Mr Mah Bow Tan, Chairman of SLF and Minister for National Development
Mr John De Payva, President of NTUC
Distinguished guests
Ladies and gentlemen.
It is with great pleasure that we gather for the Topping-Out ceremony of One Marina Boulevard today. We have watched with growing anticipation at the development of this flagship building for the labour movement in Singapore.
One Marina Boulevard - Location & Rental Rate
Prime Minister Goh Chok Tong, had, in past speeches, outlined why the new NTUC Centre should be located in the New Downturn. It is the Government's recognition of the labour movement's contribution to the success of Singapore. He had said that NTUC should be here, in the heart of the city, to rub shoulders as equals with management, proud that they, as much as their employers, had contributed to the stability and prosperity of Singapore.
The Government kept its promise by setting aside a parcel of land, at market value, for the SLF to build a new NTUC HQ. SLF funds the land and construction costs. Government funds only the cost of the area to be occupied by NTUC - the prorated cost of land and construction. This amounts to about $75 million.
Noting that the former NTUC Trade Union House had been dwarfed by many new and tall office buildings in Shenton Way, the Government took a long-term approach when it came time for the new building. As PM Goh had said in 1990, "This time we should not make the same mistake of making it a small building."
Hence, the new 32-storeyed HQ will have a larger total floor area than the space set aside to be taken up by NTUC.
What happens to the remaining area of the building? It will have to be tenanted out. And rental rates will naturally have to be in line with the market.
Importance of the Labour Movement
Now that it is nearing completion, we look forward to moving to One Marina Boulevard. It symbolizes what NTUC has achieved so far.
The labour movement in Singapore has come a long way since its tumultuous beginnings in the 1960s, the boom period of the 70's and 80's, and the economic upheavals of the 90's and the new century. Through it all, the NTUC has shown resilience in its development, striving always for the welfare of workers.
The challenges that we have faced in recent years - economic, political and social - are ever more complex and intertwined. They reinforce the importance of the labour movement as a vital part of the tripartite relationship - among the Government, employers and unions - that works towards overcoming these challenges while maintaining stability and growth in Singapore.
Reflection - Recent Obstacles Faced by Labour Movement
Since 1997, Singapore's economy has had a roller-coaster ride. Globalization and rapid technological changes brought significant impact on our economy and work environment. But like most changes, it has not come about smoothly and without the need for adjustments.
Just before the Asian Financial Crisis of 1998, we had noted the strong underlying trends changing the world of work. Intensified global competition had forced companies to become leaner and fitter. It meant that companies would keep a smaller core of 'permanent' employees, supplemented by outsourcing, contract workers and part-time workers. The rapidly falling cost of using IT meant the de-layering of management ranks. Furthermore, as business cycles became shorter, employers would shed excess workers quickly, even as they were profitable, in order to stay competitive and profitable for the longer term. We explained these trends in our delegates' conferences, and began to map out our strategy for this new environment. These discussions may not have caught the attention of most people because at the time Singapore was still growing strongly.
Then came the Asian Financial Crisis in 1998. It signaled the need for Singapore to restructure its economy to meet the new challenges. Declining GDP figures were accompanied by rising retrenchments.
Singapore's strong rebound again masked the underlying changes taking place. However, slowly but surely, changes did come. The banks, for example, consolidated, and thinned management ranks. As another example, SingTel restructured quietly shedding large numbers of employees. The old jobs disappeared. For Singapore, the restructuring of the services sector had begun. Because the banks and SingTel restructured and refocused their business strategies, they are healthy companies today. Those that left it late, like PSA, face difficult problems. It is a warning to others who have yet to understand the changes under their feet, putting the jobs of thousands of workers at risk.
Over the past few years, we have been hit by the effects of September 11, 2001, the war in Iraq and, of course, SARS. The first two had left foreign investors jittery, leaving companies and workers in Singapore equally nervous about affected businesses and pay cuts or even retrenchments. But with the SARS outbreak, the full effects of an economic downturn were brought home to Singapore. We have had to face business closures and loss of jobs head-on, with our tourism and retail industries, in particular, severely hit. Singapore has had to come to terms, both economically and socially, with the fact that SARS could be with us for the long run and could not be dispelled just because we were removed from the WHO list of SARS-affected countries. But because of these events, some may still think that we are suffering from these short-term problems.
The truth is that these short-term events only amplify our problems. Singapore must now come to terms with the reality of structural unemployment and wage restructuring. Lifelong employment is a thing of the past, as some jobs have been lost forever to countries with lower-cost business environments. In the global economic race, Singapore has found itself having to pit against the world in order to retain its economic competitiveness; hence the focus on economic restructuring, which must be matched by worker "restructuring" as well. The simple truth is this: Restructure, accept the short-term pain, then we can grow again. Wages will rise again, because higher productivity justifies it.
Efforts by Labour Movement
As economists talked about moving towards a knowledge-based economy and economic theory, NTUC got down to work. We have to deal with both the short-term as well as the long-term. First we save as many jobs as possible, or keep them as long as we can, by trimming costs. We try to soften the impact as much as we can. Then we restructure for the longer-term, so that there will be new investments to create new jobs.
The NTUC JobLink was set up to help unemployed and retrenched workers find new jobs. Working on walk-in applications as well as referrals from job fairs, Community Development Councils and Members of Parliament, the NTUC JobLink succeeds in matching 100 workers with jobs every month. The cost to NTUC is about $500 for each successful match.
The NTUC-initiated Skills Redevelopment Programme was further developed and expanded to train and upgrade workers' skills, in order to help them achieve lifelong employability. The SRP programme has provided more than 118,000 training places for the 1,300 course modules on offer.
Way Ahead for NTUC
But more work still needs to be done. The Ministry of Manpower's statement that the unemployment rate could rise above 5.5% this year has sounded the warning that times are unlikely to improve anytime soon. Workers need to adjust to the reality of structural unemployment and the need for flexibility.
NTUC's existing initiatives will go towards helping workers adjust to this new reality. In addition, we will need to drill down further to increase worker and job flexibility, facilitate training and placement for the retrenched, and promote the importance of long-term savings.
NTUC's calls for more companies to implement the Monthly Variable Component or MVC, for short, have yielded encouraging results, with 40% of unionized companies having already implemented it. But we will continue to push for a higher implementation rate as we work towards setting up clearer guidelines on MVC. Setting aside part of the wages as MVC is not the end. Companies and the Unions need to know how to use the MVC to adjust and restore wages. Workers must see that the MVC is a variable component. They need to make their financial commitments based on that understanding. The onus on unions in this respect is heavy. Employers may find it easier to assert their prerogative to hire and fire, rather than administer a more complex wage system. But we do not want workers to face retrenchment more often than is necessary.
The MVC is the third component of our wage structure. Conceptually, for those below the media income, 70% of the annual wage should be fixed monthly pay, 10% MVC and 20% bonus payments. For those above the median wage, the variable components should be greater.
We must also deal with the seniority-based wage system. It puts longer-service employees at a grave disadvantage when business turns down.
In terms of training and placement, NTUC has fine-tuned the training programme for retrenched and unemployed workers. It would be more targeted. There will be greater focus on securing jobs for the trainees. We will make use of the networks of training providers in different industries to secure jobs for these trainees.
Our calls for workers to "save-as-you-earn" have now taken on greater urgency, as we are hit by rainy days. With more frequent changes because of the speed of technological change, we can expect more frequent retrenchments. The high retrenchment pay-outs we have seen recently are going to be the exception rather than the norm, simply because the length of service an employee has in a company will be shorter. Therefore it is important for workers to save for that rainy day. NTUC continues to sound out this message to workers.
New NTUC HQ
The labour movement has worked hard towards improving workers' opportunities and well-being through the years. The challenges before us are as difficult as any that we have faced in the past. They problems are in fact more complex.
We look forward to working from our new headquarters, the NTUC Centre at One Marina Boulevard, with the NTUC logo prominently displayed at the top of the building. It will be a place that union members can look at with pride.
