10% of households in Singapore experienced a whopping 110.8% increase in real income, while for the lowest 10%, the increase was 7.7%.

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Low-skilled and low-wage workers are not the only ones who need special attention as we strive to ensure that, as the motion reads, "all Singaporeans may share the fruits of our prosperity". If the goal is to be a truly inclusive society, then we cannot ignore the needs of those who are not employable because of physical or mental handicap, as well as the elderly and others who are struggling to survive not for want of effort. It is important that we include this group as we explore ways to address the needs of low-skilled and low-wage workers. I would imagine that their concerns and issues are similar.

As we punch ahead moving up the value chain in a knowledge-based economy – which is necessary, I agree, to survive in an increasingly competitive environment – we should expect that the number of workers displaced or struggling to catch up would increase. If this is not mitigated, the result would be that this group of Singaporeans would feel increasingly marginalised, would not be psychologically geared up to respond adequately to the calls for productivity growth and innovation, and would end up with very little savings to sustain them for retirement and the health issues that they are likely to face at that point. They will be caught in a downward spiral that will adversely affect their families, especially in providing quality education for their children which in turn could result in reduced inter-generational social mobility, and this group would certainly feel increasingly disillusioned, leading to an erosion of rootedness.

It is therefore important that we recognise that if we fail to adequately address the pressing concerns of this group, the casualty is not just the worker or the individual struggling to make ends meet but those who are dependent on him, and over time it is bound to affect our social compact.

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The Government, together with the union movement and the CDCs and ethnic self-help groups, has been doing much in the area of training, skills upgrading and job placement of low-skilled and low-wage workers. The schemes include Workfare, Work Support Scheme, CCC Comcare Fund, Comcare Transitions Scheme as well as the Inclusive Growth Programme, as highlighted by Mrs Josephine Teo earlier. While these have been very helpful for this group of workers, clearly we can do more, hence the motion.

First, we should enhance the holistic approach adopted by the Government, and quite successfully. It is imperative that we continue to address the various needs of the worker and his family that would provide much needed solace, a sense of control over his life, and confidence in his ability to fulfil his responsibilities. Without this, it would be difficult for the worker to perform at the workplace and be motivated enough to reap the benefits of the various training programmes he attends. Currently, there are already a number of schemes that provide such assistance. Here are some suggestions to enhance the support in a holistic manner.

Rising healthcare cost is one area of great concern for those in the lower income bracket. The Government could consider higher subsidies for outpatient care and medication, in particular. For hospitalisation: the concept of portable insurance schemes should be seriously explored. This would go some way in giving comfort especially in an environment where job security would be low. I understand that this idea of portable insurance schemes was mooted a few years back. Perhaps the House could be updated on the progress of this.

For subsistence, the Government could consider a ration-card system where qualifying households are automatically

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given vouchers for household essentials for a six-month period, instead of the current ad hoc arrangement.

For utilities, low-wage households that meet consumption reduction targets could be given an additional special discount. Transportation is another cost item that adds up. It would be most helpful if, on a six-monthly basis, low-wage workers could be given passes that allow them to have discounted fares when taking public transport.

The second area that needs to be addressed is the effect of depressed wages for low-skilled workers as a result of foreign workers who are willing to work for low wages. While we can cite anecdotal evidence of Singaporean workers being choosy and spoilt, which I am sure is true, it is important for us to recognise that when the pay is too low it really does not make financial or practical sense to take the job especially when you factor transportation, accommodation and subsistence costs for the worker and his dependants. The foreign worker, on the other hand, does not have these additional costs, at least in Singapore, and so can accept the low-wage.

The reality, Mr Speaker, Sir, is that employers will continue to seek ways to lower their factor cost, which includes manpower cost. So, this matter naturally cannot be left to the market to sort out. The Government has to step in more proactively to correct the downward wage trend. As Mrs Josephine Teo said, employers need to move from cheap-sourcing to best-sourcing. I completely agree with this. While I agree that a minimum wage policy has its setbacks and, if not managed well, could even adversely affect local workers, I urge the Government to carefully and with an open mind examine its merits as part of the overall solution. After all, several developed countries have minimum wage

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policies and seem to be quite pleased with the outcome. In yesterday's Business Times, there was an article that states that "companies are split in the middle on whether minimum wage help low-wage workers". This was based on a survey by remuneration data specialists and the Human Resources Institute of Singapore.

Finally, I would urge the Government to recognise that while skills upgrading, job placement measures, rental and utilities rebates and so on do help, many in the lower income bracket are struggling with pressing here-and-now problems that are really quite insurmountable. This is not something that they are imagining. It is real. For such individuals, direct welfare assistance is absolutely necessary for survival. Providing direct welfare grants to those in dire need will not necessarily result in Singapore becoming a welfare state.

Today, the pre-requisites for qualifying for welfare assistance are very stringent – gross household income of $1,500, among other factors. This needs to be reviewed because a typical four-member household with a gross income of even $2,000 or $2,500 a month today would find it hard to cope, especially with the rising cost of living and high inflation rate. Similarly, the $360 per month Public Assistance allowance rate is hardly enough for a household with low gross income or no income. Yes, there are various MCYS schemes that will assist the household to offset their specific expenses, such as utility and rent. There are many who applied for such assistance and whom I have spoken to say it often takes a long time – some say several months – for their applications to be processed. I am not sure how pervasive this problem is but this has to be looked into because it can be very frustrating and painful as their needs are immediate and pressing. Some social workers I spoke to also share the same concerns.

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So, I urge the Government to find ways to shorten the processing time needed for applications for financial assistance. And the system should be streamlined so that prompt processing is a norm regardless of which agency you go to. Secondly, the Government should seriously consider upping the social welfare assistance quantum which all social workers I spoke to agree is not sufficient. Thirdly, and most importantly, given the cost of living, it is important that Government reviews the household income pre-requisite for social assistance and what is defined as "low wage". The current figure of $1,500 a month is I feel unrealistic and I suspect too many legitimate cases are falling through the cracks.

Mr Speaker, Sir, let me conclude by highlighting what Prime Minister Lee stated in a recent article he contributed to Bloomberg , I quote:

"The only reliable strategy for improving the lives of citizens is for countries to upgrade the skills of their people and the capabilities of their economies."

This makes absolute sense. But we must also recognise that this is indeed a long-term strategy. Meanwhile, the low-skilled, low-wage workers and others at the bottom of our socio-economic strata will have to confront the harsh realities that are staring them in the face everyday. They need help – more direct and immediate forms of assistance. For this, we need to ensure that this group in our society gets the attention and the interest of the Government and the rest of society. Prime Minister Lee stated in the last paragraph of the same article, and I quote:

“The State needs to tilt the playing field in favour of the less successful, and those having difficulties keeping up.”

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I am heartened by our Prime Minister's concern and commitment. It should certainly set the tone. The true success and quality of a nation is measured not so much by how many PhDs it has or how strong the GDP growth is but, in my view, how we take care of the poorest and less fortunate amongst us.

Mr Speaker, Sir, with that, I support the motion.

Mrs Josephine Teo: Sir, I thank the Member for supporting my motion. Since he talked about the minimum wage, I am not sure I got a clear understanding of whether he is for it or he is not for it. So, perhaps, the Member could help us so that we can sharpen the debate.

Mr Viswa Sadasivan: I brought up the minimum wage scheme as a proposal that I feel requires further debate, whether within Cabinet or outside. I am urging that before we push it aside or say that it may not be effective in our society – there are valid reasons for that argument as well – I am urging that we look at it once more, review it once more perhaps in this House before we say it does not work for our society. That is all I am saying.

Mrs Josephine Teo: I have provided some arguments as to why I am not for the minimum wage. It would be helpful if the Member could let us know whether he agrees with my arguments or he is not in agreement.

Mr Viswa Sadasivan: I do not disagree with the Member's arguments but I am also suggesting that there are counter-arguments which also have been raised before, one of which is that if you do not set some form of a minimum wage, companies could be incentivised to exploit workers. It is possible. That is also an argument that is valid. So, it is not a question of a zero sum. If one argument is valid, the others are not valid. What I am saying is, you need to weigh the pros and

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cons of both and see which one applies better for us and it is a judgment call in the end. That is all I am saying.

I am not saying that just because of what the Member has highlighted – and I agree that it is valid – it does not mean that the contrary argument is not valid. It is one of those situations. I am sure we can agree that it is a subjective issue. You need to weigh the pros and cons because you do not have a silver bullet solution to this, which is also similar arguments that have been highlighted by various economists who studied it, many of whom are highly accomplished. Some of them are highlighting the pros of it, some of them are strongly defending that this is the best approach. Others are saying, "no, the downside is too heavy a price". I am not saying that this is the right approach. I am saying that this is something we need to debate further before we make a decision.

2.44 pm

Mr Terry Lee (Nominated Member): Mr Speaker, Sir, I rise in support of the motion to do more for low-skilled and low-wage workers. It is very important that no Singaporean be left behind as Singapore progresses economically. And perhaps that sharply and succinctly defines the spirit of inclusive economic growth. This is a call to review what we have already done and see what we can do better for these workers.

During the last Budget debate, I spoke on the importance of forging a learning and training culture. I suggested that we should be less conventional in our approach. Instead of asking workers to come for training and upgrading, we can facilitate the training and go to them. We need to build learning communities in our heartlands. To promote a self-driven learning attitude, we need to integrate that with work. We can do more to

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strengthen On-The-Job-Trainings (OJTs), so that workers become more productive and companies can gain from it.

The Labour Movement launched the Inclusive Growth Programme (IGP) in August 2010. And we are seeing more companies appreciating the importance of helping workers upgrade and how this translates into productivity gains for them. Employers are then expected to reward workers, sharing these gains with them – increasing their wages and improving their lives.

The reward mechanism will persuade more workers that this is not lip service but it brings real benefits. This is the only way mindsets will change and growth can be sustainable. This is also how we can strive towards our national productivity targets according to the ESC report.

I believe it is every worker’s dream to have a better life for himself and his family. It is the human natural survival instinct to change when it is beneficial. We should continue to provide opportunities for every worker to improve. In doing so, we will scale further heights as one nation.

We already have a slew of workfare benefits such as the WIS and WTS in place. They are serving the purpose well as long as workers have jobs. But since our early days, it was education that brought our nation out of poverty and into a world-class city. It was that self-driven attitude and the spirit of meritocracy that allowed us to prevail against our natural limitations. Therefore, we should continue teaching people to fish for themselves instead of depending on others to fish for them, and we should help them fish more effectively.

The Government must drive this message home through all its Ministries and Organs. We must continue to play a positive role model and encourage every

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company to do more for their workers, especially those who are low-skilled and low-wage. On this note, we can all do better to help our fellow Singaporeans and their families. For if we do not take care of our own, no one else will.

In closing, I echo the call for inclusive growth and that we continue to find new ways for our workers to improve, our companies to prosper, and our nation to progress as one.

2.49 pm

Mr Low Thia Khiang (Hougang): Mr Speaker, Sir, despite economic expansion in the past years, the 2009 report on wages in Singapore shows that the medium monthly gross income for cleaners, labourers and related workers went up by only $37 to $1,307.

The GDP growth has created an uneven distribution of income and wealth in the past decade. The Gini coefficient for employed households has been climbing steadily since 2000, reaching 0.489 in 2007 before easing off in the past two years. At its peak, Singapore was reported as No. 2 on the list of top countries with the biggest gaps between the rich and the poor. The wealth-divide continues to widen as prices of private properties continue to climb. Data release by URA shows prices of private apartments within the city central have broken their previous peak recorded in 2008. The average monthly income of bottom 20% of households have been in decrease in the past decade. In contrast, about 50% increase for the top 20% of households. The wage gap between the top and bottom income earners has also widened from a decade ago. In 2009, the top 20% of households earns 12.7 times the income of the bottom 20%, which is one of the highest income gap in the world.

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The Resilience Package and other Government schemes in 2009 helped to push the Gini coefficient slightly lower but these measures could only provide temporary relief. It is clear that our society is at risk at being polarised by the issue of growing income gap and uneven wealth distribution.

In uplifting the lower-income group or low-wage workers, I have noted the Government's commitment to invest in re-training our workers and to encourage businesses to improve productivity. The end result is just a hope that there will be a rise in wages. Until that happens, how is the low-wage worker going to face the rising costs of living?

Workfare Income Supplement Scheme (WIS). I support the principle behind WIS but there is room for improvement. It should be expanded to better narrow the income gap. First, there should not be a minimum three-month work requirement to qualify for WIS. Secondly, WIS should be paid out every month that the worker remains employed instead of a half-yearly or yearly payout currently. This will be more effective in helping workers meet their monthly expenses.

The current policy requires informal workers to make Medisave contributions before qualifying for WIS payments, which are credited entirely into their Medisave accounts. This policy should be revamped as it discourages participation in the WIS. Informal workers should receive their WIS payments without any preliminary Medisave contributions. A portion of the WIS payment should be in cash. WIS payments should be increased, so as to benchmark against the costs of living and an income sufficient for a decent and dignified life in Singapore. The major portion of the WIS payment should be in cash. The quantum of WIS payments for informal workers should be raised to match that of formally employed workers.

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Recommended Minimum Wage (RMW). While I believe that skills training and upgrading as well as productivity growth should have some effects on lifting the incomes of some low-wage workers over time, I am of the view that we should track these strategies closely to determine if they are sufficient and effective overall, and not denounce the option of minimum wage too soon.

I believe not all job processes can be significantly improved to a desired productivity level to enable a worker to be paid fairly according to the value of the work done. I am also sceptical that continuing education and training will eventually equip all workers with sophisticated skills set to command higher wages. There will come a day when Singapore will achieve significant productivity growth and skilled efficiency to move up the economic value chain. When that day arrives, can our low-skilled workers catch up and move up the value chain as well? Based on historical data, the wages of these workers may be left stagnant again as I have highlighted in this House before. When that happens, we may have to consider a minimum wage policy.

I would like to state that the Workers' Party is not advocating the introduction of minimum wage at this point of time. It would be preferred if our workers can command good wages by being competitive internationally and doing high-value work. However, if our low-wage workers are still not uplifted despite the efforts of productivity growth and CET, minimum wages may have to be considered. The Government has incentivised innovation and productivity improvements. It hopes that the various industries can show progress in these areas. Since the aim of all these efforts is to uplift wages, the Government should work with the various industries to set tangible wage benchmarks for workers to strive towards.

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I propose a Minimum Wage Advisory Board to be set up by the Government to undertake research on the recommended minimum wage for specific industries in consultation with the employers and the unions. Recommended minimum wage can provide a tangible benchmark for the labour market to follow. It can also prevent the exploitation of labour. More importantly, it will spur the employees to upgrade their skills over time in order to reach a desired wage target. Employees will also know which employers are grossly underpaying their staff or have not upgraded their work processes. Recommended minimum wage will also push employers to raise productivity in the long run. Employers who consistently underpay their workers will find it hard to hire good hands.

Meaningful growth. Mr Speaker, Sir, as for the sharing of the fruits of prosperity, I would expect the Government to give big handouts and goodies in the coming Budget, just in time for the General Elections. However, what is more important and pressing now is for us to formulate policies that promote meaningful growth and social cohesion.

Everyone must feel a sense of progress with the nation, not a sense that they will occasionally get scraps which fall from the table. It is not meaningful to boast about economic growth year after year if income level of low-wage workers and middle-class families are not uplifted in the process. There is also not much meaning for a nation to achieve high economic growth when a growing section of the population is finding it more difficult to own a home or a small family car with each passing year. Let us measure the well-being of our country with a new indicator that comprises more than just Gross Domestic Product, Gross National Product and Consumer Price Index numbers. The statistics and data

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captured will affect the formulation of policies to run the country.

Besides being an indicator for economic performance, the proposed Composite Index should include measurements related to quality of life as well as social progress. It is written in our Pledge that we should "achieve happiness, prosperity and progress for our nation". Perhaps "Happiness, Prosperity, Progress" or in short, HPP Index should be created to measure how meaningful our growth is as a nation in the next decade.

2.57 pm

Ms Irene Ng Phek Hoong (Tampines): Sir, in my speech, I would like to focus on the Singapore Dream and ask whether it is still within reach of all Singaporeans.

Certainly, many Singaporeans are enjoying a high quality of life with a decent job and better bonuses today. Most have a roof over their heads, and thanks to HDB's home ownership policies, the homes are getting higher in quality every year with better estates. But even as our country chalked up stellar GDP growth last year, we need to make sure that we are creating an economy and a society that lifts up all Singaporeans and not just the top 20%. We have to look at the lowest 20% and make sure that they have the opportunity and the support to move up the income ladder.

The ladder used to be pretty short and most people started at the same ground level. You could see the top, and you know that with hard work and perseverance, you could reach the higher rungs. But over the years, the widening income gap has made the ladder much longer, with the top rung shrouded beyond the clouds. For those right at the bottom, even the middle rungs might seem beyond reach.

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According to figures from the Department of Statistics, between 1995 and 2009, the increase in the average monthly household income for the top 20% experienced a fantastic increase of 120%. For the lowest 20%, the increase was about 50%. One may say, well, at least it is an increase of 50% over the 14-year period. Certainly, there is progress; that is true. But let us examine the actual facts for a more complete picture.

In terms of quantum, the increase for the bottom 20% is small. They experienced an income increase of only $330 over 14 years. For the top 20%, the increase was about $6,700 over the same period.

Granted, humans are not all equal in ability. There will always be some who are faster, stronger and richer – and others who constitute the bottom. But inequality does not have to be as stark and polarised as it is in Singapore today. It is important that we have an honest conversation about the widening income gap without any political posturing. If left unaddressed, it will breed resentment at the bottom and undermine trust in our open and meritocratic system. It is not just the poor who suffer when social divisions become toxic but the entire society.

At our Meet-the-People sessions (MPS), we come across residents who struggle to make ends meet because of their low wages and their family circumstances. Some are resilient and self-reliant. They include one of my residents, Rosy Law, who is 72. She works as a cleaner and earns about $650 a month. She is a widow and supports her 44-year-old son who is visually-handicapped. He sometimes busks at MRT stations for some income. Members may see him at the MRT station in Tampines. When she saw me at my MPS, she refused to accept any financial assistance.

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All she asked was for help to repair her ceiling leak which is a common problem in ageing estates, which we did. I admire her spirit. It is a courageous can-do spirit. We must support such a spirit and strengthen it. At the same time, I know that she is struggling to cope with her household bills. One of the best ways to help her is through her wages and that of her son. How to lift their wages so that they can enjoy a better life? It is hard for them to be more productive in their present jobs. We lift their wages through Workfare. But, presently, the way Workfare is structured does not give sufficient cash support to meet their immediate needs. I would urge the Minister to review how Workfare is paid to such workers so that they are not forced to turn to welfare.

Right now, about two-thirds of Workfare is paid into their CPF accounts. I know the rationale is to help these workers save for their retirement needs. But to be effective in supplementing the income of low-wage workers, the Workfare payout should be treated like wages. That is, it should have the same CPF contribution rates as wages and not more.

If you are aged 35 to 50 years, the total CPF contribution today is about 35% of wages. Going by this formula, the Workfare payout should be about 65% in cash, not one-third as it is today. As the CPF contributions decrease with age, this also means that older workers will get to take home more of the Workfare payouts in cash.

Another issue is the frequency of payments. It is now paid only twice a year. To make an impact, it should be paid every month like their monthly wages or at least every quarter as long as they have work. Some low-wage workers I spoke to, including Rosy, do not know how much they have received from Workfare and cannot quite remember

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when they received it. Sir, Workfare needs to work and it needs to be fair. It should make a meaningful impact on the low-wage worker's current standard of living, not once in six months almost as a charitable handout. Workfare should also be fair in valuing the contributions of these low-wage workers who have helped to build up Singapore and whose unglamorous jobs are a benefit to us all. Their services are crucial to maintaining our standard of living. What will be do without our cleaners, for example? Their pay is paltry despite the importance of their services in improving our daily lives.

Sir, the amount of Workfare should be enhanced. This is to take into account the rising cost of living and the fact that wages at the lowest end tend to remain stagnant and even decline in this fast-paced globalised economy through no real fault of these workers themselves.

Sir, some MPs have spoken about the pros and cons of the minimum wage. I look at it this way: there are various tools in the toolbox to address the problems of the widening income gap and the downward pressure on the wages at the lowest end, minimum wage is one tool. We have looked at it, we studied it, we looked at the pros and cons. We studied the countries that have used this tool and we are not convinced that it is a right tool for our low-wage workers given the circumstances that we are facing today. There is evidence that this tool may hurt them more than help them. So we are leaving that tool in the toolbox. Our preferred tool is Workfare. It is a made-in-Singapore tool, it is relatively new, tried it out the last few years, we can sharpen it and we should sharpen it, we should strengthen it and improve it. We should give it time to work but we should be bold in making sure that it works. Having said that, if after strengthening and sharpening Workfare and using the various tools in our toolbox, such as increasing the job scales, increasing productivity, best

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sourcing. If after the tools fail, it is worthwhile looking at the other tools in the toolbox which may include the minimum wage scheme.

Sir, beyond Workfare, we have to address the emergence of an underclass who may feel that they have problems of access to education, housing, good jobs and financial security. We have to look out for any structural inequalities which may impede their progress. We sometimes see young people from poor backgrounds who feel that there are too many obstacles to achieving a better life and they become victims of low expectations. They feel that society looks down on them. The danger for some is that they then turn to gangs to win respect and acquire self-esteem.

I can see this danger in one of my residents who came to see me for a job. He is 29, healthy, his highest qualification is GCE "O" levels. To add to his woes, he does not have a roof over his head. His mother, who is divorced and works as a part-time cleaner, does not qualify for a rental flat because she has sold two HDB flats previously. He roams around in mosques, void decks and parks. When he saw me recently at MPS, he told me he wanted to give up on life. I told him he is still young, things can change for the better, do not give up hope and we would help him. The good news is that he has found a job, just recently, as a car jockey earning about $12 an hour, working three days a week. But it is a temporary job. On the housing problem, I am still working on it and appealing to the HDB and I am sure we can come to a solution for them. I asked my young resident, "What is your ambition, what do you want to be?" He said he does not know. I cite this story to illustrate that, for some, they suffer from a deeper problem – the poverty of aspirations. They started with high hopes, with aspirations just like others in society:

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they want a job, a decent home, a good life. But over time, they find too many obstacles in their paths and get discouraged. More often than not, it is because they lag behind in their education and skills.

Rightly, some MPs today have focused on the need to upgrade the skills of the workers. It is important, however, to move further downstream and to make sure that Singaporeans of all backgrounds have a strong foundation for learning. Sir, education is supposed to be the means by which all students acquire a chance to realise the Singapore Dream. We need to invest more in education of the lower-income children from their pre-school days. Previously, when most kids do not go to pre-school and there was not such a wide range of pre-school centres, there was not much difference in the starting point between children at Primary 1. The entry point was ground zero. Now the entry point is five levels up for the richer kids who attend a host of enrichment classes, studied at expensive, elite pre-school centres and come from a home environment which encourages learning. For the poorer kid who starts at ground zero, the achievement gap is becoming wider. We have to strive to close it and make sure that they have an equal opportunity to reach their full potential.

At this point, I would just like to respond to Nominated Member of Parliament Viswa Sadasivan's point where he made a rather sweeping comment that he suspects too many legitimate cases are falling through the cracks. I would like to say that there are various financial schemes on the ground that help lower-income Singaporeans to cope, including the CCC welfare fund where we can help Singaporeans on the spot and very quickly. We are not bound by the income ceiling that is set by MCYS. In fact, we are very flexible in how we dispense the ComCare payouts that we have at our disposal. So, I am not sure where he gets

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the idea that there are too many legitimate cases falling through the cracks. But I would say that we are making sure, through our efforts, that either very few or none at all will fall through the cracks. Therefore, today when we are talking about widening income gap, we are looking at how we can close it, making sure that the safety nets are robust and sound.

Sir, those of us who do regular house-to-house visits know that in every HDB block there are stories of hope and stories of despair. We can cite many success stories of poor Singaporeans who have overcome their hardships to achieve their dreams but, at the same time, we do know of stories of those who could not. Our task is to make sure that hope prevails and that the Singapore Dream will not be an impossible dream to anyone even as the world spins faster and becomes a harsher place. We have to place the Singapore Dream within their reach and lift their eyes towards it.

With that, I support the motion.

3.11 pm

Ms Audrey Wong Wai Yen (Nominated Member): Mr Speaker, Sir, thank you for the opportunity to join in this debate. I would first like to express appreciation to the hon. members, Mrs Josephine Teo and Mr Zainudin Nordin, for tabling this motion.

In my short time as a Member of this House, I have seen a lot of discussions about and concern for the economically-disadvantaged population of Singapore: low-wage, low-skilled workers, those who have lost their jobs or their flats, those who find it hard to support their families, the children of such households, the destitute elderly, and more. Public housing policies, support and help for re-employment, schemes like Workfare, have been regularly debated in this House. I

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have no doubt that our Government is truly concerned about this segment of the Singapore population and really desires not to leave anyone behind. Hence, I would like to add my voice in support of this motion.

In last year's Budget, the Minister for Finance declared the aim of raising the median Singapore salary from the current $2,400 to $3,100 in 10 years' time, confronting the reality that salaries for the Singapore workforce need to keep rising in order to keep pace with inflation. As we all know, however, low-wage and low-skilled workers like cleaners and technicians, the monthly salary for them still lags far behind the median. Some earn only $700 a month and earlier Mr Zainudin Nordin mentioned a worker who earns just $600 a month. Talk to any ordinary Singaporean today and it is clear that being able to make ends meet is an urgent issue, even for what we might consider middle-class, middle-income households. Last month, it was reported that inflation was at its highest level for the year, with the Consumer Price Index having risen 3.8% in November compared to a year ago. The issue of rising prices, especially rising food, transport and housing prices, is a matter of urgent concern for most Singaporeans.

One aspect of sharing the fruits of Singapore's prosperity with the broadest strata of society is ensuring that those with weakest earning power and their families do not suffer because of rising prices of basic necessities. This might be due to increasing business costs among other factors. Let me just cite one example: the takeover of wet markets in some HDB estates by private operators that resulted in increased rents for the market stallholders. Increased rents will translate into higher prices for customers. A private operator's primary concern is profit rather than the welfare of the public. On the other hand, the Government's concern is the public and, thus,

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Government can and should step in to ensure that housing estate residents, especially those from the lowest-income group have access to reasonably-priced food and basic necessities.

No doubt, the pressure of the rising cost of living was a factor in sparking the call among certain quarters for a minimum wage law. It was heartening to see the Government openly discussing and debating the question of minimum wage. While the debate has rested for now, if the cost of living keeps rising, the call is likely to be re-ignited and it will be time for the Government to take up the debate again. I do not intend to debate on the pros and cons of minimum wage, rather I would like to focus on inclusive growth that leads to Singaporeans' overall well-being and not just material and economic well-being, because beyond raising the earnings of low-skilled workers through improving productivity, there is a question of quality of life.

Many low-paying jobs – cleaning, construction, production operators, some types of technical work like electricians, even retail assistants – are simply not accorded the respect and dignity that they deserve.

I spoke on this during the Budget debate last year about the need for Singaporeans to appreciate the contribution of these workers who play a vital part in our economy. All workers need to feel that they are earning a decent wage for a decent job, and that it is enough to allow them to raise a family. When someone feels that he or she can support a family, it equips them with the confidence to confront other problems in life and at work and to contribute to the community beyond the immediate family. This in turn builds social bonds – it is "social capital". I urge the Government to continue to develop frameworks for upgrading these workers’ jobs, instill workers with pride in their skills and

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abilities. Such frameworks for professionalisation, accreditation and job redesign lead not only to higher productivity and incomes, but also better self-actualisation for workers. We have already seen a number of examples of how these frameworks of job redesign and training have contributed towards raising professional standards and changing the perceptions of certain jobs – for instance, security guards. The Government must continue to do this.

In addition to job redesign and productivity, there is a question also of social attitudes towards these jobs. Perhaps the Government could look into how we can better inculcate a respect and appreciation among the population for "working with one’s hands". One example is how the image of the Institutes of Technical Education (ITEs) has been refreshed to emphasise the value of its students to society, communicating the career possibilities of a less academically-inclined, more technical education. This was through the advertising campaign called "We Make You Shine" that was rolled out in 2008. In the spirit of according dignity and social value to low-skilled workers, I would also like to urge the Government to take the lead in encouraging employers to pay decent wages for workers and to provide job enhancement opportunities for them. For instance, for more companies and Government agencies to adopt the best sourcing practice – which Mrs Josephine Teo has described in some detail – rather than going for the cheapest tender in awarding cleaning contracts and jobs like that. I think more companies and Government agencies could adopt the best sourcing practice.

Naturally, employers will be concerned at how raising wages will affect the bottom line. Hence, Government also has to continue to keep an eye on business costs and provide support and incentives particularly for the small and medium

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enterprises which form the bulk of Singapore's enterprises so that they can in turn better support workers' quality of life through creating better jobs and equipping workers with the skills through training as well as other job enhancement schemes.

Concerns over rising business costs were expressed recently by the Singapore Chinese Chamber of Commerce and Industry when they presented a Budget Wish List for this year. This was reported by Channel NewsAsia earlier this month where they expressed that they were concerned about rising costs and called on Government to do more to help their cause.

Finally, when we talk about inclusive growth, I believe we should also include the socially and economically disadvantaged like the destitute elderly, troubled children from broken homes, and those who – for one reason or other – through no fault of their own find themselves left behind. This is a segment of our population who might feel that they do not share in Singapore’s prosperity. The Government advocates a "many helping hands" approach to social services which makes sense as this encourages the community to rally round and take the leadership in initiatives to help those in need. Here, the Government also plays an important role in funding and developing the capabilities of the many welfare organisations and charities that provide these essential social services – nursing homes, hospices, Family Service Centres and so on. At the same time, we can do more to encourage more corporate social responsibility among local companies and locally-based companies, to stimulate greater giving back to society and community. Major local corporations, particularly those with strong links to Government, can be encouraged to play a bigger part in the charity and social services sector.

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But these sources cannot replace direct Government assistance and intervention for the most vulnerable members of our society. Only with the commitment to inclusive growth can we make Singapore "the best home for all". The "all" is all-important here! Otherwise, we face the prospect of ending up with widening income gaps and an unhappy, underclass leading to social fragmentation.

There is a saying that a chain is only as strong as its weakest link and so a strong society is one where its leadership pays attention to those on the lowest rung of the economic ladder to enhance not only the material and economic well-being but also the social well-being of its people. Ultimately, it is about social fabric of the nation.

With that, I support the motion.

3.21 pm

Mdm Halimah Yacob (Jurong): Mr Speaker, Sir, thank you for allowing me to speak on this motion. We all know the importance of inclusive economic growth. No growth in any country in the world is sustainable if it is also not inclusive. In other words, we cannot have growth where some segments of the society benefit while others do not or benefit very little from it. We know the consequences of such a lopsided growth. Over time, there will be loss of confidence and, in the end, everyone suffers. How can we hope to build a common identity, develop bonds among us and share a common dream if some among us cannot see much of a future?

However, Sir, by debating this motion today, we are not saying that nothing has been done and we are only now awakened to this issue and are scrambling to put the pieces together. Far from it. Many important pieces are already in place, some of which have already been extensively debated in this House, such as

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the WIS and the WTS, which benefit low-income, low-skilled Singaporeans. In addition, social assistance programmes are firmly entrenched whether it involves housing, medical or education.

The challenge of ensuring that growth is inclusive is not confined to Singapore only. In my work at the International Labour Organization (ILO), this is an issue that every country in the world has been grappling with. The ILO even set up a high-level committee some years ago on the Social Dimensions of Globalisation, which focuses on how to make globalisation fairer. The committee identified globalisation as a factor which can create opportunities but, if not managed properly, can also result in serious income disparities. One of its key recommendations is for countries to invest heavily in education and skills upgrading so that everyone can benefit from the opportunities provided by globalisation. Long before this ILO report, Singapore has already adopted this approach and has made extensive investments in training and skills upgrading for our workers, so that they can enjoy higher incomes with higher-skilled jobs.

Sir, let me at this point touch on the issue of minimum wage which was raised by a number of hon. Members here – Assoc. Prof. Paulin Straughan, Mr Viswa Sadasivan, Mr Low Thia Khiang and also in some ways, MP Irene Ng and also NMP Audrey Wong. Now, I think the crux of the arguments used in the minimum wage debate is to ask the basic question and that is: how to prevent low-wage workers from being exploited? Therefore, minimum wage is seen as policy tool to level up wages in the face of growing income disparity. But, Sir, the reality is this: minimum wage does not stop the exploitation and abuse of workers. Studies have shown that in countries where unemployment rate is very high,

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many workers are prepared to accept work that pay less than the minimum wage and they will not complain to the authorities in enforcing the minimum wage payment because then somebody else will do the job. If there is one job and there are one thousand people chasing after that job, nobody will complain if they are going to be paid less than the minimum wage.

Studies have also shown that minimum wage is not a wage leveller because one problem with minimum wage is that the wages set by governments are very much below the market rate and this also applies to the developed countries, because countries are afraid to price themselves out of the global competition. So, again, it is economic growth and availability of jobs that determine the pay and not a minimum wage policy.

MP Mr Low Thia Khiang also talks about Government introducing recommended minimum wage policies or payments for specified sectors. There are two problems with this approach: the first problem – and this is a problem faced by many countries – is the fact that it is not always easy to seek a consensus as to how much should be the minimum wage for a particular sector. For every sector and even in each sector itself, there are companies that are doing well and there are others that are not doing so well and, therefore, would be faced with the big problem of meeting the needs of paying a minimum wage if they cannot afford it. So even in a particular sector where a minimum wage is set, companies that cannot afford to pay will be forced to close their business and workers will lose their jobs. Another problem with this sectoral approach is the process of getting a consensus because of the diverse and complex interests that has to be taken into account before a recommended sectoral or industry-based minimum wage is implemented. This means that the minimum wage can never

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keep pace with the market wages for the sector.

Sir, I think minimum wage in many ways as a policy tool is attractive. It attracts a lot of sound and fury but it does not necessarily guarantee results and that is the reason why in many countries there has been a lot of pressure put on the government to put job creation as the centrepiece of its economic and social development policies; and that was also the decision made by a conference in Oslo of all the developed countries which says that all governments must recognise the need to put job creation at the centre of its policies – which is what is being done in Singapore.

Let me now, Sir, share with this House on our efforts in helping one important segment of our society and that is the homemakers who want to return to work. Last year, our female employment rate grew from 69.4% to 71.7% for the 25 to 54 age group. This is good progress and we want to reach out to more. The majority of our economically-inactive women in MOM surveys cited family responsibilities as the reason for their inactivity. I must stress that ultimately it is up to the women and their families to decide whether or not they should work but the most important thing in my view is that we must give these women the choice to decide for themselves. To me, this is the essence of inclusive growth where everyone counts, everyone belongs and everyone deserves a chance. We all know that ensuring inclusive growth cannot just be the work of the Government alone but that everyone has a part to play.

Recognising the importance of focused and targeted programmes to help women return to the workforce, the NTUC Women’s Development Secretariat started a programme called "Back to Work" in 2007. To date, we have helped more than 8,000 women to return to work. Let me

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share with you the story of Mdm Leong Yoke Har who is 48 years old and has two children aged 15 and 18 years. In 2001, she left her job in order to look after her kids but decided to re-enter the workforce when her youngest turned 14 and with the encouragement of her husband. After being a housewife for 10 years and having lost touch with the workplace, she found it difficult to return to work. She approached the NTUC Back to Work programme and we arranged job interviews for her. She is now happily employed as a full-time receptionist with PASS Employment Services.

Another example involves someone who had left the workforce in order to take care of an ageing parent, a growing challenge in our society as women are still the main caregivers and our population is ageing rapidly. In her 40s, she was working in SingTel as a customer service officer. But in 2003 she had to leave her job in order to take care of her parent. She decided to re-enter the workforce in 2010 for financial reasons. She approached the NTUC Back to Work programme and we helped to place her in a company called One Bearing as an account cum payroll assistant.

Our Back to Work programme is based on 3Rs. The first "R" is recruitment, where we place women who are essentially job ready and could be placed into jobs almost immediately, as in the case of the two examples which I had cited earlier. The second "R" is re-adjustment, where we help to prepare women to be skills ready thereby enhancing their employment chances. The third "R" is retention, where we work closely with companies to re-structure jobs and make them more flexible so that women can balance work and family and do not drop out of the workforce. Mdm Zuraini is one person who has benefited from our Flexi-Works! efforts. Mdm Zuraini was working with Cherie Hearts since 2002 where she was employed as

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an Assistant Vice President in the IT department.

However, in 2009 when her son was taking his PSLE, she decided that she had to spend more time at home. It was at this point that Cherie Hearts decided to tap on the Flexi-Works! funding, administered by NTUC, in order to help them make the necessary changes to work so that employees like Mdm Zuraini could work part-time or telecommute. Mdm Zuraini was subsequently promoted to the post of Vice-President in charge of a larger portfolio which shows that flexible work arrangements can, in fact, boost performance and productivity and is certainly one way ahead for us to ensure a more inclusive society.

We will continue to ramp up efforts to help more women who are re-entering the workforce through targeted programmes. We do not wait for the women to reach out to us. Last year, we even did a pilot outreach programme to engage women living in the rental flats in Ang Mo Kio. Our Back to Work team went knocking from door to door to speak to the women and inform them about the jobs that are available. Another approach is mindset and sectoral training programmes, to prepare the women for jobs in particular sectors so that there is a better job fit. Yet another interesting approach is to ask the companies not only to conduct interviews at the workplace but also to allow the women to watch and experience first hand how work is being done, so that they will be more open and receptive to different kinds of jobs. For example, we tried to ask women to work in the kitchens but they said it is too hot and stuffy. What we did was we arranged for them to go and look at the hotel where there is a kitchen or a restaurant and they realised it is not so bad after all. So these are some of the more targeted efforts that we make, that we do in order to help women.

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Moving ahead, Sir, I urge the Government to continue doing more in the following areas so that more women can work and take advantage of the opportunities and ensure that our economic growth continues to be inclusive.

Firstly, we need to ensure that there is sufficient and affordable social support infrastructure such as childcare and kindergarten services as well as eldercare services as women are still the main caregivers in our society. One reason why the Scandinavian countries have such a high female labour force participation rate is because child care facilities are so accessible, so much so that in Denmark, for instance, almost 90% of the children below the age of five are in childcare. We now have the KIFAS and CFAC schemes which provide highly subsidised childcare and kindergarten services to children from low-income families. Currently, the family income limit for access to subsidised care in KIFAS or CFAC is $1,800. To enable more women to go out to work, this income ceiling could be increased to $2,500 so that with more women working, their family incomes would increase. With our rapidly ageing population, we will see increasing numbers who have to live at home to take care of their elderly parents. Hence, we also have to ensure that there are adequate and affordable eldercare support services to free more women to go out to work.

Secondly, encourage more companies to adopt telecommuting and ICT-leveraged home-based work. Singapore is a highly wired up country with at least 80% of the households having broadband access, yet the number of people telecommuting or working at home either fully or partly, is very low. Think of all those who could not commute daily to work such as housewives, retirees, people with disabilities and many others with special needs. Imagine how much more inclusive our society could become if only they

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could have access to productive, paid work because they could work from home. Imagine, too, if many more women who currently have to stay at home because of childcare or eldercare obligations could have access to paid work through telecommuting, how many more women could re-enter the workforce, how much more inclusive our society would be and how much less dependent we would be on foreign workers?

Thirdly, according to an MOM survey only one in five of the economically inactive women has upper secondary education or above. This means that most would need re-training, particularly in literacy and numeracy skills before they could re-enter the workforce. One possible solution would be to have numeracy and literacy courses conducted at community clubs so that these women would be able to acquire the basic foundation skills needed to land them in jobs or for other forms of training but in centres close to their homes and at their own pace. We should also explore how we could better leverage on ICT in order to deliver this training at home to the women.

Finally, I would like to repeat my call to the Ministry of Manpower for the WIS payment to exclude the overtime payment. As this appeal – I must tell the Minister for Manpower – has been made by many workers to me and since we want the idea of people levelling up revolving around Workfare and not welfare, I think we should reward work and not disincentivise people who do overtime, work on rest days and public holidays and so on.

With your permission, Sir, I would like to speak in Malay for a few sentences.

( In Malay ): [For vernacular speech, please refer to Appendix A.] In order to ensure that each of us gains the benefits

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of economic growth, various efforts have been launched through the WDA and the Employment and Employability Institute (e2i) to help less skilled workers improve their skills while paving the way for them to undergo skill training so that they can progress to obtain better salaries. These efforts are also strongly supported by the Employability Network under the Community Leaders' Forum through its programmes, like the Workforce Skills Qualification (WSQ) on Workplace Literacy and Numeracy Programme, which was launched recently.

Statistics from the e2i show that many Malay workers have taken advantage of the job opportunities that are provided or offered. This is very encouraging for our community as it indicates that more of our workers will progress to get better paying jobs. Between 2008 and October 2010, around 100,909 Malay workers are either placed in or have been trained by the e2i. With skills upgrading, the family and individual incomes have also stabilised and increased.

At the same time, Malay/Muslim workers who are low-skilled have also benefited from the Government's special grants, including the Workfare Income Supplement (WIS) Scheme and the Workfare Training Support (WTS) Scheme. The inflation rate has been predicted to increase this year. We must monitor the situation so that the inflationary pressures will not be too burdensome; it is crucial for the Government to ensure that the prices of goods or cost of living do not go beyond the affordability of low-wage workers. More importantly, we must improve productivity while increasing the competitiveness of our workers by improving their skills and helping them overcome training constraints.

Since our economy will continue to change according to current interests, the type of jobs and the way we work will

*Cols. 2485-2486.

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also need to adjust. This means that we must not take things lightly and must continue our efforts to secure a brighter future and gain benefits from our economic growth. I am confident that our community will have the ability and strong determination to continue this struggle.

(In English) : About an hour ago, I was speaking to Puan Arshad Bibi. She is a cleaner working in our Parliament House and I asked her how is her work and she answered me in Malay. She said, " Semua pekerjaan adalah sama." That means all work is the same. She went on, " Kita harus bekerja kuat " or "we have to work very hard", and she went on, " Tanpa usaha, kita tidak akan ke mana " or "without effort we will not go anywhere". I respect Ms Bibi's determination and I hope many of us will have her strength of spirit and I really hope and am sure that many of us here in Singapore share that same spirit, that same sentiment, and have that same strength so that we can all move forward together.

Mr Low Thia Khiang: Sir, the Member referred to my speech on recommended minimum wage. She said that it would be difficult to set each sector's recommended minimum wage because of the diversity of the companies within the sector. I thought that was actually the same problem that was faced by the Government through the strategy of CET and to improve the productivity of companies in order to uplift the low-wage worker. But will she not agree that there is a need to have some benchmark or to set a benchmark to monitor the progress of the twin strategy of the Government in uplifting the low-wage worker?

Mdm Halimah Yacob: Sir, Member Low Thia Khiang mentioned my comment and I would like to say that when he talks about setting productivity indicators and upgrading people's skills, that talks about

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providing people with tools. But when we talk about minimum wage, it is a completely different thing. What I said was that the difficulty is due to not just the complexity and the diverse interests but also because within each sector and within each industry, there are diversities. There are some that are doing very well and some that are not doing very well. When you set a minimum wage of a particular sector or industry, it has to apply to all. Governments in many countries find that they cannot make an exception. If you pick up the retail sector or the construction sector, whatever, once you set the minimum wage, it has to apply to everyone. But then the complexity is that in each sector, there are different types of companies. Some can pay more, some can pay the minimum wage, some cannot.

Two things happen as a result. One, if you set a minimum wage which some companies in that sector cannot afford to pay, they have to close down and the workers lose their jobs. That has happened if we look at the example in South Africa. That happened to the garment industry because they set a minimum wage higher and some companies in the garment sector had to close down and people lost their jobs.

Secondly, because of the difficulty of setting the minimum wage in that sector, it takes a very long time. That is one point. The second point: people tend to under-set the minimum wage. In many countries, one sees that the minimum wage never ever reaches the market rate of the wages because it is always under-priced. Businesses will not agree to the wage being set higher than the market and countries that are export-oriented are very concerned about losing their competitiveness. The whole process of setting a new minimum wage sometimes takes two, three years, and because it has to be revised all the time, by which time it

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is set, it is completely out of whack with the market rates.

3.43 pm

Ms Denise Phua Lay Peng (Jalan Besar): Sir, I strongly support the motion. Economic growth is necessary for the development of a country but not everyone benefits from economic growth. Singapore's highly educated and skilled talents are sought after locally and overseas, leading to an inevitable rise in their income. Many low-skilled workers, on the other hand, especially those in low-end manufacturing jobs are at daily risk of losing their jobs to countries of lower cost. Unless they upgrade in time, they will either become permanently redundant or become chronic low-wage workers in industries that cannot be relocated overseas such as the cleaning, food and beverage, laundry and other service industries. Hence, ensuring that these low-skilled workers are not left behind in Singapore's economic growth is critical.

Thankfully, the situation is contained by several pillars on which Government's inclusive growth policy rests. The key pillars, as we all know, are the individual Workfare Schemes on Training and Income Supplement; the Workforce Skills Qualifications (WSQ) frameworks to certify skills for Continued Education and Training – all three of which rightly focused on low-skilled and low-wage workers. Government has also introduced the Productivity and Innovation Initiatives, and restriction of foreign labour to encourage local hiring, amongst others.

Sir, I am convinced that the overall strategic directions are clear and accurate. I would like to share some observations and suggestions to enhance the impact of some of these strategies.

The Workfare Income Supplement (WIS) and minimum wage. Sir, I fully support the WIS and I am against the idea

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of minimum wage which has gained traction recently. I fear that instituting minimum wage will backfire on the very same people whose livelihood we are trying to protect. A minimum wage will become an additional cost to business paid by employers who in turn will either:

(i) pass on the cost of business to their customers, causing further increase in the cost of living; or

(ii) become more cautious especially in hiring those who are less skilled, or able, or undergoing training, and not as fully competent yet.

Parties who advocate minimum wage should dwell deeper on the subject and get some inputs from the employers, especially the smaller enterprises struggling to keep prices constant.

The food and beverage industry, for instance, pays their workers differently depending on the setting: fast food or fine restaurants. To forgo Workfare and enforce a minimum wage will hike food prices further, especially for the lower end outlets, leaving the customer and employer to bear the brunt of increased costs.

On a recent visit to a big Laundromat overseas, I found that workers who are not so able were able to secure jobs where they can job-share and each was paid according to their productivity level. An enforced flat minimum wage would have discouraged the company to even consider hiring anyone of them. Hence, Sir, my support for Workfare instead of minimum wage, the cost of which is borne by employers. Workfare, for instance, I would say, just like Mrs Josephine Teo has said, is pro-worker, pro-business, whereas a minimum wage is pro-worker but anti-business.

On the importance of Workfare Income Supplement: the WIS is a very important top-up for workers who are

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upgrading their skills but need the pay supplement to cope with their daily expenditure. But WIS is even more critical for low-wage workers whose potential to learn is low due either to their age or ability or other reasons. This is a group whose future is dismal unless something is done to help them. Even if they wish to, many of them due to their age or calibre will continue to occupy low-skilled and low-paying jobs such as packing, sorting, cleaning and washing, and so forth. These are not people or jobs that we can wish away or who can benefit as much from the Workfare Training Scheme. Unless there is a transfer of the fruits of prosperity to them through schemes such as Workfare, they are unlikely to survive.

On fine-tuning WIS, for both groups, however, whether they have low or high potential to learn, the ground input is that the quantum of Workfare, and especially the quantum of cash payout are low in the face of inflation and increasing cost of living globally, I seek the Government's consideration to fine-tune the current WIS Scheme:

(i) to conduct a study and measure the pros and cons of increasing the quantum of WIS to an amount that is sufficient for a minimum standard of living; and

(ii) to increase the cash component of the Workfare payout to meet the needs of daily living.

Next, on the jobs for the low-potential, I seek the Government's help to identify jobs that are low-skilled in the public sector and award these jobs or contracts to workers who can work but whose potential or calibre is low.

Sir, I recently visited a Work Centre run by MINDS for the more severely intellectually-disabled people of our

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country. For years, the few hundred adults were dependent on an ongoing earphone cleaning and packing contract, a contract that is kindly awarded by Singapore Airlines. The contract can be terminated anytime, especially when wireless technology kicks in, and all of them would be banished to stay at home. These adults with severe intellectual disability are not so young or so disabled that they should stay home until they expire but they are unlikely also to be able to benefit from the Workfare Training Scheme due to their ability level.

Sir, we have jobs such as mail sorting, cleaning, washing, sealing, packing that can be performed by such Singaporeans whose potential to learn is low due to certain reasons. I urge the public sector to identify such work and award these jobs to them. Pay them based on productivity, but just like what HDB has done for this special category of citizens, give them bonus points when awarding contracts or jobs. Let them have a chance to be included in the workforce and not simply stay at home till they expire.

Next, Sir, Job-Recreation Programme. I turn now to workers with a higher potential to learn. I am convinced that they can benefit from MOM's Workfare Training Scheme, CET framework and subsidised courses and the NTUC-driven Job Re-creation Programme to transform low-productivity and low-paying jobs.

However, the trophy of Job Re-creation, the one step creates a lot of recreation, appears to be kept so far by the security industry, which saw the rise in the skills set and salaries of many security guards increased by 15%-25%. So far, what is visible is the security industry's achievement. I believe that there are other industries such as environmental cleaning and even nursing home care that remain plagued by what I call the three Ls: long hours, low pay and low status.

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Recently, a food centre in my constituency faced a temporary crisis when its Singaporean cleaners walked out of their jobs because of the nature of the work. Simply increasing the cleaners' pay however would mean a hike in food prices at this hawker centre. Sir, the solution to problems faced by some of these industries cannot be solved by the small-time cleaning contractors or the hawkers and need to be studied and facilitated even more by job analysis, design, re-creation and even re-branding experts.

The same can also be said of nursing homes where most jobs are shunned due to the same three Ls: long hours, low pay and low status. The solution is not simple, I admit, and I urge the tripartite partners to continue to eyeball these local industries urgently so that there will be a light at the end of the tunnel for workers and employers alike in these industries.

Next, on Continuing Education and Training for the mild to moderately disabled or those who have some potential to learn. Sir, there are many workers with special needs or milder disabilities who have the potential to learn but are excluded from the opportunities for Continuing Education and Training. The next Enabling Masterplan for the Disabled is due for review this year and I urge the coordinating Ministry, MCYS, to work closely with the other helping hands, and especially with the Manpower Ministry, to play a more active role to offer the same education and training opportunities for the disabled as what the able-bodied workforce is receiving.

I also urge the union to include the disabled workforce in their national plan. There is no doubt that they are part of the definition of the vulnerable workforce that MP Josephine Teo has spoken about. The final jigsaw of inclusive growth has to include the single family also, mentioned by labour MP Josephine Teo. It will be incomplete if this group of vulnerable

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workers is perpetually and persistently left out by the union.

Next, identification and integrated help for families with chronic low-wage bread-winners. Sir, this is my final suggestion for today and that is for a multi-agency approach to identify the families whose breadwinners are chronic low-wage workers. Many of them, like cleaner Mdm Rabiah, in my ward, are sole breadwinners providing for several school-going children. Rabiah herself is an ex-ComCare recipient who has opted for work. This is low-wage work. People like her family needs to be identified so that there is tighter case management for them. Tighter case management is required so that proper child supervision, career counselling, job training, temporary income top-up can all be packed in an integrated case management portfolio, in an integrated solution to pull folks like Mdm Rabiah and her family out of their poverty spiral. Left on their own, it is unlikely that these families can see beyond their struggle just to get by the day.

Sir, I hope the relevant agencies will consider my suggestions:

(i) to retain Workfare instead of instituting a minimum wage policy;

(ii) to fine-tune the Workfare Income Supplement Scheme;

(iii) to do more for low wage workers whose potential to learn is low and may not be able to leverage on training;

(iv) to repeat even more of the success in the security industry through more Job Re-creation Programmes in the low-productivity industries;

(v) to include the disabled and special-needs workforce in our country's Continuing Education and Training plans and labour plans;

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(vi) to identify and help chronic low-wage workers in an integrated type, multi-agency approach.

Sir, Singapore's widening income gap is one of the highest in the world and we are sometimes a victim of our own success. Instead of putting a brake on our economic growth which we need, let us sharpen the current initiatives like Workfare and CET and to include other vulnerable groups like the disabled so that none will be left behind and that everyone has a chance to contribute and benefit from the economic growth.

With that, I strongly support the motion.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.15 pm.

Sitting according suspended

at 3.54 pm until 4.15 pm.

Sitting resumed at 4.15 pm

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[Mr Speaker in the Chair]:

INCLUSIVE GROWTH:

(Motion): Debate resumed.

Mr Yeo Guat Kwang (Aljunied): ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Compared to 2009, 2010 was indeed a Happy New Year for Singapore. The Singapore economy grew a stunning 14.7% in 2010, making it Asia's fastest growing economy for the year. The economic recovery is something to celebrate.

As part of the labour movement, I think we have more reason to celebrate because we have not overlooked the

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underprivileged, the low-wage or the low-skilled worker even as we achieved economic recovery. Indeed, we are glad that the tripartite social partners here are committed to inclusive growth for all.

In searching for solutions, we should be mindful that it is not a case of just having alternative views. This may be fruitless. As an old Chinese saying goes:"只听楼梯响, 不见人下来"or "雷声大雨点小". A situation where we are not effective, unable to implement concrete action or face poor buy-in from stakeholders.

Like many Singaporeans, in the labour movement we believe in "4D", but our 4D stand for "do good, do well, do together and do more", thus in searching for solutions, we often seek alternative views and look for overseas case studies and experiences, consult widely and then we "do" with dedication.

As a worker-centric and practical movement, we are committed to ensuring that, not just look for alternative views but initiate action and results-orientated solutions that suit our political and social context. These need to truly benefit the low wage and low skilled worker. Like what we were taught in school: 做事要四到: 眼到, 耳到, 心到, 手到. We must ensure that apart from our eye, ear and hearts being in the right place, our hands should also be ready to be hands on, so we need workable programmes.

For instance, in the services sector, we have already various schemes to help companies strengthen their competitiveness and in doing so, upgrade the service skills of their employees. Many companies have also reported increased revenue and the trickle-down advantage means better job and pay for their workers.

I am pleased to share the success stories from Customer-Centric Initiative (CCI). It has made good strides in helping

*Cols. 2487-2494.

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companies help themselves. Their staff also benefit from associated training and performance-based reward system.

CCI is led by SPRING, the National Trades Union Congress (NTUC), the Workforce Development Agency (WDA), the Singapore Tourism Board (STB) and the Singapore National Employers Federation (SNEF). It aims to enable companies to take the lead in raising service standards in their industry.

One example is Traditional Chinese Medicine (TCM) retailer, Eu Yan Sang. The company implemented a loyalty programme, online portal, staff training, service audits and a staff reward initiative. These have resulted in customer satisfaction level improving by 21% and revenue increasing by 6.5%. Staff also benefit from enhanced workplace recognition for good service and performance, as the company rewards employees with company-wide bonus or incentives to all employees based on increase in revenue and customer satisfaction level, thus boosting morale.

At Han's Group of Companies, which runs F&B outlets across the island, they managed to make CCI work for them and their employees. Through the programme, food ordering and arrival times were reduced by 93.9% and 65.4% respectively. Overall productivity improved by 118% and staff productivity (return on manpower cost) improved by 291%. The company has also seen an increase of 58.9% in revenue, and 428% in profit. For Han's commitment to profit-sharing meant staff were awarded a bonus – amounting to a generous 15% of the group's profits.

Such initiatives in the private sector companies are spreading. At Sakae Sushi, it has kicked off its new Inclusive Growth Programme (IGP) that aims to improve service standards, food ordering time and

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payment speed at their restaurants. To encourage staff to sustain these improvements, a monthly financial incentive will be rolled out. Workers in the outlets who meet the KPIs can receive average monthly increase of up to 17% (about $200).

Such profit-sharing and performance awards have multiple benefits – they raise the morale of staff, boost their salaries, improve service and customer satisfaction. These Singapore companies that continue to build a culture of inclusive growth should be commended for their commitment to fair and equitable employment practices.

A farmer once told me when I was a little boy that you have to keep chickens healthy so you can expect to have a good egg every day. I find this is a good way of looking at things. We need to keep our companies competitive and companies need to keep their workers happy and self-fulfilled so that we can continue to be productive and continue to see gains.

On the ground, we have seen how these programmes enabled low-skilled and low-wage workers to find suitable jobs, upgrade their skills, enhance their employability and increase their earning power.

With the support of North East CDC and e2i, the Employment Assistance Programme in Aljunied GRC has been strengthened by having WorkCare Agents who have made a difference in the lives of local residents who have lost their jobs or who are looking to improve their job situation.

Aljunied-Hougang resident Mdm Annie Koh, 64 years old, with no education qualification, had a tendency to change jobs and had been unemployed for three months when she sought help. At this point, she was feeling depressed about her situation. Our WorkCare Agents did

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not only help her find a job, but initiated counselling so that Mdm Koh could regain her mental well-being and remain positive. WC Agent, Peggy, found Mdm Koh a job as a plate collector at Kopitiam in Hougang Point with a monthly pay of $800, and Mdm Koh has been happily working there for nine months now.

Resident Ong Eng Siong, 45 years old with primary education qualification, was working as a machine operator since 1995 to 2009. He was retrenched. He could not find a job for four months. Our WCA, Ann, has helped him with a job in F&B as a service crew earning $1,300 a month. He has been working there till now.

For 30 years old Johnny Tan with "N" level education, work over the last five years only took the form of odd jobs and part-time work. When friends introduced him to our WorkCare Agents, he was keen to better himself. Our agents encouraged him to take up a security course and later found him a full-time job as a Protection Officer at Aetos Security Management where he has now been working for nine months earning a monthly income of $1,600.

This is just a sampling of the good work that WorkCare Agents have undertaken. In addressing the practical side – finding suitable work – and the emotional side – counselling residents to build their self-esteem, self-reliance and mental well-being – they have been able to help residents sustain longer and more satisfying employment.

Apart from raising employment levels and employability, WorkCare Agents also set job-seeking residents on the first step of a journey to better things. Government incentives also kick in to encourage these low-wage and low-skilled workers to remain employed and upgrade their skills

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through the Workfare Income Supplement Scheme and Workfare Training Support (WTS) scheme.

I am pleased to start the New Year with these tales of success and optimism. It gives us reason to be optimistic that our many helping hands approach is working. We are on the right track.

From the people sector, private sector and public sector, we have managed to engage our tripartite energies to look out for those in need, enhance the potential of every individual and give people the right mix of practical tools and emotional support to elevate themselves and their lives. The Government has to continue doing more to support our low-skilled and low-wage workers so that all Singaporeans may share the fruits of our prosperity through better skills, better jobs and better incomes.

Sir, I support the motion.

4.29 pm

Mrs Mildred Tan (Nominated Member): Thank you, Mr Speaker, Sir, for allowing me to speak. Sir, I stand in support of the motion. This is not a difficult stand to take since an inclusive growth is not just about doing the right thing and not because it upholds moral values, but because it makes good business sense. And because it makes good business sense, it provides us with a long-term sustainable economic model for the future.

For me, an inclusive growth draws on the different strengths of each individual and creates a greater collective value than would have been the sum of one. Sir, I would like to reiterate a point I made in the Budget debate last year about how we need to fundamentally re-think issues relating to low-wage workers.

Low-wage workers are stuck in structural realities. They need to acquire

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new skills to fit to the demands of the new economy and it should not be training for training sake, but training and learning that enables them to match skills and knowledge and competencies they are required to compete in the global marketplace including technology and language skills at a competitive cost.

The House has been consistent in the support that training and developing workers are critical and important to the new economy. I think we need to go beyond training and development. Companies need to take a deeper look at how they can re-design their organisations and jobs. Here lies the importance mindset shift that organisations need to constantly re-invent themselves and that workers are not a widget of production, but one of the most critical components and that they can add value that there is sometimes not easy to define to the institutions.

We often think of changing workers to fit the organisations when, in fact, there are things we can do to re-design the organisations, and how workers can bring about a culture of innovation and improve the way we work. Yet, there are employers, who at the first signs of economic pressure, reduce training and development hours. We therefore need employers and companies to recognise the importance of building a corporate culture that values enhancing skills and competencies as a progressive strategic advantage, almost a business imperative.

I would like to now offer another consideration: that of self-help and apprenticeship initiatives. This is not new, yet apprenticeship and placement programmes offer many opportunities that may help low-skilled workers move up the competency and income ladder. We can see this in many forms – apprenticeship in kitchens, gardens and even cleaning services. I was recently invited to a dinner

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and met the chef who cooked for us. I knew him as a kitchen assistant in a small restaurant I used to go to. He told me that he lost his job two years ago and could not find another job. But that, he said it turned out to be a turning point. With his skills and interest in cooking, he decided on a new track to offer his skills and services as a cook for people who enjoy good homecooked food. To that end, this man stepped out and re-invented himself. It is a time-tested adage of teaching a person to fish as opposed to giving him the fish. While we can offer various opportunities, the worker himself must consider how he can step up and have a desire to excel. However, often we keep to what we know, we are in our comfort zone and moving out is not easily undertaken. However, with support and a good dose of encouragement, we may be able to overcome our fears and insecurities to move forward, like Mdm Goh, as highlighted by Member Josephine Teo.

I commend the efforts of e2i as it continues to help workers to re-skill and re-train. However, it is also important to recognise that workers themselves need to be motivated on the possibility and potential within themselves, to want to step out and not to be afraid. Sir, there will always be a need for low-skilled jobs. But I think it is still important to include development opportunities, so that the workers who do these jobs have the chance to move up.

The meaning of inclusive growth for me is a simple one. It is a triangle where employers need to be fair, provide a safe working environment and respect workers. Workers need to open up themselves to new opportunities, want to have a better life for themselves and their families, and to be willing to invest in the future. The Government needs to balance growth with equity, but it also needs to make sure that new opportunities and subsidies through workfare and incentive

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schemes are weighted towards those who need them most.

Sir, I support the motion and urge the Government to put in place policies that will help the market decide which way they ought to progress, so that everyone benefits and we can all grow together.

4.34 pm

Mr Calvin Cheng (Nominated Member): Mr Speaker, Sir, I rise in support of the motion. I do not think that anyone would oppose a motion on inclusive growth to ensure that no Singaporean is left behind as we prosper. The devil, as always, lies in the details.

The first problem that we encounter is in definitions. What is inclusive growth? If we are clear what inclusive growth means, we would have a better idea on how to achieve it. The problem is such terms are always politicised at the battle ground more over what inclusive growth entails, rather than how to achieve it. I think this is wrong. Politicans need to stop fudging the definitions and politicising terms, such as income and equality and be truthful to the electorate about what they really mean. Only then, can we move forward in making sure that all Singaporeans participate fairly in the fruits of our growth.

Firstly, I think it is stating the obvious that it would be great that when the country is growing, all the citizens are including in its growth. If this is what we are debating today here in this Chamber, let us recognise this as the platitude that it is, vote "aye" for the motion right now, and be done with it.

In my opinion, a more useful way to look at this issue and defining inclusive growth is that it should not only mean that everyone should be included, but that

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"no one" group should be consistently excluded. This is important, especially when people are obsessing over the bottom 10% and politicising it. There will always be a bottom 10% in any measure, this is a logical necessity.

My hon. colleagues today will also no doubt be highlighting the worrying statistics that the wages of the bottom 10% are stagnating or growing less fast than the average. This is indeed also something to fuss about. However, I think what we really need to know is whether this stagnating 10% are, through the years, the same people, and are drawn from the same family units and demographic groups. If this is so, we have something fundamentally more damaging and poisonous than any mere statistics taken show.

If sociological studies have evidenced that the demographic profile of our bottom 10% is not changing, it means that we have an underclass forming. That is, there is one group being consistently excluded from our growth. I bring this up because a society that truly promotes inclusive growth means that even though that there will always be a bottom 10%, the people at the bottom 10% has a chance to raise, may be not to the top 10%, but at least out of the bottom 10%. Even if they cannot, their children have a chance to. The bottom 10% cannot and should not consistently be drawn from the same group of people or families. I am talking about the equality of opportunity.

Inclusive growth does have to be based firmly on the tenets of meritocracy. Saying that everyone should benefit from the fruits of growth is the platitude. Stating and believing that everyone should have a fair chance and an equal opportunity to participate in the fruits of growth, on the other hand, is a policy direction. This is something that Singapore should strive for. It is my fervent belief that the best way to achieve

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this policy-driven vision of inclusive growth, rather than the other Eutopia-driven vision of inclusive growth, is to ensure that nobody should be left behind, because of the lack of access to education and health. This is the surest way to prevent an underclass in Singapore from developing, rather than re-distributive policies that subsidise our bottom 10% without understanding who the bottom 10% are: what got them there and whether they and their families – the actual people, and not the statistics – have a chance of moving up the income scale.

This is because re-distributive policies target the symptoms of the disease rather than the causes. It also causes us to obsess over relative welfare, rather than absolute welfare, which brings me to the issue of income inequality, another concept which I feel is too often politicised and too little properly debated. Income inequality is a relative measure. It tells us nothing about the absolute well-being of a society’s poorest people.

Recently, I have an article about an island in the Caribbean where billionaires retire and reside. This island is not on the normal charts of Gini coefficients. This tongue-in-cheek article did a survey and found that not only the Gini cofficient and income inequality of this island is extremely high, but the bottom 10% consisted of mere millionaires. That bottom 10% – these mere millionaires – were cast extremely badly off in the relative sense, compared to their billionaire neighbours but it would take a brave and silly person to claim that in the absolute sense, they were poor and deserving of welfare.

Of course, the poor in Singapore are not millionaires, far from it. However, it is my opinion that the obsessed over income inequality over this relative measure misses the forest for the trees. For example, let us take two situations. The

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first situation is one where the average grows at 15%, but the bottom 10% grows by 8%. The second scenario one where the average grows by 2%, but the bottom 10% grows by 4%. In the first scenario, the average grows much faster than the bottom. In the second scenario, the bottom grows slower than the average. But not only does both the average and the bottom grow throughout the first scenario, the bottom in the second scenario grows only at half the pace of the first. Therefore, although income inequality is reduced in the second scenario, everybody is worse off than in the first scenario. Inclusive growth therefore cannot specifically aim to reduce income inequality. This cannot be its priority. Inclusive growth has to be long term in its vision to ensure that everybody grows as much as possible, with no one group being consistently excluded. The most pernicious effect of income inequality is when one group is consistently being excluded from economic benefits, forming an underclass and not from income inequality in itself. More important than the wealthy well-being of the poor, we should be more concerned with the absolute well-being of the poor. The poor needs to be helped regardless of whether the rich are getting richer. The absolute well-being of the poor needs to be cared for. This is a fact, independent of how they are fairing compared to the well-off. Politicising income inequality will only lead to unnecessary social resentment, jealousy and envy, when what we should be focussing our attentions on are the absolute welfare of our poor and making sure an underclass does not develop, by ensuring that the same people, same family units or same demographic groups do not get entrenched in poverty, generation after generation.

In order for inequality – and some inequality will always exist – to not lead to bitterness and disruptive envy, there must be an equality of opportunity,

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meritocracy and a fair chance of moving up. The old man from the rental flats in Assoc. Prof. Paulin Straughan's story, instead of feeling bitter or resentful, must be made to feel hope. Hope and faith that his children or grandchildren, if they take the chances could one day live in the beautiful condos opposite.

Finally, I turn my attention to the issue of minimum wage, which no doubt will be much debated in this Chamber today. I will not be liable for the arguments for and against minimum wage, as even professional economists cannot agree. There are empirical studies that abound on both sides of the argument that purport to prove that either side is correct, and neither shall I go into these.

I would instead like to ask another simple and perhaps obvious question: who pays? Amidst all the sophiscated economic arguments and empirical studies being bandied about on both sides, I wonder whether anybody has given thought to this question. I feel that there are some mistaken impressions that because the Government does not want minimum wage to be implemented, somehow, if it would be legislated, the Government will be paying the minimum wage. It is, of course, utter nonsense. The people who will be paying the minimum wage, who will be financially responsible for it, are employers. And who are these employers? Employers are not some faceless monolithic evil empire of multinational corporations, but people around us, people whom we meet everyday. In politicising the issue on minimum wage and pulling on the feelings of resentment and envy, I think some politicians have hoodwinked people into believing that the minimum wage is some magic medicine, that is somehow paid for either by the Government or some faceless people detached from ordinary Singaporeans. This is blatantly untrue.

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The people who would be affected by minimum wage are employers who are not only big companies – who would ironically be the least affected because they are capital-intensive – but people around us, the small employers: the provision stall owners round the corner, the HDB coffeeshop owners, ordinary people who are our family or friends and our neighbours. The people most affected would be the small businesses who have no money to invest in automation and therefore, the people who rely the most on low-wage labour. A minimum wage at the end of the day, when one cuts through all the verbosity is a re-distributive tax, a tax on the employers of low-wage labour and benefiting low-wage earners. It is not only a tax, but the very narrow-based tax. Taxing one small group of people to benefit another small group of people.

This is not very inclusive at all, is it? Put like this and recognising that the people who would bear the most burden of a minimum wage will also be ordinary Singaporeans, a minimum wage does not look very attractive at all, does it? But would politicians and people lobbying for minimum wage, go forth and shout to the world "let us tax one group of ordinary Singaporeans, so we can help low-wage earners". No, they would not, because no politician who wants to get elected will campaign for higher taxes. But that is precisely what a minimum wage is. It is a tax that is not only narrow-based, but will most likely be borne by ordinary Singaporeans around us. Even a broad-base increase in our progressive tax system may be more directly efficient in re-distributing income and helping low-wage earners. But as I have said, it would take a very brave politician to campaign on a platform of higher taxes.

Mr Speaker, Sir, I am for inclusive growth. What I am against is the politicising of this issue to serve the narrow interests of certain groups. What I

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am against is playing on human feelings of resentment and envy for political ends. We want all Singaporeans to benefit from growth. We do not want an underclass to develop. We want everyone to have a fair chance to succeed and an equal opportunity to prosper. Regardless of political loyalties, I believe this to be true for all Singaporeans. Let us all work towards these noble aims.

With that, I support this motion.

4.45 pm

Ms Jessica Tan Soon Neo (East Coast): Mr Speaker, Sir, I rise in support of the motion. Inclusive growth must mean high and sustainable growth that leads to the following: availability of good quality jobs for Singaporeans and access for Singaporeans to participate in this growth, to take advantage of the job opportunities and enjoy the fruits of the growth. There must also be access to quality education and healthcare for all Singaporeans to ensure that Singaporeans will remain relevant and have the ability and health to participate effectively in the economy.

Mrs Josephine Teo talked about the need to focus on the low-wage worker. As much as the progress we have made, this is an important point because the lower 20% does still face challenges in terms of income level. However, I think that we also must not just focus on that one group because there is also, as Mrs Josephine Teo said, the no-wage worker. People who are to date not effectively in the economy, but have the ability and the opportunity to be. They may not be in the job cycle today because they have been displaced and we need to also look at that. So while we do ensure that there are quality jobs, we must also ensure that our workers are adaptable and stay relevant to be able to be suitable for these jobs. I believe that the emphasis and the strategy on quality education, together with the focus on Continuing Education

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Training (CET) in Singapore, is important for inclusive growth and sustainability.

Singapore is an economy in transition and we are working on addressing the changes and the opportunities of the global market. Here is where, I believe, the role of Government is key. Government intervention and support for CET in a holistic manner like what we saw with SPUR during the economic downturn was an effective policy intervention to help us ensure that we not only drove inclusive growth, but addressed the needs of the lower income.

To drive a culture of a mindset change of encouraging workers to stay relevant requires programmes like SPUR and now the expanded CET system to be continued. This will help workers participate and capitalise on new opportunities that are available. While we look at the quality of CET centres, resources and programmes, we must ensure that they address the changing demographics and diversity of the workforce and business requirements. CET must be comprehensive and targeted in approach and focus on employee training and development that is aligned to the market demands. To ensure a mindset change in attitude towards CET, I want to stress that a holistic approach like the one that SPUR took, was important because it is not about just employees being trained and the impact on employees but also the impact on employers. In order for employers to be encouraged and enthused to have their employees trained, they need to be able to manage the impact to the disruption to work while the employee is being trained and also the financial impact. I think that programmes like IGP will also help to encourage employers to recognise and change jobs, re-design jobs, but that also requires employees to be trained and their needs to be CET.

There will also need to be social support and sound governance to provide

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social safety nets to mitigate the effects of external and sometimes transitional life changes and shocks that all individuals go through and, especially for the chronically poor, to meet the minimum needs and break the poverty cycle, I believe there are many measures available today. I want to emphasise on the topic of – beyond access and participation – hope and aspirations for Singaporeans.

The concept of meritocracy has been frequently used to describe the Singapore system. At the risk of sounding incorrect, I would however point out that it is more than meritocracy that has made Singapore what it is, and it has allowed many Singaporeans to improve their lives and those of their families. Singapore, as all of us know, is a small nation, dependent on its people and talent. It has often been described as the improbable nation, the Little Red Dot. The areas that I touched upon – the intervention that the Government has put in place and needs to continue to put in place like sound policies on investments in education, health, the social support networks – must be deliberate to ensure that we sustain the environment and growth for Singaporeans to have the opportunity to enjoy and have inclusive growth.

I want to stress that true inclusive growth is not just about equal income distribution. It must mean that all Singaporeans will be able to continue to aspire and can achieve better quality of life for our families regardless of individual circumstances or status. We must never reach a state as a country where the dreams and aspirations become out of reach of any segment of our society. I do not think we will be there. I will give you an example. I have done some work with the Society for the Physically Disabled and with the Infocomm Accessibility Centre. I must tell you that we always think giving help is the right answer. I will

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say that I am firm believer that enabling is the best answer; and that is why I am a believer of CET and a firm believer of enabling.

The Government plays an enabling role. The Infocomm Accessibility Centre focuses on training and finding employment for physically-disadvantaged individuals who still has capability and this was focused on the IT industry that I am in. I spoke to some of these individuals who managed to get jobs. I asked one young lady, a web designer. She said to me when I gave her the certificate and congratulated her that what was the most enlightening for her was the ability after she acquired the skills to apply for a job, competing with able-bodied Singaporeans or maybe non-Singaporeans for that matter, and she got the job on her ability, earning the same income that an able-bodied person was going to make. There was no special concessions needed for her but what we needed to give her was this accessibility to training and ensuring that she played on her strengths. I can give Members many examples and I think Members have heard many examples. Of course, we can tell the other side, too, when people struggle.

On the point of minimum wage, I would just like to touch on this point. I am not going to debate on the pros and the cons, but I am going just talk about why I am against minimum wage. I do not think it will work because it does not necessarily change the condition for the worker. If it is set at the wrong level, it might actually have repercussions; set at the right level, it might give the worker the right amount of additional income but that can be achieved in other ways. I think Workfare, WIS, these are measures that effectively achieve that objective without taxing the employer and without discouraging the employer to hire the worker. Another thing about minimum wage: it does not guarantee the worker. We talked about income inequality, we

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talked about Gini coefficient. We always worry about whether that is going to be too high or too low. I think it is a factor we have to consider and we must still consider it but, again minimum wage does not guarantee that we will narrow the income gap. Therefore, I believe that CET and opportunities creating and ensuring that we sustain the growth opportunities will empower workers to take advantage of the opportunities and therefore be able to share and enjoy inclusive growth.

If Members would allow me to end my speech with a quote from the United Nations International Policy Centre for Inclusive Growth. I quote: "Inclusive growth implies participation and benefit sharing; participation without benefit sharing will make growth unjust; and sharing benefits without participation will make it a welfare outcome."

With that, Mr Speaker, Sir, I support the motion.

4.54 pm

Mr Seng Han Thong (Yio Chu Kang): Sir, I support the motion moved by Members Josephine Teo and Zainudin Nordin. I would like to cite two cases to illustrate how IGP can uplift workers’ skills, pays and lives in the logistics sector.

The first case is the bipartite effort by the Singapore Newspaper Distributors Association (SNDA) and the Singapore Press Holdings (SPH) which involves the newspapers delivery workers.

As Members know, SPH prints more than one million copies of newspapers daily. About 600,000 of these copies are delivered to 400,000 households and offices. To do this, the industry requires 5,000 delivery workers. This is a very labour-intensive industry. To many Singaporeans, this is a tough job. Imagine waking up in the wee hours of the

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morning at 3.00 am and having to walk up blocks and blocks of housing flats to deliver newspapers to the doorsteps.

Over the years, the industry has been facing a huge challenge in recruiting workers. Last year, we formed a Tripartite Workgroup with key representatives from NTUC, MOM, SPH, the news vendors associations and worked hard to look at ways and means for solutions. Together, we achieved some breakthroughs. SPH ploughed in $1.5 million and started a re-branding exercise to raise the image of delivery workers, with uniforms, etc. They organised job fairs, with e2i, Town Councils and the CDCs. The news vendors raised salaries and improved the benefits given to these workers. And since the exercise started, 180 Singaporeans were recruited.

With the introduction of the IGP last year, the Tripartite Workgroup is now tapping on this programme to look at ways to raise the productivity of the delivery workers. These workers will be trained to be multi-skilled and to improve their service standards so that they are also able to retain the current subscribers and if they decide to stop subscriptions, to recruit new subscribers. Workers will also be able to deliver newspapers to more households and offices. Ultimately, the productivity gains will be shared with the workers.

Sir, the second case is the tripartite effort by the ITE, taxi companies and the National Taxi Association (NTA). NTA is committed to the IGP which aims at helping companies enhance their productivity and workers transform their job, skills and wages. Together with the e2i, NTA has initiated discussions with Taxi companies on tapping the IGP fund to enhance taxi companies’ productivity and improve drivers’ income. Taxi companies’ response to the IGP has been positive. Specific initiatives and projects

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have been identified and discussed such as enhancing the call system booking, the service excellence training of drivers, enhancing automotive service and work process to drivers.

Among these initiatives, automotive services and its work process seem to be a primary concern to most taxi companies, in particular the shortage of qualified and good motor mechanics in their workshops. As a result, in some workshops, drivers have had to wait for long periods of time for their vehicles to be serviced. This down time for a taxi vehicle inadvertently affects the driver’s income, the taxi service to the commuters and eventually translates to higher operating costs for taxi companies as they too need to compensate drivers for their down time.

Mr Seng Han Thong (Yio Chu Kang): 4.55 pm

Hence, a work group with representatives from taxi companies, e2i and ITE will soon be formed to discuss on how to address the shortage of mechanics and enhance the workflow and work processes in the workshops. For a start, the work group would focus on a few areas such as:

(i) standardising training across the industry to promote minimum skills standards;

(ii) determining if companies can pay better for entry-level mechanics;

(iii) raising productivity and improve work processes in the workshops.

It is laudable for the taxi industry and companies to come together and take the initiative to form the workgroup and

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address their own specific industry challenge. While IGP funding is usually company-based support, we do urge and hope that MOM could also consider extending and allowing funding support to be applicable also to specific industry identified initiatives or projects. If a project or initiative is implemented at an industry-level, the number of workers to benefit from it would surely be of greater number than just company specific. At the same time, not all companies especially the SMEs, have the financial and manpower resources to work on initiatives and projects. As such, many would not be able to tap onto the IGP.

The above two cases show that NTUC, with its tripartite partners, can help low-wage and low-skill workers through the IGP to have better skill, better pay and better lives.

Madam, I would like to join in the debate on minimum wage from the perspective of the self-employed. To the self-employed, they have to prove their job worth, and their relevance to the market. That is what they call 自食其力. Thus, the worth of the job is set by yourself, set by the market, not by the Government. However, the IGP can help improve their skills, relevance and improve the work process and the company’s productivity. In the end, they share the gain. They also enjoy the Workfare and the WIS. Thus, I would like to urge the Government to do more for many of the self-employed who are also low-income workers. Indeed, this same argument of job worth applies to all workers too.

5.00 pm

Mdm Ho Geok Choo (West Coast): Mdm Deputy Speaker, with the Singapore economy booming again, I propose that the functions of the Community Development Centres (CDCs) be re-aligned to match low-income Singaporeans to better-paying jobs.

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At present, CDCs provide direct job-matching services for unemployed residents seeking work. The CDCs now also highlight training opportunities for low-income workers to improve their chances of getting a job. These courses should go further to help workers secure better-paying jobs.

Helping Singaporeans to move up the ladder is important because the rich-poor divide is expected to grow as globalisation intensifies. Those who have the relevant skills and knowledge will do well as knowledge, skills and competencies are the best passport to break through the poverty trap and to move up the salary ladder.

Minimum wage will not help to inspire the desire to build up individual capabilities. Workfare is as good as minimum wage, if not, far superior than minimum wage. Workfare provides a potential pipeline of development for the individual to move up. Madam, an analogy is canned sardine fish and smoked sliced salmon. Smoked sliced salmon, like minimum wage, is fashionable food but does not fill the stomach and is costly affair. Canned sardine fish, like Workfare, is practical solid food with many uses and because it is more economical, more can benefit from it.

Madam, this motion calls for all-inclusive economic growth so that all Singaporeans may share in the fruits of the country's prosperity. I feel that the CDCs helping Singaporeans in new ways could go distance in achieving these objectives. In bridging the rich-poor gap, the CDCs will continue their role of securing help for deserving cases through the relevant Government assistance schemes.

In this regard, I am heartened to hear the Finance Minister, Mr Tharman Shanmugaratnam, said on Monday that

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the Government would take another look at the Community Care Endowment Fund (ComCare) in the next Budget to provide more buffer for the needy. ComCare has disbursed over $210 million helping more than 160,000 cases since it was launched in 2005. Prime Minister Lee Hsien Loong highlighted last month that the Government had worked hard on its re-distribution measures such as improving the Public Assistance Scheme, building up Medifund, and introducing Workfare.

Madam, indeed, the Government has in its arsenal a multitude of assistance programmes to ensure that no one is left behind even as Singapore prospers. The assistance programmes and the organisations that provide the aid have abbreviations that are a jumble of almost all the letters of the alphabet, such as, CET, Jobs Credit, PCP, SPUR, WDA and WSQ.

With the current healthy economy, we have breathing space to take a more strategic look at what to do next. To start off, I suggest that a post-mortem be performed especially on the many help schemes introduced during the 2008 to 2009 financial turmoil. This will allow all, including the people, to see how much the Government has done, which programme has been effective and what can be applied again in another economic downturn.

Madam, as children are the future of our nation, we need in particular to understand how youngsters in low-wage households are being affected by their difficult straits. To this end, I am pleased to say that Boon Lay grassroots leaders are taking steps to review the problems of under-privileged children in the constituency.

Being one of the poorer constituencies, we have many so-called latch-key children. Though poor, the residents are pragmatic and demonstrate pride to

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want to improve themselves. Again, Workfare offers this opportunity. Boon Lay grassroots leaders plan to go beyond financial factors to study issues like learning difficulties, truancy and behavioural problems. Boon Lay grassroots leaders will find out from the ground what measures are likely to work to resolve the children’s problems. The aim is to help under-privileged kids achieve their potential and pull them out of poverty. Such multi-hands approach is the signature hallmark of the Singapore culture, one that emphasises on self-reliance and resilience.

Madam, helping low-income households cut expenses is another way to alleviate their burden. I propose that the relevant agencies scrutinise their billings to see how expenses can be lowered for the less well-off and, perhaps, provide them with financial counselling. It is not uncommon at MPS to discover that the bulk of their income goes into handphone bills and Courts furniture.

Madam, new technologies can help consumers cut their power bills. An example is the energy-saving bulb, but it is generally more expensive than the incandescent bulb. I propose that a study be conducted to ascertain how to tap new technologies to alleviate the burden on households. For instance, the Government could consider subsidies for low-income households to convert to energy-saving bulbs which are also more durable than the incandescent bulbs for the entire household.

Madam, for all-inclusive growth, we need to take a step back to identify people – including PMETs and those who live other than in three-room HDB flats – who may feel that they have no part in the robust economic recovery. Not all sectors benefit alike as the economy grows; and within each sector, such as

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manufacturing, not all segments enjoy growth.

Therefore, I am glad to hear the Minister of State for Manpower, Mr Lee Yi Shyan say in Parliament yesterday that the Government plans to increase training capacity to cater to 250,000 PMETs by 2015. I am also happy to see that the Manpower Ministry has been publishing since 2008 its annual Labour Market Highlights containing information on executive and non-executive jobs in demand in several sectors. While I appreciate that the effort involved in collecting the data is massive, I would like to suggest that the guide be published on a half-yearly basis to better serve job hunters.

Madam, finally, in ensuring that all Singaporeans can share the fruits of our country’s prosperity, the Government needs to carry out an education drive too, at the national and district levels, to press the point that Singaporeans have to do their part by accepting that there is a continual need to upgrade their skills. A mindset change programme and campaign on "It's my choice because I am inspired to upskill and upgrade" so that every Singaporean plays a part in closing the income divide. Let us do well together so that, instead of looking at others from outside, we will be the ones that others look up to. On this note, I support the motion.

5.07 pm

The Minister of State, Prime Minister's Office (Mr Heng Chee How): Mdm Deputy Speaker, thank you very much for allowing me to join this debate. I would like to begin by making two points that I think the whole House can agree on.

First, that inclusive growth is a critical ingredient to a nation's progress and social cohesion. That if we do not have inclusive growth, then there is always a

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risk that over time we may develop deep social divides, and then morale, productivity and ultimately even the law and order of this country may be jeopardised. And that in seeking inclusive growth, it is important that we pay particular attention to helping the lower skilled, lower income amongst us.

If we want to be quite clear and level-headed about it, in my view, I think we should ask the question: If we want to "include" and we want to "share this growth", then how do we do this? If there is growth, you want to include and you want to share. I think there are only two ways: one, boost earning power; the other way, through gifts, that is, transfer.

I think, quite clearly, by boosting earning power, we have a more sustainable way forward because that boost, that additional earning comes out of more productive work, whether by the salary or, as mentioned by Member Seng Han Thong, even the self-employed. And because of the added capability, then they are able to earn more and be able to sustain their capability to continue to compete successfully and do well.

If you go the other way and you try to do that through gifts or transfers, then it is necessary in the short term, necessary as a painkiller of sorts, but it is not a long-term solution to boosting incomes and standard of living because if you do that, aside from the negative impact that it would have on long-term employment and employability and on the morale of those whom you try to help this way, it also begs the question of where the resources to fund all this would come from. I think this is also a point that NMP Calvin Cheng mentioned earlier when he asked the question, "Who pays?"

To me, the right way to look at transfers, including the Workfare, would be as an opportunity to "buy time" for a majority of our low-wage workers to do

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the necessary in order to upgrade their earning power. As an analogy, if you look at the recession we had in 2009, at that time if we did nothing, then I think we can all also agree that retrenchments and unemployment would have been much higher in that year. But what was done was a package, a Resilience Package and one key component within that was "Jobs Credit". And because of that, cash was pumped into companies that gave them breathing space, they could then hold on to more jobs and therefore fewer workers lost their jobs. In that same period, SPUR was introduced to upgrade and re-train the workers and so the workers went and at the end of it, we have a more skilled workforce, a more capable workforce and the individual workers, they were more capable of holding down a job and a better one. So that is the way in which, I think, we should look at these kinds of assistance given, that is, to "buy time" in order to assist our workers to do better as they go along.

Several Members have mentioned just now about reviewing the terms of the Workfare. I would also like to echo my support for that. I think as time goes on, there is always room to look at the way in which, for example, the cash and the CPF components as well as the quantum are calibrated and whether or not that ratio is optimal as circumstances evolve. We do want to make sure that our Workfare is, on the one hand, helping the workers with a certain addition to what they can earn on their lower wage jobs to be able to look after their families and, therefore, depending on what they need to spend on their living expenses to look at the possibility of reviewing from time to time and, on the other hand, not overdo it until you then develop a liking and dependency on Workfare itself.

If you had not done Workfare, then the alternative of giving that amount to the workers, such as through a minimum wage, would have been to ask the

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companies to fork out the money. Some Members have argued that that would have amounted to being a tax. If you look at how much Workfare has been given out, it would have amounted to $400 million, benefiting close to 400,000 workers. You put that as a tax on the companies, all other things being equal, and let us just ask ourselves what might that do on an individual company basis and on an economy basis to our employment numbers. You will know that it poses a definite risk to employment, especially to workers at the lower end if their skills cannot match up to the value.

I come back to this point about increasing earnings – if we have a proper perspective about gifts and transfers. Here, I will say that there are two ways. You want to increase earnings, you can try minimum wage. But I think there is a better way and I would say instead of going for the minimum, why not we go for the best? Let us go for the best wage instead of the minimum wage.

It is not as if Singapore has not really tried something similar to minimum wage. I think there is a close analogy. Back in the 1980s, before the 1985 recession, the National Wages Council was giving out quantitative guidelines, percentages. Although these guidelines were not law, not binding, but they were taken very seriously throughout the economy, across all industries. Yes, these were wage increment guidelines but, ultimately, the aim was the same, that is, up the wages. The strategic intent at that point was, you move it up, companies will be forced in a way to upgrade their value add, improve their productivity, climb that ladder, move the Singapore economy faster. But when you set it too quickly, too high, companies cannot catch up, who loses? It is the worker who becomes unemployed

even as the companies close down. What we had that year was a recession, and in

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order to come back out, I think all of us will remember very painful measures were taken, including a very deep cut in the employer's contribution to the CPF. It is a dangerous thing to just try to make a number that would apply regardless across the board. We have tried something like that. If we are not careful, that has been what happened, and it can happen again. When Mr Low Thia Khiang said just now that he would like to see industry-level boards being set up to set industry wages, it just reminded me so much of this and I thought that I should sound this warning that it is not a good thing to do. I would say that from the Singapore's own experience, it is not a clever thing to do. If you do that, and if the workers become unemployed, you have just converted them from low-wage workers to no-wage workers. Then who is going to be responsible for these no-wage workers and their families?

I do not recommend minimum wage. I recommend best wage. What is best wage? Best wage is my way of describing the package of measures that have been put together. Upgrading the industry, upgrading the individuals – WSQ being one particular system – going for best sourcing, get people to pay for value and not go for the cheapest, and, therefore, you can then introduce technology, you can then introduce improvements to processes, up the productivity so that the Inclusive Growth Programme (IGP) driven by NTUC's e2i is another example. With improved productivity, we can then reduce our reliance – in some cases, I would say over-reliance on foreign labour – that would also serve as a re-balance, and will do some good. At the same time, productivity improvement can be part of gain-sharing, and that would motivate our workers to go along and make the companies even better. There are so many ways of doing that. Earlier speakers have shared so many specific examples pertaining to women, taxi-drivers, printing industry, work of the e2i. Yesterday, we

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also shared many examples about older workers in the re-employment debate.

All these must happen at the company level: training, upgrading, to make it happen. Commitment from workers, commitment from management. At the macro-level, what can be done is to make sure that the conditions are conducive for economic growth because if you have robust growth then your labour market will be tight. When your labour market is tight then employers will look for workers, they will know how to treat their workers well because these workers are in demand. That answers the question that if you do not have a minimum wage law, then how to you ensure that your workers are not exploited? The best way to ensure that your workers are not exploited is full employment.

Mdm Deputy Speaker, in conclusion, I would say that the truth is that there is no magic bullet. NMP Assoc. Prof. Paulin Straughan gave the story about that elderly gentleman looking into the condominium. There are many ways of looking at the story. I would just like to give my take on that. That condominium was sited, she said, next to the Singapore River and I think we would also all remember the Singapore River did not use to have Roberston Quay, eating places and condominiums. When the Member said there are rental flats across the road and on the other side are condominiums, we should then say how did we get Singapore River to become what it is today. What is it that we can, therefore, do to make sure that there will be more such successes and use those methods? What we would then find is that it is not by chance. It certainly was not that a group of people came, passed the law and then the condominiums suddenly came up. It is because of deliberate action over years, focused perseverance, hard work, leg work, hand-holding, persuasion, never give up. That is what made Singapore River look like that today, and the things

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that are next to the river. That must be the same spirit that, I believe, we must take in helping sincerely, practically, our low-wage workers to improve their skills and make sure not only are they not exploited but that they and their children will have a hope and a future.

Mdm Deputy Speaker, I support the motion.

5.20 pm

The Minister, Prime Minister's Office (Mr Lim Swee Say): Thank you, Madam. Madam, I thank Member Josephine Teo for moving this motion. To me, this motion contains two core issues. First, is the commitment to inclusive-economic growth. To me, "economic growth" means growing the economic pie of Singapore. "Inclusive" means allowing as many, if not all, Singaporeans to participate in this enlargement of the Singapore's pie.

Secondly, this motion calls on the Government to do more to support low-skilled, low-wage workers so that all Singaporeans may share the fruits of our prosperity through better skills, better jobs and better incomes. In other words, in the process of enabling more Singaporeans to participate in the enlargement of Singapore's economic pie, how can we, along the way, help the low-wage workers, the low-skilled workers enhance their earning capacity, their earning capabilities?

Madam, many Members have shared their views regarding how this can be achieved. Several Members touched on the issue of minimum wage. I noticed that not many Members here stood up to strongly support minimum wage and, yet, at the same time, not many Members are prepared to rule out the possibility of introducing minimum wage in Singapore. I thought it will be useful for me to speak from the standpoint of the Labour

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Movement why the NTUC has no intention of adopting minimum wage as part of the solution, as suggested by Member Viswa Sadasivan. We have no intention to pursue minimum wage at the sectoral level, as suggested by Member Low Thia Khiang. We do not intend to wait for all our tools to fail and to go back to minimum wage, as suggested by Member Irene Ng.

Madam, what is minimum wage? Imagine: a worker, an employer and the Government – three parties – come together. The worker says, "cost of living is too high; I need $1,400 of salary every month to survive". The management says, "competition is too strong; cost of business is too high; I can only afford to pay this worker $1,000 per month in order for the business to survive". The Government looks at the worker and says, "yes, I hear you; $1,000 is too low, but I also hear the employers – $1,400 is too high". So what does Government do? It says since $1,000 is too low, $1,400 is too high, why not with some negotiation let us settle for $1,200. When we settle on $1,200, frankly speaking, nobody is happy. To the worker, $1,200 is too low. To the employer, $1,200 is too high. So, both sides are unhappy.

上有政策，下有对策. When the Government, notwithstanding, the unhappiness on both parties, decides to implement the minimum wage, what are the problems? The first problem is the rise of the no-wage workers. A few of my fellow labour Members have touched on this. When we impose minimum wage and to think that no employer would retrench their workers and just accept the minimum wage, is not realistic. As Member Josephine Teo pointed out – and I think it is a very important point – just imagine if the Government imposes a minimum wage of $1,200, who are the workers who are most at risk of losing

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their jobs? Take two workers: one is earning $1,100 today – just $100 below the minimum wage, one is earning $800 – $400 below minimum wage. If the Government were to impose $1,200, between these two workers: $1,100 versus $800, who do you think is at greater risk of losing his job? To me, the answer is very obvious. The one who is earning $800, the lowest-skilled workers, the lowest-wage workers, are the ones who are most likely to lose their jobs and they are the ones, in fact, who need their wages – even though it is $800, even though it is $1,100 – more than anybody else. I do not think we, as a labour movement, want to see them ending up as no-wage workers.

Secondly, some of my colleagues have also mentioned, again, and I think it is important to repeat. Minimum wage in practice would turn into maximum wage for the low-wage workers. Once the minimum wage is imposed, these low-wage workers that are paid the minimum wage, they do not have any increment. Why? The employers will adopt the position: actually you are worth only $1,000 but under the law, I am forced to pay you $1,200. Since I have already met the requirement of the law, there is no way I am going to give any increment. So, minimum wage would always end up being a maximum wage for the low-wage workers. But, most of all, minimum wage will end up to be sticky wage for the low-wage workers. Just study the countries that have implemented minimum wage and I think it is easy to see. The workers there are not happy because the minimum wage has turned into maximum wage and that maximum wage can only go up when the governments having consulted the employers, the workers, come to a decision to revise the minimum wage. As Member Halimah Yacob mentioned, in many countries it took them two years, three years, many years to agree on the increase. By that time they had agreed on the increase, the cost of living has already

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gone past them. So, minimum wage will impose these three potential problems: no wage, maximum wage and sticky wage. That is the reason why the labour movement of Singapore is against this idea of minimum wage. It is a solution that looks easy, a stroke of the pen, but actually we do not believe it will serve the interest of the low-wage workers of Singapore.

Singapore has adopted a different approach, and Members have described it using different terms. I heard Member Heng Chee How using the term "best wage". Basically, this Singapore approach is different in that the three parties come together: the workers, the employers and the Government. The Government basically said, "yes, I hear the workers facing this problem of 'money no enough'. At the same time, we hear the employers that global competition is very keen." So, what do we do as a Government? What do we do as tripartite partners? We introduced Workfare Income Supplement. As the Prime Minister mentioned at our PAP Party Convention, Workfare Income Supplement is our version of minimum wage. A worker who is earning $1,000 per month can receive as much as $2,800 per year which is equal to 2.8 months of his salary. It is not a small sum – $400 million for the low-wage workers in the workforce. Workfare Income Supplement is our version of minimum wage but the beauty is this: this money does not come from the employer. It is not a burden imposed on the employers, it is a funding directly from the Government. We also recognise that the main purpose of the Workfare Income Supplement is to buy time so that workers who may need some time to move upward – from lower wage to higher wage – can receive the kind of financial support in the mean time. But as Member Calvin Cheng mentioned, upward mobility is important, and I fully agree with that. So, in our situation, in helping low-wage workers, besides providing Workfare Income Supplement, we spend a

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lot of time, a lot of energy on other programmes to help to enhance the jobs of the low-wage workers, the skills of the low-wage workers. Again, many labour Members, in their speeches, have shared with this House the kind of programmes, the kind of efforts being put in by the tripartite partners to help the back-to-work women, the low-wage workers, the casual contract workers, the older workers. And the list goes on and on.

In the process of doing so, of course, there are some concerns. Member Assoc. Prof. Paulin Straughan's concern is that the employers may take advantage of Workfare Income Supplement from the Government by exploiting the workers, by hiring more foreign workers who are cheaper and so on. Madam, the truth of the matter is that the labour movement and the tripartite partners all subscribe to what the former Secretary-General of the NTUC, Minister Lim Boon Heng, reminded us year after year that a job is the best welfare for the workers. In fact, the labour movement has always believed that a job is the best welfare and full employment is the best protection for the workers of Singapore. That is the reason why while the tripartite partners do allow foreign workers, foreign manpower to come to Singapore, we have never done so at the expense of having high unemployment in Singapore. Why? Because the inflow of foreign manpower, foreign workers, is to help us sustain economic growth. They are not here to raise our unemployment rate.

In fact, if you look at today's situation, the economy is growing strongly, the labour market is tight. And when the labour market is tight, as we support our low-wage workers with Workfare Income Supplement, and yet at the same time, employers would have no choice but to re-design the job, to enhance productivity so that they can produce more with the same number of workers. At the same time, we put in

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place a programme to help the workers to upgrade their skills. In this way we upgrade the skills, upgrade the productivity, re-design the job and, as a result, we avoided the three problems.

We avoided the first problem of no wage because the minimum wage in Singapore in the form of Workfare Income Supplement comes from the Government, not from the employer. As a result, we do not have a no-wage problem. Secondly, we do not have maximum-wage problem. A worker who is on Workfare Income Supplement, as far as his employer is concerned, he is still receiving his market salary. At the end of the year, he still gets his annual increment. So the workers on Workfare Income Supplement, still have their wages continue to go up year by year. They do not end up being stuck to the minimum wage as the maximum wage. And, thirdly, the low wage in Singapore is not necessarily sticky for those who are able to upgrade their skill and enhance their productivity.

Some Members may wonder while this sounds very good in theory, does it really work? Has it worked on the ground? Madam, Member Denise Phua pointed out that so far the security sector is most visible in the progress of re-creating the job. As a result, security officers five years ago were within the bottom 10 percentile of our workforce, earning about $850 per month when our 10 percentile income was about $1,000 or so. Today, those in the security sector, on the whole, have now reached 20 percentile. In fact, some of them have already exceeded the 20 percentile towards the 30 percentile. The security sector is a clear illustration of how we helped the security officers through Workfare Income Supplement and, yet, at the same time, re-created the job and re-developed the skills of the workers.

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I am happy to share with Member Denise Phua that the security sector is not the only one. In fact, the landscaping sector under the leadership of NParks has also made tremendous progress under their Best-Sourcing Initiatives. Conservancy cleaning too. All PAP Town Councils practise best-sourcing. The average starting pay has now exceeded $1,000 and those who are more skilful, those who operate more productive equipment are able to earn more.

Obviously, we would like to do more. Member Josephine Teo shared with Members that under the Inclusive Growth Programme (IGP) we are now extending our reach to more and more sectors. Madam, some Members may wonder if the Singapore approach does so well – better than the minimum wage solution – then why is it that 90% of the countries in this world have decided to adopt minimum wage? Why is it that Singapore think that we can have this same-same but different solution? Same-same problem with low-wage workers but different solution in not adopting minimum wage? Madam, recently a new ambassador to Singapore made a call on me and asked me about this issue of low-wage workers. I explained to him how the Workfare Income Supplement scheme work in Singapore. And his immediate reaction was, "Only you can do it because in many countries, governments are running budget deficits, there is no way they can find the money to fund such a programme." So he said, "Yes, this is the strength of Singapore." But I told him, "Yes, Workfare Income Supplement is capitalising on our financial strength because the Government, as a country, has the financial resources to support the low-wage workers."

But, more importantly, over the years, we have put in place Continuing Education and Training (CET) system – to enable the widespread upgrading of low-wage workers in Singapore. Over the

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years, starting with Skills Redevelopment Programme (SRP) to pursue skills certification, we went into NSRS, ESS and WSQ, and so on. Today the CET system in Singapore is one of the most comprehensive in the world and we have very strong support programmes targeted at the low-wage workers, like for example, the Workfare Training Scheme (WTS). So in other words, we are able to do what other countries are not able to do because we have been working on this for many years. We have been building up our financial capital, we have also been strengthening our knowledge infrastructure and, as a result, we are able to pursue WIS, we are able to pursue WTS which other countries are not able to do. And on top of that, we have something that many countries do not have and this is the constructive tripartite partnership. Because in other countries the labour movement, the government, the employer are not able to sit down together to find a solution that will work for all three parties. But in Singapore, with tripartism, we are able to do so.

Madam, in conclusion, I want to emphasise again. Even though 90% of the countries in this world have decided to pursue minimum wage as a solution towards helping the low-wage workers, we in Singapore, the labour movement included, is determined not to take that path because that is not a better path. Our approach is different from the rest of the world but being different does not mean we are wrong. In fact, being different means we are better, we have a better solution. So other countries play to their weakness, we should capitalise on our strength.

On that note, Madam, I urge this House to support this motion moved by Member Josephine Teo. Let us work together. Commit ourselves to inclusive economic growth and, more importantly, commit ourselves to continue to do more, do together, to enable more Singaporeans

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to have better jobs, better pay and live a better life.

5.39 pm

The Minister for Manpower (Mr Gan Kim Yong): Mdm Deputy Speaker, thank you for allowing me to speak. First, I would like to thank Mrs Josephine Teo for introducing this motion. I would also like to thank Members for supporting the Government's efforts and approach to help these workers and for making useful suggestions.

Madam, I agree with Members that Singapore's economic growth must be inclusive and sustainable. This means that everyone who has put in their best efforts must be able to share in this growth and look forward to better lives.

Over the years, lower-income families have indeed benefited from our economic progress. Take household incomes, for example. In the last decade between year 2000 and 2008, the first quintile of employed households saw their household incomes after taxes and transfers grow by an average of 3.9% per year, from $19,000 to $25,900. Even after taking inflation into account, real income grew by 1.7% per year. Members like Mrs Josephine Teo, Mr Yeo Guat Kwang and Mdm Halimah Yacob have also shared heartwarming examples of individual low-wage earners making progress.

Madam, we must accept the reality that the pace of growth will be uneven across our population. Highly-skilled Singaporeans are globally mobile and will command salaries that are similar to their counterparts in the US and Europe. On the other hand, our unskilled workers will face competition from the less-developed countries. Being a small and open economy, we have no choice but to remain globally competitive and manage the income differences the best we can. If

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we become uncompetitive, we will risk stagnation and have fewer resources to help the lower income. Everyone will lose out. This is not a race among ourselves, but a global race between Singapore and the rest of the world.

Last year, the Government reinforced its commitment to helping the lower-income and accepted the recommendations of the Economic Strategies Committee (ESC) on inclusive growth. In particular, the Government agreed to raise productivity through skills and innovation and to moderate the dependence on foreign workers through our foreign worker levy mechanism. The first two rounds of levy increases were effected in July last year and earlier this month, with more to come. When the announced increases are fully completed, the levy will range from $200 to $450 per foreign worker per month. If we add the Workfare Income Supplement (WIS) that the low-wage workers will receive, the advantage for local workers can be as high as almost $700 a month versus a foreign worker. With higher foreign worker levy, therefore, we tilt the balance in favour of local workers, in particular our low-skilled, low-wage workers.

As Members have pointed out, the notion of inclusive growth is not new to the Government. Over the years, the Government has introduced many initiatives to help low-wage Singaporeans. Let me just highlight a few.

Housing is one example. In addition to substantial subsidies for first-time homeowners and concessionary interest rates on housing loans, lower-income families enjoy an additional CPF Housing Grant of up to $40,000. Among households in the first quintile, 85% own their flat. The average home equity of their flats, which is the market value minus the outstanding loan, is about

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$242,000. Few countries in the world, if any, have achieved such a high level of home ownership and asset value among their low-income families.

Healthcare is another example. Our public hospitals and polyclinics are heavily subsidised. Mdm Halimah asked about capacity and accessibility of nursing homes. Minister Khaw has already given his reply on Monday to a similar parliamentary question and, therefore, I will not go into the details. In general, the "3M" framework of Medisave, MediShield and Medifund, ensures that no Singaporean will be denied of good healthcare. For those who do not have the means, the group which Mr Viswa Sadasivan is most concerned about, the Medifund serves as the safety net. Medifund pays out $64 million in 2009 as direct subsidies and we will top it up from time to time.

Mr Sadasivan also asked whether low-income families could be given more help. For families who face serious financial difficulties, there is ComCare. A total of $210 million has been disbursed since it was introduced in 2005. Today, ComCare not only targets the Government's assistance at needy and low-wage workers but also mobilises the community to help them through the "many helping hands" approach, as highlighted by Mr Zainudin Nordin, who is also the Mayor of the Central CDC. The CDCs also provide a lot of support.

For older low-wage workers, we introduced Workfare in 2007. I will talk more about Workfare later.

Mrs Josephine Teo mentioned the Inclusive Growth Programme (IGP), which was one of the first programmes endorsed by the National Productivity and Continuing Education Council. Mr Seng also shared a few examples of those who benefited from IGP. I am pleased to hear the encouraging results after just a few

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months. The Council will review the programme after two years. There are many other programmes as highlighted by various Members: Best Sourcing Initiative, Customer-Centric Initiative, JRP, and so on, all aimed at helping these low-wage, low-skilled workers.

From time to time, the Government implements special budgetary transfers, which are weighted in favour of these less well-off. These include top-ups to CPF, GST Credits, U-Save vouchers, Growth Dividends, and so on. Between 2007 and 2009, households in the first quintile income group received over $650 million from the various Government transfers.

Mr Low Thia Khiang talked about Gini coefficient. Madam, Workfare and Government transfers helped to improve our Gini coefficient from 0.478 to 0.453 in 2009 – this is lower than 0.456 in 2001 before Government transfers. This means that these measures have helped to slow down the widening of the income gap. In comparison, the Gini coefficient in the United States increased marginally over the same period. But we should not read too much into the Gini coefficient, which is just a statistical measure. It does not tell us how well our low-wage workers, our low-income families are doing as it does not account for housing, healthcare and other benefits, which Singaporeans enjoy.

Mr Heng Chee How is right in saying that these Government transfers, though helpful and timely, are not long-term solutions. As pointed out by several Members, education and training are fundamental to uplift low-wage workers and their families. We must continue to invest in our children – the next generation. We have recently announced a series of measures to raise the affordability and quality of our education, especially the pre-school education and childcare services. Our education policies have been designed to level the playing field and

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ensure that all children receive high quality education and have an equal chance of success in their lives, regardless of the socio-economic status of their parents.

Our programmes to help the lower-income share three basic principles. First, they must not diminish our strong work ethic, culture of self-reliance and the tradition of family support. Singapore could only come this far through the drive and energies of our people. We must therefore preserve this unique spirit that makes us Singaporean.

Second, they must address the workers' fundamental needs. The schemes that we introduce must provide immediate relief for these workers, but should also deal with the underlying causes of their lower wages. Otherwise, we risk keeping them permanently trapped in their low-wage conditions rather than helping them.

Third, our programmes must be practical and sustainable, taking into account the local context. We must not simply follow what other countries have done.

It is these principles that guide our approach to Workfare. We introduced Workfare in 2007 to help older low-wage workers deal with the challenges of globalisation. Today, some 400,000 Singaporeans earning a gross income of up to $1,700 a month receive about $400 million a year from Workfare.

Workfare helps low-wage workers in three ways. First, the Workfare Income Supplement (WIS) supplements their income by up to 25%. WIS is paid in cash and CPF. The cash helps workers to meet their most immediate requirements which Mr Viswa Sadasivan was concerned about. The CPF component is for longer-term needs, such as housing, education, healthcare as well as retirement.

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Second, Workfare encourages workers to continue to work. Those who were previously out of the workforce will also be more motivated to get a job because of the higher total income they can enjoy. By making regular work a condition for Workfare, we are actually helping to strengthen self-reliance.

Third, Workfare helps low-wage workers to upgrade. To lift them out of low-wage work, we need to help them acquire skills to take on higher-value jobs. The Workfare Training Support (WTS) scheme that we introduced last year helps to achieve this, through a combination of incentives to encourage the low-wage workers to go for training, as well as generous subsidies on course fees and absentee payroll support for their employers. We understand the concern expressed by Mrs Mildred Tan and Assoc. Prof. Paulin Straughan that training for low-wage workers has to be accessible and preferably near their homes and workplaces. Indeed, we have rolled out a number of programmes together with our partners, including

HDB, as well as merchant associations in the shopping malls, to provide training programmes right at the centre of the shopping areas in the heartlands so that these retail workers can have access to these training programmes during their break time. It is convenient for them, and we encourage them to participate in these training programmes.

Ms Denise Phua asked about CET for the disabled. My Ministry will discuss with MCYS how best to address this issue.

Madam, through training we help low-wage, low-skilled workers to progress to a better job and earn a better pay. Members may have read about Mr Sivakumar Munisamy, who was featured in the Straits Times last week. He is a security guard at a primary school in Woodlands,

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and a WIS recipient. With his good performance, I understand that he may be promoted this year and will receive a higher salary. While he may no longer be eligible for WIS as a result of his pay rise, we should be happy for him as this means that he has succeeded in moving up in his career. There are also many others like him. Between 2008 and 2009, about 20,000 workers graduated from WIS because their incomes had grown. With higher incomes, they are in a better position to provide for their families.

Some Members such as Mrs Josephine Teo, Ms Denise Phua, Ms Irene Ng and Mr Low Thia Khiang have suggested various ways to adjust and fine-tune WIS. I thank them for their suggestions and my Ministry will study them. We have to be mindful not to over tweak WIS. We must allow time for the scheme to be implemented, for the effects to benefit the workers. But we will take in their recommendations and suggestions in our review of WIS.

Madam, now and then, we hear calls to impose a minimum wage to lift the incomes of the low-wage workers, just as many advanced countries have done. Mr Sadasivan asked if we could consider a minimum wage because many countries have done so. We should be mindful that each country's situation is unique and each must find the best way to address its challenges. We should resist the temptation to follow others blindly. In fact, contrary to what Mr Sadasivan believes, the experiences of economies with a minimum wage show that they are not at all happy. Let me just share a few examples. Hong Kong's minimum wage law will come into effect in May this year, at HK$28 an hour which is approximately S$4.66. By the way, domestic helpers in Hong Kong also receive a Minimum Allowable Wage of HK$3,580, or about S$600 a month. However, both the law as well as the level of the minimum wage have created a

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lot of problems in Hong Kong. Businesses are concerned that the minimum wage will inject inflexibility into the labour market and increase costs. A data and research outfit, the Business Monitor International, has cautioned that the minimum wage may partially erode Hong Kong's economic advantage as a leading free market economy. Prof. Francis Lui, an economist and former government advisor, has also estimated that up to 100,000 low-wage workers may lose their jobs when the minimum wage law takes effect. The impact will be worse during a recession because employers are more likely to retrench low-wage workers who are drawing the minimum wage as they cannot adjust their wages. These workers will bear the brunt of job losses.

Even with the impending minimum wage, unions have criticised the law for not doing enough, lobbying for a higher minimum wage of HK$33 per hour, approximately S$5.49 per hour. But a higher minimum wage carries higher economic costs and risks and could instead hurt low-wage workers. So the minimum wage has created these undercurrents in Hong Kong, between businesses, unions and the government.

Next, in Taiwan. The adjustment of the minimum wage level has also been a contentious issue. Between 1997 and 2007, the minimum wage in Taiwan remained constant, for fear that higher labour costs would affect their economic competitiveness. This is exactly what Minister Lim Swee Say talked about – the "sticky wage". In July 2007, the Taiwanese government decided to increase the minimum wage by 9.1%. Businesses reacted strongly and the government had to scramble to provide relief packages to lessen the financial impact. However, this added a financial burden to the government and the minimum wage ended up being a double-draw on the economy, from both businesses and the government. But this

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year, Taiwan's minimum wage will be further increased.

On the other hand, unions have been unhappy with the Taiwanese government's earlier decision during the recent recession to maintain the minimum wage at the 2007 level. Instead of working on cutting costs to save jobs, the unions wanted to raise the minimum wage. Even with this year's increase, the unions in Taiwan remain dissatisfied, claiming that the increment is not enough. This constant disagreement over the minimum wage level is harmful to tripartite relations.

The experiences of Hong Kong and Taiwan are just a sample of the practical difficulties that economies face with a minimum wage. Apart from implementation difficulties, a minimum wage may also hurt low-wage, low-skilled workers, the very same group that such a policy was designed to help. How is this so?

First, a minimum wage carries the risk of displacing low-wage workers. This is simple demand and supply. If the price of labour goes up, employers will look for alternatives: cut jobs to save costs, rather than cut costs to save jobs. They will reduce benefits or working hours to lower wage costs. Workers may end up receiving less. Employers will not want to pay a salary that is higher than what is justified by the productivity and skills of their workers.

Our unemployment rate is lower than most other countries, even during times of recession. This can be attributed to our flexible and responsive labour market and, certainly, the flexibility of our wage system. Let me show Members this chart*. This chart shows that our unemployment rate was one of the lowest in the world during the recent downturn and, in fact, it is the lowest most of the time.

*Cols. 2479-2480.

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Madam, today, we foster a culture of continuous learning to achieve productivity growth. However, our efforts may be reversed by a minimum wage policy, as it could discourage upgrading and mobility. A guaranteed level of income may remove the incentive for training for the less productive. For lower-skilled workers, if they earn the same wages as the higher-skilled workers, there is no incentive for them to upgrade. When the minimum wage level is raised, both will enjoy the same higher wages. There is no incentive for them to work harder, to work smarter, to innovate and to improve their productivity. This way, the minimum wage will become their maximum wage.

Thirdly, a minimum wage will affect the competitiveness of businesses as the cost is borne by the employers. If businesses cannot compete, they may choose to move to another country. New investments will slow down. The end result will be that our local workers, not just low-wage workers, but all workers will have fewer jobs. Instead of earning a minimum wage, they may end up earning no wage at all, just like Mr Heng Chee How pointed out.

Because of these concerns and others which some Members like Mr Heng Chee How, Mrs Josephine Teo and Ms Jessica Tan have highlighted, the Government is not in favour of a minimum wage. I am glad that Mr Low has just stepped in and he has confirmed that the Workers' Party is also not asking for a minimum wage for now. We all agree that we are all for helping low-wage workers and this is where Workfare comes in.

Workfare is better than a minimum wage. Like a minimum wage, it helps our low-wage workers earn a better income. But unlike a minimum wage, Workfare does not risk displacing low-skilled workers because the cost is borne by the

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Government. Employers are not burdened with paying a high wage that is not supported by the productivity of the workers. I mentioned that Workfare provides income supplement of up to 25%. Can you imagine setting a minimum wage that requires employers to pay an additional 25% to the low-skilled workers? Madam, Workfare is not cheap. It is a programme that not many countries can afford, as Minister Lim pointed out. These countries do not have as strong a fiscal position as Singapore. We are able to do so because we have enjoyed strong economic growth for a number of years.

Workfare is also more inclusive as it includes self-employed persons, unlike a minimum wage which only applies to employees. This is important as around one-fifth of low-wage workers in our workforce are self-employed. More importantly, Workfare sets low-wage workers on a sustainable path to income growth by obtaining better skills. This is in direct contrast to a minimum wage which discourages training and upgrading.

Assoc. Prof. Paulin Straughan was concerned about the working conditions of low-wage workers. Madam, beyond Workfare, we work with our tripartite partners to improve working conditions for low-wage workers and encourage fair and progressive employment practices. For example, Mr Zainudin Nordin talked about the Unit for Casual and Contracts Workers (UCCW) and how it helps workers improve their working conditions. My Senior Parliamentary Secretary chairs a tripartite committee to look into ways to improve working conditions of these low-wage workers. We will continue to do more.

Mdm Deputy Speaker, may I now conclude in Mandarin.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mdm Deputy Speaker, the Government has

*Cols. 2495-2496.

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always been concerned about low-wage workers. We should avoid creating an artificial support system that may slowly erode our values. We help our low-wage workers in ways that are effective and sustainable. We provide assistance for their immediate, daily needs through support mechanisms such as ComCare as well as housing and healthcare subsidies. We encourage them to work so that they can be self-reliant and earn more through WIS. We also provide support to help them build a better future for themselves through training and skills upgrading under WTS. Helping the low-wage workers is like a farmer looking after his crops. The farmer wants the seedlings to grow strong, but he cannot pull the seedlings up to make them grow. He must take care of them with love and care. If he forces the seedlings to grow, they will end up withering instead. Therefore, we must continue to put forward various incentives and schemes to help the low-wage workers. We should not consider a minimum wage system.

( In English ): I would like to assure the House that the Government has been concerned about low-wage workers. We should avoid creating an artificial support system that may slowly erode our values. We help our low-wage workers in ways that are effective and sustainable. We provide assistance for their families, we will provide help for their immediate needs through support mechanisms such as ComCare as well as housing and healthcare subsidies. We encourage them to work so that they can be self-reliant and earn more through Workfare. We also provide support to help them to build a better future for themselves through training and skills upgrading through Workfare Training Support scheme. Our approach preserves the strong work ethic of our people and addresses the fundamental cause of income inequality.

Madam, we need not follow in other countries' footsteps. We have consistently

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shown courage and innovation in developing our own solutions, such as the Jobs Credit Scheme, the Skills Programme for Upgrading and Resilience during the recession; and also Workfare, as the way to help our low-wage workers. I am pleased that Members support this approach. The Government will continue to work with our tripartite partners to foster inclusive growth for all Singaporeans. Together, we will create our own Singapore Dream where we progress together as one nation and as one people.

Mdm Deputy Speaker, I support the motion.

6.05 pm

Mrs Josephine Teo: Mdm Deputy Speaker, first, let thank the 16 Members and the two Ministers who have spoken on the motion. They have made many useful contributions to the debate and I will attempt a brief summary.

First, many Members supported the view that growth has been inclusive. In addition to better jobs, better wages, Mayor Zainudin highlighted the beneficiaries of the ComCare Hope scheme. Assoc. Prof. Paulin Straughan marvelled at Pinnacles, a public housing project right smack in the centre of the business district. Ms Audrey Wong talked about the job-re-design efforts that have helped sectors such as security. Mr Yeo Guat Kwang talked about the workers in the services sector who have benefited from the Customer-Centric Initiative. Mr Gan Kim Yong shared various forms of Government assistance to low-income families – through housing, through medical care. The Member, Mr Low Thia Khiang, earlier in his speech, suggested that the programmes that the Government have put in place offer only hope but, perhaps, not such concrete improvements. I beg to disagree with him with all due respect.

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For the 32,000 workers that e2i has helped to find new jobs, for the 15,000 workers that are benefiting from the inclusive growth programme, for the 4,000 workers that have participated in the Best-Sourcing Initiative – these programmes do not just offer hope. They offer a real lift, a real improvement in their circumstances. We should not diminish these efforts. My collegues in the e2i, 101 of them – we just recruited one more today – are passionate about what they do, they put a lot of real effort into it. It is hard work, they get scolded left, right, centre. Jobs seekers who are unhappy; employers who also face pressures of their own. I think to say that the work that they do offer only hope is a great disservice to them and I want to say this so that Members do recognise the work of not just the e2i colleagues but many others in the WDS, in the UCCW, in the MOM, in the WDA, in the CDCs, and the self-help groups. So many people in Singapore are working together to make sure that this group of low-wage workers, low-income families benefit from growth. I am glad that most Members supported the view that growth has been inclusive.

There has been a robust debate on minimum wage. I think it is fair to say that most Members agree that Workfare is a better alternative. Ms Jessica Tan pointed out that Workfare does not discourage employment. She shared the very important point that inclusive growth must mean not just benefit-sharing but also participation. I fully concur with her.

Mr Calvin Cheng asked a very pertinent question of minimum wage. Who pays, he says? He says it is not a magic medicine, it is more like a tax. I agree with him. This was a point I made also in my opening speech. He pointed out that small businesses will suffer and, in that sense, it is not inclusive at all. I agree with him too.

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Mdm Halimah Yacob shared with us some very useful studies conducted by the ILO. One particular study that she shared, I think, bears repeating. She said that this study shows that the workers who cannot get jobs at minimum wage are basically driven underground. Is this something that we want to do? I think the answer is clearly "no". Far better for them to remain within the formal workforce. Mdm Halimah also pointed out that the study shows clearly that if we really want to help low-wage workers we must put job creation at the centre of policy. So, we must put job creation at the centre of policy. That is important.

Ms Denise Phua pointed out that a minimum wage will backfire. It will cause the low-wage workers, whom we are trying to protect, to lose their jobs. Minister Gan Kim Yong shared some data of what is happening in Hong Kong – that estimates of up to 100,000 workers could lose their jobs. I think these are very strong arguments for us not to go down the path of minimum wage.

Mr Low Thia Khiang gave suggestions on Workfare. Since he is not advocating minimum wage but chose to offer suggestions on Workfare, I think it is quite reasonable to conclude that he thinks Workfare is better at least for now.

Mr Heng Chee How asked a very good question on minimum wage. Why go for minimum when we should go for best? I agree with him. Minister Lim Swee Say took pains to explain to us how a minimum wage could end up as a maximum wage.

There is a consensus forming here on the difficulties associated with minimum wage. What is infinitely clear is that no one has argued definitively for minimum wage. No one is prepared to make an outright call to the Government to implement minimum wage because no one is 100% confident, in fact, not even 50%

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confident perhaps, that it is better than what we have today. That clarity and consensus has emerged from this debate and I think it is a very useful clarity to have. Mdm Ho is no longer here but she mentioned that minimum wage is fashionable but not practical, and I think that is precisely what it is: sounds fashionable, looks good but not terribly practical.

Madam, I would like to speak briefly in Mandarin.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Some people believe that imposing a minimum wage can motivate the employer to upgrade his workers' skills. However, in reality, things are not so simple. Many experienced Members remember that during the period between 1979 and 1981, the Government implemented a high-wage policy. My colleague Mr Heng Chee How also mentioned this high-wage policy earlier.

At that time, our economy was not as diversified as it is today and productivity levels were generally lower. Hence, when the policy was implemented, initially we did see some increase in productivity. However, the policy is a blunt tool. It could not differentiate between industries which were doing well and could afford to pay higher wages, and which industries were facing difficulties and not able to do so. In addition, productivity levels varied in different sectors. To require companies across the board to raise their wages uniformly resulted in some companies, especially SMEs, losing their competitiveness. This contributed to an economic recession.

The minimum wage system has the same shortcomings. It is a pro-worker, anti-business policy, as my colleague Denise Phua has rightly pointed out. What we want is a pro-worker, pro-business mechanism.

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( In English ): Mdm Deputy Speaker, from the high wage policy of 1979-1981, there are two key lessons to be drawn:

The first is that blunt instruments caused rigidities and should be avoided especially when our modern economy is so diversed. The second lesson is that wage increases should follow skills upgrading and productivity improvements, and not the other way round.

Minimum wage is blunt. It is unrelated to productivity and it will not easily be able to discriminate across sectors, across companies within the same industry. It has the same problems as the high-wage policy that even though was officially stopped, had generated a momentum that was hard to draw back.

I agree with the Member Mr Heng Chee How that it is not wise, "not clever" in his words, for us to try the policy of this nature. That is also why the Labour Movement champions sustainable growth through the economy becoming "Cheaper, Better, Faster" and inclusive growth through programmes like the IGP, both of which make sure that wage increases are underpinned by skills and productivity improvements.

Minister Lim Swee Say gave strong reasons why in Singapore we can have the "same-same" problems but a different and a better solution. I agree with him.

Mr Gan Kim Yong spoke briefly that the foreign workers levy would have to be adjusted; if I did not hear him wrongly, I think he said it is going to go up further. Why? To tilt the balance in favour of low-wage workers in Singapore, our Singaporean low-wage workers. I thank him for supporting them.

Madam, several Members spoke on the widening income gap. Assoc. Prof. Paulin Tay Straughan, while praising the

*Cols. 2497-2498.

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Government's efforts, wondered how it was possible for us to ensure that no Singaporean is left behind. Ms Audrey Wong spoke about the importance of preserving our social fabric. Mr Viswa Sadasivan expressed concern about the potential harms of different segments being marginalised. Ms Irene Ng talked about polarisation of society that could happen and how it would undermine trust.

Like them, I too am concerned. Some believe that the only way to close the income gap is to somehow hold back growth at the top, while trying to move up the bottom, so close the gap. But will this work?

In a stable society where education and job opportunities are fairly equitable, those who rise to the top are likely to be more skilful, more resourceful, more in demand, perhaps more hungry and sometimes more fortunate. If we deny them the opportunities here, there is no shortage of options outside of Singapore. But not so for those at the bottom.

Moreover, it makes no sense whatsoever to pull back some because their loss will not cause anyone to gain. In fact, the actions to slow down the top will likely slow down the bottom even more. So we could have a situation where we slow the top, but the bottom goes further down and what we have is a further widening of the income gap.

Madam, I think that while we want to be mindful, and we must always be mindful of the income gap, we must not forget something more fundamental. In fact, I think the Member Calvin Cheng pointed out that it is not relative poverty that is all-important, we have to look at absolute poverty. I agree with him that what we should not take our eyes off is the bottom line for the low-skilled, low-wage, low-income Singaporeans. We

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should watch the bottom line for them. If we really want to help them, raise their skills, raise their productivity, raise their incomes in a sustainable way. That is being inclusive.

That is why I have provided five suggestions for the Government to consider. I shall not go through them again. I would like to point out that several Members have given other constructive ideas. Mayor Zainudin talked about the need to widen the reach of the best sourcing initiatives (BSI) to more sectors. Ms Audrey Wong expressed the hope that more Government agencies and companies could adopt the BSI. Mr Seng Han Thong talked about the taxi industry workgroups' own initiatives. Mrs Mildred Tan and Mr Terry Lee suggested that we bring training to the workers to overcome their time constraints. Ms Denise Phua talked about the importance of getting Singaporeans with mild disabilities on board as well. Mdm Ho Geok Choo shared some very heartwarming examples of how the grassroots leaders are taking initiatives and, in so doing, demonstrates self-reliance.

I want to thank Minister Gan, firstly, for saying that his Ministry will consider all our Workfare related suggestions. I thank him and at the same time I urge him, where possible, please introduce them – or if he is going to accept the changes, accept them sooner rather than later. Next month will not be a bad idea.

So, Madam, in conclusion, let me just share what this debate has achieved. Firstly, I think it has shown that the issue of inclusive growth is very close to our hearts. And that is a good thing.

Secondly, I think there has been a consensus that we have, as a nation, made very good progress and this gives us hope that the inclusive society we want to create together, we want to build together, can be a reality. Ms Jessica Tan

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calls us the "improbable nation". I think we should continue to repeat and continue to do things that other people think impossible because that is what makes us special.

Thirdly, I think at the same time, we all recognise that this effort of building an inclusive society is going to be a long-term effort. I really like what Mr Yeo Guat Kwang said, "一步一脚印". With one single step, you leave one imprint. I think what this means is that there is no shortcut. Only if you take a step, you can leave a print. I thank him for sharing that thought with us. If we take shortcuts, such as the minimum wage, a quick fix, we will eventually shortchange Singaporeans.

Finally, I would just like to say that there has been no lack of ideas. I thank Members for heeding my call to be energetic, focused and constructive.

Mdm Deputy Speaker, I thank you once again for allowing this debate. I ask

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all Members to give this motion your strongest support. Thank you very much.

Question put, and agreed to.

Resolved,

That this House reaffirms its commitment to inclusive economic growth and calls on the Government to continue doing more to support low-skilled and low-wage workers so that all Singaporeans may share the fruits of our prosperity through better skills, better jobs and better incomes.