Long term issues to consider in GE2020

In today’s interview with Bloomberg News, Minister for Trade and Industry Chan Chun Sing that there’s “not much time” left for Singapore’s government to hold its next general election as the city-state has to dissolve parliament in January, months ahead of an April deadline.

Mr Chan also said, “Coming up against a hard deadline to hold elections, there’s actually ‘not much time’. We would like, when the opportunity arises, to have a strong mandate because the challenges that we are going to face in the coming years will indeed be the challenge of an entire generation.”

When the time to vote does come, Mr Chan thinks Singaporeans “are wise enough to look at the government performance not just on an episodic event”, but how it has done in the long term.”

 

My thoughts on this are:

1. The PAP has been given a super strong mandate since 1968, I believe the strongest for any country with democratic elections even in their worst performance. The current strong mandate that the PAP had been given certainly allows it to do whatever had been required to in the fight against Covid-19.

2. Yes, we should not judge based on just an episodic event, even though the government themselves had admitted that they could have done better in the explosive Covid-19 infection outbreak amongst migrant workers, if they had hindsight, etc.

The issue with migrant workers though, is actually a long term one that has become worse and worse each year. In the Population White Paper debate, Singaporeans had given their views very strongly yet the move towards the 6.9 mil ‘cap’ continued. The 2013 Little India riot cast a spotlight on migrant workers again. The key response was to curb drinking, especially among the migrant workers past 1030 pm. The Foreign Employees Dormitories Act (FEDA) was passed in 2015 but three manpower ministers later, some key parts of the bill appeared to be unimplemented, including the appointment of a Commissioner to oversee safety, maintenance, health and other issues across all large foreign workers dorms. We now know that half of the large dorm operators flout regulations yearly, thanks to questioning by MP Png Eng Huat. Singaporeans are paying a huge cost in now trying to control the situation at the dorms. How much we are paying is not yet clear but the government had said they will fund the additional costs that the already very profitable dorm operators have to incur for the required additional Covid-19 safety measures. Should Singaporeans fund dorm operators especially if they had cut costs and constantly flouted regulations previously and yet made huge profits each year?

3. In researching on this issue for an earlier blog post on how Singapore grew to nearly 1.5 mil migrant workers, I found that several of our prominent first generation leaders including the late Mr Lee Kuan Yew and the late Dr Goh Keng Swee had been against the idea of growing our migrant workforce beyond what we can manage, for many good reasons – our space cannot handle the large numbers that the PAP wanted, the negative impact on our culture and society, that over-reliance on cheap foreign workers will kill the push for innovation and entrepreneurship, etc. Dr Goh had warned that Singapore’s growth will one day come to a grinding halt if we become too reliant on these low wage workers. This is a long term issue that must be urgently addressed. The explosive number of Covid-19 cases has put a timely spotlight on our over-reliance on these migrant workers, living in what I believe are overpriced, poor and crowded conditions.

Former GIC Chief Economist Yeoh Lam Keong cited a IPS study in 2014 which projected that if our labour force was allowed to grow at just 1.7% annually, Singapore would hit 10 mil population by 2050, just 30 years from now. Can we handle this? Will more migrant workers issues explode in our face in the coming years after GE2020? Will we come to a grinding halt as warned by Dr Goh? Will the wealth and income inequality become too crazy to handle as we overpopulate? Can we even have a Singapore culture with local-born as minority?

Yes, there are indeed long term issues Singaporeans should be concerned about in the coming GE. It will certainly be the challenge of an entire generation as we seek to deal with a very tricky over dependence on low wage migrant workers problem and other issues caused by years of grow-at-all-cost..

Privatising Profits and Socialising Costs

We need to be mindful of privatising profits and socialisiing costs.

It was recently report that the government will absorb additional operational costs for dormitory operators during the circuit breaker. Responding to queries from The Straits Times, the Manpower Ministry (MOM) had said that the Government will offset the increase in operating costs for operators of purpose-built dorms, factory-converted dorms and construction temporary quarters owing to the longer hours workers now spend in their residences.

To qualify for additional relief from the government, the criteria certainly must be more than what is the operators’ normal running cost versus the additional costs incurred due to measures required due to Covid-19.

Firstly, the operators would, like all businesses in Singapore, qualify for Jobs Support Scheme (JSS), support for foreign staff, property tax rebates and perhaps other measures. These must be factored in before allowing them to claim additional costs. When ECDA made all preschools give 50% rebate on net fees for Apr and May to Singaporean parents, the main rationale was that centres already receive JSS and foreign staff support from government and these must be used to provide the fee rebates. All preschool centres definitely had increased costs during this period due to additional cleaning, health screening, additional MCs for staff, etc, on top of loss of revenue due to withdrawals and deferred enrollments. The centres all bore these costs as part of the expectation that these are part and parcel of their business risks.

The dorm operators, especially the larger ones, seemed to have been rather profitable in the good years as the government pushed foreign workers away from HDB and other places into large dorms in a short period, plus a constant growth of low wage migrant workers coming to Singapore. Have all the operators complied with the regulations, health and safety measures required by the Foreign Employees Dormitories Act? Or were a number flouting regulations and cutting on costs needed to implement these? Surely their level of readiness must be factored into how they would qualify for additional support.

While I can understand that the situation at foreign workers dormitories is urgent due to the fight to contain massive explosion of Covid-19 infections, I do hope the authorities will be very careful in reviewing carefully all applications for additional relief. It seems to me from a cursory read of the Straits Times report on this issue that the criteria to give out additional relief is far too simple and these businesses can continue to enjoy the normal good profits they make and no mention was made on whether the regular generous business support that they already received from our Budgets would be taken into account. We must not double support them given that they already automatically receive support like all Singapore-based businesses. There should be sharing of pain, in fact more needs to be borne by the operators as they had benefited in the good years and they will want to continue to partake in this business after Covid-19.

Singapore’s journey to nearly 1.5 million migrant workers

The massive explosion of Covid-19 cases has cast the spotlight on migrant workers. Much has already been said about living conditions for these workers and whether this has contributed to the spread of Covid-19. The purpose of this article is not to add to these debates, but to examine how we ended up with such as a vast number of low wage workers, living in a different world from Singaporeans even though they are very much in our midst all the time. What could have been the economic thinking behind this massive influx?

 

Singapore has seen migrant workers grow from 7% of our workforce since 1970 to 38% today (presented by NMP Associate Professor Walter Theseira at a recent IPS forum). Currently, 72.4% of these migrant workers are on Work Permits (WP) and 14% are on S-Pass (SP). In absolute numbers, the migrant workforce grew from just over 60,000 fifty years ago to a staggering 1.472 million today. The vast majority of 1.234 million are WP and SP holders (Source: MOM & Migration Policy Institute).

 

WP and SP workers form the lower wage spectrum of our work force. Their numbers are so large now that they occupy almost every area of our social spaces. In 2008, the late Mr Lee Kuan Yew said that he was not convinced on his own party – the PAP’s plan to have 6.5 million population, to be achieved largely through immigration to drive economic growth. “There’s an optimum size for the land that we have, to preserve the open spaces and the sense of comfort,” the late Mr Lee said. Other than occupying our social spaces, the presence of so many low wage foreign workers have depressed the wages of less skilled Singaporean workers, which has in turned caused a great divide between those who have benefited from our economic progress and those whose real wages have stagnated or even regressed in the past two decades.

 

How did we arrive at this situation of so many migrant workers, many stuck at low wages and with low productivity compared to other developed countries?

 

I believe it was the obsession with economic growth when the baton was passed from the first generation of leaders. Economic growth is good, but we also need to look at how the growth is derived, whether it is sustainable quality growth and how the benefits are spread across society. Our rapid growth from independence till the 1990s has made many countries and economists praise Singapore as a role model for development. One contrarian view was that of renowned Professor of Economics, Paul Krugman. To him, Singapore’s miracle was based on perspiration rather than inspiration. The growth had come from a very successful mobilisation of the population to participate in the workforce, jumping from 27% in 1966 to 51% by 1990. Professor Krugman warned that Singapore’s workforce participation rate was by then so high that it was unlikely to be further increased significantly. Such ‘sweaty’ economic growth model has its limit. Unless productivity, efficiencies and innovation are raised in the future, economic growth has to be captured through an ever-increasing migrant workforce.

 

By the 1990s, the ruling party had monopolized parliament with absolute or near absolute monopoly since 1968. The leadership was transferred to our second PM, Mr Goh Chok Tong in 1990. There was an unprecedented loss of four seats to the opposition in GE 1991, a really big deal to a party that will not tolerate any loss or the rise of a serious competitor. Mr Goh had in 1984 promised that Singapore would reach the 1984’s Swiss standard of living by 1999, in per capita GDP terms. The measure of success was to boost up GDP.

 

The late Dr Goh Keng Swee, architect of Singapore’s economic transformation in our first 2 decades, had since the 1970s till his retirement in 1984, warned of the dangers of growing our GDP through large influx of foreign workers and foreign direct investments. In the Future of Singapore (FOSG) talk in 2017, former Chief Economist at GIC, Yeoh Lam Keong who had worked under Dr Goh, said that Dr Goh frowned upon those who dare suggest growing the economy by boosting immigration. Dr Goh had felt that getting unlimited access to cheap labour would impede the critical need for upgrading and innovation.  The first-generation leaders seem well aware of the dangers of large influx of cheap foreign labour and overpopulation. The next generation of leaders however, felt that it was imperative to capture economic growth fast. I believe they must have felt the pressure to retain their super majority control of parliament through continued economic growth.

 

There were massive infrastructure projects in the 1990s. It opened the doors for a much looser migrant workforce policy to feed the expansion. Foreign workers grew from 311,264 in 1990 to nearly 800,000 in 2000 (a 255% increase in just 10 years). In the mid-2000s, to capture another wave of economic boom, Singapore had another massive round of migrant workforce. The 2009 Global Financial Crisis put a temporary pause but in 2010, our GDP grew a phenomenal 14.7% and the influx continued. Foreign workers numbered 1.3 million by 2010. As infrastructure had been a key part of the economic activities, the construction workforce grew very rapidly in these two decades, from 114,000 in 1996 to some 300,000 in 2019. This numbers will potentially be even higher going forward as the Singapore Business Review recently projected a 3.3% average annual growth in the construction industry from 2019 to 2028. The late Mr Lee Kuan Yew had observed in 2011: “We’ve grown in the last five years by just importing labour. Now, the people feel uncomfortable, there are too many foreigners.” He had estimated that it might take five years for the country to scale back its need for foreign workers, something which the government is still grappling with nearly a decade later and the numbers have continued to increase.

 

During the 2013’s debate on the government’s Population White Paper, we were reminded of this simple formula: Economic growth = Annual Productivity Growth + Growth in Workforce. Singapore’s productivity in recent years have been miserable, mostly flat for the decade of 2011-2020. It even fell by 1.5% in 2019 and is likely to be worse in 2020 due to Covid-19 disruptions and an impending recession. Today, despite recent acknowledgement of our low construction workforce productivity and some efforts to improve on this, we are still lagging very far behind our developed peers such as Australia, Japan, Taiwan, and Hong Kong. For example, Australia’s and Japan’s construction workforce are 3.9 times and 2.8 times respectively more productive that their peers in Singapore. In other sectors that depend heavily on low wage migrant workers such as F&B and retail, our productivity has lagged significantly behind that of Hong Kong, a city state economy like ours.

 

The trouble with looking at purely GDP numbers is that it is misleading. GDP can be divided into three components – Wage share, Profit share and Tax share. Singapore has now one of the highest GDP per capita in the world but its wage share has been hovering just above 40% for the past few decades, way below those of OECD countries which are around 50% and some even much higher.

 

The profit share component of GDP would go back to shareholders. In Singapore, the government owns a disproportionately large share of the economy compared to other developed countries. We encourage foreign investments and the profits would have to flow back eventually to where the investments originated from. Prior to Covid-19, the Marina Bay Sands was the most profitable casino in the world. It was generating some US$1.5 billion in earning (EBITA) a year. It is owned entirely by Las Vegas Sands Corp, listed in the USA.

 

For a long time and up till 2011 when astronomical ministerial salaries became an issue in GE2011, GDP was the measure for how well the civil service did. GDP growth was a key determinant of the bonuses of political office bearers. With the rapid rebound from the Global Financial Crisis, in 2010 the salary bonus for ministers went up to 8 months on a then-super high salary base. When productivity is low, growth in workforce can boost up the GDP growth; so we should also look at the quality of GDP growth, as well as how income growth had been distributed to the median and lower income groups.

 

I believe that the last three decades of drive to boost GDP numbers through large-scale foreign labour import had masked many brewing long-term structural problems. It has come to a stage where our Singapore Inc. economy is hooked on an ever-increasing base of low wage, low productivity workers to continue with our model for ‘prosperity’. I believe it is this obsession with GDP that impedes bold decisions such as having a national minimum wage.

 

It is unsustainable. In the same FOSG talk, Yeoh Lam Keong shared a 2014 forecast by IPS: A mere 1.7% annual growth in labour could see Singapore hitting 10 million population by 2050! The 2013 Population White Paper only presented a population scenario of 6.9 million by 2030. What’s beyond 2030 if we continue at this rate? This is quite a frightening thought considering that our imported labour is indeed growing at beyond 1% per annum currently. At a population of 10 million, the IPS forecast was for 3.3 million migrant workers, a 235% increase from currently. This will be on top of regular injection of new citizens and permanent residents. How do we manage the housing and social spaces by then? How do we manage the growing wealth and income inequality that will come? What will our Singapore identity be like then?

 

We have seen how troubles like that of the Little India riots of 2013 could happen when we overcrowd our small city state with the many people that we currently have, not to mention if we allow it to explode to another 235%!  The government now collects some $3 billion per year in workers’ levies. These add significant costs to employers and force them to keep wages of workers low. There has to be big structural changes, initiated by the government to bring us away from the ‘perspiration’ driven model that Paul Krugman warned of in the 1990s.  We have to also look at the ‘optimum size’ as advocated by the late Mr Lee that our island can hold and figure a more sustainable quality and innovation-led economic growth. The government has to take the leadership to effect big structural changes to sectors that persistently have this problem of huge dependency on low wage workers.

 

For too long,  we have kicked the can down the road from one generation of leaders to another in the drive to capture GDP growth in the quickest (and lazy) way, even though we had been warned by prominent leaders and economists that such methods will lead to unsustainable population growth, depressed wages for the bottom income earners and social problems associated with vast inequality. We are all feeling the negative effects now in a very real way. Uncomfortable though the changes may be, the time to tackle this escalating problem is now.

 

Note: The views expressed here are the opinions of the author.

Examining The Storm Over Social Enterprises Run Hawker Centres

* published in The Workers’ Party Hammer Newsletter, March 2019

The recent storm over high rental prices in Social Enterprise-run Hawker Centres (SEHC) cast the spotlight on what social enterprises are and how they run public goods. When the plan was presented in parliament in 2013, I expressed concerned that if we gave too much autonomy to the operators to impose rents and other charges to hawkers, when they operated a significant market share of the hawker centres, we might face monopolistic behaviours that would impose high operating cost on hawkers. Hawkers would in turn impose higher food prices on consumers. Although we term the operators as social enterprises (SEs), from the reality of how SEs had run public goods in the past, it was obvious that they did make surpluses; and when they dominated the market, monopolistic behaviours had been observed.

Hence, I sought the assurance of the ministry to monitor the way SEHC are operated. Then-Minister for The Environment and Water Resources, Dr Vivian Balakrishnan, gave his assurance in Parliament that his ministry would keep a tight watch over the way hawkers would be charged.

Fast forward five years and the issue became a national debate when food blogger K.F. Seetoh revealed details of high rental charges and ridiculous terms and working hours that hawkers had to bear with.

Much debate online ensued. Many Singaporeans were angry that commercial operators were allowed to form SEs to manage hawker centres with burdensome terms for hawkers compared to those at NEA-run hawker centres, and that hawkers seemed to be imposed with many other costs beyond the actual rental.

NEA finally acted to stop operators from imposing some onerous conditions, allowing now for early termination with smaller penalties, shortening required operating hours of hawkers, capping the fines that SEHC operators can impose on hawkers and imposing better feedback channels for hawkers.

I believe the unfortunate saga could have been prevented if NEA had indeed taken a very proactive examination of contracts by SEs for hawkers in the five years that SEHC had been operating.

The issue also called into question how government outsources the provision of public goods to third party organisations. The preference thus far has been for social enterprises to run public goods such as childcare and hawker centres. A commercial company has to incorporate a social enterprise entity to bid for such projects. I do not object to social enterprises running public goods, but we must know that they do not work magic and cannot be relied on to fulfill government objectives automatically. As can be seen from revelations of contracts and correspondences between SEHC and hawkers in the recent saga, the SEs tend to behave like typical large landlords, imposing harsh terms on hawkers and using employees who will apply rules strictly on hawkers without mercy. Without government subsidies or interventions, they also cannot work magic to bring about lower food pricing, maintain low rents to hawkers whilst having to manage own costs (including payments to NEA) and be profitable themselves.

I believe one reason this issue has generated so much sympathy for hawkers is perhaps because the situation hawkers faced mirrored the feeling of many SMEs and Singaporeans – squeezed by rent-seeking landlords in a country where costs have become very high. This has caused the ordinary person to feel the stress of making a decent living and small companies being forced out of business. It stems from a mindset of squeezing as much money as possible out of the people. Industrial land, for example, used to be managed by JTC who as a large supplier of such space, could dictate market rents. After JTC divested the industrial factories to Real Estate Investment Trusts (REITs), many of them majority-owned by the government, rents went up steeply. Public transport was outsourced to private companies with the government also benefitting initially from the privatisation. This however backfired when private companies, pressed constantly for profits, cut back drastically on maintenance.

Mr Ngiam Tong Dow, former Permanent Secretary recalled a conversation he once had with the late Mr Lee Kuan Yew over the Certificate of Entitlement (COE) scheme, which he felt was taxing transportation, and hence taxing every man, woman and child in Singapore, from the day of his birth till the day of his death. The late Mr Lee shot back, “Ngiam, are you the Permanent Secretary of the Budget and Revenue Divisions at MOF? … What’s wrong with collecting more money?” (ref: https://www.theonlinecitizen.com/2013/10/01/pap-elitist-dont-feel-for-the-people-ngiam-tong-dow/)

Hawkers today are not spared from this, being squeezed by ever higher rentals and operating costs. A different government mindset, more understanding on the plight of hawkers and a better support system will be needed if we are to help hawkers manage a decent living whilst keeping food costs manageable for all.

Hammer-hawkercentre-chineseHammer-hawkercentre-english

Watching start-ups grow up

I attended my final evaluation meeting yesterday as an panel member of ACE Startup Committee. Yesterday’s session was a marathon one as some groups were re-invited back to present as the panel had queries on various aspects of their proposals in earlier sessions, and the rest were those rushing to meet the deadline for the final session before the startup funding programme is superseded by the recently announced Startup SG initiative.

It has been a fulfilling journey. I was invited to be on the then-newly convened panel in late 2011. I recall in my first speech in parliament in October 2011, I had offered to help with the government’s effort to develop entrepreneurial attitudes amongst students and youths. So I accepted the invitation readily.

The committee initially met monthly to evaluate application for startup grants from SPRING Singapore of up to $50,000 per successful application by new entrepreneurs and entrepreneurs-to-be. This was later changed to bi-monthly meetings. From time to time, as an ACE representative, I also sat in presentations at polytechnics, at ITEs and at non-government groups which were also centres where their alumni / mentees could apply for the same SPRING Singapore grants.

I must have listened to some 300 presentations through these session in these 5 and a half years as a panel member.

A lot has changed since I took the plunge to be an entrepreneur in end 1999. Back then, government support structures were lacking. It was not so cool to give up secure careers to try to realise the dream to create a new business in uncharted waters. The first wave of dotcom was just hitting Singapore. Some enthusiasm had built up due to the success of silicon valley in the 1990s and that caught on in Singapore around early 1999 with some dotcom listings on our stock exchange. It died very rapidly too with the NASDAQ crash of April 2000. The crash nearly killed our business too as we had started the business but had barely raised funds when all equity funding sources dried up. It forced us to be disciplined to chase for revenues and to evolve our business models to what services the market would want to pay us something for. Eventually, we had a lucky break when e-learning became an essential service in our target market and we successfully sold off our already profitable business in 2007 with decent returns to our investors. That’s another story you can read about in my earlier blog posts.

Now as panel member, I face eager new and would-be entrepreneurs of all types, determined to convince the panel that they have a differentiated, interesting and viable business. We see business proposals of all types – the typical tech and mobile / internet ones, to interesting ways to disrupt age-old businesses such as fashion and food. Many proposals were accepted but many more were not supported for various reasons, and hopefully they will have the resilient to move on and explore alternatives.

The ecosystem has changed much since my journey more than a decade ago. It is certainly more ‘cool’ now for young graduates or even undergraduates to try for that start-up dream. I have seen many top graduates and even highly qualified and successful professionals give up lucrative careers for the hard work of running a start-up. Passion is key to making startups work. We cannot artificially mandate entrepreneurship. It has to come from the founders as they will need that inner belief and drive to make it successful through the endless challenges that will come. It helps that the universities and to a lesser extent, polytechnics have taken on this message seriously and have created their own ecosystem to make it easier for ideas to be incubated. Whilst funding is nowhere as vibrant as that in established and more exciting markets like the USA and China, there is definitely a lot more channels for good ideas to chase for funding.

Our market size remains a huge constraint for startups to really grow big and take on the world stage. In some cases, regulators are opening up to create friendly environment for startups, though a lot more can be done. I would like to see more vibrant sandboxes in as many industries as possible. In some industries where the government itself is a big user and purchaser of services, such as education and defence, it can be more open to working with start-ups, and to create environments where startups can evolve innovative solutions. Whilst there has been a lot of preaching by our leaders about our country needing innovation and entrepreneurship to drive it forward, I still get a sense that many in the government services lower down have not bought into the vision. They are still creating rules that control and restrict, and relying on old ways that will not encourage vibrant industry ideas to flourish in their sector. Hopefully leaders themselves buy into what they preach and look into how there are rules and habits in their own backyard that can be changed to encourage national innovation.

I am happy to have played a role as best as I can as an individual in this scene. I had the opportunity to mentor some of the startups actively, particularly those in the education sector. It is still a great challenge that they face and will face, as this path is hardly an easy one. I have seen some grow after much sweat and even change of business directions, sometimes more than once. I have seen some give up too. Many will fail for every major success we hear of. Yet, try we must and I am glad that many of our best and brightest are indeed trying.

 

YJJ’s third rally speech – 7 Sep 2015

亲爱的马林百列集选区选民,来自新加坡各个角落的工人党支持者,每个爱国的新加坡人,大家晚上好!

 3 天前,在义顺的群众大会结束后,我去了在如切的德明路小贩中心吃orh luak. Wah, 马林百列的orh luak真好吃,和凤山的有的比

 在小贩中心里,我碰到了一个人。这个人说他学过中医。他看到我穿着工人党的制服,就跟我说,在中医学里面,单单有素质 (“quality”) 是不够的:除了有,还要有‘ (“quantity”)。一个人不可以只吃了一两次药,就问为什么药没有见效。药,一定要吃得够,才会有效。

 这是什么意思呢?新加坡的国会里很久以来只有2位反对党议员。在2011年,我们有了6位反对党议员。在榜鹅东的补选之后,我们有了7位。2011年之后,我们就看到政府的政策有了改善。我们一定要继续给行动党服药。7个反对党议员够吗?不够! 我们一定要把更多的工人党候选人派进国会,才可以继续看到政策改善!

 911号,请投工人党一票。掌握民权,把握未来!

 

Good evening dear voters of Marine Parade GRC, dear Singaporeans.

Two days ago, ESM Goh Chok Tong had said that voters can have their cake and eat it. He said that the NCMP scheme is good enough for opposition to be in parliament. You can vote the PAP in and there will still be NCMPs to be voices in parliament. Do you know what the PAP wants? They want to bring Singapore back to the dark days of politics where they have absolute control over everything. The PAP just wants a blank cheque to do what they want so that they do not need to listen to you. Voters of Singapore, you, you have the power to stop them. You must stop them!

ESM Goh seems to like cruise ships. He likened the PAP and opposition to cruise ships. He said that the PAP’s ship has a clear destination. Yes, it is destination to a population of 6.9 million. The PAP ship is sailing there even though Singaporeans have clearly rejected this destination. It is sailing away with a Swiss standard of living for selected elites, but a Swiss cost of living for all of us! This year, the Economist Intelligence Unit has listed Singapore as the world’s most expensive city to live in, for the 2nd year running. And I am not sure what type of cruise ship we are in when our elderly needs to collect cardboards, not for exercise, but to make a living.

ESM said that the opposition is like a ship on a journey to nowhere. They are like casino ships.

Hey, wait! Who put casinos into Singapore? No the Workers’ Party! We had rejected casinos when it was debated in parliament.  ESM is mistaken. The casinos are on the PAP’s ship on the destination to 6.9 million. The Workers’ Party’s ship is on a journey towards a dynamic population for a sustainable Singapore!

Yes, a dynamic population for a sustainable Singapore is what we like to see for our children. When one looks at the government’s argument in its population white paper, you get the sense that Singapore is a big factory. We need 2-5% economic growth yearly. Our local workforce will shrink. To achieve the economic targets, the population white paper worked out a 1-2% increase to our workforce yearly. Based on that, Singapore will receive large number of immigrants. It will bring our population to 6.9 million by 2030. It will bring the percentage of citizens in our population to just 55%. In just 15 years from now, almost half of anyone in Singapore will not be a Singaporean. It is hardly a sustainable Singapore. And after 2030, what’s next? What will this government continue to do in order to have that desired economic target?

If we are just Singapore Inc.; if we are a business that looks coldly at hard economic data and at the bottom line, then what the PAP is doing will sound logical. However, we are not a business. We are a country, a nation. We can coldly grow the economy, but it will lead to cracks in society. It will lead to a crowded and divided Singapore. It will lead to a Singapore with high income inequality and where people do not feel they belong to.

As difficult as it may be, we need to invest in Singaporean workers and in our local enterprises. We need to empower ourselves to be sustainable in the long-run. In our businesses, we need to develop confident Singaporeans and dynamic Singapore companies, able to compete on innovation with the world. I have spoken on this topic in parliament on several occasions and we have outlined proposals in our manifesto as well. We need to empower our future. Vote our WP candidates and I into parliament, and we will continue to push for a dynamic population for a sustainable Singapore!

As you all know by now, I contested in Joo Chiat SMC in 2011 and lost by 300 over votes. I did my best to reconnect with residents of the SMC for the past few years, mostly in publicly accessible areas. On 24 July, just 6 weeks ago, I found that the field that I was playing in had suddenly grown 5 times in size. I had to take the ball from a far end and start running towards the goal post again.

I am thankful that we have received lots of support. Over the past few weeks, several condominiums have allowed us to meet with residents. I am sorry that we are not been able to enter some condominiums because permission has been refused.

I recently visited several condominiums in the now defunct-Joo Chiat SMC. I met again with people that I had met during GE2011. Some had told me that they are happy that I did not go away, but expressed their concern if the battle is now too difficult because this is a big GRC and it is a PAP’s stronghold. My response is, “Yes, my opponents may wish me to go away, but I am still back. (In hokkien, they say, ‘par si beh ciao’!) I am back with a dedicated team of 4 others, with people that I know are professionally competent and most importantly, passionate about serving the people. We are here because we want to offer a committed alternative to you, the voters of Marine Parade GRC.”

In the course of our visits to many parts of the GRC, I had found that the Workers’ Party had contested actively in many of these areas in the past, and some very recently. The Workers’ Party had contested in areas such as Joo Chiat, Kembangan, Chai Chee, Ubi and Eunos. Boundaries were shifted at every General Elections, with very short notice between the EBRC report and nomination day. Marine Parade GRC has had constant change of boundaries. Residents in Serangoon Central can claim to have sea view property because they are in Marine Parade! I think it is time. It is time for the Workers’ Party to offer ourselves as a choice to serve residents of Marine Parade.

People have asked how we will manage this GRC if we are elected.

First, the TC will be directly managed. We already have 7 WP MPs and staff who have town council experience. This will provide us considerable expertise to tap on for advice in how to handle a changeover of management and to establish operations quickly. A key priority will be to ensure that there will continue to be proper maintenance and cleanliness.

We will also want to focus on the Heartware, as in H.E.A.R.T. As in how WP had managed Aljunied, we will move in quickly to establish our own grassroots. There will be regular activities amongst residents to create bonding and to build a community spirit. We will also work with Voluntary Welfare Organisations and government institutions to ensure that essential help will continue to be given to vulnerable sections of the community that need them.

I have now been in WP for nearly 5 years. I can say with conviction about something that I have observed first hand. Given access to fewer resources, our MPs and volunteers work a lot harder. There is a greater human touch, something that is coincidentally reported in today’s newspaper about how Aljunied has changed. There is a bigger human touch in Aljunied now than before.

I dare say this for my team members too, because I have worked with them and I know know that they are hands-on people. They have all joined the Workers’ Party first as a volunteer, working hard on the ground in all sorts of activities such as helping with meet-the-people sessions, grassroots events and with policy work. They stepped up to our call to be candidates in this GE. They are qualified professionally, but we did not pick them only because they are qualified. We saw how they had worked quietly and diligently for a long time and hence we want them to be your representative in parliament, your representative to see to your needs.

At this juncture, I like to give a big thank you to the many volunteers who had helped diligently, into the wee hours of the morning every day just to get our campaign here going. It is difficult because we had just a few weeks to put everything together after the EBRC was out. I am so proud of my team of volunteers. Thank you!

Let me introduce the team of candidates again. Terence Tan, lawyer and entrepreneur. He Ting Ru, head of legal department in a public listed company. Firuz Khan, entrepreneur, the chocolate man and a social activist. Dylan Ng Foo Eng, head of wealth management in a foreign bank. People with different and complementary backgrounds but with something common. They are people with passion and heart for the people. This is Team Marine Blue.

Come Sep 11, vote Team Marine Blue, vote Workers’ Party. Empower your future!

Mr Lim’s two-thirds target of Singapore core – For how long?

Today’s TODAY headline reads, “Two-thirds S’porean core in all sectors a firm target.”

The Manpower Minister, Mr Lim Swee Say had say that “The Government will hold fast to its goal of having a two-thirds Singaporean core in the economy, and this will be the structure of the country’s workforce in the ‘medium to long term’.”

This two-thirds target was first established in 2010. Mr Lim’s predecessor, then Acting Manpower Minister Mr Tan Chuan-Jin had also said this during his Committee of Supplies (COS) rounding up speech for the Manpower ministry in 2013.

Mr Tan had said, “First, we are watching very closely the growth rate of our foreign workforce. We want to slow the growth of the foreign workforce significantly in this decade, so that the proportion does not increase significantly beyond the one-third ratio that we adopted in 2010. Last year, our foreign workforce grew by about 67,000, excluding foreign domestic workers. This is still too large, and we have tightened our policies to bring it down further. We will be watching the numbers closely this year sector by sector.”

I had just two months prior to this COS debate, worked with the WP’s team to prepare our alternative proposal to the government’s Population White Paper. The figures were then fresh in my mind. I knew from the government’s own projection that this ratio of one-third foreign manpower did not hold in their own projections in their own White Paper. So I sought clarifications from Mr Tan. Below is an extract of the debate on 14 March 2013 from parliament’s records:

================================

The Chairman: Before I call the next two Members, I note that Mr Dhinakaran and Mr Yee Jenn Jong have been raising their hands very diligently. The reason I did not call you earlier is because you did not raise any cuts under this Head and, therefore, I am giving all the other Members the first right. I will come to you, Mr Yee Jenn Jong.

Mr Yee Jenn Jong (Non-Constituency Member): Thank you, Mr Chairman. Just a quick clarification from the Acting Minister. The Acting Minister has said in his speech that the foreign workers will not go significantly above one-third of the total workforce. But during the tea break, I took the Population White Paper and I did some quick calculations. I found that the foreign worker workforce could grow to around 45% by 2030 and it is not difficult to understand this if you look at the chart 3.4 of the White Paper, where the foreign workforce growth is growing much faster than the local workforce for the next 17 years. So my question is: how long can we keep foreign workers to one-third of the total workforce?

Mr Tan Chuan-Jin: I thank Mr Yee for the question and the opportunity to clarify. When we are looking at the ESC’s recommendations, I think we are looking at keeping to about a third where we can, and we are really looking at this decade. For the following decade, the dynamics are a bit different. So for this decade, depending on how it unfolds, with the measures taking place, we would aim to hover at or around one-third if we can. I think we can probably manage to do that but it will be painful. But beyond that, of course, as you all know, by 2020 our own domestic labour force growth will basically end up at about zero. So whatever growth we have thereafter will largely be foreign labour growth. So what happens in the following decade? A lot depends on productivity. A lot depends on where we are in terms of restructuring efforts which is why this phase is particularly important. So it is really about one-third for this decade until about 2020.

Chart 3.4 of the Population White Paper (source: http://population.sg/whitepaper/resource-files/population-white-paper.pdf)

Chart 3.4 of the Population White Paper (source: http://population.sg/whitepaper/resource-files/population-white-paper.pdf)

================================

In his reply, Mr Tan had admitted that the one-third target is possible only for this decade. That I agree with. Whilst doing our own computations for alternative models, we had then studied all the publicly available numbers about population in Singapore. There will be net addition to the local workforce from 2013 till 2020, the end of this decade. This is because there will be more Singaporeans turning of age to be included into the workforce than there are Singaporeans retiring. Beyond 2020, the numbers are horrible. In order to get the kind of economic growth the government had wanted in the White Paper, there has to be more addition of foreign labour without any addition of local manpower. How much to add will depend on productivity growth, which the government had set a target of 2-3%. Sadly, this productivity growth has been near zero or negative in recent years.

So Mr Lim’s comments that the two-thirds Singaporean core will be something for the  ‘medium to long term’ is rather puzzling. What is  ‘medium to long term’? His predecessor had already agreed with me that “by 2020 our own domestic labour force growth will basically end up at about zero. So whatever growth we have thereafter will largely be foreign labour growth.” and that “it (foreign workforce) is really about one-third for this decade until about 2020.”

At the point that I had asked the question in March 2013, based on available manpower data of 2012, locals made up 63.0% of the workforce. By 2014, this figure has dropped to 61.9%. It was 62.1% in 2013. (Source: http://stats.mom.gov.sg/Pages/Labour-Force-Summary-Table.aspx)

Mid 2012 Mid 2013 Mid 2014
Total Workforce (‘000) 3,361.8 3,443.7 3,530.8
Local Workforce (‘000) 2,119.6 2,138.8 2,185.2
% Local 63.0% 62.1% 61.9%

               Figure 1: Summary of data from MOM’s website

Is Mr Lim’s definition of long-term up to 2020 only? If it is beyond 2020, how is he going to achieve that because even with a growing local workforce in this current decade, the ratio has been declining well past the two-thirds ratio already while productivity has failed to improve.

What do you think?

 

MTI Committee of Supply Debate 2015 – Internationalising Singapore companies

I delivered the following two speeches during the Committee of Supply debate for the Ministry of Trade and Industry on 6 March 2015.

Growing Singapore’s Global Corporate Champions

Mr Chairman, we have recognised the limitations of relying on Multi-Nationals to drive our economy.  SMEs account for 70% of employment but contribute a much smaller percentage of GDP.

I like to call for a whole-of-government approach to nurturing Singapore’s global corporate champions; just had we had done so in our pursuit of FDI.

This is an important national priority. We should create an inter-departmental secretariat to take ownership of the target to have 1,000 Singapore enterprises with revenues above $100 million by 2020 and even more ambitious goals. This is similar in approach to our National Productivity Council which sets over-arching goals – such as the 2-3% productivity growth targets – and then works with various agencies to set sector goals and monitor sectoral progress. For other urgent national priorities, we have committees, such as the National Climate Change secretariat and the National Population and Talent division

Such a secretariat could work with MFA to ensure that the wish-lists of the most promising Singapore firms be fully factored into our trade diplomacy. It could work with companies to identify R&D needs and coordinate with our tertiary and research Institutes to help to focus important IP developments. It could work with MAS and MOF to address issues related to funding – and perhaps revisit the idea of an EXIM Bank which some of our competitor nations have.  It could also work with all agencies to help improve access to government procurement opportunities or special innovation projects in ways that are GPA[1]-compliant.

It could also work with economic agencies like IES, EDB and SPRING to ensure that more aggressive support is given to firms with the most potential to become our global corporate champions. It could help bring partners together to exploit opportunities as well as government co-investment. But support has to be conditional on delivering results – exports, revenues and spin-off benefits to the Singapore economy.

In the early days of South Korea’s industrialization, then-President Park Chung Hee made aggressive government support available to the emerging chaebols, but conditional on the achievement of very aggressive export targets. Otherwise the firms would be dropped from the program.[2]

Looking at other countries with a similar population size to Singapore which have nurtured global champions – like Israel, Denmark, New Zealand and Norway – as well as looking at how a few of our promising local firms are making good progress globally, I believe that using this results-oriented approach can help build a strong third pillar to our economy.

[1] https://www.wto.org/english/tratop_e/gproc_e/gp_gpa_e.htm

[2]

http://www.ft.com/intl/cms/s/0/9d84d488-5f90-11e4-8c27-00144feabdc0.html#axzz3TPJbfFZ1

Encouraging Internationalisation

Mr Chairman, we need to grow our promising local firms into globally competitive companies, but with their roots in Singapore.

The new programmes such as IGS (International Growth Scheme) and the Double Tax Deduction for Internationalisation are a welcome step in the right direction. These schemes can benefit companies venturing abroad, especially by organic growth. However, in some situations, acquisition may be more efficient.

We can improve our ecosystem to enable our future world champs. We should encourage more companies to use IFS (Internationalisation Finance Scheme) now that it can be used for M&A. The number of companies getting IE-administered grants for cross-border M&A has been increasing but is still small at 32 last year[1].

To encourage strong development of our brands overseas, can we have a lower tax rate for IP-related income from abroad instead of the usual 17% for corporate tax?

I also like to ask about the new schemes. Can DTD cover manpower expenses incurred to put Singaporeans overseas, such as kids’ schooling allowances and relocation costs?

For IGS, is there a target for the number of companies to be on this? We have targets for the other schemes, but what about IGS? And how many years will be granted and what are the key conditions for renewal at expiry?

For Venture debt risk-sharing, do the schemes apply for overseas M&A?

Thank you.

[1] http://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00007198-WA&currentPubID=00007207-WA&topicKey=00007207-WA.00007198-WA_5%2BhansardContent43a675dd-5000-42da-9fd5-40978d79310f%2B

Pawnbrokers Bill

I delivered the following speech in Parliament on 19 January 2015.

This Bill seeks to update the Pawnbrokers Act which was last amended in 1993. Amongst others, it removes the existing auction system, requires pawnbrokers to provide an indicative valuation of a pledge to a pawner at the point of pawning and at the end of the redemption period, and raises the minimum paid-up capital of pawnbrokers for their first outlet and for each subsequent branch.

Madam Speaker, I support the Bill. I am concerned though about the rise in the number of pawnshops and in the total value of pawnbrokering loans in recent years. The number of pawnshops has grown from 114 in 2008 to 217[1] as at June 2014. The value of pawnbrokering loans rose more than three times from S$2 billion in 2009 to a peak of S$7.1 billion in 2012[2]. Many of the pawnshops are in the HDB heartlands. In an earlier parliament reply, we are told that HDB does not generally limit the number of shops for each trade and leaves it to market forces to determine the trade mix of shops. Market forces have indeed led to the rise of the pawnbroking industry.

In our geographically small island state, with some 217 outlets, access to pawnshops for a quick loan is easy. This has prompted some journalists to cast the spotlight on our pawnbrokering industry which now has three publicly listed pawnbrokers as key players in the market. A Bloomberg report in June last year titled “Rolex for Casino Cash Fuels Singapore Pawnshop Growth”[3] highlighted stories and statements by industry players about the rise in pawnbrokering activities being driven by gambling. The report, as well as other reports[4] [5], also pointed to soaring living costs as another reason for Singaporeans to turn to easy credit sources such as pawnbrokers to cover their living expenses.

Madam Speaker, there is very little data available on the profile of pawners. The ministry has said that it does not track the reason for non-redemption of pledges[6]. While the overall percentage is small at 5%[7], 5% of 4 million valuables pawned in 2012 works out to around 200,000 items that were unredeemed and had to be sent for auction. We do not know how many of these 200,000 items were from pawners who repeatedly failed to redeem their valuables. We also do not know the reasons for these non-redemptions.

I’d like to call for a more detailed study on the profile of pawners and on the industry. In particular, we should look at those who do not redeem their valuables to understand the underlying reasons. Also, in order not to become a society with excessive pawning, the study can also look into the appropriate number of outlets in each neighbourhood and if the level and content of advertising should be subjected to some controls. I believe better data will be useful to help look into the underlying causes for the rapid rise in the pawnbrokering trade and how we can tweak the Pawnbrokers Bill in future to continue to keep pace with this industry’s changing landscape.

Thank you.

[1] http://business.asiaone.com/news/pawnshops-the-rise

[2] http://tablet.todayonline.com/singapore/removal-auction-system-among-proposed-pawnbrokers-act-changes

[3] http://mobile.bloomberg.com/news/2014-06-17/rolex-for-casino-cash-fuels-singapore-pawnshop-growth.html

[4] https://sg.finance.yahoo.com/news/singapore-cost-living-sees-pawnshops-043309125.html

[5] http://www.fool.sg/2013/11/04/the-battle-of-the-pawnbrokers/

[6] http://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00006308-WA&currentPubID=00006301-WA&topicKey=00006301-WA.00006308-WA_1%2Bid-da07f921-38d6-46fc-8a85-f7f746df8cfd%2B

[7] http://news.asiaone.com/print/News/Latest%2BNews/Singapore/Story/A1Story20130527-425418.html

 

MOF Debate – Life Insurance Tax Relief and M&A Scheme

I delivered the following 2 speeches during the Ministry of Finance’s Committee of Supply debate today.

Life Insurance Tax Relief

Sir, currently taxpayers can claim tax relief on premiums paid for life insurance if their CPF contribution is less than $5,000. This $5,000 ceiling was last raised from $4,000 in 1979, 35 years ago. That increase was to ensure that the lower-middle income earners continue to benefit from the concession.

Income levels have changed a lot in 35 years. Many working Singaporeans are not able to enjoy this concession while their foreign counterparts can because they do not contribute to CPF.  I hope the minister can review this scheme to raise the ceiling to a more appropriate level so that the lower-middle income earners of today can benefit and will be encouraged to save more for their old age.

[Ref: 1979 Budget speech- http://sprs.parl.gov.sg/search/topic.jsp?currentTopicID=00057321-ZZ&currentPubID=00069377-ZZ&topicKey=00069377-ZZ.00057321-ZZ_1%2Bid037_19790305_S0004_T00171-budget%2B%5D

 

Merger and Acquisition Scheme

Sir, I refer the Minister to my Budget speech. I had spoken quite extensively about encouraging M&A as it can help raise our productivity and global competitiveness. The current M&A scheme has not been well utilised and is meaningful only for larger acquisitions.

I hope the Minister can review the provisions in the M&A Scheme to encourage more M&A activities amongst SMEs through targeted measures. This can include higher allowances for smaller M&A transactions. It can also cover purchase of operations and businesses of SMEs rather than outright share sales, as the acquirers may be wary of potential liability associated with small companies. Acquirers who invest in automation of their acquired businesses to achieve greater productivity and to change old business models could be rewarded with more generous PIC incentives or special grants.