Mr Speaker, Sir, thank you for allowing me to join in the debate. Yesterday, Deputy Prime Minister Lee announced the Government's acceptance of the Economic Review Committee Work Group's recommendations on Central Provident Fund and related issues. Since then, 38 hon. Members have spoken mostly in support and also, at the same time, to raise valid and important points to reflect public concern on these changes. Sir, I would like to take this opportunity to respond to Members' queries and concerns. But before I go into the specific issues raised by individual hon. Members I would like to say something about the employment market to provide a backdrop for the Government's acceptance of these wide-ranging recommendations. First, I want to talk about the changes in the external environment and the employment market. From 1990 to 1997, Singapore's economy grew strongly. Employment creation rose by 413,200 jobs in total, and that did not include jobs that were created by the construction sector. Members will remember those were the boom years, and the construction sector was going great guns. So if we took those out, in effect, we are talking about creating about 52,000 jobs a year. That is more than the average cohort of young Singaporeans entering the workforce. The result is full employment for many years. However, much has changed in the last five years. The 1997 Asian financial crisis caused a downturn in 1998. Then, after a brief recovery, we were hit by the global economic slowdown in 2001. These are some of the shifts. Some of these are cyclical trends which come and go. More importantly, over and above these cyclical changes, we also have to face structural challenges ahead of us. The emergence of new players bigger and better endowed than Singapore is rapidly reshaping our business environment. Multi-nationals are on the prowl looking for locations which can offer more comparative advantages. That is why Singapore and many other ASEAN countries face strong competition from China for investments and job creation. In the manufacturing industry, China's vast resources of land, labour and the sheer enormity of its domestic market give it a comparative advantage way ahead of us. Furthermore, we are not only competing against countries like China. In the higher value-added industries, Singapore faces competition from the mature developed countries such as the Netherlands, Ireland, Denmark and Finland. These countries have highly trained, highly skilled, very creative and innovative workers much needed by the knowledge economy. Because of intense economic competition, and the rapid pace of corporate restructuring, our employment patterns will change. Instead of secure jobs in stable companies, the future will see frequent job creation and job destruction at the same time. This is already happening in countries such as the US, when many jobs are being replaced or lost, while new jobs are being created in different industries. So, how will these changes affect us here in Singapore? Sir, we cannot compete on low cost manufacturing in the years ahead of us. This is not where we have a comparative advantage. Instead, we must shift into higher value-added production and services over the years in the future. A decade ago, investments in Singapore amounted to S$3.3 billion (based on 1990 prices), creating 18,000 jobs. 33% of these jobs were jobs requiring people with at least NTC-2 qualifications. Last year, investment commitments were more than doubled at S$8.3 billion. But these investments will result in only 24,000 jobs. However, three-quarters of these jobs will be skilled jobs. So, for every investment dollar in future, fewer jobs are going to be created, but more of these jobs will be skilled ones requiring skilled workers. Likewise, we are also experiencing more job turnovers in Singapore. Singaporeans of all ages and educational qualifications have been affected in the process of economic restructuring. Even when the economy was growing strongly in the years between 1991 and 1996, the number of workers retrenched rose at an annualised rate of 17%. Whilst we were enjoying good economic growth, some years 6-8% growth, we were still seeing increased number of workers being laid off purely as a result of the retrenchment from structural changes taking place in the company. Whilst new jobs are being created, the demand will be for more skilled and knowledge workers. Under such circumstances, older workers will be hard hit by this changing environment. This is in part because a significant proportion of our older workers have only secondary and below qualifications. Hence, they do not have the skills necessary for the new jobs that are being created. But, even for some of the older workers with higher educational qualifications, on-going restructuring is creating difficulties for them, and they face greater job competition. In March this year, the unemployment rate of residents aged 50 to 55 years was 4.6%. This is significantly higher than the 4.1% for workers aged 40 to 49 and the 3.9% for workers in the 30 to 39 age group. However, it is still lower than the unemployment rate for young workers below 30, which stood at 5.5%. Recently, the media and yesterday several Members in this House - as pointed out to me by my Minister of State, Dr Ng Eng Hen - had mentioned that the unemployment rate for the 50-55 stood at 11%. I think this was a mistake. Somehow, it has crept in. People have got this impression that it was 11%. Let me say that this was a mistake. It is wrong. It is not the right figure. We do not have double-digit unemployment rate in Singapore, not even for the older workers. But this is no cause for comfort. When an older worker is retrenched, he or she tends to remain jobless for a longer period. As Deputy Prime Minister Lee pointed out yesterday, last year, older job seekers aged 50 to 55 experienced a median duration of unemployment of 21 weeks, compared to 14 weeks and below for younger workers. The re-employment rate for workers above 50 was 37% compared to 56% for younger workers. Sir, there are jobs available in Singapore, and most of these older workers are able to do these jobs. But it may be a different job, in a different sector, which requires the older workers to make an effort to learn a new skill. Otherwise, older workers will have to accept lower wage. And, in fact, older workers above 50 who found re-employment were already likely to earn less than before their retrenchment, as mentioned by DPM Lee yesterday. Clearly, what is happening is that we are experiencing growing structural unemployment and older workers are facing the greatest risk of prolonged unemployment. Faced with growing global competition, changing corporate structures and the emergence of new employment trends, we have to examine our existing systems and structures to identify whether they will still serve us well in the new operating environment. It is the recognition of these new trends and growing threat of structural unemployment that has prompted Government to accept the ERC Work Group's recommendations to restructure the CPF system. Where the CPF is concerned, this institution has stood the test of time. As both Senior Minister of State, Mr Tharman, and DPM Lee had said, the CPF has served us well and is in no danger of a collapse. Going forward, we are confident that it will continue to serve us well, provided we refine and retune the system for a more competitive environment. Sir, I will not dwell on the core areas of retirement, housing and health care. These have been more than adequately addressed and explained by DPM Lee. In refining the CPF system, we must take care not to add to or reinforce existing rigidities in the labour market, which could eventually make the Singapore worker less competitive than his counterparts in other countries. It must be made more flexible and more resilient so as to better serve workers. The Government knows that these changes will cause some difficulties for some of our CPF members, for example, the 50-55 age group or those earning above $5,000. We are sympathetic that they have to make this adjustment. But the underlying driving forces causing job losses in many sectors, namely, global competition, corporate restructuring and the changes in the employment trends, will only get stronger with time. We did not cause these changes. But we cannot avoid them. So we must adjust to them. Sooner or later, we have to adjust. It is better to make these changes earlier, so that the younger members have more time to prepare and will be better placed to face the realities of competitive global environment. Sir, I would now like to turn to the issues raised by hon. Members. I will group them into key areas where the changes have been recommended, starting with the Minimum Sum. The recommendation is to retain the Minimum Sum, the present framework, to reach $80,000 by July next year. Mr Yeo Guat Kwang supported the concept of maintaining the Minimum Sum framework and he asked if Government were to revise the Minimum Sum, what will be the future Minimum Sum like. I believe Dr Amy Khor also supported the idea of raising the Minimum Sum and emphasised that it should be done gradually. Sir, we started to revise the Minimum Sum back in 1995. By next year, ie, after 8 years, we will reach the target of $80,000. That Singaporeans need a higher Minimum Sum in future is beyond doubt. The Government will study what would be an appropriate Minimum Sum and the schedule of implementation after we have achieved our current target. The amount will be increased, taking into consideration inflation, higher standards of living and the rising expectation of basic retirement needs. In response to Dr Khor who pointed out that we should move gradually, let me assure Members that we will give CPF members plenty of time to adjust to any revision in the Minimum Sum in future. We will certainly not rush this issue. We took eight years in the last revision. We can take equally long, or maybe a little longer. Mr Chew Heng Ching asked whether we will allow members to opt out from the Minimum Sum Scheme, if they have a pension plan. Let me point out that, in fact, this is already the existing position. Members who, upon reaching the age of 55, can enjoy a pension that will pay them an annuity, or a monthly pension, more than what the Minimum Sum can pay, will be allowed to withdraw their Minimum Sum. Those who have enough in their CPF account can convert to an annuity at the age of 55. An annuity which will pay more than what the Minimum Sum would allow them to draw on a monthly basis would also be allowed and, in fact, we encourage them to withdraw all their CPF to purchase their annuity, or to place it in a bank which will then allow them to withdraw a monthly amount. So, in fact, we already have this mechanism. Next, I turn to the Special Account where the recommendation is to increase the contribution rate from our present rate of 4-6-6 to 5-7-9 for the different age groups. Here, like Mr Seng Han Thong, I was also quite surprised that Mr Low Thia Khiang has taken a fairly strong position on this issue. He has agreed with the gradual adjustment, and he also pointed out that it will get people to be more self-reliant. I agree with him. I would like to say that his idea is not wrong, in principle. And I am also very glad that he supports the Government's principle of putting more into the Special Account and also cutting back on the contribution to the Ordinary Account for housing. However, his scheme of having four age groups contributing 7-9-9-6 to the Special Account is quite drastic. It is front loaded, very heavy for the younger workers, and will make it very difficult for young people to start buying their first house. So we have no reason to cause people to delay marrying, starting a family and buying a home. In fact, that is what our home ownership programme is all about. Our concern is that they over commit either by buying too big a house, or by upgrading beyond their financial limits. So the way to address this concern is to have a Special Account which increases with age. So there has to be a balance. The ERC Work Group's recommendation of having 5-7-9 percentage point contribution to the Special Account strikes a better balance between old-age needs and housing needs of the younger CPF members. The proposed four-step rate by Mr Low Thia Khiang would have too adverse an impact on the existing younger members, ie, those in the 35-45 age group. The sharp increase in the Special Account contribution would seriously affect their ability to service their existing mortgages. For new members adopting the four-step proposal it will delay their ability to purchase a first property using their CPF savings. So, on balance, I would not be able to support Mr Low's proposal and I would prefer to go along with the ERC's recommendation of 5-7-9. Mr Othman Haron Eusofe, Mdm Yu-Foo Yee Shoon, Mr Andy Gan, Dr Chong Weng Chiew and Mr Zainudin have all spoken on the proposal to facilitate pooling of CPF funds for investment in private pension plans. They support the idea, but they urge the Government to enhance public education in the use of pension plans because they have serious doubts whether the average Singaporean knows exactly how to participate in a pension plan. Sir, public education on the use of CPF investment scheme or pool pension plans would be critical for its acceptance by Singaporeans. We agree that Singaporeans need to understand the concept and the mechanics of how a pension plan works in order to be able to take full advantage of the potential to enhance their savings through pension plans. So public investor education on pension plans should be driven along three tracks - the Government, the non-profit industry body as well as the financial institutions and fund management companies operating pension plans. On the part of the Central Provident Fund Board, we will disseminate information to enhance consumer awareness of pension plans. We will promote public investor education on pension funds through publicity activities as well as in collaboration with agencies, such as the Ministry of Community Development and Sports and the Financial Planner Association of Singapore. Industry bodies, such as the Investment Manager Association of Singapore could also help consumers learn more about pension funds. The relevant Government bodies will work with these industry players to promote better understanding of pension plans. Sir, CPF Board will also study existing restrictions, such as foreign currency denominated equity, and the difficulty faced by CPF members to have a flow through of CPF contributions to pension plans. We will facilitate members' access to these pension plans. Finally, the financial institutions and the fund management companies themselves should also promote their products professionally. Sir, with each party playing their part in providing information and educational material, CPF members should have ample opportunities to better understand the use of pension plans for their financial planning. What we hope to achieve is to provide all the information to CPF members so that he or she can make an educated decision on whether to join any pension plan. The CPF Board cannot make this decision for the members. Dr Ong Chit Chung suggested that we confine investments under the CPF Investment Scheme to investments in unit trusts and pension plans, and not to share purchases. We have been moving in that direction. We started out with a fairly liberal regime under the CPF Investment Scheme where members can invest about 80% of their investible funds in shares. Then we scaled it back to 50% and, I think, more recently, it was scaled back to 35%. On the other hand, we allow them to invest up to 100% of the investible funds in the professionally managed funds. We also allow them to use their Special Account savings for such investments. So we are moving in that direction, scaling back on the personal investments in shares, where there is a highly speculative element, and encouraging members to move towards professionally managed funds. Next, on the salary cap recommended by the ERC Work Group, that is, to lower the salary cap for CPF contribution from $6,000 to $5,000. Dr Teo Ho Pin asked whether the reduction in salary ceiling will affect the members' ability to upgrade their housing type in future. Sir, let me point out that the changes will be implemented gradually in tandem with CPF restoration. We still have this outstanding 4% CPF that has got to be restored for most of the workers over the next three, maybe four, years, depending on how the economy performs. So any negative impact on mortgage payment would thus be moderated because we are not implementing this measure in one go. The labour market itself will adjust to the reduction in the employer's CPF contribution, and part of this will work its way back into the member's salary which he can, of course, use to service his mortgage. Mdm Ho Geok Choo and Mr Andy Gan asked whether reducing the CPF salary ceiling may lead to higher take-home pay for those earning about $5,000 or above, but as a result of higher take-home pay, they would end up paying more taxes. Are they not worse off than before? Reducing the salary ceiling for CPF will enable them to have a higher take-home pay. We have to look at it this way. All along we have used CPF for the past 47 years as one-size-fits-all kind of plan. Everybody contributes the same amount. But increasingly, we notice that, for the higher income earners, there is less need for them to have the same level of mandatory saving as the lower income. I think we should start to free up some of this, allow those in the higher income to have more control and discretion over how much more they should save. Hence, the idea of trying to limit the CPF to serve the 10th to 80th percentile group. Sir, the ERC Sub-Committee's recommendation to lower the salary cap from $6,000 to $5,000 should also be taken together with the previous recommendation to lower personal income tax. So CPF members in this income tax group facing a cut in the ceiling will also benefit, to some extent, from the new tax regime that was announced by DPM in the Budget Statement. Furthermore, for the higher income group, while income tax obligation may go up, we now have a mechanism called the Supplementary Retirement Scheme for them to make tax exempt investments to mitigate their tax burden. So there are offset mechanisms available for this group of people who will enjoy a higher take-home pay as a result of this change in the ceiling. On the point about the income floor, the recommendation here is to raise the income floor for employee's CPF contribution for low wage earners. Many MPs have spoken on this. Mr Gan Kim Yong, Mr Heng Chee How, Mdm Yu-Foo Yee Shoon, Mr Ravindran, Mr Sin Boon Ann, Mr Ang Mong Seng, and Miss Penny Low all supported this move. They understand that it will allow the low income group to have a higher take-home pay, and this is welcome. The idea behind this move to raise the CPF floor level is to encourage more part-timers to enter the job market. Because in the past, with a wage floor of $200 attracting CPF contribution, many would-be part-time workers, or odd job workers, say that by the time the CPF contribution is deducted, the take-home pay becomes so small and miserable that they just did not feel sufficiently incentivised to take on the job. So, with this raise of the CPF floor to $500-$750, we hope that more homemakers and housewives will join the workforce to supplement their household income. Others who will benefit from this change include the odd-job workers. We hope that the higher take-home pay from odd jobs will encourage more of such people to enter the job market in this manner. I also like to point out that there is no reduction to the employer's CPF contribution for this group of workers. So although they are not making full contribution, as an employee, they still receive full employer's contribution and they are still saving some money for their old age. And with the higher take-home pay, they will be supplementing the family income and, I think, that is good for the family. Of course, there are those with very low income and they would have great difficulty saving for their future retirement needs, and this is the group that may eventually have to fall upon some social assistance measures. We also have schemes, such as Medifund, to look after the very poor to help them meet their medical expenses. We have rent and utilities assistance scheme and also many other community welfare schemes to help the very poor. When the economy does well and the Government is able to achieve a budget surplus, then we will try to give some CPF top-ups or New Singapore Shares. We can try to allocate more to those who are poor and those who are in greater need of such help. The subject of older workers aged 50-55 has been the most controversial element of the recommendations of the ERC Work Group. Many Members have spoken on this. First, I would like to respond to Mr Leong Horn Kee, who suggested that the reduction in CPF contribution for the group of workers aged 50-55 should not be done now, but should be done for future cohorts of older workers. We are beginning to see the emergence of structural unemployment, as I explained earlier on. It would be unwise and irresponsible for this Government to pretend that there is no problem now and to leave the problem to be tackled for future cohorts of workers. The problem is emerging now. The sooner we tackle it, the better off we are. We should give notice that we are going to make this move. The change itself is going to be phased out gradually, so that it is not a sudden shock. Mdm Ho Geok Choo observed that the non-restoration of CPF contribution for the older workers in this age group will result in an 8% reduction in the Ordinary Account, from 22% currently, to 14%, and this could affect their ability to meet their mortgage payment. Workers in this age group will see an 8-percentage point reduction in the Ordinary Account as a result of the non-restoration of CPF contribution, together with a 4-percentage point reduction in the employee's contribution, and also the migration of 1-percentage point to Medisave and 3-percentage point to Special Account under the earlier recommendation. But the 4-percentage point cut in the employee's CPF contribution is not lost to the employee. It becomes higher take-home pay for him. So, he should be able to use that to supplement his mortgage payment through his CPF account. Effectively, the reduction for this age group is only 4-percentage point, because today they are already short of 4-percentage point which is not going to be restored. So, the effective reduction is the 4-percentage point which will be migrated to his Medisave and Special Account. We feel that the shortfall in mortgage repayment will not be as drastic as suggested by this presentation that the Ordinary Account has been reduced from 22% to 14%. The impact is less than that. I would also like to remind Members that DPM Lee announced yesterday that CPF members who are affected and are in this age group will be allowed to draw on their Special Account to meet their mortgage payment. This will help those in the 50-55 age group during the transition period to ease their financial burden. Mr Steve Chia yesterday supported the changes recommended by the ERC. But he asked that we should not micro-manage the CPF system, that we should let employers and employees to decide on their own contribution rate, based on company performance. Dr Jennifer Lee, Mr Sin Boon Ann and many other hon. Members asked whether a 4-percentage point reduction in employer's contribution will be effective. Will it only just hurt the worker by cutting his CPF, without actually enhancing his employability? We have to look at it in totality. Freezing the contribution rate at 16% is one of the many measures to help enhance the employability of older workers, and these are the older workers who are at greatest risk of retrenchment and who are most vulnerable. Sir, we have, over the years, tried to narrow the salary minimum-to-maximum ratio for workers doing the same job. Because of our seniority-based wage scale, this minimum-to-maximum ratio is quite wide. In some industries, it may be as wide as two or even more than two. However, despite many years of effort, the seniority-based wage system is still deeply entrenched in Singapore. Not many employers are able to change the system on their own. Any change will also result in much unhappiness. Many Members who expressed reservations over this recommendation had also at the same time considered that wage cost is not an insignificant factor. For example, Dr Jennifer Lee noted that wage cost is a factor, although she questioned whether this 4-percentage point reduction would make a big difference. Mr Speaker, Sir, we agree that we should make greater effort to replace the seniority-based wage system, or to progressively change it to a system where wages are paid based on value of jobs and performance. But this will take time. We just cannot wait for the seniority-based wage system to be completely phased out over many, many years, in order to address the immediate problem of rising structural unemployment. We have to move on every front. We have to tackle the problem in many ways, because this is a problem that cannot be solved with one magic bullet. It is a problem that requires a plethora of solutions or efforts in order to address it. Sir, neither can we leave it entirely to the workers to negotiate with their employers, as suggested by Mr Steve Chia. If, in fact, our CPF structure today reinforces or makes the seniority-based wage system even more inflexible and difficult in this competitive environment, then we should be prepared to restructure and change it to make it more relevant to the current employment market. Sir, while many Members have questioned whether the 4-percentage point reduction will be sufficient on its own, I would like to point out that, yes, a 4-percentage point reduction is not a very big difference. It is not a solution or alternative for the seniority-based wage system. But it is a move in the right direction. It sends a strong signal. Here, I am cheered when Mr Ahmad Magad expressed the view that, in fact, it is a pragmatic way to address the rigidity in our labour market. Likewise, Dr Amy Khor and also Dr Warren Lee have expressed support for this move and said that it will help us to address the seniority-based wage system. So, on balance, while this is an issue that many Members have reservations, we must also recognise that the seniority-based wage system is going to be here for quite some time, and we will have to begin to address it, and this is the first step that we are taking to address this issue. Mr Chiam said that the freezing of the employer's CPF for the 50-55 age group is unfair to the older workers, and that the 4% saving is not a sufficient incentive to employ workers. As I said, in itself, it may not solve the problem completely, but if it is seen as part of the rest of the measures - some of which I will touch on later on - it is a step in the right direction. Mr Chiam went on to say that it is unconstitutional. Surprise! Surprise! If it is unconstitutional, he himself has decided not to do anything, but he suggested to my colleague, the Secretary General of NTUC, that the unions should do something about it, because this is unconstitutional. If indeed this is unconstitutional, Mr Chiam knows what the remedy is. If he feels that this measure is unconstitutional, he knows how to take it up. So, I would ask Mr Chiam to follow up, rather than ask the trade unions to do it, because the representatives of the trade unions have in this House supported such a move. As Mr Nithiah Nandan has pointed out, he has to deal with his members' anxiety and difficulty in finding re-employment, and he sees this as one of the helpful measures. Even though it is not the single most important solution, it will help his members in addressing their structural unemployment concerns. So, I will leave it to Mr Chiam. If he sincerely believes that it is unconstitutional, he certainly knows what to do with it. Dr Ong Seh Hong made an interesting point that by freezing the employer's CPF contribution for the 50-55 age group, we are creating a situation where there is no longer equal pay for equal work. I do not quite understand the logic behind that. I would like to point out that under today's seniority-based wage system, there is already an element of distortion. In some jobs, where two persons are doing the same work, an older person can get paid one-and-a-half or even twice as much as the younger person. So, there is already this element. What we are doing with this freezing of the employer's CPF contribution is to take one small step to try to level the playing field, to try to bring it back, and make it more equal. So, I hope that Dr Ong, who believes in equal pay for equal work, will support the NTUC in their effort to promote revision of the seniority-based wage system to promote paying workers by job rate. If he does so, then he will be helping us to overcome the rigidity in our employment market. When we accept this recommendation to freeze the employer's CPF contribution, employers should also not just stay put and keep to the old mindset about older workers, and be too quick to want to release older workers in the event that they have to restructure or reorganise their companies. We hope employers will be more open-minded and more willing to employ older workers. Many of the older workers are equally productive and reliable in their jobs. In this regard, our employer organisations in Singapore have a very important role to play in changing the mindsets of employers. DPM Lee had already announced yesterday that the Government will set the example in the civil service by providing civil servants with a special payment, the Transitional CPF Non-restoration Top-up Component, to offset the non-restoration of the 4% CPF contribution. I certainly hope that this will send a strong signal to employers in the private sector to consider adopting the same approach to return all or part of this non-restored CPF portion to older workers who are making good contribution to the company. Employers can do so by way of giving mid-year and end-of-year bonus or some other variable payment. Sir, many other Members have also spoken about the need not just to freeze the employer's CPF contribution to enhance employability of the 50-55 age group, but also to enhance their skills. Skill is a very important factor. I agree with Mr Othman Haron Eusofe, Mr Heng Chee How, Mdm Halimah Yacob, Mr Yeo Guat Kwang and Dr Maliki that skills are a very important factor. This is another area that the Government is tackling with full commitment. In fact, freezing the older workers' CPF is not the only way that we are going about tackling structural unemployment. We have, indeed, implemented programmes to help older workers enhance their employability through skills upgrading and training. We have put in place programmes to address the skills mismatch between older workers and the new jobs that are being created in the economy. We have introduced a wide range of programmes, including the People-for-Jobs Traineeship Programme, to help particularly the older workers to acquire the necessary skills to meet the requirements of the new jobs. With immediate effect, workers above age 50 can qualify for an additional three months, after the initial six months of wage support under the People-for-Job Traineeship Programme. This means we are extending the People-for-Job Traineeship Programme to a full nine months, provided they were recruited after retrenchment or switched jobs with some retraining required for the new jobs. One Member asked whether we would extend it for two years. Let me say that we should proceed with this extension, try it out and then, based on the experience that we get from managing this more generous programme for another year, we can decide whether it needs to be extended for a longer period. We are open to the suggestion. Sir, in addition to programmes like the People-for-Job Traineeship Programme, we have also set up a job task force chaired by the Minister of State, Dr Ng Eng Hen, to look more holistically into ways of helping the older workers who are retrenched or who are unable to secure alternative jobs. This would, in a way, address the point raised by Ms Irene Ng that we need some central or national body to look at the plight of the older workers. This Committee would continue to examine ways of helping older workers to enhance their employability, to facilitate skills upgrading and retraining for them. We will certainly continue to work with the employers and the trade unions to invest in worker training because we believe that ultimately, it is the skills and competency of our workers that would ensure their employability in the future. It is more so for the older workers because there is an increasing challenge for them. Each younger cohort of workers that goes into the job market is more skilled, better educated, more capable than the older workers. It must be so because of our education system. The older workers are going to be increasingly challenged. We will have to invest efforts in continuing education and training so that they can also keep up-to-date and also face the increasing challenge from the younger workers. Mdm Halimah and Mr Heng Chee How spoke on the need to introduce greater flexibility in our wage structure. This is exactly what the ERC's recommendation about restructuring the CPF scheme is all about. We do want to introduce greater flexibility in our wage structure. So freezing the employer's CPF contribution for this group of workers, aged 50-55, should be seen as part of the overall package to enhance employability and also flexibility of our wage structure for this group of workers. In terms of flexibility of wage structure, we will continue to promote and push the idea of building up the monthly variable component so that companies can make quick adjustments to their wage costs when they face severe business downturn, instead of having to rely on the across-the-board CPF cut, as we had done twice already in recent history. Finally, let me respond to Mr Othman Haron Eusofe. The point he made was that older workers need to upgrade their skills. I agree with that. As I have said earlier on, we will continue to invest in efforts to upgrade the skills of the older workers to help them cope with the new skills demand in the job market. Mrs Yu-Foo Yee Shoon has suggested setting aside 1% for personal training from the CPF account. Sir, our problem today is that allocating the limited CPF contribution to the three accounts for home, retirement and healthcare is already a difficult balancing act, as we have all debated over the last two days. We should not further complicate the matter by creating another sub-account within the overall CPF framework, even though it is for an admirable objective of encouraging the member to be more responsible for his continuing education and training. Let me say that this does not mean that people will have no opportunity to go for training. On the contrary, the Government already provides ample opportunities and financial support for training and skills upgrading for all workers. These programmes will continue to be reviewed, updated and when necessary and beneficial, it would be enhanced. Let us make use of these resources, instead of trying to draw on the already limited CPF savings. Dr Warren Lee mentioned a not quite related point but allow me to respond. That is the difficulty faced by self-employed who want to renew their trade licence but did not contribute to their Medisave. This is actually an unrelated issue but let me assure him that the CPF Board is very sympathetic. If a self-employed cannot renew his licence because he is not up-to-date with his Medisave payment, all we require is that he makes us a promise that he would make some payment. We will work out a very reasonable instalment payment plan for him to pay the contribution. But bear in mind that it is not really a payment - he is contributing for his own future medical and healthcare needs. Self-employed are well-advised to keep their Medisave updated so that they do not run into this difficulty. But if they do have the difficulty, let me assure Dr Warren Lee that the Board is very sympathetic and we will help the self-employed to work out an appropriate payment plan. Mr Speaker, Sir, in summary, the ERC Work Group's recommendation is wide-ranging. It touches on many people. It sets in train a series of changes and adjustments for the CPF system. But these are not sudden changes. These are changes that would be introduced gradually and progressively over time as we restore the CPF to the target contribution rate of 20% plus another 20% from the employee. If we do not make these changes, if we remain status quo, we will be allowing rigidities, employment problems and inadequacy of retirement savings to become more deep-rooted and intractable. If we tackle these problems head-on and early, we will have a reasonable chance of overcoming them. By acting early, quickly and decisively, we will be better placed to enhance our long-term competitiveness and economic progress. Mr Low Thia Khiang rose ---