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Mr Speaker, sir, thank you for allowing me to join this debate.
I support the Budget.
Earlier, the honourable member, Mr Melvin Yong spoke of the threat of shrinkflation, which is that maybe the price is the same, but the items get smaller. That is the pressure, that inflation can put on consumers.
But not everything is going in that direction. There are certain things which are going in the opposite direction and one of them is the longevity of Singaporeans.
Singaporeans are living longer and there are implications, and it is to this direction that are now turned.
Sir, I wish to speak on measures to further strengthen the Retirement Adequacy of present and future generations of older workers.
Gratitude for Steps to Implement Older Workers Workgroup Recommendations
First, I thank the Government for beginning to implement the recommendations of the Tripartite Workgroup on Older Workers. In January this year, the first step to improve the CPF contribution rates for older workers aged 55 to 70 was carried out. This is part of the journey to harmonise CPF contribution rates for workers up to age 60 by the year 2030, as part of overall measures to help strengthen the retirement adequacy of Singaporean workers.
I therefore welcome our Finance Minister’s announcement in this year’s Budget that the next tranche of CPF contribution rate improvements would be carried out in 2023.
It is important for these steps to be undertaken while conditions permit, because 10 years might sound very long, but it passes much faster than one thinks.
Two Ways to Strengthen Retirement Adequacy
Sir, while improving CPF contribution rates for workers aged 55 to 70 will indeed help increase their retirement savings to some degree, it is not a silver bullet to achieve retirement adequacy, in and out of itself.
For workers to be able to maximise their CPF retirement savings gained from work, they need to be in work for as many years as they are willing and able to, and for them to be able to qualify for both employer and employee CPF contributions as pay levels change with time.
Hence, there should be periodic reviews of the qualifying criteria for employer CPF contributions to ensure that as pay levels improve over time, the proportion of pay that qualifies for CPF keeps pace and does not become materially eroded, of course taking into account prevailing economic conditions. This will enable us to strike and sustain a fair, judicious and necessary equilibrium between employers’ legitimate cost concerns and workers’ legitimate need for retirement adequacy.
Maximising retirement adequacy through enabling Employment
Sir, each year of additional work would mean that an older worker earns at least 12 months’ pay of additional pay. And for many workers they have that 13 month as well. So at least 12 months. Clearly, this would greatly help with an older worker’s financial position and retirement savings. I think much more than any other measure.
This was why the Tripartite Workgroup on Older Workers had recommended increases in the statutory retirement and reemployment ages to be accomplished within this decade, moving from 62 to 65 and from 67 to 70, by the end of the decade.
The Government had previously announced that the first step in this journey is to add one year to both the statutory retirement and reemployment ages in July this year, July 2022. I fully support this step as our economy is projected to grow this year, at a still healthy 3%-5%. Just like the improvements in CPF contribution rates, we must take incremental steps while we can, so that we will reach the goal within the timeframe that the tripartite partners agreed upon.
The enactment of the Retirement Age Act and its subsequent expansion to encompass Reemployment represents overt Government and Legislative intent and support for older Singaporean workers.
I therefore look forward to the outcomes of the Tripartite Workgroup on Workplace Fairness, and in particular its recommendations to safeguard and strengthen the interests of older workers for fair consideration and treatment at work, including for training.
Government has also put money where its mouth is to spur the continued hiring of older workers through a range of policy incentives – training subsidies, hiring incentives, CPF offset measures, and so on – all stacked in favour of the hiring of older workers.
The combined result of tripartite and Government resolve and action has been a steady rise in mature workers employment rates. It improved from 27.6% in 2019 to 28.5% in 2020 to 31.7% in 2021. Now this is all the more remarkable because these improvements happened, even in the midst of the COVID-19 pandemic that we are experiencing here in Singapore. And when we compare this achievement with the large-scale shedding of older workforces in many other countries over the past 2 years, then we know that we must not take this support and investment in our older workers for granted. This did not come naturally and it is not by chance.
Trends that Can Erode These Hard-earned Employment Gains
That said, I want to point to two areas that I urge close attention and coordinated action on in the coming years, to make sure that these hard-won gains are sustained and not eroded.
Sir, in 2019, the proportion of Singaporeans aged 60 outnumbered Singaporeans aged below 5 for the first time. We have also heard that the proportion of Singaporeans aged 65 and above has grown from 9% of the population in 2009 to 16% of the population in 2019 and will reach 25% in 2030. These figures all basically showed that Singapore is aging very rapidly.
The implication of that on healthcare costs is clear and has been extensively discussed, including in the Budget Speech, so I will not dwell on that.
But there is another significant implication – which is the implication mature workers’ employment rate, that we must not miss. As I had said in previous Budget debate speeches, there is a significant trend of departure from work among female workers from around middle age. By some estimates, there could be some 30,000 such work-able persons in our population. This is likely to be due to care responsibilities, that is the fact that they had left work, is likely to be due to care responsibilities at home – and such care responsibilities given that living in middle age are likely to be related to caring for senior members in the family.
Sir, this trend, we must expect will intensify as our population bulge of baby boomers aged into their 70s and beyond, and that will trigger a corresponding increase in pressure on middle-aged family members, especially women, who have to leave work in order to care for the senior family members.
If this happens, the impact on household income and the retirement adequacy of caregivers on the one hand, and implication on the availability and the mix of our workforce on the other companies will be big.
Traditional measures to help retain more middle-aged workers with care responsibilities either at work or to allow a return to work include the promotion of Flexible Work Arrangements. This is correct and must of course continue.
But I believe that is not sufficient, and that we have to do more.
I believe that it is timely for a very thorough study to be carried out on how to enable appropriate affordable senior day care services, whether they be homecare or the day focused institutions, to be made available at scale that would also be sustainable for the service providers to provide.
Conceptually, this would be similar to the thinking behind providing affordable childcare services so that parents, especially the mothers can have a practical option of choosing to work rather out of no choice, to have to stay at home to look after the babies. So we flipped it to the other end of the population, conceptually is the same. Of course, the details are different and the conditionality for providing such affordable and accessible senior day care services at scale is not identical but have to be studied.
But we must study this expansion of such day care services in earnest and through policy direction implement a scaling up of such services with appropriate conditions so that we can forestall a surge in local workforce departures in the medium term, or a huge further increase in demand for foreign domestic help to look after the seniors, but that in itself brings about its own complexities. Doing so will also allow us to create viable jobs in this sector, turning the unavoidable population aging into an opportunity.
I turn now to my final point, which is that we need to focus attention on jobs and occupations that employ significant numbers of older workers that we know will be impacted significantly by fast changes in technology. In this regard, we must pay special attention to the subset of such jobs and occupations that our switch to a Low-carbon economy will likely put additional pressure on.
The vulnerability of older workers in such settings is quite self-evident. And I think earlier on my colleague, Mr Melvin Yong, and before that Mr Patrick Tay had also given examples of how the middle aged PMEs are also facing these difficulties and pressure, including the three invisibles that Mr Melvin Yong spoke about.
For older workers if they are displaced, their risk of structural unemployment will be higher than the rest. And even if they are rehired, their earnings will likely be lower and therefore negatively impacting retirement adequacy.
To forestall this, I call for specific tripartite focus to identify such priority sectors and occupations for re-skilling so that older workers holding these current job roles can be reskilled and be part of the firm’s future, even as their companies transform. Such efforts can tap into the NTUC’s growing network of Company Training Committees or CTCs, in order to systematically, deliberately and proactively do so. And in this regard, I join my colleagues in thanking the Government for the investment of $100 million to work together and to support NTUC’s efforts in this area.
And where is ultimately an excess of manpower, parallel efforts to help the older workers re-skill and convert to other job possibilities elsewhere will be equally crucial.
Sir, the theme of this Budget is “Charting our New Way Forward Together”. This means we must look at what is coming ahead and rally the whole of Singapore society to face it together and thrive, leaving no one behind.” As for NTUC, we will continue to champion better wages, jobs and work prospects for all workers. Every worker matters and we believe that this is the best way to care for their present and to uplift their future. Our older workers are a valuable and growing part of our local workforce. Let us work together with them to shape that better future.
Thank you.
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