EFFECT OF DEVALUATION OF STERLING ON THE STABILITY - OF LABOUR AND CAPITAL IN PIONEER INDUSTRIES
Mr Speaker, Sir, much has been said about the Sterling devaluation the last couple of weeks, since the United Kingdom Government announced the devaluation of the Pound. Apparently, the devaluation of the Pound by nearly 15 per cent with its broader economic consequences did not seem to be a matter of great concern to the people of Singapore. Instead, the half a million workers and businessmen were more concerned about the depreciation of the old Malayan currency by 15 per cent. This was the main concern. Little or no attention was given to the effect of the devaluation as a whole, on the future earnings of the Singapore workers. Sir, some have expressed gleefully, "The British-made cars would be cheaper by 15 per cent." So may it be. But the fact that no one seemed to be worried about the effects of devaluation on the broader economic front, including its effects on labour, indicates a possible complacency on the part of the Singapore workers. This may be understandable. More than 1,200 motor-cycles or scooters are registered every month. This is a clear indication that the workers in the lower and middle income groups have benefited from the economic expansion over the last five years. Can this rate of economic expansion be maintained and can the workers of Singapore as a whole continue to increase their earning capacity at the same rate? One may wonder what the devalued Pound has to do with it. Singapore is an island-State with no natural resources, and the value of the new Singapore dollar in terms of purchasing power depends entirely on how much Singapore-made goods can be exported, and how much foreign exchange we can earn thereby. There is a great possibility that our export may be affected adversely one way or the other. For example, Hong Kong, which devalued by 4.3 per cent - originally Hong Kong devalued by 14 per cent - would be in a better competitive position in the international markets in terms of price, as Hong Kong-made goods would be cheaper than Singapore-made goods of similar kind, as Singapore did not devalue. Mr Speaker, Sir, some of the pioneer companies may use this as an argument to deny any wage increase. Some of the Commonwealth countries have devalued equally with the Pound. Singapore, therefore, would theoretically be at a disadvantage in pricing by 15 per cent in competing with those countries which have devalued 15 per cent. Can our goods, therefore, remain as competitive as before? This may be possible if the two parties concerned in the manufacture of export goods, employers and unions, preserve good sense and not take advantage of each other by using the devaluation issue as an excuse. Labour in the manufacturing companies, particularly the pioneer industries, must be prepared to exercise restraint for at least one or two years on increase of wages. This should apply more specifically to those pioneer companies where the unskilled workers are being paid at $3.50 and above. Labour as a whole at all wage levels in the export manufacturing industries should seek to increase their productivity by 15 per cent, in terms of greater efficiency, by cutting costs, for example. On the other hand, the pioneer companies must be prepared to recognise the greater efforts put in by labour and grant reasonable increases to those who are in the $2 to $2.50 bracket up to a maximum of $3 to $3.
50. The Government has given added incentives to export manufacturing companies. Similarly the pioneer companies themselves on their own volition should grant incentives for increased productivity to the workers. Both the management and union leaders must be prepared to appreciate the difficulties encountered by each other. The workers in the pioneer companies have a greater responsibility than just irrationally increasing their pay packets. By 1971, at least 10,000 Singapore citizens would be seeking employment due to retrenchment in the British bases. Owing to the devaluation of the Pound, Britain may possibly accelerate the withdrawal of the bases. To add to this, we have an unemployment figure of 52,000, not counting the school-leavers seeking employment in the labour market. Sir, with restraint of wage increases for unskilled labour at the $3.50 mark and above, accompanied by an increase in productivity of 15 per cent, the reputation of the Singapore workers would induce overseas investors to bring in capital to start new companies. The greater the investment from overseas, the more manufacturing companies set up, the smaller would be our unemployment problem. By reducing the unemployment figure, the workers can have more for themselves in the long run. A practical solution must be found if we in Singapore are to overcome any possible adverse factors that may arise as a result of devaluation which may restrict our effort to export more. One way is to set up a tripartite council, consisting of management and labour representatives together with the national productivity centre representing the Government, to investigate the effects of devaluation on our export industry and to seek solutions. A tripartite council was set up a few years ago. This council represented all employers and labour at the national level. The council was inaugurated with a lot of fanfare, but where is this council today? No one hears about it today. It is completely dormant, sleeping. Let us not make the same mistake again. A tripartite council, as I have suggested earlier, with special functions must be initiated. The emphasis would be on increased exports, higher productivity with quality and lower costs, and industrial peace with justice which will be the responsibility of the Council. All grievances between employer and labour could be investigated and solutions arrived at, to the satisfaction of all concerned. If concrete results are to be obtained and the fate of the first national tripartite council avoided, the persons nominated to this council must include persons who are directly connected with the export industries. Sir, the functions of this council I would envisage to be: (1) To educate the workers and instil in them the importance of increased productivity. (2) To instil into employers the importance of recognising the efforts put in by workers for increased production which should be compensated reasonably. (3) To investigate into complaints from employers or unions on all matters affecting production, quality and industrial relations. Sir, since increased export is the overall aim and is of vital importance to Singapore as a whole, I would suggest that the Government appoint a public servant as secretary in the Council. I would even go further and suggest that full publicity by posters, advertisements and talks be given to drive home to all concerned about the vital role they are requested to play in boosting the economy of Singapore. Assuming that by the efforts of this Council production is boosted, what should the Government or the employer do about finding the overseas markets? To what extent should employers finance the setting up of trade missions in every large city in the world? Sending trade missions overseas once in every six months is not good enough. Singapore must have super-salesmen posted in every capital in the world. The employers should be willing to bear some of the expenses of these trade missions which would be manned by people with expert knowledge of the various industries. Mr Speaker, Sir, businessmen alone cannot be expected to have governmental contact overseas. I think the Ministry of Finance is obviously the department which should initiate and lay the foundation of setting up various trade missions throughout the world. Otherwise all efforts made in Singapore to produce quality-made goods at reduced cost and all the incentives offered to the export industries would be in vain. I suggest in all seriousness to the Minister for Finance that the campaign to achieve the target should be tackled with the same vigour that the Government is tackling the problem of family planning (so that we need not have to legalise abortion) and the "eat more wheat" campaign. Sir, I would go further and recommend to the Minister for Finance to plough back the 4 per cent tax on export earnings, or at least some portion of it, to the setting up of trade missions in those countries where Singapore-made goods have or have not found a market, or in countries where businessmen find difficulty in establishing contacts. I will be failing in my duty as a trade unionist if I do not emphasise that the workers alone cannot he expected to practise restraint as part of their role to boost the economy of the State. The Government and the employers too must play their part. It is the co-ordination and co-operation on the part of every one of the three parties concerned that can herald a new and bright phase to our industrial growth - to borrow the phrase of the Finance Minister in his Budget speech. 4.03 p.m.