Straits Times: Eyeing the next general election

Budget debate

“Having good notice will give voters confidence in the boundary redrawing process. It will also give a reasonable time for political parties to do more focused groundwork and consider their candidate line-up.”
Workers’ Party chairman and Non-Constituency MP Sylvia Lim, on why the Electoral Boundaries Review Committee report should be released six months to a year before the general election

“Well, between now and the end of Budget (debate), I am not aware of any committee being appointed. So I can safely tell you that the committee has not been appointed yet. It will be appointed only after the Constitutional change.”
Deputy Prime Minister Wong Kan Seng, dispelling any notion that the report will be out soon

Posted in 2010 03. Comments Off on Straits Times: Eyeing the next general election

Straits Times: Growth for whom, asks Sylvia

Budget debate


WORKERS’ Party chairman Sylvia Lim cautioned yesterday that as Singapore pursues economic growth, the average citizen must also feel that he gains.

The Non-Constituency MP cited three areas of concern as she noted that “our ultimate aim of growth is to improve the welfare of all citizens”.

One was how much locals benefited from rising gross domestic product. She cited an article last July by economist Manu Bhaskaran which noted that profits took an extraordinarily high 46 per cent of GDP, almost half of which went to foreign-owned companies.

Two, the quality of life for many had fallen in the past five years. Business costs had escalated; an influx of foreigners had worsened congestion and made locals feel like strangers in their own neighbourhoods; and property prices and rentals had shot up.

She took issue with Finance Minister Tharman Shanmugaratnam’s claim that median incomes had risen between 2005 and 2008, saying that the benefits of growth had not been spread evenly.

For instance: foreign workers had depressed the wages of lower-skilled Singaporeans, especially the older and more vulnerable.

Her claims built on those made a day earlier by WP chief Low Thia Khiang, who had lashed out at the strategy of maximising growth, saying it kept low-wage workers’ pay down and widened the income gap. Said Ms Lim: “While I agree that we need foreigners to augment our population and talent pool, the pace and scale of the influx in the last few years was wrong.”

Her third area of concern: income inequality at a level more commonly found in developing countries.

Singapore’s Gini coefficient, a measure of income inequality, had risen steadily in the last decade and was now at 0.478, or 0.453 after government transfers – a figure Ms Lim said was way below nations like Japan and South Korea.

“We should not dismiss increasing inequality as inevitable,” she said, as prolonged disparities could reduce social mobility.

She pointed to a recent book by British social scientists Richard Wilkinson and Kate Pickett, titled The Spirit Level: Why Greater Equality Makes Societies Stronger. Singapore did not fare well in it.

“If inequalities in Singapore continue at such levels, we should seriously question whether our policies of promoting equality of opportunity are really working,” she added.

Addressing her criticisms, labour MP Halimah Yacob (Jurong GRC) said: “The greatest dignity that we can give anyone is the dignity of having a job.”

She pointed out that the Budget itself was geared towards making sure Singaporeans got better jobs and incomes. “Although there may be a widening Gini coefficient, there are also tremendous social transfers that the Government has provided to those who need help.” A statistic she cited: Government spending on assistance schemes rose by 30 per cent to 40 per cent during the recession.

Posted in 2010 03. Comments Off on Straits Times: Growth for whom, asks Sylvia

TODAY: Quota cut and thrust


MP’s counter suggestion to do away with levy and use only dependency ratio sparks debate


SINGAPORE – Many of them went to Parliament with concerns about the economic and social impact of higher foreign worker levies. But when one Opposition Member of Parliament (MP) suggested the levy be abolished, it sparked a spirited defence of the mechanism.

The fourth to speak yesterday, Mr Low Thia Khiang (Hougang) urged the Government to “take the bold step” to remove the levy and just use the dependency ratio to control foreign worker intake.

Mr Low’s reason: “It doesn’t look like a system designed to control the growth of foreign workers, but as a source of revenue for the Government.”

The levy collected for 856,000 work permit holders is now about $1.6 billion annually, noted the Worker’s Party secretary-general, who likened it to an “opium” the Government relies on and a soft option, too, for businesses.

Consult industries and companies and reduce the ratios gradually instead, he said – and the money that would have gone to pay for the levies could then be redirected to local workers’ salaries, for training or to upgrade production processes.

“(A lower) dependency ratio will force employers to look hard at how to re-skill and make Singaporean workers productive instead of looking to relatively lower-cost foreign workers as an option to compete in the market.”

This suggestion was quickly criticised by two People’s Action Party (PAP) MPs.

Ms Irene Ng (Tampines GRC) wanted to “spell out the consequences” and “hopefully, get it clear in his (Mr Low’s) head, what he’s saying” – which was, she felt, that cost of living would go up, among other consequences.

Mrs Josephine Teo (Bishan-Toa Payoh GRC) stated on behalf of unionists: “We totally and firmly reject Mr Low’s disastrous suggestion … as it’ll harm the interests of our workers.”

She asked: “How does Mr Low propose the Government allocate the foreign worker quota efficiently to businesses, without a levy mechanism? Would it be right for civil servants to pretend to know all about market demand and supply?”

Retorting that it was the “job of the Government”, Mr Low also noted the current tiered levy system was “equally complicated” and has not prevented local wages from being dampened.

Mrs Teo then challenged Mr Low to find a way to allocate foreign labour to industries. “If you let me make a study first, if you give me the Ministry of Manpower, yes, I will propose to you what’s the dependency ratio,” said Mr Low, drawing laughter from the House, before he was asked to sit down.

Mrs Josephine Teo:

How does Mr Low propose the Government allocate the foreign worker quota efficiently to businesses, without a levy mechanism? Would it be right for civil servants to pretend to know all about market demand and supply?

What about the social cost of foreign workers? Removing the levies is turning a blind eye to the social disamenities they create.

Mr Low Thia Khiang (picture):

But I thought that’s the job of the Government? … The member also says that I made comments, I accuse and criticise the Government but I have no alternative …

What solutions do they (the labour MPs) have? … Their views are the same as the Government’s, maybe they don’t even have their own views. They have enough resources so they have solutions, but I don’t have solutions.

Posted in 2010 03. Comments Off on TODAY: Quota cut and thrust

Straits Times: War of words over low-wage workers

Budget debate

WP’s Low and PAP MPs cross swords on foreign worker policy


Mr Low (left) wanted the foreign worker levy scrapped and blamed the Government for not lifting the lot of low-wage workers.

A WAR of words between Mr Low Thia Khiang and People’s Action Party MPs erupted yesterday when the Workers’ Party chief attacked the Government, saying its policies have done little to lift the lot of low-wage workers over the years.

Blaming especially its foreign worker policy, he suggested that the levy for hiring them be scrapped and employers be allowed to employ fewer of these workers.

In his 20-minute speech, the Hougang MP lashed out at the strategy of maximising growth in the past decade, pointing out that it has caused salaries of low-income workers to stagnate and, in turn, widened the income gap.

“When the Workfare Income Supplement (WIS) has to be revised upward and the qualifying monthly income limit increased to $1,700 to ensure low-wage earners are not left behind in our foreigner-dependent economy, doesn’t that raise an alarm in the Government about the meagre salary our low-wage workers are getting?” he said. “The growth strategy… for the past 10 years has definitely not made these Singaporean workers feel any sense of progress with the nation.”

He placed the responsibility for helping the low-income achieve higher wages on the Government’s shoulders. “It is easy to blame our local workforce for low productivity but who opened the gates to allow foreign workers to flood the labour market in the first place?” he said.

“Easy access to cheap foreign labour offers little incentive for companies to up their productivity… The Government has to assume some responsibility for the low productivity in the last decade.”

He wanted the Government to improve their pay soon and not wait for productivity gains to reach the target set in 10 years. “How long more must our low-wage workers wait to enjoy a First World pay?” he asked.

On the foreign worker levy, he argued the savings from doing away with it, coupled with a reduced dependency ratio, could be used by the company to provide employment for local workers, upgrade the production process or send local workers for training.

“The reduced dependency ratio will force employers to look hard at how to reskill and make Singaporean workers productive instead of looking to relatively lower-cost foreign workers as an option to compete in the market.”

PAP MPs, especially those from the labour movement such as Mrs Josephine Teo (Bishan-Toa Payoh GRC) and Mr Seng Han Thong (Yio Chu Kang), slammed his ideas.

Both accused him of ignoring government measures like Workfare to supplement the income of low-wage earners.

Mrs Teo and Ms Irene Ng (Tampines GRC) also criticised his levy suggestion.

“Without the levies, foreign workers are even cheaper and even more attractive to businesses. And some of these businesses will find loopholes to get round the quotas, to get more of the cheaper foreign workers,” said Mrs Teo.

Ms Ng added that any move to tighten the dependency ratio as a way to raise workers’ wages could also lead to higher cost of living for consumers.

Mr Low jumped up to respond several times during the debate.

On help for low-wage workers, he said that despite measures like Workfare, “the fact remains that the low-wage worker remains low-wage… So is the Government going to be happy to say, ‘Okay, I’ve given you some assistance and thereby you remain low wage?'”

On the labour MPs’ assertions that he did not offer alternatives, he said in Mandarin: “What solution do they have?… Maybe they don’t even have their own views because they are members of the Government and NTUC.”

As this is the Year of the Tiger, Mr Low used a Chinese proverb “hu jia hu wei” – a fox assuming a tiger’s identity – to describe the labour MPs. It meant they had borrowed someone else’s authority.

As for ditching the levy, he said it had “become an opium, opium for the Government because it collects money from the levy, opium for the businesses because it’s a soft option for them”.

On Ms Ng’s point that higher wages lead to higher cost of living, he said: “That could happen… But can we say that because we’re worried about the cost going up, then we… want a section of our society to continue to be impoverished?

“Is it fair?”

Posted in 2010 03. Comments Off on Straits Times: War of words over low-wage workers