DPM Lee Hsien Loong
President, NTUC
Advisors and Cadre Members of Taxi Operators Associations
Senior Management of Taxi Companies
Sponsors and Well-wishersÂ
Good Afternoon,
Sars has indeed rained heavy blows on several of our industries. The tourist and travel sectors have been hit hardest. The taxi industry is bearing considerable pain. However, taxi companies, associations and drivers have not let this bring them down, but instead have worked together to present a strong front in the battle against Sars. Such collaboration and co-operation of the Taxi Industry Task Force have produced many effective measures to help cabbies, culminating in the launch of the taxi operators' savings scheme this afternoon.
I'd like to congratulate the taxi industry for bringing the idea of a taxi operator's savings scheme to fruition. It is indeed a testament to your dedicated efforts to protect yourselves against the impact of Sars.
Savings Scheme
I am particularly pleased to be here at this launch because one of my favourite causes is also being fulfilled. Union leaders and members are probably familiar with my many calls to workers to save for a rainy day. But for those who have not been acquainted with it, let me briefly recap.
Many years ago I noted that our reliance on retrenchment benefits to tide over workers out of jobs was highly unsatisfactory. Some companies fold up without being able to pay any retrenchment benefits. So we explored the idea of a centralised retrenchment fund. But we found that it has many shortcomings, abuse being the foremost problem.
In our search, we found that some companies in the US adopted the concept of hunting time. For each year worked, an employee would be entitled to say, a week of "hunting time". It is paid leave to find another job when redundancy occurs. This works when the company is doing well. Actually this is similar to the way we pay retrenchment benefits. The scheme also has the same weakness - it is good only when the company is viable.
At the same time we realised that workers can also face hardship for reasons other than retrenchment. For example, a family member being suddenly struck by a severe illness, or met with an accident.
From this, we realised that what workers need is not just a retrenchment fund. They need a hardship fund.
So why not save as we earn? Put aside a little each year, or even each month? If things go well, a tidy sum can be built up. This will be extremely useful on a rainy day. We broached the subject, but most people were not interested. Employers saw it as added cost if co-payment is required. Employees did not see the need because the economy was doing well, and they were not worried about finding a new job.
In NTUC, I set up a scheme. We took a part of the annual bonus, and bought unit trust shares. What each employee earns will be vested after 3 years. The vesting period is to force save, and develop the habit of saving. I actually wanted a 5 year vesting period, but our house union negotiated for a shorter period.
There are downside risks in unit trusts. So this idea can also work if the money is simply left in individual savings accounts. However, the returns will be unspectacular.
Up to now few employees have such a savings plan. When Sars struck, the rainy days have come. Taxi drivers have been badly hit. So they, like other self-employed, need a save-as-you- earn scheme even more. I asked Seng Han Thong to discuss it with the taxi association. Everyone readily agreed as they can see very clearly the need.
NTUC Thrift
The setting up of the taxi operators savings scheme with the NTUC Thrift & Loan Cooperative is a perfect fit, as the NTUC Thrift was created with the specific aims of encouraging thrift and savings. Founded by NTUC, SLF and major trade unions to serve unions and co-operative members, the NTUC Thrift & Loan is a worthy anchor to tie savings to. By joining NTUC Thrift, taxi drivers can enjoy competitive rates on their deposits.
I urge all taxi drivers to take advantage of the savings scheme set up with the NTUC Thrift and Loan.
Thanking Donors
Finally, I would like to thank the donors of the Taxi Operators Savings Scheme, and of the other measures taken by the Taxi Industry Task Force to help taxi drivers, for their generosity. You have given us reason to remain hopeful and to carry on in these difficult times.
