RETRENCHED AND UNEMPLOYED WORKERS

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RETRENCHED AND UNEMPLOYED WORKERS: 11.

Mr Ong Ah Heng asked the Acting Minister for Manpower in light of the impending recession (a) what is the Ministry's projected number of retrenched workers and unemployment rate for 2009; (b) which sectors and industries are likely to contract and which will create jobs; and (c) what measures are being planned to help the retrenched and unemployed workers.

12.

Ms Sylvia Lim asked the Acting Minister for Manpower (a) in the last 12 months, what is the percentage and number of Singapore citizens, permanent residents and foreigners who lost their jobs at all levels (unskilled to professional levels); (b) what measures has or will the Government put in place to induce employers to retain Singaporeans as opposed to foreigners in any downsizing exercise; and (c) whether the Government will reduce the number of work passes in the various categories issued to foreigners so as to increase the employment opportunities for Singaporeans.

The Acting Minister for Manpower (Mr Gan Kim Yong) (for the Minister for Manpower): Mr Speaker, Sir, may I have your permission to take Question Nos. 11 and 12 together?

Mr Speaker: Yes.

Mr Gan Kim Yong: Sir, I think it would be useful for me to provide an update on the employment situation and outlook.

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The Ministry of Trade and Industry (MTI) announced earlier this month that it expects the Singapore economy to grow between -2.0% and 1.0% in 2009. The Minister for Trade and Industry has given an update earlier. Consequently, we expect job growth to slow down significantly this year and unemployment to rise. In fact, employment growth has begun to slow down in the second half of 2008 and more so in the fourth quarter. The overall unemployment rate for 2008, which will be released at the end of January, will be higher than the 2.1% in 2007, which was a record low in 10 years.

Over the nine-month period, from January to September 2008, a total of 6,418 workers were retrenched. Figures for the fourth quarter of 2008 will only be available at the end of January. Nevertheless, we expect the number of retrenchments to rise significantly in the fourth quarter of 2008. Based on the voluntary notifications provided by companies, about 4,800 workers were retrenched in the fourth quarter of 2008, and another 3,300 could be retrenched over the next few months. These are numbers based on notifications by companies. The actual numbers may be higher and we will know the numbers by the end of January based on our surveys.

Out of the 6,418 workers who were retrenched in the first three quarters, about 70% were locals, comprising Singapore citizens (SCs) and permanent residents (PRs). However, many employers release their foreign workers through early termination of contracts rather than retrenching them. The number of redundancies, which is the sum of early terminations and retrenchments, presents a more complete picture of the impact of job losses on locals and foreign workers.

Therefore, in terms of redundancies, locals constituted about two-thirds of the

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7,478 redundancies in the first three quarters of 2008, while foreigners constituted one-third, roughly the same as the local-foreign proportion in our workforce. Amongst these, 56% of these redundancies came from the Production and Transport Operators, Cleaners and Labourers occupational group, while the Professionals, Managers, Executives and Technicians (PMETs) made up 32%.

The number of retrenchments and early termination of contract could increase further over the next few quarters, as more companies restructure their operations to respond to the economic downturn. Close to 30,000 workers were retrenched in 1998 due to the Asian Financial Crisis, and about 26,000 workers were retrenched during the economic downturn in 2001. If our economy contracts sharply this year, it is possible that retrenchments could reach these levels seen in previous recessions.

Sectors such as manufacturing and wholesale trade that rely heavily on external demand and regional movement of goods and services, may be more affected. The financial services sector is also likely to see more job losses. However, new jobs will still be generated from certain sectors in the economy, such as construction, healthcare, pharmaceuticals, public administration and the integrated resorts. For example, the integrated resorts are expected to add some 20,000 jobs to the economy over the next one or two years.

Mr Ong and Ms Lim have also asked how the Government is helping local workers and whether we can reduce the number of foreign workers to improve the employment opportunities for locals. Sir, we will monitor the situation closely and continue to carefully calibrate companies' access to foreign workers. On the supply side, the Dependency Ratio framework helps to ensure local employment since

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companies' access to foreign workers is dependent on the number of local workers that they employ. The foreign worker levy, on the other hand, helps to moderate demand for foreign workers. However, even in a downturn, there will still be a need for foreign workers, especially in jobs that Singaporeans are unable or are unwilling to fill, such as those in the construction sector. Foreign workers help keep companies competitive against global competitors and keep jobs within Singapore. If companies are required to retrench only foreign workers, they may be forced to close down, or move to countries where they can have unlimited access to even cheaper labour; this will result in more job losses and, in turn, affect Singaporeans who work for these companies. This is a lose-lose outcome.

What is more effective is to enhance the employability of local workers. This will not only give them an added advantage over foreign workers but will also benefit the companies that employ them. This will be a win-win strategy. For this reason, we institutionalised the Workfare Income Supplement (WIS) Scheme to help the lower income and older workers. The tripartite partners are also working together to save jobs for locals. For example, the tripartite partners rolled out the Skills Programme for Upgrading and Resilience (SPUR) on 1st December 2008 to help companies cut costs and save jobs as well as to build up our workforce capabilities.

SPUR provides enhanced course fee funding and absentee payroll, but these benefits are only for local workers, therefore making it worthwhile for companies and employers to send their local workers for training during the downturn and save cost as well as save jobs at the same time. We recently expanded SPUR to over 800 courses, up from 150 when it was first launched.

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This means that employers now have more options when sending their local workers for relevant training. With SPUR, companies are encouraged to retain local workers in managing the current downturn and positioning themselves for the economic recovery. As of 15th January 2009, more than 170 companies have committed to tap on SPUR to train nearly 8,000 workers. In addition, another 2,100 locals who are mostly retrenched or unemployed have signed up at our CET Centres for SPUR programmes.

We have also released the Tripartite Guidelines for Managing Excess Manpower on 19th November 2008, to encourage companies to adopt flexible work arrangements to help contain costs and avoid retrenchments. The response has been very encouraging, with over 90 companies already implementing the recommendations in the guidelines.

For the retrenched and unemployed, MOM, WDA and the unions have been working closely with companies to help them find suitable jobs. We have enhanced the job matching capabilities of the Career Centres, by building up a comprehensive job bank with jobs sourced from industries, as well as economic agencies such as EDB. Locals who are retrenched or unemployed may also be eligible for training allowance when they enrol for training under SPUR.

The upcoming Budget will be an expansionary one, with additional measures to help households and businesses cope with the downturn, as well as to develop our longer term competitiveness and capabilities.

The tripartite partners will work together to encourage employers and workers to adopt the tripartite guidelines as well as the NWC guidelines and to make full use of the training support and

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opportunities available under SPUR. This way, we will be able to ride out this downturn and emerge stronger and more resilient.

Mr Speaker: Order. It is almost 3.00 pm.

[ Pursuant to Standing Order No. 22(3), Written Answers to Question Nos. 13-18, 21, 24, 26, 29-30, 34 and 36-41 on the Order Paper are reproduced in the Appendix*. Question Nos. 19-20, 22-23, 25, 27-28, 31-33, 35 and 42 have been postponed to the sitting of Parliament on 22nd January 2009 .]

*Cols. 1163-1194.

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