NATIONAL PRODUCTIVITY BOARD BILL

Order for Second Reading read.

6.51 p.m.

The Minister for Labour (Mr Ong Pang Boon): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

The importance of raising productivity in Singapore stems from basic economic realities. We are a small country in terms of our population and the natural resources we possess. Indeed, our only natural resources are our resourceful working population, our geographical location and a fine harbour. While other countries have abundant mineral deposits to exploit, we have none. While other countries have vast, fertile tracts of land to till, we have none. We can build a healthy economy and enjoy a high standard of living only upon the productivity and discipline of our working population, including both the managing and the managed in both the public and private sectors.

Unlike other populous countries, we do not even have a large, guaranteed, domestic market for our locally-made products. Given our limited domestic market of 2.1 million persons, in order to attain our targeted Gross Domestic Product growth rate of 15 per cent annually over the next five years, we simply must export more and more. To secure markets for our exports, we must be able to compete internationally in terms of the price and quality of our products. And to do so our businessmen, industrialists and workers must be efficient and productive. The importance, indeed, the necessity of raising productivity in Singapore can never be overemphasised.

Moreover, increases in productivity make possible wage increases without upsetting the economic apple-cart. Many of our workers in the past have worked conscientiously, diligently and with the welfare of the nation at heart. Not only do they deserve our thanks, in this decade they should enjoy higher wages. However, higher wages without accompanying productivity increases can impede economic growth. Fundamentally, the businessman is more interested in his labour cost per unit of output rather than wages as such. If the productivity of his employees rises, he can raise their wages without simultaneously increasing his unit labour cost. Through higher productivity then, the aspirations of our workers for higher wages can be met without inflation, without damaging the competitiveness of our products in international markets, and without reducing the attractiveness of our investment climate. I repeat --the necessity to raise productivity in Singapore cannot be over-emphasised.

The National Productivity Centre was established in May 1967, within the Economic Development Board as a result of a joint declaration signed by the National Trades Union Congress, the Singapore Employers' Federation and the Singapore Manufacturers' Association. In July last year, the National Productivity Centre was transferred from the Economic Development Board to my Ministry. It had always been envisaged that after the National Productivity Centre had acquired sufficient experience and expertise, its status would be raised to that of a statutory board. Having been in existence for almost five years now, and bearing in mind the importance of raising productivity, it is opportune to transform it into a statutory board now.

Mr Speaker, Sir, I do not wish to go into the details of the Bill as regards the aims, powers and functions of the National Productivity Board as these are clearly indicated in the Explanatory Statement to the Bill. I shall only point out some of the salient features of the Bill.

Clause 4 of the Bill provides for the appointment of a 14-member board consisting of the chairman, three directors each to represent the Government, employers, trade unions, academic and professional bodies associated with productivity, and an Executive Director. This equal and broad representation will help the Board to better serve the felt needs of different groups in our society and to better elicit their support in the task of raising productivity.

Mr Speaker, Sir, the fundamental task of the National Productivity Board is to raise the level of productivity in Singapore. Its specific objectives are set out in clause 6 of the Bill, the more important of which are:

(i) to promote productivity consciousness amongst management personnel, trade union leaders and workers;

(ii) to provide training facilities for management and trade unions personnel in all productivity techniques, including general management, personnel management, supervisory development, management accounting and industrial engineering;

(iii) to foster and promote good industrial relations by training and by promoting the formation of joint consultative councils;

(iv) to render management consultancy services in the same fields in which training activities are undertaken with a view to assisting industrial enterprises to achieve a general raising of productivity; and

(v) to assist industrial establishments in formulating and rationalising wage policies and wage systems.

In order that the objectives of the Board will be achieved, it is also empowered in clause 7 to publish works and disseminate information concerning productivity techniques, to award certificates of efficiency to persons attending courses organised by the Board and to establish, under clause 6, a scheme of subscribing membership to the Board.

Mr Speaker, Sir, I beg to move.

Question proposed.

7.00 p.m.

Inche Abdul Aziz Karim (Kallang): Mr Speaker, Sir, I wish to express my views on the National Productivity Board Bill which are purely those of a common man. Sir, I therefore beg the indulgence of the economists and other intellectuals to bear with the viewpoints of the common man, which I now express. The common man believes that if he works, and works hard enough, he is entitled to a fair wage and a bonus out of the fruits of his labour. The average man's basic philosophy towards work and the purpose of production as an extrapolation of work is to satisfy his own welfare and those whom he considers are part of society. I hope the National Productivity Board, when it proceeds in furthering its objective, will endeavour to simplify the meaning of productivity in terms of job security and satisfaction and a better standard of life. The average worker could hardly feel secure and happy if it were otherwise.

Mr Speaker, Sir, for the time being I would like to express my views on the subject in simple, rounded terms. I hope over the years I could have the opportunity of elaborating my viewpoints.

I could not but agree that this is a vitally opportune time to introduce the concept of productivity in the process of production and in the process of distribution of wealth in a just and logical mode and manner. Therefore, I support the establishment of the National Productivity Board whose main purpose is to promote productivity in all enterprises industrial or otherwise for the general well-being and economic progress of Singapore.

It is already accepted as a fact of life that Singapore does depend on foreign investments, foreign raw materials for its industries and foreign markets for our manufactured goods. Practically all that we have is abundance of human resources, and there is no option but to improve productivity through better use of labour through time and space. In doing so, I hope the National Productivity Board will ensure the adoption of the following working principles:

1. Productivity exercises should not cause job insecurity.

2. Productivity exercises should proceed through bargaining at grass-roots level.

3. Productivity exercises should not endanger the health and safety of workers.

4. The employer must pay for the cost of retraining the employee when there is redundancy.

If these conditions cannot be fulfilled, then all productivity drives and plans will be looked with suspicion, cause resentment, frustration, discord and conflict.

One other pertinent point I wish to make is that the National Productivity Board should not take upon itself the ultimate of knowing the absolute truth and solutions to all problems and to proceed by setting guide lines and recommendations without due consultation with both individual employers and workers and their organisations. No amount of firm orders or benign decrees, even lawfully given after this Bill is passed, will create good industrial relations and human happiness in the long run. Democracy must be practised at grass-roots level in the best principles of industrial democracy.

If you will recall, Sir, I said in Parliament on 11th July, 1968, when the House debated the Employment Bill in 1968 [Hansard, Volume 27, No. 10 cols. 535-61]:

`The question of increasing productivity in any firm or undertaking and the payment of productivity rewards can also be worked out between the particular employer, employees' representatives and the National Productivity Council. There must be the machinery for working out productivity plans, examining the results and for negotiating the payment of incentive awards to make any productivity drive achieve its objectives. The question of increasing productivity is an urgent matter and should be of serious concern to employers, Government, workers and their organisations in the interest of economic progress. In this respect, if workers are asked to give their wholehearted support to higher productivity programmes and campaigns, they must be allowed to participate actively and constructively in formulating and implementing them. When there is success there must be concrete and reasonable returns or rewards.'

It was my thinking then as it is now that it is illogical and beyond comprehension that payment of bonus to workers, a vital incentive to higher productivity, is negotiable only within a certain restricted limit.

I see there is provision to foster and promote good industrial relations through the formation of joint consultative councils as one of the objectives of the National Productivity Board. I do hope that it will be within the province of such joint consultative councils not only to discuss and to implement agreed work procedures, but also to look into the question of the payment of productivity bonuses, provided, however, they represent the will of the workers.

Mr Speaker, Sir, at this point I would like to say that the idea of forming joint productivity councils in enterprises, which would serve as consultative bodies guiding and promoting productivity, is not new. In 1965, the Singapore Employers' Federation, the Singapore Manufacturers' Association and the National Trades Union Congress at the behest of the Government jointly endorsed the Charter for Industrial Productivity Code of Practice. Unfortunately, this Charter, which was solemnly contracted, was not religiously practised in spirit and in real terms. This Charter is nothing but a dead letter. I hope the National Productivity Board will pick up the fallen threads, but not tread the same path.

Sir, I also observe that among its objectives, the National Productivity Board shall assist industrial establishments and trade unions in formulating and rationalising wage policies and wage systems; shall assist the Government from time to time in shaping a national wage policy; and shall undertake manpower and wage studies. On the other hand, the Minister for Labour has on 8th February, 1972, constituted the National Wages Council with somewhat similar terms of reference, as follows:

(i) To assist in the formulation of general guide-lines on wage policy;

(ii) To recommend necessary adjustment in wage structure, with a view to developing a coherent wage system consistent with long-term economic and social development;

(iii) To advise on desirable incentive systems for the promotion of operational efficiency and productivity in various enterprises.

Can the Minister for Labour clarify if the Wages Council is to operate as a body separate from the National Productivity Board or as an adjunct to the Board? Or will the Wages Council be subsidiary to the National Productivity Board? Or will it be unscrambled?

Sir, I hope the Minister For Labour will consider the last point because if he has too many dons around him, sometimes they become boisterous. They do not write a one-and-a-half page memorandum to the Cabinet. I tend to think that the Minister himself might be confused, and we all will suffer in the end.

Mr Ong Pang Boon: Mr Speaker, Sir, I share the sympathy of the Member for Kallang in respect of his apprehension and fear that the increased productivity may lead to loss of job security for workers, may endanger the safety of workers while at work, and so forth. It is, in fact, to meet this kind of reservation that there will be representations from the trade unions on the National Productivity Board itself. I am quite sure the trade union representatives on the Board will be competent enough to safeguard the interests of the workers.

Sir, regarding the question of bonus payments, as I have said earlier during the Budget debate, the whole question of bonus payment and the amount of bonus negotiable is being referred to the National Wages Council for deliberation. The Government has made known its views to the National Wages Council regarding this matter, and we are waiting for its recommendations. I think the Member for Kallang is well aware that the recommendations of the Wages Council will only be ready around the end of April or early May. So I ask him to be a little bit more patient.

There can really be no conflict arising between the National Wages Council and the National Productivity Board, because the Board is, in fact, servicing the National Wages Council. The National Wages Council is purely an advisory body which will submit reports and recommendations periodically to the Government on wages and guide-lines for implementation by the Government and the `various employer organisations. In servicing the National Wages Council, I am quite sure the National Productivity Board will be able to assist in the various ways of formulating such guide-lines.

Question put, and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

The House immediately resolved itself into a Committee on the Bill. - [Mr Ong Pang Boon].

Bill considered in Committee; reported without amendment; read a Third time and passed.