HEAD S - MINISTRY OF MANPOWER

Column No : 1425

Head S - Ministry of Manpower

The Chairman: Head S - Ministry of Manpower. Mr Yeo Guat Kwang.

Manpower Challenges

Mr Yeo Guat Kwang: Sir, I beg to move,

That the total sum to be allocated for Head S of the Estimates be reduced by $100.

Sir, workers in Singapore face many challenges today. I would like to touch on a few key issues, namely, structural unemployment, labour market, supply demand disequilibrium, women in the workforce, older workers and medical benefits.

Structural unemployment is the greatest manpower challenge today. Workers of all levels are hit, some more badly than others. Even executives are not spared. As our economy restructures and moves towards more knowledge-based activities, there is a rising danger that the less educated and the less skilled workers will find it increasingly difficult to find new jobs.

The way to address the problem is clearly skills redevelopment and training. In this regard, the WDA, together with other tripartite partners, ie, NTUC and SNEF, has made very good progress. I think it is timely for the Minister to provide an update, particularly an assessment of whether our drive to upgrade the skills of our workers is bearing fruit.

Notwithstanding our skills redevelopment efforts, there are two critical issues that we need to address. They are the mismatch of skills between demand and supply and the low level of training among those most vulnerable to structural unemployment. I understand that, for example, on average, those who have less than secondary education received only one day training per year. The tripartite partners have to find ways to reach out to them more effectively.

Sir, the services sector, where 75% of our jobs are coming from, is a key engine of employment and GDP growth. Does the Ministry have any plan to build up our service capacity and capability, and plug the skill gaps? The WQS and the other WDA initiatives have ambitious plans for the services sector. There is, however, room for improvement in the running of the actual training programmes. For example, would it not be more practical to have course materials available in Chinese since a substantial number of workers from the services sector may not be conversant in English?

With the declining birth rate, new entrants into the job market in future would be reduced substantially. The local workers' net inflow per annum will drop from 41,000 today to 28,000 after year 2010. Moving ahead, there is a pressing need for MOM to ensure equilibrium of manpower demand and supply. One serious implication is greater foreign worker dependency. There is already a large pool of foreign workers today in Singapore. MOM should help industries that are heavily dependent on foreign workers to reduce its dependency by raising productivity, and encourage these industries to adopt innovative methods to redesign and re-engineer their work processes. If we do not restructure work processes and redesign our jobs fast, we will see not just a disequilibrium in the labour market but even our continued dependency on foreign workers.

Another area of concern is women in our workforce. The women workforce participation rate is far from desirable. Much has been debated, but I personally would hope to see more concrete action being taken. I would like to urge the Ministry to consider doing a deeper study on how other countries achieve higher female labour participation rate than us even without a heavy reliance on domestic maids. This will definitely help us fine tune our policies to encourage more women to rejoin the workforce.

One key challenge we face is an ageing workforce. The life expectancy of our population has also increased significantly compared in the past. While all workers face retrenchments and unemployment, the older workers feel the heaviest brunt. Some people argue that our efforts to get our employers to employ older workers and effectively raise the retirement age beyond 62 may not work, as the employers may remain unwilling to hire older workers. Would MOM consider introducing the older worker re-employment legislation implemented in Japan, if our promotional efforts fail?

A key obstacle discouraging employers from employing older workers is the higher medical costs. Employers are not willing to incur higher medical costs associated with older workers, particularly those who may have developed medical conditions as they change jobs. The way to address the problem is the portable medical benefit system (PMBS). The concept is simple, ie, a worker can get portable and continuous seamless medical coverage during his working years, and extending into his retirement. With portable medical benefits, the worker does not lose out when they change jobs, even if he develops medical conditions. At the same time, there will not be unnecessary cost burdens to his employers as he ages.

However, for the portable medical benefit system to firmly take root, we need to enable workers to use the additional contribution of the minimum 1% of his salary by the employer to enhance the medical insurance coverage on top of MediShield, according to the employment, financial and health conditions of the worker at the various stages of his life. The workers want to have the employer-based medical benefits converted into cash equivalent, so that they can keep it and wait until when they need it, and keep those that is not used. The question is: where should the money be kept? Therefore, I would like to urge the Ministry to set up a national PMBS account to manage the additional contribution for workers' inpatient needs. It is timely for the Ministry to take firm steps towards making medical benefits portable in Singapore.

Mdm Ho Geok Choo: Sir, I will be raising three issues.

First, about our efforts to attract the brains or the talents to our shores. Many were attracted here especially with the billions of R&D fund being dangled before their eyes. We have been wooing many top researchers to conduct their highly-priced and high-risk work in our laboratories. After spending so much money into R&D, my concerns are as follows:

(1) How do we ensure that the billions that we invest on this pool of talent to enable them to make these forays to expand the boundaries of mankind's knowledge on many complex and life-important issues remain within our country?

(2) How do we ensure that what is discovered is inherited by our own experts?

(3) How do we train the second echelon of local experts so that they can carry on from where others have left off?

Mr Chairman, we have to build up our own talent base as we cannot go on relying on foreign talents. A recent Reuters ' report on staffing highlighted that employers have difficulty in finding the right people to fill jobs despite high unemployment in Europe and the US. This phenomenon is also experienced across North America and Asia, and the talent shortages identified are: sales representatives followed by engineers and technicians. It polled 33,000 employers in 23 countries in January, including 627 in Singapore.

Has the Ministry of Manpower done any study to look into the talent shortage? What is the action plan to mitigate this problem? Should a knowledge management database be launched to see how we can inventorise and nurture our knowledge so that we can add value and expand on it? In building up our knowledge base, we may gradually become less dependent on foreign talent.

Sir, my third point is on mindset training. Whilst we worry about the shortage of talents and over reliance on foreign talents, we have, in our midst, a group of what I call, PMETs - professionals, managers, executives and technicians - who can fill many vacancies. What we need is a wake-up call for these PMETs and our employers in Singapore - to help them to re-adjust and re-mould their work ethics and attitudes. It is not meant to be disrespectful of their quality and abilities. It is more trying to energise them to take a fresh look at what is available.

Sir, the way to do it is to put them through a mindset training programme. Some may say that this is a step backwards for them, but I think it is more a case of taking one step backwards and two steps forward. So I urge that we structure a scheme for PMETs to be put through a training of mindset awareness. This will ensure that the PMETs will get a better chance of getting a job.

Similarly, employers need mindset training to eliminate their prejudice for these PMETs. I urge for a national training scheme to reach out to these employers.

On this note, I thank you for my participation.

Jobs

Mr Yeo Guat Kwang: Sir, we have to ensure that there will be continued availability of jobs for Singaporeans.

With much changes taking place in the employment structure, we see a drastic increase in the number of contract workers. While the compensation package of direct contract workers is comparable to permanent workers, indirect contract workers receive less favourable terms. Generally, their wages are lower and they are not paid CPF contributions. They also do not enjoy benefits, such as leave entitlement, medical benefits and training opportunities. This is an anomaly we must correct.

We also have to look into ways to enhance contract workers' jobs and income security, as the nature of contract work is short term and contracts are subjected to renewals. In addition, indirect contract workers may find themselves under new employment contracts with lower terms than what they had previously received. This is due to "cheap sourcing practices" whereby the bidding war of the labour suppliers drives the tender price down. Wages are reduced in order to cut cost. This is detrimental to the contract workers.

The inadequacy of savings for long-term needs among this group of workers is also another key concern. As indirect contract workers are often paid higher take home-pay without CPF contributions and other benefits, they will face the problem of inadequate savings for long-term needs, such as retirement, medical treatment and housing.

Additionally, contract workers also lack awareness of their basic employment rights. Even if they are aware, they may be unable to assert their rights for fear of non-renewal of contract and discrimination from their employers. In view of these problems that contract workers face, what is MOM's plan to enhance the wages and employment terms of contract workers?

There is also a need to review our labour legislation. We need to review the legislative protection to ensure that employers comply with minimum standards, such as paying the employees promptly even for contract workers. Under the Employment Act, entitlement to some statutory benefits is based on a worker's minimum continuous period of service. The labour movement here is suggesting that for the purpose of calculating the length of service under the Employment Act, "minimum service period rendered within a time frame" should be used as the basis instead of "continuous service".

MOM should also step up enforcement efforts. Finally, the Ministry should also publish better labour statistics on contract workers. Without them, it is difficult to effectively analyse the trends on contract employment in Singapore, much less make the policy to help contract workers.

Mdm Halimah Yacob (Jurong): Sir, last year, there was very strong job creation with more than 100,000 jobs created, and this is good because the experience of many countries show that economic growth alone does not ensure that there is job creation. So the need to be a specific focus on job creation. However, many Singaporeans are asking whether these jobs that are created have gone to Singaporeans or have gone to foreign talents. May I ask the Minister how many of these jobs have gone to Singaporeans, particularly in the high value-added sectors, such as the bio-medical and higher value-added manufacturing which pay much better?

Secondly, may I also ask the Minister for his projection on the job creation for this year? How many jobs will be created this year and in which sectors?

Thirdly, I would also like to ask the Minister whether the Ministry has done a longer-term projection of jobs. What kind of jobs will be created, in which sectors and what kind of skills are required? Sir, the concern is this. We still have a sizeable number of workers who have no secondary education. And we know that the projection of the Ministry itself is that by the year 2009, at least 45% of the jobs will require

post-secondary education. We know EDB brings in jobs but two out of the three jobs are for professionals and require skills. In this regard, we are working very hard to recreate jobs and retrain low-skilled workers. But in the meantime, we still need an overall strategy to provide jobs for those without secondary qualifications. So I would like to ask the Minister what steps are being taken to ensure that our low-skilled workers and those without secondary qualifications continue to have jobs in the long term.

2.45 pm

Mr Chiam See Tong: Sir, I would like to throw out some ideas on job creation. Anyone who has visited Marrakesh in Morocco would not have missed the world-renowned colourful marketplace there, known as the Djamaa el Fna. Although it is world-renowned, it is nothing more than a big open ground with mainly hawker-like food stalls and all kinds of local food and plenty of pasar malam type stalls. Then there are also all sorts of street entertainers there - musicians, performers - which bring life to and make the place really interesting. But the main attraction is still the food there.

Sir, Singapore still has plenty of vacant land. I would suggest that the Government develop one of these vacant lands, charging low rentals for its use and supply perhaps transport if the land is out of town. I am sure it can attract many hawker and pasar malam stallholders, and street entertainers to this place. If the rent is low, hundreds of jobs would be cheaply created thus.

Structural Unemployment

Mr Low Thia Khiang: ( In Mandarin ): **** Sir, the employment situation now is much better than it was a few years ago. But I understand that many people are forced by circumstances to accept whatever jobs they could find irrespective of whether the jobs would allow them to make full use of their talent and skills.

For example, some Singaporeans may have high qualifications and rich work experience. But they lost their jobs due to restructuring or relocation of their companies. Because of their age, the competition from foreign talents and other factors, they are no longer able to find jobs commensurate with their qualifications and experience. With a heavy burden of living, they have no choice but to accept lower jobs with lower salaries. To the Government, these people are already re-employed, they are no longer the problem of the Government. On the manpower statistics, these people are no longer included in the number of unemployed persons.

Of course, we must give credit to these people for their ability to adapt and adopt and their willingness to accept the jobs to earn a living, despite their low pay. Human resource is the strongest, if not, the only resource we have in Singapore . MOM should be more concerned with this phenomenon of people not being able to optimise their talent, so that human resource potential could be developed to the fullest for our economic development.

This is one of the problems of the so-called structural employment. As such, we feel that we should compile "Under-employment" and "Skills Inadequacy Employment" statistics so that we have a better understanding of the situation here in Singapore .

At the 16th International Conference of Labour Statisticians held in October 1998, a statement was made that "under-employment" and "skills inadequacy employment" statistics are very important to the nation. This is because such a potential problem reflects the inability of the national policy to enable the economy to make full use of this potential. This is a very important indicator for nations which are undergoing economic restructuring. Some of these people who are under-employed due to economic reform may migrate to other countries. They could well be our home-grown elites who have benefited from our education system and the cultivation of our society. We spend a substantial part of our budget on education and skills training every year. If we continue to allow our local elites to migrate or being in the state of "skills inadequacy employment", it would be a great loss to our resource-scarce Singapore .

Mr Ong Ah Heng: ( In Mandarin ): Sir, I am happy that the Government has announced a $40 million package to support the Job Recreation Programme. This is indeed very encouraging. My feelings may not be the same as that of Mr Low Thia Khiang. Many people are structurally unemployed in Singapore and have difficulties in getting jobs, but most of those affected are the older and lesser skilled ones, not the professional or the highly-qualified. I believe that this $40 million package will be able to give these people a better opportunity to get employed. I would like to ask the Minister to further elaborate on how the $40 million will be spent to recreate jobs. But as I see it, it is a very complex process to review the existing business processes or workflows. We have to conduct market research and use new technologies or equipment so that we will be able to improve productivity, enhance the image and raise the pay of certain jobs. I hope that the Government or the Ministry of Manpower could look at which type of jobs would require what type of workers, and try to match them. Of course, the Member from Hougang talked about people migrating because they could not find suitable jobs here. He was referring to those who were highly-skilled and highly-qualified. I am looking at the problems of the older Singaporeans, the lower-skilled workers. Even if they want to migrate, nobody would take them. So, they stay in Singapore . I hope the Minister for Manpower would look into how we could help these people to find jobs which they could be comfortable working in. I would be most grateful.

Employment Assistance

Mr Leong Horn Kee (Bishan-Toa Payoh): Sir, in the past, employment and job search assistance was mainly provided by the former Ministry of Labour's Employment Service Bureau. This is a specialised central agency that assists all Singaporeans to find jobs.

In recent years, with the formation of the Community Development Councils (CDCs), job search and employment assistance have devolved and decentralised to the CDCs. Whilst providing employment assistance at the CDCs is convenient and more direct for the residents, I feel that there are various shortcomings. One main reason is that CDCs are more oriented towards welfare and financial assistance as their main raison d'etre. But people going to CDCs for job assistance may not necessarily be asking for financial aid and welfare. They are basically responsible Singaporeans who just want to secure a job, not to get welfare. These are mostly the older Singaporeans whose sense of pride and dignity is high. However, at the CDCs, they could be treated with the same disdain as though they are going for welfare. They suffer the same stigma. This should not be the case. Hence, I would like to ask the Minister whether he would consider it worthwhile to centralise the job search and employment assistance functions back to his Ministry. MOM could still work with the CDCs, for example, to provide contacts and assistance points at the CDCs, but the function is the centralised responsibility of MOM.

I think there are several advantages on centralisation. Firstly, central pulling of information and details on job availability can cater for wider options and better matching of job searches. Secondly, the services can be done professionally with no stigma that it is welfare, to borrow a current word in vogue, it is Workfare. Lastly, by centralising at MOM, I wish to urge the kind Minister to provide more funds and resources for job search programmes.

Most feedback from residents is that they are not getting sufficient help and satisfaction on job search services at the CDC level. Looking for a job in itself is really a very stressful and heart-wrenching affair. Go and ask the older unemployed workers. We should not make it more difficult or emotionally draining. Therefore, job assistance agencies should be more helpful, sympathetic and professional. Can the Minister please consider how to better help the unemployed workers?

Re-designing Work

Mr Chay Wai Chuen (Tanjong Pagar): Sir, I would like to raise this issue of redesigning work. We have an ageing workforce and one of the issues in redesigning work is to make sure that our workers are continually trained and retrained, and WDA is doing programmes to retrain the workers with proper allowances, and so on. But I believe equipment and machines also have to be redesigned to suit the older workers. So the question we should ask is whether there are incentives given for employers using new equipment, to employ retrained workers and possibly older workers. All these new workers and new equipment in redesigning work must, at the end of the day, make a profit. Otherwise, there is no incentive to use the proper equipment.

I want to give an example that was piloted in the Tanjong Pagar Town Council three years ago when I was the Chairman - the current Chairman, Dr Chong is sitting here - when we decided to switch from a 30% local workers environment in cleaning work to 70%, which is currently in the Town Council there today. There was no big need for us at that time to really do this change, apart from the periodic disturbance that we had from MOM to check on foreign workers. So we sat down with the management staff and we just wanted to show Singaporean workers, even older ones, how to respond to incentives and training, so that this 70% local portion ratio can be achieved by the right alignment of process, incentives and productivity. Workers alone, redesigning work, with all the training, will not solve and address this problem. They need suitable equipment to do the job. And the corresponding output productivity must make economic sense.

Firstly, jobs have to be redesigned by retraining workers in learning the use of equipment. Secondly, equipment have to be suitable for the job of cleaning that we undertake in the Town Council. There are many definitions and standards and requirements regarding standards of cleaning. What we have to do is that we must be sure that there must be an outcome of performance that is satisfactory to the Town Council and residents. So it is only with this suitable equipment that we can match together with the workers that we have to undertake this kind of realignment. Thirdly, sourcing of contracts has to change. The cheapest guy with a broomstick may not be the preferred solution. Fourthly, contracts have to be redesigned so that the legacy contract documents which, for example, were handed down from HDB days with the old set of parameters and yardsticks of measurements also have to be changed to a better set of performance indicators.

So in our new pilot, cleaning equipment were leased from the respective suppliers, so that the serviceability of the machines and equipment is assured and the replacement units are delivered should there be a contract failure or an equipment failure. Contract terms also have to be fixed for a longer term, instead of yearly, to stabilise the risk.

As a result of these, which were successfully implemented, the 70% local ratio was achieved in the Town Council without much increase in cost. The local workers were better paid because productivity is higher. Today, the Tanjong Pagar Town Council has a full roll out of mechanisation in the town where 70% local workers are doing the cleaning services.

As a result, some enterprising businesses and grassroots people have even come up with better ideas on equipment and machines designed to suit

our HDB estates, HDB rubbish chutes and our older workers, to make the equipment easier for them to handle.

3.00 pm

I give this as an example. The cleaning work in Town Council estates is not a big services sector. But unless we all do the redesigning - in work, equipment, contracts and, along with it, the incentives - the services sector will not improve, and all the input expenditure cost in WDA that Prof. Ivan Png alluded to some days ago will not lead to better output or outcomes and, along with them, more employment for Singaporeans.

Professionals, Managers, Executives and Technicians (PMETs)

Mdm Halimah Yacob: Sir, I would like to ask for more support and help for the PMETs, ie, Professionals, Managers, Executives and Technicians.

In the last quarter, for instance, 37% of those who were retrenched were PMETs and, once retrenched, PMETs who are above 40 years old find it a lot more difficult to get jobs within the six-month period, ie, the benchmark we use to determine whether a person is considered as a long-term unemployed or not. Older PMETs need help in two key areas.

(1) Job placement. As our current efforts are largely focused on non-PMETs, may I ask the Minister whether MOM can do more to create a job data bank for PMETs and help to match them to jobs?

(2) PMETs need help in retraining, as their skills can also become obsolete after some time. Currently, the SDF does not apply to them. May I ask the Minister to put in place more initiatives to help reskill and retrain PMETs, to prepare them for jobs in sectors that need workers? If the SDF is not the proper fund, could MOM think of other ways to provide subsidised training for PMETs? This is an area that is important that we need to pay a lot more focus on, although hitherto a lot more attention has been paid on the non-PMETs. I think, as the economy churn takes its effect, it would also affect the PMETs and they also need some assistance.

Mdm Ho Geok Choo: Sir, like my colleague before me, today I want to bring up again the plight of a group of workers who are caught in a wedge. This group looks seemingly good. They hold high qualifications, hold jobs as managers, supervisors, and they are what we call the PMETs. They are mainly in their mid-careers, many in their 40s and 50s when their careers are at their most precarious. This is the age when what they needed most are their jobs. They are at that point in their life where they are in the midst of paying for housing, renovation and car loans, and their children are going to JCs, polytechnics or even the universities. This is also the phase in life when many body parts require more than just a touch-up job. They need repairs and cost money.

Then, one morning, when they go to work, they are crunched. Like the cork of the champagne bottle, with no more than a shake of the hands, their careers just go "pop"! A corporate merger and relocation of business, a downsizing or a change of top leadership, and they are out of jobs. Who is there to lend a voice to these PMETs? The plight of these PMETs affects not just themselves, but also their families, spouses, children and all other dependants.

I would like to urge the Minister to set up:

(1) a special database of these PMETs, so that the Government can monitor the status of this group of executives, managers, etc, who are in need of jobs, and help them get back into the job market;

(2) a network hub, where those aspiring for business contacts or portfolio manager jobs could be linked. At the same time, we should encourage the proliferation of more micro enterprises which could well provide the starting point for the PMETs;

(3) a platform similar to the ADVANTAGE! Scheme to help them.

Mr Chairman, Sir, allow me to share the case of Mr X - in his 40s, unemployed, and took up a part-time lecturing job. Sir, he will not qualify for Workfare Bonus, because he teaches in modules of 24 hours at any one period of time. His average income is slightly above the Workfare Bonus' cut-off point. He lives in an apartment where, again, the annual value works against him. Can he sell his flat? He cannot, because he will be out of money, as prices are below what he owes the bank. Interest rates are rising and, before long, he may be asked to up his instalment repayments.

In raising this issue to the Minister, I am speaking for the silent mass of PMETs. We should note that the unemployed PMETs are a growing group and not a dying breed. If the issues they face are glossed over lightly, or not adequately addressed, we may unwittingly be allowing a group of negative energies to brew. The Government has been as inclusive as it can be. I call for more visible outreach to the PMETs. It need not be monetary assistance alone, but a booster and a leap-frog to the business network or micro enterprises.

The Chairman: Order. I propose to take the break now.

Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House.

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.30 pm.

Sitting accordingly suspended

at 3.06 pm until 3.30 pm.

Sitting resumed at 3.30 pm

[Mr Speaker in the Chair]

**** Debate in Committee of Supply resumed.

[Mr Speaker in the Chair]

Head S - Ministry of Manpower (cont.) -

The Minister for Manpower (Dr Ng Eng Hen): Mr Chairman, let me thank Members for their queries. Before I answer them specifically, let me just, as a preamble, address some general remarks.

Compared to previous years, this Committee of Supply is held amidst much better economic and employment conditions. If Members of this House will remember, and certainly those who stepped in with me to this august Chamber in 2002 and that was not long ago, where the spectre of a jobless recovery loomed in the aftermath of several difficult years, when Singapore's unemployment peaked at 4.8% in September 2003. The corresponding resident unemployment rate then was 6.3%. I remember the prevailing mood then was one of despair and despondence. But in contrast to that bleak period, the economy grew by 6.4% last year, and the outlook for this year is favourable. And Members will also remember that there were concerns during that period that even recovery would be a jobless one. It has not happened. Growth has translated into jobs for Singaporeans. Overall unemployment fell to just 2.5% by the end of last year. The situation has turned for the better and indeed, there are jobs, jobs, jobs for Singaporeans.

I have asked for a table to be distributed. If you look at the table, years 2002 and 2203, we have GDP growths of 4% and 2.9% respectively, and they were indeed very difficult years. Following a negative GDP growth in 2001, if Members cast their minds back, our GDP shrank by -2.3%. This was compounded by SARS and other factors. And because of that, if you look at the chart, 2002 and 2003 combined, those two years, we actually lost jobs, in other words, the economy, in terms of jobs, shrank about 36,000 in those two years. But in contrast, our economy and employment rebounded vigorously in 2004 and 2005 and we created together something like 181,000-182,000 jobs. These two periods served as very useful periods of contrasting fortunes and indeed, they provide for us valuable lessons that should guide our efforts and strategies, moving forward in helping all Singaporeans find jobs, earn decent wages and remain employable. Lest we forget too quickly, it would be useful for us to use this occasion where the economy is up and jobs have returned, to recap broad policies that have worked, many of which were prompted by Members of Parliament in this House. But we should also learn from the ideas that were not taken up or those, if implemented, would have created problems for us today.

In the midst of these difficult times, let me just say that I was very encouraged that Members supported the Government when we did not resort to quick and ineffective fixes. We did not succumb to calls for protectionist policies to shut out foreign workers and impose minimum wages. We avoided unemployment insurance. These policies would have led to economic stagnation and more job losses. Members in this House would have read recently of press articles about how these very same protectionist policies in some European countries have increased unemployment rates there. They do not insulate workers from global competition, but worsen their plight. In contrast, we face challenges head-on, press on with restructuring to remain competitive and relevant in a global marketplace. And because we persevered with sound policies, and unions were able to persuade workers to bear some hardship in the process, with some sacrifices, we now have a more resilient and competitive workforce to deal with challenges that lie ahead. We are in a much better position having gone through the difficult periods.

Many jobs have been created for Singaporeans. Mdm Halimah asked for a particular breakdown and I would give her the figures later. But let me revisit the key strategies that were put into place which ensured this job creation. First, in response to calls from many of you, we pushed for skills upgrading and supported strongly NTUC's efforts in job recreation. That made a big difference. We set up the Singapore Workforce Development Agency (WDA) which many of you called for in September 2003. I would like to remind Members that WDA is a relatively infant organisation, but much needed. This was to help unemployed Singaporeans gain employment and to upgrade their skills.

Second, we maintained flexible wage and labour market policies. We worked with employers and unions to reduce CPF and implement more flexible and performance-based wage systems. That we did this in a downturn was a significant effort and has enabled us to better cope with further downturns and hence protect jobs.

Third, we maintained the fine balance of allowing companies to have access to foreign workers while having jobs for Singaporeans. In 2004, we introduced the S-Pass to give companies access to more mid-skilled manpower. Last year, to help companies meet additional demands, we allowed them to hire work permit holders beyond the prevailing Dependency Ratio then, but at a higher levy of $500.

These three major efforts have produced results. Mdm Halimah Yacob asked how many of these jobs created last year went to Singaporeans. From preliminary estimates, last year, we created 110,800 jobs, and the majority of 61,000 jobs went to locals. That figure of 61,000 has to be explained. First of all, more jobs went to Singaporeans than foreigners. But 61,000 is the highest annual employment creation on record for locals, not only the last few years, but even exceeding pre-Asian crisis level. We looked back at the statistics and we never had a year of such strong local job creation. Two-thirds of the jobs, or close to 72,000 jobs were in the services sector. In the services sector, of all the jobs created in the services sector, 70% were taken up by locals. The gains in local employment were mainly in business, wholesale, retail, trade, financial services. Over the last five years, the average number of new labour entrants that enter into our labour market was only around 31,000. So for the fact that we created 61,000 jobs in that year shows that our economy is buoyant. It translates to jobs and Singaporeans benefit. It indeed has been jobs, jobs, jobs for Singaporeans.

In fact, we created jobs for locals in every year since 1999. If you look at the figures that I have shown you in the table, foreign workforce bore the brunt of the economic downturns. The total number of jobs shrank but it was the foreign workers that bore the brunt of this. For locals, there were still net job creation. This tells us that we have struck the right balance in our manpower framework because companies are able to adjust their manpower needs quickly, in good and hard times, and this reduces the adverse impact on our own workers. MOM will release more details later this month in its annual report on the state of the labour market.

Have these been good jobs? Members may have been given the impression that just because we have concentrated an Inter-Ministerial Committee on Low Wage Workers, that all jobs were poor quality jobs. That is very far from the truth. I will give a fuller picture when I address PMETs that some Members have asked. But these have been good jobs and, in fact, the percentage rise has been higher for professionals, managers, executives, and technician jobs and wages for higher percentiles, the better jobs, have also increased. So our economy has provided jobs for Singaporeans with good wages and good quality jobs.

Mr Loh Meng See raised some concerns during the Budget debate that labour productivity rose only 1.9% but he has to understand this was against the background of very strong employment creation. There were many more jobs added in that flow and things may round up, and that is the reason why our productivity only increased by 1.9%.

Our economy is forecasted to grow by 4%-6% this year. Barring any external shocks, such as the avian flu outbreak or rising oil prices, there will be enough jobs for new entrants and unemployment is likely to remain around the current levels. Most of the jobs will come from the services sector. Manufacturing and construction sectors are also expected to create jobs but with higher value add and skill levels for Singaporeans.

But amidst these strong economic and employment performance, I agree with some Members - Mr Yeo Guat Kwang mentioned structural challenges that continue to persist. He is quite right. We do face a shrinking workforce growth as a result of our aging population and the decline in fertility. He said that MOM must meet long-term manpower challenges and indeed he has a point.

Beyond 2010, labour growth will slow significantly because our baby-boomers would have passed the age of 50 years by then. It grows about two-odd percent every year. It will shrink about 1.2%, about half the rate of growth. With the shrinking rate of growth in the labour force, Singapore's economic growth could be stunted if businesses cannot find sufficient workers here because you are adding too few and, secondly, sufficient workers with relevant skills. We need to encourage older workers and, as Mr Yeo has pointed out, women to stay in the labour force longer and remain productive.

The second challenge is economic restructuring. Due to increased globalisation, we recognise our workers are facing wage pressures from millions of workers from China, India, Eastern Europe and Latin America. That is why we must continually upgrade their skills and maintain their cost-competitiveness.

Sir, I want to thank many Members who recognised and understood these challenges and spoke in support of our policies. When we set up the WDA in September 2003, Members gave very good suggestions when I moved the Bill on setting up WDA. Let me quote from what some of you said. Mr Seng Han Thong said, "priority should be given to the industries which are vulnerable to the New Economy". Mrs Yu-Foo Yee Shoon emphasised generic employability skills training. Other Members also rallied our workers. Mr Ahmad Magad pointed out, "Today's world takes no pity on the individual who gets lazy about training". Mr Loh Meng See reminded us that "the Government can only do that much if the workers do not exercise personal responsibility." We have taken your suggestions to heart and indeed many of the ideas that you have put out have been translated into programmes.

Through the employers' contributions into the Skills Development Fund and the Government's Lifelong Learning Fund, I am happy to report that 166,000 received training in 2005. Of this, 40% were aged 40 and above. As PM announced in his Budget speech, the Government will top up the Lifelong Learning Fund with another $100 million. This will generate another $4 million per year in interest.

Even though the economy has rebounded, let me assure Members that we will not let up in our efforts in skills upgrading. On the contrary, we will invest more resources to raise training standards and enhance outcomes to benefit all Singaporean workers. The Government has set aside $100 million to develop the Workforce Skills Qualification (WSQ) system which is a national framework for vocational skills and this is recognised and accepted by industries because we worked with industries to develop this. WDA has implemented the WSQ in the retail, finance and training sectors and we will also include new industries like infocomm, food and beverage and tourism by the end of this month. Other industries, such as education and creative industries, are in the pipeline and to date, we have more than 6,000 workers trained under WSQ. I take Mr Yeo's point that we should include Mandarin. I am not sure whether we do or not, but if we do not,

I agree with him that we might have to include some of the material in Mandarin.

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Having industry and training providers participate in the WSQ framework is similar to Dr John Chen's suggestion brought up during the Budget debate. In addition, we are building WSQ training institutions to make sure that the delivery of training is high. These institutes will research how adults learn, undertake industry outreach, and ensure that training is tied to jobs. We have the first of such institutions, which is the Singapore Institute of Retail Studies (SIRS), jointly set up by WDA and Nanyang Polytechnic in October 2005. This institute aims to upgrade the skills of at least 5,000 existing retail workers, and to train a further 1,000 new workers in 2006. We will add more quality institutions. So, just as we have done for the pre-employment training, we are striving to build top-notch quality institutions for our workers, because we believe that investing in our workers is investing in our future. WDA will also collaborate with top international institutions such as the University of Nevada, Las Vegas, William F Harrah College of Hotel Administration, to develop WSQ for executive training in the Meetings, Incentives, Conventions, and Exhibitions (MICE) industry, in anticipation of the growth in that sector. So, I assure Members that even though the economy is doing well and there are jobs, we will not let up, because as you have rightly pointed out, we need to invest in our workers.

But I share Members' concerns for the vulnerable segments of our workforce, the low wage and older workers, who face more difficulty coping with economic restructuring. Mr Low Thia Khiang and Mr Chiam See Tong gave good ideas. Sir, I have not been to Morocco. I would certainly like to go there and see what he saw. Let me say that we recognised and, actually discussed, the idea of having an informal economy in the Inter-Ministerial Committee on Low Wage workers. We recognise that in neat and cookie-cutter-style Singapore, it is sometimes very difficult and daunting for, say, a housewife who wants to sell kueh , nonya , Malay, Indian, or whatever, to enter into the market place, because there is sometimes a huge bureaucracy that they have to confront. So, one suggestion which MCYS is willing to champion is for it to be the one-stop centre. In other words, if you have an idea, whether it is micro-enterprise or a small idea, you come to us in terms of financing, outlet, licensing, being able to cook in the house, and I will offer you a one-stop shop front. This will take time to develop. I must say that a number of Mayors have already launched these initiatives in the CDCs and have some success. But he is quite right that this is an area we feel that they can supplement their income in an informal economy.

As more jobs have been created, let me also give some good news to Members that

even those who were vulnerable to structural unemployment have found jobs. The number and share, which is the proxy we use, of the long-term unemployed, that is of those who were unemployed more than six months, have fallen sharply. Preliminary estimates show that 13,200 or 21% of the unemployed residents in December 2005 have been looking for work for at least 25 weeks. This is a significant improvement from the 21,300 workers or 28% of the unemployed, a year ago. The long-term unemployed, that is, those unemployed for more than six months, has also reduced. The figure now is 0.7% of the resident labour force, and this is down from 1.2% in December 2004 and 1.5% in December 2001. In other words, compared to December 2001, the long-term unemployed has fallen by about 1.5% to 0.7%, which is half. But, despite these improving trends, I agree with Mr Yeo that we must continue to assist those aged 40 and above, and as Mdm Halimah mentioned, especially those without secondary qualifications.

Mr Low Thia Khiang asked about under-employed, in other words, someone wants to rise higher than what he is in his current job. As Members can well imagine, it is a difficult proxy to measure aspirations. You could have, say, a CEO who earns half a million dollar and still wants to earn a million, or wants to do a bigger job, and by that definition, he would also be under-employed. So, it is a difficult measurement. The way to look at it is really unemployment rate, the types of jobs created and the wages. What type of jobs has the economy created over the last 10 years? And this is to address the impression that the jobs we created are low-quality, low-class, which is far from the truth.

Let me give you some figures. You take two contrasting marks, June 1994 and June 2004, a 10-year difference. Look at the occupations and you separate them. If you look at managers, proprietors and senior officials, in 1994, they formed about 11% of all occupations. It has risen now to 14%, a 4% jump. Professionals are up by 7%. Associate professionals and technicians are up by another 4%. In fact, the ones that have shrunk are really the lower quality jobs in terms of plant and machine operators, production craftsmen, service and sales workers. And wages have also gone up in terms of real wages and nominal wages. So, I want to assure Members that the Singapore economy, as we have done our restructuring, has delivered in terms of providing good quality jobs to Singaporeans. Now, there is a skills mismatch between what Singaporeans have and what the jobs want. But that is a very different argument from saying or giving the impression that our economy has not provided good jobs.

We need to help those with the skills that they have and the skills that the job or economy needs. The first area is employment assistance. Our training programmes are geared towards this objective. WDA trained and placed about 3,000 job seekers last year. It placed about 27,000 job seekers through the various job centres in the Distributed CareerLink Network.

Mr Leong Horn Kee has suggested that MOM should centralise certain job functions. Yes, we will see how we can improve, but let me just explain that we do centralise some functions. We have already created a nation-wide Integrated Job Bank where every CDC or, even WDA and partners, see the same thing. It is data-linked. It is the same job bank. There are common user items that we also share. But, as he has pointed out, the CDCs do offer wider geographical outreach and access to job seekers. Many of us at the MPS have recognised this. It is more convenient. I am very happy that the CDC, as a job centre, is in Toa Payoh, because as long as I tell my residents where it is, they just hop over to the interchange. It is very convenient. So that geographical access is important.

Also, there are other micro-trends that are also important. For example, the CDCs have quite a good understanding of what are the local trends and unique challenges. If you speak to the Mayors in different sectors, in fact, Dr Teo Ho Pin knows that there are certain industries that have a particular flavour and need. Other Mayors would have also understood there are different dynamics, and they have been able to, for example, organise job fairs which suit their districts, because people also do not want to travel very far when they want to work, if they can.

Mr Leong Horn Kee said the CDCs may have a particular mould and they may get a stigma. I want to explain to Members that, indeed, we are moving towards a work-assisted programme rather than pure unconditional handouts, and new terms beyond "Workfare", the CDCs have come up with "WorkSupport", "WorkAssist" - there is always a "Work" in front - which is what we are trying to move our system towards. That, "Yes, you can come and we can help you, but you also must put in some effort and we can tie up social assistance and employment assistance at the CDCs". That is actually what the Mayors, MCYS and MOM want to do. In fact, that indeed is the correct direction.

So I think there are possibilities because we have, as you said, decentralised it. These possibilities include things like micro-enterprises and even an informal sector. The CDCs offer out, for example, local licences to sell ice-creams or other items, and they can integrate these programmes because it is very geographically-based. But let me assure Members that we do not adopt a hands-off approach. Far from it. WDA supports, and will continue to support the CDCs in several ways, in addition to more funding. It will work with the CDCs to constantly review on how they can improve their placement, and draw on best practices. We also organise and train on profiling and career counselling of job seekers. You actually need trained professionals who know how to do it. It provides IT support and information on jobs and we also deploy managers to head certain job centres. Sometimes, WDA seconds managers to head these job centres. We will regularly monitor and review the performance of these job centres with the CDCs.

So although job placements are done at the CDCs, there is quite a strong coordination and support. But I agree with Members that we will review, learn and improve. Let me just say, to be fair to the CDCs, that they have done a very good job. They have placed more than 16,000 job seekers in 2005, 55% of whom had secondary and below education. When we met with the Mayors, as we started this, and some Mayors will remember, I was very careful to point out that the CDCs can actually make their lives easier by choosing only the more and better qualified ones, the ones with good education, and that makes their placement rate very high, but they may not need their help. But as you and I know, some of the cases that come to us during the meet-the-people sessions, indeed, it is quite challenging for anyone to look at face value and say, "Well, I am going to employ you." They need a lot of hand-holding, training and confidence-building. And for the CDCs to have placed 16,000, including some of these job seekers, is indeed an achievement. 53% were aged 40 and above. So the CDCs cannot be accused of selecting the best ones to place. 58% of those directly placed in jobs by the CDCs remained in their jobs for at least three months. So let us be fair to them. We know the type of people that we send to CDCs to ask them to place and they are not easy, they are not the ones with sterling resumes or, some, to be frank, with good job attitudes.

So, I do not think that removing the CDCs from the Distributed Careerlink Network will serve us better. In fact, we will lose them as valuable partners. I constantly assure them that we will support them, and we will continue to support them.

The second key focus is the Job Recreation Programme (JRP) and this is spearheaded by NTUC and has been very successful. The most important element in my mind, the most significant success that NTUC has done in the JRP, is to give hope. That is very tangible, and in many sectors, much needed for workers. It is very hard to get. Some of their stories are simply uplifting. To give hope to the masses of workers to say, "I can compete at my own level. I can have the confidence. I can move up. I, indeed, can see my wages go up. I can see my life being better", is something that very few unions in the world, and many have promised, but I tell you very few have delivered and NTUC should be given full credit for what they have done to the JRP.

The Government will show its support by giving $40 million over the next three years to support this programme. The $40 million will be used to recreate existing jobs and they work with companies. The unions have an enormous and extensive network that knows the ground, so they are going to work with companies, and as Mr Chay and Mr Ong Ah Heng have pointed out, it is not just giving money. You have to raise productivity, enhance job worth, improve the image, train workers to do the job well. So you see Mr Lim Swee Say wearing different costumes, depending on which month you flip back in the newspapers - one month is a baker's hat, then it is a security guard, and I am not sure what he is going to wear next. The point is it is a total package.

We have other programmes. WDA and NTUC are supporting the Singapore Taxi Academy and this is to enhance the job scope of local taxi drivers. Sir, the idea that NTUC and the JRP had was: how do you increase the value add? So, not only restricted to a taxi driver, but can he be a medical services chaperon? Because he is the first person to meet the patient, can he be a medical services chaperon (MSC) to ferry patients to and from hospitals? To become MSCs, the taxi drivers will undergo training to acquire patient handling skills, I suppose, how to move people on wheelchairs, and to familiarise themselves with the hospitals. With the enhanced job scope, the taxi drivers can expect to take home higher pay. By providing a transfer service for medical tourists between hospitals and airports, the project will also support Singapore's development into a regional hub for international medical services. It is a smart idea. He brings the patient to the hospital, and the family would also want to do some shopping and sightseeing and he also recommends to them. The economy wins. So this is what NTUC means by a win-win-win formulation. I agree with what Mr Ong Ah Heng and Mr Chay Wai Chuen have said, that it really is a complete supply chain that you need to work it out, in terms of job redesign.

We need to look at a range of solutions. And I was very thankful to Mr Chay that he brought up the Tanjong Pagar Town Council, because that is one classic example of how, as he pointed out, we have to only change the landscape in terms of contract, we have to change on how we mechanise and what we need to do to finally make a change in the industry. I will tell Members that that is a very good example of how partnership between Government and the unions have allowed us to navigate through difficult circumstances in restructuring.

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We are going to move on to more industries. For example, in healthcare, the National University Hospital is implementing a flexible work scheduling system. This will allow nurses to enjoy a better work-life balance. The Singapore General Hospital is reviewing the job responsibilities and career paths of staff in nursing and nursing support - enhance their job scope so that they can earn more and professionalise the jobs.

Two weeks ago, the Prime Minister launched the JRP and gave out some awards. Each story was an inspiration, but let me just mention one that has made a difference to a JRP, Ms Thilagarani. Ms Thilagarani is currently undergoing training in the ITE Skills Certificate in Health Care, and when she graduates, she will work as a Patient Services Clerk at SGH. Once the job redesign has been implemented, Ms Thilagarani will take on the non-nursing tasks and some of the nursing duties currently performed by enrolled nurses. She can expect to receive a higher pay, ranging from $1,100 to $1,300. In fact, many beneficiaries of the JRP have enjoyed higher earnings - between $1,000 and $1,800.

So we take Mr Chay's point that the JRP is not just giving money. In fact, under the job redesign incentive, each company can get up to $120,000. They can use it for job redesign, and this includes consultancy, procurement of equipment and training. This reflects the multi-faceted aspect of job redesign.

Mr Yeo Guat Kwang pointed out that older and lower-skilled workers can encounter difficulties. We will put in $30 million over the next three years to help these workers - about 45,000 of them can benefit -for basic aspects of IT literacy, workplace literacy and numeracy. WDA will provide another $4 million for SMEs, because we recognise that workers in SMEs also need training.

As at end of last year, more than 4,000 workers have been trained under ESS. Again, these figures can get bland, they can get dull, but they represent individual lives which have been touched by these programmes.

Some Members have also expressed concern for PMETs - professionals, managers, executives and technicians. Specifically, Mdm Halimah Yacob and Mdm Ho Geok Choo urged for more help for this group. Again, I have good news.

The first point is that we can render help to these workers if we create enough jobs. The economy will take care of them and, indeed, it has. In the last two years, it benefited PMETs, more so than other groups. In 2005, PMETs formed the biggest share of private sector job vacancies at 37%. In other words, of all the jobs in the private sector, 37% were due to PMETs. This is in contrast to 1995 when only 19% - it is almost double - the proportion of PMET jobs in our economy in the private sector.

On average, in 2005, 65% of retrenched PMETs managed to find a job within six months, which is higher than the overall re-employment rate of 61%. This is the highest re-employment rate experienced by retrenched PMETs in four years. So it has improved. Similarly, the unemployment rate for degree and diploma holders above 40 years has dropped to 1.8%. This is the unemployment rate. For degree holders, it is 1.8%; for diploma holders, it is 2.1%. A year ago, it was double that - 3.6% and 4%. So the unemployment rate has halved.

We do have specific programmes for PMETs, including in the SME sector. The SME Manpower Scheme (SMS) is one example. It was introduced in December last year, just recently. This was to recognise that SMS restructured and de-layered. There may be fewer jobs. But our SMEs sometimes have many job openings. So this was to help PMETs make a transition to SMEs, and we started this programme in areas such as finance, business development and human resource.

Similarly, Members would remember the Strategic Manpower Conversion Programme (SMCP) for the healthcare sector, and it has helped registered nurses and diagnostic radiographers. Since its inception, 282 PMETs are currently undergoing training.

We have also placed jobs for PMETs. About 15,000 PMETs were attended to and about 4,300 found new jobs.

Mdm Ho Geok Choo asked that we monitor this talent shortage, and this was the point that Mdm Halimah Yacob said, "Can you give some forecast?" Indeed, we do. We have the National Manpower Council which is a multi-agency and we meet together - economic agencies, manpower - and we give some forward projections. I agree with the Member that we need to give out more information. This is an area that we need to, not only for PMETs, but also for lower-skilled workers and across-the-board so that people can make career choices and decide what they want to go for training. So we will do that and we will work with industry, and that will form somewhat, as Mdm Ho suggested, a network hub for an advantage scheme.

I need to be realistic and be honest to say that it does cost more to help one particular PMET. For example, a conversion course for healthcare nursing could, theoretically, help 50 lower-skilled workers. But we recognise the investment and we will pour some investment but there is a need to allocate resources.

We will go the extra mile for service, as many have rightly pointed out. Mr Yeo Guat Kwang says we should up our service capabilities and we will spend $48 million over the next three years to build service capabilities and cultivate a service mindset, because that is where the majority of jobs will come from. I think it has helped. There is a nation-wide service awareness that now occurs. And we will develop WSQ and quality schools in key service industries. This will allow service workers to pursue their training. WDA is currently developing national customer service indicators. We want to know whether we have improved nation-wide and sectors. So we need to build some indicators.

Sir, before I close this section, let me address Mdm Ho's point about talent shortage, in terms of R&D. She is quite right. We need to understand whether we have enough, and we will conduct regular dialogues with HR and industries - to get from them a sense whether we have a steady pipeline to support our growth initiatives. There are some issues - portable medical benefits and contract workers which Mr Yeo has brought up. With his indulgence, let me defer to answer later together with other Members who have also raised cuts on those issues too.

In summary, Mr Chairman, people are our most precious asset. We will increase efforts and resources to invest in our workers - young or old and of all educational backgrounds because, indeed, that will be investing in our future.

Mdm Halimah Yacob: Sir, I just want to seek a clarification from the Minister. I note his explanation that a lot more high value-added jobs have been created. In fact, on the ground, that is the trend that we have also seen. Even as manufacturing companies relocate, more higher value-added jobs are created. We do note that in these sectors where high value-added jobs are created - high-value added manufacturing, aerospace, bio-medicals - there seem to be a strong presence of foreign workers. My question is: is there a strategy on the part of MOM working with EDB, maybe working with the Ministry of Education, in order to ensure that, over time, three-five years or so, there will be more Singaporeans actually going into these higher value-added jobs in some of these sectors?

Dr Ng Eng Hen: Sir, it is a valid and good point. Our overall strategy is to ensure that our growth benefits Singaporeans first. That is the cardinal rule and over-arching strategy. But, of course, there are realities. For example, whether it is the bio-medical manufacturing sector or aerospace, where we, first, wanted to establish an aerospace MRO - maintenance, repair and overhaul - we needed to ramp up. The airline industries were willing to send their planes here, but we did not have the technicians. And it takes at least two-three years to go through a polytechnic course and another four years for experience. To train our local pipeline, we only train them for what RSAF needs, for example, for some of our planes, and this would mean that we have to hold back. We recognise these practical realities. But at the same time that we allow more foreign workers initially, we slowly scale back, and this is indeed what happens.

This will happen for every sector. As some Members may have read, Macau is facing a shortage of workers in IR industry. And I am sure that we will face the same shortage. So we will calibrate it. But, overall, I think the figures will give some assurance - as I said, our unemployment has dropped - that the value of the jobs has gone up and Singaporeans have gone up the value chain. So it is a metric that we watch very closely. We will ensure that Singaporeans have good quality jobs and that their wages can go up.

Mr Low Thia Khiang: Sir, I would like to ask the Minister why he thinks that statistical data on under-employment and skills inadequacy employment are not really useful to understand the extent of the problem of structural unemployment, given the fact that some of these people might actually not maximise their skills and also their qualifications and experience in certain jobs. And that would not generate a maximum effect in the economy.

Dr Ng Eng Hen: Sir, I did not quite say that I did not think they were useful. I was saying that it was very hard to measure under-employment - not unemployment. It is under-employment which is Mr Low Thia Khiang's point. In other words, if we took a survey of 1,000 workers in a particular company and say, "How many of you think you can do a bigger job than what you are currently doing?", you may get answers. In fact, the service worker may think that he or she should be manager. But how do I act on it? A survey of under-employment is a measure of aspiration - what I want to become or what bigger job I want to do. Very few countries track that, honestly. The only proxy that we have is asking somebody, "You are working part-time, do you want to work full-time?" That is quite objective. That is based on time. But if you ask him, "Are you working to the fullest of your potential?", I would venture a guess that many Members in this House would say that a good proportion would say no and, therefore, you are under-employed too. So it is a difficult metric to measure and it is not useful from a planning point of view. What we want to do is to make available training courses and provision for workers to step up, so that if they want to, we provide the training to the best of our ability. And then, they must also go and market themselves in the marketplace to move to a better job.

So, it is not that we do not find it useful. It is that the data is quite subjective. But we do look at other issues, in terms of part-time, full-time, employment rate, wages and the percentage share of PMETs' jobs.

Workfare

Mr Seng Han Thong (Ang Mo Kio): ( In Mandarin ): Sir, in encouraging the low-income workers to qualify for the Workfare Bonus, they have to work continuously for six months before they can qualify for the Workfare Bonus. I am glad that the Government has been flexible in allowing workers who have worked accumulatively for six months during the last 12 months to qualify as well. I think accumulatively is very good. Many low-income workers can now qualify for the Workfare Bonus. We know that a lot of low-income workers work for three days and stop for two days. Today, they work as a painter, next week, they sell durians. On another week, they may be doing another job. They are very grateful that the Government is flexible in dealing with this issue.

Another thing is a technical problem which MOM would face, ie, how do you count the six months? There are many workers who ask, "If we work five months and 28 days, will we be ruled out?" I think we should take five working days as one week, hence, 28 working days should be deemed to be one month. If they work hard and deserve the bonus, we should give it to them. They are the people who deserve our help.

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On this concept of continuous working, some people do not know the rationale for Workfare. They asked, "They have work and receive income, then they get the welfare. I am unemployed, yet I don't get the welfare." They do not get the point. Even Mr Low Thia Khiang did not understand. He said that we are now facing structural unemployment and a lot of professionals are unemployed. Although they are initially prepared to be under-employed, but later on, they cannot take it anymore, they will migrate to other countries. Actually, not many people migrate because they cannot find jobs in Singapore. If their skills are not relevant here, I do not think other countries will take them in too. In Singapore, you need to have the relevant skills to find jobs. If you do not have the relevant skills, you cannot get a good job. I think the workers should participate in all the training programme or NTUC's Job Recreation Programme. When they have the relevant skills, they will have no difficulty getting a job.

Unemployment does not cause people to migrate. The important thing is that we have jobs but no suitable people to take them. We must have people to do the job.

Workfare Bonus

Dr Lily Neo: Sir, I support the intended social objectives of the Workfare Bonus to help our older, low-wage Singaporean workers.

There is a segment of Singaporeans who fall under the vulnerable low-income group with no job security. So much so they are often at their employers' whims and desire. I have heard from both my residents and elsewhere that some older workers earning less than $600 a month on irregular jobs, though qualify for the Workfare Bonus, do not dare to come forward and apply because they might lose their jobs. There is a segment in Singapore that finds regular employment hard to come by and would agree to anything to find work. Often, it includes no contribution to CPF. As a result, this group is afraid to register for fear of upsetting and implicating their employers with CPF non-payment. The older workers risk losing their jobs and livelihood if they register for the Workfare Bonus. They are caught in a dilemma. May I ask the Minister how does he intend to address this problem?

Sir, a second low-income group that I like to ask the Minister to consider extending a helping hand to help them access the Workfare Bonus is that comprising those who are not plugged into the regular channel of communications. These are the elderly Singaporeans living in rental flats and subsisting on irregular and odd source of income. This is the group that would benefit most from the Workfare and Progress Bonuses. We need to make sure that they do not fall through the cracks. May I ask the Minister whether more can be done for them to ensure that they do not fall into disadvantage?

Mr Chiam See Tong: Sir, in my Budget Statement speech, I brought up a specific case where a worker missed out on the Workfare Bonus. I believe it was not fully answered by the PM. This case concerns a worker who earns a basic salary of $1,200 a month. He has a wife and three children, and he worked hard and did a lot of overtime which earned him a gross salary of $2,500 a month. Since his salary of $2,500 is over the $1,200 and $1,500 Workfare Bonus upper limits, he is not entitled to the Workfare Bonus. The way the Workfare Bonus is framed is not fair to the hardworking Singaporeans. Can the Minister comment on whether something can be done for workers in this category?

Employability of Older and Low-Income Workers

Mr Ong Ah Heng: ( In Mandarin ): Sir, just now, the Minister talked about employability of older workers. With our ageing population, we should take some steps to give older workers more job opportunities, particularly those who are physically and mentally fit. The NTUC has convinced some 50 unionised companies to employ older workers. But for those companies which are yet to be unionised, is there any plan on the part of MOM to persuade the employers to also agree with our plea to employ the older workers? The exercise to employ older workers cannot be carried out unilaterally. We cannot expect MOM to dictate it. We need the support of the employers. As the NTUC works its way into convincing the unionised companies, can MOM find some way to persuade the non-unionised companies?

Employability of Older Workers

Mr Leong Horn Kee: Sir, allow me to read out a note I received recently from a resident when I went on my rounds of house visits. I quote: "It has been many years since the economic downturn. Many people have difficulty looking for jobs. I hope the Government can stop using the term "older workers aged 40 and above". This has a great impact on us as many naive employers do not want to employ people who are 40 and above. Even if we managed to get a job, we are often abused with heavy workload and little pay, as low as half of what we used to earn. No matter how good we do our job, employers often think otherwise because we are older workers."

Sir, I think this note encapsulates the very sad sentiments of older workers in their sense of loss and pain being unemployed, and being looked down upon as useless when they grow old. I think this resident is a little mistaken as "older worker" is generally defined by the Government as "50 years and above", not 40 years and above. However, this goes to show that people do feel that even 40 years old and above are deemed older workers by some employers.

I hope that the Government will do more to encourage both the public and private sectors to employ more older workers. We know that workers above 50 years old are not necessarily less energetic, slower or less capable than the younger workers. Older workers have experience and wisdom. These traits are in fact very valuable. There are many fine examples of people around the world who are still productive when they reach the age of 50, 60, 70 and even 80. In the US, Warren Buffett, the world's richest man is still working at the age of 82. He has not mentioned about retirement. In Singapore, we also have our own notable examples of our President, Mr S R Nathan, and, of course, our Minister Mentor, Mr Lee Kuan Yew, who are also in their 80s. They are doing a great job and soldiering on. Most commendable, Sir!

As medical care and healthcare improve, people will live longer and remain mentally and physically active for longer years. I feel strongly that the Government should lead by example. It should stop labelling the older workers and curb the practice of early retirement of our senior civil servants, army officers, police officers, general staff and workers. Older workers should be encouraged to work as long as they can and willing to. They would agree to be paid less as they have passed their peak, but employment should continue. Older workers would not feel any sense of shame or stigma if they are paid less, provided they continue to be gainfully employed. They will retain their pride. Therefore, I strongly urge the Government, statutory boards, GLCs, and TLCs to take the lead to employ more older workers. The private sector would then follow the Government's example.

Mdm Cynthia Phua: Sir, finding employment for older workers, especially those who are not equipped with special skills, is a problem. The current trend among employers is to find ways and means to retrench older workers and push them back into the job market. For the next employer, it is a long and painful process to reassess the ability and performance of these retrenched older workers. We need to change this trend of shoving our older workers to the job market at age 40 to 50. While I am not advocating an iron rice bowl mentality, we need to encourage our employers to look into the redeployment of their workers at each stage of their employment career so that their skill sets stay relevant and they can contribute positively to the job market.

We should make definite review at definite stages of a worker's employment. The review of the skill set of the employee can be from a helicopter view of the person or a review of the actual skill set needed for him or her to handle the work. Employers should plan and chart ahead of a person's career in the company. This review can be done when the employee is at the age of 30, 40, 50, and after which the review can possibly be done at shorter intervals as the employee becomes older. At each stage, the workers are encouraged to stay on at work. The main objective is to keep people working and to create the environment so that they can stay longer to get additional training.

Secondly, this definite review would also be in line with the remuneration of an employee. He is paid for what he is doing and not based on his seniority. In this manner, companies are more willing to keep the older workers within the company. They would have to assess between reliability and agility. And as human beings, at different stages in our life, our physical and mental capability will vary. Recently, we went to Japan , and we note that this definite review is done for their older workers at age 50.

Next is the cost of healthcare for older workers. It is a fact that health insurance premium is higher when a worker is older. It is also a fact that it is expensive to insure a worker at an older age in view of his or her health condition. I have gone to great lengths, during the debate on the Prime Minister's Budget Statement, to ask the leaders of the tripartite relationship of the employer associations, the NTUC and the Government to resolve the question of the cost of healthcare for the older workers. Unless we walk the talk, we will still be talking about this in the next Budget in 2007. Where are we stalling? When can we begin this portable medical benefits scheme?

Finally, we should be able to review the jobs within the job market as many of our older workers do not have specific skills. We can get employers and unions to agree that certain general jobs be reserved for older workers, eg, F&B work, kitchen helpers, storekeeping, support staff in libraries and childcare centres, and other backroom operations where the demands are not pressing. The older workers can be channelled to work in these areas. Those who have the qualifications, skills and ability to cope will, of course, take on more front-end jobs.

Before I end, I am glad that the Minister has mentioned that it is important to develop the service culture under GEMS. Unfortunately, recently, when we encouraged our hawker stallholders to talk about GEMS, WDA is not as supportive of this matter itself.

Mr Seng Han Thong: ( In Mandarin ): Sir, a few years ago, we were saying that by age 50, we need to have savings for our old age, a wife to keep us company, some friends to talk to and good health to do what we want to do. Now, we talk about lifelong learning and lifelong working.

The mindset now is different. In those days, when you are old and still working, it was considered a shameful thing. But now, the older people want to work. They feel very uncomfortable if they are not working. Many older workers began looking for alternative jobs after retirement. Some work as newspaper distributors, some as gardeners and some as car-washers. They just want to have something to do. Moreover, some of them are actually getting jobs which are better-paid than their previous jobs.

The Government now sets aside more money for the Lifelong Learning Fund. However, it seems to be targeted at the younger people. As we encourage the older workers to continue working, we would like to see the Government opening up more job opportunities in the various departments and train the older workers to fit into these jobs. Some of the training courses should be conducted in Mandarin to enable the older workers to participate in. We need to actively settle this matter. If we do not do it now, it would be a problem in the future. As we promote lifelong learning and lifelong working, we should encourage everybody to work and find some suitable work for them to do.

4.30 pm

Ms Irene Ng Phek Hoong (Tampines): Sir, I have residents coming to me looking for jobs. They used to be 40-plus or 50-plus, but, increasingly, over the last few years, 60-plus, 70-plus, and they always ask where are the jobs for them. I have referred them to the North East CDC, as all of us are now looking for jobs for older workers and they share a databank with other CDCs. And a few months, half a year or sometimes a year later, the same residents would come back and say no job-matching for them yet. Even those who have been job-matched, they say the employers tell them, "Sorry, you are too old".

It is a recurring story, Sir, and I feel that there must be some truth in what they are saying. I understand that the CDCs are doing as good a job as they can. But I think the problem is deeper. One is whether there are jobs for them. The Minister said that there were 61,000 jobs created last year. I would like to ask the Minister, of these 61,000 jobs, how many have gone to older workers. I also want to support the point made by my hon. colleague, Mdm Cynthia Phua, about whether we can reserve some jobs for older workers. In other words, looking at the job landscape and these jobs that are being created, which all the investments are bringing in, can we, say, " chope " a few for our older workers, without introducing rigidity into the system or making our employers uncompetitive, ie, giving them wage enhancement and training, making sure that they are up to the job?

I would also like to ask the Minister whether he would consider setting up a job-matching centre dedicated to older workers because, with the present system, we have the CDCs doing it. They have many other things to look out for. There are community programmes to do and welfare assistance to look out for. So, when the older workers go to them with their problems - they may have medical problems and some of them may have problems finding suitable jobs - they may not receive the care and attention that they need. Given that we have an ageing workforce, and that this trend will continue far into the future, should we not invest in a centre dedicated to finding jobs for older workers, training them, placing them, giving them the necessary support that they need?

Sir, this is done in other countries. In Japan, as we know, it has the Silver Jinzai Centre, a human resource centre which matches employers and job-seekers aged 60 and above. It registers about 750,000 senior workers and, according to their record, about 80% of them are placed in jobs ranging from school tutor to gardener. I am not sure whether we have achieved anywhere near their success rate for our older workers in Singapore.

Sir, in Britain, they have a government programme that provides job search assistance for people aged 50 and older when they have been out of work for six months or longer, and also offers training opportunities and wage enhancement. There is a need for such a centre, and I hope that our Minister for Manpower will consider this.

Increasingly, we are also moving towards the re-employment of older workers beyond the retirement age of 62. I commend all the initiatives done under ADVANTAGE! to give incentives to employers to hire older workers, and I know more will be invested in this initiative.

Sir, I hope, when the contracts are being renegotiated, that MOM will make sure that older workers will not be discriminated against or even exploited. Sometimes, I wonder, especially for higher skilled workers, say, they are 62 years today, doing the same kind of job, contributing as much as ever, then when they are 63, suddenly, their value drops, as if, overnight, they have changed. But all that has changed really is that time has passed. And I worry that, if we move in this direction without clear guidelines, employers will say, "OK, you are 63 today, half your pay, no medical benefits and no annual leave, because the Government is now moving towards re-employment of older workers and this is what employers must do. Therefore, it is acceptable to cut your pay according to a new contract."

Sir, I know that the unions are working very hard to make sure that workers get fair terms. But I hope that employers will also do their part, and that the Ministry of Manpower will also make sure that when employers hire older workers beyond 62, it will be on fair terms for them.

Mr Chew Heng Ching (East Coast): Mr Chairman, Sir, I echo the views and concerns raised by various Members before me on the need to do more to help older workers get jobs. This is more so, as our population matures and Singaporeans live longer as a result of improving standards of healthcare and quality of life.

Sir, I applaud the Minister for setting up the Tripartite Committee on Employability of Older Workers. The Committee has submitted an interim report, and I understand it is expected to complete its work by the end of the year. The Committee may be looking at legislation for the re-employment of older workers. I have read the report.

Sir, whilst I acknowledge that the Committee's work is work-in-progress and it may be some time yet before legislation can take place, I suggest we start changing perceptions and mindsets among employers, and this includes the Government, to encourage them to employ older workers. Older workers have the advantage of wisdom, experience, stability and knowledge, which, like what my colleague, Mr Leong Horn Kee, has said, the younger workers do not have. Perhaps, we could initiate a nation-wide campaign to educate all employers on the virtues of employing older workers.

In addition, I suggest that the Government take the lead and implement practices to employ older workers in the public sector, in much the same way as what the Government had done in the past in taking the lead in employing handicapped Singaporeans, ex-prisoners and ex-drug addicts in the public service. The engagement of these older workers could be on shorter durations, on contract basis, say, one-year, two-year or three-year contract, renewable every year subsequently, or it can be on a project or assignment basis. These jobs need not necessarily be limited to menial jobs like cleaners, sweepers and lift attendants, but could be extended to include the services of older professionals such as engineers, accountants, managers, and clerical officers.

Sir, by doing so, we can convince private sector employers to do the same and start re-employing older workers. May I urge the Minister to convey this suggestion to the Public Service Division of the Ministry of Finance for implementation?

Central Provident Fund

Mr Yeo Guat Kwang: Mr Chairman, Sir, Singaporeans understand that the CPF is fundamentally for old age, medical expenses and basic housing, and that the Government will continue the CPF system around these core objectives.

However, with the number of changes proposed and made to CPF, for example, lower CPF contribution rate and ceiling, Singaporeans worry that savings for old age will be eroded. We must ensure that our workers' CPF savings will have stable and reasonably good returns. Allowing individual CPF members to invest their savings seems not to be a preferred choice, and the privately-managed pension plan also does not seem to be an effective alternative. So what is the Ministry's long-term plan for CPF savings to ensure that we have better returns? I would like to ask the Minister to provide the House with greater details and insights.

[Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair]

4.35 pm

The Chairman: Ms Eunice Olsen is not around. Dr Ng.

Dr Ng Eng Hen: Mr Chairman, Sir, let me first thank the many hon. Members who have spoken in support of the recommendations from the Ministerial Committee on Low Wage Workers. This is in specific reference to Workfare and other initiatives. Indeed, many MPs - Dr Tan Cheng Bock, Mr Wee Siew Kim, Mr Ong Ah Heng, Dr Amy Khor and Mr Ang Mong Seng - had previously in this House raised the need to look after the lower-income group and to help them cope with the effects of economic restructuring and globalisation.

It was in response to these calls and public feedback that the Prime Minister set up the Multi-Ministry Committee in July 2005. In formulating our strategies, the ministerial committee consulted widely and listened attentively. Members of the committee met with employers, unionists, community and social leaders, low-wage workers themselves - we had some sessions with them - and the general public. This gave the committee an in-depth appreciation of the poverty traps, the vicious cycles of the low-wage workers and their families that kept them down.

Most Members of this House would have read the report that we had circulated, and will be gratified that the majority of stakeholders that we consulted, like many Members in this House, and indeed the low-wage workers themselves, argued against "unconditional needs-based assistance." Many understood that such an approach was not sustainable and, in fact, did not help workers over the long term. Workers wanted help to contribute to the economy and gain self-reliance. This is what they told us. The recommendations were crafted, taking in their feedback and views. After the release of the report, the committee received positive feedback from diverse groups of Singaporeans. While we are gratified with the resonance and affirmation, it would be prudent to focus on the fundamentals of our recommendations on how we should assist low wage workers.

First, continued economic growth and job creation is the best assurance of a better future for low wage workers;

Second, the efforts to help low wage workers must reinforce our strong work ethic;

Third, increasing opportunities for upward mobility should be the main means to help low wage workers; and

Finally, we will focus on raising the skills and know-how of the next generation, to create hope for their future.

These are the four fundamental principles which we listed in our report. The Government has approved the recommendations and set aside $1 billion to implement them. While the Workfare Bonus has attracted much attention during the Budget debate, I want to refocus attention on where the main emphasis of our recommendations lies. Yes, the Workfare Bonus was meant to incentivise work and help meet short-term needs. This was a practical response to the reality that the incomes of low wage workers were held down as a result of globalisation. We understood that. And it was positioned as a one-off scheme over two years for reasons spelt out by the Prime Minister.

But I want Members to note also that the larger share of $630 million of the $1-plus billion is to meet long-term goals through recurrent spending. Not one-off. $230 million will be spent on enabling work, expanding job opportunities and training for higher skills. About $250 million will be spent on helping the children of such families move ahead in life. Another $150 million will be spent to help them own homes and have assets as a reward for their work.

These recommendations are not an election ploy, as some have suggested. The ultimate goal, through the next election and every election thereafter, is to ensure that Singaporeans progress together, as one people. I quote from the report, chapter 1, paragraph 10:

"The common vision of Singaporeans working and progressing together must carry on through to the next generation. We must help those who can work to find meaningful jobs and earn adequate wages to support themselves and their families. They should be able to own their homes, educate their children and put aside enough for their medical and retirement needs."

All Singaporeans must share in the fruits of our progress. These are not just short-term aspirations but long-term goals that this Government has committed itself to.

Let me now address some of the specific concerns and questions about the Workfare Bonus raised by Members during the Budget debate and in this COS.

In response to Mr Seng Han Thong's question, we assess regular work based on the number of months worked, rather than on the number of days worked. We know that there are cases that need special consideration. We are not completely inflexible. As the hon. Member rightly pointed out, we have already made one adjustment by relaxing the six continuous months' rule to six months over one year for those who have really genuine difficulties. But I would like to remind Members that the thrust of the Workfare Bonus scheme is to incentivise long-term goals, to make sure that the worker keeps a steady job, for at least six months or more, to be self-reliant. That is the overall goal of the scheme.

This is why the Workfare Bonus is deliberately divided into two portions, so that those who did not qualify for it this year will do so next year. So we want to encourage them to try to enter the economy, now that the jobs are there, to find a regular job. I know that it will cause some pain on the ground, but workers will have to adjust. I think it is the right thing to do, and we will need, as we said, help from the community, as well as business and unions, to achieve that. Our counter staff at the various CCs, CDCs and CPF Board have been trained to direct the unemployed who cannot qualify to the Distributed CareerLink Network and the job centres to allow them to have more comprehensive assistance.

Mr Chiam pointed out that those who work hard and then exceed the upper limits may not receive the Workfare Bonus. I agree with him that for that person who has worked very hard and does not receive it, he may feel that this is not equitable. But all of us recognise that we are targeting that assistance to the lower-income group and that there has to be a ceiling to that, and we have chosen $1,500. In response to his example of the $2,500, he has forgotten that that family can benefit from the housing grant, which is not a small sum by any measure - $20,000, $15,000, $10,000 and $5,000 - and this is on top of other housing grants

that we have given out. I do not think that we should cast it as if Singaporeans will not get anything if they work very hard. That is not the message, but we are targeting our assistance to lower-wage workers.

4.45 pm

During the Budget debate and COS, both Dr Lily Neo and Dr Warren Lee highlighted that some workers would be afraid to sign up for the Workfare Bonus in case they got themselves and the employers into trouble for not paying their CPF. Let me assure Members that the purpose of the income declaration exercise is to facilitate those without CPF contributions and who not have received an income tax return to receive their Workfare Bonus if they fill up that declaration form. It must be a true declaration because we can verify in some cases and the penalties are quite stern. But if it is a true declaration, the purpose of the income form is to facilitate the Workfare Bonus. If during the process, they decide that they want to complain against the employer, we will act.

Finally, on Workfare Bonus, Mr Seng Han Thong has suggested using this exercise to promote the concept of Workfare. We agree, because we believe that for Workfare to work, we need to help that layer of Singaporeans who find it hard to cope with restructuring. Yes, there will be skill gaps, attitude gaps and aptitude gaps, but if we resort to an unconditional need-based, in other words, if you need, I give it to you, we would have done them a disservice because they will expect the next handout every time they need it. So we have to couple it with these efforts to make them self-reliant and I take that some difficulty there will incentivise them.

Let me now talk about employability of older workers. Sir, this has been close to many Members' hearts in the past. Assoc. Prof. Koo Tsai Kee, Mr Loh Meng See, Dr Teo Ho Pin, Mdm Cynthia Phua, Dr Lily Neo, Dr Ahmad Magad and, recently, Mr Seng Han Thong talked about training that we ought to incentivise this training, and we agree.

Many Members - Mr Leong Horn Kee and Mr Chew Heng Ching - have now asked that we ought to ask employers and industries not to view older workers negatively, and to highlight enlightened employers who hire older workers. Some have suggested an Equal Opportunities Commission. Let me say that Government feels as passionately as Members, but we need to translate your passion into real results, and that is our job. And we want to take a very pragmatic approach that works. I would want to caution ourselves that this would take time. We will need to work with industries and every industry that we succeed in will be a step forward. But there will be very few magic bullets that we can shoot. We do not agree with the quota system and for good reasons that the PM mentioned. If you move down that way, it will be no different from having moved down, and, in my last reply, I talked about how when you asked for quotas for older workers, it will basically rigidify your labour market and it is very inflexible and people can work around it. If there are quotas for older workers, why not we have quotas for women or other groups? In the end, you are left with a very small group that would not have a quota, so it is reverse discrimination. In other countries where quotas have been applied, it has not worked. We think that we ought to change practices pervasively and work very hard at it. But we have acted on some of the Members' suggestions, and one way to go is the Tripartite Alliance for Fair Employment and Practices, which is one suggestion of the Tripartite Committee to promote mindset change of employers and employees. They will go on a roadshow sometime this year. This is in response to Mr Chew Heng Ching and Mr Ong Ah Heng.

We will publicise examples of good employers and excellent older workers. We will facilitate sharing of best practices and pilot projects that have worked. Many of you have asked for the civil service to take the lead. Minister Teo Chee Hean has answered on what the civil service position is. To just add on to his reply, civil service is aware and is in tune. In fact, they were very much involved in our discussions. There are certain organisations that require certain aspects. We do need a vibrant and young SAF to be optimal but where the civil service can move in certain areas. We will work with them to develop some of the programmes that can redeploy some of the older workers. At the end of it, we have to convince businesses that there is a business advantage for hiring older workers.

Forward-thinking companies around the world have already started changing their employment and work practices to accommodate older workers. In essence, they are turning the problem on its head and using an ageing workforce to its business advantage because they know that that is the group that is growing the fastest.

Let me give you one example, IBM in the United States. IBM was concerned about the shortage of IT workers, and it looked at post-retirement employment, alternative work schedules, benefits, mentoring, and ways to transfer knowledge. The company is now working to engage former IBM alumni. They have an IBM alumni where they worked for the company, they keep a database, if they move and the company needs them later, they will bring them back. This is an on-call-on-demand workforce which they are capitalising. Some of these retirees are engaged via intermediaries to work on projects. The scope may not be long but it may work both for the company and the employee.

BT Group in the United Kingdom is another forward-thinking employer. It started a programme called NewStart and this challenges employees' expectations about retiring early. The programme provides flexible options. I presume near retirement, they would say that these are options that you can tick off, that you do not have to retire, you can either be redeployed, job-share at lower grades, phased sabbaticals, reduction in working hours, and secondment to other companies. There is a menu of choices, and we will learn from these examples. Employers who act now will find it in their best interest, but we have to work with industries. This is something that you cannot grandstand and say that this is good or this is what you want. You have to engage the industries to slowly change their practices. Workers also need to change their mindsets, in terms of being redeployed and being adaptable to flexible working schedule.

In terms of specific measures, what have we rolled out? I am pleased to report that even though we launched the ADVANTAGE! scheme quite recently, 31 companies have come on board. Together, these 31 companies who hire more than 800 older workers retain 480 workers approaching or above age 62, and implement job redesign projects that will improve the work of 4,400 older workers. They span various sectors, including manufacturing, F&B, retail, public transportation, and healthcare.

Let me give you one local example. SingHealth has tapped on ADVANTAGE! to set up what they call a Silver Connection Office. I promise you that you will get a slew of these new initiatives coming up. It is called the Silver Connection Office run by mature workers for mature workers, something like what Ms Irene Ng said, a dedicated centre for job search for older workers. The Silver Connection Office will recommend working options, new roles and older worker-friendly policies as well as run activities, workshops, and counselling services for SingHealth's 5,200 mature employees. For a start, the Silver Connection Office has hired a 60-year-old Programme Consultant on a one-year contract to manage this set-up. Programme executives will be hired to staff the office and go through a preparatory Diploma in Counselling Psychology course, subsidised by ADVANTAGE's training grant. This office aims to re-employ about 80% of its retiring employees.

Translink Express is another company that has come on board. Translink Express helps food service chains like Coffee Bean and Tea Leaf to deliver food products from the warehouse to the outlet. Originally, the products were transported in pallets and this required physical strength to lift them. Further, you have to do it in two trips because you have to do it for chilled and non-chilled, so delivery workers had to do it twice and this required manual strength. This favoured younger workers. The company recognised that they did not want to change that and with the help of ADVANTAGE! scheme, they found a solution. Instead of using pallets, it now uses containers and cages which can be used to pack both chilled and unchilled, and this saves the workers one extra trip. They are wheel-mounted for easier movement, and productivity has gone up and is suitable for older workers. These are simple examples that you can do, company by company, process by process, to be able to move this initiative forward. I know it is slow sometimes but we need to persevere. I encourage more companies to come on board and we need to get business leaders and there are many enlightened business leaders who will come on board.

During the Budget debate, some MPs - Dr Teo Ho Pin, Mr Wee Siew Kim and Mdm Cynthia Phua - asked whether we can help older and less educated workers to set up their own business. WDA is piloting a 12-month programme to help individuals become self-employed and earn a living by starting and managing a business. This is a pilot programme where they are taught how to start and write business plans. One participant in the pilot that has been done so far is Mdm Toh Ah Tuan, who is 45 years old. She has two young children, relying on her husband's monthly pay of $800. Mdm Toh joined this pilot scheme and was put through a three-month job attachment programme at McDonald's, where she was rotated to do different types of work. She also attended the Retail Workforce Skills Qualification course and in February this year, with the help of the mentor, Mdm Toh rented a stall at a coffeeshop to sell fish soup. Her business is doing well and they tell me that she takes in about $180 a day, not bad. The mentor will continue to guide her for the next nine months. I give you this individual example to explain to us that it does require hand-holding and helping for these processes to move along.

In response to Mr Yeo Guat Kwang's earlier question, and also Mr Chew Heng Ching who also talked about looking at re-employment legislation, we will be looking at the legislation that Japan puts in where older workers beyond age 62 are given a re-employment contract.

To answer Ms Irene Ng, we do issue tripartite guidelines on re-employment, medical and other benefits that need to be adjusted. These were formulated with the inputs of employers and workers, so it is a set of guidelines that form the yardstick and benchmark.

Mdm Cynthia Phua and Mr Yeo Guat Kwang asked about portable medical benefits. Last year, MOH reviewed and revamped MediShield. The changes are to protect Singaporeans against the financial burden of large hospital bills, at least at the Class B2/C level. Members should understand that this is a de facto national scheme that providers will have to subscribe to and cannot cherry pick. In this way, premiums for essential coverage under MediShield are kept affordable. If you think about it, this, in fact, enhances the portability of medical benefits. I want us to be careful, when Members talk about portable medical benefits, where indeed, they may not be talking about portable medical benefits, but about comprehensive medical coverage. Let me explain. As long as someone has enough in his Medisave to pay for the premiums for MediShield, even if he is not working or has retired, in essence, he is covered for basic medicare. And the MediShield premiums are affordable. Let me give you an example. We keep saying that it costs a lot to hire workers and we work against ourselves because the messaging is conflicting. We actually reinforce that notion that if the older worker is hired and he falls sick, you have to pay a very high medical bill and if he does not have MediShield, maybe the employer has to pay. The truth is not there. Let me explain why.

What is the annual premium for MediShield for someone age 40? It is $40.

For age 50 it is $80, aged 60 it is $160, and aged 70, it is $275. This is the annual premium. This means that even a worker who earns a few hundred dollars a month would have enough Medisave to pay for his annual premium plus many more years' premium even if he is not working. So the key to portability of medical benefit is you must work long enough and accrue enough in your Medisave. So we should not send mixed messages. I think the revisions in MediShield, in fact, work for older workers, because they were set to protect larger hospital bills, and it is the older workers that are likely to have longer hospital stays to incur larger bills. So, companies, therefore, do not need to be biased against hiring older workers for fear of being saddled with high medical expenses. Now, the tripartite partners are studying how medical coverage can be increased, but that is different from portability.

5.00 pm

One idea, as Mr Yeo Guat Kwang pointed out, is to convert what the company spends on medical benefits for its Workfare into individual contribution. Then the worker purchases coverage for himself. The civil service, for example, moves to an individualised system. This is known as the Medisave-cum-Subsidised Outpatient System (MSO), where in-patient subsidies were replaced with 1% additional CPF contribution in the civil servant's Medisave account. This may be a model that the tripartite partners can study.

But MPs have also asked to increase coverage to reduce deductibles and co-payment elements. That is quite different from increasing the portability. I want to issue an universal caveat that nothing is for free. For the same premium paid, you can either choose to buy a policy that insures against a big medical bill or a different policy that pays for your smaller bills but less of your big bills. It is a necessary trade-off. But if you want a policy that comprehensively covers the first dollar from the smallest bill to the biggest bill, then your premium must go up. As most big bills are incurred when one is older, I think it is prudent to opt for a system that covers more of your bigger bills through higher deductibles which excludes smaller bills. This will ensure that Medisave contribution lasts beyond retirement, where most medical costs are incurred. So, to reiterate, as long as the person is working and contributes to his Medisave, and has enough in his Medisave account to pay for his premiums for MediShield, even when he is not working the premiums are still paid, he is still covered.

Mr Yeo Guat Kwang asked for helping CPF account holders gain better returns. I agree. Mr Inderjit Singh and Dr Teo Ho Pin raised similar issues in the Budget debate. As a first step, many Members will remember that, as on 1st February, we tightened the criteria for entry of new funds. Now they have to meet the benchmark of the top 25 percentile in their global peer group and their expense ratios must be lower than the average. But beyond that, we will help members understand the factors that impact the fund's performance, and make available tools and information through CPF's website. We will also encourage greater disclosure by fund managers and publish information on fees and costs to help members make comparisons.

The second strategy is PM's suggestion in September last year of a default pension plan which is optimised for the needs of a typical member. Such a scheme would basically aggregate members' funds for long-term investments, to reap economies of scale and lower costs. We are presently studying this, but it will take time. Because it is not just about designing a scheme that is more cost-efficient. The greater challenge is to explain to CPF members that nothing is for free, that higher returns will be accompanied by higher risk.

The improvements that we need to make to the CPF system will have significant implications for all of us and so I am going to take my time. But we should also draw from the experience of others, taking advice from local and foreign experts. To facilitate this, I am, therefore, pleased to announce that we have set up the International CPF Advisory Panel, chaired by Mr Koh Yong Guan, who is also the Chairman of the CPF Board. I will ask the Clerk to now distribute to Members a press release to be issued by CPFB today on the composition of the Panel. As you can see, the Panel will comprise both local and foreign experts in pension funds and investment management. We do not need to reinvent the wheel. We can learn from their mistakes as well as their pluses. Their advice will help us to better achieve our objective of enhancing returns for members.

Sir, our combined efforts on these various fronts - low-wage workers, older workers, CPF adequacy, medical benefits - will improve conditions for Singaporeans. It will ensure that we work and progress together.

Ms Irene Ng Phek Hoong: Sir, the Minister did not reply to my question on whether there are jobs out there for older workers and to reassure that where there are jobs they will be matched to them. Also, he did not reply to my question on whether he would consider having a national centre that will cater to job matching and also to train older workers for new jobs, not SingHealth, but a national one.

Dr Ng Eng Hen: Sir, in a sense, I did. I said that last year there were 61,000 jobs created for everyone. So the first question to ask is: are there enough jobs created for Singaporeans? When we create 61,000 jobs for Singaporeans, obviously, if your average number of entrants per year is only 31,000, you have actually created quite a lot of jobs. Then the issue becomes: can the person do the job? This is where we can help the older workers.

We will consider the idea of a dedicated centre for older workers. I am not sure whether that works for or against us. So, let me study that. But let me say on a programmatic basis, we do have specific programmes catering to older workers. She mentioned, for example, whether we can give certain wage supplementation for certain aspects. Indeed, wage supplementation for certain programmes in electronics and other sectors is for older workers. And, indeed, the Workfare Bonus, there is an age criterion - Many of you tell me that I cannot use "age 40 and above" and I cannot call them "older workers" - so I do not know what I am supposed to say, but it is meant for this special group of people with special age characteristics but, indeed, that is what that programme is called.

The Minister of State for Foreign Affairs (Mr Zainul Abidin Rasheed): Sir, since the Northeast CDC's name was invoked, may I have a chance to clarify? First of all, I would like to thank hon. Member, Ms Irene Ng, for empathising with the heavy responsibilities of CDCs. Second, I also empathise with the proposal that we should have a more focused approach to older workers. But I would just like to add on to say that all our job fairs cater to all age groups, even our job preparation exercise and walk-in interviews too. This Saturday, in fact, we are having a special training and employment opportunity for mature workers, where all the people in our databank, seeking for jobs, will be invited to attend. Some are more employable than others, some have better mindsets than others. Just as there are choosy older workers, there are also choosy employers. But as mindsets change, our records have indeed been improving.

The Chairman: Any more clarifications? No, then we move on. Mdm Halimah Yacob.

Employment Practices

Mdm Halimah Yacob: Sir, the Tripartite Committee on the Employability of Older Workers has recommended the establishment of a tripartite alliance for fair employment practices. May I ask the Minister what will be the focus of this alliance? What will be the measures that will be put in place and, equally important, what kind of resources will be allocated to this alliance so that it can perform its work effectively?

Sir, I would like to urge all employers to employ people based on merits, which has been the cornerstone of our meritocratic society. If employers start looking at other factors, over time, people would lose confidence in the system. Hence, as a society, I urge that we build a consensus to make all forms of discrimination, whether on the basis of age, gender, race or religion or any other factors, so taboo that it becomes intolerable for any employer to practise such discrimination.

Sir, we have heard quite a lot of complaints about discrimination against older workers, pregnant women and also job advertisements that ask for Mandarin-speaking candidates when that is not required for the job advertised. May I ask the Minister what more can be done to prevent such discrimination in our workplace, how to change mindset, perceptions and stereo-types?

Mr Steve Chia Kiah Hong (Non-Constituency Member): Sir, what is the point of having labour laws when they are not strictly enforced when companies cut corners and costs by employing illegal foreign workers to do the jobs that rightfully should go to Singaporeans? I know the Ministry carries out surprise checks and enforcement actions, but these apparently are not regular. Every now and then, I have Singaporeans calling me to complain of certain coffeeshops employing foreign workers to clear their dishes and that certain Town Councils are employing construction work permit holders to do the cleaning service, and that certain construction companies are deploying Bangladeshi work permit holders as drivers to ferry the workers from the hostel to the worksite and back. You can see many of these illegal redeployed drivers along Kranji Road and Admiralty Road turning into Sembawang Shipyard, etc. Sir, these are not allowed under the law, but enforcement action is slack. I hope the Ministry do not just report but the enforcement ---

The Chairman: Mr Chia, your time has expired.

Contract Work

Ms Irene Ng Phek Hoong: Week after week, in my meet-the-people sessions, I see residents coming for financial assistance, and if you scratch the surface a bit, they are often contract workers - contract workers who are not paid regularly or contract workers who have no CPF, or contract workers who have just lost their jobs and are in the hunt for another contract, or contract workers who found another contract job later on at a lower pay. Sir, it seems to me that the trend is on the increase and I feel that more should be done to address this issue.

Sir, as my hon. colleague, Mr Yeo Guat Kwang said, especially for indirect contract workers, those employed by agencies and deployed to individual employers are often not paid CPF, do not enjoy benefits such as leave entitlement and medical benefits.

Sir, there is a big problem due to cheap sourcing practices, which is still currently the trend, even though we have been promoting best-sourcing. When the bidding of labour supplies drives the tender price down, what happens is that they will eventually squeeze the workers and the wages will suffer. And there is little that the workers can do. Sometimes, they worry about complaining to the Ministry of Manpower because it would mean that they would get into trouble with their employers, it would mean that they would get into trouble with CPF Board if they are not paid CPF, and this is often the case. I also want to reinforce the point made by Dr Lily Neo, and it has been raised to me just last night by my grassroots leaders, that workers are afraid to even apply for Workfare Bonus if they are not paid CPF.

Can the Minister give a very clear signal that if they fill their income declaration form and they claim that they are not paid CPF, that the Government would not go after them or their employer and get them into deeper trouble?

Sir, on the need to address the trend of contract workers and ensuring that workers' interest are protected, from time to time, the labour movement on its part has helped contract workers where there are problems with payment of salaries, for instance, and now the NTUC is also looking at how to organise them, how to help this growing group of contract workers more effectively. But we need the tripartite efforts of all parties, and I would urge Government Ministries and statutory boards to show the way in adopting best-sourcing practices instead of cheap-sourcing so that the wages of workers are not driven down. The Ministry of Manpower should also take active enforcement measures to ensure that contract workers are provided with statutory benefits that they are entitled to under our labour laws.

Sir, I also want to raise one last issue, which is the fear of losing their jobs. While I understand that from the employer's point of view the trend should be encouraged, that it encourages labour flexibility, helps them to save cost, I hope that the Ministry of Manpower would do more to assure workers that their interests are also protected. The labour movement is doing its part, but we need the Ministry of Manpower to enforce its labour laws and make sure that our contract workers are well taken care of and that there are more options beyond low-wage jobs.

Outsourcing

Mr Seng Han Thong: ( In Mandarin ): Sir, there is a Chinese saying: "Rich water must not flow into other people's field." In other words, what is good should be retained for your own use and not be extended to others. That was why in the old days, almost all the factories made everything themselves so that they did not lose the business to others. But now, as long as it is more viable, the manufacturers will outsource parts of their processes to save cost. Because of globalisation, everything can now be outsourced, not to only one location but all over the world.

However, not all outsourcings yield good results. If you are unlucky, your outsourcing may end up as bad-sourcing. Just the other day, Mr Low Thia Khiang mentioned the translation in which Katong, the sea turtle became the grandfather of Chew Joo Chiat. This is a typical example of bad-sourcing.

Outsourcing is a trend that cannot be stopped. In NTUC, our preliminary responsibility is to protect our workers. To us, good-sourcing means if the work is done well, the bosses will not go away. Now, we learn from MOM that there are in fact a lot of cases of bad-sourcing. In order to win the tender, the contractor has to cut its cost, and hence the wages of the workers. If the workers are not well-paid, they would not put their hearts and souls into their work. As a result, the product is sub-standard. The outsourcing became bad-sourcing. When business stops coming, the company will collapse.

I hope that MOM would look at this problem squarely and see how the interest of the workers can be looked after. We should get to the root of the problem early, so that the workers can have good protection.

Workplace Safety and Health

Mr Yeo Guat Kwang: Sir, the number of industrial accidents and occupational diseases has been steadily declining over the years. This is the result of the efforts put in by the Ministry, the employers, unions and the workers in improving the workplace health and safety. What I like to ask is that, with the new Workplace Safety and Health Act introduced on 1st March 2006, what is the response so far from all the stakeholders, particularly the employers? What is MOM's plan to ensure that all workers will be able to have a better understanding of the OHS risk at work so that they can be effectively a whistle-blower at the ground as mentioned in the Act? How would MOM alleviate the fears of the workers being whistle-blowers? There are numerous ways to make the whistle-blower's life hell as soon as he is exposed,

and when the employers get to know about it.

MOM has introduced a hotline for workers to report safety breaches. What is the volume of the calls and how effective is this hotline? What will MOM do to effectively prevent the whistle blowers being penalised by the employers?

5.15 pm

Workplace Safety

Dr Wang Kai Yuen (Bukit Timah): Sir, like Mr Yeo Guat Kwang, I too want to talk about the new Workplace Safety and Health Act, which was passed in Parliament and enacted this month.

Sir, this Act is a major piece of legislation for workplace safety in Singapore. It covers general factories, construction sites and shipyards, totalling about 17,000 workplaces. There were 44 fatal workplace accidents last year, and MOM has set a target to reduce workplace fatalities by half within 10 years. I applaud MOM for taking a firm stand on workplace safety. If the tripartite partners, ie, the Government, employers and workers, take a collective and collaborative approach to improving workplace safety, I am confident that our workplace fatality and accident rate could be reduced.

Sir, while I support MOM's objective and approach in improving workplace safety, I have received negative feedback from construction companies who felt that the approach relies too much on using the stick rather than the carrot. Some also felt that the system of workplace safety checks and demerit points could be improved.

Sir, MOM, currently, has a system where demerit points are given for safety breaches at the construction site. Upon accumulating a number of points, the company will be penalised. In the more severe cases, the construction site will be given stop-work orders. The construction companies are also informed of these breaches. Furthermore, the demerit points are given to the construction company regardless of the number of construction projects under its portfolio. With the Workplace Safety and Health Act in place, the enforcement of the demerit system has been retched up. Some large construction companies are facing imminent disqualification from hiring foreign workers. Once they are disqualified, they might as well close shop.

Sir, I am sympathetic to their plight and that it is unfair to apply the demerit points to a single company as a whole, regardless of the number of ongoing construction projects. This could act against big companies with multiple projects. Applying the demerit points to a single construction site would be logical if it is also in line with the Government's requirement of the formation of green fuel company for each development project.

Sir, if the current demerit system were to be retained, perhaps MOM could consider fine tuning it to give more allowances to companies with multiple ongoing construction projects. Further, I hope that the Ministry would move towards a more collaborative approach and work together with companies to improve workplace safety rather than relying heavily on a system of punitive measures.

The Minister of State for Manpower (Mr Gan Kim Yong): Sir, let me, first, begin by thanking Members who have spoken on employment practices and workplace safety. Our efforts to nurture a quality workforce must be supported by parallel programmes to build great workplaces. Employment practices must be fair and equitable, based on ability and productivity. Occupational safety and health systems must be comprehensive and robust.

Globalisation and competition may put pressure on companies to cut costs in order to survive. Some may be tempted to take the easy way out by cutting back on the provision of legislated employment benefits. Some may even be prepared to compromise safety and health standards and, in the process, put their workers at risk. These practices are not acceptable and will in the long term undermine the interests of our workforce and our economy as a whole.

On employment practices, the Government recognises that more needs to be done to prevent discrimination and other unfair practices at work. During the Budget debate, Mr Ahmad Khalis raised the concern that the "Mandarin requirement" in job advertisements was not always relevant to the job. I agree that employers should not use discriminatory criteria. They should assess candidates based on their merits. The Tripartite Guidelines on Non-Discriminatory Job Advertisements serve as a useful guide to employers in this regard.

MOM investigates all complaints of discriminatory employment practices, including those alleging that the "Mandarin requirement" was used to exclude non-Chinese candidates. In some cases, employers are able to justify the requirement, such as the need to deal with Mandarin-speaking clientele. However, imposing the "Mandarin requirement" in jobs where this is not needed is inappropriate and it will prevent companies from getting the best candidate.

The Tripartite Committee on Employability of Older Workers also recognised the need to improve HR standards in relation to recruitment and retention. It recommended establishing a Tripartite Alliance for Fair Employment Practices, which will go beyond age-related issues. Mdm Halimah Yacob has asked what role the Alliance will be taking and what measures it will put in place and what resources have been given to the Alliance.

The Alliance will be set up by June. Led by SNEF and NTUC, it will receive support from MOM. The Alliance will also work with employers, employees and unions to promote a culture of fair and responsible employment practices. The Alliance will start by publishing guidelines and good practices to help shape behaviour. It will also partner relevant agencies to develop industry capabilities and introduce training programmes. Employers that are exemplary in implementing fair employment practices will be recognised. I expect the scope of the Alliance's role to evolve over time as it gains more experience and confidence in promoting fair employment practices at the workplace.

Several Members expressed concern over the impact of certain employment practices on workers. Ms Irene Ng was concerned that contract workers were not paid CPF and other statutory employment benefits. Mr Yeo Guat Kwang mentioned the need for legislative protection for these workers. Mr Seng Han Thong had urged a more holistic approach to outsourcing to reduce its impact on workers and how we can help them. I will take these issues in turn.

First, the number of contract workers has been increasing over the past few years, although the overall proportion remains small. MOM's Labour Force Survey showed that the share of workers on short term contracts of less than a year rose from 2.9% in 2001 to 4.9% in 2004. Notwithstanding this increase, the number of successful claims lodged by contract workers under the Employment Act has remained stable over the past few years, at about 200 per year.

Contract workers enjoy the same protection as permanent full-time employees under our employment laws, such as the CPF Act, the Employment Act and the Workmen's Compensation Act. Their employers must contribute to the CPF if their income exceeds $50 a month. They are also entitled to specific employment benefits under the Employment Act, such as annual leave and medical leave, and overtime pay if they work beyond the contracted hours of work. Mr Yeo pointed out that there is a minimum service period of 3-6 months to qualify for benefits under the Employment Act, and suggested that this should be reviewed.

First of all, it is not easy to track intermittent employment and it is not easy to verify such employment. It is also not easy to justify on-going liability for an employment contract that has been severed. For example, an employee works for an employer for a short period of time, say, one month. At the end of the month, the contract is terminated or is completed. Later on, if he were to return to the employer to continue to work, the employer would then become liable for the previous employment that they have entered into. This may not be fair to the employer and, in the long term, it may, in fact, deter the employer from employing these employees who have left the company. But we will look at the Act from time to time and see whether we can improve the effectiveness of the Act to protect the interests of contract workers.

The issue, today, really is one of compliance and enforcement, not the lack of legal protection for these contract workers. The CPF Board and the Ministry of Manpower will continue to investigate complaints against violations and take serious actions against errant employers, including legal prosecution.

Employees, including contract employees, who are denied their employment benefits under the Employment Act should seek advice and assistance from their unions, if they are union members. Non-unionised workers can approach my Ministry officers for help. Our officers will help the workers to pursue their claims if they have a valid case.

It is important for employees to bring incidences of non-compliance with the law to the attention of the authorities promptly. Any delay in reporting non-payment of salary and CPF will make recovery much more difficult, especially when the company is facing financial difficulties.

Some employees may agree with their employers to forgo CPF payments in return for higher take-home pay. By doing so, they compromise their retirement savings and financial security, as pointed out by Mr Yeo.

Mr Yeo also asked for more statistics on contract workers to be published. We do provide such statistics but, as Mr Yeo would appreciate, it is not easy to track contract workers as many of them are informal.

Let me now turn to Mr Seng Han Thong's comments on how we can help workers affected by outsourcing.

Companies operating in Singapore are increasingly outsourcing part of their operations to focus more on their core businesses, and to reduce costs. Of the 10,200 workers retrenched from private sector establishments with at least 25 employees in 2005, about 4,000 were from companies with relocations overseas. It is inevitable that we will continue to lose some of the lower-end activities to the lower cost countries. Therefore, we need to continue to build up high-value, high-technology industries, and identify new growth areas.

We can understand that workers are concerned. Those who are affected by outsourcing may be displaced and have difficulties coping. Under the Employment Act, a retrenched worker is eligible to claim for retrenchment benefits if he has at least three years of service. Singapore employers are generally enlightened and responsible, and they do pay retrenchment benefits to their staff who are made redundant, sometimes even for those with less than three years' service.

Employers should also try to help retrenched workers in their search for jobs, where possible. Some companies have engaged counselling services to help retrenched employees cope with the psychological impact. We encourage more companies to do so. Unions can also help in the process too.

The WDA has various programmes to help displaced workers acquire new skills needed to secure new jobs. WDA also runs a network of job centres under the Distributed Careerlink Network (DCN) to advise on job opportunities and help retrenched workers find jobs.

Mr Steve Chia has highlighted the need for my Ministry to step up its enforcement action against illegal workers, and suggested regular but surprise checks. Perhaps we should inform them ahead of time! Such illegal activities are clearly in breach of the Ministry's work pass conditions and they do undermine our manpower policies. But I would like to inform the House that we have, in fact, stepped up our enforcement efforts significantly.

For example, in the food and beverage sector, the Ministry's stepped-up enforcement has resulted in a significant increase in the number of illegal workers arrested, from 474 in 2004 to 603 in 2005. In November last year, a series of coordinated raids were conducted at 13 coffee shops which led to the arrest of 52 illegal workers over a period of two days.

This stepped-up enforcement has resulted in more errant employers being prosecuted in court. Last year, the total number of errant employers jailed was 42% more than the average during the period from 2001 to 2004.

Moving forward, we intend to continue our emphasis on enforcement and we will expand the Ministry's Employment Inspectorate in the coming year. The Ministry is also reviewing the Employment of Foreign Workers Act with a view to increasing the penalties against illegal employment, among others.

Let me now turn to the other important area of workplace safety and health raised by some Members. During the COS debate last year, MOM announced that it would be revamping the existing occupational safety and health (OSH) framework to engender a strong safety culture at the workplace.

Since then, we have put in place a new legislative framework. The new Workplace Safety and Health Act was passed by Parliament in January this year. It came into force on 1st March, replacing the Factories Act as the primary Act regulating occupational safety and health.

Mr Yeo Guat Kwang has asked what the reaction has been since the passing of this new Act. Unions have been supportive, as this Act means better protection for workers. There has been good support from industry too - particularly from companies which have a strong OSH culture and appreciate its long-term benefits. Understandably, some businesses have expressed concern. SMEs, in particular, are concerned with the potential increase in costs to meet the requirements of the Act. They are also worried that they do not have the skills and competencies to comply with the Act. MOM acknowledges these concerns. We will provide written and online guides to explain the new legislative regime.

5.30 pm

We will also devote additional resources to helping industry build stronger OSH capabilities, including the use of third-party safety professionals. Together with the industry, we will develop a framework of competency standards for OSH personnel to raise their competency levels. We will also step up the accreditation of training providers to ensure that there are adequate and competent providers to support the needs of the industry.

Our aim is to persuade all employers to become willing partners by embracing and adopting sound OSH practices as part of their corporate culture. The newly formed Workplace Safety and Health Advisory Committee (WSHAC) will champion various promotional activities, at the national and sectoral levels. The Advisory Committee will be playing an active role in this year's National Workplace Safety and Health Week to be held next month. One early initiative of the Advisory Committee is to publish a report jointly with the Ministry on accident trends and analysis. This will highlight the "hotspots" and will be useful in designing programmes to curb accidents.

During the Second Reading of the new Act, Dr Amy Khor, Dr Teo Ho Pin and Mdm Halimah Yacob urged MOM to increase our pool of inspectors and step up enforcement. I am pleased to inform the House that we will increase our enforcement presence significantly. The number of inspectors will be increased by 50% to about 150 inspectors over the next two years. A range of new targeted enforcement programmes will be introduced, supported by new capabilities in collecting and analysing information through an electronic reporting system. This information system and analytical capability will guide our enforcement measures, as well as our promotional and educational efforts.

Under the new framework, the conduct of comprehensive and proper risk assessments will be a key requirement. Some companies may not have the capabilities or competencies to do this on their own and may need to engage external parties for this purpose. To help companies defray these costs, MOM has set aside a $5 million Risk Management Assistance Fund, which would be used to co-fund the cost of engaging a consultant to assist in identifying and addressing risks at the workplace. Under this Fund, employers who qualify will receive up to 70% co-funding when they engage safety consultants to conduct risk assessments, subject to a cap of $7,500. We will announce the full details of the scheme soon.

MOM will also step up worker outreach, to ensure that workers are aware of their rights and know the channels to voice their concerns. We will be enhancing the orientation course for foreign workers for this purpose. We have already published a new booklet for foreign workers to help them understand their rights to a safe working environment and their responsibilities. We will be producing more materials with safety messages and make them available to the workers. Under the new Workplace Safety and Health Act, it is illegal for employers to dismiss their workers or threaten to dismiss them if they raise legitimate safety and health matters with the authorities. We want to create a culture of openness in this area, and foster a spirit of co-operation and feedback.

I thank Mr Yeo for his questions and inputs over the past year on the reform of occupational safety and health in Singapore. He has been a consistent and tireless supporter of our efforts to raise standards and thereby protect the welfare of our workers. Other Members, such as Mdm Halimah Yacob, Dr Amy Khor and Dr Teo Ho Pin have also made important contributions to the debate and given us valuable suggestions and insights.

Dr Wang Kai Yuen has asked whether the current enforcement regime and demerit points system used in the construction sector are too harsh on contractors. MOM's enforcement framework is not penalty-driven. Our inspectors do not have to meet targets or quotas for detecting violations, and it is not a numbers game. In addition to detecting non-compliance, we will focus on systemic weaknesses, and giving feedback to companies on how to improve. This will have a greater impact over the long term rather than simply penalising errant companies. Recalcitrant companies will be closely monitored and guided under a special surveillance programme.

Over the past year, we have increased our enforcement activities and will continue to do so over the next few years, but our inspectors will be fair and professional in carrying out their inspections. Stop-Work Orders will be issued only where there are imminent dangers to workers. Remedial Orders will be issued instead where there are serious lapses, particularly systemic lapses, which require attention so that we can compel companies to take remedial actions. Other penalties will be calibrated to better reflect the costs of irresponsible practices. Where appropriate, we will also hold directors and managers who are responsible personally accountable.

Contractors who have not instituted comprehensive safety management systems should do so promptly. They should ensure that their workforce is adequately trained and that resources are allocated to proper safety equipment and processes.

My Ministry is currently reviewing our demerit points system for the construction sector. I note concerns that contractors, who have multiple worksites, would find the current system a disproportionately heavier burden on them. We will factor this into our calibration of the demerit points system. But let me emphasise that we will not hesitate to stop work or impose other penalties against all worksites, if a contractor is found to have serious systemic flaws in his safety management practices, because the lives of workers at all his sites could be endangered.

In summary, our ultimate objective is to shape behaviour to create workplaces with fair and acceptable employment practices, and which take care of workers' safety and health. In doing so, we will make Singapore a great place to work.

Mr Steve Chia Kiah Hong: Sir, the MOS did not explain what enforcement action has been taken on the illegal deployment of Bangladeshi work permit holders, acting as lorry drivers and ferrying workers to their worksites.

Mr Gan Kim Yong: The Ministry has a programme on enforcement action against illegal workers. Some of these programmes, for effectiveness reasons, have to be kept confidential. Therefore, it is not possible for me to tell him when we are going to conduct a raid on illegal drivers who are ferrying workers to the construction sites. But we take note of his comments and, at the appropriate time, enforcement actions will be taken against employers who employ illegal workers, whether in the construction sites as drivers or in any form of illegal employment.

Mdm Halimah Yacob: Just three clarifications. The MOS said that MOM will be coming up with safety materials. I would like to request MOM to come up with materials in multi-languages, taking into account not just the local workforce, but also the huge presence of foreign workforce with multi-nationalities. The second point is on the Workplace Safety and Health Act. Whilst we put our focus on accidents at the workplace, I would also like MOM to pay special focus and attention to occupational diseases. Because in developed countries, which have the same regime that we are now introducing, accidents have gone down but occupational diseases have gone up. So I think there should be a parallel track on this. The third point is this. MOS said that, in the case of contract workers, employees should bring incidents of non-compliance of the law to MOM's attention. That is one way of seeking redress. But I would also like to ask MOM to be more proactive, in terms of trying to weed out unscrupulous employers of contract workers and bringing greater awareness on the need to comply and also the need to enforce the law.

Mr Gan Kim Yong: I would like to thank Mdm Halimah for the suggestion. Certainly, we will take into account the different language requirements for the materials that we will be circulating to the workers in order to reach them effectively.

Mdm Halimah also suggested that we should also look at occupational diseases, and this is something that we will look into.

The last point is about contract workers. In fact, I mentioned in my speech that the Ministry does take a proactive action to reach out to contract workers. Mdm Halimah would also appreciate that these contract workers very often are "informal". So there are no established channels for us to reach out to. If they are members of the union, we could take advantage of the union's network to reach out to them. And if they are employed by members of the SNEF or SBF, we can also reach out to them through their employers. But I agree that more needs to be done and, hopefully, together with the Tripartite Alliance, as well as the Tripartite Action Group, we can do a lot more in time to come.

Ms Irene Ng Phek Hoong: On contract workers, perhaps MOS can consider doing audit inspection to ensure that employers are paying the contract workers CPF contributions. Because, as we have mentioned, the employees themselves may feel that they are not in a good position to complain to the Ministry of Manpower and many of them are still not organised in unions, although the labour movement is now looking into how we can represent them more effectively.

Mr Gan Kim Yong: On Ms Irene Ng's suggestion, we have to also bear in mind that it is not easy to enforce because, first, we have to check whether they are paid CPF. If they are not paid CPF, then the CPF record will not be there and we are not sure whether they are working. But we will take up the suggestion and see what we can do with regard to inspection and to see whether we can check at the worksites.

Unions

Dr Tan Sze Wee: Sir, three unions are formed essentially to balance the interest of employers and employees. In Singapore, from my understanding, there are currently up to seven registered employee trade unions. My question is therefore to ask the Minister for Manpower what percentage of Singapore's workers are unionised now, compared to perhaps about 10 years ago? Is the difference of concern to the Government? And does the Government have any programme or incentive in place to encourage more workers and employees to achieve a high percentage of unionisation?

ElderCare Leave

Assoc. Prof. Ong Soh Khim: Sir, Singapore's population will age rapidly over the next few years. Compounding the problem is the trend of families with only one or two children, such that for every two old dependent persons, there is only one young person to provide continuous physical and economic support. Singaporeans increasingly find themselves in the caretaker role, having to cope with the stresses of caregiving as well as work demands. At present, there is an absence of employee leave scheme to meet this group of employees in most private and public sector organisations. Although a variety of eldercare benefits can be introduced, an effective option is the Eldercare Leave Scheme. Currently, the majority of caregivers are forced to rely on personal, urgent or compassionate leave to meet this specific need.

Recently, the Committee for Ageing Issues recommended holistic healthcare and eldercare for the seniors but did not recommend provisions for Eldercare Leave for Singaporeans who need to look after old dependants while struggling with their work.

The employers have a significant role to play in providing eldercare leave. But a majority of Singapore employers have not become actively involved in helping caregivers. I would like to ask the Ministry to consider entitling employees who are caregivers three to five days of paid Eldercare Leave per year, for the purpose of bringing elderly parents above the age of 70 to the clinic or hospital for their routine check.

The Eldercare Leave Scheme is widely practised in countries, such as the US, for some years, but it has yet to be widely implemented in the public sector in Singapore. I would like to ask the Government to take the lead in this practice in the various Ministries as a model to encourage the private sector to follow.

Women more than men find themselves in the caretaker role, in spite of taking on wage employment. Since a sizeable proportion of caregivers are women, providing eldercare support in the workplace means that employers are choosing to be gender-sensitive in two ways. First, the employers are involved not only in retaining female employees but also concerned with their career development. Second, the employers are contributing actively to the CPF benefits of the female employees, which means that the latter would be more likely to be prepared for old age on retirement.

The Chairman: Mr Ong Ah Heng, take both cuts together.

Foreign Domestic Workers

Mr Ong Ah Heng: ( In Mandarin )

Mr Chairman, Sir, every month, we read in the newspapers that some foreign maids were abused. I would like to ask the Minister whether there is a comprehensive plan to review the welfare given to our foreign maids, and whether there is any channel for the maids to voice their grievances. Could the Ministry legislate to ensure that the maid agencies visit their maids at least once a month or once every two months? This will reduce the number of maid-abuse cases. I hope the Minister will consider this.

_Marriage Restriction Policy
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Mr Chairman, Sir, it is very difficult for Singaporeans to marry work permit holders. Very difficult indeed! We all know that. But we read in the newspapers that some Singaporeans find it much easier to marry brides from China or Vietnam.

Any foreigner who is in Singapore, but not holding a work permit, can marry a Singaporean any time. But for those who come here to work in the factories, meet their Singaporean colleagues here and maybe build up a relationship with them, they are not permitted to tie the nuptial knots.

Likewise, Singaporean workers meet their prospective brides in the workplace and hope to eventually marry them. But because their prospects are work permit holders, they become the forbidden fruit. In the end, they have to resort to brides from Vietnam and China. Why can we not relax this rule? Can we have some flexibility? Now, the Singapore population is not growing, and our women are not giving birth. Why should we force our men to marry these brides from China or Vietnam? Since our men are colleagues of these foreign workers and they are working together, why should we not consider letting them marry these work permit holders, instead of having to go to Vietnam and China?

The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi): Sir, the debate in this House has centred on skills upgrading, employability, employment practices and workplace safety thus far. Apart from these, we must continue to protect the interests and well-being of our workforce.

Our unions serve an important role in this regard. I am pleased that Dr Tan Sze Wee has asked for an update on the unionisation rate of workers in Singapore. Over the past 10 years, from 1996 onwards, the total number of "unionisable" employees has grown from 1.2 to 1.5 million. Union membership increased from 255,000 in 1996 to 450,000 in 2005. As a result, the unionisation rate rose markedly from 21% in 1996 to 30% in 2005.

Our rising unionisation rate bucks the global trend where union membership in many countries has been declining. I believe this bears testimony to the ability of our labour movement to stay relevant. Our labour movement under NTUC has been a constructive partner. It has made significant contributions to our harmonious industrial relations climate, economic growth, and to enhancing the well-being of workers. Our unions have worked closely with employers and the Government to help workers upgrade their skills, enhance their employability, and improve their employment terms based on higher productivity. The labour movement has also set up various workers' co-operatives and introduced a wide range of programmes and activities for workers. All these various efforts have pulled in more members, further affirming the achievements of our labour movement. We should applaud the excellent work of NTUC.

Mr Chairman, Sir, I move next to the issue of leave entitlement, which is an integral part of employment benefits. We recognise that, as our population ages, employees will need more support to take care of their elderly dependants. Employers are already responding to this by providing family care leave or unofficial time-off for employees to look after their aged parents. In addition, annual leave entitlements have been going up. In 2004, 41% of full-time employees enjoyed 15 or more days of annual leave. Ten years ago, the percentage was only 34%. A five-day work week in the civil service and in many parts of the private sector has also helped. I thank Prof. Ong Soh Khim for raising this question. Indeed, we must continue to encourage companies to support their employees who need to care for their elderly parents. However, making eldercare leave an entitlement will affect companies' costs. A stipulated three to five days for eldercare leave may not allow companies flexibility to tailor their leave benefits to the diverse needs of individual employees.

In addition to providing adequate leave, employers should try to introduce work-life programmes, including flexible work arrangements. These will help employees balance work and their family responsibilities as well as personal needs. Companies which have done so have found that work-life programmes make business sense, as workers perform better and their productivity increases.

In this regard, my Ministry introduced the $10 million Work-life Works! Fund in August 2004 to help companies design and implement work-life programmes. This includes catering to the work-life needs of all employees, including the older workers who may be part of their companies' workforce. To date, the Fund has attracted more than 100 private sector applicants. We hope more companies will tap on the Fund.

Let me now turn to the well-being of foreign workers. Mr Ong Ah Heng has passionately raised several points on the employment of foreign domestic workers.

First, Mr Ong has asked if rest days could be mandated for these workers, similar to that enjoyed by other workers covered under the Employment Act. Sir, all foreign domestic workers generally work and stay in their employer's house. Their work patterns and duties vary across households. Prescribing minimum employment terms and conditions will inevitably lead to rigidities and inconvenience for many households. For example, some households have elderly or infirm members with special needs who require constant attention, and may find it difficult to release the domestic workers for a prescribed period every week.

Nevertheless, MOM agrees that all workers should be accorded adequate rest. As part of the work permit conditions, employers are held responsible for the well-being of their foreign domestic workers, including the provision of adequate rest. Employers who breach these work permit conditions can be fined up to $5,000 or served with a jail term of up to six months.

The Ministry also understands that CaseTrust and the Association of Employment Agencies (Singapore) (AEAS) are looking at introducing a standard employment contract which would include terms on rest days. We understand that the two accreditation bodies are still in discussion on the exact terms. We look forward to the finalisation of this initiative.

Second, Mr Ong asked MOM to review the conduct of employment agencies which place foreign domestic workers. Sir, the Ministry has actively prosecuted and removed the licences of errant employment agencies over the past two years. Since January 2004, 13 employment agencies have had their licences revoked or non-renewed due to infringements of the Employment Agencies Act. Since February this year, MOM has also implemented a demerit points system for the industry. This system provides early warning for employment agencies that have breached minor infringements to improve. It also helps the public identify errant agents which flout the Ministry's rules.

Third, I now respond to Mr Ong's question on available channels for assistance. While employers and employment agents have to fulfil their responsibilities, the Ministry also believes that foreign domestic workers should be empowered to safeguard their own interests. All foreign domestic workers are therefore given a list of telephone numbers to contact upon entry into Singapore, as well as at the Safety Awareness Course, which is compulsory for first-time foreign domestic workers. These numbers include a dedicated hotline run by MOM to provide assistance to foreign domestic workers in distress.

Finally, I would like to address several questions which have arisen on the foreign domestic worker levy during this session as well as in the earlier Budget debate.

Sir, the levy serves as a pricing mechanism to moderate the demand for foreign domestic workers. Currently, there are already about 160,000 foreign domestic workers in Singapore, and about one in every six households hires a foreign domestic worker. In recent years, the levy has already been lowered twice.

First, on 1st August 2004, as part of the marriage and procreation support package, families with young children and those with elderly parents or grandparents residing in the same household were granted a concessionary levy rate of $250, as compared to the normal levy rate of $345 per month. This concessionary rate applies to both single as well as married employers.

Second, this concession was followed by a further reduction of $50 to both the normal and concessionary levy rates on 1st April last year. We will, therefore, not be lowering the levy further for the time being.

The Chairman: Mr Yeo Guat Kwang, would you like to withdraw your amendment?

Mr Yeo Guat Kwang: Mr Chairman, Sir, I would like to thank the Minister, Minister of State and Senior Parliamentary Secretary for their comprehensive responses to all the issues and concerns raised. I am particularly happy and pleased with the good news that the overall labour market and employment situation in Singapore have improved significantly and that there are jobs, jobs, jobs for Singaporeans. On this note, I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $202,512,230 for Head S ordered to stand part of the Main Estimates.

The sum of $47,335,900 for Head S ordered to stand part of the Development Estimates.