WORKERS FROM LOWER-INCOME GROUP (Training grants)

Mr Noris Ong Chin Guan asked the Minister for Manpower if his Ministry has any plans to provide further incentives to workers from the lower-income group to enrol for training courses to upgrade their skills, for example, by giving an appropriate level of training grants directly to these workers.

The Minister of State for Manpower (Encik Othman bin Haron Eusofe) (for the Minister for Manpower): Sir, worker training is critical for our economic competitiveness and successful transformation into a knowledge-based economy. With economic restructuring, the types of jobs available and the skills needed to perform these jobs will continue to change. These new jobs will require higher skills. For Singaporeans, especially lower income and less educated workers, continual skills upgrading is the key to ensuring employability and enhancing incomes.

Hence, the Government has recently committed additional funds to motivate and facilitate skills upgrading. In February this year, my Ministry established a $200 million Manpower Development Assistance Scheme (MDAS) to support manpower development initiatives over the next five years. Of the $200 million, $90 million has been set aside for the Skills Redevelopment Programme (SRP), aimed at retraining lower skilled workers. This is in addition to the $50 million committed to the programme in 1998. Under the SRP, we aim to provide training for 100,000 workers over five years. Currently, we have about 26,000 workers who have completed or are undergoing SRP training. Companies sending their workers for training receive generous grants, covering up to 100% of course fees and 85% of absentee payroll. SRP also covers those who are unemployed or those who initiate their own training. They can sign up for the training programme through the CDCs and self-help groups. Already 6,700 Singaporeans had done so.

The Government has also generously supported the Education and Training Fund (ETF) set up by the NTUC with a matching grant of $3 for every $1 raised by NTUC. Since 1998, the Government has committed $15 million to the fund. The ETF supports training for union members.

In addition, with effect from 1st July 2000, the salary cap for the Skills Development Levy will be raised from $1,000 to $1,500. The change will raise the total levy collection from the current level of $20 million a year to about $48 million a year. This will significantly increase the training grants that can be made available under the Skills Development Fund. Apart from supporting employer-based training, the SDF also operates a Surrogate Employer Scheme. Under the scheme, Singaporeans who sign for training through the self-help groups or CDCs can also benefit from SDF's training grants.

As it stands, I believe that we have sufficient resources to fund skills upgrading for lower income workers, whether it is employer-based or individual-initiated. Our biggest challenge now is not so much in finding funds for upgrading but encouraging both employers and workers to come forward and utilise these incentives and embrace continual skills upgrading.