What Singapore Needs in Budget 2015


It’s that time of year again – in just a short while, Parliament will be poring over a new budget plan. So far we’ve made a lot of headway for the Singaporean worker, but there’s plenty more our workforce needs. Here’s what we think the best outcome will be:

What is Budget 2015?

The Singapore budget dictates how the government spends our available funds. Each financial year (starts on 1st April and ends on 31st March of the next year), the government reviews the existing budget.

Changes are proposed and discussed in Parliament, and once it’s approved (along with the President’s assent), the budget is passed as the Supply Act.

Budget 2015 is of special importance to organisations like the National Trades Union Congress (NTUC). The budget allocation has great bearing on improving the lives of workers in Singapore, from young to old, high income to low and in all professions.

What Do We Need in Budget 2015?

As a fast growing country, Singapore’s cost of living rises rapidly. The country has a core inflation rate of 3%, much higher if you go by the Consumer Price Index (CPI), which includes private housing and transport.

Some jobs, particularly lower paying ones such as cleaners and assembly line workers, are not seeing wage increases that match inflation.

Singapore has also tightened the supply of foreign labour, which in theory should raise employment prospects for locals. However, this assumes that the positions once held by foreigners can be filled by Singaporeans.

This is problematic in highly specialised fields (if you don’t think so, ask the companies looking for someone who can rewrite a UNIX kernel or analyse coal mining sites!) As such, the follow-up to the tightening of labour laws should be intensive skills upgrading. There’s no point creating job openings that Singaporeans can’t fill.

Here’s how we’re hoping the government will address these, along with some other concerns:

  • Productivity Schemes that Support Progressively Higher Wages
  • Intensive Drive to Promote Skills Upgrading
  • Stepped Up Efforts to Help Mature Workers
  • Incentives for Family Oriented Companies


1. Productivity Schemes that Support Progressively Higher Wages

Pushing for higher wages is tricky – even if companies are forced to give in (unlikely), the long term effect is a wage price spiral:

When higher wages don’t match productivity, the price of goods rise across the board. This hits consumers first, which causes them to press for higher wages, which then raises costs even further, etc. In essence, we’d be trying to combat inflation by causing more inflation.

The alternative is a productivity drive. When companies are able to produce more goods (and / or better goods), they generate more revenue. This in turn leads to better bonuses and wages. It also has the advantage of killing your boss’s “we have no budget for raises” excuse.

So we’re hoping budget 2015 sees incentives for productivity, that also reward workers. Some examples could be more technology grants, such as IDA’s iSprint, NTUC’s Inclusive Growth Programme (IGP) and the IRAS’s Productivity & Innovation Credit (PIC).

These grants subsidise companies that invest in new technologies, thus enhancing productivity and giving the country a technological edge. As these new technologies often require new skill sets, it is also a chance for workers to be trained and to justify higher wages.

We’d also like more grants for process based productivity drives. Some companies are hampered by a failure to re-organise, rather than by a need for more software or machinery.

For example, a courier company might potentially improve productivity with small changes to its drivers’ routes. However, implementing such a change could carry a risk of service failure (e.g. the drivers get lost for the first few days). That could end up costing hundreds of thousands of dollars.

At present, grants are mostly given for more tangible forms of productivity improvements (e.g. buying machines to speed up assembly lines). Unsurprising, since it is difficult to qualify claims that are more abstract.

But that’s no reason to try. The government could consider, for example, subsidies in the cost of accredited expert consultants. The more we help companies make money, the more our workers get paid.

2. Intensive Drive to Promote Skills Upgrading

Skills upgrading is a mandatory part of the productivity drive (if we replace a whole assembly line with robots, we’d better have jobs waiting for the former human employees).

We already have this in the form of Workforce Skills Qualifications (WSQ). However, an area that needs more attention are adult education subsidies. Most WSQ courses are geared toward highly specific certifications, such as the license to operate a forklift or be a welder. However, we should consider funding a deeper sort of upgrade – such as diploma or degree courses for older workers.

Some workers may not have had academic aptitudes or opportunities earlier in life; but at this point in their career, a combination of formal education and tempered experience would make them powerful contributors to the economy.

These career upgrades are beyond the scope of certification courses. Thus far, we have counted on workers taking their own initiative to pay for such an upgrade, or for companies to provide scholarships for their employees.

While this is has served us well before, economies such as China and India are rapidly developing, and catching up with us. The Singaporean workforce has to raise its competitive edge, and if our traditional means aren’t fast enough then maybe a government effort will spur it.

3. Stepped Up Efforts to Help Mature Workers

We’ve made progress with the re-employment act, which is great. What we need to pay attention to now are mature workers who want to return to the workforce.

Imagine if you retired when you were 45, but suffered a financial difficulty five years later. If you need a job at age 50, it’s a tough call – and you don’t benefit from the re-employment act either.

Now there are subsidies for hiring older workers, but take-up rates can always be improved. In particular, we’d like to see funding for new start-ups or small businesses to hire older workers – entrepreneurship is traditionally (and unnecessarily) considered the province of the young.

By encouraging budding news businesses to take on older workers, our entrepreneurs gain the benefit of experienced workers. By being in a smaller company, older workers will also have more input (which are complementary to senior positions they may have held before), and a more flexible employer.

4. Incentives for Family Oriented Companies

We need a comprehensive telecommuting initiative. Reward companies that allow employees to work from home, particularly new parents.

This will decrease traffic jams, allow employees to pay more attention to their family, and mitigate costs like company cars and transport allowances. All the cost of some funding and subsdised equipment.

Companies should also receive more funding to support longer maternity and paternity leave. We’re not about to say it will raise the birth rate (there’s no way to prove that causal link), but it does raise productivity. New parents are invariably worried about their children; move them back to the office too soon, and most will be wondering if they picked the right babysitter – not whether the dates on their budget reports are correct.

None of these are new ideas, but they do have to be stepped up.

With the reduction in foreign labour, businesses are in a tight squeeze. We have a limited time to fill the positions that we pushed the government for; and more than ever, workers and employers need to rush to raise their game.

Budget 2015 doesn’t have to be new and revolutionary – all the basics are in place. But we need to step up the existing programs, if the Singaporean worker is to stay competitive.

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