INFLATION AND STAGNATION OF WAGES ON LOWER-INCOME SINGAPOREANS

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INFLATION AND STAGNATION OF WAGES ON LOWER-INCOME SINGAPOREANS:

(Assistance): 7.

Dr Lily Neo asked the Minister for Community Development, Youth and

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Sports (a) whether his Ministry is monitoring how the lower income Singaporeans are being affected by inflation and stagnation of wages; (b) whether the available assistance is lessening their difficulties; and (c) whether there will be other measures to ensure that no one falls through the crack.

The Minister of State for Community Development, Youth and Sports (Mrs Yu-Foo Yee Shoon) (for the Minister for Community Development, Youth and Sports): Mr Speaker, Sir, I would like to thank the hon. Member, Dr Lily Neo, for her concern. The Government closely monitors the impact of inflation on low-income families.

Improving productivity and employability is the most effective way to deal with this challenge. Consequently, the Government has implemented programmes aimed at increasing the productivity of our industries and helping lower-skilled workers upgrade so that they can take on jobs in new growth sectors, like Minister Lim Hng Kiang has explained just now. We also invest in redesigning jobs for enhanced productivity and better wages for workers. At the same time, we work at enhancing the employability of our mature workers and encouraging homemakers back to work.

The Government has instituted the Workfare Income Supplement (WIS) scheme as part of our social security system. Some 300,000 low-income workers have benefited from $300 million worth of WIS payments for work done in 2007.

To further cushion the impact of rising costs, $3 billion will be given to Singaporeans this year, with low-income households receiving more. On top of the GST Credits, Senior Citizens' Bonus and Growth Dividends, they will also receive

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U-Save, Service and Conservancy Charges and rental rebates as well as top-ups to their Medisave accounts and their children's post secondary education accounts. On top of this original $3 billion package, the Government will be distributing an additional support package amounting to $256 million as announced recently at the National Day Rally by the Prime Minister. The enhancements comprise a 50% increase in the remaining instalment of Growth Dividends (GD) and a 50% increase in the total amount of Utilities-Save (U-Save) rebates to be given out in Fiscal Year (FY) 2008. Taking all this help together, a low-income family of three living in a 3-room HDB flat could receive benefits of about $5,400, which would help to offset the recent increase in their cost of living.

Mr Speaker, Sir, we are fully aware of the situation. There will be those who need more help. The ComCare Work Support Programme was launched in 2006 to provide short-term help to needy families. The workfare-based programme seeks to help workers upgrade their skills and find a job. In the interim, they also receive financial assistance, rental, utilities and service and conservancy charges vouchers, childcare and student care subsidies, and medical and educational assistance. Currently, about 4,000 households benefit from the Work Support Programme.

Needy families can also tap on extensive community support. For example, the Citizens' Consultative Committees (CCCs) can tap on the CCC ComCare Fund to provide urgent help to needy residents. From January to May 2008, the CCCs disbursed about $850,000. As announced in March 2008, we will be topping up the CCC ComCare Fund by $5 million over the next four years. With this boost, there will be $6.25 million per year available in the CCC ComCare Fund.

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There are adequate resources and many helping hands to ensure that no one falls through the cracks. Those who need help can approach their Community Development Council (CDC), Family Service Centre or RC grassroots leaders for help. They can also call the ComCare Call service at 1800-222 0000.

Dr Lily Neo (Jalan Besar): May I ask the Minister of State on the group of Singaporeans who are in need of assistance despite our presently available assistance schemes. They are lowly paid Singaporeans with many mouths to feed and who are perpetually trying to make ends meet. Is it true that, according to one survey, there are about 100,000 households of such families? May I ask the Minister of State whether there is any better long-term solution to get them out of the poverty trap and whether their children can be given a better chance to climb the social strata?

Mrs Yu-Foo Yee Shoon: Mr Speaker, Sir, I am sure the Member knows that before 2005, before the establishment of the ComCare Fund, the public assistance cases were about 3,000 and today, after the establishment of the ComCare Fund, the Government policy is to take care of the 20% low-income group in Singapore. We take $1,500 as the family income and for those below $1,500, we are trying to develop various schemes to help them. And despite this cap at $1,500, we have certain schemes to cover those who earn even $1,800 to help the students, such as KiFAS, CFAC. If you do a calculation, we cover slightly more than the bottom 20% of Singaporeans. Our Ministry's concern is: how far do you want to cover? Do you want to cover up to the bottom 30%, 40% or 50%? So far, the cut-off point is about $1,500 or the bottom 20% of our population.

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Like I said just now, after the last Budget debate, we have implemented a few new schemes. For instance, for public assistance, in the old days, it was only for old people without family support, without children and unemployable. After the last Budget debate, we have relaxed this criterion. We even cover old people who have children but the children have difficulty taking care of their own family and as long as the children earn below $1,000 and have school-going children, these old people can also apply for public assistance. By doing so, we expect another 600 such public assistance cases which will benefit.

Another area we have made changes is the ComCare Transitions. So, in some of the families, even though they have children but they are temporarily unemployable, maybe because of accident or some chronic sickness, we are prepared to help them for about a year. We will review the case year by year. This is monitored by the CDCs. So we call it the ComCare Transitions. It is quite close to the public assistance cases, but we do not give them long-term help. We hope that they can go back to work again.

The other area we have relaxed is the cap for KiFAS, CFAC and the other benefits for the children. Previously, for the children, we capped it at $1,500. But after the last Budget debate, we increased it to $1,800. For those families whose income is about $1,800, their children can apply for KiFAS, CFAC and also the student care services. On top of all this help plus the GST Offset, U-Save, and so on, I think the range is that even for public assistance cases, one adult PA can get about $2,000 for this year. And for a family who has two adults and two children, it will get benefits of about $3,600 from the Government. This amount can offset the inflation cost. Of course, the Government will monitor all this very carefully, and this is only the

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MCYS' effort. What about the efforts of the Ministry of Education, Ministry of Health and also the many-helping-hands? As a society, we do our best to help. But I totally agree with Minister Lim Hng Kiang's argument just now that, in the long run, the most important thing is that Singapore needs to develop and improve productivity and we add value to the investors and make sure that our workers can have better return.

Mr Speaker: Dr Lam Pin Min.

Dr Lily Neo: I am sorry, Mr Speaker. Can I be allowed to come in here, because I was asked a question? Therefore, I should be given a chance to reply.

Mr Speaker: Your question was not answered?

Dr Lily Neo: No, Sir. One, my question was not answered and, two, I was asked a question.

Mr Speaker: Yes.

Dr Lily Neo: Mr Speaker, I like to object to the fact that I was asked a question on what I wanted. Was assistance for 20% or 30% enough? No, that was not what I was asking for. I was asking for 100,000 households which are only 3% of the population. I could not be asked a question. We have already given 20% of ComCare, and may I just qualify that ComCare was temporary assistance, and that was really out of the question.

Mr Speaker: To cut it short, your question was not answered then?

Dr Lily Neo: Sir, the questions I asked were:

(1) Was it correct to say that there were 100,000 households that require long-term assistance, whereas the assistance schemes we have at the moment are all temporary?

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(2) Can they be helped with long-term solutions to get them out of the poverty trap; and

(3) Can their children be given a better chance?

But I have definitely never asked for assistance for 30% or 40% of Singaporeans, and I object to being asked that kind of question.

Mr Speaker: Mrs Yu-Foo, would you like to answer that question?

Mrs Yu-Foo Yee Shoon: Mr Speaker, Sir, I did not say that Dr Lily Neo asked for 30%. I just said that, generally, we have one million households. If we say 100,000, it is about 10% of the households. After we have the ComCare scheme, actually the Government covers the bottom 20% of households in Singapore. My question to Singaporeans is whether we want to cover beyond the bottom 20%. I am not saying that Dr Lily Neo asked for more than the bottom 20%. I just want to clarify that.

Another point is that, for the very, very poor, it is about 3,600 persons who are under Public Assistance. Some are under the interim ComCare scheme while others are under the Workfare Scheme. Together, if we add the 4,000 or 5,000, those are the really poor cases. But those with income beyond $1,500 who can manage but have difficulty when their children go to school –

Mr Speaker: Mrs Yu-Foo, you are actually repeating your replies –

Mrs Yu-Foo Yee Shoon: So, beyond MCYS, the Ministry of Education also has bursaries, scholarships and a lot of other schemes to help school-going children, such as the School Pocket Money Fund, and so on. If they are sick, they can go for Medifund and MediShield. MOH also

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tries its best to help. As a total package, we try our best to help them to manage. But my suggestion is that, in the long run, as a country, we should improve our productivity and make sure that our retraining is effective and our workers are employable and hope that they can have an increase in their salaries. At this moment, the Government gives GST offsets, Growth Dividends, and so on. Each family gets a few thousand dollars that can cover the cost of inflation. But in the long run, I do understand, agree and sympathise with the difficulty that the lower-income group has had to manage. But, as a country, we need to grow. Without growth and productivity, how much can we help? That is a big question. At this moment, if you ask me, it is manageable.