Among efforts to strengthen the compact with workers, DPM Wong said the Government will pay special attention to those in vocational and technical roles, and especially ITE and polytechnic graduates.
As Singapore's economy continues to recover, and amidst a volatile external environment, the Government has reiterated its commitment to supporting Singaporeans.
In his 2023 May Day Message, Prime Minister Lee Hsien Loong noted that Singapore’s GDP grew 3.6% last year. Hard-hit sectors are recovering rapidly, with establishments in sectors such as tourism and hospitality back in business.
Looking ahead, PM Lee cautioned that Singapore is expected to see slower growth this year, but should avoid an outright contraction. At the same time, inflation remains high, though there is hope that it will moderate in the second half of the year. Meanwhile, he added, unemployment rates have stayed low, and retrenchment numbers remain manageable.
PM Lee stated: "Overall, we can be cautiously optimistic about our immediate economic prospects."
Recognising external factors including geopolitical tensions, a risk of recessions in Western countries, and new technologies such as artificial intelligence disrupting economies around the world, Singapore must respond to these broader trends by adapting to them, he highlighted. This means continually transforming industries, enhancing existing capabilities, and building new ones. This could also cause disruptions to some existing jobs, but at the same time create new jobs with better prospects for the future.
In this vein, the PM also shared that Singapore's worker training and upgrading programmes are progressing well, helping many workers to upskill and reskill. At the same time, employers are making the effort to maximise the potential of their workforce, providing training opportunities and encouraging their workers to take them up.
Apart from the above, there has also been progress in uplifting vulnerable workers, through progressive wages. Moving forward, PM Lee affirmed that more will be done to professionalise skilled trades to create more pathways to success, and to improve career planning support for Singaporeans.
Separately, in his speech at the May Day Rally 2023, Deputy Prime Minister and Minister for Finance Lawrence Wong elaborated on the new challenges facing Singapore and the world, and how these developments will impact Singapore – making it harder to compete, grow the economy, create jobs, and to earn a living.
First, he shared, the rules of trade are changing. While countries lowered tariffs and pursued win-win trade deals over the last few decades, they no longer talk about win-win cooperation in trade.
DPM Wong explained: "Many are thinking: 'I don’t want to become over-reliant on you, just in case relations turn sour'; Some go even further, they think: 'I not only want to win, I want you to lose'. The value of our trade is more than three times our GDP. We will be hurt if more countries become protectionist and flout trade rules."
Second, investment flows are also shifting — global foreign direct investment or FDI flows grew strongly in the past decades, as companies established footprints all over the world. Singapore has benefited tremendously from this. However, geopolitics is now re-channelling FDI flows.Third, the advanced economies are rolling out massive subsidies to build up their own domestic production, especially in strategic industries like semi-conductors and clean energy.
In an attempt to stop governments around the world from "undercutting one another" with more and more generous tax incentives, resulting in harmful tax competition, there was a global agreement — the Base Erosion Profit Shifting includes a global minimum corporate tax of 15%. Around the world, everyone sets a minimum corporate tax of 15%.
However, before this can be implemented, the major economies – the US, EU, and China, for example – are already rolling out huge subsidies for key projects and investments.
As DPM Wong illustrated, Singapore is already feeling the impact, and the competition will be much tougher. He stated plainly: "We cannot afford to outbid the big boys, just to get the MNCs to invest here. We won’t have enough money to match the competition.
"But what we must have enough of are ingenuity and innovation; guts and gumption. That’s the only way we can and will prevail, even when the odds are stacked against us."
Seizing opportunities and growth
With that being said, DPM Wong reminds that this is not the first time Singapore has had to respond to such grave challenges, citing crises from the withdrawal of the British from their military bases post-independence in Singapore, pil crises, and financial crises.
"We survived each of these critical moments. We turned every challenge into new opportunities."
Singapore's strategy for remaining competitive through thick or thin is to continue investing in its connectivity infrastructure. DPM Wong cited the Changi Airport Terminal 5 and the Tuas Port projects as an example, which he deemed will significantly enhance Singapore's capacity and reinforce its status as a business and logistics hub.
With these moves, in fact, more multinational corporations are choosing to anchor their regional and global supply chain operations here, he pointed out.
Another important strategy is to deepen Singapore's capabilities for innovation, especially in areas of competitive strengths. This is why the Government is continuing to invest heavily in R&D and innovation, and is doing this with leading global companies.
Another example he cited is Procter & Gamble, which has deepened its presence here by growing its innovation centre to be one of Singapore’s largest corporate research facilities.
Refreshing the compact with workers
On this, DPM Wong highlighted the following:
- To ensure all Singaporeans continue to progress as the economy grows, the Government is undertaking the Forward Singapore exercise. A key aim of this exercise is to refresh and strengthen the compact with workers. This will include studying how the Government can invest more in every worker – to help them take ownership of their own careers, continuously reskill and upskill, and take up better jobs and opportunities throughout their working lives.
- Efforts under the SkillsFuture will be shifted to higher gear, to make skills training and lifelong learning a key pillar of a refreshed compact with every worker.
- The Government will pay special attention to those in vocational and technical roles, and especially ITE and polytechnic graduates, implementing further avenues to deepen their skills through different pathways, so they can secure better salaries and career paths in the professions they have trained for and have the aptitude for.
Additionally, DPM Wong called on professionals, managers, and executives (PMEs) to also reskill and upskill themselves, even more so to keep up with rapid technological advancements.
"Integrating new technologies like AI into our work will bring sweeping changes, including for highly-trained workers," he explained.
"We must expect more human tasks to be taken over by machines. Some existing skills will no longer be so useful, but new skills will be needed. And that’s why we must continually reskill and upskill."
DPM Wong also recognised the difficulty sme workers might face in juggling work and family responsibilities, while studying at the same time. As such, the Government will reduce the costs, and lower the barriers to training: "We will work closely with NTUC, and all of you, as our key partners in this endeavour, and support every worker in your journey of lifelong learning."
He also acknowledged some feedback received from the NTUC’s “Every Worker Matters” Conversations, which NTUC Secretary-General Ng Chee Meng had covered in his own speech. For example, issues such as:
- what more can be done to uplift lower-wage workers, professionalise skilled trades, and ensure dignity and respect for every job and every worker?
- how can there be more support for those who lose their jobs – to reduce the strain on their finances, and at the same time, help them upskill and get back into work, and bounce back stronger?
- how can all workers be enabled to meet their retirement needs?
He affirmed that the Government is looking into all of these issues to ensure good jobs and opportunities, and better assurance to all workers.
Going further, he recognised that there are concerns about other matters besides careers and jobs — namely the cost of living. In response, measures under Budget 2023 aim to cover the inflation-induced spending, in other words, the increase in spending due to inflation, for lower-and middle-income households.
Support such as the CDC vouchers have since been disbursed, with more efforts on the way: Later this month, there will be top-ups for children; utilities and S&CC rebate every quarter, and, for all adult Singaporeans, cash payouts of up to S$2000.
Lastly, DPM Wong also addressed any housing concerns, especially in regard to insufficient BTO flats.
In terms of affordability, DPM Wong emphasised the importance of looking at how the price relates to income, as well as the proportion of income that’s needed to service the housing loan. "Then, you have a complete picture of affordability," he noted.
Currently, BTO flat prices have, in fact, moved in tandem with incomes. As DPM Wong assured "in a fair comparison, "BTO flats remain affordable."
"The typical household now continues to use less than 25% of their income to service the loan, like in 1980. And the vast majority of our first-time homebuyers today service their housing loans through their CPF contributions, with very little or even no out-of-pocket cash. This is what we are doing today and this is what we will continue to do in the future to ensure affordable public housing."
To end off this point, he reassured that affordable and accessible public housing, just like access to Singapore's quality of education and healthcare, will always be a key part of the social compact in Singapore.
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Lead image / Lee Hsien Loong Facebook