http://www.channelnewsasia.com/stories/specialreport/news/1186279_177/1/.html
SINGAPORE: Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam on Thursday emphasised that keeping the small and medium enterprises (SMEs) thriving in Singapore is a way of achieving an inclusive society.
He added that the transformation of Singapore’s SMEs over the next decade is also essential to raise productivity, incomes and living standards for Singaporeans.
Echoing views expressed by the NTUC Secretary-General in Parliament on Wednesday, Mr Tharman acknowledged that the operating environment for the SME is a tough one.
But he said the government must never neglect them as the country progresses.
Mr Tharman gave this assurance to the SME community in his reply to various questions raised by the MPs, while wrapping up the debate on the Budget 2012.
He explained that the main reasons why costs are going up were due to two factors – and these are labour and the cost of space.
“Space is more expensive and principally it is because of our constraints as a city space … we have many more businesses and the business community is doing well and the demand for space has gone up somewhat faster than the supply of space. That’s the fundamental driver, tight labour market with growing wages and shortage or high demand for space,” said Mr Tharman.
And the government has focused its attention on helping the SMEs in every regard to raise productivity, invest in jobs and allow people to have higher wages.
And this means training in skills, developing new products and brands and also finding new markets abroad.
In each of these areas, Mr Tharman said the government pledges its support for SMEs.
Turning to specific concerns of foreign worker quota tightening measures, Mr Tharman explained that foreign workers are and will remain integral to the Singapore economy.
And he stated categorically that Singapore is not turning off the tap or implementing a cold turkey treatment when it comes to foreign workers. He also added more levies can be expected in the future.
“This is not a sudden change in policy and what we are doing is a graduated and calibrated strategy. We made our intentions very clear two years ago after the Economic Strategies Committee Report … we immediately introduced a three-year programme of increasing foreign worker levies,” said Mr Tharman.
“Last year, we accentuated the programme because we realised the foreign worker growth was very rapid. This year, we are taking a further step, a calibrated reduction of the dependency ratio ceiling, again because the growth of foreign workers continues to be rapid … much more rapid that our own local workforce,” he added.
Mr Tharman added that steps announced to calibrate the entry of foreign workers into Singapore will not be the last move as the government will have to watch how rapidly the foreign workforce grows this year.
And if need be, the government will have to make further moves on foreign worker levies in the years to come.
He elaborated that Singapore’s basic approach to manage foreign worker inflow was to use levies, complemented by maximum dependency ratio that is set at broad sectoral level.
Mr Tharman said different industries are asking for more foreign workers.
But a industry-specific approach to dependency ratio ceilings, as some MPs had suggested, was neither practical nor equitable.
The government is also looking into suggestions of deploying foreign workers across job duties within the same firm and this move will be first implemented in the hotel sector.
Mr Tharman said: “If the government was to grant the more productive and higher skilled industries with more stringent limits, and the less productive ones, like construction, are given more liberal limits, what that amounts to overtime is you’re going to help the low productivity sector relative to the high productivity sector. That’s the opposite of the restructuring you want to encourage in your economy because that will hamper overall productivity growth.”
Mr Tharman stressed that the government’s aim is to help the more efficient players in every sector and the levy system is the basic approach to help ration foreign labour.
“What we want to do in every sector is to help the more efficient players, whether its construction or F&B, raise productivity. That’s why we have a levy system. The levy system is a basic approach we have to rationing foreign labour. We don’t control the actual numbers, we control the price. It’s a level playing field. Every firm in every industry knows what the levy is.
“Foreign workers are and will remain integral to our economy and to our competitiveness as an economy. They are a valuable complement to the Singapore core that we are building up in every segment of our economy.”
Mr Tharman also acknowledged that parliament members’ proposal to retain older, more experienced workers who have been trained for a longer period of time has merit as it help raises productivity, and this policy will be reviewed by the Ministry of Manpower.
Addressing challenges of tackling inequality, Mr Tharman noted that there was consensus on the efforts being undertaken.
These include raising wages through restructuring the economy and raising productivity to sustain economic growth; preserving social mobility by maximising opportunities for all, especially for those who start off at a disadvantage; redistributing to provide significant benefits for the lower-income without placing an excessive tax burden on the middle-income; involving social service professionals, Volunteer Welfare Organisations and community stakeholders in extending holistic help to the needy.
Mr Tharman stressed that the government will continue to invest in education to sustain social mobility.
And in consultation with tripartite partners, the government will also take measures to support incomes for the lowest-wage workers, such as cleaners and security guards.
Wrapping up his reply, Mr Tharman said MPs have voiced strong support for the Budget.
But he noted that building an inclusive society will always be a work in progress.
Mr Tharman said: “We do not claim to have a perfect system, but we are not doing badly. Median incomes have risen faster in the last five years than any of our peers in Asia – the NIEs (newly industralised economies) or Japan, or any of the developed countries. Our unemployment rates are the lowest in Asia, and certainly the lowest among developed countries.
“Social mobility through education remains higher than most other countries, certainly most of the developed countries. Home ownership remains the highest in the world, and in particular, home ownership amongst our low-income group is without equal internationally. We are still rated AAA by S&P and Moody’s, a diminishing breed.”
Some 60 Members of Parliament from the ruling party, the opposition and the new cohort of Nominated MPs took part in the three-day debate on the government’s Budget 2012.
- CNA/cc/de
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