Speech at Ministry of Manpower National Day Observance Ceremony 2009
Mr Gan Kim Yong, Minister , NTUC Auditorium, One Marina Boulevard
Mr Lee Yi Shyan,
Minister of State for Trade and Industry and Manpower
Mr Hawazi Daipi
Senior Parliamentary Secretary for Manpower and Health
Mr Stephen Lee,
President, Singapore National Employers Federation
Mr Teng Theng Dar
CEO, Singapore Business Federation
Mr Ong Ye Kung
Assistant Secretary General, National Trades Union Congress
MOMers and fellow Singaporeans,
Introduction
Today, we gather here to celebrate our nation's 44th birthday as well as to commemorate 50 years of self-government. We are all aware of the challenges confronting us as we face an unprecedented global economic downturn. In Europe, unemployment has hit a high of nearly 9%. In the United States, the world's largest consumer market, the unemployment rate had reached 9.5% in June. Singapore, being an open economy, has also been affected. On a seasonally-adjusted annualized basis, real GDP in the first half of this year registered a 6.7% decline compared to the same period last year. MTI has projected that our economy could contract between -4% and -6% this year. 12,400 jobs were lost in Q2 2009. However, there are also some encouraging results. Redundancies fell by more than half, from 12,760 in Q1 2009 to 5,500 in Q2 2009. Despite a contraction in the economy, the unemployment rate has stabilized at 3.3% in Q2, unchanged from Q1.
2. The swift response by the tripartite partners and the willingness to work together have contributed significantly to saving jobs for workers.
Coming together
3. The theme for this year's National Day Parade is “Come Together – Reaching Out. Reaching Up.” This describes the very spirit of what we are doing on the manpower front. Our strategy is “
One front, Two outs, Three ups”. First, “Come Together” denotes one united front, exemplified by the spirit of tripartism in these challenging times. As we weather the current recession together, we have deepened the strong tripartite relationship, enhancing mutual trust, cooperation and shared purposes. The tripartite partners have taken a collaborative approach to achieve win-win outcomes for businesses and workers through a range of initiatives including Skills Programme for Upgrading and Resilience (SPUR), and the Tripartite Guidelines on Managing Excess Manpower (MEM) to help companies and workers manage the impact of the recession
4. Our efforts have borne fruit. A recent survey conducted by my Ministry
1 showed that these measures are having a positive impact on the ground in helping companies and workers cope with the downturn. About 3 in 4 (73%) companies polled with earlier plans to lay off workers before Jobs Credit was introduced reported they would postpone or reduce the number of affected workers, as a result of the measures introduced by the Government. In particular, 9 in 10 hotels & restaurants polled who planned to layoff employees had reported they would change their plan after the introduction of Jobs Credit, SPUR and the Tripartite Guidelines. Only a small proportion of companies, less than 10%, resorted to retrenchments. This means most companies viewed retrenchments as a last resort after exhausting other measures, in line with the tripartite guidelines.
5. The survey has shown that measures implemented by the Government have indeed made a positive impact in helping companies and workers cope with the downturn.
Reaching out
6. The second aspect of the National Day theme, “Reaching out”, is also relevant to what MOM is doing. We have taken a “two-out” approach. Our outreach to our two key stakeholders, businesses and workers, is crucial to successful outcomes for employers and employees. The same survey MOM conducted also showed that more than 60% of companies polled were aware of the guidelines, while 3 in 4 were aware of SPUR. Awareness was generally higher among unionised and large establishments, which shows that our tripartite channel is working well.
7. With the high level of awareness, SPUR has done well so far, giving workers the opportunity to re-skill and up-skill, while helping companies deal with their excess manpower. As of end-June, 2,200 companies and 159,000 workers have committed to the scheme. The Professional Skills Programme (PSP) under SPUR saw about 49,000 trained or committed to training. 23,000 workers have been matched into jobs under SPUR. 67 companies have committed to hiring 1,520 locals in various industries, under SPUR-JOBS. However, there is still room for us to do more.
8. The survey has shown that some 4 in 10 companies did not send or had no plans to send workers for SPUR. Some felt that SPUR was not relevant to their company or industry. Others explained that they have their own in-house training. The survey has provided useful feedback for us. There is no one-size-fits-all solution for all the companies but we can see what refinements, if any, can be done for SPUR and to reach out to more companies and workers, to help them take up Continuing Education & Training (CET).
Reaching Up
9. The third aspect of the theme, “Reaching up” embodies our hopes and aspirations for our people. We are working on three “ups” – to up productivity, up employability and up our competitiveness as we prepare for the upturn.
10. Productivity numbers have gone south for six consecutive quarters since the last quarter of 2007. When the economy contracted during the last two quarters, productivity is likely to be affected as output falls. With Jobs Credit and SPUR, we are encouraging companies to keep their workers rather than to retrench them, despite lower output. The more successful we are, the greater the impact on our productivity. This is inevitable if we want to save jobs. But we must not sit back and do nothing. It is all the more important for us to address the productivity issue during the downturn so that when economy recovers, we can grow again.
11. However, we must calibrate our policy response carefully. It may be too simplistic to assume that reducing employers' access to foreign manpower will automatically lead to an improvement in productivity. If we are not careful, it will instead create rigidity and distortion in the labour market, add costs to businesses and undermine their competitiveness. To achieve real sustainable growth in productivity, there is no alternative to concerted efforts by all parties and a lot of hard work on the ground. We need all stakeholders to take ownership of the productivity challenge.
12. A joint MOM-MTI taskforce, chaired by the Permanent Secretaries of MOM and MTI, has been set up to look at ways to enhance productivity in Singapore. Minister of State Lee Yi Shyan is overseeing this taskforce. The taskforce has identified key strategies to spearhead the productivity drive in three sectors, namely retail, hotels and F&B. On the ground, we are now working closely with the industry through SPRING and STB, to implement these strategies. For employers, higher productivity means higher profits. For workers, higher productivity growth translates into more sustainable wage increases and a bigger take-home pay at the end of the month.
13. To up the employability of our workers, we will continue to invest in education and training to help each worker realize his or her potential. Through Continuing Education & Training or CET, we are working to establish a lifelong learning culture that is here to stay in Singapore, not just for the downturn but beyond the recovery. This will in turn help to up the quality of the local workforce in the long term – making Singapore workers more employable.
14. A recent survey conducted by Reach showed that older workers and retrenched workers are very concerned about finding jobs. Their anxiety is expected given the severe downturn and the uncertainty we are facing this year. There are jobs currently available and new ones will continue to be created. However, some of the job seekers may not be job ready and there may be mismatches in skills, interests and expectations. It is therefore very important that we help job seekers in a targeted way, by addressing their skills gap, manage their expectations and prepare them better for their new jobs. I will also encourage job seekers to be patient and work with us so that we can help them more effectively.
15. Besides productivity, we are focusing on another “up” – to up our competitiveness. Singapore has always ranked high against the world's most competitive nations. For instance, BERI has ranked Singapore first against 128 cities in 9 industrialized countries in overall cost and labour cost competitiveness. We cannot afford to rest on our laurels. As we continue to attract and anchor investments here, we need to stay competitive. MOM will promote progressive HR and workplace practices to develop local talent and attract foreign talent. As we help local workers to upgrade through the CET system and become more productive and adaptable, we have also raised the quality criteria for skilled work permit holders and S pass holders. We must continue to maintain a responsive labour market so that our businesses can stay globally competitive.
16. In line with positioning Singapore for the upturn, the Government has set up the high-level Economic Strategies Committee (ESC) to identify opportunities for Singapore and to chart our long-term growth strategy at the national level. I am co-chairing the sub-committee on Fostering Inclusive Growth, which will look at how we can create quality jobs and enhance skills and capabilities to achieve broad-based income growth, how to improve enterprise productivity, and how to ensure a sustainable foreign worker population that complements our local workforce and supports a high-productivity economy. The ESC will put forward its key recommendations by January 2010 and release its full report by the middle of next year.
Conclusion
17. To conclude, the outlook will continue to remain uncertain for at least the rest of the year. There are however some bright spots looming in the horizon. For example, when the two Integrated Resorts (IRs) begin operations in 2010, our cityscape will look different. We can already see the Marina Sands Resort taking shape when we look out of the windows here.
18. We will need to stay the course and press on with our tripartite efforts. As we celebrate National Day this year, let us remind ourselves that there is still much to be done to help companies and workers cope with the downturn. If we keep doing the right things, we will position ourselves well for the future.
19. I would like to take this opportunity to thank our tripartite partners who are here today, NTUC, SNEF, Singapore Business Federation for their contributions over the past year. We will continue to work even more closely with them and continue to strengthen this partnership.
20. I wish you all a Happy National Day.
The survey, conducted from May-July 2009, covered a sample of around 4,200 private establishments (each with at least 10 employers) and employing a total of 930,000 employees.