Hansard, 2007-03-08

Under the provisions of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Members have been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which they have been appointed) for the periods stated: Name From (2007) To (2007) Mr Lee Kuan Yew 17 Mar 06 Apr Mr Wong Kan Seng 05 Apr 08 Apr 18 Apr 22 Apr 23 Apr 02 May

ABDULLAH TARMUGI Speaker Parliament of Singapore

Order read for consideration in Committee of Supply [6th Allotted Day].

Head S - Ministry of Manpower (cont.)

Resumption of Debate on Question [7th March, 2007],

"That the total sum to be allocated for Head S of the Estimates be reduced by $100." - [Mr Seng Han Thong].

Question again proposed.

Dr Ahmad Magad is not here. Mr Baey Yam Keng.

Employment Passes for Freelancers

Sir, as the economy evolves, more and more people are no longer working for a single employer, but work on a project basis. This could be a freelance website designer who uses his home PC to create web pages for corporate clients. He charges a fee to set up a website, which may be one-off, or could include maintenance of the website and occasional updates. This is also an example of how technology and new media are changing the face and substance of work.

Someone with the gift of the pen can also be writing a weekly column in the newspaper, be a freelance correspondent for an overseas journal, and working on a script for the next Eric Khoo movie. He may also earn a daily keep by doing some copywriting or translation work for an advertising agency. At the same time, the writer can also be working on his first novel, and still revising his manuscript while trying to find an interested publisher. He does not view anyone as an employer, nor is any party able to guarantee regular assignments and hence income.

I know someone from Malaysia who is a freelance actress in Singapore. She has been appearing in a number of theatre productions a year. She has also acted in movies, TV serials and sitcoms, but she is not a MediaCorp artiste. Before she became a PR recently, she has been staying and working in Singapore on a social visit pass. It is not that she does not want to apply for an Employment

Pass or Work Permit. The challenge is that she does not have an employer.

Therefore, for some years, she was running the risk of being prosecuted as an illegal worker in Singapore. However, like many freelancers, she is no less professional or dedicated to her work. Or, perhaps, she will never be prosecuted because all authorities do not recognise her as "working" in Singapore, I wonder.

I note that the Ministry launched the Personalised Employment Pass Scheme last August, but that does not apply to her, because she has not been a "P" or "Q" Pass holder before as the current guidelines require one to hold the respective pass for at least two and five years with an employer. And the PEP is only valid for five years and not renewable.

I do not have the figures of freelancers or, for that matter, foreign freelancers in Singapore. However, in our efforts to develop the creative industries, we have to note that this sector has a higher than average proportion of freelancers than other industries. According to a 2005 report by the New York Freelancers Union, it is estimated that freelancers make up approximately one-tenth to one-third of the labour force nationwide and they are mostly in the creative sector.

Currently, some foreign freelancers do fly into Singapore for a specific job and out they go. Sometimes they are blamed for taking jobs away from Singaporeans. I believe we can attract this group of freelancers not only to contribute to the development of Singapore's creative industries but also to make Singapore their base and become tax-paying residents.

I would like to ask if the Ministry could finetune our employment pass guidelines to respond to this trend of working.

Mr Chairman, Sir, may I take my two cuts together, please?

Yes. Three minutes in total.

Workfare Bonus

Sir, inter-generational cohesion is important in our ageing society and inter-generational bonding can be enhanced by encouraging seniors to take on a more active role in the family as grandparents or caregivers. The Government can assist in this area by allowing the eligibility of Workfare Bonus for grandparents to take care of their own grandchildren and not just taking care of grandchildren or fathers. I hope MOM can consider this.

Central Provident Fund

Sir, may I ask MOM to review the adequacy of CPF in providing the retirement needs in view of our fast ageing population? Could MOM consider implementing a mandatory universal annuity insurance scheme to ensure that old Singaporeans are self-reliant and able to provide for basic retirement needs by deducting a percentage of their CPF? The lower income families can get their CPF top-ups from the Government to participate in this insurance scheme. This scheme can be distributive in nature. This insurance gives monthly annuity payouts to Singaporeans till their ripe old age after retirement. This addresses the insecurity or retirement needs as a result of lack of savings during working life or loss of savings either due to poor management of personal funds or blown away in too short a time after retirement. The advantages of such a scheme are better economies of scale, lower premiums and higher payouts.

May I ask MOM how are members' funds being invested presently and are

there plans to increase the rates of returns of these investments? Is there enough transparency in the investment process and outcome and transaction costs? What measures are currently being taken to review the adequacy of the CPF in providing for the retirement needs of an ageing population? What measures are being taken to ensure that members' returns are constantly being adjusted to inflation? Does CPF have any good asset management team to get better returns on their CPF funds? Should there also be a review on the CPFRS scheme to better protect members' funds?

CPF Rules

Mr Chairman, most children need their parents to help them pay for their education or for the cash portion for the purchase of their first home. More often than not, parents, out of the kindness of their hearts, will do so to the best of their financial ability. More often than not, parents have to draw from their hard-earned savings that are meant for their own retirement needs. The parent-child relationship in our Asian society is such that parents often will not even broach the subject of repayment, whether in cash or in kind, by their beloved children. They hope, with good upbringing, their children will be filial and look after the hands that fed them. Unfortunately, this hope does not always come true. We are beginning to see more and more sad cases of children heartlessly abandoning their elderly parents or kicking them out of their flats, even though they are enjoying successful careers and high incomes as a result of the help their parents had so generously given to them.

Take the example of one of my constituents, Mdm Ng of Tampines Street 44. Mdm Ng helped her son to purchase a four-room simplified HDB flat from the open market on 1st July 1996 for $190,000. At the time of the purchase,

for the initial capital payment of $72,000, Mdm Ng chipped in $40,000 cash out of her hard-earned savings. Her son used $32,000 from his CPF. The flat was registered in their joint names. So, Mdm Ng should be entitled to at least 20%, ie, $40,000 divided by $190,000, or so we think. Her son now wants to sell the flat and it can fetch about $210,000 in the open market. Although the flat can be sold at a small profit, Mdm Ng would not get back much of the $40,000 cash that she had put in about 10 years ago. This is simply because of the CPF rules which override Mdm Ng's legal and equitable interest in the property.

When a CPF member uses money from his CPF account to finance the purchase of a property, he will have to refund fully the CPF monies withdrawn plus interest when the property is sold. This is a requirement under the CPF rules. The order of deduction from the sale of Mdm Ng's property is as follows:

Resale price of $210,000 less outstanding loan from HDB or commercial bank of $78,000, less her son's CPF refund plus accrued interest which amounted to $123,000, and deducting other charges, such as property tax, Town Council's service and conservancy charges, etc, the balance left for the owners is only a few thousand dollars.

Mdm Ng had provided $40,000 cash from her savings to help pay for the $190,000 flat. But she will not be receiving 20% of the sale proceeds. She will, in all likelihood, only receive a few thousand dollars from the sale. This is simply because she came up with cash, while her son's money came from his CPF account.

Sir, it pains me to explain to Mdm Ng that because her son used his CPF, CPF rules will protect him and safeguard his

interest to the detriment of his ageing helpless mother. Out of the proceeds of the sale, CPF will get for her son $123,000, the first bite of the cherry, after deducting the outstanding loan. The CPF rules will protect him to the extent that, even if he wanted to take $40,000 from the sale proceeds to refund his mother, he is not allowed

and CPF would ensure that his CPF account is topped up first with what had been withdrawn plus interest.

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Sir, the result in this case is that her healthy young son would have more than $123,000 in his CPF account which he can use to pay for his next flat, while Mdm Ng would be left with hardly enough savings to see her through her remaining years and is at the mercy of her son to provide for her. In fact, in this case, her son recently married and Mdm Ng informed me that her son and daughter-in-law want to sell the flat to purchase another one but they do not want her to live with them. She has approached me to help her to apply for an HDB rental flat.

Sir, my proposal to address this problem is straightforward. For the cash portion of a property purchase, we should allow parents to voluntarily contribute the required cash into their CPF's Ordinary Account and treat this as part of the initial cash payment for the property. The parents would then have a stake or interest in the property which ranks equal to the child's CPF. After repaying the outstanding loan, the balance would then be refunded to the parents' and to the child's CPF accounts proportionately. At least, the parents would have money in their CPF for their retirement needs. Otherwise, if the parents pay cash directly to help purchase the property, they rank last in priority of payment.

This is similar to the existing CPF rules regarding parents using their CPF to

finance their children's education. The student has to repay the full amount of CPF withdrawn plus interest from their parents' account. If the student does not pay up subsequently, CPF Board will chase for repayment. I think this is a good scheme and should be extended. So for parents who wish to finance their children's education beyond the current CPF education scheme, instead of paying for the school fees or giving cash to their children, the parents should be allowed to voluntarily contribute the cash into an education account within their CPF account which their children can withdraw from time to time, on condition that the children undertake to CPF Board to repay the amount withdrawn from the parents' CPF account plus interest.

I think my proposal is a more practical and realistic solution than saying or hoping that all children should be filial and take care of their parents or leaving the elderly parents to fend for themselves, which will eventually end up as a problem for the State or society to bear.

Medisave

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Sir, all self-employed persons are required to top up their Medisave account with the CPF Board. The majority of them will have enough to put aside and they cannot afford not to pay. If they do not comply, they will not be able to obtain their business licence. But a minority will face difficulties topping up their Medisave. For this group, the CPF Board is generous to make an exception and allow them to pay in instalments. In this regard, I would like to suggest that the CPF Board make it compulsory for some companies to arrange for instalment arrangement plan for their employees, including taxi drivers, property agents, insurance agents, etc. Such a policy will allow employees to pay their CPF on a regular basis, for example,

monthly basis or quarterly basis. In this case, we can ensure that employees will have sufficient funds in their Medisave accounts.

To enjoy Workfare Income Supplement (WIS) benefits, the low income group will have to top up their Medisave accounts. These workers may find it financially difficult because they do not have money to top up. They have a pressing need to meet daily expenses and, as such, they will not have enough funds to top up their Medisave. This is the group of poor people who really need financial help. Therefore, I hope that the Government will consider implementing educational programmes to teach them the importance of the Medisave scheme. On the workers' part, they will have to be more proactive and start attending such activities, and understand the proverb – that many a little makes a mickle. Hence, I would like to suggest that the CPF Board consider launching a series of publicity events targeting at this lower income group, and tell them why they need the 3M (Medisave, MediShield and Medifund). In fact, many employers have misconceptions and think that this is a Government charge imposed on employers. Therefore, we need to let them understand that it is their money and they will earn interest on their Medisave contributions. From there, monies will roll into more monies.

As I mentioned earlier yesterday, maybe we can offer them an incentive scheme like what was reported in the Straits Times. Or we can also follow the example of POSB draws and give out cash prizes since money is most needed. Besides top prizes, there should also be more consolation prizes such as rice cookers, study tables, etc. By adopting a two-pronged approach - hard and soft approach - it will be more effective in reaching out to the low-income workers and, as such, they are more likely to support the scheme wholeheartedly.

Having done that, they will feel more hopeful about their future because they do not have to worry about their health problems and the future of their children. Therefore, I sincerely hope that the Government will consider the suggestions I have made earlier.

*Cols. 3439-3440.

Division of Matrimonial Assets

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Mr Chairman, during my meet-the-people sessions, I often meet divorced couples who are forced to split up due to some personal reasons. But, very often, it is the woman who suffers a greater pain. This is because the women are softhearted and want to fight for the custody of their kids regardless of their financial ability. Most importantly, it is the expression of love of the maternal instinct since she is the natural mother of the child. Often, they need to look after their children, but being lowly educated and unemployed usually put them in adverse circumstances. Therefore, I am concerned with the court’s decision with regard to the division of matrimonial assets, that is, the HDB flat. In the event the divorced couple need to equally divide their assets, if the husband is more than 55 years old, then the sale proceeds of the flat will have to go back to his CPF account so as to meet the CPF Minimum Sum balance. What is given to the wife will eventually be lesser.

I would like to urge the Minister for Manpower to consider revising the CPF ruling, so that a certain percentage of the sale proceeds, for instance, 30% will be given to the wife’s CPF account while the remaining 70% will go back to the husband’s CPF account. It is thus the husband’s responsibility to top up his CPF account to ensure that the CPF Minimum Sum is maintained. In comparison, the

wife will usually suffer a greater loss than the husband. Therefore, I hope that the Minister will consider a change in the CPF ruling so as to take better care of the welfare of these divorced women and their children.

*Cols. 3441-3442.

Mr Chairman, some Members raised issues related to CPF changes and Workfare Income Supplement (WIS) during the Budget debate. Most of these have been addressed. Some other issues have been raised during this Committee of Supply. I would like to focus on those aspects.

I agree with Mr Seng Han Thong when he suggests that we should make it easier for self-employed to make regular contributions. He said that many people do not disagree with the idea that they ought to contribute into Medisave to benefit from the Workfare Income Supplement scheme. It is a good scheme and, as he says, they are not contributing to Government, but they are contributing to their own account for their own medical needs. So the idea is a good one. But how do you facilitate this?

In fact, there are already different channels that the self-employed can make contributions now. Apart from their cheque payments, they can use e-payments via the CPF's website. I know that many of them do not know how to use or may not be familiar with Internet access, but they can use NETS or their cashcard or any AXS station. They are also allowed to pay by monthly instalments by GIRO. And, indeed, about 51,000 of them actually do so.

But his point is, and I agree with him, the key is to encourage them to put away small sums on a regular basis so that they do not have to wait for a lump sum and do not have enough to put into their Medisave contributions to benefit from WIS. We will work out other schemes

and we will facilitate this. In this regard, I would welcome innovative ideas from Members on how best to achieve this. Mr Seng Han Thong has suggested lucky draws. It is useful that he reminded us that, in fact, the Post Office Savings Bank (POSB) had such a scheme. I had forgotten. He refreshed some memories. I think we are on good precedent and well-founded grounds. If POSB had done it before, if we decide to do this, there may be better avenues. We are not encouraging gambling, but if there is an incentive and a lucky draw does actually encourage the self-employed to contribute into the Medisave, then I say, why not? As to the list of prizes that he has suggested, I will consult him if we decide to implement this scheme. But the idea is a good one.

We will also take the suggestion to work with the principals of the self-employed. He mentioned insurance agents and taxi-drivers. That group is where they are self-employed, but there is a management layer. Can we also work with them to make sure that they help these self-employed make regular contributions? But we need to emphasise that, ultimately, the self-employed, like formal employees, are responsible for making regular contributions into their own accounts.

A number of MPs, including Mr Seng Han Thong, Mdm Halimah Yacob, Mrs Josephine Teo and Ms Indranee Rajah during the Budget debate, had expressed concerns about getting informal workers to be paid CPF. Let me reiterate very clearly in this House that employers are liable to pay the CPF of all employees, formal or informal. To MOM, there is no differentiation. If you are the employer, you pay CPF. We will be sympathetic to employers who had previously not made CPF contributions but who wish to do so now. But going forward, we will intensify our efforts to improve the compliance rate.

Dr Lily Neo asked whether we could allow grandparents, who look after their grandchildren, to qualify for the Workfare Bonus and, presumably, for the Workfare Income Supplement scheme. Her question actually touches on a larger issue about some informal working relationships which would be eligible for WIS. When would we consider them eligible? And, indeed, when we were thinking of this scheme, we expect many variations of such informal working relationships for which we would have to decide whether they are eligible or not. Let me just state principles.

For these cases, we want to guard against flagrant abuses of the system because if we allow that, then it would, over time, undermine the whole concept and derail the entire purpose of Workfare. However, in instances where there is genuine work and where specific details of work are honestly provided, with the prescribed Medisave contributions, we will be sympathetic. That is clear enough.

Sir, let me now move to CPF-related issues which some Members have brought up. Many Members in this House have touched on the need to use CPF to better prepare ourselves for a greying population. I agree wholeheartedly. This is indeed why we link Workfare for low-wage workers to CPF. We have also increased CPF by 1.5% points for the rest. The 1.5% points is not trivial. Let me give you some numbers. Suppose you are aged 21 and have entered the workforce and earning $1,700 a month. Over time, this 1.5% increase will result in a 12% increase in the CPF balances by the time you reach 55. It is a sum of $17,900, in real terms. For someone who is aged 45, earning, say, $3,000, he will actually enjoy a 6% increase in the CPF balance at age 55, or $6,000 in real terms. So it is substantial.

I also want to announce today certain relaxations to enhance measures for

family members to help one another build up their CPF balances. A number of Members have asked for it. We have looked at it. We agree with you that it makes sense. These relaxations are particularly to help those who are not working. To achieve this, we will expand the CPF top-up scheme.

First, to encourage top-ups, we will use the present Minimum Sum level, in other words, the Minimum Sum level today to determine the top-up limits for various age groups amongst the elderly. This is a significant increase as the current scheme uses the Minimum Sum level of the recipient, not today's Minimum Sum. In other words, for someone who was aged 55 in 1987, the Minimum Sum then was only $30,000,

and there was a property pledge. That was the top-up limit we allowed. I am moving it up now, for various age groups, the top-up limit. The Minimum Sum level of today is about $90,000. So it is a significant increase. It varies for different age groups but we will come out with the details. This will allow, basically, older Singaporeans and their family members to receive a regular income over a longer period. In other words, Singaporeans can top up their parents' account and other recipients, so that they get larger balances, and it can be drawn out as a sum or to buy annuities, as suggested by Dr Lily Neo.

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Second, apart from raising the limit, I am going to expand the list of recipients. Currently, members can only top up their grandparents' retirement accounts using cash. We did not allow them to use their CPF funds. We will now allow grandchildren to transfer funds from their CPF Ordinary Account to their grandparents' retirement account, subject to both meeting the top-up criteria.

We will also now allow, as a new initiative, members to top up their siblings' retirement accounts with savings from their own CPF accounts, or in cash. As announced by MOF, a tax relief for cash top-ups of up to $7,000 a year will be given if the sibling receiving the top-up earns not more than $2,000 a year and is 55 years or older.

I will also now allow top-ups for spouses and siblings below the age of 55. The top-ups can be made into members' Special Accounts, subject to limits.

These changes will take effect from 1st October 2007, except for top-ups to members below the age of 55, which will take effect from 1st January 2008. The difference is because of tax reasons and to get our systems ready.

Basically, the purpose of the top-up scheme is to build up the CPF for long-term needs. This will allow family members - some are better off and some are not - to transfer their funds, so that, overall, the family is more sufficient. Top-ups are not meant as a way to allow premature withdrawals. Appropriately, top-up amounts must be kept in the CPF accounts and cannot be withdrawn as a lump sum but to provide a steady income stream.

The remaining sums from the top-up amounts will revert to the donor, in the unfortunate event of the demise of the recipient. In other words, it will go back to the donor. As I said, the CPF will release the details later. Fundamentally, we want to send a message that family members should take care and help one another, and we are facilitating this.

Dr Lily Neo suggested that we make annuities, at least of some amounts from the CPF funds, mandatory to all members. It is a good idea. People are living longer. What happens if a member runs out of his CPF funds? Can we annuitise it so that it

pays as long as the member is alive? It is a good idea, in principle. Indeed, MOM welcomes this initiative. We do encourage members to sign up for annuities. It is currently allowed but on an opt-in basis. About 9% of members covered under the Minimum Sum Scheme have chosen to purchase annuities - a very small number. Younger members who are below the age of 55 and who want to prepare early for their retirement can also purchase deferred annuity policies under CPFIS.

We will study Dr Neo's suggestion seriously. But the main problem is to educate members about how annuities work. As Dr Neo said, annuities pool risk for the same cohort with different life expectancies. But a feature in our population is that most members, as loving and caring parents, wish for their CPF sums to revert to their children rather than to the pool, and that is why they do not purchase annuities. Their thinking is that if I live longer, my children will support me. If I am unfortunate and if I die young, I hope that the money will go to them. That is their thinking, and that is why the purchase of annuities is very low.

A number of Members - Dr Neo, Mr Ong Kian Min, Mr Christopher De Souza and Ms Olsen - have also asked whether returns to CPF monies can be enhanced. Mr Ong - I listened to his impassioned speech and I was lifted to the throes of investment ecstasy during the Budget debate - asked if people like Warren Buffett and George Soros can earn super normal returns, why could the CPF savings not attract higher returns? Like him, I too wish that we could identify people like them who could guarantee higher returns for all us. It will solve many of our problems. But Mr Ong, of course, I presume, was using extreme examples to exaggerate the point, and not seriously expecting that our CPF funds offer a return of 21.4% annually, as

Warren Buffett's Berkshire Hathway Fund provides. In fact, Warren Buffett, whom Mr Ong Kian Min quoted, himself said, "If I had to pick the most probable return ... that investors in aggregate would earn in a world of constant interest rates, two percent inflation, and those ever hurtful frictional costs, it would be six percent ..., that is 4% in real terms." So even someone who is as wise as Warren Buffett - realistic of him - says that that would be the average return that one would expect - 4% in real terms.

As all investment products point out religiously in their brochures, past results do not guarantee or predict future performance. It is caveat emptor. And as Mr Ong himself pointed out, expected higher returns do require higher risk tolerance and volatility. As I was listening to him and reading the newspaper the next day, even within a short span of two weeks across this Budget debate, the STI plunged by about 328 points. He expected 8%-10%. He was correct but the STI dropped south - not went up north - down 10% within two weeks. To reach Mr Ong's putative 8%-10%, we will have to deliver 20% over the next 11 months. So there is volatility. Volatility and possible losses are inherent in any investment.

Every investor knows that he is exposed to market risks. He may decide to ride through a bear cycle. If he comes through this week's turbulence on the stock market and he holds his stocks and, in the next few months, there is positive returns, he congratulates himself and says, "I've been astute. I have nerves of steel. That was a correct decision." But if he suffers losses, what does he do? He licks his wounds and says, "Well, better luck next time, better learn about the next cycle."

But we can expect the reactions, especially in a protracted bear market, to

be quite different if the CPF Board invests on behalf of members. Indeed, this is exactly what one member of the public wrote in response to Mr Ong Kian Min's impassioned speech to seek for higher returns from CPF. Let me quote from Mr Philip Ang's letter on 6th March published in Today:

"Mr Ong's expectations of an 8 to 10% yield is rather unrealistic ... the CPF Board should not take more risks for its members in search of higher returns as there are significant risks involved. We should not look at only one side of the coin where private bankers are expected to make 8 to 10% returns for their clients. What about those whose performance pale in comparison to CPF returns? For Mr Ong's suggestions to come at the tail-end of a stock or property bull market, it seems we have not learnt from the painful past experiences. The element of luck in investment should not be discounted. If the CPF Board had introduced policy changes prior to the 1997 financial crisis or the 2000 Internet bubble and had allowed CPF funds to be managed by fund managers, many will probably not be looking forward to retirement today."

I understand that he has had trading experience as a professional. This is a mature and balanced view of investments, their risks and rewards.

Let me put the issue of expected rate of returns on investments into perspective by giving a brief survey of what exists currently in the market. Investment 101 will tell you that returns on investments are a function of risk exposure and the tenure of your investments - how long you put your money in any particular product. For example, as I have listed in the chart, low-risk bank savings deposit - you put in your money and you can take out any time - attracts 0.3% interest. Fixed deposits and short-term bond instruments, like Singapore Government Treasury Bills or some low-risk

Singapore bond funds, provide 0.5% to 3% at minimal risk.

Further along this risk/tenure spectrum are capital protected or guaranteed funds. In the case of capital guaranteed funds, the bottom line is that they promise the depositor that if he puts in, say, $1,000, there is a guarantee that after X years of investment, his original sum of $1,000 is guaranteed less the sales charge - that is, in the worst case scenario; in other words, there is no yield or interest, and a small outlay as commission to the bank or broker.

The capital guaranteed and protected Unit Trust funds that are outstanding under the CPFIS currently have earned annualised returns before sales charge of between -0.10% and 4.85% over the last three years. So they are performing as expected.

At the other extreme are those that offer higher returns but with higher risks. For example, there is a fund called APS Alpha Fund. They do not charge any fees or expenses unless it beats a target return of 6% per annum. They tell the depositor, "You invest with me, I will promise you 6%. If I perform below that, I am not going to charge any fees." But they are not guaranteeing the depositor that if they do not perform, the amount that he puts in with them will not reduce. They do not guarantee his capital. It may actually be lost. But if they perform over 6%, they will take 25% of anything above that.

Basically, a depositor's higher risk tolerance allows the fund managers to adopt a more aggressive investment stance, and if they lose money, well, that is his luck. If they do meet his expectations, they will recover from him a higher cost to cover their downside. And this is why expense ratios for higher risk CPFIS funds are, on average, about 2 to 3 times that of lower risk funds. Exposure to equity markets is accompanied by

higher risks, which is why we cap it to 35% on the proportion of your CPF savings which can be used to purchase shares under the CPFIS.

So, indeed, Mr Ong and other Members are quite right - there is no running away that commensurate risks are inseparable from expected returns. Even a balanced portfolio, as mentioned by Mr Ong, can mitigate but not eliminate market risks. There have been bear runs in the past that were protracted. Between the peak in March 2000 and the trough in September 2002, the MSCI World Index fell 48% - over three years, it fell by half. All types of boats fell with the sinking tide.

So, I think that as a mainstay of our pension system - the CPF system - the present scheme is correctly positioned. Members do not have to worry about the interest rate environment. They do not have to worry about yields and they do not have to worry about stock market volatility. They have the full assurance backed by Government and earn risk-free returns of 2.5% on their Ordinary Account and 4% on their Special, Medisave and Retirement Accounts which, by and large, are above the market rates when compared against products of similar risk and tenure.

To achieve better returns, members can transfer their CPF savings from their Ordinary Account to their Special Account which yields a higher interest rate. For members who have an appetite for higher risks, they can choose to invest their CPF savings under the CPFIS on their own. Dr Lily Neo asked whether we should review it. We have indeed been reviewing it and we are tightening it to help members, because we are now setting more stringent criteria as well as how much a fund can charge in terms of the expense ratio. In February 2006, we capped the sales charge from July 2007,

and we are capping expense ratios from January 2008.

However, I also agree with Members that between the risk-free 2.5% and 4% and CPFIS - we now have two options - in between, there would be avenues for investment options with acceptable risks and volatility and possibly higher returns that can be provided. I think there is a space there in between to help members.

We should look out for these opportunities - some low-hanging fruits that we can quickly pluck to help increase returns. One possible low-hanging fruit is to increase the returns on Ordinary Account, which now pays 2.5%. The OA account functions, basically, as a withdrawal-on-demand account. We use it for housing, education and we can withdraw. So 2.5% interest rate is reasonable.

However, many members do not withdraw from their Ordinary Account continuously. A member bought his house and there are sums there and left it for a few years before buying his next house or not at all, because he has purchased his house and does not intend to use his OA any more. They do not want to transfer it to the Special Account because they do not want it to be locked up, as they might want to buy something.

The yields for short-term instruments, like the 3-month or 1-year Singapore Government Securities, are currently above the Ordinary Account interest rates. They are now around 3%. And we do allow members to use their OA funds to purchase these and earn more than 2.5%. They could technically now earn 0.5% more. We allow this. And I asked my staff what is the update. It is very low.

So, I understand that purchasing SGS (Singapore Government Securities) can be cumbersome. I have, therefore, asked the CPF Board to consider playing a facilitative role to help members earn

higher interest rates, and they will study this.

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Along this line of options which provide acceptable risks, but possibly higher returns than the current 4% in the Medisave and Special accounts, I have also asked the CPF Board to study more options for members. Some exposure to equities, bonds or other asset classes may provide better returns over the longer term. As previously mentioned, we are studying the proposal for the CPF Board to play an aggregator role. We have made progress in this study. It is clear from our public consultation that, in this case, having more choice is not necessarily better. What we want to provide is a simple system, with acceptable risks and returns that people can understand and the majority of members can participate in.

Any such scheme should be positioned over the long-term horizon so as to offer better rates than the 2.5% and 4% which members get now. I ask members to be patient because this is a complex aspect. There are different members with different risks, different age groups, but we want to reassure everyone this is very much on the radar screen and when ready, we will put out more details.

Mr Ong Ah Heng asked whether we can help facilitate division of matrimonial assets. My quick answer is, "Yes, we've agreed." He brought up a point that divorced wives who get very little from the sale proceeds of the matrimonial property because our current CPF rules require the husband - actually it is not the husband, it is the spouse - if he uses his CPF and he gets divorced, that CPF must go back into his account. This protects your CPF money and most of us agree, but when you get divorced, even

if, for example, you split the property, the sum of money that was used must go back to that person's account. So, if the wife does not have money to return the CPF sum, the house cannot be divided, it has to be sold off, in some cases. In the division of matrimonial assets, in other words, under the CPF Act, there is currently no discretion to allow some portion or all of the CPF monies used to go into the other spouse’s account. This has created practical difficulties and, in some cases, the wife has had to sell the property even if the husband is willing to transfer the house to the wife.

MOM has studied this and I am pleased to announce that later this year, we will make changes to the CPF Act to bring about a smooth and equitable distribution of CPF monies arising from the division of matrimonial assets to either members' accounts. These changes will allow an immediate transfer of CPF monies from a member to the ex-spouse's CPF account.

So, for example, for a matrimonial property, $100,000 is used. Under the current rules, all the $100,000 will have to go back to the member's CPF account, even if the Court has awarded the ex-spouse half the proceeds. The Court has no discretion under this. We will change the rules so that the Court can do that. We will also be making amendments to facilitate the immediate transfer of property to the ex-spouse by allowing CPF monies embedded in that property to be transferred, provided that a charge is placed to secure the refund of CPF monies in the event of the sale. This refund will go either into the CPF member’s account or the ex-spouse’s CPF account. Let me put that in plain English. In other words, if the member had used his CPF for the property, but the Court had ordered that the ownership of the property be transferred to the ex-spouse, we will no longer require the member to refund his CPF in cash before a transfer can take place. We

will actually allow the property to be transferred. Instead, a charge should be created in the ex-spouse’s interest, so that she will need to refund the same amount into her CPF account when she sells the property.

L et me just say that we are doing this not because we want to encourage divorces, but we recognise that separations are a fact of life. Sometimes, we have to pick up the pieces and move on, so we want to facilitate those episodes.

I have also decided to address another practice not quite in line with our Minimum Sum policy. When members sell their properties, which they have used CPF money to purchase, all of us know that they must return the CPF money into their account, plus accrued interest from the sale proceeds, and this is to secure the payment of the Minimum Sum. This is existing policy and common knowledge, but we have not enforced this policy for those above 55. We enforced it uniformly for those below 55 because the Minimum Sums have been changing. We have not enforced this uniformly for those above 55. What we have been doing now is we are only recovering the property pledge, but not the cash short-falls. So, I have asked the CPF Board to rectify this practice and apply the rule uniformly to align the policy. However, to give prospective home sellers, who are above 55 years old, adequate notice, we will enforce this from 1st January 2009. So I am giving advance notice.

Mr Ong Kian Min brought up a point about this in terms of the parents using cash to help their children buy a house and then when the child sells the house, the parent does not get back anything. T he cash component that is required for buying houses has various purposes. One, of course, is to make sure that there is no speculation and there is some upfront, if you like, deterrence to make sure that speculation does not go awry.

So, I think that is correct. The second rule is that CPF monies ought to be returned into your account, and I think that is right again. He has suggested that we change the order. But that gets a bit complicated because we do not know where the cash came from as there is no cash trail. We will study what he has suggested. But I think that both these aspects should be separated. I am not sure that we can change our CPF rules to address family problems. In other words, in this case, the parent used the money to help the child, thinking that the child would repay their kindness. I think our CPF rules are right, but we will study his suggestion.

Mr Chairman, before I close, I also want to address certain points. I apologise that I chose to speak before Mdm Halimah had made her cut on S-passes and that was because I was not sure I could have finished yesterday.

She had brought up some points about S-passes having an impact on our local diploma holders and university graduates because we have increased it from 10% to 15%, but the overall ratio remains the same.

The S-pass was launched on 1st July 2004 and this was because businesses said they needed a lot of middle manpower and our own projection showed that we were short of manpower at the diploma and post-secondary levels. Mdm Halimah asked for some figures. They are now about 30,000 S-pass holders across the different sectors, reflecting the broad-based market demand for this group of workers. More than half of these are employed in the services sector.

I would like to assure Mdm Halimah that my Ministry monitors closely the impact on employment of this group, in other words, the local diploma holders, because that is where the S-pass is

pitched at. Since the introduction of the S-pass, the unemployment rates for local diploma holders and university graduates have not risen and, in fact, have fallen and the mean monthly gross starting salaries of polytechnic graduates have gone up. Last year, it was $1,700. It has gone up 6% from $1,600 in 2004, where we introduced the S-pass. I had also mentioned yesterday that nine out of 10 fresh polytechnic graduates found jobs within six months after graduation.

So, the introduction of the S-pass has not reduced the employment opportunities or the wage levels of our diploma holders. It shows that the employment of these groups, ie, the local diploma holders and graduates, is driven mainly by general labour market conditions, rather than the inflow of any specific group of foreign manpower. Our foreign workforce, including S-pass holders, has, in fact, enabled us to support business manpower needs and grow beyond the limits of our indigenous workforce.

Yesterday, I mentioned that last year we created about 180,000 jobs, but we could only supply about 30,000. If you push hard enough, get your older women to come into the workforce, stop people from retiring, you may be able to ramp up the supply by up to 60,000. That leaves you 120,000 short. If we do not allow businesses to meet those needs, we are going to constrain our growth. So, I said that over the next five years we can expect 450,000 jobs if our economy grows, ie, 90,000 a year, but we only have 30,000 local workers to supply. Mrs Josephine Teo asked: “Shall we look at the ratio?” If we really need to have 90,000 jobs and we only have 30,000 local workers to supply, the Mathematics speak for themselves.

Should we then stop foreign workers from coming, saying, “Out! Before we

allow you in, I want to make sure that our local manpower wages rise up.”? After a while, it will be self-defeating because, as Mrs Josephine Teo rightly pointed out, businesses will move elsewhere.

So, we need to move away from the mindset that keeping others out will help Singaporeans. This is giving false hope. No country has succeeded in doing this. It has not worked in Europe. I know that when we attend labour conferences and the unionists will tell you that the unions in Europe are suffering. They try to protect jobs, but companies leave. In fact, these protectionistic policies have worsened the situation. We can only ensure jobs for Singaporeans if we set the right conditions for the economy to grow and these include allowing businesses to meet their manpower needs.

If business demand goes up and we do not have an adequate local supply, we should be prepared to allow more foreign workers in to grow the economy. So, for this point, I am keeping the quotas. But if businesses pick up, if the IRs come in, if the BFCs gets built and more restaurants, F&B, entertainment or tourism industry grows, it will be silly and shortsighted of us to try to stick to the quota. We will have to monitor the situation and respond.

Mr Chairman, the issues that I brought up regarding the CPF changes, the Workfare and WIS schemes will strengthen the CPF system. In addition, the relaxation in top-up rules will open up ways for family members who have accumulated adequate amounts to help their family members and spouses, even ex-spouses, and we are studying more ways to help members achieve higher returns in a reasonable risk climate.

Mr Chairman, I am most glad to note that the Ministry is looking into ensuring that there are sufficient job

opportunities for the older workers in our society.

I am also certain that the Workfare benefits would ensure sufficient support to look into their needs and benefit this group. However, much has also been said that, despite many of our elderly workers being motivated to work, the issue remains that they may not have the opportunity because of the mindset of some of the employers who may be unwilling to employ them. I would like to ask the Minister what measures the Ministry is taking to motivate such companies to change their mindset towards employing older workers.

In Japan, they have a reemployment law which requires employers to offer reemployment to workers when they reach 60 years, not necessarily in the same jobs or at the same pay. Is there a possibility of such a measure being considered in Singapore?

In addition, there has been feedback from the ground that there are many older Singaporeans, who are still fit and healthy, still keen on contributing to the economy. Quite a number of the elderly I have met related to me their desire to work beyond their retirement. They even suggested that the Government increase the compulsory retirement age. In particular, those who are still healthy and fit to work fear that their health condition may start to deteriorate once they stop working. In fact, many of the elderly see employability as a path towards sustaining an engaged, active, self-reliant and healthy lifestyle.

Sir, a retiree told me that he enjoys being engaged by the activities of the Residents’ Committee. He frequently joins the karaoke sessions and activities organised by the Senior Citizens Committee. In addition, he enjoys engaging with his grandchildren. However, he still has adequate time and energy to work to

be self-reliant and leads an active lifestyle. In view of the ageing population in the horizon, what are the plans of the Ministry in ensuring that our elderly are actively engaged economically?

Older Workers in the Service Sector

Mr Chairman, our demographic trends show that our population is ageing surely and steadily and a key challenge is to get a greater proportion of older Singaporeans to remain active in the workforce.

Indeed, this is one of the core objectives of the newly formed Task Force on Ageing, led by Minister Lim Boon Heng, and the reason for this is obvious; otherwise, there would simply be too few workers supporting those not working.

Further, a significant portion of our unemployed are the older workers, especially those with lower level of education or skills. They need to be re-skilled and/or have jobs re-designed

to fit their abilities in order that they can rejoin the workforce.

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At the same time, the service sector of our economy continues to grow robustly at a faster rate than other sectors. There is a corresponding greater demand for man and woman power. To take an obvious example, the two Integrated Resorts coming on-stream in about three years' time will create 30,000 new jobs, most of these in the service sector. In the slightly longer term, our aim is to double the number of tourist arrivals to about 18 million or 19 million by 2020. To cater for this huge influx of visitors, the service industry will surely have to boost its number significantly.

It seems only natural and mutually beneficial to match the older Singaporeans looking for jobs with the service sector looking for more workers. Furthermore,

service industry jobs tend to focus less on physical demands but more on softer people's skills. And this fits better the attributes of older workers who also tend to have a more mature outlook and are less prone to job hopping. So I trust this would be a key initiative for the Ministry to both fulfil two objectives, to keep older workers active in the workforce and to fill the huge demand for service industry workers.

For the older and unemployed, this tends to fall within the less educated, lower skill profile. It is not a straightforward task to reskill them for modern manufacturing jobs which, nowadays, require a certain degree of technical proficiency. It would be much more feasible to retrain them for service positions which rely less on technical skills but more on a service mentality. I appreciate this is already an initiative with the Ministry, but I hope greater effort can be brought to bear to solve the plight of these older unemployed.

Statistics compiled by the Ministry revealed that, in 2006, for those in the 55 to 59 years age bracket, some 63.5% remained in the workforce. But that dropped to 43.9% for those in the age 60 to 64 bracket. While these percentages have increased from 10 years ago, there is still room for improvement, especially given that average life expectancies are getting longer. More worryingly, the percentage of women in those age brackets, in the 55 to 59 age bracket, the percentage of women remaining in the workforce is only 44.7% or less than 50%, while those in the age 60 to 64 bracket is only a quarter or 26.2%. With the increasing demand for labour and the fact that many families do need dual incomes to survive, it is hoped that the Ministry will find ways to persuade more women to stay economically active in their golden years.

In conclusion, I hope the Ministry will focus greater efforts on getting older Singaporeans to remain in the workforce by matching them with service positions and, particularly, for the older, less educated, less skilled workers who would otherwise face great difficulty in obtaining employment.

Discrimination of Workers

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] Mr Chairman, the Ministry of Manpower (MOM), employers and unions have been actively promoting and encouraging fair and responsible employment practices. As part of an overall effort, the Tripartite Alliance for Fair Employment (TAFEP) has launched a pledge to support non-discriminating employment practices. I would like to congratulate MOM and its partners for successfully engaging more than 300 employers to pledge their commitment towards adopting fair employment practices at their workplace. I am happy to see that TAFEP, in its effort to assist employers to organise seminars, small group discussions, layout of education materials and planning of training courses, is helping employers to better understand and implement fair employment practices. But much more can be done.

I do hope that the Ministry of Manpower (MOM), National Trades Union Congress (NTUC) and the Singapore National Employers Federation (SNEF) can do more to help employers who wish to adopt fair employment practices and to provide them with the necessary assistance when needed. This will in turn encourage more employers to support and adopt fair employment practices.

Employment Discrimination

Sir, job discrimination is on the

rise in Singapore. The number of pregnant workers complaining of unfair dismissal is twice the number three years ago. Older workers have it the worst. To-date, the Government has publicly said no to legislation as an anti-discrimination tool.

Sir, I agree that there is no silver bullet, nor is it wise to take a blanket approach. But how wise is it to have a similar blanket aversion to legislation? We should, and we can be flexible, selective and creative. For example, we have laws like the Retirement Age Act so that workers who are let go due to age can seek redress. We should note that wrongful dismissal here is not legislated by how close to the age of 62 a worker is. This should apply to the Employment Act.

Workers who are fired due to pregnancy at any stage should get full and due compensation and maternity benefits. Surely, we want our laws to be consistent. It is much harder, however, to prevent employers from asking female job applicants during interviews if they plan to start a family, and so on. If employers ask such questions or make hedges or racist comments, applicant can complain to the Manpower Ministry. The question is, what then? How far can cajoling go?

Perhaps, we can take an additional approach, a voluntary compliance agreement (VCA), which the Consumers Association of Singapore uses when it receives a series of complaints about a company. If we can tackle unfair trading practices, we can change unfair hiring practices. This way, it is not just about seeking redress, and it is done without incurring frivolous legal claims as only MOM, after a fair assessment, can take legal action against employers who refuse to sign an agreement of breach.

With the VCA, employers who correct their unfair practices immediately may be

let off. This is about educating employers and having the teeth to back it up. It is more effective than issuing guidelines on job recruitment. We can start with the VCA for hiring practices before deciding if it is suitable for complaints on training prospects, promotion benefits and retrenchment bias.

*Cols. 3443-3444.

Contract Workers

Mr Chairman, Sir, yesterday, the House heard during Question Time that, last year, the Government best sourced non-core services valued at about $1.8 billion to private sector providers and, in the process, saved $34 million. This represents a significant saving of about 19%. As a taxpayer, I am very happy to hear that. However, when it was also mentioned that the services included carpark wardens, call centres and email handling, which were quite manpower intensive, I have to confess that I feel a little bit sceptical that none of the savings was due to the salaries of the employers being driven downwards.

We have heard about NParks and the National Environment Agency, being two very good examples of agencies, which had moved from headcount based contracts to performance based contracts. However, I think this might not yet be the case for some other services. Waste collection is one example. Contractors are given feedback that the competition is so keen each time a contract is called. The successful bidder is sometimes paid less than the previous contract value, sometimes by more than 10% to 20%. When this happens, the workers often have to move to another contractor that won the job, so that they may do the same job, follow the same route, but they have a different boss, different uniform and certainly a lower pay. This is really only because the contractor has been paid lower.

Sir, besides cheap sourcing, there is also the issue of errant subcontractors. The Government may best source to the contractor, but the contractor will cheap source to the subcontractor and statutory benefits, like CPF, may not be provided.

Sir, as one of the biggest procurers of services, I think Government can help to turn things around and I like to suggest that MOM lead an effort to promote better awareness among Government procurement officers so that they can help to ensure that the best sourcing is done completely and all the way in all Government agencies.

Sir, the Minister has also said, on previous occasions, that those employed on short-term contracts are also covered under the Employment Act. There are ways in which this has been circumvented, for example, a contract may be extended but there is a one-day break in service. So if the first contract ends on 30th June, the extended contract does not start on 1st July, but starts on 2nd July instead. This means that the contract staff does not perform continuous service and, as a result, the worker may not be eligible for certain statutory benefits, such as medical relief, which requires a continuous service of 180 days. Moreover, I think that the nature of short-term contract is such that it may not even last 180 days. I would like to ask the Ministry to consider updating the Employment Act to address the issue of continuous service and the minimum periods for eligibility.

Ms Cham Hui Fong, four minutes for your two cuts.

Sir, while employment agencies are required to be licensed under the

Employment Agency Act, labour suppliers are not. So with more and more companies outsourcing more of their non-core services, such as cleaning and security services, to service providers who are essentially the labour suppliers, many workers who are employed to work for these labour suppliers are often exploited and not provided the statutory benefits, although the Minister has earlier said that all employees, whether they are in the formal or informal sector, should be getting it. But the reality is that they are not being paid the statutory benefits, including the CPF. So, in order to secure the service contract and to maximise profits, most of the labour suppliers often treat these workers as casual contract workers and do not make the necessary CPF contributions for them. They also do not provide them with the basic employment benefits, such as sick leave and annual leave. It is therefore necessary for the Government to consider at least licensing the labour suppliers or the service providers under the Employment Agency Act.

I understand that some countries have already licensed them together with their employment agencies. Licensing of labour suppliers will impose on them the responsibility of complying with the Acts - the CPF and the Employment Acts. So, before a licence is issued, the suppliers can be briefed on their roles and responsibilities, towards the workers, and this would certainly help the workers to have some savings for their medical and old age needs as well as the basic employment benefits.

In the light of the Government's decision to institutionalise the Workfare Bonus, licensing the labour suppliers would also help to ensure that these unprotected contract workers are able to enjoy the full Workfare Bonus on top of the CPF contributions and the basic employment benefits.

Training Opportunities

The labour movement has schemes to help our members who, on their initiatives, wish to train and upgrade without employer's support by NTUC providing them with training awards and also by acting as their surrogate employer. WDA also provides funding assistance to company for training, not only for employees directly under their payroll, but also for their subcontract workers, such as employees hired through a third party employment agency.

But for temporary and casual workers, who are usually at the bottom of the value chain, the employer and employment agency are usually not willing to train them because of the short tenure that they have with them. Government funding is also not available except for the individual based training which is very limited in scope. It does not quite help in the functional training which most companies require for them to upgrade their skills. Of course, in most cases, attending the courses will also mean no pay for these contract workers who are usually paid on a daily basis.

If our intention is to graduate these low-end workers out of the Workfare, then we have to make training more easily available for them. Training opportunities must be given to all Singaporeans, whether you are a regular employee or a casual worker or a contract worker. Government can act as a surrogate employer, since they are all Singaporeans, for them to enjoy the subsidies and even to consider the absentee payroll. Because we believe that all Singaporeans should be able to join this learning fund which is primarily the objective to help them to upgrade.

I would like the Ministry to make available training funds for this group of workers who are vulnerable to being displaced by the economy, and whom we

should really help to allow them to move up the value chain.

Mr Chairman, many Members have spoken today about several important challenges facing our workforce. These challenges are driven primarily by two major factors, demographics and globalisation.

First, from the demographic angle, we are facing the challenge of an ageing population. This problem is not unique to Singapore as many countries face the same issue. An ageing workforce, coupled with longer life expectancy, will require a major shift in mindset and expectations on the part of both employers and employees, as well as changes in workplace practices.

Second, globalisation has increased market efficiency and created new opportunities for us. However, the process of globalisation has also created new challenges. Outsourcing, for example, challenges the traditional employer-employee relationship as well as long-standing workplace practices.

Many companies have to restructure to remain competitive.

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The way forward for us is to recognise these challenges and engage various stakeholders in addressing them. Our key advantage is that we have developed a strong tripartite relationship over the years that allows us to address these crucial issues with openness, mutual trust and confidence. Let me first deal with the challenges of an ageing workforce. MOM recognises that there is no simple and neat solution that can address all these challenges. Rather, a multifaceted approach is needed. We also recognise that, ultimately, it is economic growth that will create jobs and drive the demand for workers, including older workers. This is evidenced

by the improvement in the employment market over the last two years. We have made progress in raising the employment rate for older workers. Last year, 61% of those aged 55 to 59 were employed, a five-percentage-point improvement from two years ago. For those aged 60 to 64, the improvement is even more marked – up eight percentage points to 42% in 2006.

But I agree with Mr Seng Han Thong that we can still do more to raise the employment rate for older workers. As my Minister mentioned yesterday, the other group which we need to focus on is women. In fact, the two issues are related. If you look at the employment rate figures, two important points are noteworthy.

Firstly, the employment rate of male residents from 55 to 64 is already quite high, and comparable to that in the developed economies. Sir, with your permission, I would like to refer to Chart 1: Country Comparison of Male ER 55-64. We are better than the US, UK, in fact, the OECD total. We are just behind Korea, Japan and Sweden.

Secondly, the employment rate of female residents aged 25 to 39 is also high, and comparable to that in the developed economies. If you see chart 2: Country Comparison of Female ER 25-39, we are still ahead of many economies. However, after the age of 40, the employment rate of female residents starts to lag other developed countries, and we do not fare so well in the 55 to 64 age group. Chart 3: Country Comparison of Female ER 55-64 will show that we are quite far behind.

Therefore, one of the key efforts is to keep more mature women in the workforce or, if they have left the workforce, to find ways to bring them

back in. This is an area that the Tripartite Committee on Employability of Older Workers will be studying further. In the meantime, the tripartite partners have already recognised this challenge and have swung into action. A “Women Back to Work” Committee has been set up under the leadership of NTUC and comprises members from WDA, SNEF and the self-help groups to identify the key barriers that women face in returning to the workforce and to help them overcome these obstacles.

A big part of the solution will lie in the availability of flexible work arrangements to help women juggle between family responsibilities and work. The tripartite partners are, therefore, encouraging companies to create part-time or flexible working opportunities as well as promoting family-friendly employment practices among employers. Our efforts in improving work-life strategies and promoting more family-friendly workplaces will help to encourage women to go back to work. Senior Parliamentary Secretary Mr Hawazi Daipi, who chairs the Tripartite Committee on Work-Life Strategy, will elaborate on this later.

In connection with the employment of older workers, Mr Yeo Guat Kwang has asked if MOM, together with the tripartite partners, could push for a review of medical benefits in the private sector to provide portability and better management of the cost of medical benefits to employers. This is not easy, as many companies already have existing medical benefits which have generally served them and the workers well. Nevertheless, a number of companies have taken up the challenge of providing comprehensive yet portable medical benefits. One example which was in the newspaper recently is the Salvation Army, which has shifted all its 400 employees from a group medical insurance plan to an Enhanced IncomeShield Plan for every employee. NTUC FairPrice is also introducing a similar

medical scheme for its employees. MOM will continue to work with our partners to promote the adoption of medical benefits schemes that will enhance the long-term employability of our workers.

Dr Muhammad Faishal called for more to be done to facilitate re-employment beyond official retirement age of 62, including the introduction of legislation on this, as Japan has done. The legislation in Japan took effect only last year. Early indications are that the legislation is working relatively well, due to a number of factors. First, there is a strong desire on the part of workers to continue working. At the same time, older workers are able to adapt to new roles and environment after retirement. What is also critical is that companies start discussing with employees on re-employment early, to prepare them and to set expectations. Some companies in Japan do so as early as five years before the workers retire.

However, Japan’s experience also shows that the implementation of re-employment legislation is not without difficulties. It is a challenge for employers and unions to agree on the criteria that workers have to meet, to qualify for re-employment. It is also not easy for some re-employed workers to accept the adjustments, which are necessary to keep them competitive. These are some of the teething problems faced by Japan.

The Tripartite Committee has been discussing the feasibility of introducing a re-employment law in Singapore. The unions and employers are receptive of the concept because of the flexibility in this system. However, greater flexibility also means that re-employment is more complex to implement, as the Japan experience has shown. In fact, many Singapore companies do not yet have systems in place to prepare workers as they approach retirement age, and help them make the transition, including to

different positions where necessary. Employers have to put the system in place. Workers’ attitudes also need to change. Today, many workers begin to withdraw from the labour force after the age of 55. Given the longer life expectancy of 78 for men and 82 for women, retiring at 55 may no longer be an option for most of us. The Tripartite Committee will finalise its report soon, which will include its recommendation with regard to the re-employment legislation.

Mr Seng has also asked about employment rate targets for older workers for the next three years. Minister Lim Boon Heng has set a medium term target of 65% employment rate for those aged between 55 and 64. It is a very tough target, but we will work towards that and we should avoid setting short-term targets, as employment rates are subject to short-term volatility in the economy and other factors.

On MOM’s part, the ADVANTAGE! Scheme launched last year is an important instrument to help older workers stay employed. Mr Low Thia Kiang asked what ADVANTAGE! has achieved. So far, grants under the ADVANTAGE! Scheme have been used primarily to redesign jobs or processes, to make them more suitable for older workers. More than 300 companies have participated in the ADVANTAGE! Scheme and have committed to implementing age-friendly practices, ranging from re-employment of workers beyond 62, automation, changing of benefit and wage structures, and the creation of new jobs. Collectively, these companies have committed to hire more than 2,500 additional mature workers and re-employ more than 3,400 workers beyond the retirement age. These jobs will be in a variety of sectors, including retail, manufacturing, finance and hotels, and will include positions, such as store managers, technicians and aircraft engineers.

A key lesson in many of these projects is that, very often, simple changes can make a huge difference. You can reap significant benefits at very little cost. For example, Croda Singapore, a specialist chemicals manufacturer, leveraged on the funding support from ADVANTAGE! to purchase specialised equipment that eliminates the need for its workers to bend their backs and lift heavy loads when packing the materials produced by the company. Not only does this allow Croda’s mature workers to continue in the job with lower risks to their health and safety, it also increases workers’ productivity. Going forward, we will use ADVANTAGE! grants to help companies restructure their HR systems and introduce re-employment practices.

Next, let me touch on the issue of the quality of jobs for older workers. During the Budget debate, Dr Amy Khor and Dr Ahmad Magad expressed concerns that the increase in the employment of older workers had been mainly in the low-skilled jobs. While it is true that in 2006, 68% of workers aged 50 and above were employed in lower-skilled jobs, this proportion has been declining over the years. Increasingly, older workers are being employed as professionals, managers, executives and technicians as well, and we can expect this trend to continue as the educational profile of our older workers improves.

Mr Ong Ah Heng and Ms Eunice Olsen asked what we can do to encourage the adoption of non-discriminatory employment practices. To put the issue in context, MOM receives an average of about 70 complaints on discrimination at the workplace each year. These complaints are mostly related to age, race or language requirements, and pregnancy. So, the problem is not excessively large compared to the size of our workforce.

Ms Olsen has asked that we be more flexible, selective and creative in dealing with these issues of discrimination, and I agree. We have adopted a promotional approach, leveraging on our strong tripartite relationship. In May 2006, following the recommendation of the Tripartite Committee, we set up a Tripartite Alliance for Fair Employment Practices (TAFEP). The Alliance, co-led by Mr Bob Tan from SNEF and Mdm Halimah from NTUC, has done very well in raising awareness of fair employment practices through its range of activities and programmes, including the publication of Tripartite Guidelines on non-discriminatory job advertisements.

To address the issue of inappropriate questions asked during interviews raised by Ms Olsen, TAFEP will soon be launching a set of Tripartite Guidelines on Fair Employment Practices. These Guidelines will not only cover the do’s and don’ts for interviews, but also deal with the issue of job application forms and other in-employment practices.

While Guidelines serve as important reference points, real and sustained changes in employment practices will come about only when there is commitment by employers. TAFEP has launched a Pledge of Fair Employment Practices, which organisations are encouraged to voluntarily endorse, as a sign of their commitment to the cause. To date, about 330 employers, including various chambers of commerce and other employer federations, have come on board, which shows that commitment is growing. I certainly hope more companies will join this movement.

I agree with Ms Olsen and Mr Ong Ah Heng that more can be done to change mindsets and practices, besides exhortation and promotion. TAFEP will set up a Tripartite Centre for Fair Employment to expand its activities to reach out to and benefit more companies and workers.

This Tripartite Centre will also serve as a focal point to promote the awareness of fair employment practices. It will receive public feedback and give advice to employers and workers on fair employment practices. The Centre would also provide assistance to employers who are keen to adopt good employment practices. MOM, SNEF and NTUC will jointly provide the resources for the Centre. Details of the Centre and its programmes will be announced by TAFEP in due course.

My Ministry does not condone discriminatory practices and we will continue to play our part in regulating employment practices. As Ms Olsen has pointed out, the Retirement Age Act provides an avenue for redress for workers whose employment is terminated on grounds of age. Likewise, section 14 of the Employment Act provides an avenue for redress for a worker who has been unfairly dismissed, which would include a dismissal on discriminatory grounds. This would also apply to a female employee at any stage of pregnancy.

Let me now address the points raised by Members concerning outsourcing. Mrs Josephine Teo commented that some companies do not make CPF contributions for outsourced workers, on the basis that they are no longer their employees.

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First, allow me to clarify. When a company outsources a function, it can do so in one of two ways. The first is for the outsourcing company to hire individuals as contractors to perform the task. In such a case, the independent contractor is treated as self-employed. He, and not the outsourcing company, is liable for CPF contributions, as for all self-employed persons. This model is

more likely for advanced and specialised functions such as consulting work. It is

highly unlikely to be the arrangement for outsourced jobs that are performed by the rank-and-file workers. If any company claims that its team of 20 cleaners are each working as independent contractors, our enforcement officers would certainly scrutinise the arrangement very closely and would need very strong evidence to be persuaded that it is bona fide. Indeed, in 2006, the CPF Board took action against 180 companies which tried to evade their statutory obligations by labelling their employees as independent contractors. We will continue to be vigilant against such practices.

The second way of outsourcing is to engage another commercial entity to take over the function. This new commercial operator will then hire its own employees to perform the job. In such a situation, the new commercial operator is the employer and is obligated to comply with the CPF Act and the Employment Act. In other words, the worker does not lose his right just because there is outsourcing.

Although the responsibility to comply with the law now rests with the new commercial operator and not the outsourcing company, I agree with Members that the outsourcing company could and should do more to promote greater compliance. For example, they can exercise their influence as purchasers of services to require their suppliers to comply with the CPF Act and the Employment Act requirements. I agree with Members that, from time to time, there will be employers who will try to circumvent the law. Both MOM and CPF Board will step up enforcement against errant employers, including the directors of the companies who do not pay CPF for their workers. Doing so will also help ensure that their workers can benefit from Workfare. MOM and CPF Board will also continue to work with the tripartite partners in educational and outreach efforts.

Ms Cham Hui Fong suggested licensing manpower staffing companies that provide outsourced workers in order to protect workers' CPF and employment rights. This is a good idea but it is not necessary as our existing laws are already adequate. Ms Cham also suggested that temporary and casual workers should not be disadvantaged in terms of access to training opportunities. I agree. Mr Alvin Yeo also noted the importance of training of older workers, particularly in the service sector. This is an area which WDA has studied carefully. This is why WDA has reviewed its funding system and established two avenues of funding - employer based and worker based - to make training more accessible and affordable to all workers. While temporary and casual workers do not have employers to support their training, Ms Cham rightly pointed out that they can access WDA's worker-based funding where financial support is not tied to employers, but channelled through the training providers in the form of subsidised fees.

WDA funding support will kick in and the worker pays only the subsidised fees for training. Even then, as noted by Ms Cham, some casual and temporary workers are reluctant to go for training as it would result in a loss of income for them. I encourage these workers to take a longer term view and to avail themselves to the many training opportunities, including WDA's Place-and-Train programmes which are open to them and are subsidised under the Lifelong Learning Endowment Fund. In doing so, these workers not only improve their skills, but, more importantly, are in a better position to find permanent employment.

Mr Chairman, this debate has covered many issues arising from an ageing workforce and the impact of globalisation.

These trends are inevitable and cannot be ignored. Together with our tripartite partners, MOM has been working on practical responses to the challenges ahead. I want to emphasise that the strong spirit of tripartism nurtured over the years has allowed us to develop out of the box solutions in a consensual and constructive manner in our own unique Singapore way. That is one key strength of our labour market and an important reason why Singapore workforce continues to be ranked highly in the eyes of international investors. We must work to preserve and strengthen this tripartite relationship between unions, employers and the Government.

Dr Ahmad Magad is not present. Mr Yeo.

Workplace Safety and Health

Mr Chairman, Sir, I would like to echo Dr Ahmad Magad's speech during the Budget debate that it is imperative not just for the Government, but all stakeholders at the workplace, particularly the employers, to put their act together to make our workplace safer for our workers.

While the new Workplace Safety and Health Act currently covers only the workplaces such as factories, construction worksites and shipyards, employers of all the other workplaces should also make full efforts to ensure that good measures are in place for the safety of their workers. Could the Ministry expedite the process to make more new workplaces to be covered by the new Act? In order for the industry to have sufficient time to prepare to meet the requirements under the new Act, we should activate the tripartite network to work out more practical solutions and measures to address all the OSA risks in all the other workplaces that were not covered by the Factories Act before.

For instance, the NTUC's Workplace Safety and Health Aviation Sectoral Workgroup, in consultation with the Occupation Safety and Health Division of MOM, has identified and initiated a series of OSA improvement recommendations and action plan with the support of the CAAS and the management of the relevant workplaces like SIA, SATS and CIAS, etc, to further strengthen the occupational health and safety standards for Changi Airport. I hope the Ministry of Manpower could consider providing more incentives and facilitating more of such industry-driven initiatives.

I would like to also ask the Ministry for an update on the progress made so far in improving workplace safety and health performance. What percentage of the workplaces have already attended the required training courses on risk assessment and how many have now instituted the risk management framework for their workplaces? Do we see significant improvements in safety standards since a new legislation has been in place?

Flexible Work Arrangement

Mr Chairman, when we think of flexible work arrangements, many of us think of part-time work. Flexible work arrangement is about providing the right work environment to enable us to attract the right talent to the right job opportunities as well as to provide individuals who can and want to work, the choice to do so.

But why am I asking for more serious thought to be put into this area? Yesterday, in this House, Minister Ng Eng Hen spoke about the challenge of getting enough people to fill the jobs - the 450,000 jobs that would be created over the next five years, as growth of our labour supply would shrink with an ageing population and declining birth rates. In June 2006, there were one million persons economically inactive. What this

means is that they were neither seeking employment nor working. Of these, 3.2% and 5% respectively had polytechnic diplomas and university degrees. That seems small, but if you take in absolute numbers, that is 32,000 and 50,000 respectively. This equals to the supply of our resident workforce each year, which is at 33,000, as mentioned by Minister Ng yesterday. 38% of economically inactive persons cited family responsibilities as the reason for not seeking work; 16% cited disability and old age. 90% of women aged 25 to 54 who stayed out of the workforce mainly did it to take care of the family. 15% of all economically inactive residents indicated a desire to work in the next two years. 54% of these potential entrants indicated preference for full-time work.

Flexible work arrangement includes whether we are talking about part-time or full-time work, areas like when and where work is done, tools to support effective and productive work, including mobile or tele-work, employment arrangements, such as compass work week, job sharing, and work in family programmes that include provision of facilities to support special requirements of different groups. For example, access and tools for physically disabled and elderly, and mothers who are nursing, providing programmes that ease childcare logistics for employees. A good example of this is Giordano, which was cited by Dr Ahmad Magad in his Budget speech. Giordano has a programme that actually allows working mothers to take a work schedule that ends before 7 pm. That allows them to be able to pick up their children. For the elderly workers, they assign them to less strenuous physical work in the outlets as well as one with lower customer traffic. And this allows for an inclusive workforce.

Of course, flexible work arrangement should not be done just for the individual. It has got to be done without adversely

affecting actual job or performance. In many cases, flexible work arrangements have actually shown that work has been done and done better. Let me also clarify that flexible arrangement at work is not just about attracting more women to the workforce. Both men and women, young and old, able or disabled, will benefit from flexible work arrangements. It has been found that in many developed countries and companies, flexible work arrangements, apart from talent attraction and retention, have also helped in motivating high-performing and experienced employees, reduce absenteeism, help the employees manage worklife balance and increase job satisfaction and creativity, energy and ability to manage stress, and, in some cases, also reduce cost of operations.

I must say that good progress is being made in Singapore to recognise and promote flexible work arrangements. The Worklife Excellence Award is one good example, but I think more can be done because it requires a mindset change. Today, flexible work arrangement is seen in Singapore as more a benefit to the employee. But, it is also a benefit to the organisation and it should be looked that way. If you go and surf the websites today, even our civil service website is seen as an employee benefit. I would tell you that I have benefited from flexible work arrangements for more than 10 years now, as it has allowed me, when my children were very young, to stay very active in the workforce. It has not affected my career and pay and my job opportunities. At the same time, it has allowed me to do worklife balance. I think I actually do more work, because you are more committed as the company has given you the flexibility to balance that.

From that perspective, I will give Members a very radical example. We talked about the pressure on teachers

yesterday. If you look at teachers, for example, if their classes start a little later in the early morning, could we not look at the group of teachers and say, "Manage that."? Given the flexible work arrangement, to actually manage that as a workgroup such that they get flexibility, they do not have to all come in at the same time, it does not reduce child-teacher face time, and it actually increases the motivation and reduces job pressure. Think about that, and think about a lot of other jobs like call centres which, today, I think it is more physical in terms of one centre located in the homes of individuals, and you could actually make it more accessible to the disabled and the old as well.

I think a lot more can be done in terms of flexible work arrangements and this could increase the workforce participation and address some of the challenges and filling up the quality jobs that we are looking for.

Maternity Leave

Mr Chairman, I have a simple request to ask if more flexibility can be given to parents to decide how and when they want to make use of leave granted when they have a new baby.

Currently, the Government pays for three months of leave for a mother who has a baby. Such leave was extended from eight to 12 weeks in 2004. The first two months is usually taken at a stretch. The additional four weeks can be taken flexibly over a period of six months. There are two areas of concern here. One, to preserve the rights of a mother in recuperating from childbirth. The second, to give the family, in this case, the mother and child, some time together.

In the first area, the current legislation of MOM is sufficient. It states that in the first four weeks, immediately after the

confinement, no employer can knowingly require a female employee to work. However, beyond the four weeks' period, there is no legal restriction. Both the employer and the employee concerned can agree for the latter to return to work. The existing restriction, however, is not a legal but a financial one. Why is this so? The answer is simple. Under the Children Development and Co-savings Act, as administered by MCYS, the Government-paid maternity leave is payable only on condition that the female employee consumes the eight weeks of maternity leave continuously to qualify for the scheme. My request is equally simple. Why not grant this flexibility to those who take only one month at a stretch? This costs the Government nothing extra but gives a lot to the mother and her employer. We cannot calculate the many contingencies that may arise. Say, for example, there is a project to complete and the new mother may be required to come back to work after a month. The work is not onerous and, indeed, the mother may be quite happy to do so, provided she can take her sacrificed leave at another time.

The Minister for Manpower was kind enough to give me a written answer to my earlier request for more flexibility. He said that for the first eight weeks of maternity leave, the feedback from employers and workers was that the existing arrangement is acceptable. He said that more than 92% of employees have opted to take their leave in a continuous stretch of 12 weeks and, therefore, this indicates that the demand for more flexible maternity leave period is not high.

Sir, I thank the Minister for his consideration but his reply is not an argument, merely an accurate statement of the status quo. Demand for flexible leave does not have to be high. It merely has to exist for us to know that there will be mothers made happier when we are

more flexible,

to be exact, 1,600 of them each year, assuming an average of 20,000 babies are born. Actually, we do not know how many mothers would like to go back to work after a month, simply because there are not many silly enough to give up two months of paid leave. Even if they wanted to, they would not do it. Sir, I fail to understand why we must force women to take two months of leave at a stretch.

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Let me now say something for fathers. Indeed, a more difficult issue is that of paternity leave. Is there room to give fathers some leave when a baby is born as well? Is there a way of allowing some of the maternity leave to be converted into paternity leave? Again, this is an issue of flexibility.

I would also like the Minister to consider legislating paternity leave. Many companies already practise this and it will be useful for men to have this assurance when they become fathers. There is a Chinese saying, ma que sui xiao, wu zang ju quan. Literally translated, it means the sparrow, though small, is perfect in every way. This piece of legislation affects a small number of people. There is no reason, however, for not trying to make it perfect in every way.

Work Life Balance

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] The Ministry of Manpower recognises the need to develop a work-life friendly culture in Singapore. In 2004, a $10 million Work-Life Works! Fund was set up as an incentive to offer more work-life practices and create a family-friendly work environment. This programme is well received and popular with their employees. In this regard, I would like to ask the Minister whether he will give an update on the progress of the Work-Life

Works! Fund initiative. Apart from the $10 million fund in 2004, what plans are there in the pipeline to achieve a better work-life balance?

*Cols. 3445-3446.

Mr Chairman, let me first highlight the progress that we have made in the area of workplace safety and health. Last year, MOM replaced the decades-old Factories Act with the Workplace Safety and Health Act. This is a key milestone in the overhaul of the workplace safety and health framework, in order to achieve the target of halving the workplace fatality rate by 2015.

Dr Ahmad Magad and Mr Yeo Guat Kwang have asked, in the Budget debate and today, about the improvements that we have made so far. Our efforts have started to pay off. The total number of deaths at our workplaces fell from 71 in 2005 to 62 in 2006. Correspondingly, the workplace fatality rate in 2006 was 3.1 per 100,000 workers, a 22% reduction from 4.0 in 2005, and a reduction of more than one-third from 4.9 per 100,000 workers in 2004. While construction remained one of the riskiest sectors, accounting for almost 40% of the workplace fatalities in 2006, the absolute number of construction fatalities has fallen compared to 2005. The Workplace Safety and Health Advisory Committee, or WSHAC, will be releasing a more detailed analysis of the workplace fatalities and injuries that occurred in 2006 later this month.

We have also made progress in charting the strategic direction for WSH. The WSHAC and MOM have jointly developed a National Workplace Safety and Health Strategy called WSH 2015 to map out a national, strategic and long-term approach towards improving WSH.

More than 1,500 stakeholders were consulted in the process. The International Advisory Panel for Workplace Safety and Health, whom we consulted last year, has given the WSH 2015 a very strong endorsement. This extensive consultation is important in building up ownership by industry for safety and health standards - a point made by Mr Yeo Guat Kwang. The WSH 2015 will be the national blueprint to bring together stakeholders to drive the implementation of the WSH framework in Singapore.

To specifically address safety standards in the construction industry, the WSHAC and MOM have also developed a Construction Strategy to complement WSH 2015. The construction strategy takes into account the specific challenges in the sector and recommends sector-specific measures based on the broad directions of WSH 2015.

Let me address the request for extension of the WSH Act. While we continue to raise the workplace safety and health performance in construction sites, shipyards and general factories, the intention is to ensure that workers in all workplaces are protected. Mr Yeo asked MOM to expedite the extension of the WSH Act to new workplaces. Sir, we will do this in phases. As announced in Parliament last year when the WSH Act was passed, my Ministry will cover all workplaces under the Act in three to five years.

This approach will ensure a sustainable build-up, with industry ownership. MOM will roll out the next phase of workplaces to be included under the WSH Act on 1st March 2008. These will be sectors that either have higher accident rates or where the potential consequences of any accident can be serious.

The six selected sectors are:

Services allied to the transport of

goods, such as logistics, freight forwarding and cargo surveying services;

Landscape care and maintenance service activities, such as grass-cutting;

Water supply, sewerage and waste management, such as refuse disposal;

Hotels and restaurants;

Healthcare activities, such as hospitals; and

Veterinary activities.

This will allow a reasonable timeframe for the affected companies to build up their capabilities to comply with the Act. Stakeholders in these sectors have been consulted and my Ministry will continue to work with them to address their concerns in the coming months, and also offer compliance assistance to help them. Specifically, we will extend the Risk Management Assistance Fund to small and medium enterprises (SMEs) in these six sectors, to help them build up capabilities to conduct comprehensive risk assessments.

I am heartened to note that many organisations have already taken the initiative to enhance the safety and health of workers at their workplaces, even when they are not legally required to do so under the WSH Act as yet. For example, NTUC led the formulation of a set of guidelines on safe work procedures to guide contractors involved in town council cleaning and custodial services. NTUC also secured the commitment of 55 cleaning companies that have pledged to make the work environment safer and healthier for their workers.

Mr Yeo has asked if MOM could provide assistance for industry-driven or tripartite initiatives to improve workplace safety and health. Sir, we have done so. Many of the initiatives headed by the

WSHAC, which is industry-led with tripartite representation, are funded by MOM. Last year, MOM together with the WSHAC and our tripartite partners - NTUC, SNEF and SBF - jointly organised a seminar on workplace safety and health. MOM officers also provide technical assistance to industry associations to develop risk compendiums, guidelines and codes of practice. This indeed is a key approach in our drive to enhance workplace safety and health, working with industry associations who have a good reach to companies in the sectors.

Mr Yeo also asked for an update on the implementation of risk assessment in the workplaces. The Risk Management Regulations came into effect only in September last year, and my officers from the Occupational Safety and Health Division have been offering assistance to companies to meet the requirements. Since September, we have also issued more than 1,200 Notices of Non-Compliance to companies as a warning for them to improve their risk assessment measures. Of the 470 companies inspected in January 2007, about 30% have implemented risk assessment. This is not unexpected because our inspections are generally targeted at sectors and companies with weak safety management systems or poorer safety records. Nevertheless, industry capability is gradually being built up in this respect, eg, with the help of the Risk Management Assistance Fund, and we expect this proportion to increase.

Another important area is safety training for workers so that they can recognise potentially hazardous situations, understand their responsibilities under the WSH Act and know their roles in creating safe work conditions. The WSHAC and MOM are reviewing how to ensure that workers are adequately trained prior to and during the course of employment, especially for those working in high-risk sectors.

Sir, let me now move to the question of safety of foreign domestic workers. The Ministry has similarly introduced mandatory safety awareness courses for first-time foreign domestic workers (FDWs) and employment orientation programmes for first-time employers since April 2004. In 2006, we have also introduced a set of new measures to better educate FDWs on their rights and duties, including circulating a 6-monthly newsletter for FDWs, conducting random interviews with first-time FDWs, and including safety messages on the 6-monthly medical examination envelopes - all these to enhance the knowledge of their rights and their responsibilities so that they can perform their work much better in a safer environment. Additionally, we issued an employment guide to inform all FDW employers of their responsibilities.

Apart from promotional and educational efforts, the Ministry has stepped up enforcement against employers who wilfully put their FDWs at risk. In 2006, two employers were fined for endangering the lives of their foreign domestic workers, while one employer was jailed after her foreign domestic worker fell to her death while hanging laundry from a ledge.

With the introduction of all these measures, the total number of FDW deaths in 2006 fell by 35%, from an annual average of 37 deaths over the past six years. Nonetheless, there is still room for improvement and the Ministry will continue to do more in this area.

In line with my Minister's announcement that MOM will review the compensation system for injured workers under the Workmen's Compensation Act, we will also be reviewing the compensation for foreign domestic workers who are injured. FDW employers are currently

required by the Ministry to purchase a personal accident insurance for their foreign domestic workers. We will consider raising the minimum coverage of this insurance. We will announce more details later.

Sir, the second issue that I will address relates to the concerns raised today as well as during the Budget debate by Members. My Ministry agrees with Members - Dr Amy Khor, Mr Ong Ah Heng, Mr Yeo Guat Kwang, Ms Irene Ng, Ms Jessica Tan and Mr Ang Mong Seng - on the importance of work-life harmony and the need for flexible work arrangements. Effective work-life strategies are beneficial to both employers and employees. They are likely to make employees more engaged and motivated - as stressed by Ms Jessica - at their workplaces, thereby raising their performance.

This is why MOM, together with the tripartite partners, has been actively promoting work-life strategies since 2004, including recognising family-friendly organisations through the Work-Life Excellence Award. A key partner is the Employer Alliance, which comprises 95 forward-thinking and like-minded CEOs who are committed to promoting work-life to their fellow CEOs. So this is really a grounds-up work - CEOs trying to motivate their fellow CEOs to do the same to ensure that their workers can do their work better and more productive in the process. Over the coming year, MOM will continue to support the work of the Employer Alliance as they develop programmes to bring more employers on board.

I agree with Members that there is room for more flexible work arrangements for the workforce. Our approach is to educate employers of these possibilities and for them to see the business case for doing so. To facilitate the implementation of work-life strategies, MOM launched the

$10 million Work-life Works!, or WoW!, Fund in August 2004. SMEs currently account for more than 90% of the approved projects to build their work-life capabilities and facilitate flexible work arrangements. A significant number of companies have used the WoW! Fund to invest in systems to support telecommuting.

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One example is a small firm called Financial Alliance Pte Ltd. With the WoW! Fund, Financial Alliance assessed the needs of their employees and the business, organised work-life training and introduced a telecommuting project for their employees. The result is a win-win outcome for both the company and the staff, with improved productivity, more satisfied customers, reduced healthcare costs and no employee turnover since the project started a year ago. So, as you can see, the initiative has benefited both the employers and the employees.

Another example is Fei Yue Family Service Centre. The WoW! Fund enabled employees of Fei Yue, especially the middle managers, to undergo extensive work-life training, provided payroll support for their employees to drive the implementation of family-friendly workplace practices and enabled Fei Yue to set up a network for telecommuting. I have been told that both employee satisfaction and customer satisfaction with Fei Yue’s Counselling Services have improved as a result, and staff turnover has fallen.

By the middle of this year, the Fund will be fully committed and would have benefited over 400 companies. Given the positive responses, I am happy to announce that we will be topping up the WoW! Fund with another $10 million. This new stream of funding is expected to benefit more than 1,000 locally-based companies over the next three to four years. We will also be refining the

funding criteria so as to encourage applicants to go beyond the typical measures, like telecommuting, so that there is greater diversity of the types of flexible work arrangements offered.

Sir, let me now touch on the issue of maternity leave.

To complement the work-life efforts, maternity leave was extended from eight weeks to 12 weeks in 2004 as part of the marriage and parenthood package. For the last four weeks of maternity leave, female employees have the option to take the leave flexibly over a period of six months from the child’s birth, with mutual agreement from the employer. Mr Seah Kian Peng has suggested that female employees be allowed to take a larger portion of the maternity leave flexibly.

Sir, the primary purpose of maternity leave is for the mother to recuperate after childbirth. He might have heard this, but I think it is useful to repeat the reply of my Minister because it is an important principle that we are basing on. Since the flexibility option was first introduced in 2004, we found that the take-up of such flexibility has not been high. More than 92% of mothers have opted to take their leave in a continuous stretch of 12 weeks. So, 92% is quite a high proportion. The current provision for flexibility was introduced after extensive consultation with all stakeholders. It is a fair position, bearing in mind the overall purpose of maternity leave and the need to prevent excessive disruptions to business operations. As such, it may not be necessary to make changes to the maternity leave provision at this juncture.

The proposal by Mr Seah and Dr Amy Khor to introduce statutory paternity leave should be assessed in relation to the prevailing working patterns and leave entitlements. The five-day work week is currently the norm and 40% of employees

in the private sector enjoy 15 days or more annual leave. Under the Employment Act, employees are also entitled to two days’ childcare leave per year if they have a child under the age of 7. Hence, it may not be appropriate to impose an additional burden on employers by legislating paternity leave. Nonetheless, Members may be pleased to know that a survey conducted by my Ministry shows that 43% of firms (employing 25 workers or more) currently provide paid paternity leave even though it is not mandated.

In closing, I would like to reiterate that our manpower policies are working. Singaporeans have benefited from these policies. However, in the global race for talent, our efforts to meet the demand for manpower must be supported by strategies to optimise the quality and performance of our workplaces. We must strive for safer and healthier workplaces, with workplace arrangements that can enable our workers to enhance their contributions and optimise their productivity while addressing their personal needs.

We have some time remaining for clarifications. Mdm Halimah.

I have three clarifications to seek.

First, I am happy to hear the programme - the Professionals Conversion Programme - being put in place to help the PMETs. I would like to ask the Minister when will the programme start, how much is being allocated, how many PMETs are intended to be assisted, and who will be eligible.

My second question is on maternity leave. Could the Ministry consider providing better safeguards for maternity leave because, presently, the maternity

benefit of women who are retrenched and who are pregnant is not protected?

My third clarification, Sir, is on foreign domestic workers. Despite all the safeguards being put in place, foreign domestic workers continue to fall to their death, primarily because of two reasons: cleaning the windows and hanging out clothes to dry. Can the Ministry look into how to better safeguard them from falling from high places? Would the Ministry consider banning foreign domestic workers from doing such chores, since employers are not able to protect them?

Are there other Members who want to raise any matter about maternity and paternity leave?

Sir, I thank the Senior Parliamentary Secretary for his reply. But I recognise and I have certainly heard what the Minister has replied that 92% currently take their leave in a continuous stretch of 12 weeks. My clarification is whether for that 8%, we can make it more flexible. For the 8% who currently take the last four weeks, can we make it more flexible by allowing them to take the leave from the fifth week onwards?

On paternity leave, I would like to ask: is there any intention by the Ministry that at some point in time, it will consider legislating it? And, if so, could the Senior Parliamentary Secretary share with us what this timeframe would be?

Sir, on maternity leave, I think we have provisions to protect the maternity leave rights of pregnant women. For those who feel that they are being discriminated, eg, they have been sacked due to their pregnancy, then they can come to the Ministry. We can help them, investigate the case and, if found guilty, employers can be punished.

As regards fall from heights involving foreign domestic workers, as Members know, we have already tightened our regulations and we have instituted measures to advise first-time foreign domestic workers on safety measures that they must take into consideration when hanging clothes out or cleaning windows. Cleaning windows on the outside is not allowed. Currently, we have not banned window cleaning at all but, if necessary, we can look into the possibility of banning it in the future. But we have seen the good results of all these measures taken to help increase the awareness of both the employees (foreign domestic workers) as well as first-time employers.

On maternity leave - flexibility for the 8% who did not consume the maternity leave in a stretch - I think since 92% of our pregnant women consumed their maternity leave in a stretch, it shows that the majority feels that it is the best way to recuperate and develop bonds with the child.

We have no plan at the moment to mandate paternity leave. But, as I said in my reply, there are companies which have already extended paternity leave and it is done based on mutual arrangement between the employer and employee. We can facilitate, and we can encourage, but I think, at the moment, there is no need to mandate this.

Sir, on the Professionals Conversion Programme (PCP), the Minister mentioned that in the next two years, we will spend $20 million for 1,000 PMETs. My question is: how does he arrive at this figure of 1,000? And since it has enabled the PMETs to enter into new careers, would there be an age criterion that only the old PMETs would be allowed, and not the new PMETs?

To answer both Mdm Halimah and Mr Seng Han Thong, we do

have existing programmes to help professionals. As Members know, the Strategic Manpower Conversion Programme which we first started was applied to help nurses because there was a demand for nurses at that time. This was in 2001 and 2002, where there was quite a lot of restructuring and professionals were affected and they asked for help, and we launched that. It was very successful. I met many of those on course - ex-architects, ex-bankers, ex-lawyers - who for a variety of reasons felt that their calling was actually in certain profession. And subsequently, more importantly, the head nurses, the doctors, and the management staff of the hospitals who had these mid-career changes gave very good feedback. They said they were more mature in their views and they were very positive. We extended that scheme, if Members remember, to teaching aid assistants as well and, again, it was very positive. So I thought these two initiatives give us a lot of encouragement to extend it.

Mr Seng Han Thong has rightly remembered that I said 1,000 PMETs costing $20 million over two years. The implementation date is targeted at 1st April of this year. And the amount that was arrived at is based similarly on how much it actually costs to convert someone. Because as Members realised, when you try to do that at the mid-level, it does cost a lot more resources. It costs us about $20,000 a year for training a nurse. When it was about two years, it was about $40,000. So $20 million, about $20,000, some would require shorter; and some would require longer.

While I think beyond the resourcing which I will be happy to extend or increase if it proves successful, it is really to see how we can improve efforts. So, for example, our nursing course, many fed back that actually adult learners could learn faster and they may not need that amount of time because of their working

experience. So I would also encourage beyond just providing the resources for various partners to see how we can more rapidly transit professionals if they want to start new careers. So I think we are focusing on this. I want to assure Members that we will try to help but it will take us time to build up the programmes, and we can learn as we go along.

Mr Chairman, I have a number of clarifications. I do not know whether I heard rightly. I was heartened by the response from the Second Minister for Finance in the Budget debate. But I must say I was somewhat disappointed when I heard comments from the Minister for Manpower just now. So, I would like to ask a few clarifications on this.

Firstly, addressing the concerns over our Net Investment Income, the Second Minister for Finance was willing to study how top endowment funds, such as Harvard University, manage their long- term returns. So I would like to ask the Minister for Manpower whether he would study these endowment and pension funds, maybe even the same endowment funds that the Minister for Finance would be studying, and see how they manage their risk to maximise their returns.

Secondly, the Minister for Finance quoted the comments from Mr Warren Buffet that 4% is a realistic return. I think those comments are academic. I would like to ask: in real life, is the situation different? Is the Minister aware of the kind of returns that endowment and pension funds, in practice, are getting over the long term?

Thirdly, on the investment behaviour and fears that the Minister for Manpower spoke about - and he also cited the writer who contributed his comments to Today - is this not a representative of the typical CPFIS investor? When the

market is up he is delirious, and when the market goes down south he licks his wounds. Like last week, when the market went down south, he licked his wounds. Is such an investor concerned by the short term and focuses on timing the market and picking the right stock? Does the Minister for Manpower not agree that that is a very narrow and myopic view of investing for our long term for our old age?

Fourthly, does the Minister not agree that that is exactly one of the problems that I was asking CPF Board to address, that is, to restructure the CPF Investment Scheme and actively help CPF depositors to maximise their returns? So, for example, if you have $10,000, you go to a private banker, you may not even see the receptionist. But if there are 1,000 CPF depositors, they pool $10,000 together, and so they have $10 million. I am sure the professional fund managers will be very keen to manage this money for them.

2.15 pm

Sir, let me thank Mr Ong for asking four clarifications. He is quite right. We certainly do not want to encourage a mentality where a substantial proportion of CPF members enter into CPFIS. They are punting basically, and they end up with losses. But neither do we, having accepted that we do not want that behaviour, want to put up products which members, with varying degrees of risk tolerance, find it hard to accept. My point was that if you chose the investment yourself and you made losses, it may be a very different reaction if someone, on behalf of you, invests your money.

We have allowed the CPFIS scheme which basically allows you to choose, and we have tried to reduce the expense ratios, set the limits, in terms of the criteria, how they perform, and we have

gone even the extra step. Mr Ong may be aware that now we are capping the expense ratios, in other words, if you charge above this, you cannot receive CPF monies within the CPFIS. That is quite a hard hurdle. Over time, we may even bring it down to reduce the expense ratios.

But beyond reducing expense ratios, there is a market risk, in other words, because you have entered it and you bear the risk. So these are complexities that we have to address. We do want to offer options that may, over the longer term, improve returns compared to 2.5% and 4%. But we will be able to give products that are simple to understand. For example, the Swedish Pension Authority Fund, they started out with a model where they said, "I'll give you a plethora of choices and you choose." And then there was the default scheme. Over a longer period of time, they found that the default scheme did better than what most members did choosing on their own. So we are learning from these experiences. But one of the problems has been that 4% is risk free, there is actually hard to find ex ante a fund that will guarantee more than 4% at this point of time. We will study it, and we will see when we can, at an opportune time, offer options to members.

I also want to make a distinction between NII and the CPF. They are different investment stances, different mandates, and they should not be equivalent. For the CPF fund, the interest rate which members enjoy is risk free. Basically, the CPF Board purchases special Singapore Government securities where there are no risks, in other words, no matter how the market does, you are guaranteed 2.5% and 4%.

Sir, maybe I have missed it. But I believe the Ministry has not responded to my cut on Employment Passes (EP) for freelancers.

My apologies. Indeed, I have missed that. Mr Baey talked about how the creative industry requires certain employment arrangements which do not quite fit into our Employment Pass. Our Employment Pass is more centred on the fact that it is employer based. But he is quite right that in the creative industry, a substantial proportion will be freelancing, which means they do on their own. We had addressed that somewhat. As he rightly pointed out, we have introduced the Personalised Employment Pass. We have also introduced other categories which are more fitted for this. This is the EntrePass and the Professional Visit Pass. We will see whether that is adequate. The EntrePass does not require you to have an employer. But it does require you to have a good business plan. Basically, the problem is this. We want to have a balance between allowing people in to help us grow the industries versus allowing foreigners in that we are not quite sure they are going to add to our economy. So we have to balance that and see how it works. Let us review that. If it is inadequate, we are willing to look at other schemes. But we have just introduced the EntrePass not long ago. So let me evaluate the results of that.

I was very heartened to hear about the progress made with WOW! as well as the Worklife Excellence Award. But I did not hear much about the civil service actually adopting flexible work arrangements in the light of not just part time work, but the kind of work that I was talking about. So I would like to ask the Ministry what has been done to encourage the civil service to also look into that direction because it is a large employer, and it really helps with the worklife balance.

I think the question has been raised in a parliamentary question before, and I am not going to speak on behalf of the civil service. I am not sure whether the civil service is

excluded from applying for the WOW! Fund. I have to check. But, intuitively, I think, not. So if they have schemes, we are quite happy to support.

I was heartened to hear the Minister of State acknowledges that the final buyer of outsourced services is really the one with the ability and in the right position to assert pressure on contractors and subcontractors to comply with statutory requirements. In this case, the Government is a big final buyer. So can the Ministry consider taking the lead to promote better awareness among Government procurement officers? The second clarification is that, unless I have missed it, I do not believe that there has been a response to my suggestion for the Ministry to consider updating the Employment Act to take into account the need for continuous service as well as the current eligibility criteria for certain statutory benefits.

I think it is important for us to bear in mind that the responsibility for fair employment practices lies with the contractors themselves. While it is useful and value adding for the outsourcing companies to work with the contract suppliers to ensure compliance, we must not run away from the basic principle that the contract suppliers themselves are fundamentally responsible and legally liable to provide fair employment terms to their employees, including payment of CPF. Again, like my Minister, I do not want to answer on behalf of the civil service. But, certainly, MOM will work with the civil service to look at how we could further improve our right sourcing practices within the civil service.

On her second question about continuous service, yes, it is one of the areas that is of concern. I think we will monitor the trend and we will also collect

feedback from the employees and workers, and if indeed it is a problem, we will address it. There are many ways of addressing it other than by legislation. One way is through persuasion, promotion and education, both at the employer side as well as the employee side, because the employee must also be aware of his rights to insist on a continuous service. Also, we want to work with our tripartite partners, the employers, and persuade our employers to be enlightened. Up to a point, we can also include this into the tripartite guidelines for employment practices so that we will work with our tripartite partners for fairer employment for all our workers.

Sir, I just want to further clarify on maternity and paternity leave. The Senior Parliamentary Secretary argued that because 92% of mothers take their leave at one stretch, therefore, the 8% flexibility is not an issue. In the same breath, he argued that 43% of companies that were surveyed offered paternity leave, that is a minority position. So, heads you win, tails I lose. I find this a bit disturbing because for all the talk about pro-family and procreation, I think this goes against the thrust, and there is not even a definitive timeframe. The Senior Parliamentary Secretary is saying that this paternity leave legislation is not even on the radar screen. I find that is a bit disturbing.

I hope that Mr Seah is not too disturbed. But let me put the issue into perspective. My Senior Parliamentary Secretary said actually more than that. The main point was that we have just moved on the pro-maternity package. Many of you in this House were consulted and participated in the stakeholders' group. In fact, I well remember at one meeting where we were discussing the extension of maternity leave. The men, like Mr Seah, were quite for it. But it was the women, who said, "Please do not do too much of it." I

looked at them and said, "Why?" They were being very practical. They said, "If you extend it too long, it would affect our employment opportunity." They were being very practical and, therefore, we rolled it out.

As the Senior Parliamentary Secretary rightly pointed out, the maternity leave is based on the time required for the mother to recuperate. We extended it from two months to three months, and we said that the last month could be taken over six months if she wanted it. But we must not run away from the idea that there is no cost in that sense. The Government is willing to bear the extra four weeks because we do want to improve the fertility rate and therefore we are willing to pay for this. Even beyond that provision, there is a disruption to businesses and employment prospects. So there is a trade-off. It is not just one sided. Every time we move, we have to consult with businesses to see how, in the longer term, this can be helped.

Having said that, there is a committee that is overlooking this issue, chaired by the Deputy Prime Minister Wong Kan Seng, and we discussed these issues. We want to evaluate the results. After we spent X hundred million of dollars, reduced to a five-day week, extended maternity leave, we are very, very happy to say that we have got 500 more babies last year. So let us evaluate this and see where are the right measures because more of the same may not necessarily give us the results. One of the conclusions, from our ongoing reviews in that committee now, is that for those who are married, they actually produce 2.1 babies. That is the replacement level for those who get married. It has come down from 2.8, but at least they are replacing themselves. It is the larger percentage, as DPM Wong rightly pointed out in his reply, the growing proportion of singlehood and marrying later. So this seems to be two areas that we should

focus on. How to make it? If you like a positive experience, marry early and have your first child early. That may yield better results and higher fertility rate.

On paternity leave, I have looked at the data and the countries that have introduced it, I think the men will like it, but I am not sure that it will lead to improved fertility rate.

Sir, the Senior Parliamentary Secretary clarified just now that there are existing safeguards to protect the maternity benefits of pregnant women in the event of retrenchment. But I would just like to say that in our law, when a pregnant woman is retrenched, her maternity benefits will not be protected. So I think for the woman to have access to that right, the law would have to be amended. I would like to ask the Ministry to consider amending the law to make it very clear that the maternity benefits of pregnant woman will be protected in the event of retrenchment. This is very fundamental in court because, otherwise, it would also act as a deterrent to women having more children and that would affect our population policy.

Sir, we understand these concerns. For those who are having problems, we are managing the issues. But we are also monitoring the development and see whether all these reviews are necessary in future. We are not closing our mind to any possibility. What we have reported is that we have made progress. We are protecting our workers, including our pregnant women. And we are sending a very strong signal to employers that they should not discriminate against pregnant women. These are all working at the moment -

and we keep our options open in the future.

2.30 pm

Sir, I am happy that the Minister has said that they will

ensure that all employers who employ foreign workers must produce proof of their accommodation. I am not sure what the details are, but it cannot be just showing proof of address because, at the end of the day, it will be like the heavy vehicle parking situation where all the car park lots are taken but the heavy vehicles are not there.

On the issue of medical insurance, I think the Minister said that, for many employers, they do already have some form of hospitalisation and surgical plan that they can actually purchase or get their workers to be insured. But I am worried about those places where there are less than 50 workers, and these small and medium enterprises which employ foreign workers would not be able to get an insurer to insure them. That is not only for the foreign workers but also the local workers on contract.

Sir, I agree with Mr Yeo that when MOH withdraws the subsidies for foreign workers, MOM responded by saying that it should be mandatory for employers of foreign workers to purchase some form of medical coverage for their workers. He is right again in pointing out that most big companies have already purchased medical insurance but the small companies with small groups of workers may have problems. This is the very reason why we have tried to facilitate this by requesting for proposals for insurance companies to offer this product and we are facilitating this. So this is one area that we are looking at.

For housing, he is right. We are a bit smarter than that. We do not only require you to give us an address. That address allows us to check up and to make sure that there are acceptable conditions. We are calling this for a number of reasons. Some years ago, we launched a

requirement that I needed to know where your foreign workers were housed. This was after the SARS epidemic. For control of that group of population, we needed location-specific aspects. So we launched that and we are just extending this.

Mrs Josephine Teo asked about whether we are reviewing the Employment Act. We do make regular reviews and I think it makes sense to look at the benefits when work arrangements change. The fundamental change now is, as Members have rightly pointed out, there is an increasing proportion of contract workers, different working relationships, and we have to see how our Employment Act continues to be responsive to them. We may not want to make changes to all benefits, because certain benefits, for example, may apply to certain groups. But we are looking in that direction. Other benefits, eg, sick leave, we may have to review that. So, yes, we are making reviews.

I will allow clarifications till 2.40 pm, so please keep your clarifications short so that we will all have a chance. Dr Fatimah Lateef.

Mr Chairman, Sir, I have two clarifications. The first one is on leave but it is not maternity or paternity leave. Seeing that we are encouraging Singapore to become the philanthropic hub and also the volunteer capital of Asia, and companies are now being judged on the triple bottomline of their economic performance, environmental contributions as well as social contributions, is the Ministry considering formalising to a certain extent volunteer leave, and to support the proposal?

My second clarification is on industrial accidents. We are seeing more industrial accidents at the hospital. I do not think the numbers have increased but probably more serious ones perhaps, and often

these are traumatic in nature. Most of them happen at construction sites, as you probably would gather. Are there plans to enhance the initial management of these casualties on site, ie, before the arrival of the ambulances, because a lot of damage or deterioration can actually happen before the ambulance arrives and these examples could be related to spinal and limb injuries? So are there any plans to empower or train some of these site supervisors to help out before the arrival of the ambulances?

Sir, I am pleased to report that, yes, we have taken all these needs into consideration. We are requiring our companies to train their supervisors, safety officers and managers, people through the ranks, to ensure that their ability to manage hazardous situations, and when accidents happen, can be enhanced. Accidents do happen. We want to make sure that workers of different levels are able to manage. How they manage different situations is very difficult to generalise. But we do require companies to train their workers and supervisors, have a system, risk assessment, and to make sure that their workplaces are safer.

Sir, there is also a question of leave for philanthropy. There may always be a tendency to mandate all good things. Yes, we must encourage people to do good, community service, whether in Singapore or overseas, and we are encouraging these in our schools too. But we should take caution that we need not necessarily use the law to encourage such good heart and good practice. What we need to do is to educate more employers to practise in a light-heartedly way in approaching requests for leave for such purposes, and I think it is working already.

Sir, I want to come back to the MOS' point earlier about setting the terms and conditions for

outsourced workers. In his reply, the MOS mentioned that it is out of the reach of the Government to determine the contractual conditions of these outsourced workers. Surely, the MOS will also know that as a standard requirement, the Government, in outsourcing some of these contracts, can specify the parameters and the standards. I am not sure whether the Ministry of Manpower can prevail upon the civil service to lead by example. My point is that if the civil service does not lead in setting the employment standards and conditions of these outsourced contract workers, then it would be very difficult to tell the private sector to do likewise.

Mr Chairman, Sir, I just want to clarify that I did not say that the outsourced contracts are beyond our reach. I mentioned in my reply that even outsourced contractors are bound by the Employment Act and they will have to follow similar employment terms and conditions.

With regard to the civil service, my response was that we will continue to work with the civil service to improve the best sourcing procedures and to work into the best sourcing contracts to ensure that workers' benefits and interests are protected.

Mr Chairman, Sir, a clarification about the case of the mother coming up with cash to help her son to buy a property. My proposal does not detract from our existing measures to deter speculation in properties. The buyers still need to come up with the 5% cash. The change I am proposing is, instead of paying this cash directly to the sellers, that the parent is allowed to put this cash into his own CPF account. It is still cash, but it goes through the CPF, so that it ranks equal to someone who uses the CPF to pay for the property. I do not think this requires an overhaul of the CPF rules. It is also not meant to solve

domestic problems. It is meant to protect the interests of another Singaporean who may not be a CPF account holder, vis-a-vis the interests or rights of a CPF account holder.

Sir, just one clarification. The Minister reported that there will be 450,000 jobs created over the next five years and that about 50% to 60% are mainly for the PMETs. I presume that about 40% of the jobs will be blue-collar jobs mainly for the process and construction industries, which are mainly for the foreigners. How many jobs are actually available for older Singaporeans and, of these jobs, how many are low-paying jobs below $1,000?

Sir, the numbers we projected were based on, of course, the macro-economic factors which basically suggest that, if our economy grows as in the past for about 4% to 5% till 6.5%, this is the number of jobs that the economy creates. Again, out of those, more than half would be requiring expertise at the professional and technical levels.

Dr Teo asked how many of them are low-paying jobs. Usually, it is about a third, a third, a third. In other words, that is the usual structure of the jobs created. Not quite right to say that the majority of them are in the process, maintenance or construction industry. That is not the case. For example, we have said that, over the next three or four years, because there is a stream of big projects coming online, BCA estimates that the annual contract values would go up to about $17 billion, which will require about 30,000 workers to do that. So, that is not accurate.

How many jobs are available for Singaporeans? I would reverse the question and ask, "How many

Singaporeans are there?" I made the point yesterday that, for our employment rate for those aged 25 to 64, in other words, of all available bodies in that group, 90% are working. And that 10%, for a variety of reasons, may not want to work, be able to work or need to work. If you are well-off, you may choose not to enter the labour force. So we are actually one of the highest rates in the world for workers. And, annually, on average, we can supply about 30,000 workers. If the economy needs 90,000 workers, we will have to make a choice.

First of all, we can say we want to increase the productivity of each Singaporean to work as many as two or three workers, then that would solve the problem. Perhaps we could do that, but that is unrealistic. We could try to bring in more of those who traditionally are working, eg, the older women, as I pointed out yesterday, or extend those and say, "Let us retire later." But even if you did all that, every year, as I said, you supply 30,000, that is the supply. You could extend it by 40,000 or 50,000, but the economy, if it grows, may need 90,000.

So we have judiciously used foreign workers to meet the demand and allow our businesses to grow. And this is the way that we have grown our industries. For example, the aerospace industry. When we wanted to attract and make this a maintenance, repair and overhaul (MRO) hub, we did not have the technicians and we allowed companies to hire as many as 70% or 80% foreign technicians because we did not have that ready supply of technicians. At the same time, we started programmes in the polytechnics so that now they are coming online to take those jobs. That is how we have cleverly, and to our advantage, used this flexible labour market, and I would encourage us to continue to think along those lines and not to see this as a lose-lose proposition, ie, every time we bring in a foreign

worker, a Singaporean loses a job. As I pointed out yesterday, our figures show that, in the last five years, every time a foreign worker comes in, three jobs were created for Singaporeans.

Mr Ong Kian Min asked about this particular case. I think the policy, that whatever you use from your CPF to purchase a house and when you sell it it goes back to the CPF, is a correct one. It protects the member. He is trying to address a separate problem, when a mother gives the money to the child and he is trying to use the CPF route to do that. My point to him is that the CPF is a big system. It requires many needs. He may not see the other needs, but it is a system that works well, that protects the members' funds from what they have used. So I think we should keep to that. We should not try to change it. There is nothing to stop now. The parents can already voluntarily contribute up to a maximum of $24,000 a year to their child's account. They can already do that. And they can choose to use that route, if they want to.

Mr Seng Han Thong, would you like to withdraw your amendment?

Sir, I would like to thank the Minister, MOS and SPS for their frank answers to our practical questions, and the positive response to our constructive suggestions. I also thank the Minister for the good news he brought to the House, eg, the 450,000 jobs to be created over the next five years, the introduction of the PCEP for the PMETs that will help cheer them up, and also the relaxation of the CPF top-up that will really help promote family bonding.

On this note, Sir, may I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn.

The sum of $219,409,290 for Head S ordered to stand part of the Main Estimates.

The sum of $24,882,800 for Head S ordered to stand part of the Development Estimates.

Head I - Ministry of Community Development, Youth and Sports

Head I - Ministry of Community Development, Youth and Sports. Mr Sin Boon Ann.

Social Assistance

2.45 pm

Sir, I beg to move,

That the total sum to be allocated for Head I of the Estimates be reduced by $100.

Sir, in his reply in last year's Committee of Supply, the Minister made the point that if one were poor, there is no place that we would rather be poor in than in Singapore. I cannot agree more. Many of us have travelled extensively all over the world. In almost all of the countries that we travel to, it would not be uncommon for us to come across the destitute and the homeless. We see this not only in less developed countries, but also in developed ones as well.

In Singapore, we are indeed proud of the fact that we hardly have homeless destitutes sleeping rough in our streets; nor do we have people going without medical care or people going to bed hungry without food. We provide shelter for the homeless and we consistently assured our people that there will always be a social safety net for them.

However, that does not mean that there is no room for improvement on our delivery of social assistance. In the course of our meet-the-people session, we would typically come across families and

residents that are in great distress, financial or otherwise. Often, we would have to write to various welfare agencies to get financial or other assistance for them. And often, the help required is quite immediate. Unfortunately, our common experience on this score has been the relative tardiness in the delivery of help to them. Sure, ComCare allows the grassroots organisations to provide immediate relief. However, there is only so much help that the grassroots can extend. It is not uncommon for these agencies to take a while to respond; and even if they did respond, assistance rendered is often short term in nature and does not seem to address the deeper and longer term difficulties of the people in need.

Recently, I wrote on behalf of a resident who was poor and unable to help herself and members of her family, many of whom were school-going children. I could see that this resident was rather desperate and I thought that she would have required longer term intervention.

Unfortunately, it took a while for the agency to reply. Even in its reply, the response of the welfare agency was that the resident had already received some interim assistance earlier, particularly the Straits Times Pocket Money Fund and was no longer entitled to further renewal. The reply further indicated that the agency had written to other agencies and had not heard from them. There was no indication about what further steps are being taken to help the resident concerned. A copy of the reply was extended to me.

Sir, I was rather disturbed by the reply. Firstly, it took a while for the reply to come. Secondly, the reply merely gave the stock answer that the children had enjoyed the benefits of Straits Times Pocket Money Fund for the year and are

therefore no longer entitled to further renewal. Nothing was said about whether the welfare of the children would be looked after despite the withdrawal of the benefit. Will the children be left to go hungry as a result? Thirdly, the reply merely said they had not heard from the other agencies they had written to and would be writing to them again. That is fine; my concern was for the family and what was going to happen to them in the meantime.

Sir, this episode led me to wonder whether in the context of our social assistance delivery, our agencies are mindful of the urgencies that confront many of the families and that it is not enough if they just merrily wrote to various organisations to ask for assistance while the family in need continues to wait. In law, there is a maxim that justice delayed is justice denied. In this case, I wonder if the welfare agencies are equally mindful that social assistance delayed is also social assistance denied.

I would therefore like to ask the Minister whether the Ministry keeps tabs on the performance standards of the agencies that deliver social assistance and whether these agencies are measured in respect of their performance and, in particular, the outcome. Perhaps, the Minister would also like to enlighten me if the Ministry has any scheme that calibrates the subvention that is given according to the performance of the welfare agency concerned.

Sir, many of the poor Singaporeans need long-term assistance. May I ask whether public assistance (PA) allowance is commensurate with inflation? Has there been any study done on the adequacy of PA allowance? Does it serve the needs of the recipients? Could MCYS review and ensure that PA recipients do not go through hardshi,p such as skipping one meal a day, just to make ends meet? Could MCYS be less stringent on the

approval of PA cases in view of our widening income disparity in order to preserve our social fabric?

Mr Chairman, Sir, I would like to ask the Minister what are the results of the review alluded to by Minister of State, Mrs Yu-Foo Yee Shoon, in reply to a question by the hon. Member for Jalan Besar GRC earlier. She gave a cliffhanger of a reply saying that there was good news pending a review.

The Budget provides some support for low-income to help cope with the GST increase, but how do we help those on public assistance? Can the Minister enlighten us on what is the level of subsistence that is required for this group of people at this time and age? What are the results of its review?

Sir, I am the advisor to the Amalgamated Union of Public Daily-Rated Workers Union. One of the union leaders there tells me that the estimated earning of a cleaner is about $800 to, at most, $1,000 a month. Many daily-rated employees from the public service, in fact, have to go for a second job to supplement their earnings. In particular, the ones who are struggling with their daily lives are the ones in families with single working parent, for example, the spouses are not fit to work and, therefore, the burden lies on the worker himself. For elderly daily-rated employees who are lucky to have children's support, this burden can be lightened. But while they get money from their kids, senior daily-rated employees above age 55, need more money to meet their medical needs, daily expenses and HDB mortgages and utility bills.

Sir, these people are struggling with $800 and now, with Workfare, they can get more help. Sir, I wonder how then can anyone manage on $260. Yes, it is true that people on public assistance get free healthcare and do not have to worry on that count. However, I know that many other costs have increased. Take,

for example, the prices of essential products. As you all know, I work at NTUC FairPrice and, for obvious reasons, we keep a close eye on this as it is part of our social mission. In particular, our everyday low-price items are essential items. While we are generally cheaper than our competitors, we have noticed that prices for these are also trending up over the last three years.

In fact, as part of our social mission, we recently announced that we will be absorbing the 2% increase in GST for all our 400 everyday low-price items, ie, essential products for a six-month period from July. These essential items include oil, rice, instant noodles, sauces, canned fish. Sir, this is not an advertisement for NTUC Fairprice. Quite the reverse, it is to show that even in a cooperative which prides itself on being price-competitive, prices do creep up, a phenomenon which is beyond our control. And this will impact the people on public assistance for whom every cent counts. Given this, I urge the Minister to consider giving them a decent significant increase, echoing what Dr Lily Neo has been pushing for the last few weeks.

Sir, there are fewer than 3,000 people on public assistance in Singapore. This is a very small number compared to the more than 100,000 who are considered low-wage in Singapore. Given this small number, we can do a lot for them without greatly affecting our fiscal position. As I pointed out in my speech earlier during the Budget debate, a doubling of their allowance could have been done by not giving GST credits to those well-to-do and channelling it to these needy Singaporeans instead. Sir, I am not suggesting a doubling of the allowance, just a significant increase and on a timely basis.

ComCare

(In Mandarin): [For vernacular speech, please refer to

Sir, I would like to take this opportunity to wish all the ladies a happy International Women's Day.

Sir, last year, Prime Minister Lee Hsien Loong announced that the Government would set up the ComCare Fund to help care for low-income Singaporeans with financial difficulties. ComCare Fund has since helped many poor families who need urgent financial assistance. This is a good scheme, like the Chinese saying, “雪中送炭” [xue zhong song tan] - to send charcoal in snowy weather, meaning that it has provided timely help for the needy. Although we have achieved strong economic growth and created many new job opportunities last year, helping the less educated and older Singaporeans remains a great challenge for us.

During my meet-the-people sessions, I have come across at least 10 residents who are genuinely in need of financial assistance. Currently, the Community Development Councils (CDCs) have allocated $40,000 of ComCare Fund to each constituency, but this sum is still not enough. In this respect, I would like to suggest that the Government consider allocating a bigger sum of ComCare Fund to each constituency so that we can help the needy solve their financial problems.

At the moment, all financial assistance applications will be directed to CDCs for approval and this process can take a very long time. This is due to the large number of applications and hence the CDCs require a longer processing time. In this regard, many residents feel that “远水救不了近火” [yuan shui jiu bu liao jin huo ]- distant water will not put out a fire close at hand, meaning that a slow remedy cannot meet an urgency. Therefore, I would like to suggest that the ComCare Committee of each constituency take over this role and function. They will examine

and assess these applications at their end. Through the Internet, they will keep in close contact with the CDCs so that financial assistance is given to those who need them in the most prompt and effective way.

*Cols. 3447-3448.

Mr Chairman, Sir, like Mr Ang Mong Seng, I would also like to take this opportunity to wish all the lady Members in this House and all the ladies out there, a "Happy International Women's Day".

Sir, my first cut is on ComCare. Originally, I wanted to request the Ministry to make the ComCare database widely accessible to all the VWOs. However, after filing my cut, I received a circular from the MOS that the ComCare database now is available to 134 agencies. Sir, I believe this must be a pure coincidence. Anyway, as my question has been answered by the Ministry’s action, I have nothing further to comment on the ComCare.

I would just like to move on to my second cut, which is on the HOPE scheme.

Home Ownership Plus Education Scheme

Sir, I would like to first declare my interest as a staff member of the Chinese Development Assistance Council, which is an outreach agency of the MCYS for the HOPE Scheme. HOPE is the acronym for Home Ownership Plus Education Scheme.

The HOPE scheme was launched in 2004. I would like to request the Minister for an update on the progress of this scheme which has been implemented for about two years now.

As one of the outreach agencies, CDAC has made limited progress in the HOPE scheme, not, I think, because of the lack of effort, but mainly due to the rather stringent eligibility criteria.

Sir, the CDAC has checked through its 2,500 bursary students to identify the potential families for the HOPE Scheme. Out of these 2,500 low-income families, only 20 families were found to be eligible at the first screening. After sending letters to these 20 eligible ones, only five had applied for the scheme. Those who did not take up the scheme said that the criteria were too stringent. I have been told that a similar situation is also facing other outreach agencies.

Sir, the aim of the HOPE scheme is to help the low-income families keep the family size small, and the Government will assist them to build a better future through a range of financial incentives. Indeed, the original name of the scheme is called Small Families Improvement Scheme (SFIS). I understand that the response to this scheme had been lukewarm and, hence, the MCYS had to revamp it and change the name to HOPE.

The eligibility criteria of the HOPE scheme are as follows:

the mother's age must be 35 or below;

with no more than two children;

the monthly household income must be $1,500 or lower;

the father must be working; and

one of the parents must be a Singapore Citizen, and the spouse must be a citizen or PR.

I understand the rationale of setting these criteria as the HOPE scheme is specifically meant to help low-income Singaporean families to stop at two children. With the Government’s incentive schemes, they will receive a housing grant to ensure that they have a roof over their head, their children will receive bursaries

to pursue their education, and the parents will receive training grants to upgrade their skills. The total quantum for each family can be up to a maximum of $100,000. All these are designed to help the needy family break out of the poverty circle.

Sir, we often hear that the proof of the pudding is in the eating. While we can have very sound principles and rationale behind any good scheme, if very few people are eligible to take a bite at it, the pudding will be left on the tray. It will become mouldy after a while, and needs to be replaced by another pastry called cake. The SFIS is like the pudding and the HOPE scheme is like the cake. If many people are also not eligible to eat the cake, the cake will become mouldy and needs to be replaced by another pastry yet again. Sir, if nothing is done to the cake now, I fear that the mouldy history will repeat itself.

Sir, I have learnt from a report in the New Paper in September 2006 that only 600 out of 6,000 families have joined the HOPE scheme and the Government is aiming to sign up 1,000 by 2008.

Sir, my questions are:

Why is it that only 10% of people have signed up?

Why set a low target of 1,000 by 2008 when there are about 6,000 families out there who can benefit from the scheme?

Sir, the HOPE is a good and generous scheme. The best thing is that, out of the $100,000, not all the money goes in the form of handouts, but also an investment for the future, as much of the money goes to home ownership, skills training fund for the parents, and education grant for the children.

As only 10% of the eligible families have taken up the scheme, I hope the Minister can re-examine the eligibility criteria to see if they are indeed too stringent and not appealing to the target group.

Sir, due to the very strict criteria, we have seen how the Small Families Improvement Scheme has become "So Few Families in the Scheme". And now that this scheme has been replaced by the HOPE scheme, I really hope that the current criteria will not make this new scheme to become a "Handful Of People Eligible" scheme.

Charities

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Mr Chairman, Sir, the charity sector is paying a high price for governance as a result of the NKF and Youth Challenge sagas.

Many charities, particularly smaller ones, are facing difficulties with governance and operational funding issues. I raised this in a previous Parliament session. Many face high cost of audits and few willing auditors. Today, donors are also more careful and insist that their donations benefit benefactors directly. Charities, therefore, have a difficult time funding their operational costs and paying their staff. This worsens the problem.

Sir, the Minister mentioned that measures are under way to simplify governance requirements and that it would take time for the market to come to equilibrium on the accepted prices and quality of service. My question is: how long are we prepared to wait? What measures is the Ministry considering to address the issue of cost of governance, lower funds raised for operational expenses and lack of willing suppliers to fulfill governance requirements?

The recent move to improve social workers' salaries is also a welcome boost. However, this does not cover support staff who play important roles to deliver charity services. They number about three to four for each social worker. Due to low wages, their attrition rates are also high, negating the NCSS' efforts in training and building capacity to strengthen the charity sector. I urge the Ministry to benchmark and review the salaries of this group and provide sufficient funding for the sector to employ good staff to help our needy more effectively.

Sir, my third point is that the removal of the 80:20 regulations in the Budget to promote philanthropy and attract overseas NGOs is a welcome one. However, many charities also fear that this will result in greater competition for donations and human resources. Smaller local NGOs may not have the ability to compete on services as well as benefits. Perhaps the Ministry can look into levelling the playing field by levelling tax deduction benefits for small charities and other local NGOs in the people sector to help them compete for donations. For a limited period, the Ministry can also consider helping the sector with more development funds to bridge the capability gap and up-skill their human resources.

Many have referred to this Budget as one that will help to lift all boats, big and small. But let us not forget that there are others without boats or non-functioning boats who will otherwise sink or drown as the tide rises, unless we put together a stronger safety net by strengthening the charity sector.

Sir, I need to declare that I work for CapitaLand which has a charity arm - CapitaLand Hope Foundation focusing on underprivileged children.

With the recent episodes of NKF and Youth Challenge, it is timely that a Commissioner of Charities is appointed with the support of the Charity Council. It is necessary to require charities to practise good governance and provide transparency in order to reinstill confidence in the public.

In the spirit of the 3P approach where the public, private and the people sectors can all play a part, we need to find ways to encourage greater philanthropy in the society with the Government playing a leading or catalytic role. Based on a piece of research by the National Volunteer and Philanthropy Centre (NVPC) on the landscape of giving in Singapore, over 18 months between 2004 and 2005, corporate philanthropy in the private sector constitutes a miserable 12% compared to individual and grant makers' contributions at 46% and 42% respectively.

In the list of about 2,000 registered charities, I did an estimate of the number of corporate charities crudely based on whether the names have a linkage to a company's name, I can only find not more than 10 names. This represents less than half a per cent of all charities.

NVPC's corporate giving survey in 2004 also shows that Singapore's corporate gave 0.22% of its pre-tax profit to charity, which is a lot lower than the 1-2% in the US, UK and Canada.

With many Singapore companies achieving record profits, we should find ways to encourage corporations to boost up the private sector on the 3P philanthropy pie. Companies contribute to charity for various reasons. Some have an altruistic desire to be socially responsible corporate citizens, some do it for good name, and others may be motivated by tax reasons, eg, the double tax deduction when they are registered as IPCs.

There are also companies which set up their own charity arms where their own corporate financial resources are dedicated to philanthropic causes. In these cases, where no public money is raised, there should be less stringent regulations for these corporate charities. Sir, I do hope that the Ministry could look into ways not to impose unnecessary restrictions but to give greater incentives to encourage companies to be more proactive in corporate philanthropy.

Dr Loo Choon Yong is not present. Mr Wee Siew Kim.

Voluntary Welfare Organisations

Sir, the National Volunteer and Philanthropy Centre released the results of its study on institutions of public character (IPC) recently. Some of the IPCs' top concerns are donor fatigue and limited resources for a dedicated fund-raising staff. Will the Minister be looking into these concerns?

Depending heavily on volunteers is also a problem, as the report notes that there is a "lack of commitment from volunteers" and difficulty "sustaining volunteers' interest". One solution would be hiring more professionals to run operations. The needs of those we try to help require that our VWOs become more professional and improve their standard of operations. VWOs will require help from the Ministry to make the transition. Additionally, are there any measures to motivate the volunteers?

Government agencies must also pitch in. I have one example. I have a home in Buangkok which houses autistic children. Some of them need weeks to familiarise themselves with the dental chair before starting treatment, and the dentists have to be very patient. There are two private practitioner dentists that come in weekly.

They have been asking for the assistance of nurses from the Ministry of Health without success so far. Not only are they patient with the autistic children, they too have been very patient with the Government agencies. Can the Minister have a forum where the VWOs can go for help, so that they can coordinate with all the Government agencies?

Sir, I have three points to propose to MCYS to better the social service sector in Singapore. They are to do with:

Essential services;

Cost of governance; and

Volunteerism rate.

First, on essential services. In most countries, the state considers services to do with health, education and security to be "essential services", usually performed and managed directly by government or government-linked agencies. It is not so in Singapore, as charities take on quite a host of activities, like community hospitals, early intervention and even special schools.

Sir, in the "outsourcing" of services to the charity sector, I suggest MCYS or PMO take the lead in developing a decision-making matrix on what might be considered "essential services" and what should be undertaken by state or charity. We must make sure that there is "mindful" instead of "mindless" outsourcing decisions.

Let me give one example. For many years, families and professionals were always speculating on services and service providers in the disability sector. Many made ill-informed decisions and inaccurate comments which led to wastage and negativity.

A couple of years back, a very critical one-stop Disability Information and Referral Centre (DIRC) was set up to provide comprehensive information regarding all forms of disability services and service provider data like waitlists, fees and so forth - very important information. This important function was unfortunately outsourced to a charity organisation. Because that particular VWO does not have the clout or the influence to mandate other service providers to update it constantly, this centre has been under performing through no fault of the charity organisation or its staff - not excellent services, not very useful to the community it is meant to serve. This was clearly a function that is best run by one of the Government or Government-linked departments, which has a more direct access to data submitted and more authority to get updated information.

Sir, I ask that more mindful thought be given to what constitute essential services.

My next topic, Sir, is regarding cost of governance in VWOs, as mentioned by some of my colleagues here. It is a right direction to upgrade governance standards - no qualms about that. The Charity Act and the Charity Commissioner have their part to play. But this begs the question - who should pay for the cost of governance?

I ask, Sir, because the cost of governance cannot be loaded fully onto the VWOs. Many donors or funders pride themselves in funding only services that directly impact beneficiaries. This is a catch-22 situation. The bigger the operations, the higher the risks and the greater the need for a chief executive, auditors and a competent financial professional. And yet few funders want to pay for these costs. As a result, the VWOs spend their time trying to raise

funds and less time is available for governance matters.

Sir, I propose that the Ministry and the agencies, like the NCSS, the Charity Commissioners and even NVPC examine the traditional funding mindset and help to co-fund the chief executive, the auditor, accountant or chief financial officer in some of the bigger VWOs. Before telling especially the bigger VWOs to shape up, value-add by footing the bill for some of these costs of governance for those which are larger than, say, $5 million in revenue or operating expenditure, and especially those performing essential services that the state decides not to take on.

The Thye Hua Kwan Moral Society is one example. The Moral Society runs a host of community services, including the Ang Mo Kio Community Hospital, Early Intervention Centre, counselling centres and the like. The CEO of this $30 million operation receives a monthly salary of $7,100 - I would say a charity pay for an operation of this size. We cannot afford the sorely needed financial chief nor internal auditor to oversee this vast operation. And the same can be said of many large VWOs. It will then make sense for Government or enlightened donors to defray some of these costs of governance. Sir, I hope the Ministry will be able to facilitate that.

The third area I am concerned about is the volunteerism rate in Singapore. The volunteerism rate in Singapore has hovered around 15%. This is much lower than that in developed countries, such as the United States, Japan, Britain and Canada. My prophecy is that things will get worse, as it is getting very difficult to get competent and committed professionals to sit on the boards of VWOs or to be volunteers.

I ask the Charity Commissioner and all the appointed sector auditors to help the

VWOs and be careful not to end up witch-hunting and dampening the spirit of volunteerism amongst the professionals. If anyone were to look hard enough, I am certain you will find something that is out of line in most of the 2,000 VWOs in Singapore.

Sir, the Charity Act alone nor the Charity Commissioner and all their auditors may not be able to prevent the NKF-type frauds from happening again. Those of us who have sat on even corporate boards know that there is no way a director can know in-depth the business operations of a firm through quarterly board meetings - not even when you are in a Audit Committee. Only attracting and retaining the right executives and volunteers, with both character and competence, can we prevent another NKF saga.

Sir, let us not discourage them. Help us. Be careful not to witch-hunt.

Person with Disability

Sir, we want to build a Singapore society that is fair, just and inclusive. It must be a society where everyone, no matter the colour of his skin or his belief, must feel that he or she is a member of; and this must include those among us who, whether by birth or otherwise, are disabled mentally or physically.

We have come a long way in accepting disabled persons as equal members of our society. For many of us, we have handicapped friends whom we are proud to be associated with. Personally, I know a number. I can think of my old friend, Henry Ho, not much older than I am but who is a polio victim. Henry did not allow his polio condition to affect him in any way. It did not stop him from living life to the full. He swam, learned to cycle, and graduated from our local university. His physical condition did

not set him apart from my other friends. In his zest for life, Henry was inspirational.

There are others who are even more inspirational. I can think of David Lim, our very own Singaporean who led the first Everest expedition. David was paralysed by a rare nerve disorder and upon his subsequent recovery, made him a disabled person. That condition did not stop David from attempting to climb the highest peak in the Americas, which he did in February 2000.

Henry and David are but just two of the many examples that all of us are able to recount of the handicapped Singaporeans who were able to overcome their physical limitations and lead fulfilling lives. Their journeys were no doubt fraught with much difficulties and obstacles, and their effort made more challenging because of their conditions.

3.15 pm

Unfortunately, for every Henry and David out there, there are many who are not as fortunate. For them, life is a constant struggle. Being handicapped is often a condition that has prevented them from finding gainful employment and to lead meaningful lives. While society may learn to accept the handicapped socially, it is still struggling to accept them as working colleagues.

Indeed, it is still a challenge for the handicapped to find fair opportunities at employment, both with respect to getting past that door for the interview and being given a fair shot at promotion. Beyond the recognition and acceptance that our handicapped fellow Singaporeans may be different, we must be prepared to engage them without discrimination and accept them as they are.

The Government, to its credit, started a number of initiatives to help the disabled in our society. One key initiative is the Enable Fund which is aimed at providing persons with disabilities equal opportunities in the job market. Equally, I noted with much satisfaction last month when we were updated of the initiatives of the Government to form the Enabling Masterplan as part of the overall ambitious approach by the Government to deal systematically with the needs of the disabled from education to employment opportunities.

I applaud the Government for these initiatives. However, we do know that we are still some distance away in educating our society to be open and broad-minded in our approach and treatment of the disabled in Singapore. I do hope that the day will soon come where we will learn to accept our disabled brethren equally as a member of our family, where they will be judged not by their physical appearance or mental ability but by the strength of their character.

I would like to ask the Minister, therefore, whether there has been any significant improvement in employment of our disabled Singaporeans since the commencement of the Enable Fund and whether he is able to share with us some of the major initiatives that the Enabling Masterplan Committee is contemplating at the moment.

Caregivers' Allowance

Mr Chairman, Sir, Jane, a 45-year-old mother of an eight-year-old boy was doing well as a secretary in an American MNC nine years ago. But at age 36, she left to become a full-time homemaker and care-giver of her 82-year-old mother who is bed-bound after suffering from a major stroke six years ago. Her husband is the sole breadwinner making $2,500 per month, barely enough to make ends meet. Jane is torn between the desire to return

to the workforce to supplement the family's income and her love for her mother and duty as a daughter. Money is a constant worry for Jane and her family.

Jane's story is typical of many care-givers in Singapore. The care-givers are mostly female, aged 30 and above, with secondary education, married, unemployed and looking after a sick aged parent. They also belong to what is known as the sandwich generation. With the high standards and cost of living in Singapore, most of us need a regular paying job to support our families and ourselves.

However, there are many families amongst us with elderly sick or disabled family members who require special attention and care. The care of a disabled family member and the elderly can be emotionally and physically challenging. Often times, care-givers have to quit their jobs to care for their dependent loved ones at home. Home-based care not only provides the ideal cost-effective long term care of the elderly frail and disabled in the family, it also helps free up limited vacancies in rehabilitation centres, day-care centres and old folks homes for families who genuinely require such services.

Other arguments supporting payment of care-givers' allowance include recognition of work provided and promotion of autonomy of people living with disabilities. It offers some financial support to care-givers who may find themselves without immediate and long-term financial security. Without financial support, the sustainability of the care-giving relationship may be threatened or strained. Many countries have already embarked on providing care-givers with monetary allowances designed to compensate family care-givers for their unpaid effort and stress.

Take, for example, in the United Kingdom, the care-giver would receive a

weekly allowance of about 47 pounds, or just $140, when he spends over 35 hours a week to take care of a person with disabilities. In Osaka city, Japan, care-givers are paid an allowance of 100,000 yen a year for providing nursing care to the elderly family members. Other countries that provide allowances for care-givers include Australia, New Zealand, Norway, Sweden and Estonia. I know it may be potentially difficult to administer, but I believe this hurdle can be overcome by studying how the other countries do it.

I would, therefore, like to urge the Minister to consider providing an allowance to care-givers in Singapore or even extending the Workfare scheme to them so that their sacrifices and hard work will not be left unrecognised.

Elderly Care

Mr Chairman, Sir, it is by coincidence that my colleague Dr Lam Pin Min talks about care-givers because what I want to talk about is actually the legal protection for the elderly suffering from dementia - an important area, but often neglected because these elderly people are kept at home and out of public view.

Over the past 50 years, there has been much recognition of the discrimination against mentally-ill adults, both nationally and internationally. Human rights and the rights of people with mental and physical disabilities have been given greater importance. Yet, in Singapore, the understanding and regard for the rights and needs of these people are still severely lacking. They and their care-givers are at risk of social exclusion because of the nature of their illness and as a result of people's negative attitudes even amongst many professionals.

People with dementia gradually lose their abilities to make effective decisions.

They cannot understand speech and words, cannot communicate, make mathematical calculations, and perceive risks, and lose memories of recent events and decisions, and cannot recognise places. As a result they put themselves in physical danger, make bizarre decisions regarding finances and related matters and sometimes even commit crimes.

In the perspective of violence, caring of elderly people with dementia stretches the care-givers' patience to the limit. The potential for abuse by care-givers is always there. Apart from the usual physical and emotional abuse, it is also common to hear of financial abuses.

Would the Ministry therefore consider rallying some institutions, such as the HDB, banks, Legal Aid Bureau and medical systems, to link up to inform and protect the interests of these dependent elderly? Can the elderly go to a tribunal to lodge a complaint of abuse, be it physical, emotional or financial, and let the tribunal intervene?

Many people are still unaware of the care-giver support services now available. Anecdotally, families often do not comprehend dementia and feel that their elderly relatives are making life difficult for them, hence, straining relationships. If households struggling with such an elderly member could reach out for help, say, at an FSC, a proper assessment of the condition could be facilitated. They could be advised on constructive ways to manage the demented person's condition and link them to support services at the same time.

Sir, given that there is an increasing trend of elderly living on their own, it is therefore important to have a "community watchdog" such as the one recently set up, ie, the ComCare Local Network, to serve as a lookout for them. We cannot

neglect public education. Unfortunately, care-givers are unlikely to come out on their own due to a lack of awareness, and dealing with elderly depression, very often accompanied with dementia, is very time-consuming and emotionally exacting. For those living on their own, a community of support is crucial.

Elderly and Ageing Issues

Sir, that we are a rapidly ageing nation is undeniable. Singapore has experienced below replacement fertility since 1975. In 2005, our fertility rate was 1.25, and it seems that if our total fertility rate continues to remain at 1.5 for several years to come despite our various efforts, it is unlikely that our public policies in its current thinking are likely to raise the level significantly or at least above our replacement requirement. This low fertility rate, coupled with increasing life expectancy of our people, makes for an ageing society.

By 2030, one in four persons in the society will be over 65 years of age, and they will be considered elderly by our standards. In 2000, there were 10 workers supporting every elderly person. By 2030, there will only be 2.2 persons to support every elderly person in Singapore. Quite clearly, with an increasingly ageing profile, Singapore cannot afford to let the burden of looking after the elderly fall disproportionately on the younger members of the country. There is a growing recognition that the elderly may have to continue working to support themselves well into their sixties. Indeed, we are now talking about raising the retirement age to 65 in order to ensure that elderly Singaporeans remain financially viable and independent. Unfortunately, in the face of globalisation, the choice of wanting to remain in employment is not a choice for the elderly alone to decide. It would be interesting to see how we will still be able to continue to find sustainable and, above all, meaningful employment for the elderly

in the years to come. In this regard, I hope the Minister can share with us how the Ministry is looking at dealing with this issue.

Besides financial security, one issue that is fast becoming a feature in our neighbourhood is the presence of elderly couples or elderly persons living on their own. This is an outcome of our society having smaller homes in HDB estates and children leaving the roost when they leave to set up their own homes. This is a concern, as loneliness can affect the mental and emotional well-being of those who are affected. These days, it is not uncommon to read of old people dying alone in their flat and it could take days before the neighbours realise it. This is a sad and tragic end for anyone living in Singapore.

Sir, what is heartening perhaps is the fact that our Government has come to recognise the growing problem of the elderly in Singapore, and this has come about with the formation of a Ministerial Committee on Ageing and Elderly Issues under the leadership of Minister Lim Boon Heng. This is a significant and major attempt at tackling the issue of ageing at a most comprehensive level. While we are talking about early days for the committee here, I believe the Minister in charge has indicated what plans he has with the rest of the committee. I should like to take this opportunity to ask the Minister whether he could give this House any further indication of specific challenges that we are going to be faced with beyond the broad concerns and the plans he hopes to recommend to the Government on this issue.

Eldercare Homes

(In Mandarin): [For vernacular speech, please refer to Appendix A *.] The Community Centres (CCs) and Residents' Committees (RCs) organise yearly visits to old folks' homes

during the Chinese New Year and other Chinese festivals. I visited a home for the aged last year. And this year, I have participated twice. Each time I visited an old folks' home, I have an intense feeling of sorrow and sadness, because many of them are weak and feeble and they need nurses to feed them. Even if you give them an ang bao, they are weak and they need nurses to receive it on their behalf. Most of all, I am saddened by their expressionless face. On two separate occasions, I asked two elderly people what will make them happy. One of them replied that he wished his children could visit him since they have not been coming for a long time and he would be very happy to see his son. The other elderly person wished that he could see his grandson whom he vaguely remembers to be eight years old now. Because his son never brings his grandchildren to visit him, he has no idea how his grandchildren look like.

Sir, our society has been emphasising the importance of tenderness, kinship and relationship, but I feel that these qualities have thinned. As such, it is necessary for us to come up with a solution, otherwise it will chip away the pillars of our society and we become less humane. Therefore, I would like to suggest that the Minister consider making it compulsory for the children to visit their parents who are admitted into nursing homes. This can be made mandatory in the application process. For instance, unless they agree to visit their parents at least once a month, or once in two or three months, their application will not be accepted by the nursing home. To make it effective, we have to lay down hard and fast rules, even if it means forcing them to do so. It is like the saying “用真情买假爱” [yong zhen qing mai jia ai ] - to reciprocate true feelings with insincerity. We have to resort to doing so, if need be. Otherwise, we will face the same situation five years later. In that regard, we are not a warm society that we think we are.

Day-Care Centres for the Elderly

On another point, I would like to talk about the day-care centres for the elderly. There are about 30 day-care centres for the elderly in Singapore. These day-care centres look after the elderly and engage them in constructive activities such as social dances, karaoke and handicraft-making, etc. As you might be aware, these day-care centres and nursing homes are run by voluntary welfare organisations. And their role is to provide supportive help to the targeted group, which is the bottom 20% of low income earners.

*Cols. 3449-3452.

Currently, the Ministry of Community Development, Youth and Sports (MCYS) will do means-testing to determine the applicants’ ability to pay and this includes looking into the number of family members, family income, etc, before it decides whether a subsidy should be given. The purpose is to make day-care and nursing services more affordable to the low income earners. However, not everyone can afford to send their elderly to the day-care centres or nursing homes. For instance, the middle income group will definitely not meet the means test criteria, as they are likely to exceed the quota by $200 to $300. Therefore, I would like to ask the MCYS to consider giving the upper middle income group earning between $1,500 and $1,800 a month some form of assistance, for example, giving them 50% subsidy instead of 100%, so that those who do not meet the means test will nonetheless still enjoy a subsidised rate for day-care and nursing services.

According to feedback from day-care centre operators, I was informed that the cost per head per month is at least $500. And the transport charges from home to the centre will cost about $120.

However, many day-care centres are charging less than $300 for the fees and $80 for transport. Although the centres are eligible for subsidies from MCYS, the subsidy does not cover all items. From my knowledge, it is just like the NTUC Eldercare, where it is heavily subsidised by the Government up to over $100,000 each year. As a result, it has to organise fund-raising events every year. The question is that many activities at the day-care centres are organised by voluntary workers and, as such, the quality and standard vary.

Having said that, I think we should give the voluntary workers proper recognition for their dedication and effort. Hence, I would like to suggest that MCYS consider giving more aid to the day-care centres. Apart from giving subsidy to keep fees affordable to low income earners, more can be done. In this regard, I would like to suggest that the Minister consider giving assistance to day-care centres for organising constructive activities for the elderly, so that more enriching programmes can be organised for the elderly and not just mindless activities such as clapping of hands and dancing. This, I believe, will greatly enhance the old people's quality of life.

Ageing Population

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(In Mandarin ): [For vernacular speech, please refer to Appendix A *.] Sir, the family has always been the cornerstone of the Asian society. We face today an ageing population and thus it is important for us to fortify family cohesion. Globalisation brought a new wave of competition and challenges to our economy. Due to the lack of interaction among parents and children, family ties are much weakened. As a result, increasing numbers of the elderly are choosing suicide to extricate themselves from depression. There are more and more

elderly people seeking love and concern from their families and society.

According to a NUS survey carried out from 1991 to 2000 on 712 elderly suicides, it showed that those who committed suicide were aged 65 and above, the older they were, the higher the suicide rate. The Chinese elderly have the highest suicide rate, followed by Indians and Malays. Results of the survey also show that the Malay community has a higher degree of family cohesion. Even though they do not know their neighbours, they will still help one another. This is something lacking among the Chinese community. Another NUH survey shows that depression is the main cause leading to elderly suicides. The main reason being that their children are busy with work; as a result they have less time to communicate with their parents. Therefore, it is much easier for them to slide into depression.

Apart from the ComCare elderly scheme, we hope to see more of such concrete and systematic approach to cope with the problems of our ageing population. To achieve this, we need to strengthen the physical and mental health of our people, family ties, as well as the society's cohesiveness. Efforts to help the elderly people include encouraging our elder workers to stay employed, granting them more medical benefits, setting up of more eldercare centres and old folks' homes, etc. Having said that, is it possible for MCYS to follow the example of Hong Kong? The Hong Kong government has launched a systematic eldercare scheme, whereby they provide 24-hour homecare services for the needy elderly people. This is something Singapore can learn to build a happy home for our elderly citizens.

*Cols. 3453-3454.

Order. I would like to take the break now.

Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House.

Order. I suspend the Sitting and will take the Chair again at 3.50 pm.

Sitting accordingly suspended

at 3.30 pm until 3.50 pm.

Sitting resumed at 3.50 pm

Debate in Committee of Supply resumed.

Head I (cont.) -

Mr Chairman, I thank Members for their probing questions and excellent suggestions.

Sir, the primary focus of my Ministry is to ensure that Singapore society remains united, cohesive and resilient, even as we face the full impact of globalisation. Consequently, in 2006, my Ministry paid special attention to those who are most vulnerable, that is, the families of low-income Singaporeans, senior citizens and those with disability. In the interest of brevity, I would like to refer Members to the handouts, which I believe have been circulated . There are two of them. The first one called Annex 1 gives an update on the key initiatives, which I announced last year. And I hope after reading it, you will agree with me that we have substantially delivered on all our commitments made last year. In fact, if I am totally successful at that, I could

actually sit down now and achieve my ambition of the shortest ministerial Committee of Supply speech. Since we are running so far ahead of time, I think I better do justice to my staff and go through the rest of my speech.

My Ministry is guided by four principles. First, and this is one which I have repeated several times in this House, Singapore will not have a permanent, unconditional, needs-based social safety net. We will not have such a system because we believe that it will erode our work ethic, it will damage our competitiveness and even, more importantly, it will bankrupt us in the long run. And many societies which currently try to run such schemes are storing up big problems for themselves and, more importantly, for those who are most vulnerable in their societies and the future. The second principle is that all our schemes, initiatives and projects will be very low on entitlement so that people do not come to your MPS and bang the table and say, "I'm entitled to this help. You give it to me now." Our schemes will have very low entitlements, but it will emphasise the concept of mutual obligation, it will emphasise the role of families and it will emphasise self-reliance. The third principle is the fact that we will focus on children because children represent the future, and they are the best hope for families to escape the poverty trap. The fourth principle is that work remains the best form of welfare and the best form of the social safety net. And that is why all our schemes empower people to take charge of their lives, make decisions for themselves and enable them to fish in the sea of opportunities, rather than merely give them stale fish.

Mr Sin Boon Ann has quite rightly, in his usual way, focused on outcomes, and he has asked after all these things, "What has happened?" For financial year 2006,

the ComCare Fund, which is one of our key pillars, expects to disburse a total of $43 million and this $43 million has gone to some 64,000 needy families. The money has been spent in three ways.

First, under the pillar which we call ComCare Self-Reliance, my Ministry has launched the Work Support programme in July last year. This has so far helped more than 4,400 families who have been looking for jobs or are in low income jobs. One in two job seekers on this scheme have been able to find work within six months of coming on to the programme. This scheme has also helped them increase their monthly income by an average of $560 a month.

The next pillar, which we call ComCare Grow, obviously focuses on children. Sir, last year, we enhanced the kindergarten and the childcare financial assistance schemes. You will remember that these schemes have now helped more than 15,000 children attend pre-school. And some 95% of children of kindergarten age today actually do attend pre-school.

But between MOE and MCYS, we have targeted that by the year 2011, we want to ensure that 98% of all children of kindergarten age will attend pre-school.

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Finally, the third pillar under ComCare is called ComCare Enable. The number of households receiving public assistance has remained stable at about 3,000 per year. The question you should ask me is "What is your index of success?" Should we be aiming for a larger number or a smaller number? My index of success is to keep that number of families, ie, people with no family support, those who are unable to work for the long term, as small and as tiny a proportion of our population as possible. So far, I have been happy with the fact that it has remained at about 3,000.

Mr Sam Tan asked about the home ownership scheme and, in particular, about whether our qualifying criteria were too strict. Members will also remember that, last year, we liberalised the qualifying criteria for this scheme so that it would now include those who have gone beyond just three "O" levels, in fact, those who have achieved post-secondary education qualifications but still seem to be unable to move themselves up onto higher planes of employment. In addition to that, we also now have an appeals committee chaired by my MOS, Mdm Yu-Foo Yee Shoon, and this committee will consider cases which are on the margin, or cases whom you refer to us and, if it is possible to give them the benefit of the doubt, we will do so.

But having said that, we cannot change the fundamental criteria, because this is not an assistance scheme. This is an incentive scheme to keep family size small so that these families can focus their limited resources on these children and give them the best chance in life. That is why we cannot compromise on the number of kids. It has to stop at two. Although we may be able to exercise some slight flexibility on the income threshold, we cannot go much beyond that because, if we do that, we will be targeting the wrong group of people. So let us just remember that, yes, we will be flexible, but we cannot be absolutely so.

In August last year, we appointed the five voluntary welfare organisations and the self-help groups, and that was what Mr Sam Tan was referring to, because we felt that there was a need for more effective outreach. For this financial year, we expect to see at least 230 families sign up for HOPE. Each of these families, as Mr Sam Tan has alluded to earlier, in fact, stands to benefit from a package worth about $100,000. We expect to pay out about $9 million in HOPE benefits for Financial Year 2006, and this reflects the Government's commitment to the

scheme. As such, at this point in time, I do not feel that it is necessary for us to make further relaxation in the eligibility criteria. In total, we have 706 beneficiary families as at December 2006.

Let me just quickly move on to the seniors' scene with respect to 2006. Members will recall that there was a committee on the ageing issues, which came up with 39 recommendations. Of these 39 recommendations, a committee, which is co-chaired by the Permanent Secretary of the Ministry of Health and the Permanent Secretary of the Ministry of Community Development, Youth and Sports, has monitored the outcomes and they have reported to me that 32 out of these 39 recommendations have been implemented and the other seven are being studied seriously by the various Government agencies with a view to possible implementation as well.

Let me move on to the charity sector last year. In response to Mr Baey Yam Keng, Mr Zaqy Mohd, Ms Denise Phua, and I think also Dr Loo Choon Yong's concerns which he expressed during the Budget debate, I wish to highlight, and I think Members of the House do not really need to be reminded, that the major plank was, first, the transfer of the Office of the Commissioner of Charities from the Ministry of Finance to my Ministry.

Secondly, Members will recall that a short while ago, when we passed the amendments to the Charities Act, yes, these changes were a reaction to an unpleasant situation. Yes, these changes do lead to higher regulatory oversight over the sector. But even as we do this, I think it is worthwhile remembering that we made these changes because we want to restore public confidence and trust in this sector. That is the objective. We have no intention to engage in petty witch-hunting. I can assure the House on that.

There was a very valid question about the cost of governance because, clearly, as you make the regulatory regime stricter, there will be some increased costs. And Members have quite rightly asked who should pay for it. I believe that, in this particular model, we need enlightened donors, donors who need to understand that when you donate to an organisation, not every single cent can go directly to the beneficiaries. You need an organisation, systems, governance, professionals and paid employees. So what we need to do is to educate the donor public that if we want higher quality, reliable, trustworthy voluntary welfare organisations, then we must be prepared to also do our bit to pay for it. Secondly, because Government subsidises or co-funds many of the programmes of the VWOs, in effect, Government will also have to bear its fair share of the higher regulatory burden.

But having said that, I also want to assure the House that we are not working on a one-size-fits-all model. Consequently, large institutions of public character or charities that raise large amounts of funds from the public must, and I am sure you will agree with me, be subject to higher regulatory requirements. But smaller charities or, as Mr Baey Yam Keng has said, corporate arms, which are really only raising funds from themselves and not engage in public fund-raising, we can afford to be a bit more flexible, less onerous but still have some basic minimum in place so that we can be assured that everything is kosher and working well.

But I think it was also Ms Denise Phua who emphasised that we can have all the regulations in the world, it will not prevent abuse. In the end, it depends on people. We need good-hearted, strong-minded people as employees, board members and members of that organisation. I would

ask this House, therefore, not to be too quick to arrive at judgment as to whether our regime is too strict or too lax. We have gone through a hard time. Let us give it some time for this system to settle down and see how it evolves and, with time, we can make further changes.

The removal of the 80:20 spending rule will give charities greater flexibility in the way they manage their expenditure versus building up of reserves. The fact that we now have a more transparent system and the charities have to declare how much they are raising and how much they are keeping away in reserves, gives us the assurance that even when we relax this rule, people will raise funds and build reserves and spend money responsibly. The key thing here again is transparency and having the right people in the right place.

There was also some concern expressed that local charities may lose out to international charities. We believe that our local charities are becoming more sophisticated and more professional. I believe that, ultimately - and it will be in a short time - there is no reason why our local charities cannot compete on a level playing field even with the international charities. At the end of the day, if you are raising funds from Singaporeans, we are now in a climate where Singaporeans want to know where their money has gone and how it is being spent. I see no reason why our local charities cannot attract funds from Singaporeans and spend them in worthwhile ways within Singapore or, indeed, even if they are going to spend them overseas, they will still have to do so transparently. Singaporeans' generosity, as we all know, from the way we responded to the disasters in our neighbouring countries, does extend beyond our shores.

So I would reassure this House that this is not a zero-sum game. We can create a situation where more charities,