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Singapore behind Hong Kong and USA, both which have minimum wage – Tan Jee Say

photo by Shawn Danker

Irene Shen/

Housing prices, healthcare costs and foreign labour policies dominate the Post Election Transformation Talk organized by The Online Citizen on 11 June. Its aim was to gather Singaporeans to talk about the transformations that were most desired.. The 3 hour talk, of which half was devoted to a Question-and-answer session, featured two guest speakers – The Online Ctizen’s Mr Leong Sze Hian and former principal private secretary to then-Deputy Prime Minister Goh Chok Tong, Mr Tan Jee Say.

Cost of Living

On housing, Mr. Leong mentioned that Singapore is the only country in the world that inflates the price of public housing, and then gives housing grants that never seem to match price increases, and then claims this is  helping people to own homes. He added that flat prices rose 66 per cent or 11.1 per cent per annum over the last five years or so, whereas housing grant increases were about a few thousand dollars a year for most eligible buyers. He also raised that Singapore public housing supply policy caters almost entirely to first-timer families and forsakes other groups such as second-timers, divorcees, single mothers, singles, and down-graders who may need to do so because of financial stress. According to him, 95 per cent of Build-to-Order (BTO) flats are reserved for first-timers and an unknown percentage are reserved for grassroots volunteers.

With regards to healthcare, Mr Leong said that the current public spending on healthcare is approximately 2 per cent of GDP, one of the lowest in the world. Instead of transferring $76 million of Medifund surpluses to the Protected Reserves (http://theonlinecitizen.com/2011/04/helping-the-poor-too-much-money/), he suggested that Medifund can be used for the needy who cannot afford polyclinic out-patient treatment. He also suggested that the criteria for approving Medifund applications and Standard Drug List should be made public. He remarked that the last disclosed 99 per cent rejection rate in Parliament, for down-grading applications may be forcing more Singaporeans to choose lower class subsidized hospital wards.

Foreign Workforce

Mr Tan Jee Say, who is now with the Singapore Democratic Party,  touched on four areas of foreign workforce – economic, financial, social and political. He explained that Singapore's economic growth, conventionally measured as GDP, is determined by labour supply and productivity. Mr Tan also observed that the immigration policy was one of the main factors for the vote swing against the PAP in the recent General Elections. From a political perspective, while the incumbent may benefit from a huge number of new citizens who may have voted out of gratitude, the advantage would only last for one elections as the new citizens would soon encounter the same problems that Singaporeans face.

Yardsticks

Mr. Tan said that setting a minimum wage would not affect Singapore's competitive position as Singapore has in fact fallen behind in world competitiveness ranking behind Hong Kong and the United States, which implement minimum wage. To transform this, he suggests that the CPF Equalisation Levy should be implemented on foreign workers to balance the cost of hiring foreign workers and Singaporeans. This would allow Singaporeans to compete with foreigners on an equal platform. Additionally, ministerial pay should not be linked to  GDP growth and CEO salaries.

Transform, Tweak or Counter-Transform?

On the PAP’s pledge to transform itself, Mr Tan felt that the most important ingredient is sincerity. “Sincerity comes from the heart and it is non-calculative, tweaking doesn't mean transformation,” he said. He also noted that the PAP’s desire to tranform wasn’t new.

In GE 1984, when the opposition politicians secured an elected seat in parliament and PAP's share of votes went below 70 per cent for the first time, there were calls for the party to listen to Singaporeans.

Mr Tan further questioned PAP's DNA on transformation with an extract from Page 45 of Hard Truths:

“Any credible opposition would not be able to come up with a truly alternative platform because if it were made up of smart people who want to do what is best for Singapore, it would arrive at similar conclusions to that of the PAP's.”

Q & A

Responding to a question why Singapore did not continue to adopt prefabrication HDB flats which significantly reduce the amount of manual labour. Mr Tan, who was in the Public Housing Committee in 1981, thought that prefabrication was the answer when they identified that there was a shortage of flats and had to build 150,000 flats by the next election in 1984. Mr Tan futher explained that prefabrication flats require a minimum volume and also land to store.

On the foreign labor policy, a member of the audience felt that the crux of the problem lies with policies which allow corporations to squeeze employees to the fullest rather than the liberal immigration policy itself.

Mr Leong answered that we cannot have a policy where you define everyone as foreign talent. “If you bring in people at the top with skills, high pay – that's foreign talent,” he said. Mr. Leong added that the job category that Singaporeans do not want such as cleaning or general workers has the third highest unemployment rate according to the latest statistics. “What we need is an equal opportunity employment commission,” said Mr Leong. Mr. Tan added that it is not easy to fire or dismiss someone in western countries, but when western companies come to Singapore, it is easier to do this under the Employment Act, where companies can give 1 to 3 months notice (contractually) to employees.

One lady asked why drive away foreign investors (job creators) by raising the threshold to be Singapore citizens and instead, give jobs away to foreign talent/worker. Mr. Leong commented that instead of encouraging the kind of people that we want to come to Singapore, we increase the S pass to $2,000, and employment pass from $2,500 to $2,800, so foreigners have a minimum wage, but Singaporeans don't. "The real way is actually equalize the wage cost of foreigners and Singaporeans as I recommended,” added Mr. Tan.

Another member of the audience who is in the retail business felt that one overlooked factor was high rental costs for businesses. In response, Mr Tan explained due to high rental, stores have to open long hours to justify the high rental and thus, have to hire foreign workers who are willing to work long hours.