Speech by Senior Minister of State for Manpower Mr Zaqy Mohamad at Committee of Supply 2022 at Committee of Supply 2022

Mr Zaqy Mohamad, Senior Minister of State for Manpower

A. INTRODUCTION: LOWER-WAGE WORKERS AS A PRIORITY OF MOM
A1. Mr Chairman, in his National Day Rally speech last year, Prime Minister Lee accepted the recommendations by the Tripartite Workgroup for Lower-Wage Workers. This refreshes the Government’s social compact with our lower-wage workers to better support them, provide stronger wage outcomes and for all of us to play a stronger role to create a more inclusive and cohesive society.

A2. We have already made good progress in uplifting our lower-wage workers through efforts such as Workfare and the Progressive Wage Model (PWM).

A3. In the last five years from 2016 to 2021, we have seen good wage growth across our workforce. Real  median income  of full-time employed residents has increased steadily at 2.1% per annum. In comparison, real income  at the 20th percentile has risen faster than median at 2.7% per annum. Now, this means that we are reducing the income gap even as we move up as a workforce. 

A4. Our moves to enhance wage growth in the PWM sectors and introduce the new Local Qualifying Salary, or LQS requirement provide us with further opportunities to narrow income inequality in the coming years. 

A5. In my speech Mr Chairman, I will elaborate on:
a. The progress of the Tripartite Workgroup on Lower-Wage Workers recommendations; and 
b. How Progressive Wages and Workfare will continue to be the key thrusts in our efforts to uplift lower-wage workers.

A6. I will also elaborate on our efforts to strengthen HR capabilities so that HR professionals are better able to support businesses.

B. SUSTAINED AND SIGNIFICANT PWM WAGE GROWTH FOR AN UPLIFTING SOCIETY
B1. With your permission, Mr Chairman, may I ask the Clerks to distribute a handout detailing our efforts to support our lower-wage workers. Members may also access the handout through the SG Parl MP mobile app.

B2. The Tripartite Workgroup on Lower-Wage Workers report was released in August 2021 and outlines our recommendations for a refreshed approach and ambition for an inclusive and uplifting society.

B3. We have seen good progress since the release of the recommendations. New PWM sectors, such as Retail and F&B, have been identified and negotiations are underway. 

B4. We can expect to see significant progress in wage outcomes in the coming years for our existing PWMs in the Cleaning, Security, Landscape, and Lift and Escalator sectors. 

B5. For example, from 2022 to 2028, entry-level cleaners will see a cumulative wage increase of up to 84%, to receive baseline wages of about $2,400 in 2028. The other existing PWMs have also shown similarly strong momentum and you can find them in our factsheet here, on significant wage increases over the coming years in the PWM sectors. They reflect the Workgroup’s commitment to narrow income dispersion between workers at the lowest 20th percentile and median and strengthen our social compact.

C. EXPANDED PROGRESSIVE WAGE APPROACH
C1. At the same time, our overarching principle continues to be that wages and productivity should rise in tandem. Hence, we not only want wages to rise, but we also want productivity to increase, through upskilling workers, and through the transformation of businesses. 

C2. We have seen more Singaporeans joining sectors with the PWM, such as Security and Landscape, as wages and working conditions improve. For example, the employment of locals in the Security sector grew by an average of 5% per year, compared to 2015, which was before PWM was introduced. 

C3. Now, this is different from some other countries where broad-based minimum wages caused unintended unemployment. 

C4. It is this sustainable progress that gives the Tripartite Partners confidence and impetus to expand the PWM to cover new sectors and new occupations.

C5. Starting in September this year, we will implement the new Local Qualifying Salary requirement, as well as the Retail PWM and the extension of PWM to cover in-house cleaners, security officers and landscape workers.

C6. This will be followed closely by our second wave of moves in March 2023 just next year, at about this time, when we will implement the Food Services PWM and Occupational Progressive Wages.

C7. Overall, by early 2023, 234,000, or more than 8 in 10 full-time lower-wage workers will be covered by Progressive Wages.

C8. Given the competitive labour market, we are confident that the PWMs will continue to set the pace of wage growth of lower-wage workers. 
a. Hence, even lower-wage workers who are not covered directly by any PWM should still see good wage growth, as their employers will likely have to adjust their wages to keep pace with the market and to retain them. 

D. ADVANCING WELL-BEING OF LOWER-WAGE WORKERS THROUGH TS-LWW AND PW MARK 
D1. Beyond uplifting wages, we also want to encourage our employers to pay more attention to other aspects of the well-being of our lower-wage workers.

D2. Therefore, following the recommendation of the Tripartite Workgroup, I am pleased to now launch a new Tripartite Standard on Advancing Well-being of Lower-Wage Workers.

D3. The Tripartite Standards (TS) are a set of good employment practices that all employers should implement at their workplaces. 
a. The new Tripartite Standard on Advancing Well-Being of Lower-Wage Workers will encourage employer to provide better workplace support for our lower-wage workers, focusing on areas such as training and career development, to provide rest areas as well as care for mental well-being, as mentioned by Mr Melvin Yong. 

D4. We recognise that our workforce has experienced significant disruptions to their jobs due to COVID-19. Therefore, it is important that employers cultivate a healthy working environment. Minister of State Gan will elaborate more on these efforts in her speech.  

D5. To strengthen our social compact, the efforts of the Tripartite Partners and employers alone are not enough. We must recognise that all of us have a role to play – all of us, as consumers.

D6. It is in this light that the Tripartite Workgroup recommended establishing a new Progressive Wage Mark (“PW Mark”) mark or accreditation. 

D7. We want to help individual consumers and corporate buyers easily identify progressive employers that are supporting lower-wage workers, and support these employers through their purchases.

D8. The PW Mark will be launched in the second half of this year. 
a. And employers that pay at least the relevant Sectoral or Occupational Progressive Wages to eligible workers, as well as the Local Qualifying Salary to all other local workers, will be accredited with the “PW Mark”. 
b. For employers that go one step further to adopt the new TS on Advancing Well-Being of Lower-Wage Workers, they will be recognised with the “PW Mark Plus” accreditation. 

D9. To rally the industry to adopt the PW Mark, the Singapore Business Federation has agreed to help administer the PW Mark.

D10. The Government will do our part to lend strong support to the PW Mark. From March 2023, we will require all suppliers who are awarded Government contracts to be accredited with the PW Mark, starting with contracts with larger value. 
a. More details will be announced in the coming months. We encourage potential suppliers to apply for and obtain the PW Mark early once it is launched.

D11. Chairman, putting our Progressive Wage measures together, this increases our coverage of Progressive Wages further to up to 266,000, or 94% of full-time lower-wage workers.

E. TRANSITIONAL SUPPORT FOR WAGE INCREASES
E1. As we significantly widen the coverage of Progressive Wages and introduce the new Local Qualifying Salary requirement, we recognise that the employers would need some transitional support to adjust to the changes in the immediate term. 

E2. The Government has thus committed its strong support through the Progressive Wage Credit Scheme (PWCS). 

E3. To recap, under the PWCS, there will be two tiers of funding. First, the Government will co-fund the two most recent years of wage increases given to resident workers up to a wage ceiling of $2,500, for a 5-year period from 2022 to 2026. 

E4. Co-funding will be at 50% in the first two years, 30% in the next two years, before tapering to 15% in 2026. 

E5. With economic conditions remaining uncertain in the immediate term, the PWCS will also provide a second tier of funding to cover those earning between $2,500 to $3,000, for a shorter period of three years. 

E6. With PWCS, we are providing direct support to the firms as they adjust to the Progressive Wage and LQS moves. We want to encourage all firms, including those not in the PWM sectors, to provide wage increases voluntarily, in the immediate term when the Government’s support is the strongest.

E7. We urge employers to use this period of support to accelerate the structural transformation of their business processes. Employers must take the lead in improving firm-level productivity, so that wage increases will remain sustainable for businesses, even when the support ends. 
a. I thus agree with Mr Sharael Taha that employers must press on to innovate and digitalise. 
b. Now the Government is expanding the range of solutions under schemes such as the Productivity Solutions Grant and Advanced Digital Solutions scheme to support such efforts.
c. Now working in tandem with these schemes, I encourage our Trade Associations and Chambers to play a key role in promoting innovation and digitalisation efforts and share best practices.

E8. Workers should also continue to take initiative in upgrading their skills and applying these skills at work, be it to increase productivity or to take on new roles. Now, this will help them continue to support business transformation and ensure that wage improvements are sustainable in the long run.
a. Therefore, I fully support Mr Sharael Taha’s suggestions for encouraging lower-wage workers to upskill.  Today, the Workfare Skills Support scheme provides incentives to encourage lower-wage workers to upskill, through training allowances and a training commitment award.
b. In 2020, MOM expanded the income qualifying criteria, and increased the amount of allowance and award. So that, I hope that our workers will take the opportunity to upskill and improve their career prospects.

F. ENHANCEMENTS TO WORKFARE
F1. Next, the Workfare Income Supplement (WIS) Scheme, or Workfare for short. Workfare was introduced in 2007 to 
a. Narrow income inequality; 
b. Help our lower-wage workers save more for their retirement; and 
c. Encourage our lower-wage workers to work regularly, whether it is in full-time or part-time work, depending on what best suits their circumstances.

F2. 15 years on, almost a million workers have benefitted from over $8.6 billion dollars in Workfare payouts. 
a. One worker who benefitted from Workfare over the years is Mdm Timah Binte Mohamad Kasan.  
b. Being the sole breadwinner while raising two children was not easy for Mdm Timah. Workfare made it better for her and her family by topping up her income since 2007.
c. In total, she has received over $34,000 in cash and CPF top-ups from Workfare. This has helped her support her husband, who is unable to work, and her children, while paying off her mortgage for her 3 room HDB flat.
d. Mdm Timah is also supported by other Government schemes. For example, she currently receives Silver Support payouts of $720 per quarter. She also chose to boost her retirement income via the lease buyback scheme, and received a $30,000 cash bonus on top of the proceeds from selling part of the flat’s lease.
e. The support from Workfare has not stopped - Workfare will continue to boost her income for as long as she wishes to continue working.

F3. Uplifting our lower-wage workers is a collective responsibility. As businesses and consumers pay our lower-wage workers better, the Government, too, will do our part. As announced by the Minister for Finance, the Government will be making significant enhancements to Workfare in 2023. Let me briefly recap the enhancements here.

F4. Workers earning up to $2,500 a month will now be able to qualify for Workfare, up from the current qualifying income cap of $2,300.

F5. Workers will also need to earn at least $500 a month to qualify for Workfare. Members have debated this extensively during the Budget Debate. We understand and share your concerns.
a. Allow me to first clarify a statement that I made at the Budget Debate, about the number of Workfare recipients that would be affected by the new criterion. The 20,000 figure, as cited by Minister Tan See Leng, had already taken into account the expected wage growth from the PWM expansion and new LQS requirement.
b. Our objective, in line with Workfare’s overall design, is to nudge all our workers, part-time and full-time, towards more gainful employment, so that we give them a higher sense of achievement. 
c. We also want to better target Workfare at those who need it, our lower-wage workers, those with lower household incomes, and not casual workers doing vacation jobs, for example. 

F6. At the same, we will ensure that those deserving, and in need, will continue receiving Workfare, by providing concessions for them.
a. For low-income part-time workers who qualify for ComCare, they will continue receiving Workfare, even if they earn less than $500 per month.
b. There are some who want to work more but are unable to do so, due to various personal circumstances, such as persons with disabilities (PWDs). They too, will continue receiving Workfare. In fact, PWDs will receive the highest tier of Workfare. 

F7. I hope this assures members of this house that those who are in need and are deserving of Workfare will continue to keep receiving it. 
a. Here, I wish to reiterate a point that Minister Tan made at the Budget Debate – Workfare is not the endgame for these workers earning less than $500 per month. 
b. We need to help these part-time workers find jobs of the appropriate quality and quantity of working hours to earn at least $500 or more, if they can. And we have a whole suite of employment facilitation programmes and initiatives, ready to assist.

F8. Finally, we will increase payouts. 
a. Older workers, like Mdm Timah, will continue to receive the highest Workfare payouts, of up to $4,200 a year or $350 a month. 
b. Workfare has supported our PWDs for more than a decade, and could also do with some extra support. From 2023, we will provide a stronger helping hand by placing all PWDs on the highest payout tier of $4,200 a year.
c. We recognise that our younger and middle-aged workers are also dealing with greater family and financial obligations. Many of them are taking care of both their children and their elderly parents, while still paying off their housing loan. This is why we will be increasing Workfare payouts for them. 

F9. Mr Abdul Samad Abdul Wahab suggested to exclude overtime pay when assessing a worker’s eligibility for Workfare. Overtime pay, together with the basic pay and bonuses, make up a worker’s total income that will help support the worker and his or her family. 
a. As Workfare helps lower-wage workers by supplementing their income, looking at the total income earned by the worker enables us to better assess the additional support to be provided by Workfare. 
b. If we had only used basic salaries to determine who will qualify for Workfare, some workers with low basic salary but high overall pay may displace another worker with a higher basic salary but lower overall pay. The worker displaced would have needed Workfare but does not get it. The worker with high bonuses gets Workfare, and therefore you can see the challenges of why we go towards gross wages.

F10. Mr Chairman, Workfare has supported generations of workers and helped them save more for retirement. We will now extend this same support to younger workers, like Ms Lily. Ms Lily is an anonymised name as she prefers for us to not use her real name. 
a. Ms Lily is turning 30 years old next year. She works at a pest control company. She bought a flat 4 years ago and is living with her 6 children and her elderly mother. 
b. She is current receiving a suite of Government support to help her with her household expenses, including financial support such as the ComCare Short-to-Medium Term Assistance and the MOE Financial Assistance Scheme for her school-going children. 
c. From 2023, workers aged 30-34 like Ms Lily, many of whom are just starting their families or supporting elderly parents, can expect to receive up to $2,100 Workfare payouts a year. 
d. She is looking forward to the boost in income, which will be an additional source of help with her household expenses. She says that the Workfare monies will be used to pay her HDB instalments and buy school supplies for her children.

F11. These enhancements will apply to all lower-wage employees and self-employed persons (SEPs), regardless of occupation.
a. As pointed out by Dr Shahira Abdullah, to qualify for Workfare, SEPs need to declare their incomes and make the required MediSave contributions. 
b. The need to meet CPF obligations is part of Workfare’s eligibility criteria and applies to both employees and SEPs. Nonetheless, CPF Board does exercise flexibilities to help SEPs facing difficulties make their MediSave contributions. 

F12. Overall, the enhancements will benefit more workers - over half a million lower-wage workers from 2023 will benefit from Workfare, up from 460,000 today. 

G. OUR MULTI-LAYERED SUPPORT
G1. Progressive Wages and Workfare will continue to form the foundation of the Government’s multi-layered support for our lower-wage workers. 

G2. Even as we roll up our sleeves and implement these moves over the next 2 years and beyond, I am reminded of workers like Mr Mohammed Ali.
a. In 2017, Mr Ali was an entry-level Security Officer, earning about $1,700 per month. As a worker earning less, he received some support from Workfare. 
b. Guided by the PWM’s career pathway and with training support from Workfare Skills Support, he upskilled and took on new responsibilities. 
c. Today, he is a Senior Security Supervisor overseeing around forty officers. He earns about $3,100 per month, an increase of $1,400 compared to when he first started. He has since graduated from Workfare, as his income exceeds the current Workfare qualifying income cap. 
d. This is a good and intended outcome. While Workfare provided Mr Ali with income and training support when he needed it, Progressive Wages also offered a progression pathway to higher wages and better skills for workers like him. 
e. Mr Ali made the most out of it, and I’m happy to share that he has graduated from the Workfare scheme, as Progressive Wages has enabled him to earn more. 
f. With the new recommendations for the Security PWM, Mr Ali will earn $3,550 per month in 2024. And by 2028, Senior Security Supervisors like Mr Ali will earn at least $4,430, a significant progress compared to $1,700 that he earned when he first started. 
g. Members may also be pleased to know that under the PWM, entry-level Security Officers will earn at least $3,530 by 2028.
h. Mr Ali’s story is also situated within the larger story of progression for his company, APRO Asian Protection. Spurred by the PWM and industry transformation efforts, APRO has adopted various tech-based solutions to increase their productivity and the value-add to service buyers. 

H. STRENGTHENING HR CAPABILITIES
H1. Moving onto a separate but pertinent topic, HR plays a vital role in supporting our workers and businesses. I thus echo Mr Edward Chia, Mr Yip Hon Weng and Mr Patrick Tay’s calls for companies to build up their HR competencies and capabilities. 

H2. The Institute for HR Professionals (IHRP) accredits and certifies HR professionals as well as guide their continuous professional development. 
a. To date, there more than 5,000 certified aspiring and practising HR professionals who support one another, developing and sharing HR best practices. 
b. IHRP also provides curated learning resources such as HR playbooks as well as facilitates peer-led Communities of Practice and networking opportunities. 
c. We encourage more employer and HR professionals to join this expanding network. MOM will also continue to work with NTUC, SNEF and the TACs to strongly encourage more HR professionals to be certified by IHRP. 

H3. Mr Patrick Tay also asked for an update on the Human Capital Partnership (HCP) programme. 
a. Since the launch of the HCP Programme in 2017, we have awarded the HCP mark to more than 600 employers, who employ over 210,000 locals, or about 10% of the total local workforce. 
b. We will continue to work with the Tripartite Partners to identify and recognise our progressive employers.

I. PENGENALAN: MAJU KEHADAPAN DAN KEATAS
I1. Mr Chairman, allow me to recap some of MOM’s efforts in Malay.

I2. Seperti yang dikongsi Menteri Tenaga Manusia, MOM komited untuk membentuk dasar-dasar tenaga kerja kita untuk membolehkan lebih banyak peluang untuk semua dan maju sebagai sebuah negara bandar raya yang bertenaga.

J. MENETAPKAN KUALITI PENANDA ARAS PAS PEKERJAAN DAN PAS S, DAN MEMPERKENALKAN COMPASS
J1. Seperti yang dikongsi Menteri Tenaga Manusia, MOM komited untuk membentuk dasar-dasar tenaga kerja kita untuk membolehkan lebih banyak peluang untuk semua dan supaya kita maju sebagai sebuah negara yang bertenaga.

J2. Biar saya mulakan dengan bercakap tentang dasar-dasar tenaga kerja kita. Dasar-dasar tenaga kerja asing kita dipandu oleh matlamat kita iaitu teras rakyat Singapura yang kukuh, dilengkapi dengan tenaga kerja asing yang bermutu tinggi dan pelbagai.   

J3. Pertama, kita akan pastikan bahawa pemegang Pas Pekerjaan (EP) dan Pas S adalah setanding dengan mutu sepertiga teratas tenaga kerja PMET dan APT tempatan kita. Gaji kelayakan dan levi akan dinaikkan dengan sewajarnya untuk mencapai penanda aras ini. 

J4. Kami juga akan memperkenalkan Rangka Kerja Penilaian Pelengkap, ataupun COMPASS, sebagai sebahagian daripada rangka kerja Pas Pekerjaan. COMPASS adalah sistem berasaskan mata yang menilai kelengkapan pemohon EP secara holistik. 

J5. Ia akan mengambil kira, satu, gaji pemohon berbanding dengan gaji PMET tempatan dalam sektor mereka; kedua, kelayakan pemohon; ketiga, kepelbagaian kerakyatan pekerja firma; dan keempat, sokongan firma untuk mendapatkan pekerja tempatan. Dan juga kita akan melihat faktor-faktor lain seperti sama ada calon itu mempunyai kemahiran dalam kekurangan, ataupun sama ada firma itu menyokong objektif ekonomi strategik kita. 

J6. Pada masa yang akan datang, Pemohon EP harus memenuhi gaji kelayakan EP, dan meraih jumlah mata yang mencukupi di bawah COMPASS. Pemegang EP sedia ada juga harus memenuhi kriteria-kriteria ini apabila pas kerja mereka perlu diperbaharui.

J7. Jadi, apakah maknanya bagi tenaga kerja tempatan kita? 

J8. COMPASS akan mengambil kira lebih banyak faktor dalam menilai permohonan EP. Bersama-sama dengan keperluan gaji kelayakan EP yang lebih tinggi, rakyat tempatan boleh dipastikan bahawa pemegang EP di sini berkaliber, dan bukan hanya kerana gaji mereka lebih rendah berbanding rakyat tempatan.

J9. Dengan COMPASS, rakyat tempatan juga seharusnya lebih yakin bahawa firma-firma akan diberi insentif untuk memperbaiki kepelbagaian pekerja mereka dan mengukuhkan sokongan mereka bagi pekerjaan tempatan kita. 

K. SOKONGAN UNTUK PEKERJA BERGAJI RENDAH
K0. Tuan Pengerusi, kami juga akan meneruskan usaha-usaha yang sedia ada untuk meningkatkan para pekerja bergaji rendah. 

K1. Kami akan memperluaskan lagi PWM dan melaksanakan keperluan Gaji Kelayakan Tempatan atau LQS. Menjelang awal 2023, 234,000, atau lebih daripada 8 dalam 10 pekerja bergaji rendah sepenuh masa akan dibayar gaji progresif. 

K2. Pemerintah sedang memainkan peranan melalui Skim Kredit Gaji Progresif, atau PWCS, yang membiayai kenaikan gaji pekerja bergaji rendah kita. Kita juga akan mempertingkatkan Skim Tambahan Pendapatan Daya Kerja, ataupun Workfare, untuk menyediakan bayaran yang lebih tinggi kepada semua penerima Workfare kita.

K3. Jadi, pada keseluruhannya, Pemerintah akan membelanjakan $9 bilion sepanjang 5 tahun yang akan datang untuk kedua-dua skim ini.

L. CONCLUSION: OUR WAY FORWARD
L1. Mr Chairman, to conclude, our suite of measures will benefit both lower-wage workers and businesses and allow us to renew and strengthen our social compact.

L2. The Government will spend $9 billion over the next 5 years for the Progressive Wage Credit Scheme and enhanced Workfare.

L3. This reflects the PAP Government’s strong belief and commitment to uplift our lower-wage workers and to build a fair and inclusive society. Our social compact must be one in which everyone enjoys the fruits of growth, and no worker is left behind as Singapore progresses. 

L4. We must be careful to not let our social compact be eroded by inequality, otherwise our society – including our businesses – will not function well and much less thrive. 

L5. We have made significant progress over the past decade, and we will do even better in this decade in creating a more progressive and inclusive society. We have made significant progress over the last decade, and we will do even better in this decade in creating a more progressive and inclusive society.