The Online Citizen

Budget 2012: Income growth in some sectors cannot be tied to productivity growth

February 19
23:53 2012

~by: Ravi Philemon~

The Government should be lauded for enhancing the schemes that cater to the people with lower-income, people with disability and the elderly. The increased budget for healthcare expenditure from $4 billion to $8 billion a year should be especially appreciated. It's good that the Government has realized that it cannot continue to spend less than 4 per cent of its GDP on healthcare.

Singapore's Department of Statistics Report on Retail Sales Index reveals that despite the high GDP growth in 2011, the retail sector remained lackluster. The Report said, 'The total retail sales value in December 2011 was estimated at $3.5 billion compared to $3.4 billion in December 2010'.

Budget 2012 could have considered a retail rebate scheme where retailers could give 5 per cent of the GST back to the consumer as a rebate in the form of shopping vouchers. Such a scheme would have boosted consumption. Singapore's consumption remains at 40 per cent of the GDP, whereas it is as high as 55 per cent in other developed Asian economies.

Such a retail rebate scheme will entice the consumer to keep the retail scene in Singapore more vibrant.

It is good that the Finance Minister has given assurance that the economy of Singapore will be restructured on the basis of skills, innovation and productivity. But there will always be some essential sectors where upgrading of skills, innovation and increased productivity may be limited. To tie the income growth of workers in these sectors to productivity growth would be meaningless.

For example Minister of State for Transport Josephine Teo told Parliament that despite stepped-up recruitment efforts, fewer younger Singaporeans want to become public bus drivers. Ms Teo admitted that the reasons for this as being, 'the tight labour market and the availability of other jobs where working hours would be more conducive to family life' (see HERE). How much more skills upgrading can drivers have? How much more productivity or innovation could be infused into driving buses?

There are quite a few similar sectors where there can be very little productivity, innovation and skills growth. To tie in income growth to these factors in these industries will mean that Singaporeans will find it very difficult to take up jobs in such sectors as they may not pay meaningfully well. And the jobs in these sectors are essential and cannot be relocated to other countries.

Budget 2012 could have identified such sectors and increased funding for such sectors, specifically aimed at increases in income growth, which may have induced more Singaporeans to take up jobs in these sectors.  

While one can appreciate that that with the new Budget the Government will now 'give a $120 grant per month to families hiring a foreign domestic helper to help care for elderly family members who have severe dementia, or are immobile and unable to care for themselves…on top of the $95 concession in the Foreign Domestic Worker Levy that all households with elderly persons will continue to enjoy', the Budget could have aimed to do more for the elderly and the disabled, like:

1.                       Removing the Domestic Foreign Worker levy for qualified foreign workers who are brought in to care for the elderly, so that the elderly could be provided appropriate care at home (where possible) without the need step-down care at nursing home; and

2.                       Providing Elder/Disability Care Tax Credit for qualified elder and/or disability care expenses. As caregivers make heavy financial sacrifices in spending a large amount of money each year on expenses for aging relatives, including cost of providing food and transportation and paying for medical expenses, such a tax credit would be an added incentive and encouragement for caregivers to provide appropriate care for the elderly in their own homes.

Budget allocation for such initiatives would make significant difference in a graying society like Singapore's.

Another area the Budget could have addressed is the Total Fertility Rate (TFR) problem, which has also resulted in the high influx of foreigners.

The TFR problem may be mitigated if the Budget had provided for free education from pre-school right up to college.  By providing 2 months of maternity leave and 4 more months of childcare leave (which can be taken by either the father or the mother) for every child born. And by providing free medical care for the child until he or she turns 21.  

Mr Lee Kuan Yew said in June 2010 that America has overcome the TFR problem probably because of 'wide open spaces' (see HERE). The Budget could have made allocation for creating more 'wide open spaces', instead of encroaching on such spaces for the sake of urbanization, which besides contributing to the TFR problem, has also been blamed for the problem of flooding.

"This earth can hold only so many people. It's six billion now. It will be nine billion in 50 years. You destroy all the biodiversity, you destroy all the forests. You have to grow more food and this (results in) earth warming… it will destroy our habitat."

- Mr Lee Kuan Yew (speaking at the Singapore International Water Week and the World Cities Summit in June 2010)

  • Robert Teh

    I remember I came across a report somewhere that the US Department of Labor, has conducted a study on Singapore productivity investments some years back and found that such investment have failed to achieve increase of productivity in terms of ROI. It is like throwing away of good monies after bad. This fact was confirmed by the SPRING GM at a seminar I attended. Ministers have a habit of spending away people's hardearned monies without second thought. No wonder they have to keep paying for all kinds of profligate spending by the government without ever  seeing a chance of improving their standards of living or having their overdue retirement.

  • Robert Teh

    I remember I came across a report somewhere that the US Department of Labor, has conducted a study on Singapore productivity investments some years back and found that such investment have failed to achieve increase of productivity in terms of ROI. It is like throwing away of good monies after bad. This fact was confirmed by the SPRING GM at a seminar I attended. Ministers have a habit of spending away people's hardearned monies without second thought. No wonder they have to keep paying for all kinds of profligate spending by the government without ever  seeing a chance of improving their standards of living or having their overdue retirement.

  • iHUNTUMleekingyouHEAD

     
    "This earth can hold only so many people. It's six billion now. It will be nine billion in 50 years. You destroy all the biodiversity, you destroy all the forests. You have to grow more food and this (results in) earth warming… it will destroy our habitat."
    - Mr Lee Kuan Yew (speaking at the Singapore International Water Week and the World Cities Summit in June 2010)
    ………………………………………………
    why is leekingyou mubblin when he still 1st singapoor to import more foreign talents into this tiny red-dot?
    is he takin his kork to hammer his balded head?

  • iHUNTUMleekingyouHEAD

     
    "This earth can hold only so many people. It's six billion now. It will be nine billion in 50 years. You destroy all the biodiversity, you destroy all the forests. You have to grow more food and this (results in) earth warming… it will destroy our habitat."
    - Mr Lee Kuan Yew (speaking at the Singapore International Water Week and the World Cities Summit in June 2010)
    ………………………………………………
    why is leekingyou mubblin when he still 1st singapoor to import more foreign talents into this tiny red-dot?
    is he takin his kork to hammer his balded head?

  • Pingback: Budget 2012: Income growth in some sectors cannot be tied to productivity growth  |  The Temasek Reveal

  • Pingback: Budget 2012: Income growth in some sectors cannot be tied to productivity growth  |  The Temasek Reveal

  • Rodolfo

    The Govt's measures will inevitably result in higher wages and higher costs overall.
     
    What is important is that workers are able to generate a level of output higher than the wage increase. And this calls for intelligent and diligent workers, intelligent and efficient work processes. It takes two to clap. Workers need to put in their effort and that in itself is no easy task. Companies also need to create the environment and processes to facilitate this and looking at the kind of feedback companies have been giving the Govt, it appears they still want to stick with the high volume, low margin poor value adding activities they have become accustomed to.  
     
    It won't be an easy ride making this transition.

  • Rodolfo

    The Govt's measures will inevitably result in higher wages and higher costs overall.
     
    What is important is that workers are able to generate a level of output higher than the wage increase. And this calls for intelligent and diligent workers, intelligent and efficient work processes. It takes two to clap. Workers need to put in their effort and that in itself is no easy task. Companies also need to create the environment and processes to facilitate this and looking at the kind of feedback companies have been giving the Govt, it appears they still want to stick with the high volume, low margin poor value adding activities they have become accustomed to.  
     
    It won't be an easy ride making this transition.

  • adam

    In order for Singaporeans to be 'AHEM' Bus Captain one must realise that  the cost and difficulty to get a class 3 licence is an uphill task.
    How than??? why not try  a new approach i.e. turn Bus driving into a career, the earth bound commersial pilot not too different from commercial air pilot as there are passengers and road users safety in their hands.
    A school or course can be incoporated into ITE or Poly is a good start and a salary of $1,800-$2,500 with gross including overtime @ $3,000-$3,500 per month with all ther normal perks thrown in should encourage many Singaporeans proud to put on a Bus Captain uniform and not the silly garment they are currently wearing.

  • adam

    In order for Singaporeans to be 'AHEM' Bus Captain one must realise that  the cost and difficulty to get a class 3 licence is an uphill task.
    How than??? why not try  a new approach i.e. turn Bus driving into a career, the earth bound commersial pilot not too different from commercial air pilot as there are passengers and road users safety in their hands.
    A school or course can be incoporated into ITE or Poly is a good start and a salary of $1,800-$2,500 with gross including overtime @ $3,000-$3,500 per month with all ther normal perks thrown in should encourage many Singaporeans proud to put on a Bus Captain uniform and not the silly garment they are currently wearing.

  • Rodolfo

    I think the Govt itself is a part of the problem.
     
    The Govt has been exhorting the private sector to "best source". And yet they just have a non mandatory "best sourcing" guideline for the public sector. When questioned in parliament, the Govt refuses to push for this to be implemented in a more concrete manner across the civil service.
     
    As many citizens may know, the Govt can be very efficient in collecting its dues. But far less reluctant and inefficient in paying its dues. Yet it refuses to lead by example and wants the private sector to bear the burden of "best sourcing" while wanting to keep the option of "cheap sourcing" available to the public sector. What kind of leadership is this? What kind of moral authority does the Govt, possibly the largest employer in the country (including those "private" GLCs and fairly recently privatised formerly public organisations), have when it openly engages in such double standards?

  • Rodolfo

    I think the Govt itself is a part of the problem.
     
    The Govt has been exhorting the private sector to "best source". And yet they just have a non mandatory "best sourcing" guideline for the public sector. When questioned in parliament, the Govt refuses to push for this to be implemented in a more concrete manner across the civil service.
     
    As many citizens may know, the Govt can be very efficient in collecting its dues. But far less reluctant and inefficient in paying its dues. Yet it refuses to lead by example and wants the private sector to bear the burden of "best sourcing" while wanting to keep the option of "cheap sourcing" available to the public sector. What kind of leadership is this? What kind of moral authority does the Govt, possibly the largest employer in the country (including those "private" GLCs and fairly recently privatised formerly public organisations), have when it openly engages in such double standards?

  • lim

    Is there too much growth focus? Has growth focus created the need for immigration, foreign workers and created more stress locally for productivity gains? I fail to note any evidence that foreign workers increase local productivity. If anything, I suspect growth driven by foreign workers = more gain for foreign workers.
     
    More important is that the Government maintains high employment rates. This is something the Government has done very well. If it can sustain high employment rates in low or negative growth periods, that will be a bigger achievement.
     
    Most of the unemployment today may be driven by disabled, seniors and less abled persons (often called unemployable). The focus on the budget on these people esp the employment credit is a big plus in my books. Gahmens often rest on their laurels in that able-bodied people have jobs = sufficient. I think the Government's focus this year should be applauded.

  • lim

    Is there too much growth focus? Has growth focus created the need for immigration, foreign workers and created more stress locally for productivity gains? I fail to note any evidence that foreign workers increase local productivity. If anything, I suspect growth driven by foreign workers = more gain for foreign workers.
     
    More important is that the Government maintains high employment rates. This is something the Government has done very well. If it can sustain high employment rates in low or negative growth periods, that will be a bigger achievement.
     
    Most of the unemployment today may be driven by disabled, seniors and less abled persons (often called unemployable). The focus on the budget on these people esp the employment credit is a big plus in my books. Gahmens often rest on their laurels in that able-bodied people have jobs = sufficient. I think the Government's focus this year should be applauded.

  • Steve Wu

    There are several recent incidents with rather strange timings:
    1. The expose of Yaw Shin Leong's alleged affair, the spotlight on WP's (mis)handling of the aftermath, and the eventual expulsion.
    2. Shanmugam's lawyers and the take-down notice at Yawning Bread.
    3. Lee Hsien Loong's lawyers and the take-down notice at TRE.
    I strongly urge netizens to keep the eyeballs on  Budget 2012 amidst these distractions. Are there other unreported/under-reported investment losses recently?

  • Steve Wu

    There are several recent incidents with rather strange timings:
    1. The expose of Yaw Shin Leong's alleged affair, the spotlight on WP's (mis)handling of the aftermath, and the eventual expulsion.
    2. Shanmugam's lawyers and the take-down notice at Yawning Bread.
    3. Lee Hsien Loong's lawyers and the take-down notice at TRE.
    I strongly urge netizens to keep the eyeballs on  Budget 2012 amidst these distractions. Are there other unreported/under-reported investment losses recently?

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  • Pingback: Foreign Domestic Workers News 20-Feb-2012Foreign Domestic Workers

  • Chuister

    I do not get this article at all.

  • Chuister

    I do not get this article at all.

  • alex xia

    "But there will always be some essential sectors where upgrading of skills, innovation and increased productivity may be limited. To tie the income growth of workers in these sectors to productivity growth would be meaningless."  Was this statement meant to excuss poor productivity in cerrtain section fo the Ministry. If one is honest about it, Productivity can be measured and quantified for any activity. Quite often top managers would say its hard to measure their own productivity but insist that theose of the rank and file be closely monitored.

  • alex xia

    "But there will always be some essential sectors where upgrading of skills, innovation and increased productivity may be limited. To tie the income growth of workers in these sectors to productivity growth would be meaningless."  Was this statement meant to excuss poor productivity in cerrtain section fo the Ministry. If one is honest about it, Productivity can be measured and quantified for any activity. Quite often top managers would say its hard to measure their own productivity but insist that theose of the rank and file be closely monitored.

  • achtung

    The courses I attended only benefitted the lecturers

  • mice is nice

    when prices go up due to higher operating costs, etc, its passed to the consumers. such price increases are often done in a much shorter ime compared to any downward price adjustments- like oil prices.
     
    should then wages be pegged at least match inflation? since companies do the easy way of passing the buck anyway? with S'pore being one of the most expensive cities to live in, there are limits to how much individuals can reduce personal expenditure. things are worse for children & retirees.
    top 10 most expensive cities in 2011, S'pore ranks #10.
    http://www.citymayors.com/economics/expensive_cities2.html
    richest cities (pesonal earnings) in 2011, S'pore ranks #42.
    http://www.citymayors.com/economics/richest_cities.html

  • WhoIsDat

    I am currently working in the retail industry. I have worked for a local retail public listed company that owns several brands for a couple of years. Being there for years, i thought that the singapore way was the best way for asia.
    Now i am working for a foreign retail company and now i see the industry in a very very different view. My company really really emphasizes alot on productivity which is good. i like the way that it is managed a coached thru to the retail team.
    My company emphasizes alot on training and coaching but it's very different from the "training" that the govt here is suggesting. Usually when a SG company sends their staff to courses or training, they expect the staff to be super "pro" once there r back coz they are trained. I realised that the most crucial and missing part that is missing in that is CONSISTANT feedback and reaffirming of what they learnt. Upper bosses expect the middle management to train and lead the staff, but no training/feedback/support is given to the middle management. PLUS the upper management never sets and example. All i realise alot of SG company upper bosses always care about profits and not people. That is something very different about my company. People first, then profits will come in.
    There is alot more i can say but i think that we need fresh ideas. All i can say is there is definately greener pastures, beyond the fence.
    Its either the govt changes the way they see things or we just vote in new people who will have fresh ideas. Not some recycled policies, over n over again

  • Love My Country?

    I watch the parliament debate with regret. The DPM talking about the need for foreign worker and immigration to support decline birthrate. I believed PAP did not repent.
    The issue like WP – Low & Mao said. PAP" open the flood gate too much and out of control" The issue is "Control" and not do not need. These PHD are all debating on the wrong agenda.
    Look at our transport system. How many of you think that we are within control ? What is the root cause?
    Look at the Employment record and how many citizen thinks that we are within control?
    Look at the housing cost. Are we in control ?
    It the resolution of control and how we control those policies to serve the effectiveness. No MP or Minister wants to be on the ground. All Civil servants wants to sit in office as they are scholars. Few really passionate to care to change. MOst are in for the money which PAP had push to Growth at all cost to overshadow our purspose of being singaporean.
     
    Very SAD!
     
     

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