Mr Deputy Speaker, Sir, I rise in support of the motion standing in the name of the Nominated Member of Parliament, Mr Cyrille Tan. I too believe that tripartite cooperation between employers, trade unions and the workers they represent and the Government is a key factor in our competitive advantage. It has, in fact, helped us to maintain harmonious industrial relations and established a non-confrontational framework for resolving labour-management issues. Instead of wasting our limited human resources and efforts on divisive confrontations between union and management, we have been able to concentrate our efforts, our resources on common goals, teamwork, skills and productivity improvements. Our harmonious industrial relations over the past three decades were very different from the experience of many other countries, particularly those saddled with adversarial labour-management relations. In fact, our strike-free environment over a long period of time may have resulted in harmonious industrial relations being taken for granted, especially by a younger generation of workers. Sir, BERI, in its worldwide ranking of workers, had consistently ranked the Singapore workforce as No 1, top of the list. This is, to a large extent, due to the labour legislation which reflect the strong spirit and practice of tripartism. Furthermore, the absence of industrial unrest, such as strikes, work stoppages, had contributed to the high relative productivity which has further enhanced our strong ratings by BERI. Mr Deputy Speaker, Sir, like Mr Zainul before me, I too would like to take this opportunity to remind the House that harmonious industrial relations cannot be taken for granted. In the past, Singapore had experienced the consequences of confrontational and adversarial labour-management relations. In the 50s and 60s, strikes, work stoppages and other forms of industrial action were common. Just to remind Members, in 1955 alone, there were 275 strikes, resulting in the loss of one million man-days. In 1961, we had 116 strikes and we lost more than 400,000 man-days. If BERI were to rank our workforce on such performance, I have no doubt that the Singapore workforce would be occupying a position quite near the bottom, and not at the top of the list. Sir, frequent strikes not only disrupted the smooth operations and viability of companies; it also undermined the well being and livelihood of many workers. More importantly, a poor state of industrial relations had scared away potential investors, discouraged business expansion and adversely affected economic growth. So it was not surprising that in the 50s and the 60s, there was economic stagnation and massive unemployment. Today, the situation in Singapore is very different. Singapore has consistently been rated as one of the most attractive places to invest in and has topped the World Competitiveness ranking. We have enjoyed rapid economic growth over the years, especially from 1987 to 1997, averaging about 8.9% GDP growth annually. Unemployment is no longer an issue. In fact, we now face labour shortage and tight labour market conditions. We have to admit more than 450,000 foreign talented professional workers, skilled and even unskilled workers to supplement our limited indigenous manpower resource. Singaporean workers have enjoyed substantial wage increases and significant improvement in their terms and conditions of employment. Standard of living and quality of life are comparable to that of many developed countries. Sir, all these have been made possible through the efforts of a hard-working workforce, sound economic policies, and a strong and deep rooted relationship between employers, workers and the Government, based on cooperation and shared objectives. I would like to point out that tripartite cooperation had served us well, not just in times of success, economic growth and prosperity. Tripartism had enabled workers, employers and the Government to work as a team in times of adversity to overcome difficulties. Several other MPs have spoken on the recession in 1985-86. I think that was a real test and a hallmark of the depth and strength of our tripartite relationship. In 1985-86, we faced the first economic recession after nearly 20 years of steady economic growth. While the onset of recession was sudden, the Government was equally swift in its response. An extensive package of anti-recessionary measures was formulated and implemented successfully with strong support from the employers, trade unions and their members. These measures included the drastic reduction in the employers' CPF contribution from 25% to 10%, and the acceptance of severe wage restraint and even wage cut. The prompt and thorough implementation of the cost-cutting measures helped companies and the economy to turn around quickly. Growth resumed in 1987 and since then, Singapore has continued to enjoy strong economic growth and workers have been rewarded with substantial wage increases and good bonuses. Coupled with low inflation, the purchasing power of workers has risen significantly and so has the quality of life. This is reflected in better housing, better health care, better education, access to more leisure and recreational facilities and even the means to travel widely during their holidays. Sir, tripartite cooperation has allowed us to adopt a proactive approach in tackling difficult issues affecting the economy, businesses, and the well-being of our workers. Nominated Member of Parliament, Dr Lee, has observed that the National Wages Council (NWC) is a tripartite institution. I too would like to highlight the NWC as an example of tripartism at work. The NWC comprises representatives from the union, employers' organisation and the Government. It was set up in 1972 to formulate and recommend wage increase guidelines. The guiding principle was that workers should be rewarded equitably but wage increases should not undermine our competitiveness in the global market. Each year, the NWC issues wage increase guidelines taking into consideration past year's economic performance, future economic prospects, productivity gains that have been achieved and wage costs as compared to economic competitors. For the past 25 years, NWC guidelines have helped to achieve sustainable wage growth and ensure that the economy remains on track with increasing regional and global competition. In many countries, wage negotiation is one of the most troublesome aspects of labour-management relations, often resulting in very violent consequences and protests. In Singapore, tripartite cooperation has allowed us to turn this process into a rational and forward-looking system of resolving the needs of both the workers and the employers. Apart from dealing with wage increases, the NWC also studied other wage-related issues to further enhance our competitiveness. Hence, in 1986, the NWC proposed that a flexible wage system be introduced to address the problems caused by a rigid wage system which hampered the employers' ability to cope with changes in the business cycle. Currently, more than 70% of companies in Singapore have implemented a flexible wage system which has enabled them to be more responsive to changing business conditions and to remain viable despite the emergence of more competition. As the Secretary-General of NTUC has pointed out, the flexible wage system has allowed companies to first trim wage cost instead of turning to retrenchment as the first response to a downturn in business cycle. I hope that all employers will heed this message and adopt this approach of using the existing flexible wage system as a measure to respond to slower growth and to avoid turning to retrenchment of their workers as a first reaction. Mr Deputy Speaker, allow me to quote yet another example of how tripartism had helped us to address difficult issues, especially issues which are going to affect us in the future and which may not be immediately apparent to workers in particular. In late 1995, we established the Tripartite Committee on the Extension of the Retirement Age. The Committee comprises Government representatives and representatives from a wide cross section of employers' organisations and, of course, trade union leaders. The Committee set out to study the complex issues relating to our ageing workforce and came out with a comprehensive and bold package of measures to cope with the impact of an ageing workforce on our economic vitality. These measures included the introduction of the base-up wage system to replace the existing seniority-based wage system, wage reduction for workers after the age of 60, an alternative medical benefit scheme to encourage more responsible use of medical benefits, and the capping of retrenchment benefits to help companies to remain competitive. Some of these measures are major departures from current practices and may not be well-understood or well accepted by workers and employers at this juncture. However, in the Tripartite Committee, there was full consensus and commitment from union leaders and employers that the adoption of these measures is necessary if Singapore were to overcome the problems created by a rapidly ageing workforce and to ensure that the economy remains competitive in the future. A Tripartite Working Committee has now been formed to monitor the implementation of these recommendations and to develop guidelines for unions and management to smoothly raise the retirement age from 60 to 62. Sir, the effectiveness of the NWC and the Tripartite Committee on the Extension of the Retirement Age would not have been possible without a high level of cooperation among the three social partners and the ability to work together to address and solve issues that have national implications. This is the essence of tripartism which has served us well and which we must continue to nurture and strengthen. Mr Deputy Speaker, Sir, as pointed out by Mr Hawazi and several other MPs, this debate on tripartism is taking place against a deeply disturbing backdrop of economic crisis spawned by the regional currency and stock market turmoils. Because our fiscal policies have always been based on sound economic principles, we have not been affected to the same extent that our neighbouring countries have. Singapore's economic fundamentals remain strong despite the regional upheavals. Government will continue to adopt prudent financial policies. The Government is also aware of the problems facing businessmen arising from the recent financial turmoil and economic slowdown in the region. These factors will be taken into consideration in formulating the FY 98/99 Budget. However, Singapore cannot completely avoid the adverse impact from the regional economic crisis. We cannot assume that we will be able to sail through this critical period without some pains. We must, in fact, be prepared that the tidal waves which are lashing at our neighbours will also cause us some damage. We must be prepared for more difficulties ahead of us, as it will take quite a few years for our neighbouring countries to resume their normal growth. 1998, in particular, will be a more difficult year for Singapore and growth is likely to be less than what we have enjoyed before. It is thus more important at this juncture for workers, trade unions, employers, and the Government to work closely together to ride the storm. Therefore, I agree wholeheartedly with Mr Cyrille Tan and the other MPs that we need to further strengthen the tripartite partnership to enhance our competitiveness so that we can meet the challenges in the years ahead of us as we enter the 21st century. The question, Sir, is what must we do and what new ideas or areas of cooperation will help to strengthen tripartism. I would now like to touch on some of the important and practical ways of strengthening tripartism. Mr Deputy Speaker, Sir, in moving the motion, Mr Cyrille Tan referred to the need for the labour movement to stay relevant and focused on workers' needs. This, I believe, is absolutely necessary. For tripartism to work effectively, we must have a strong labour movement capable of providing leadership and constructive input to strengthen labour-management relation. This means a strong NTUC receiving full support from workers, with a growing membership fully supported by employers and Government. Mr Chiam has referred in his speech to the labour movement being controlled by the PAP. I think my colleague, Mr Lim Swee Say, has ably rebutted that point. What I would like to say at this juncture is that the NTUC is a fully independent trade union movement. The rights of workers to be a member of the union is enshrined in the Employment Act. It is provided for, subject to the laws on trade unions. So any worker or group of workers who thinks that an NTUC-affiliated trade union is not serving their interest will always have the opportunity of forming their own unions, if they believe that it will better serve their interest. The fact is that out of 82 registered trade unions in Singapore today, 73 are NTUC-affiliated. There are nine unions that have chosen not to be affiliated to NTUC. So there are plenty of opportunities for workers who feel that their interests have not been served to find alternative avenues. The truth of the matter is that NTUC has over the years proven to have been an effective champion of workers, to have served the interest and addressed the concerns of all the workers. That is why it has remained the mainstream union movement. In many countries, trade unions are mainly concerned with the pursuit of sectional interest at the expense of the overall national objective. This has often given rise to conflict with the management and the government, which has resulted in poorer economic performance and inability to compete. As a result, in many of these countries where there has been a strong tendency to adopt a confrontational and divisive kind of approach, trade unions have become increasingly irrelevant in meeting the challenges of a highly competitive global environment which actually requires a high level of teamwork and cooperation among all the social partners, rather than more confrontation. In the case of Singapore, our trade unions have always placed national objectives before sectional interest, and long-term benefits of workers over short-term gains. This has ensured the continued relevance of the labour movement in Singapore and has allowed the movement to play an important role in our economic development for the benefit of all workers. The Government recognises the constructive and valuable contributions made by the NTUC. The Government therefore has always been supportive of the labour movement's efforts and initiatives to improve the economic and social well-being of workers. For example, the Government has provided assistance to the labour movement to set up many cooperatives so that these cooperatives can provide more and better benefits for union membership. The Government has also provided annual grants to the NTUC's Research and Administration Unit to carry out research and provide expert assistance to the trade unions in their wage negotiation and industrial relations matters. In order to assist the unions in developing higher quality and higher level leadership, the Government had provided annual grants to the Singapore Institute of Labour Studies (SILS) where they conduct courses on leadership development and leadership training. To ensure that the Institute has sufficient resources to develop and upgrade the quality of union leadership, the Government has given a one-time grant of $2 million to the Institute's Endowment Fund in lieu of the annual grant. In recent years, the Government has also supported the labour movement in the development of many social and recreational facilities such as the Orchid Country Club and Pasir Ris Resort by allocating large tracts of land at concessionary rates through the Singapore Labour Foundation (SLF). More significantly, the Government has allocated a prime site in Marina South for the construction of a new NTUC building in place of its existing office in Shenton Way. Mr Deputy Speaker, Sir, the Government will continue to give strong support to the labour movement in its efforts to enhance the well-being of workers and to enable it to play a constructive and important role in economic development and nation-building. I am confident that the NTUC will continue to be a valuable social partner in our non-confrontational tripartite framework. Because the PAP and the NTUC have similar objectives to improve the lives of Singaporeans, we have worked closely together for the past 32 years. This is not surprising. We have the same objectives, we want to do the same thing to benefit Singaporeans. So we work together. And this commonality has evolved over the years into a distinct symbiotic relation between the PAP and the NTUC. This relationship complements the already strong tripartite relationship which has served us so well. For this reason, the People's Action Party will explore various ways and means to strengthen its links with the NTUC. For a start, as the Prime Minister has indicated last Sunday, we will be organising joint seminars to discuss important issues confronting workers and the economy. Such seminars can provide additional inputs for our economic policies to further reinforce our tripartite relations and also to enhance workers' understanding of key issues confronting the country. We hope that through such interactions, we will be able to reinforce the symbiotic relations between the PAP and NTUC. Sir, to ensure that the economy remains stable, on an even keel, in such troubled times, the needs of companies must also be addressed and Government and workers must help employers to cope with increasing competition which follows from the recent massive devaluation of regional currencies. The Nominated Member, Mr Tay Beng Chuan, had asked Government to review its levies and charges in order to assist businessmen and to reduce the costs of doing business. I have already earlier on mentioned that Government will take the new economic conditions into consideration in formulating its financial policies for the coming year. Government will do what is necessary to assist employers to cope with the economic downturn. The Nominated Member, Mdm Claire Chiang, had said that in 1985-86 we were able to reduce the CPF contribution from 25% to 10%, a 15% cut, and she asked whether it is still feasible today to reduce cost by cutting the CPF. I would say, yes, it is entirely possible and feasible, but the question is whether our situation is so serious and so severe that we need to take such a drastic step. In 1985-86, we were in recession with negative growth. But presently, although we are facing serious economic challenges and drastic change in the economic environment, the likelihood of Singapore being able to achieve growth in the coming year is still very strong although, as I said earlier on, growth will be slower and harder to come by. So at this juncture, perhaps it is premature to talk about reducing workers' CPF, but certainly the fact that each worker is contributing 20% plus another 20% from the employer to the CPF represents opportunities for us to reduce wage cost, if there is absolute need to do so. And it would be considered if the situation deteriorates to that level. As I said, Mr Deputy Speaker, growth will be slower this year, and perhaps for quite a few more years, before normal growth pattern in the region resumes. So here I want to make a point that in view of the new circumstances, the new economic environment, workers must moderate their wage expectations and be prepared to work harder and more productively. The current regional economic crisis may also result in more companies having to downsize and retrench workers. My Ministry will help affected workers to seek re-employment. We will consider setting up a tripartite panel to coordinate re-employment assistance to retrenched workers. At the same time, the easing of tight labour market, in view of retrenchment and slowing down of the economy, may well mean that the concerns expressed by the Nominated Member, Mdm Claire Chiang, about job-hopping will solve itself. Because job-hopping to a certain extent is very much a phenomenon linked to a tight labour market and a rapidly growing economy. When jobs are scarce, not many people are likely to hop around. The current surveys by the newspapers reflect the thinking of the workers on the ground that their concern today is more on job security than bonuses and wage increase. I think the problem of job-hopping may well be on its way out and that may be replaced with a more critical concern on security. Mr Deputy Speaker, Sir, Mr Cyrille Tan, in moving his motion, also spoke in support of the need to bring in more foreign talent to supplement our local manpower. I think this requires courage and it also highlights the far-sightedness of our trade union leaders. In the present environment, to stand up and say, we support the Government's move to bring in more foreign talents, requires courage. Because as a union leader, the standard reaction would be to protect their members first and therefore keep foreigners out. But here he is prepared to argue that in order to ensure that the economy can remain competitive in the future, we should continue to maintain an open-door policy towards talent and to welcome more talent to come to Singapore to supplement our limited manpower resources. I think this is the characteristic of the far-sightedness of the trade union movement in Singapore. Instead of adopting a defensive and sectional interest attitude, labour leaders have always embraced the national perspective and taken the stand of, for instance, welcoming foreign talents to supplement the local workforce. Sir, with limited manpower resources, it is essential for us to attract talent to Singapore. Foreign talent will add experience and skills to our economy and enable us to achieve faster growth, create more jobs and add value to the economy. The availability of foreign talents to supplement local talents will make us more attractive to foreign investors. We must continue to open our society and economy to foreign talents. Some Singaporeans may not quite understand why we should give away jobs to foreigners, especially during this period of economic uncertainty. This is where a strong NTUC, with strong grassroots support, can help the Government and employers to reach out to the rank-and-file to explain the benefits that foreign talents bring to us and how they can help us to become more competitive. The trade union movement has an important role to play in explaining to workers the rationale of our efforts in attracting foreign talents and to allay the fears that foreigners may displace some Singaporeans. Sir, I next turn to an area which many Members have spoken about, that of employability and skills training. Several Members have noted that inwith an increasingly knowledge-based economy, workers with lower education who are currently employed in low value-added industries, may not be able to take up jobs in the high value-added industries of the future if they do not upgrade their skills. I think this is a very relevant point. In fact, BERI in its annual ranking of workforces round the world has also noted that our workers are not well placed in terms of skills and work attitude. These are areas that we have to make improvements on. If nothing is done, many of the low-skilled and low-educated workers may not be able to remain employed asthe economy upgrades, to cope with increasing competition from countries with larger and lower-wage workers force the pace of changelabour force. As our economy upgrades, there is a real danger that lower educated and less-skilled workers would be displaced and may end up being the new unemployable in the workforce. This is the structural unemployment currently experienced by many European countries, which has been observed by Mr Cyrille Tan and the other speakers. However, knowing that this can happen, we can, and we must, take steps to avoid or minimise this undesirable outcome. What we have to do is to upgrade workers' skills. As several Members have pointed out, nearly 40% of the labour force have less than secondary education. We will have to invest more in workers' training and skills upgrading.ence, it is crucial for us to upgrade workers' skills. This is another area where the spirit of tripartism can provide a synergistic effect. The effort to upgrade workers' skills requires changes in the attitudes of the workers and the employers. It will require, in fact, a strong spirit of tripartism to achieve the best results. On its own, Government would have great difficulties in overcoming resistance from workers who may not be convinced of the need for skills upgrading or are just simply unwilling or unable to find time to undergo such skills upgrading upgrading. Likewise, Government will also have difficulty overcoming employers' mindset, such as unwillingness to release workers for training because they are unsure of the benefits or unwilling to bear their share of the cost. A tripartite effort with inputs from all three parties - Government, unionsworkers and employers - is more likely to succeed in making workers and employers more aware of the importance of skills upgrading. One such example of a tripartite effort was mentioned by Mr Lim Swee Say. This is the Skills Redevelopment Programme (SRP) which is initiated and administered by NTUC, supported by the Government, and and the employers. Under the SRP, workers with lower education in low value-added industries are given training in skills that are needed by the new high-value added operations. SRP will enhanceIn the process, these workers' skills and employability would be greatly enhanced to we could avoid the problem of structural unemployment. SRP is an example of how tripartism can synergise the resources of Government, trade unions and employers to achieve the objective of Our objective is to produce a well-trained and highly skilled workforce. This will enable us toenable Singapore to attract high quality investments which would create more and better paying jobs for workers. Government will expand on the scope and outreach of the SRP to reach out to more workers and employers. We will develop, apart from the SRP, new programmes to provide training and skills upgrading for mature workers to help them to cope with the changes in the future. Sir, next I would like to touch on an integrated approach in manpower training. Manpower is ourwill always be Singapore's only resource - I think this was mentioned by the Nominated MP, Mr Tay Beng Chuan. It canwill also be a major limiting factor in our growth and could become an impediment to new business investments and business expansion. We must therefore fully develop our manpower resources so as to hone our competitive edge and remain relevant in an increasingly competitive global environment. This is why, as Mr Lim Boon Heng, Secretary-General of NTUC, and several other MPs before him noted, the Prime Minister welcomed the suggestion made at the PAP Convention last Sunday for the Government to consider establishing a central national agency to undertake the task of manpower planning, development, and management. At present, these crucial economic functions are undertaken by several Ministries and Government agencies. For example, the EDB is responsible for anticipating meeting the manpower needs of new investments; the Productivity and Standards Board is tasked with skills and productivity upgrading; the Immigration Department is in charge of granting Employment Passes to foreign talents; whilst the while the Ministry of Labour, apart from many other duties, is responsible fortasked with regulating the inflow of mainly unskilled foreign workers. Such an arrangement is not entirely satisfactory and can result in a mismatch and lackslack of coordination and an an overall strategic direction. We shouldneed to look at manpower issues from a total national perspective and adopt an integrated and comprehensive strategy for meeting the national manpower needs in numbers and quality.approach to achieve better results. An integrated approach would ensure that manpower planning, development, and management remains well-coordinated and relevant to the needs of an evolving economy. Sir, by adopting an integrated approach, we can develop a world-class workforce with capabilities and skills to succeed in the new global knowledge economy. The development of such a world-class workforce requires total commitment and efforts on the part of Government, trade unions, workers and employers. The Government, in considering the need for an enlarged Ministry of Labour with manpower planning and development function, will also study closely how to involve the participation rate of the labour movement and employers' organisation in the formulation and implementation of manpower policy, including workers' training and skills upgrading programmes. This is in line with our tripartite approach in meeting the challenges ahead and will enable us to reap the full benefitssynergy of tripartite cooperation. Mr Deputy Speaker, Sir, in summary, tripartite cooperation has benefited Singapore in at least three major areas. It has brought about industrial harmony, thus creating a favourable investment climate for rapid economic growth. It has enabled the three social partners to work closely together to overcome adversity during bad times and share the fruits of economic success in good times. Equally important, ourthe tripartite framework ofor cooperation has enabled the three social partners to participate in and contribute to the formulation of national policies. The tripartite partners' participation and contribution have enabled us to more effectively tackle complex and difficult national issues that have long-term implications. Sir, the task ahead of us is to build on the already sound tripartite foundation. We must strengthen the bonds between workers, employers and Government, so as to build a more resilient and adaptable framework fornetwork of industrial relations to prepare Singapore for the challenges of the 21st century. While existing approaches have served us well, we must consciously review their relevance as the world around us changes and the regional economic crisis begins to affect us. We must examine our mindsets and make innovative use of theour tripartite framework to address national manpower issues. My Ministry, therefore, welcomes new ideas and suggestions put forward by MPs on how tripartism could be elevated to a higher plane to help develop a more efficient and highly competitive workforce. Hon. Members have made many suggestions. We will study these carefully and we will discuss them in the appropriate tripartite fora, such as NWC, tripartite committees and working groups that have been formed to address specific issues. Where feasible, we will implement these new ideas for the benefit of workers and employers. We will continue to strengthen our work for a stronger tripartite relationship and institutions by exploring new areas for tripartite cooperation. Sir, I support the motion.