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Debate Speech on Budget Statement 2023 by Heng Chee How, Deputy Secretary-General, NTUC; Senior Minister of State for Defence and MP for Jalan Besar GRC

Beyond individual cases and claims of age discrimination, I hope the tripartite partners can work closely to leverage in-company mechanisms to proactively ensure that senior workers are given due consideration and opportunity for training and skills-building.
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23 Feb 2023
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Mr Speaker, thank you for allowing me to join this debate. I speak as a Labour MP and my focus will be on advancing the interests of senior workers.
 
From my engagements with residents, workers and union leaders, the rising cost of living is the one of the top concerns amongst Singaporeans. Top concerns of our senior workers, aside from the cost of living, be that of retirement adequacy and healthcare cost.
 
At the same time, NTUC has embarked on a series of dialogues with workers from different segments under the banner of “Every Worker Matters Conversations”, what we call EWMC, this is part of our efforts to refresh our compact with workers. And the ones that engaged senior workers received the same feedback.
 
We have highlighted this clear feedback to our Government partner as part of our social partnership, and are keen to work with Government and tripartite partners to proactively and systematically strengthen existing arrangements to make further progress, to reassure senior workers as they prepare for retirement.
 
Feedback from senior workers validates the strong emphasis that Government, NTUC and SNEF (Singapore National Employers Federation) have put on improving senior workers’ employment and employability.
 
Implementation of RA/REA & CPF improvements under Tricom on Older Workers
 
In July 2022, the Government raised the Statutory Retirement Age and the Re-employment Age ceiling by a year each, to 63 and 68 respectively.
 
And in Jan 2023, the Government adjusted upwards the CPF (Central Provident Fund) contribution rates for senior workers above the age of 55, according to a tiered structure.
 
DPM (Deputy Prime Minster) Wong announced in this year’s Budget of increments in CPF contributions for senior workers in Jan 2024, again according to a tiered structured, with provision of transition offsets to help employers.
 
These moves are the fruits of tripartite negotiations and agreements struck under the auspices of the Tripartite Workgroup on Strengthening Support for Older Workers.
 
These are concrete steps taken in the national interest, and they reflect the correct understanding of the reality that Singapore faces.
 
I am happy to see our work in the Tripartite Workgroup being executed, bringing concrete benefit to our senior workers and the companies they serve. I thank the Government for enabling this through policy and legislation.
 
At the same time, I want Singaporeans to know and to appreciate that our ability to do this, the whole of Singapore’s ability to do this - to come together, to negotiate strongly from each side, and then to reach a fair and feasible balance of interests, and to then implement effectively in good faith in a timely manner – reflects the deep trust and value that Tripartism has yielded for Singapore and Singaporeans over many years. In many other countries, they tried to do similar things but they meet with protests and they meet with paralysis because of the lack of trust. And the recent protests in European countries such as France, serve as a good example. And when that happens, actually nothing happens. You just get gridlock. And everybody, all parties suffer – a degradation of interests. So that fact that we are actually able to make progress for a segment of our workforce, namely our senior workers – to be able to provide better for them, better assurance for them in terms of their employment, giving them a chance and a choice, to prolong it when they can and when they want; and at the same time, in the course of that, to provide better for their retirement adequacy. This is no small achievement. We must never take this competitive and social advantage for granted as we go on and tackle more and indeed, endless challenges. 
 
The goals set out under the tripartite committee for older workers set 2030 as a year where we would aim to achieve the outcomes. We have eight more years to that year. We aimed to reach a statutory retirement age of 65 by then, and re-employment age ceiling of 70 by then. And for equalising the CPF contribution rates for those aged 55 to 60, with those of younger cohorts; while strengthening the rates for those older in a tiered manner.
 
I started the speech by sharing that cost of living, retirement adequacy and healthcare cost are top concerns for senior workers. Enabling senior workers to earn more, save more and earn for longer are therefore clearly among the best ways to help generate resources and engender confidence in these areas.
 
Hence, Mr Speaker Sir, as we complete the implementation of the agreed first tranche of moves, namely the increase in the statutory retirement age and re-employment age ceiling by one year, along the journey, and the first tranche of CPF moves, we should consider a suitable juncture to commence tripartite deliberation to formulate the second tranche of moves to progress the Workgroup’s recommendations. This process will take time because there is a need to consider economic and business realities, the experience of the first tranche implementation and what would constitute a viable balance and pace. Hence, while we need not rush, should not rush, we should make sure that there is sufficient traction along this journey, and that such tripartite discussions be convened in due course, in good time.
 
Concerning Extension of SEC and Part-time Re-Employment Grant
 
I thank the Government for extending the Senior Employment Credit (SEC), which was to end in 2023, by two years to 2025. SEC improves the wage competitiveness of senior workers and strengthens their employment and re-employment prospects. The employment rate for senior workers aged 55 and above has reached new highs in the course of this pandemic period. So for example, for those who are aged 55 to 64, it went up by three points, from 67.6% in 2019 to 70.6% in 2022. And for those aged 65 to 69, it went up to 47.5% which is an increase of 2.9% from the year 2019. And these are figures as reported by MOM (Ministry of Manpower) and these we achieved despite the challenges of COVID-19. We must make every effort to anchor these gains as the Singapore economy emerges from COVID-19 to meet new challenges.
 
In the 2019 Budget Debate, I had argued that enabling proper part-time work options is an important way to unlock a latent workforce amongst Singaporeans, so that more middle-aged or older Singaporeans who may have had to leave work can instead stay in work or return to work; and companies, in turn, will be able to retain more good workers and have a bigger local workforce to meet their varied needs.
 
I therefore also welcome and support the Government’s extension of the Part-time Re-employment Grant to 2025.
 
The past three years of COVID-19 have demonstrated many more possibilities of flexible work arrangements (FWA) that these can be leveraged for win-win outcome, when used wisely and not mechanically. And I certainly agree with the elegant elaboration earlier by my parliamentary colleague, Ms Yeo Wan Ling, on this aspect and I shall not belabor the point. But it has proven to be something that we have all learnt – companies, workers – that under given circumstances, it can really be win-win and we should really leverage that to the best that we can. I urge the Government to strengthen support for companies to acquire the practical know-how on the smart use of FWA to strengthen their manpower models and sources.
 
Raising CPF Contribution Ceiling ($6000 to $8000)
 
Next onto the raising of the CPF ceiling from $6000 to $8000. 
 
There is every reason to encourage saving more and earlier to strengthen retirement adequacy. The raising of the CPF contribution ceiling from $6000 to $8000 does that, and I fully support it.
 
Raising the ceiling has the advantages of upkeeping the real value of CPF savings, and enables workers to benefit from longer periods of compound interest.
 
This move benefits both current cohorts of senior workers as well as future cohorts of senior workers because then you can already begin to earn and save more into your CPF at the wage range of between $6,000 to $8,000, as the rates are raised.
 
I had called for such a review in last year’s Budget Debate and I am indeed happy to see the Government had taken this move this year. And I urge that such reviews be carried out periodically for the reasons that I’ve discussed.
 
Government Pledge for Basic Retirement Adequacy
 
On Government’s pledge for basic retirement adequacy, DPM Wong was frank in noting that different age cohorts of workers will likely face different prospects and challenges in saving for an adequate retirement.
 
I am heartened by his pledge that the Government will formulate different ways to help Singaporeans achieve basic retirement adequacy, and is actively studying ways to do so beyond the steps that have already been taken, such as those in this budget as well.
 
Volatile economic environment, heightening risks of intermittent unemployment; rapidly changing business models and technology forcing equally rapid need to re-skill and raising the risk of premature exit from the workforce; and market failures resulting in sticky lower end wages are just some of the challenges that can complicate and undermine retirement adequacy. The future may yet bring even more and even harder tests.
 
This is also why retirement adequacy features as a significant concern among the senior workers as revealed also in NTUC’s survey.
 
I therefore agree that this is a critical area to pay attention to because it concerns a basic sense of security and confidence of Singaporeans. NTUC wants to work closely with Government in this area, to see what additional innovations can be arrived that can yield practical and sustainable improvements, and to help Government and whole of society to rally our workers to support for those.
 
Fair Treatment of Senior Workers
 
So I move on to the fair treatment for senior workers.
 
The MOM recently released the interim report of the Tripartite Committee on Workplace Fairness. I look forward to the final report of the Tripartite Committee and the implementation of its recommendations to further strengthen workplace fairness for all.
 
Beyond individual cases and claims of age discrimination, I hope the tripartite partners can work closely to leverage in-company mechanisms to proactively ensure that senior workers are given due consideration and opportunity for training and skills-building.
 
Relevance of skills is a factor that all parties agree will materially impact the employability of a worker. Hence, all efforts aimed at boosting employment and earnings of senior workers will be seriously hampered if they are rendered skills-obsolete through not being given fair consideration and opportunity compared to younger workers.
 
The NTUC-initiated Company Training Committee (CTC) is an in-company mechanism that can serve this purpose of ensuring fair and productive conduct of training for all workers, including senior workers.
 
And I thank the Government for the strong support in Budget 2022 via the $100 million grant to spur the scaling up of CTCs to accelerate purposeful training and skills-building in workplaces to meet the rapidly changing needs of businesses and workers. I hope that we can fully leverage such relevant mechanisms and regulations to accelerate fair and productive outcomes for companies and workers.
 
Tackling Inflation through Assurance Package+
 
Finally, Mr Speaker Sir, people I have spoken with who are aware of the contents of this year’s Budget have all said that they felt that the Government understood Singaporean’s concern over inflation and cost of living, and that the Budget measures ranging from CDC (Community Development Council) Vouchers to Assurance Package payouts to enhanced GST Vouchers (GSTV) in particular, to Conservancy rebates and more, all these go to show the Government’s sincerity and responsiveness to help citizens cope better in this challenging environment. It is appreciated by Singaporeans.
 
Stronger Together
 
Sir, what the past few years have clearly taught us is that big unknown surprises can catch us unaware and set us back even as we must grapple with known big structural challenges in our economy and society.
 
At the same time, we also learnt that in tackling and overcoming these, that unity, rationality, ability to build and mobilise trust, and always wanting to build a better future Singapore are priceless traits that set us apart, as a country and as a people.
 
So we, today’s generation and the generations to come, must learn this and must always remember this, and come back to this basic tenet which is that – we will be stronger together.
 
So I fully support this Budget because it allows us to realise the future and dreams for Singapore and Singaporeans, and for workers, it makes every worker matters.
 
Thank you.
 
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