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RECOMMENDATION |
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REsponse |
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Extension of Budget Measures |
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Ministry Of Finance (MOF) |
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1. Given the uncertainty over the strength of economic recovery, the PSW recommends that the Government maintain some of the key Budget schemes – particularly the training and SME credit schemes.
The Wage subsidies via the Jobs Credit Scheme may however need to be gradually withdrawn and be more targeted, given healthier signs in the job market, and to encourage the necessary resource and structural adjustments.
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Finance Minister has given a response on this topic in his Parliamentary Speech on the extension of the Jobs Credit Scheme on 19 October 2009. The transcript is available here |
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Enhancing the CET development |
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Ministry Of Manpower (MOM) |
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2. The PSW suggested for more resources to be invested in the CET sector. Some areas where resources can be increased include:
a. Enhanced income support (Training Allowances) for workers taking time off to take approved courses;
b. Better terms for Absentee Payroll in the form of higher funding limits and wider applicability to benefit PMETs and higher-income workers;
c. Creation of Individual Learning Accounts where Government and workers can contribute fixed sums to CPF accounts which can then be tapped to fund workers for approved training courses;
More funding for the build-up of world class CET Institutes to match the stature and quality of our PET institutes.
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In 2008, the Government topped up the Lifelong Learning Endowment Fund to $3billion in support of the CET Masterplan to prepare workers for the future and develop a source of competitive advantage for Singapore. More than 40 CET Centres are currently available islandwide, where workers can access directly subsidised courses. In effect, the outcome is similar to the concept of providing direct funding to workers through Individual Learning Accounts.
In view of the economic downturn, the Government introduced the Skills Programme for Upgrading and Resilience (SPUR) which is a 2 year programme costing $650 mil. Under SPUR, course fee subsidies were increased to 90%. Absentee payroll caps were also raised from $6/$6.80 an hour to $10 an hour so as to better support training for PMETs. As at end Sep 09, about 233,000 workers have been committed to SPUR training.
As part of continual efforts to broaden, and enhance the scope and effectiveness of CET programmes, we will be building 2 National CET Campuses by 2013. The campuses will serve as:
(i) A Gateway for all workers, from Rand-and-File to PMETs, to discover career opportunities and access relevant training;
(ii) A Hub of high quality CET providers, clustered under one roof;
(iii) An Employment Exchange
for employers to meet their manpower needs and for workers to seek out good job opportunities; and
(iv) A One-Stop Centre integrating career coaching, training, assessment and career services.
Together, the campuses are expected to provide 150,000 training places annually.
We will take into account the Committee’s feedback on training allowances when we review the funding rates after SPUR ends in Nov 2010. |
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Fine-tuning of Foreign Worker Policies |
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3. The PSW also recommends the Government fine-tune its current Foreign Worker policies to ensure that our Foreign Worker policies do not make it convenient or costless for employers to hire more low-cost and low-skill foreign workers.
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Their recommendations include:
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a. More stringent enforcement on issuance of Work Permits to end abuse by employers (e.g. use of phantom workers, transferring of worker permits from one employer to another etc.); |
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MOM conducts proactive upfront checks to detect and thwart potential Work Permit abuses. This effort is complemented by strict enforcement actions against errant employers guilty of the offence. We will continue to enhance our detection mechanism and step up enforcement to further deter employers from abusing the system. |
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b. Investigating Foreign Worker dependency, especially in the high tech manufacturing and services industries, to ensure a healthy ratio of skilled locals; |
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MOM has various controls in place to moderate demand for foreign workers, such as the Dependency Ratio framework and foreign worker levy. The Dependency Ratio requires companies to employ locals before being allowed to employ a specified number of foreign workers, while the foreign worker levy moderates companies' employment of foreign workers. MOM also reviews these controls regularly to ensure it remains relevant to the labour market situation. |
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c. Closer cooperation between economic agencies like EDB, and manpower authorities like MOE, MOM and WDA, to match the training and sourcing of local manpower with the needs of emerging industries and new investments before and not after these businesses start to ramp up their operations; |
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MOM works closely with MOE and WDA, and economic agencies such as EDB to match the supply of manpower to projected demand for manpower in various industries and investments.
MOM, WDA and the economic agencies have also identified this need for closer cooperation. We are working together to prepare ahead the skills and manpower pipeline for investments coming into Singapore.
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d. Extending minimum skills requirements for Foreign Workers (as was done by BCA for the construction industry) such that there is a Singapore-determined set of skills standards that are set as a minimum requirement for entry. [ the government may have to bear part of the costs of such training, for example via tax relief etc.] |
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Unlike the Construction sector, the Manufacturing and Services sectors consist of a wide range of industries with diverse sets of skills requirement. It may not be practical to develop a common set of skills standards as a minimum requirement for entry into these sectors. Instead, MOM adopts a flexible approach by recognising a variety of trade tests in the various industries. Foreign workers that are certified to be skilled in their respective trades are granted skilled workers status, and their employers pay a lower levy for them. Such a model aims to encourage employers to use their foreign workers more efficiently and productively. |
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Encouraging more to work |
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4. To ensure that real incomes of our low-wage workers are protected, the scope and scale of the Workfare Income Supplement (WIS) Scheme needs to be increased. The PSW felt that currently, the WIS Scheme offers too little for most beneficiaries to cover the short-term loss of take-home pay and suggest that the Government increases its scope and scale. As a start, the PSW recommends making the temporary 50% top-up to WIS permanent. |
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MOM will be reviewing the scope and scale of the WIS in 2010. We will take into account PSW’s inputs. |
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Wage Competition from the Public Sector |
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Public Service Divison (PSD) |
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5. In their proposed strategies to help companies thrive, the PSW recommended for the Government to be the decisive player in the labour market as one key area of containing business cost. Especially in the market for fresh graduates, and educated and highly qualified workers, the Government probably has an important influence over wage-setting. The PSW felt that in the last round of wage increases in 2007-2008, Government played a major role in guiding wages.
The PSW agrees that Government should have its fair share of the talent in Singapore. However, many businesses feel that it is not feasible for such large employers like the Civil and Public Services to pay above the market for a large proportion of its officers. While members of the PSW are not privy to Government salary data, anecdotal evidence suggest that Government in 2007-2008 has led the market by a significant factor in terms of pay offers. |
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The Government is mindful of its role in guiding wage levels in the private sector. To attract and retain our fair share of talent, we aim to ensure that Civil Service salaries keep pace with but do not lead the private sector. Salaries in the Civil Service (and starting salaries in particular) are benchmarked to market rates, and reflect what private sector employers are paying graduates with similar qualifications, experience and responsibilities. We regularly review our salaries and make any necessary adjustments in a responsive manner. These adjustments can be upwards or downwards.
For example, the Civil Service reduced our starting salaries by 5-20% for schemes that had exceeded their benchmarks in 2004 as the market was then weakened by SARS. This year, we also reduced our starting salaries by up to 6% for selected schemes in response to the economic downturn.
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Tackling land scarcity |
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Ministry Of National Development (MND) |
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6. Singapore is facing a shortage of available Singaporean workers for sectors which face irregular work hours and longer commuting distances & times (because of their location in industrial zones for example). The Government can consider greater flexibility in the land zoning rules and allowing more amenities/residential in industrial zones. There is considerable scope to decentralize business activities from the city centre, and improve access and amenities to manufacturing activities and jobs (for example Tuas). Given the recent productivity drive, reducing transport costs and travel time between the home and workplace is a key part in improving labor productivity. |
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As part of land use planning for Singapore, URA consciously plans for business activities to be decentralized from the city centre, to provide alternative locations for businesses and to bring jobs closer to where people live. Examples of established commercial nodes outside the city centre include Tampines Regional Centre, Novena and One-North. More commercial nodes outside the Central Area in the Jurong Lake District, Paya Lebar and Kallang growth areas are planned to be developed over the next 10 to 15 years. We will also plan how to catalyse the development of these new commercial nodes.
Industrial areas are also distributed around the island, with the less pollutive industries in industrial parks at the fringe of HDB towns. More pollutive industries are located in the Tuas and Jurong Island area.
Currently, residential uses within such industrial areas are limited by health and safety and nuisance buffers arising from the industrial activities. Agencies will review if there is scope to allow more workers’ housing within industrial areas, without compromising the health and safety of the workers. Agencies will also review the master planning of industrial parks to see how to better plan for amenities and common facilities for workers and industries.
In terms of accessibility to the Tuas area, LTA has recently extended the MRT beyond Boon Lay station to Joo Koon station, and will extend the line further to the Tuas Checkpoint by 2015. These measures should help improve the accessibility of the Tuas area to workers. |
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7. The Government can consider initiating a study on whether there are measures which can smoothen or reduce the extent of land and lease cost volatility and increases through:
a. Holding land banks earmarked for quick development as commercial space at key points of the island;
b. Allocating more land for emerging services industries versus manufacturing;
c. The government entering the commercial property rental market, [just as JTC has a presence in the industrial property market] possibly on short duration and notice, to provide a low cost alternative for services industries needing office and commercial and even retail space, moderating excessive volatility in commercial rentals.
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Maintaining stable rentals will help enhance Singapore’s position as an attractive business destination. A key strategy to achieve this objective is to ensure that there is always adequate supply of land to meet demand.
At the broader planning level, URA ensures that adequate land is set aside for commercial developments. For example, adequate land for office development is safeguarded within the Central Area to provide the critical mass for Singapore to develop as an international business and financial hub. In addition, URA has also safeguarded sites at variety of locations at the fringe of the city and in new growth areas (e.g. Jurong Lake District) to provide more choices for business locations and commercial developments.
We seek to steadily release land through the Government Land Sales system to meet demand. In addition to the Confirmed List system which releases sites at a steady pace according to our planning objectives and projected demand needs, we also have the Reserve List system which provides the market with the flexibility to trigger additional sites for sale, to meet any sudden surge in demand.
Our comments with regard to the specific proposals are as follow:
On proposal (a), we have safeguarded ‘land bank sites’ that can be developed quickly for commercial developments when needed. This includes transitional office sites1 which are small parcels of vacant state land that can be developed quickly within a year or so to meet dynamic changing market needs. In addition, URA also works with SLA to identify suitable vacant state properties which can be quickly retrofitted to meet various commercial needs, e.g. office, commercial school, student hostel, etc. These sites / properties can be released for quick development to meet short-term mismatches in demand and supply.
On proposal (b), regarding the allocation of more land for emerging services industries, MND/URA works closely with the economic agencies to ensure that adequate land is set aside for various uses, including emerging services sectors.
On proposal (c), URA is of the view that there is no need for the Government to take the lead in developing and leasing commercial properties as doing so may crowd out the private sector which has the resources and expertise to undertake the development of commercial projects. Indeed, the Poilcy Study Workgroup itself recognized that the Government’s intervention in the commercial property market may discourage future private sector investments.
Through the GLS Programme, MND/URA will however ensure that there is a steady and more than sufficient supply of land to meet demand and support economic growth. In addition, this will help minimise short-term mismatches in demand and supply which cause rental volatilities.
Moving forward, URA would continue to work with the industry to explore new strategies to maintain business competitiveness and smoothen or reduce the extent of land and lease cost volatility. |
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1Transitional offices are generally low-rise office buildings with a lease period of about 15 years.[back]
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