Opposition parties weigh in

[Perspective]

Opposition parties weigh in
They agree with general thrust of ESC report, but call for minimum wage, more help for SMEs
by Teo Xuanwei
Feb 04, 2010

SINGAPORE - Several opposition parties have responded to the Economic Strategies Committee's (ESC) report and in general, they felt the recommendations were a thrust in the right direction - though more could be done.

While the Workers' Party will give its views when Parliament debates the Budget in March, when Singapore People's Party secretary-general Chiam See Tong will also have a chance to respond, other parties not represented in Parliament seized the chance to comment yesterday.

The Reform Party and National Solidarity Party (NSP) cited similar aspects of the report for discussion: The lot of low-wage workers, ways to help local small-and-medium enterprises and how the economy should grow.

In a media statement, Reform Party secretary-general Kenneth Jeyaretnam called for a minimum wage - in tandem with the proposed hike in foreign worker levies - to "force" employers to use labour more productively. He said the ESC's suggestion to raise levies "may be a means of achieving the same goal but does not directly raise or put a floor under the wages of less-skilled Singaporean workers".

He added: "It may look more efficient on economic grounds, but if employers go further afield in search of cheaper and cheaper labour, it may nullify the effects of the increased levy."

The NSP did not offer suggestions on how to help low-wage workers, but secretary-general Goh Meng Seng felt the ESC should not dissect the economic issues without considering the social, cultural and political ramifications. "We need a more holistic approach instead of formulating quick fixes for short term gains," he said.

On ways to encourage more start-ups, both parties agreed Government-linked companies hindered the growth of local SMEs. The NSP said the Government should "provide funds and facilities for technological research and upgrading SMEs into Original Equipment Manufacturers". If not, local SMEs would remain "mere vendors providing parts and services for MNC plants".

Mr Jeyaretnam suggested "dismantling or privatising the whole GLC structure", including Temasek Holdings and the Government of Singapore Investment Corporation.

CONCERN OVER ENERGY COSTS

On the ESC's suggestions for growing Singapore into a Global-Asia Hub, the Reform party said manufacturing should eventually comprise less than 20 to 25 per cent of the economy, as suggested by the ESC, "given Singapore's limited land and other resources".

Mr Goh suggested wooing regional economies to overcome constraints: "There's no mention whether Singapore will work actively towards a more comprehensive free trade zone in South-east Asia."

He also expressed concern at the possible plan to price energy to reflect real costs.

"Singapore's energy pricing is already on the high side in this region. We should take care of implementing pricing policy that would affect our cost of living, as well as doing business," he said.

The possibility of nuclear energy as an option for Singapore worried both parties, due to Singapore's small size and dense population.

INVEST MORE IN EDUCATION

On the ESC's overarching theme of improving productivity, the Reform Party said it "supports in-principle the idea of a high-level national council to boost productivity".

As for higher investments in education, Mr Jeyaretnam said the target amount should rise to between 5 and 6 per cent of gross domestic product, from the current average of 2.8 per cent over the last five years, to be on par with other advanced countries.

Meanwhile, the Singapore Democratic Party called the ESC's suggestions "old wine in a new skin". SDP secretary-general Chee Soon Juan said: "Save for the development of nuclear power, haven't we heard all this before?"

He cited examples such as the Government's National Technology Plan in 1991 to become a world-class innovation-driven economy by 1995; the SME21 plan in 1996, targeted at helping start-ups; and the 2001 Economic Review Committee report, which touched on using levies to regulate the demand for foreign workers.

"If all these initiatives had been effective, why the persistent problem of declining productivity and the need for another report?" he said.

Dr Chee said it will present "concrete alternative proposals in the days and weeks ahead".

[Janet]

[B]

In a media statement, Reform Party secretary-general Kenneth Jeyaretnam called for a minimum wage - in tandem with the proposed hike in foreign worker levies - to "force" employers to use labour more productively. He said the ESC's suggestion to raise levies "may be a means of achieving the same goal but does not directly raise or put a floor under the wages of less-skilled Singaporean workers".

".

I disagree with KJ, employer here is to be please not "force", doing bussiness is about revenue and profit, country that can provide better cost and lesser taxes, investment will inflow there. looking around SEA, why whould any employer invest in sg and create jobs if the profit will be affected by labour cost, they can anytime set up cheaper company in other parts of the world..in the end you want minimum wages is to tell them to f@#@ off from sg

[iamtalkinglah]

I disagree with KJ, employer here is to be please not "force", doing bussiness is about revenue and profit, country that can provide better cost and lesser taxes, investment will inflow there. looking around SEA, why whould any employer invest in sg and create jobs if the profit will be affected by labour cost, they can anytime set up cheaper company in other parts of the world..in the end you want minimum wages is to tell them to f@#@ off from sg

Please read around this forum before replying. You didn't tell us how to resolve the problems with foreigners taking over Singaporean jobs.
They are willing to receive lower wages as they have an unfair advantage over Singaporeans. E.g. they don't have a family to feed in Singapore. And when they remit RMB back to their country, it is an huge amount due to the exchange difference and cost of living.

What is the salary of the offer cleaner now? $900?
What is the salary of the dish washer now? $700?
What is the salary of the people who clear your plates at foodcourts? $850?

Then make the minimum wage $1,000 (example la). Do you think it is fair for the Singaporean to earn $800/month when cost of a chicken rice is $3?

Public transport cost $2/trip = $4/day
Breakfast = $2
Lunch = $3
Dinner = $3
Total cost per month = $12/day * 30days = $360
That is almost 50% of gross salary $800. How about rental cost? Utilities cost? CPF?

I think you have mis-understood my suggestion. In fact, the suggestion I have given would make employers hire Singaporeans over foreigners.

EXAMPLE:
Minimum wages for Singaporean = $1,000

Foreigner willing to be paid $800
Then let Levy for foreigners = $220
Net cost for employer = $1,020

If you are an employer you would hire Singaporean or foreigner?
If the employer still want foreigner as PRC perceived to be more hardworking then that employer pay $20 in addition lah.
Gov't earn money then can reduce income tax.

If the Gov't cant commit on the Levy fees then dont. Have a law in place to say that the Levy will determined in the next accounting year when the Gov't received market information on how much a Singaporean earn in the previous year then the Gov't will use this as a basis to price the Levy.

This is just a suggestion, like I said, I am not smart and need the Gov't to work.

[chewed]

I disagree with KJ, employer here is to be please not "force", doing bussiness is about revenue and profit, country that can provide better cost and lesser taxes, investment will inflow there. looking around SEA, why whould any employer invest in sg and create jobs if the profit will be affected by labour cost, they can anytime set up cheaper company in other parts of the world..in the end you want minimum wages is to tell them to f@#@ off from sg

then those companies can F&^% off from SIngapore. In many 1st world countries there are minimum wage laws as well, yet we continue to see companies investing in these 1st world countries and they are as competitive, if not more competitve then SG

[rodent2005]

I disagree with KJ, employer here is to be please not "force", doing bussiness is about revenue and profit, country that can provide better cost and lesser taxes, investment will inflow there. looking around SEA, why whould any employer invest in sg and create jobs if the profit will be affected by labour cost, they can anytime set up cheaper company in other parts of the world..in the end you want minimum wages is to tell them to f@#@ off from sg

The social, legal, infrasructural environment are very important considerations as well. No one will want to be in the middle of a war zone even if there is no tax.

[Rogue Trader]

Reform Party secretary-general Kenneth Jeyaretnam called for a minimum wage - in tandem with the proposed hike in foreign worker levies - to "force" employers to use labour more productively. He said the ESC's suggestion to raise levies "may be a means of achieving the same goal but does not directly raise or put a floor under the wages of less-skilled Singaporean workers".

implementing minimum wage is not the solution. the issue is how to implement it and still KEEP BUSINESS COSTS LOW.

The NSP did not offer suggestions on how to help low-wage workers, but secretary-general Goh Meng Seng felt the ESC should not dissect the economic issues without considering the social, cultural and political ramifications. "We need a more holistic approach instead of formulating quick fixes for short term gains," he said.

social, cultural and political considerations will not make any policy works. the profit model is the only way to go. find a solution that will benefit all party and it will takes off.

[Rogue Trader]

The social, legal, infrasructural environment are very important considerations as well. No one will want to be in the middle of a war zone even if there is no tax.

One way is to increase foreign worker levy for businesses and give tax deductions for capital expenditures. construction companies will end up use better equipments and hire skill worker to operating them.

[Goh Meng Seng]

social, cultural and political considerations will not make any policy works. the profit model is the only way to go. find a solution that will benefit all party and it will takes off.

I would disagree. Corporate culture does affect how a company operates and eventually, the bottom line.

Corporate culture is a subset of the cultural setup of the environment that the company operates in at large.

Mindsets determine how a people react to problems, situations and the kinds of solutions that they could offer. Although cultivating mindsets is not an easy task and it takes a generation or two to achieve it, but the ultimate goal is the betterment of the workforce and increasing the competitiveness of the companies.

For example, the general complains of some Singapore companies which chose to invest in some third world countries are the people lack initiatives and motivation. They are lazy... etc. It has to do with the culture of the society, not merely about management and human resource.

Singaporeans are generally viewed as hardworking lot but lack the ability to "Innovate" and "Create" things. This has to do with the way we are cultivated from young. Rote learning in school is one aspect which kills innovative and creativity minds.

Such things don't just happen overnight but it has to start somewhere.

Goh Meng Seng

[Goh Meng Seng]

NSP's views regarding the ESC's recommendations
Fri, Feb 05, 2010
What is NSP's views regarding the ESC's recommendations?

In general, we appreciate the government’s effort in trying to deal with new economic challenges in the next decade. However we feel that ESC is trying too hard in dissecting economic issues without realizing that the model of economy is tightly linked to the social-cultural- political aspects of the Nation. These “software” of the Nation will mold the mindset of the citizens which in turn will impact on how the economy will develop in reality.

We need a more holistic approach instead of formulating quick fixes for short term gains. The U-Turn on the FT policy is a classic example on how such quick fixes applied in the past may just become irrelevant and worse, creating irreversible damage to our social fabrics.

For a start, we would like to see the government play their role in assuring adequate housing for every Singaporeans. While we take care of foreign workers and students’ housing needs, we should not leave our citizens living in the wild without a roof over their heads. Housing is a basic needs for citizens before they could work on upgrading their skill sets and contribute to the society.

Secondly, if we want our workforce to be more creative and innovative, an atmosphere of creativity, innovation and dynamic democratic vibrancy should be built based on a more open democratic system whereby diverse views are tolerated in schools, work place, civil service and the political sphere.

Which specific areas/aspects/ issues/recommend ations does NSP agree with the ESC? And why?

We have no issues with ESC’s broad direction as presented in their report although there is nothing specifically new. However we wish to highlight specifically the point on strengthening support for low wage workers and dependency on foreign workers which are more of a concern for these few years.

We felt that this is long overdue. Our low wage workers have their salaries depressed by the constant influx of these foreign workers, making their livelihood tougher by the day. While many of these foreign workers enjoy very low rent flats provided by HDB, many of our citizens have to manage life with a mortgage of higher amount. Sometimes, they are even deprived of a roof over their heads while HDB demanded them to wait for 30 months before they could rent a flat from it.

We have been expressing grave concerns about the government’s over-reliance on foreign workers since decade ago at every opportunity. We are finally glad that the PAP government, through the ESC committee, is finally taking heed to deduce this dependency.

On the other hand, which specific areas/aspects/ issues/recommend ations does the NSP disagree with the ESC? And why?

First of all, we are concerned about ESC’s suggestion to “Price energy to reflect real costs and constraints” on the household sectors. We would like to understand more in details and monitor the pricing implementation process to ensure households are not severely burdened.

Singapore’s energy pricing is already on the high side in this region. We should take care of implementing pricing policy that would affect our costing in living as well as doing business.

Secondly, we do not agree to ESC’s recommendation to look into nuclear energy as the alternative energy source. Singapore is too small a place to take the risk of having a nuclear disaster of any sort.

Thirdly, we feel that it is totally inadequate for ESC to focus only on labour productivity. We should be looking at Total Factor Productivity as well, which will include Capital Productivity.

While the government pays lip service in grooming local SMEs, our over reliance on MNCs and GLCs has impeded the growth of our local SMEs. A more relevant study should be done on the economic model of Korea and Taiwan. These governments play an active role in providing funds and facilities for technological research and upgrading their enterprises into Original Equipment Manufacturers (OEM) instead of mere vendors providing parts and services for MNC plants.

ESC has made bold vision about building Singapore into a Global-Asia City but we feel that Singapore should leverage more on its regional role. What is missing in this ESC report is the strategy of more integration in regional economies, creating an economic hinterland for Singapore. There is no mention about whether Singapore will work actively towards a more comprehensive Free Trade Zone in Southeast Asia or even Southeast Asian Economic Union. We feel that Singapore should start the economic integration with our closest neighbours and expanding to other ASEAN countries in the long run. We need an enlarged consumer base before our Nation could maintain continuous growth for decades ahead.

The focus on innovation and creativity should not be measured solely on dollars and cents spent in research. The cultivation of innovation and creativity needs a whole generation of mindset changed through our educational system as well as political climate. There is no way for a nation to depend solely on foreign researchers for their sustainable economic growth. Our people must be cultivated through their daily lives. Let’s start with our political climate.

Goh Meng Seng
Secretary General
National Solidarity Party

[Rogue Trader]

I would disagree. Corporate culture does affect how a company operates and eventually, the bottom line.

Corporate culture is a subset of the cultural setup of the environment that the company operates in at large.

Mindsets determine how a people react to problems, situations and the kinds of solutions that they could offer. Although cultivating mindsets is not an easy task and it takes a generation or two to achieve it, but the ultimate goal is the betterment of the workforce and increasing the competitiveness of the companies.

aiyoyo...don't place the carriage in front of the horse. all businesses are motivated by profit. clever CEO will package their business direction with mission statements, corporate cultures, values and other nice tags.
want the most effective way to cultivate problem solving mindset? tell a employee to solve the problem and get promotion. nobody work for love.

[eatshitndie]

learn our minimum wage mistakes in california. together with a liberal immigration policy or a lack of it, the two don't work very well together. what we ended up with are two wage systems: corporations, by virtue of strict hr and accounting standards, toe the line while complying with reams of tax code and labor laws and policies; and small private business entities such as service providers, contractors, restaurants, food operators, and farmers flout the law by going around it to escape the tax code. due to the large numbers of such entities engaging in illegal hiring to avoid the tax and labor codes, enforcement agencies get bogged down with case loads, prisons get bigger, prosecutors get burned out, and courts simply get drowned in paperwork. it contributed to a bigger government, more red tape, and a severe drain on the budget. meanwhile with the log jam at the state level, the farmer, restauranteer, food operator, or service provider simply pay pittance (in some cases $2 per hour) to whomever is willing to work for cash... and sometimes for food. with so much cheap labor around due to lax immigration enforcement, this grand pie in the sky called minimum wage simply doesn't have teeth. and the high end corporations which need to comply with the law simply pack and go.

[Rogue Trader]

at least california has sillicon valley and hollywood to create wealth. increasing wage component in singapore will just end up in inflation.

[eatshitndie]

at least california has sillicon valley and hollywood to create wealth. increasing wage component in singapore will just end up in inflation.

yes. the intellectual component is keeping california relevant. and why do some very high end industries such as high tech, media entertainment, and new tech continue to invest in california and her people? it's because we have achieved a critical mass in terms of talent and innovation, and the climate and beauty of the region help to keep these folks happy here. despite the high entry cost, the rewards and success far exceed the pain of dealing with a corrupt, bloated and slothful state gov. these companies are more than willing to pay the high end for high end quality people. it's very difficult for any region to amass diverse talent in so many fields over so many years in one place, but when the critical mass is achieved, it takes a life of its own. for sg to succeed to the next level, she must attract mind workers, not simply grind workers.

[chewed]

implementing minimum wage is not the solution. the issue is how to implement it and still KEEP BUSINESS COSTS LOW.



social, cultural and political considerations will not make any policy works. the profit model is the only way to go. find a solution that will benefit all party and it will takes off.

you don't get it, do you?

it's too late to roll back the cost of living & cost of doing business in SG. The other solution is to raise the wage component. Inlfation will have to come.

[Rogue Trader]

you don't get it, do you?

it's too late to roll back the cost of living & cost of doing business in SG. The other solution is to raise the wage component. Inlfation will have to come.

you then don't get it. Who's going to pay your boss to pay you? You want to earn 10k a month and pay $10 for a can of coke? Money don't grow on trees , it has to be created from somewhere in supply chain.

[Rogue Trader]

yes. the intellectual component is keeping california relevant. and why do some very high end industries such as high tech, media entertainment, and new tech continue to invest in california and her people? it's because we have achieved a critical mass in terms of talent and innovation, and the climate and beauty of the region help to keep these folks happy here. despite the high entry cost, the rewards and success far exceed the pain of dealing with a corrupt, bloated and slothful state gov. these companies are more than willing to pay the high end for high end quality people. it's very difficult for any region to amass diverse talent in so many fields over so many years in one place, but when the critical mass is achieved, it takes a life of its own. for sg to succeed to the next level, she must attract mind workers, not simply grind workers.

agree. singapore has pass over the chance to move higher up the value chain by importing 3rd class trash. what is singapore exporting nowadays? educated and skilled workers to positions in china/hk/US who will not come back.
singapore always boast a good education system, but can't even come up with a worldclass product. i think our most famous one is chicken rice.

[eatshitndie]

agree. singapore has pass over the chance to move higher up the value chain by importing 3rd class trash. what is singapore exporting nowadays? educated and skilled workers to positions in china/hk/US who will not come back.
singapore always boast a good education system, but can't even come up with a worldclass product. i think our most famous one is chicken rice.

even sg's intellectual property rights to chicken rice have been cracked wide open by so much disclosure of good recipes on the web. i can cook my own chicken rice here with all the right ingredients, which we have, including range free yellow chicken.

[chewed]

you then don't get it. Who's going to pay your boss to pay you? You want to earn 10k a month and pay $10 for a can of coke? Money don't grow on trees , it has to be created from somewhere in supply chain.

Ever heard of the Big Mac index? Cost of Big Mac in HK US$1.54, Japan US$2.34. Singapore? A whopping US$2.17.

and you still suggesting cotninue paying peanuts to locals while the cost of living keep increasing?

you tell me how to roll back the high cost of living & high cost do business.

[Rogue Trader]

Ever heard of the Big Mac index? Cost of Big Mac in HK US$1.54, Japan US$2.34. Singapore? A whopping US$2.17.

And where do the burgers comes from? ronald macdonald's bum? you increase macdonald worker pay, then macdonald will either increase Big Mac price or decrease Big Mac size. (and u have to buy 2).

and you still suggesting cotninue paying peanuts to locals while the cost of living keep increasing?

no. but if we increase wages, cost of doing business will be pass back to us. come on. this is simple economics. if you don't agree with this, don't argue with me. go and argue with adam smith and his invisible hand of demand supply.

you tell me how to roll back the high cost of living & high cost do business.

i already say in my previous posts. increase productivity thru innovation and move up the value chain. why hire 10 foreign worker to clean office windows when you can use a cleaning machine that can go up and down the side of the building? 1 singaporean worker to operate it, another engineer to maintain it. For the 10 local engineers who invent it , they can now export thousands of cleaning machines to other country.