Parliament
PSP NCMP Leong Mun Wai’s proposes living wage, S$1,200 levy on EP holders & gov’t paying for MediShield and CareShield premiums

If there is a need to help Singaporeans survive and do better in enduring the COVID-19 economic impact, the government should not hesitate to spend more and even use up the total net investment return earned each year, said Progress Singapore Party (PSP) Non-constituency Member of Parliament Leong Mun Wai on Thursday (26 February).
Speaking during the Budget 2021 debate in Parliament, Mr Leong said that his party does not foresee a shortage of fiscal revenue in the foreseeable future, allowing for the NIR to be used in full instead of the customary 50 percent, for the benefit of Singaporeans.
“Needless to say, we must ensure that the money spent will have a lasting effect on our people and give them the confidence to take ownership of and build their own futures,” asserted Mr Leong.
“It is in this regard that I think budget 2021 has fallen short,” he stated, pointing to “short-term, ad hoc” schemes with “confusing names” which makes it difficult for Singaporeans to find lasting reassurance or form long-term plans.
Mr Leong also stressed that the budget did not tackle the root cause of problems regarding job security and rising cost of living which still affects Singaporeans, especially the middle class.
He went on to make three recommendations for the budget which includes levelling the playing field for Singaporean talents in the local market, introducing a living wage for low-wage workers, and strengthening social security for all Singaporeans.
Levelling playing field for Singaporeans in the job market
On the matter of job security, Mr Leong said: “There is an urgent need to rebalance the local foreign worker mix in our job market.
He then quoted former GIC Chief Economist and co-founder of Future of Singapore Group Yeoh Lam Keong who said, “our most fundamental economic weaknesses stem from a structural excessive dependence on foreign capital and foreign labour.”
Mr Leong went on to express his disappointment that the 2021 Budget only included an adjustment on the S Pass quota for the manufacturing sector as a means of managing the local-foreign worker mix.
“The growing numbers of displaced PMET s joining the ranks of private hire drivers and gig Workers is the best final evidence of the shortcomings of the current employment and immigration policies,” he said.
As such, Mr Leong suggested imposing a S1,200 monthly levy on all EP holders, which is estimated to generate S$2.7 billion a year in new operating revenue.
“This levy will differentiate the true foreign talents who are high salaried and less affected by the $1,200 levy from the foreign talents who are simply cheap labour that compete unfairly with our Singaporeans and whom our economy has become overly dependent on,” explained Mr Leong.
Implementing a living wage for low-wage Singaporeans
Another urgent problem, Mr Leong said, is the high cost of living and heavy indirect tax burden on middle class Singaporeans. He cited the continued surge in housing prices during the COVID-19 pandemic and rising costs of electricity, ERP, and petrol tax as well as the up-to 35 percent hike in Medishield Life premiums. This is on top of the impending rise in GST.
“I hope the government will also admit that a tax system relying more on GST revenue will burden the middle class most, namely those who do not earn enough to hit the higher income tax brackets, but do not qualify for GST vouchers,” said Mr Leong.
Along these lines, Mr Leong suggested the implementation of a living wage for low-wage workers.
“The PSP strongly believe that a Singaporean who has put in a day’s work should be compensated sufficiently to allow him to leave with dignity and we firmly believe that honouring our fellow Singaporeans must take priority over all other economic arguments and we should not wait for the government to take another decade or two to slowly review the wages of the low wage workers sector-by-sector through its Progressive Wage Model,” said the NCMP.
Using the 2019 study by researchers at the Lee Kuan Yew School of Public Policy as a benchmark, Mr Leong proposed a living wage of S$1,500 take-home pay for all local workers, which would life the wage share of the country’s GDP.
Mr Leong further explained, “The government could pay the main portion of the increase from 2021 to 2023 to allow businesses time to adjust. We estimate this will increase operating expenditure, by about S$1.6 billion in each of the next three years.”
Strengthening social security
The third and final proposal presented by Mr Leong is for the government to pay all the MediShield Life and CareShield insurance premiums for all Singaporean, which would relieve the financial burden of ordinary Singaporeans and ensure that they have enough retirement funds in their CPF
Mr Leong said that while all Singaporeans “all Singaporeans should have adequate retirement resources in their CPF account,” the reality is that many do not even have enough to satisfy the basic retirement sum of S$93,000.
“This is because in addition to retirement use, the government has designated two additional users for the CPF monies, namely purchasing HDB flats and topping up the MediSave account,” said the NCMP.
He went on to say, “We estimated that the total premium paid by an average family of four up to 65 years old for the parents and 25 years old for the two children before they become independent will cause a drain of S$110,000 from the parents CPF resources.”
The figure goes up to S$246,000 when regular premium increases is taken into account.
“The MediShield and CareShield schemes are thus a big drag on the retirement resources of Singaporeans and the current social security plans are highly unsatisfactory,” lamented Mr Leong.
The government paying MediShield and CareShield premiums for all Singaporeans and PRs would increase the operating expenditure by a “justifiable” S$2.6 billion per annum, said Mr Leong. That’s about 0.2-0.5 percent of the GDP.
Doing this will also address the issue of Singaporeans not having enough funds in their CPF for retirement as they wouldn’t have to worry about unaffordable premiums in their old age and a big drain on their CPF is plugged.
Mr Leong concluded, “In total, the three recommendations would incur a net additional spending of S$1.5 billion. The government can decide whether it wants to relocate existing resources to these recommendations or allow the additional spending to provide more stimulus for the recovering economy.”

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