Minister of Finance for Singapore, Lawrence Wong

"Yes, HR takes care of it, but the senior management must devote personal time to the training and development of your workers," Singapore's Finance Minister shared. 

Minister of Finance for Singapore, Lawrence Wong, urged employers to take responsibility for upgrading the skills of their workers, and called on senior management to take an active role in this process instead of only relying on their HR teams to roll programmes out. 

This, he said at the inaugural Singapore Apex Business Summit (SABS) organised by Singapore Business Federation (SBF) and MP Singapore, and attended by Human Resources Online.

The event was officially launched by Deputy Prime Minister and Coordinating Minister for Economic Policies Heng Swee Keat on 22 March 2022, and Minister Lawrence Wong took the stage for a luncheon plenary keynote, followed by a conversation with Lam Yi Young, Chief Executive Officer, SBF.

Here are all the insights from Minister Lawrence Wong's speech:

Immediate risks to growth and inflation 

Minister Wong shed light on the series of developments impacting Singapore's economy. "We recognise that COVID-19 was a crisis of a generation, it has changed the world permanently, and we have to adapt to it.

"Before the world could recover fully from COVID-19, we were confronted with another epochal event – the invasion of Ukraine by Russia, which is now the largest war on European soil in over 80 years. This is not just a conflict on foreign lands. The post Cold War era has been shaken, so we are likely entering a new world order, which could very well be less hospitable for small countries like Singapore.

"There can be no doubt that we are living in a more dangerous, and volatile world."

As such, he highlighted that there are immediate risks for growth and inflation, with global supply chains being disrupted, and higher prices for oil, gas, electricity, and more, adding that there are likely to be more supply chain disruptions in the months to come.

"If things were to escalate further, there will be further impact on global growth and inflation – if both are impacted at the same time, then the global economy could go into stagflation – i.e. stagnant economy with high inflation."

As such, he affirmed that Singapore is monitoring these developments very closely, and the Government "will not hesitate to take further measures to help businesses, households, and workers if necessary."

Welcoming talent and investment from around the world 

In his speech, Minister Wong cited three areas for Singapore as well as its businesses and workers to consider critical in this new world order. The three areas he prioritised are:

Connectivity

Minister Wong cited connectivity as "essential, even existential" for Singapore. Strong connectivity, he said, will enable Singapore to be a choice destination for business, trade and even data flows – which distinguishes the nation as a hub. As such, the nation is pressing on with long-term plans to enhance the infrastructure.

He affirmed: "We have to retain the ethos and mindset to stay open, and welcome talent & investments from all around the world. This will help to create value for ourselves and the world."

Innovation

Innovation, the Minister shared, is key to creating wealth and raising standards of living for the people of Singapore, as such the nation strives to be one of the key innovation hubs for the region. Comparing the situation to 10-15 years ago, he noted a more vibrant ecosystem for startups, venture investments, angel investments, and startups that have achieved unicorn status.

What the policymakers currently are doing, he said, is investing consistently in science and R&D, which can help catalyse more private investment in R&D – "while we have done so in the past few years, much more can be done in these areas," he added.

"We want to see more pervasive innovation among all enterprises - especially among the SMEs. That’s why in the budget we have strengthened support to partner with research centres."

Resilient

Minister Wong was very clear that resilience is a must-have trait that all businesses and workers should aim to develop. He explained: "Indeed, we have faced many ups and downs, but clearly there will be many more shocks to our economy and society – one crisis can fuel another crisis, one risk can create another risk – for example, climate change can spread more infectious diseases.

"We have to be prepared for a world where we cannot avoid these shocks, but we can learn to be more resilient to have the ability to go through these bumps, to take some hits, and then bounce back stronger."

Three suggestions on how to build resilience 

Singapore's Finance Minister went on to lay out a roadmap for employers and employees alike to build resilience. These are the three suggestions he put forward:

Always ensure sound & stable finances 

Upholding a balanced budget and living within our means, he said, is key and vital to Singapore's success. "We are fortunate to have reserves accumulated by our forefathers so as to uphold this attitude of fiscal discipline.

"We aim to always have the fiscal firepower at our disposal to respond quickly and decisively. It is critical for us being resilient through crises and emergencies."

Continue to invest in our people

The major priority for Government spending, he said, has always been heavy investments in education. He cited that these initatives are now starting earlier in life through funding of preschools, KidSTART, and extending support through SkillsFuture.

Bringing the corporate sector into the conversation, he said he is encouraged to see many employers doing their part, by telling policy makers they are more than ready to do more and help their workers upgrade.

His message to employers and leaders was: "I would say you cannot leave this function to your HR teams alone. Yes, HR takes care of it, but the senior management must devote personal time to the training and development of your workers.

"The more personal time you devote to this area, the more they can contribute to your organisation, and they will be more motivated to help secure your company's next stage of growth."

Strengthen our social compact to become more resilient

For a post-pandemic future, Minister Lawrence Wong noted initiatives to tackle inequality and uplift low-wage workers are ongoing and imperative.

"Our income inequality as measured by the Gini coefficient is coming down – this year, we are expanding Workfare and progressive wage schemes – and we are determined to see improvements in forging a more equal society in the coming decade. We are continuing to review our approach and policies in other areas."

He urged everyone: "Let us continue to work together to chart our way forward towards a fair, greener, and more inclusive Singapore."


In addition to his keynote speech, Minister Lawrence Wong sat down for a conversation with Lam Yi Young, CEO, SBF. Here are snippets of the chat:

Q A lot of employers have been asking, can some of the policy-driven factors be pushed back so as not to add to the cost pressures of SMEs?

We have been very cognisant of the challenges companies face in this new environment which is more challenging. That's why, we have deliberately phased out and staggered a lot of our policy moves – e.g. carbon tax is going up in 2024, in a series till 2030. For S Pass, we have some changes this year, but overall it has been staggered over three years. The staggering of these policy moves was done precisely because we are aware if it was all in one go, it would have been very difficult for companies. We only announced it upfront so that businesses are aware of what to expect.

Having heard all this, some businesses still say that some staggering is good, but why not push back further? I can understand the sentiment, but these constraints we are facing on labour and carbon are not temporary. It is wishful thinking to hope that at some point down the road, we can do away with these constraints.

So long as Singapore is successful as an economy, we will always have a tight labour market. You can’t run away from that.

In fact, we have to move more decisively to understand that labour & carbon will be permanent constraints in our economy – wouldn't it be better to move proactively to trandform our business processes to rely less on labour? Moving early will position our businesses in a more resilient and stronger position.

That is why in the budget we have put in place many schemes to help businesses on adapting automation & digitalisation efforts, in order to reduce reliance on labour, improve productivity, as well as take up sustainability initiatives to be more energy efficient. However, it is not automatic – it requires companies to do their part to apply. I encourage all companies to apply for the schemes.


Photo / Journalist's own

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