LIFELONG LEARNING ENDOWMENT FUND BILL

Order for Second Reading read.

The Minister for Manpower (Dr Lee Boon Yang): Mr Speaker, Sir, I beg to move, "That the Bill be now read a Second time."

Objective

The Bill seeks to establish a Lifelong Learning Endowment Fund. This fund was first announced by the Prime Minister in August 2000 in his National Day Rally speech. The Prime Minister said that the Fund would be launched with an initial sum of $500 million from Government's surplus. It will be built up over the years from future budgetary surpluses to a target size of $5 billion.

The Lifelong Learning Endowment Fund will be used to promote and support lifelong learning in Singapore. It will finance efforts to encourage Singaporeans to engage in lifelong learning, and provide assistance and opportunities for them to do so. This will help Singaporeans to meet the needs of a knowledge-based economy and cope with the threat of structural unemployment. In particular, the Fund will help to enhance the employability of those who are lower skilled or those who come from the lower income group.

The Imperative of Lifelong Learning

Sir, the importance of lifelong learning cannot be over-emphasised. Increasingly, knowledge and skills are becoming the key competitive advantage for individual workers, companies and entire nations. Today, a CD-ROM costs less than fifty cents to produce. But when that same CD-ROM is loaded with exciting computer game or some very efficient office software, the same article can now be sold for $50 to more than $100. It is the software knowledge and skills which created the value added.

Sir, the rapid pace of technological advancement also means that the shelf life of knowledge and skills is getting shorter. We need life-long learning to remain up-to-date and in possession of skills which can drive the economy forward.

Let me give you another example, Sir. The neighbourhood or backyard mechanics that we used to go to in the past are facing a lot of competition and a dwindling customer base. Why? Because the new generation cars come with computer engine management system and many other sophisticated devices. The old mechanics do not know how to service such hi-tech gadgets in the cars. And car-owners prefer to send their expensive cars to the agents for maintenance and for servicing, because the agents have trained mechanics who can deal with these sophisticated systems. The mechanics of old who cannot or do not want to upgrade their skill may well have to look for an alternative vocation. To put it simply, lifelong learning is no longer an option. It is a necessity.

Sir, skills upgrading has a long history in Singapore. It is not a recent discovery or something that we just come upon overnight. In fact, since 1979, the Government had been providing incentives for worker training through the Skills Development Fund. National training initiatives, such as BEST and WISE, were also introduced to help the lower educated workers.

In 1996, EDB and the NTUC introduced the Skills Redevelopment Programme (SRP). This programme was expanded in 1998 into a full-scale nation-wide programme to help older and lower educated workers facing retrenchment in the aftermath of the Asian economic crisis. In July last year, we revised the Skills Development Levy to provide more funds for skills upgrading. We also launched the $200 million Manpower Development Assistance Scheme, as part of our Manpower 21 action plan.

Sir, our job is far from over. Lifelong learning is not a one-time effort, but, as the name itself suggests, a continual effort. Today, we are taking another important step towards helping Singaporeans to embark on lifelong learning.

Establishment of the Lifelong Learning Endowment Fund

Sir, the establishment of a Lifelong Learning Endowment Fund will provide a secure and continuing stream of income to support our lifelong learning efforts in the years ahead. It is a testimony to the Government's commitment to continuous upgrading and re-skilling of workers. By setting aside part of our budgetary surpluses to build up this Lifelong Learning Endowment Fund, we are, in fact, investing the fruits of economic growth in the development of our people. This will help to sustain our competitiveness and ensure prosperity in the future. The Lifelong Learning Fund will ensure not only the continuity of existing manpower development programmes, such as the Skills Redevelopment Programme, but also create opportunities for new programmes to help our workers acquire the skills and capabilities for the knowledge economy.

Size of the Lifelong Learning Endowment Fund

The Fund will be started with an initial contribution of $500 million. Based on the prevailing CPF Special Account interest rate of 4%, the initial capital sum will earn about $20 million a year to support lifelong learning activities. When the Fund reaches the target size of $5 billion, we should have about $200 million each year to support lifelong learning activities.

My Ministry will study the needs of employers and workers and develop programmes which can be supported by the Lifelong Learning Fund. More schemes will be added as we build up the capital sum. My Ministry also welcomes innovative ideas and proposals from community organisations which want to play a role.

LLF Programmes

For a start, my Ministry and the Infocomm Development Authority have been working with organisations, such as the National Library Board, People's Association, National Trades Union Congress, the Singapore National Employers' Federation, and also the self-help groups, to develop a National IT Literacy Programme. This programme aims to help Singaporeans acquire basic IT and Internet skills. It will minimise the dangers of a widening digital divide disadvantaging Singaporeans who lack such skills. A pilot project will be launched before April this year. About 5,000 adult Singaporeans from various organisations, including selected companies, the People's Association and the various self-help groups, are expected to participate in this pilot programme. The experience of the pilot project will enable us to refine the programme for wider application later this year.

Sir, aside from IT, the Lifelong Learning Fund will progressively cover other employability skills and widen the supply of training opportunities. Today, we already have an excellent network of community facilities spread throughout Singapore. This includes community clubs, self-help groups and many voluntary organisations. We will work with these community organisations to bring lifelong learning opportunities closer to the heartlanders. For many Singaporeans, the convenience and proximity to home could make a big difference in getting them to take up lifelong learning. Such community-based learning and skills upgrading is an area which we will study closely.

Provisions in the Bill

Mr Speaker, Sir, let me now address the key provisions of the Bill.

Clause 1 anticipates the setting out of the operational date of the Bill. The Minister for Manpower will appoint the date at which the Act will come into operation.

Clauses 3 and 4 provide for the establishment of the Lifelong Learning Endowment Fund with capital money provided by Parliament. The capital money can only be used for investments authorised under the Financial Procedure Act (Cap. 109).

Clause 5 sets out the purposes for which the income of the Endowment Fund may be expended. These include the promotion, establishment of facilities and provision of financial assistance for the acquisition, development and upgrading of skills to enhance employability.

Clause 6 establishes an Advisory Council to advise the Minister for Manpower on the application of the income from the Endowment Fund.

Clause 7 allows expenses incurred in connection with the operation and administration of the Endowment Fund to be defrayed out of the income of the Endowment Fund.

Lastly, clause 17 empowers the Minister to make regulations for the purposes of the Bill. These may prescribe the procedures for payments from the fund, criteria for approval of applications for the fund and the procedure of the Advisory Council.

Conclusion

Mr Speaker, Sir, as Singapore transits into the New Economy, lifelong learning will be a key competitive strategy for our success and prosperity. We must nurture the spirit of lifelong learning to equip Singaporeans with relevant skills and knowledge. The establishment of a Lifelong Learning Endowment Fund is an important part of this effort. It will provide concrete support to foster a new spirit of learning among our people. It will enable us to embark on a learning revolution to make Singapore a Learning Nation capable of tapping every opportunity in the New Economy. More importantly, it will enable all segments of our population to be engaged in lifelong learning and bring about more active participation in the economy by Singaporeans.

Sir, I beg to move.

Question proposed.

Mr Hawazi Daipi (Sembawang): Mr Speaker, Sir, I rise to support the Bill.

The need for lifelong learning cannot be emphasised enough in Singapore which depends to such an extent on its skilled, educated workforce. The setting up of an endowment fund to actively encourage Singaporeans to pursue the skills needed in an economy where technology is still rapidly evolving will only underscore the importance we see of directing Singaporeans towards a philosophy of lifelong learning.

The plan to set up an endowment fund is a bold move that will help a large number of older Singapore workers who missed the opportunity for higher education in their younger days and who are now saddled with low skills. The Fund will give them better hope in taking up skills courses that can help enhance their employability. Following the announcement of the plan to set up the fund by the Prime Minister in August last year, our workers and union leaders await eagerly for the details. I am sure today's announcement by the Minister for Manpower will be welcome not only by our low-skilled workers but Singapore workers in general, including the better educated, as well as the employers.

The Lifelong Learning Endowment Fund can fill a gap in existing assistance programmes like the SRP, the NTUC Education and Training Fund and other programmes supported by the Skills Development Fund. The conditions governing the SRP and SDF limit subsidised training to particular groups of employees. In contrast, the Lifelong Endowment Fund does not set any limits on the target groups. It should, therefore, work alongside schemes like SRP, NETF and SDF, rather than duplicating the areas already covered by these programmes. While the Fund should widen further the training opportunities for older workers at company and industry levels, it can also be even widened to assist training of better-skilled workers. I would like to urge that the Fund be made available for workers who want to take up courses not covered by the SRP by subsidising the course fees as well as to encourage companies to send their workers for skills upgrading through absentee-payroll scheme, like the SRP. As we have seen in the past three years, including during the recession years, even skilled workers and professionals were retrenched as their companies reorganised and restructured. In the New Economy, all workers, irrespective of their skills levels, are not protected against skills obsolescence, unless they upgrade and re-tool themselves. In this case, the flexibility of the endowment fund must be stressed. But having said that, I must emphasise the priority that we must give through this new Fund in assisting the more vulnerable lower-skilled workers to learn relevant skills to remain employable.

According to the Bill, an advisory council will be set up to advise the Minister on the tasks to be undertaken through the application of the Lifelong Learning Endowment Fund. It is important that this advisory council be made up of people who can best determine the array of skills courses which workers should have access to under the Endowment Fund. Representatives from the labour movement and employer organisations should be included in the advisory council.

The provisions of the endowment fund also provide for "the promotion of the acquisition, development or upgrading of such skills and expertise". The inclusion of such a clause in the Bill will help to ensure that the Fund can be used to provide incentives to companies that promise to employ retrenched workers, particularly those above 40 years old, who take up full-time SRP or SRP-like courses. Sir, I raise this suggestion because some older retrenched workers face difficulties in getting jobs suitable with the newly acquired skills after they have completed their full-time courses. The number of such workers is now small, but it could be more in future as even older workers would be retrenched and they would need the support of their employers to gain better jobs after they have completed their courses. It should provide the incentives to companies that offer jobs to such retrenched workers on the condition that these workers complete their courses. Based on NTUC's experience working with retrenched workers during the recession and working with self-help groups to help these workers under the SRP Facilitators Programme, I find that many retrenched workers are motivated to upgrade their skills. We should take one more step in helping them, by giving incentives to companies to hire them.

Sir, this Bill also includes possible funding for research and development of "learning methods and technology to enhance the acquisition, development or upgrading of such skills and expertise". This provision will make it possible to fund the development of better designed modular courses; courses that will make teaching simple and learning fun; those that would not make the workers feel fearful of being shown up as unintelligent in the classroom.

Sir, I am glad that the Prime Minister and the Manpower Minister have mentioned the IT Literacy Programme as one of those that would take advantage of the new Endowment Fund. Other than our unions and employer organisations, we should indeed make the Fund accessible to grassroots organisations like the Citizens' Consultative Committee, Community Clubs and the Community Development Councils to provide IT courses at the local community level. But I should caution against wasteful duplication of having too many IT centres in the same community.

Mr Speaker, let me just conclude by stating that the setting up of this Lifelong Learning Endowment Fund is a step in the right direction in helping our workers imbibe the culture of continuous learning. This is a bold way to support our people against the pitfalls of structural unemployment already experienced by many developed countries. This is a positive way to help our workers and our economy to be even more competitive. We are fully aware that if we are not competitive, we will not be able to generate enough jobs for our people. We will have unemployment. Even if we are competitive as an economy, but if many of our unskilled workers become unemployable as we move deeper into the Knowledge-Based Economy, we will face the problems of structural unemployment due to the mismatch of skills and jobs. So this new Fund, as provided in the Bill for which it is debated today in our first sitting in this new millennium, is a very important vehicle which will lead Singapore well into the 21st century. It could help our workers to level up in terms of income so that they can continue to enjoy high quality of life and thus maintain social cohesion in Singapore in years to come.

Sir, I support the Bill.

Mr Thomas Thomas: Mr Speaker, Sir, the European Commission made a report in November last year that within 10 years, 80% of the technology in use today will be outdated. This means that if nothing is done, only 20% of the workforce will have the skills and knowledge to keep a job.

[Mr Deputy Speaker in the Chair]

4.22 pm

Mr Thomas Thomas: If we do not train and upgrade workers, 80% of the present workforce will not have the skills and knowledge to master new technology. This will affect our ability to maintain full employment and meet our social objectives. There could be massive structural unemployment accompanied by major social problems. I am sure none of us want to see that happen.

I support this Bill because it will contribute to enhancing the employability of workers, and I fully support full employment to be part of the economic and social agenda. Economic growth must also meet social objectives. The best social safety net any worker can expect is a decent good-paying job.

This Bill is crafted in general terms and does not have details on how it works. As the Minister has explained, most of the details will be in the form of regulations. So I will just speak in general terms and hope that the Minister and the advisory council that will be formed will take up some of the comments.

Sir, training and learning is a shared responsibility. The Government, the employer, the community and the individual all have a part to play. The establishment of this Endowment Fund should not result in the reduction of the shared responsibility. The aim of lifelong learning and training should be to contribute to the continued well-being of everyone in our society. We should see lifelong learning as a continuous process that takes place throughout one's working life. We should also have to learn from real experiences at work and life. It is beyond the occasional but useful spurt of training in classrooms or elsewhere. In that light, I support the fund being used in research and development of learning methods and in the technology of delivery mechanisms.

The best approach to ensure that future demands for skills are met is for employers to invest in training as part of workplace learning. I hope this Bill will not shift responsibility for training totally to workers because workers will have access to this Fund. Employers will have to continue to invest in education, training and development of their employees. This Fund should be an additional support for workers complementing the various existing Government and employers' schemes in place now. These schemes include the Skills Redevelopment Programme, the Skills Development Fund, etc. The objects and applications of income of the Fund in clause 5 is crafted in language that is so broad that I think we need some reassurance on this point.

For the individual, lifelong learning will need an element of self-direction and self-management. People of all ages and all backgrounds will have to embrace lifelong learning, otherwise we will all lose life skills. Some workers will need more support to successfully achieve this. The 2000 Population Census shows that older and less educated workers have greater risks of facing unemployment. I will add that the physically disabled also need special attention. These people need training most, but they also have many impediments to take up training. The lower income group find it difficult to find time to go for training. They earn little. Their incomes are now dropping due to new work organisation of outsourcing and contracting. Older workers who are facing job insecurity will need to continue to work as they live longer. These groups will have to embrace lifelong learning and I ask that special extra attention be paid to these groups of people.

I am also a little concerned about clause 4(5) of this Bill. The clause says that any diminution in the value of the capital money has to be made good from the income of the Fund. This could happen if there are wrong investment decisions made or there is a general economic downturn. If there is a wrong investment, I do not think workers should suffer. In an economic downturn particularly, in fact workers would need more help and they would need more training. From this Fund itself, in an economic downturn, the returns will be less. With this reduced income, trying to make good the capital means that workers will be affected, and workers will suffer. I hope that the desire to maintain capital money will not be at the expense of workers. Therefore extra money will be found when it is actually needed.

Finally, I ask the Government to give money from the Fund to individuals as in CPF, for use of training in new areas not provided by the employers and which may not be directly related to their present job or funded elsewhere. This idea is not new. It was raised by many Members in this House and by my colleagues in the unions. It is to start what you call a skills-save account similar to the Medisave account in CPF. This is basically for workers to learn continuously and to live more fulfilling lives.

On this note, Mr Deputy Speaker, Sir, I support the Bill.

The Minister of State without Portfolio (Mr Matthias Yao Chih): Mr Deputy Speaker, Sir, I rise to support the Bill.

Sir, from the outset, may I say that I completely support what the Minister has said in his Second Reading speech and I am also in complete agreement with what my colleagues, Mr Hawazi and Mr Thomas, have said before me.

In most countries, subsidised education is given to the young only. Once the young people leave school, they are on their own. As adults, they have to find their own resources to extend their learning. Our system was also like this in the past. But as the Minister reminded us, we have changed the system.

The first change came with the Skills Development Fund which was set up in 1979. Then came various other programmes, the latest of which are the Skills Redevelopment Programme and the NTUC Education and Training Fund. These programmes work on the premise that learning does not stop after one leaves school. Learning is necessary throughout one's lifetime, and should be encouraged and subsidised, just as we encourage and subsidise our children to go to school. It is a very fundamental change in the way we should think about education, and it is a very profound change.

The Lifelong Learning Endowment Fund Bill confirms that our Government will make lifelong learning a lasting reality for our workers. Our union leaders and members are excited about the possibilities it offers. They have waited eagerly for the Fund to be implemented since it was announced by the Prime Minister last year. The Fund will help workers learn new skills to stay employable as the industries restructure and business models change. With a possible slowdown in our economy while the US economy takes a downturn, it is even more urgent for our workers to get help to train and re-train.

Our workers know, as the Minister pointed out, that lifelong learning is not an option but a necessity. Our workers know that there are many opportunities for them to upgrade. They know that training is important and that the courses are heavily subsidised. Many of the courses are modular, so the workers can break up the training into different parts to suit their schedules.

The NTUC Education and Training Fund was set up with an initial sum of $20 million. It has received so many applications from union members for training grants that we have to increase it now to $40 million. This shows that many workers are keen to retrain and are actually doing something about it for themselves.

However, we also hear that older workers are reluctant to go for training. Is that so? In my discussions with union leaders and members, I see that there is indeed such a reluctance. The workers agree that the subsidies are generous, but they think the barrier to entry is still high. I think there are three basic reasons for this. First, is the loss of income. Companies, though supportive of training, will not send many workers for the longer courses. If the workers want to take up longer courses, they will have to take no pay leave, or even resign from their jobs. The older workers have heavier family commitments. Many will feel the strain if they have to lose their income for even just a few weeks. Of course, there are classes conducted at night or on weekends. But some workers do not want to attend them because they will lose the opportunity to do overtime work to supplement their incomes.

Yet, these are the workers who will benefit most from the training. What the older workers need are not just subsidised courses, but also some help to cover their household expenses while they attend the courses. Looking at the Bill, Sir, I am not sure whether the Lifelong Learning Endowment Fund can be used to help the workers cover some part of their loss of income when they attend courses. I would therefore like to ask the Minister whether the Fund can be used in this way, and if not, whether there are other means to help workers overcome this difficulty.

The second reason for their reluctance is their fear of the courses themselves. They are afraid that they cannot absorb the lessons quickly enough, that they will be left behind by their younger course mates, and that they will hold back the classes because they are too slow. These are real fears. Young people learn faster than older people, and they learn in a different way. Those of us who have children will have had enough humbling experiences learning with them to know what I am talking about. If we put 50 year olds side by side with 16 year olds in the polytechnic or ITE, we are not going to get the same result from the two groups within the same timeframe. If we teach 50 year olds using a curriculum designed for 16 year olds, we will only discourage the older workers from joining the courses.

What we need is a better understanding of the methodology to teach older adults. We then need to structure the courses meant for them accordingly. Here, the Bill is very clear. Clause 5(2)(b) allows the Fund to be used to support the research or development in or of the learning methods and technology to enhance the acquisition, development or upgrading of skills and expertise to enhance employability. In other words, how to teach older workers more effectively. Or more importantly, how to design training so that the older workers will feel comfortable and will enjoy the training.

On behalf of older workers, I urge the Minister to give top priority to using the Fund for this purpose.

The third reason for reluctance to go for training and work in a new area is the fear of being penalised for mistakes made while the worker is new to the new job. Older workers who are in a job for a long time gain experience and knowledge. They become experts in their fields. Their peers and subordinates look up to them.

When they retrain and enter a new area, they start from square one like everyone else, including those junior to them. They lose status and influence, which they may not be able to regain. If they make mistakes, they may be penalised. Worse still, if they cannot cope with the retraining or the new job, they may become unwanted. So some workers would rather stay in the old job until it is made redundant, and then move on to another company and do the same job all over again because they are good at that job. They are afraid that their attempt to try something new may backfire on them. But the fact is if they refuse to learn new skills, their industry may simply disappear and they will be left far behind.

This is a problem the Fund alone cannot solve. But there is a solution. The employers must do their part to make the training and transition easier for the workers. Allow me to tell you how one factory helped a group of workers change from using a manual process to a computerised one. It is a real story and it happened in Wing Tai, a garment factory. In the factory, a group of ladies manually laid out paper patterns on the cloth and cut out the required shapes. They had to squeeze the patterns as closely as possible to minimise wasting of cloth and had to cut as quickly as possible to keep the sewing line going. They were very good in their jobs because they were very experienced at it.

Of course, no human being can beat a computerised machine when it comes to squeezing patterns closely together and cutting quickly. So the company decided to automate, and asked the ladies to train to operate this new machine. The ladies tendered their resignation. They would rather go to another factory to lay out the patterns manually than to learn how to operate the new machine. They were afraid of failure. It was not worth their while to try. But the boss was creative. He told the ladies: "Well, you wish to resign? OK. From now on, consider that you have resigned, consider that you are no more with my company. You are free to go." Then he told them, "Now that you have resigned, you have to look for a new job. But since you have time, why not try out this machine anyway? Every day you turn up for training, I will pay you. Anytime you want to give up, just take your pay and walk out. You can do that, because from now on you are not my staff. I cannot punish you. I cannot do anything to you." The ladies stayed on to learn on the new machine. After a few days, they decided not to resign anymore. And in fact, they became very skilled with the new machine, and became far more productive than before.

The moral of the story is: Workers fear change. They fear being penalised. They fear the loss of self-esteem. Employers can and must help the workers remove this fear. My message to employers is: Please do not just blame the workers for not trying. Please make it easier for them to try.

Sir, there is a Part 2 to this Wing Tai story. Not long after the company has automated their cloth cutting, they found that the costs were still too high in Singapore. So they closed down the production line and shifted it to a lower cost country nearby. And the ladies had to be laid off. Before we think that all the training on them was wasted, actually there is a happy ending to this story. The three of them got together and started their own company to do garment alterations. They put all their previous training, knowledge and experience into very good use. And they are no longer workers; they are bosses and owners of their own company. And the Wing Tai boss told me that these ladies are doing quite good business.

So the next moral of the story is this: Even with retraining, the industries continue to restructure and industries can disappear. Our workers must constantly retrain, be prepared to adapt and make full use of the learning opportunities to improve their own prospects in the changing circumstances.

Sir, many older workers have low educational qualification. Because they have lower education, they have lower income. Because they have lower income, they are less able to afford a loss of income when they go for training. Because they cannot attend the training, they remain less qualified. This is the "circle of disadvantage".

The Lifelong Learning Endowment Fund is a bold and concrete measure that can break the circle of disadvantage. Let us lower the barrier of entry for training. Let us find better methods to make training effective and enjoyable. Let us help them overcome their fears. Let our older workers gain new knowledge and skills that will bring them higher incomes. And with higher incomes, they will have more savings, then they can take on courses of longer duration. And then they will acquire better knowledge, and they will learn more complex skills and take on yet higher level jobs. This is the "circle of opportunity".

Let us use the Lifelong Learning Endowment Fund to break the "circle of disadvantage", and turn it into a lifelong "circle of opportunity" for all our workers in Singapore.

Sir, I support the Bill.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin): Mr Deputy Speaker, Sir, we all know that with money, time and energy, many things can be done. But many people often feel that they have not enough time, not enough money, and not enough energy, and so they could not do anything.

During the dialogue sessions with our workers, I observe that many young workers are not willing to go for training because they claim that they do not have enough time. They want to spend their time working overtime in order to earn more money. In the meantime, the middle-aged workers would say that they have family commitments, and not enough money. As for the older workers, they have time and money, but no energy to go for training. On the other hand, the workers who are undergoing training have money, time, and energy to undergo all the training that they want. So the crux of the matter is the workers must understand that whether they are old, middle-aged or young, they do have the time, money and energy to undergo some training.

The Lifelong Learning Endowment Fund is the manifestation of the Government's re-affirmation of the spirit of lifelong learning. Whether you are old, young or middle-aged, you can always find time, money and energy to undergo some form of training. As a matter of fact, lifelong learning is not a new expression that emerges with the New Economy. When we are young, we must learn. We must keep on learning for so long as we are alive. For my generation of Chinese-educated Singaporeans, we learnt in school the Chinese phonetic symbols, English, computers, Hanyu Pinyin and the Internet. So if we do not carry on learning and making ourselves relevant to the times, we will be the losers for the rest of our lives.

Today, successful businessmen all know that the marketplace is like a battlefield. They learn and adapt the various strategies from Sun Tze. So they all learn and win all life long. We must inject this spirit into the concept of lifelong learning.

It is good that we have this Bill before us. I support this Bill. But there are two points I wish to raise with the Minister for his clarification.

First, in this Lifelong Learning Endowment Fund, the stress is on enhanced employability. That is the emphasis - enhanced employability. So the emphasis is on skills. But there is no mention of the word "knowledge" in the Bill. I feel that lifelong learning should not be confined to the skills level. It should also be extended to the knowledge level so that when we encourage Singaporeans to go for lifelong learning, aside from skills enhancement, we also encourage them to enhance their knowledge. To acquire more knowledge, we must teach people not only how to do a job but how to be a man.

Mr Deputy Speaker, Sir, older people have this worry that after Singapore becomes globalised, they would lose their jobs, as there may not be jobs for them to do. So this Lifelong Learning Endowment Fund Bill is a shot in the arm for them so that they will be able to learn more skills to make it easier for them to secure jobs. It is very painful to have the skills without a job. So I feel that when we subsidise these older people for training, we have to be more liberal with their choice of training programmes.

In terms of the language of instruction, it should not be confined to English only. The Ministry of Manpower should also have a package so that these older people would be given some kind of special treatment.

We must teach every Singaporean not only how to do a job but also how to be a man. It has been observed that while most of our young people can do their job very well there are many who do not know how to conduct themselves properly. They are very strong in their jobs but when they are facing a crisis and handling human relations, marriage and parenthood, they are not so strong. We must have some programmes for social and personal cultivation to teach them how to be a man.

The second point is that there is no specific explanation on the cost of setting up the infrastructure. We know that we are aiming at all Singaporeans, including people living in HDB estates. So the best places would be the CCCs, the CCs and the RCs. In order for these CCs and RCs to be able to make available their facilities, they will have to find money. If they have to raise funds for such facilities, then it would slow down the process. For example, if a community centre or community club wants to start computer classes, they will have to raise funds of $10,000, $100,000 or whatever. To cater for National Education, all the basic infrastructure costs should be subsidised. I also suggest that in assessing applications for subsidies, they should also allow the residents to enjoy the benefits under the Skills Development Fund. We all know of the song "We must slog in order to win", but I think when you slog you may not necessarily win. So in order to win, they must have new skills and new knowledge. They must learn new skills and new knowledge so that they will be able to win. So we must learn in order to win.

Mr Chiam See Tong: Sir, in principle, I support the Bill, but I have many concerns in regard to the provisions in the Bill.

Under clause 3(2), it is noted that "The Minister shall be responsible for the administration of the Endowment Fund and that the Fund shall be regarded as a Government Fund". One would think that since the Fund shall comprise mainly taxpayers' money and public donations, there should be complete accountability and transparency in respect of the administration of the Fund. This can be achieved only if the administration of the Fund can be carried out by an independent body. As the Bill now stands, all payments out of the Fund is dependent only on the decision of one man - the Minister - who is a PAP member. I think that this kind of administration of the Fund is not satisfactory. I propose that it be administered by an independent body, which, I suggest, can comprise respectable and well-known people in our community without any political affiliations.

The duty of this independent body shall be to disburse the income of the Fund based entirely on merit and not on any political preferences. Unfortunately, I note that there is nowhere in the Bill that says that the income of the Endowment Fund shall be paid out based entirely on the merits of the applicants. As the Bill now stands, what is there to stop the income of the Fund from being distributed to only people who support the PAP? Supporters of the opposition, I think, shall have no ghost of a chance to enjoy any of the benefits of the Endowment Fund.

The administration of the Community Improvement Projects Committee (CIPC) funds readily comes to mind. Taxpayers' money that is controlled by the CIPC has, in the main, only been disbursed to PAP-controlled constituencies. The Town Council at Potong Pasir, which is opposition-controlled, has not been given one cent of the CIPC funds, although it has requested for it many times. Similarly, my fear is that the Endowment Fund, which is a public fund, without independent control, shall be made use of mainly for the benefit of the PAP rather than for the general good of the country.

Clause 5(1) states the objects for which the income of the Endowment Fund shall be used. They are to benefit only "persons". I wonder why the word "persons" is used and not "workers". This gives the impression that the Endowment Fund does not want to benefit the workers but rather is confined to certain hand-picked persons only. The word "workers" should be substituted for the word "persons".

Clause 6 concerns the Advisory Council. I notice that very little is said of the Advisory Council. Nothing is mentioned of its number or composition. I hope, like the CIPC, the Advisory Council is not going to be packed with PAP MPs.

Clause 4 of the Bill talks about the capital money of the Endowment Fund but there is no mention of a fixed amount that is to be placed as capital in the Endowment Fund. Can the Minister please give an indication as to the amount to be allocated as capital for this Endowment Fund?

Dr Lee Boon Yang: Mr Deputy Speaker, Sir, first I would like to thank Mr Hawazi and the other hon. Members who spoke in support of the Bill, including, I notice, Mr Chiam See Tong, who expressed his in-principle support although he raised several questions.

I also wish to thank the Members for making various suggestions, particularly about the type of training or the nature of training and the way to deliver training to the older workers. These are suggestions and issues which will certainly be taken into consideration when the Advisory Council is convened to study various proposals for the use of the Lifelong Learning Endowment Fund.

I will respond to the various comments as they were made. First, Mr Hawazi suggested that the Lifelong Learning Endowment Fund should work together with the Skills Redevelopment Programme (SRP) and the Skills Development Fund (SDF), and not to compete with them but, rather, to complement what is already being done through the SRP and SDF. I agree with him. That is in fact the intention of setting up a Lifelong Learning Endowment Fund: to provide more resources which could be used to complement the budget allocations for programmes such as the Skills Redevelopment Programme, and also to provide additional support for the Skills Development Fund in providing training and skills upgrading opportunities for workers.

Mr Hawazi also suggested that the Lifelong Learning Endowment Fund should provide support for CCCs or community clubs and maybe even Community Development Council-initiated programmes for skills upgrading. I agree with him. This is one of the things that we will be looking into, how to work with community organisations that want to play a very active role in offering skills upgrading opportunities to the people.

In fact, a project that I mentioned in my Second Reading speech - the National IT Literacy Programme - is something that was conceived along this line where the Government, through the Lifelong Learning Endowment Fund, would work together with community groups to offer basic IT skills and Internet skills training to people who lack such skills. So we are in fact going to work closely with various community organisations.

I note that Mr Hawazi emphasised that the priority for the Lifelong Learning Endowment Fund should still remain with the lower-skilled because this is the group that is most vulnerable, although he also mentioned that we should not overlook the needs of the better-skilled, who will also face the danger of retrenchments in an economic downturn. I agree with him. We will continue to focus our efforts and our resources on the lower-educated, lower-skilled Singaporeans, particularly the older workers. For this group, we already have a very wide range of training courses available under different programmes, such as the Skills Redevelopment Programme, the National Skills Recognition System, Strategic Manpower Conversion Programme, etc. For instance, under the SRP, we have more than 20 industry sectors covered where we are actually offering training for workers in these sectors. These include electronics, hotel, marine, telecommunications, taxi, healthcare, insurance, cleaning and even childcare. We will continue to expand the list so that more and more industry sectors are covered and the needs of workers in each of these sectors will be catered to.

He also asked that employers should be encouraged to put workers who are at risk of being retrenched or have been retrenched on to programmes such as the SRP and for the Lifelong Learning Endowment Fund to support these workers and their employers. This is, in fact, one of the ways in which we are encouraging employers to take advantage or to make full use of the SRP in helping workers who are vulnerable to retrenchment. We persuade employers, who are in the process of having to downsize, to send their workers for such training long before they actually have to be retrenched, which means that they will be given an opportunity to acquire a new skill or to upgrade their old skills so that it is easier for them, when it comes to the actual day of retrenchment, to go out there to look for a new job. The encouragement that we give to the employers is a very substantial cash subsidy, the absentee payroll, while their workers are sent away for training and we also bear up to almost all of the training costs, depending on the age of the workers.

As for workers who are better educated, such as polytechnic and university graduates, they have already enjoyed a headstart in the skills race, compared to the older lower educated workers. They have also received substantial Government subsidy in their higher education, so they should therefore take a higher responsibility and a higher proportion of the cost of upgrading their skills. Of course, in this context, many employers are also continuing to provide their better educated workers with employer-based upgrading and training. We have also raised the skills development levy ceiling from $1,000 to $1,500 in July last year and we will continue to gradually adjust this ceiling up to $2,000. By raising the skills development levy ceiling, we are, in fact, enabling the Skills Development Fund to collect more money which can then be used to provide more training opportunities. As the ceiling has been raised from $1,000 to $1,500, and progressively to $2,000, we will be able to extend more training support and assistance to even polytechnic graduates who are presently not fully covered under the skills development levy. So there will be more opportunities made available for this group of workers.

But as a principle, Government's support for the higher educated group would have to be focused on specific areas of critical industry and skills requirement, rather than just broad-based support, such as fee subsidy or allowance for them to sign up for all kinds of postgraduate courses. We have to be very selective because these are people who have already benefited from a high level of Government subsidy in their tertiary education and for an additional upgrading to a higher degree, we have to be very selective. Only when we are sure that this will make a significant difference to our economic competitiveness will we be able to provide some form of support.

What we are doing is that we are currently working towards increasing the capacity or opportunities for continuing education and training for the diploma and degree holders. But it would have to be in very selective and economically critical disciplines and courses which can be made available at our universities and polytechnics and also the ITE. If you have read today's newspapers, there is also a possibility of having a fourth university. If that comes about, it would make it even easier for polytechnic diploma holders who want to upgrade themselves. They will have access to a fourth university, which will offer affordable courses for them to upgrade. They do not have to either go overseas to upgrade or try to find one of the limited places in NUS or NTU. Let me assure him that we will also consider how we can extend the assistance to the better educated in this process of lifelong learning. But at the end of the day, we must have our priority, and as the hon. Member himself stated, the priority should be with the lower educated and the less skilled workers because they are the most vulnerable group now.

Mr Thomas Thomas has expressed concern whether, with the establishment of a Lifelong Learning Endowment Fund, it would shift the responsibility of skills upgrading and training to the workers and relieve the employers of their traditional responsibility of training their workers. Let me assure him that this should not be the case. I agree that employer-based training is, in fact, the most important and effective form of skills upgrading because training provided by the employers will definitely be relevant to their jobs and the skills much needed in the marketplace. We will continue to emphasise the importance of employer-based training in the programmes which we will develop and evolve for the Lifelong Learning Endowment Fund. I would like to assure the hon. Member that it is not our intention to undermine this nexus between employers and employees in terms of training and skills upgrading, but our intention is to supplement and strengthen this relationship so that more and more employers will be willing to go out of their way, if necessary, to provide training and skills upgrading to their employees.

In doing so, the programmes that we will craft for the Lifelong Learning Endowment Fund will, as I mentioned in response to Mr Hawazi, complement the existing Skills Development Fund programme and the Manpower Development Assistance Scheme, and because of the additional resources that are now available, we will open up more opportunities for the workers. In the future, when the budget allocations for the Skills Redevelopment Programme and the Manpower Development Assistance Scheme run down, we can then use the Lifelong Learning Endowment Fund's stream of income to continue to sustain this programme so that lifelong efforts will continue unabated.

Mr Thomas also raised a specific point concerning clause 4(5) where it states that if there is a reduction in the capital sum in the Fund, then before we spend any of the future income, we should make good this loss. He also said that if we do so, we should not do it at the expense of the workers, because of two possible scenarios - a loss in capital sum can happen in case of a bad investment decision or in a general economic downturn. I agree with him that yes, this is a possibility. We cannot dismiss it. At some point in the future, from time to time, the Endowment Fund might actually suffer a capital loss. Should we make good the capital loss before we start to spend the future revenues that come later on? I think the spirit of this clause is that we should make this effort before we start to spend future revenues. Let me explain why.

If we do not make up for the losses in the capital sum, over several cycles of losses over a period of time, we could seriously diminish the amount of capital sum available and future incomes would also diminish. Although we understand why in a downturn workers need more training and therefore we should actually spend more money and not spend less, if we were to do it, we will, in effect, be depriving future workers of opportunities for training. In any event, the workers are going to suffer. Once you have a diminution in the capital sum and you do not make up for it, the question is: should the current group of workers suffer or future workers suffer? Our view is that we should try as fast as possible to make up for the losses in capital and then we resume funding programmes so that future workers do not have to suffer the losses. I think this is a wiser and more prudent approach over the long-term because the intention of setting up an Endowment Fund is to make sure that there is a continuing stream of income, which hopefully, over the years, will grow and we can continue to support lifelong learning activities. If you allow the funds to run down by not making up for any capital losses, you are diminishing this return and, in the long run, that would not be good for the workers.

He also mentioned about a skills-save account and whether we could consider this under the Lifelong Learning Endowment Fund. Let me point out that, as I have indicated in my Second Reading speech, the estimated income from the Lifelong Learning Endowment Fund in the initial years may only be $20 million to start with, and even if we reach a target of $5 billion, we only have $200 million. The Lifelong Learning Endowment Fund is perhaps not the best means to go about setting up the individual learning accounts for the workers because if we were to distribute this amount of money to all the workers, we will probably end up with each one getting less than $200 a year which will not make an impact. And by distributing this resource, we may not be able to focus on much needed programmes to upgrade the skills of workers who are most vulnerable to retrenchment. So we should actually harness this resource to selectively help workers who are in greater risks.

Mr Matthias Yao has given us a graphic account of how workers see lifelong learning and the kind of problems that they face. He mentioned three points, the first point is that there is an obstacle confronting workers who want to go for skills upgrading. There is this concern about loss of income. Many of our skills upgrading programmes are developed with this concern in mind. If you take the SRP, for instance, we provide up to 85% absentee payroll subsidy and up to 100% course fee subsidy, depending on the age of the workers. For older workers, we contribute more. This is to help employers to put their workers up for this kind of programmes and not having to bear all the costs.

I understand that if a worker is unemployed, then of course it is even more difficult for him to go for such skills upgrading because he had already lost his job and he has no income. It is precisely because of this concern that we have set up programmes with self-help groups like SINDA, MENDAKI and CDAC to identify these self-help groups as surrogate employers. We have also identified other organisations or associations as SRP facilitators. These are people who can help the unemployed by sponsoring them for training under the SRP and we will then provide them with both the course fee subsidy and the training allowances. For instance, up to now, about 7,000 low-income workers who have lost their jobs, particularly during the downturn of 1998, had managed to acquire better skills, qualifications, and also had their skills upgraded under the SRP through the surrogate employers scheme. Under that scheme, we actually provide them with training, subsidise their course fee and also a training allowance up to a maximum of about $500. With that training allowance, we could help to defray some of the expenditure that the unemployed worker would need to incur. We cannot provide huge allowances which would make it so attractive just to become a trainee, but we can help workers who are out of job with some out-of-pocket expenses, so that during that period they would not be in too great a financial distress. But it still depends on the worker making the effort to come forward, sign up for the programme and to diligently attend the training course to qualify for his higher skill qualification.

Mr Matthias Yao also talked about the special needs for the training of adults. This is, in fact, one of the areas that the Lifelong Learning Endowment Fund will be looking at. We understand that training adults is quite different from training the school-going cohort.

When we started the Bukit Merah Skill Development Centre, we were quite conscious of this. And one of the things was that if you look at the training manuals used by the Bukit Merah Skill Development Centre, all the prints are extra large, much bigger than you would find in any textbook. The reason is simple, because older workers have difficulty reading fine print. So we had to have special instruction manuals printed with huge print to make it easier for older workers to read. We are, in fact, quite conscious of this. With the establishment of the Lifelong Learning Endowment Fund, we now have resources to even better study the training methods that will be most suitable for older workers.

His third point is that many workers, especially the older workers, fear making mistakes during the training courses. I think it is human nature to fear mistakes. But if we do not make the effort to learn, then we will never make any progress. And in the course of trying to learn something new, from time to time, we are bound to make some mistakes. My response would be that employers must understand this human nature, and in the way that they manage their older workers and in the way they motivate and encourage their older workers to go for training, they must always be patient; they must always be sympathetic and understanding, especially when an older worker, in the course of training, were to make mistakes. In fact, he learns through making mistakes. Because he has made the mistake, he learns not to do it again, and he will learn how to improve his performance at work. So employers should be more sympathetic and understand that older workers have this special need to upgrade. And in the training course, they may occasionally make some mistakes.

Mr Seng Han Thong asked whether the Lifelong Learning Endowment Fund would also support knowledge acquisition. I made it quite clear in my Second Reading speech that what we are looking for is both knowledge and skills. The word may not have appeared in the text, but I have made it quite clear that the spirit is to help Singaporeans to embark on this lifelong journey to acquire higher knowledge and better skills, so that we can be more competitive and more proficient in the new economy.

With regard to social and personal needs, I think this is a separate area, whether young Singaporeans grow up into balanced, mature adults and know all their responsibilities and obligations as an adult. This is a separate area of education. This is something that they would have received good preparation during their schooling years. And, in some cases, through some other kind of social interaction, they should acquire such skills.

The Lifelong Learning Endowment Fund's focus must be on employability. We must focus on skills and knowledge that are relevant to the needs of the labour market. As the economy transits into a knowledge-based economy, we must increasingly focus on the skills and knowledge that can help a worker hold and do a productive job in such an economy. And I think that should remain our focus.

Mr Seng Han Thong also asked how the Fund would cooperate with grassroots organisations such as the CCs, RCs and community clubs which want to set up training facilities. This is an area which we should leave it to the advisory council to consider when they deliberate on the programme that should be supported. There will certainly be some support, because we understand that if you, for instance, want to introduce training under the national IT literacy programme, you, in fact, have to invest in computers and softwares. You have to set up some small computer training facilities. You may need two or three dozen computers. And who is going to finance this? We will look into how, under the Lifelong Learning Endowment Fund, we can jointly support such projects. We could work with the community organisations to establish such training centres. But, of course, somebody else mentioned that we should avoid duplication. We should make sure that resources are not just wastefully duplicated.

Here, I just want to add one point, as I forgot to respond to Mr Hawazi about the advisory council. Our intention is to make the advisory council an all-embracing council in terms of composition. We will bring in the trade union representatives. We will have employers represented there. We will also have community organisations represented there. We will have industry groups represented there and, of course, also Government agencies that are participating in skills upgrading and also steering the economy. So, the advisory council will represent a very wide cross-section of interests and concerns in the labour market and the type of skills that are required by the labour market. In this way, we can have good feedback, good effective evaluation of the programmes that should be supported under the Lifelong Learning Endowment Fund.

I just want to add another point at this juncture. We also welcome proposals and initiatives from community organisations that want to come forward to join us in this effort to reach out to Singaporeans in helping them to upgrade themselves.

I think that leaves only Mr Chiam who queried why is it that only the Minister is responsible for the administration of the Fund and not some independent organisation. This is an Endowment Fund set up by the Government specifically to provide resources for training and skills upgrading for Singaporeans. The Ministry of Manpower is responsible for manpower development. That is why the responsibility is placed with the Ministry of Manpower and the Minister is made responsible for the administration of the Fund. It does not mean that the Minister himself is going to individually sign every cheque or approve every single payment. The Minister will have, of course, under the normal operation, to delegate the duties that will set up the administration framework to monitor the returns and disbursements of all the money under the Fund. I think this is no different from the other endowment funds, whether it is Edusave or MediFund, or as Mr Lim Hng Kiang mentioned earlier, the Eldercare Endowment Fund. This is a fairly standard provision. So I do not see why he should object to it. This is actually Government's budget surplus. So the Government has to be responsible for it, as a trustee for the members of the public, the people of Singapore.

He wants an independent body to administer and disburse the Fund. Why is that necessary? The Fund, of course, will be audited and proper accounts will be provided. The Ministry of Finance will be the first to want to know if, in fact, the Fund has not been properly administered, and somebody will be held responsible. In this case, if that happens, the Minister for Manpower will be held responsible.

He expressed his concern that the Fund should only support activities on merit, because he talked about the Fund disbursing payments to individuals or persons. He even objected to the word "person". A person can be a worker. What do you call somebody who is unemployed? Is he a worker? How about a housewife who wants to go back into the workforce? Do you call her a worker too? Sir, I think he is becoming too narrow if he says that we should only use the word "worker" and not "person". The word "person" is a wider term. From my perspective, it appropriately covers everybody who needs training in order to help him to enhance his employability. I am looking at housewives, for instance, who have left the job market for 10 years and now want to return to work, but they need some training and new skills which they did not have. So should we include or exclude them? By his definition, if we were to say that the Lifelong Learning Endowment Fund has got to be focused on workers, then this group will not be eligible. Is that good? I do not think so. I think we should extend support to women who want to re-enter the workforce. So the choice of the word by the legal draftsman is quite appropriate.

I have already explained the advisory council. We intend to bring in people from the different sectors, so that we get a very good and comprehensive feedback, and also objective evaluation. The funds are mostly going to be disbursed by way of support for specific programmes. Let me assure all Members that good ideas will not be overlooked. If Members have any specific ideas about how they and their community organisations can play a part in promoting lifelong learning and provide their constituents with more skill upgrading opportunities, please put your ideas to us and we will have them examined by the Lifelong Learning Endowment Fund advisory council. And if the idea is sound, we will definitely help you to put these ideas to work.

Sir, I think Mr Chiam missed my Second Reading speech, because he asked about the amount of the capital money. The Bill does not say anything about the actual sum, but the Prime Minister, in his National Day Rally speech last year, said that the Fund will be started with an initial contribution of $500 million from the Government, and the objective is to build it up over the years - of course, the good years when we have budget surpluses - to a target amount of $5 billion. The expected revenue from $5 billion Endowment Fund should be about $200 million. And I think with $200 million, we can do quite a lot in terms of promoting and supporting lifelong learning.

Mr Deputy Speaker, Sir, I think I have answered the questions that have been raised.

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. - [Dr Lee Boon Yang].

Bill considered in Committee.

[Mr Deputy Speaker in the Chair]

The Chairman: The citation year "2000" will be changed to "2001", as indicated in the Order Paper Supplement.

Clauses 1 to 17 inclusive ordered to stand part of the Bill.

The Schedule ordered to stand part of the Bill.

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