SINGAPORE – Economic worries occupied the first day of the Budget debate on Monday (April 4), with MPs stressing the need for accountability in government spending and tracking investment outcomes, even as they asked for more help for firms and workers.

Prudence in spending

Overall fiscal prudence was one concern, with Mr Sitoh Yih Pin (Potong Pasir) among those who warned against calls for more liberal government spending.

Mr Alex Yam (Marsiling-Yew Tee GRC) also hoped for prudence “in how society perceives the annual Budget”, citing an email he received after this year’s Budget speech that bemoaned the lack of goodies.

Accountability in outcomes

More specifically, MPs also wanted a detailed approach in ensuring that public funds are spent well. They suggested ways to improve accountability – whether at the level of industry, programme, or project.

Workers’ Party Non-Constituency MP (NCMP) Daniel Goh called for a framework to measure and evaluate Singapore’s return on investment in innovation and enterprise.

Ms Foo Mee Har (West Coast GRC) asked what outcome-tracking measures were in place for big-ticket investments such as the $4.5 billion Industry Transformation Programme.

And Nominated MP Chia Yong Yong suggested that in industry-research collaborations, the side of industry should be the one specifying and evaluating research outcomes.

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Helping SMEs help themselves

MPs stressed this need for efficiency even as they called for more help, with SMEs (small- and medium-sized enterprises) and PMEs (professionals, managers and executives) as the focus of such wishlists.

Even as Dr Teo Ho Pin (Bukit Panjang) wanted more help for SMEs to identify opportunities, get productive and find talent, he noted not all firms which tapped the Government’s Productivity and Innovation Credit scheme made genuine productivity improvements.

Nor should the Government take too large a role, said MPs such as Mr Liang Eng Hwa (Holland-Bukit Timah GRC) and NMP Randolph Tan. Dr Lim Wee Kiak (Sembawang GRC) cautioned against making firms too dependent, saying: “Let businesses learn to grapple with the crisis and come out stronger.”

But there were also appeals to less tangible forms of value, with NMP Thomas Chua and Ms Foo wanting measures to preserve traditional or long-established homegrown firms.

Helping workers

As for workers, PMEs who might be left behind by economic transformation were the concern of MPs such as Ms Sylvia Lim (Aljunied GRC), who wanted the Government to study the feasibility of redundancy insurance, and labour MP Patrick Tay (West Coast GRC), who suggested a support network for unemployed and retrenched PMEs.

Four other labour MPs spoke up for a range of workers, from the elderly – championed by Mr Heng Chee How (Jalan Besar GRC) – to the young, with Mr Desmond Choo (Tampines GRC) suggesting incentives for firms to start apprenticeship schemes instead of internship programmes.

This article was first published on April 4, 2016.
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NTUC will work with employers and govt to minimise structural unemployment, he says

THE labour movement in Singapore will have to quicken its pace in helping workers and companies cope with economic restructuring amid slower growth.

In noting that the current slowdown is cyclical and, “more fundamentally, structural”, Secretary-General of the National Trades Union Congress (NTUC) Chan Chun Sing said in Parliament on Monday: “The labour movement will definitely want to work with employers and the government to make sure that we minimise the occurrences of structural unemployment.

“The faster our structural changes go, the more we need to do this. … Because when growth slows, the manoeuvre space becomes tighter.”

Mr Chan, together with other Members of Parliament (MPs) representing the labour movement, responded on Monday to the Singapore Budget 2016.

The Budget, unveiled by Finance Minister Heng Swee Keat over a week ago, follows on previous ones in which Singapore’s economic restructuring efforts were drawn up in the Transition Support Package in 2013.

Citing consumers’ shift from shopping in malls to shopping on websites as an example, Mr Chan said there was a fundamental shift in the economy, and that workers and companies needed to adapt to that future. This year’s Budget, coming amid slower growth, should thus be viewed as part of the larger picture.

“Only when we have skills for the future and jobs of the future, will our workers have careers of the future,” said Mr Chan.

Structural unemployment is thus an issue that the labour movement must tackle.

One way it can help is to provide career counselling for younger Singaporeans, especially students, so that what they learn in school can remain relevant down the road.

Labour MP Desmond Choo, in suggesting that the government can team up with the labour movement to provide career-counselling services, said students can then make use of “the opportunities to tap the unions’ extensive network to understand jobs through industry networking, workshops and workplace visits”.

There is also a need to pre-empt those already in the workforce from becoming redundant in the future, said the labour MPs.

The labour movement will help those already in the workforce to take up training courses that keep them relevant for the workforce in the future.

At the same time, more efforts can be made to match jobs to displaced workers.

MP Melvin Yong said: “Even before the risk of displacement becomes real, we should help them acquire relevant skills to help them move ahead into new jobs, different jobs and future jobs.”

But even as there is a pressing need to help workers with present unemployment, there is a need to ensure that there are enough retirement safeguards as well.

In this sense, the labour movement will ensure that workers command a respectable pay package that enables them to save up for retirement.

The success of this will have implications on the strength of the social safety net here.

Mr Chan said: “We can then reserve the finite resources for those who are truly in need, because we accept that, even to the best of our abilities, there will be some who will not be able to save up for their retirement.”

Raising productivity will be a long-term effort between the labour movement and the government.

In doing so, Mr Chan called on all parties, including trade associations and trade unions, to work with employers to identify the work processes – by sector or even down to company level – where productivity can be improved.

In particular, he noted that the construction, retail and food and beverage sectors are three that require more attention.

But as restructuring efforts are underway, efforts must be made to ensure that Singapore’s workforce can attract that talents that it needs for the economy to remain competitive on the global stage.

In this sense, what should make up the “Singaporean Core” of the workforce is a globally competitive team that thrives on the diversity of its members, and not an inward-looking “Singaporeans-only” mindset.

Therefore, NTUC will work with employers to ensure that Singaporean workers will have an equal opportunity to “rise up the hierarchy” at their workplace.

Ultimately, there is a need for collaborative efforts from all stakeholders, including workers, to ensure that the workforce is primed for the restructured economy, said Mr Chan.

“It would be such a waste that we have all these good jobs in Singapore, that our people are unable to take on these jobs, and to have them take on these jobs, we have to train them 10, 20 years in advance,” he said.

soonwl@sph.com.sg

This article was first published on April 5, 2016.
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Companies must drive their own transformation, and some may have to fail, say MPs

STRIDENT calls for the government to do more to help businesses are often heard in Parliament, but on the opening day of the latest Budget debate on Monday, the tone was decidedly different.

Instead, law-makers cautioned against being over-reliant on the government for help – a recognition that businesses must drive their own transformation, even as the government takes the lead in tackling cyclical and structural challenges to the economy.

And, some businesses may have to fail, as part of the restructuring process.

The first day of parliamentary debates on the Budget saw 25 MPs rise to speak. In his first Budget speech as Finance Minister on March 24, Heng Swee Keat stressed the importance of partnering for the future – whether through more targeted economic restructuring plans, or via support for Singaporeans of lesser means.

While they noted the need for fiscal assistance in restructuring, the parliamentarians stressed the need for firms to be competitive in the absence of government help.

Liang Eng Hwa, chairman of the Government Parliamentary Committee for Finance, opened the seven hour debate with a reference to a pre-Budget poll conducted by The Business Times.

Poll results showed that 69 per cent of chief executives officers who responded thought that businesses should be self-reliant for growth.

While not rejecting government intervention to restructure the economy, Mr Liang said: “Businesses should be the trend-setters. The government can help but the government may not always make the right business call.”

This would be crucial in ensuring that Singapore can successfully transform itself into a innovative economy, said Mr Liang, the goal of the high-level Committee on the Future Economy (CFE) chaired by Mr Heng and tasked to come up with a blueprint for economic restructuring.

The calls for businesses to be more self-reliant come after a raft of measures were introduced in recent years to help workers and businesses cope with economic change. Measures like the SkillsFuture framework were rolled out to help workers acquire new skills for their jobs, while the Wage Credit Scheme was introduced to help companies cope with wage increases amid a tight labour market. This year saw the government introduce more measures to help companies and specific sectors with the current slowdown, while still keeping an eye on restructuring.

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The government does not shy away from spending on measures that help workers upgrade their skills or restructure industries, said Secretary-General of the National Trades Union Congress (NTUC) Chan Chun Sing. But recipients have to be accountable for how they use government monies, which is funded by taxpayers. They need to make their own effort to be more competitive.

“It is incumbent upon us – whoever who takes this money for personal upgrading or for corporate restructuring – that we have a responsibility to society, a responsibility to use this money wisely to achieve the goals that we set,” said Mr Chan, who is also Minister in the Prime Minister’s Office.

Contrary to common perception, the success of assistance measures, said Mr Chan, should not be measured by how big or fast they expand. Instead, it should be by how soon they can be wound down, which denotes the effectiveness of the help rendered.

Alex Yam of Marsiling-Yew Tee GRC concurred: “I only hope that business owners and industries do not become too dependent on initiatives and funds. We hope these measures are temporary and wish that they be the catalyst for Singapore’s growth.”

That restructuring may weed out uncompetitive businesses was also a point not lost on MPs.

“Businesses with fundamental flaws in their business models, for example those that are over-reliant on cheap labour or government subsidies, should be allowed to die a natural death,” said member of parliament (MP) Ong Teng Koon.

While some measures were introduced to help specific sectors through the current slowdown, MPs said it is critical not to lose sight of longer term national priorities.

“Are there adequate assurances that sectors will not retreat into their own narrow outlook and compete for limited resources without an appreciation for national concerns?” asked labour economist Randolph Tan.

Leon Perera of The Workers’ Party called for a national benchmarking system to “focus minds” on the long-term goal of raising productivity.

That would in turn ensure that those who can benefit the most from government assistance are able to receive the help they need, said Mr Perera: “Improvement in a company’s productivity rank could be used as one criterion or one forward-looking condition – not the only one – to grant access to government schemes.”

There was also a sense, that letting the current slowdown work its way through the economy, may help with the restructuring effort.

Said MP Lim Wee Kiak: “Let businesses learn to grapple with the crisis and come out stronger. As the Chinese saying goes: ‘The plum only blooms in the harsh coldness of winter’.”

soonwl@sph.com.sg
kellytay@sph.com.sg

This article was first published on April 5, 2016.
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