Hansard, 2009-03-23

PERMISSION TO MEMBERS TO BE ABSENT 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 (2009) To (2009) Mr Yeo Guat Kwang 19 Feb 21 Feb Mr Charles Chong 22 Feb 28 Feb 10 Mar 14 Mar Mrs Yu-Foo Yee Shoon 23 Feb 02 Mar Mr Arthur Fong 24 Feb 28 Feb 24 Mar 27 Mar Mr Lee Kuan Yew 24 Feb 26 Feb Mr Matthias Yao Chih 26 Feb 01 Mar 12 Mar 15 Mar Dr Teo Ho Pin 27 Feb 01 Mar 03 Mar 08 Mar Mr Liang Eng Hwa 28 Feb 01 Mar Mr Wee Siew Kim 01 Mar 04 Mar 06 Mar 07 Mar Mr Zainul Abidin Rasheed 01 Mar 04 Mar 12 Mar 25 Mar Dr Amy Khor Lean Suan 02 Mar 10 Mar 24 Apr 24 Apr RAdm [NS] Lui Tuck Yew 02 Mar 04 Mar 24 Mar 27 Mar Dr Vivian Balakrishnan 02 Mar 06 Mar 13 Mar 15 Mar Mr George Yong-Boon Yeo 03 Mar 05 Mar 10 Mar 10 Mar 13 Mar 15 Mar 22 Mar 29 Mar Assoc. Prof. Koo Tsai Kee 03 Mar 03 Mar Column: 3313Mr Zainudin Nordin 04 Mar 05 Mar 14 Mar 19 Mar 28 Mar 30 Mar Mr Abdullah Tarmugi 06 Mar 06 Mar 04 Apr 12 Apr Mr Ong Kian Min 06 Mar 09 Mar 21 Mar 29 Mar Mr Sin Boon Ann 06 Mar 09 Mar Mr Masagos Zulkifli B M M 09 Mar 14 Mar Mr Lim Boon Heng 10 Mar 13 Mar Mdm Cynthia Phua 12 Mar 25 Mar Mdm Ho Geok Choo 12 Mar 25 Mar Mr Hri Kumar Nair 12 Mar 15 Mar Mr Inderjit Singh 12 Mar 20 Mar Dr Lee Boon Yang 12 Mar 25 Mar Mr Lim Swee Say 12 Mar 15 Mar 19 Mar 21 Mar 13 Apr 21 Apr Dr Mohamad Maliki Bin Osman 12 Mar 25 Mar 04 Apr 11 Apr 12 Apr 18 Apr Mr Hawazi Daipi 13 Mar 15 Mar 18 Mar 20 Mar Assoc. Prof. Ho Peng Kee 13 Mar 15 Mar Mr Mah Bow Tan 13 Mar 15 Mar Mr Teo Chee Hean 13 Mar 15 Mar 01 Apr 04 Apr 07 Apr 10 Apr Assoc. Prof. Dr Yaacob Ibrahim 13 Mar 15 Mar 18 Mar 22 Mar Mr Ang Mong Seng 14 Mar 18 Mar 02 Apr 05 Apr Mrs Lim Hwee Hua 14 Mar 17 Mar Dr Lam Pin Min 15 Mar 18 Mar 02 Apr 12 Apr Dr Muhammad Faishal Ibrahim 15 Mar 17 Mar 01 Apr 06 Apr Prof. S Jayakumar 15 Mar 19 Mar Dr Ong Seh Hong 16 Mar 17 Mar Mr Tharman Shanmugaratnam 16 Mar 18 Mar Mdm Halimah Yacob 17 Mar 22 Mar 27 Mar 29 Mar Column: 3314Mr S Iswaran 18 Mar 22 Mar 28 Mar 29 Mar Mr Raymond Lim Siang Keat 19 Mar 20 Mar Mr Yeo Cheow Tong 20 Mar 31 Mar Mrs Jessie Phua 21 Mar 28 Mar 01 Apr 09 Apr 17 Apr 23 Apr Mr Lee Yi Shyan 22 Mar 25 Mar Mr Goh Chok Tong 23 Mar 27 Mar Ms Grace Fu Hai Yien 23 Mar 27 Mar 30 Mar 02 Apr Er Lee Bee Wah 23 Mar 26 Mar Mr Chan Soo Sen 24 Mar 31 Mar Mr Seah Kian Peng 24 Mar 28 Mar Mr Teo Ser Luck 24 Mar 25 Mar Mr Lim Hng Kiang 27 Mar 30 Mar Ms Jessica Tan Soon Neo 29 Mar 11 Apr Mr Khaw Boon Wan 31 Mar 02 Apr 19 Apr 23 Apr

PERMISSION TO MEMBERS TO BE ABSENT Mr Zainudin Nordin

PERMISSION TO MEMBERS TO BE ABSENT Mr S Iswaran

PERMISSION TO MEMBERS TO BE ABSENT ABDULLAH TARMUGI Speaker Parliament of Singapore

ASSENTS TO BILLS PASSED The following Bills were assented to by the President of the Republic of Singapore on the dates stated:

ASSENTS TO BILLS PASSED *The opinion of the President on the draw on past reserves was circulated to hon. Members on 12th March 2009 and is reproduced in the Annex section(Cols. 3485-3486). **The opinion of the President on the draw on past reserves was circulated to hon. Members on 12th March 2009 and is reproduced in the Annex section (Cols. 3487-3488).

ASSENTS TO BILLS PASSED 27th February,2009 (1) Criminal Law (Temporary Provisions) (Amendment) Bill (2) State Lands (Amendment) Bill 9th March,2009 (1) Supply Bill* (2) Supplementary Supply (FY 2008) Bill** ABDULLAH TARMUGI Speaker Parliament of Singapore

ORAL ANSWERS TO QUESTIONS [Mr Speaker in the Chair]

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES 1. Mr Seah Kian Peng asked the Minister for Trade and Industry given the various credit schemes introduced by the Government, whether he will provide an update on (i) the total amount of new loans approved by financial institutions to businesses in the last three months; and (ii) the total amount of loans which have been rolled over.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES 2. Mr Seah Kian Peng asked the Minister for Trade and Industry whether there are cases where banks are asking businesses to switch their loans to the Special Risk-Sharing Initiative scheme failing which their credit lines will be pulled back and, if so, (i) what are the implications to these businesses, in particular SMEs; and (ii) what is the Ministry's response to such practices by banks.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Mr Speaker, Sir, can I have your permission to take Question Nos. 1 and 2 together?

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Yes.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Sir, the Special Risk Initiative (SRI) announced in Budget 2009 has significantly enhanced the Government's existing loan schemes to help companies. The SRI has facilitated continued lending by banks to viable companies, which had enjoyed credit lines on commercial terms during good times, but were now facing the danger of reduced credit. Banks have tightened credit lines on account of heightened risk aversion during this period of uncertainty, or perceptions of weaker short-term business prospects facing the companies. Allowing banks to transfer commercial credit lines to the new Bridging Loan Programme reduces the pullback of such funding and allows these companies to continue meeting their business financing needs. Disallowing such line transfers would result in significantly reduced credit for these companies. Financial institutions would, however, do well to comprehensively assess the overall long-term banking relationship with the client company, before deciding whether there is a need to curtail existing commercial credit lines, or to supplement or transfer part of the line to a Government loan scheme.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Sir, Mr Seah Kian Peng also asked for an update on the overall credit situation. Data collected by MAS indicates that the total amount of outstanding commercial non-bank Singapore dollar-loans has fallen by about 4%, from a peak of $163.2 billion in October 2008, to $156.8 billion in January 2009. The month-on-month rate of reduction has, however, eased from 2.2% between October 2008 and November 2008, to 0.65% between December 2008 and January 2009. This overall reduction in commercial loans is reflective of the more difficult business conditions, and was also seen in previous economic downturns.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Sir, I thank the Minister for the answer.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Is he able to give me specific numbers for the questions that I have tabled? Also, would the Ministry be concerned if many banks are indeed asking their clients to switch over from their existing loans to this new package, what it means to the businesses and whether the Ministry itself is taking a proactive approach in understanding the extent of the situation?

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Mr Speaker, Sir, I think we have to go back to the fundamentals. The Government set up this Special Risk Initiative in order to help our companies and, therefore, we want to be as facilitative as possible. At the same time, of course, we cannot be granting blank cheques to all our companies. So there has to be a balance. On balance, I think we have taken a more facilitative approach.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Sir, I do not have the specific number of the bank transfer loans because the banks, in evaluating the credit needs of the companies, may just extend part and may supplement with the Government loans or may terminate the loans. So there is no clear basis for collecting the data. What I can say is that from the indication that we had previously, the Government loan schemes that we extended were less than $100 million per month in 2008, so that over the year we extended about $1 billion. For the first three months of this year, our average loan approval rate exceeds $300 million. So it is already more than three times what we approved and disbursed. It shows that we are trying to be helpful and we are extending the loans. Of course, we have to be careful that the banks do not just transfer all their bad loans to the Government schemes. And here, we are in constant dialogue with the banks. Both MAS and IE Singapore follow the banks' classification of loans closely. And if the loan is already a non-performing loan, then, of course, the bank cannot transfer the loan

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES to the Government schemes. But, on the whole, our attitude is that we try to be as facilitative as possible, and we need to strike this balance.

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Sir, just one other supplementary question. I agree that indeed this package is meant to help the businesses. Does the Ministry contemplate that there could be a situation where every loan – good or bad loan – is transferred from the financial institution's existing portfolio into this scheme? And if it does, are we allowing this to happen?

ORAL ANSWERS TO QUESTIONS - IMPACT OF GOVERNMENT CREDIT SCHEMES Sir, in our discussions with the banks, I think the banks understand the objective of the Government schemes. We do have a close audit of all the loans. We also have a general rule which we extend to the banks – that we do not expect to see more than 30% of refinancing loans. So 70% will be new loans extended to our companies. This is in the spirit of why the Government has these credit schemes in the first place – to be able to generate new credit facilities for our companies. It is with this understanding that we work closely with all the financial institutions.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING 3. Mr Gautam Banerjee asked the Minister for Finance what are the additional amounts available for Government spending included in the revised estimates for the year ended 31st March 2009 and the budget for the year ending 31st March 2010 as a result of the constitutional amendment in October 2008 that now allows the Government to spend on the basis of total returns on relevant assets.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING 4. Mr Gautam Banerjee asked the Minister for Finance with regard to investment returns on our reserves (a) what are the key assumptions in computing the expected long-term real

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING rate of return on relevant assets for the purpose of determining the total returns on these assets; and (b) how does the "expected long-term real rate of return" compare with the actual historical long-term real rate of return.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING 5. Mr Gautam Banerjee asked the Minister for Finance with regard to investment returns on our reserves, how he has satisfied himself with the reasonableness and fairness of the assumptions inherent in the computation of the expected long-term real rate of return on the relevant assets.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Mr Speaker, Sir, with your permission, I would like to take Question Nos. 3, 4 and 5 together.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Yes.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Sir, Mr Gautam Banerjee asked about the additional amounts available for Government spending for year ended 31st March 2009 and year ending 31st March 2010 under the new Constitutional framework for spending from investment returns.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING The new framework for spending will take effect from 1st April 2009. It, hence, does not affect the amount of investment income taken into the Budget for spending for the fiscal year ending 31st March 2009, which continues to be based on the earlier framework of actual interest and dividend income alone. For this fiscal year which is ending soon, the Government took in a Net Investment Income Contribution of $3.7 billion.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING For the coming fiscal year ending 31st March 2010, the Net Investment Returns Contribution (NIRC) was estimated in the Budget to amount to $7.7 billion. The figure was reflected in the Budget Statement in January 2009. Compared to the Net Investment Income Contribution

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING taken in last year under the old framework, the NIRC of $7.7 billion is an increase of about $4 billion, or about 1.6% of GDP.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Members would know that this Net Investment Returns Contribution starting with the coming fiscal year is based on the new framework of spending out of long-term expected real returns, not limited to interest and dividends. The framework applies to expected returns on the reserves managed by GIC and MAS. There is no change in rules for spending out of Temasek's returns, which continue to be based on actual dividends.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING The process for determining the long-term expected real rates of return of the reserves invested by GIC and MAS has been rigorous. The rates, which refer to the expected real returns over the next 20 years, were proposed by the Boards of GIC and MAS respectively, based on detailed study and assessments by investment professionals in the two agencies. The GIC and MAS teams first projected the expected returns on each individual asset class, such as bonds or real estate. This was followed by aggregating the expected rates of return on the individual asset classes into the overall rates of return on the GIC and MAS portfolios, which take into account their respective asset allocation strategies.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING The GIC and MAS took into account both historical trends and a forward-looking analysis of the investment outlook, before reaching their best judgments. The methodology did not in any instance involve a mechanical extrapolation of past trends. In making their assessments, they also took into account projections of future returns on each asset class by their peers amongst institutional investors.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING The Ministry of Finance undertook a thorough review of the methodologies used by the GIC and MAS, and was

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING satisfied that their approach was sound and the estimated long-term rates of return were reasonable. As Minister for Finance, I therefore proposed these rates to the President for the purpose of Budget 2009. The President obtained the advice of the Council of Presidential Advisers, as required under the Constitution, before concurring with the Government's proposals.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Mr Banerjee asked how the expected long-term real rate of return compared with the actual historical long-term real rate of return. The expected rates of return – to repeat what I mentioned earlier, which are estimates of the average returns expected over the next 20 years – reflected the GIC and MAS Boards' assessment that the future investment environment is likely to be less benign than that over the last 20 years. The expected rates of return for the individual asset classes over the next 20 years are, in fact, generally lower than the historical rates. However, the expected rates on GIC's overall portfolio also reflect the fact that it is now considerably more diversified across a range of risk assets than it was 20 years ago.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Sir, I thank the Minister for the explanations. Given the complexity of the process, the inherent risk of the assumptions that have been used in this expected long-term rate of return and, obviously, the interest by everyone in making sure that the process is robust and transparent, would the Minister consider, at some stage, giving a little bit more information and communicating on some of these details so that there is confidence and acceptance of the new procedures?

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING Sir, first, of course, I can assure Mr Banerjee

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING and Members that the process is a robust one. We spend a lot of time on this. First and foremost, within the GIC and the MAS – professional staff and the boards. The Ministry of Finance gets into a fair level of detail in assessing the methodology – we are not professional experts but we have got to make sure that the methodologies are sound and are comparable with the best practices in the investment world. The President, advised by the Council of Presidential Advisers, does an independent check on the methodologies so as to assure himself that the final proposals are sound.

ORAL ANSWERS TO QUESTIONS - RETURNS ON RESERVES AND GOVERNMENT SPENDING This is not a science. It involves judgment, and this is judgment principally on the part of seasoned investment professionals. The best way of ensuring that the system is robust is to ensure these internal processes of governance, first, of putting professional expertise into play; second, internal governance within the GIC and MAS; third, the Ministry of Finance doing its own due diligence on the methodologies used; fourth, the Council of Presidential Advisers taking an independent look and advising the President; and, finally, the President deciding on whether to approve the Government's proposals. That is really the basis of our system. But I am sure the GIC will, in its annual reports in future, give a flavour of its thinking on the investment environment going forward. It has done so in its last annual report and I am sure, going forward, it will also provide a feel for its thinking on how the investment environment is likely to shape up.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update asked the Acting Minister for Manpower if he will provide an update on (i) the unemployment situation, in particular the profile of workers affected; (ii) efforts to assist the

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update unemployed and the retrenched to find jobs; and (iii) the availability of jobs.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, with the economy falling into recession, the seasonally adjusted overall unemployment rate rose to 2.5% in December 2008 from 2.2% in September 2008 and 1.7% a year ago. The resident unemployment rate increased for the fourth consecutive quarter to 3.7% in December 2008, from 3.3% in September 2008 and 2.4% in December 2007. An estimated 69,900 residents were unemployed in December 2008. The seasonally adjusted figure was 73,200, up from 65,500 in September 2008 and 46,200 in December 2007.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update The impact of the slowdown was felt across all groups of workers. In December 2008, those with below secondary education formed the largest group, totalling 21,300 and constituting 31% amongst the unemployed. Sixteen thousand-two hundred or 23% of the unemployed had secondary education. Six thousand-four hundred or 9% were diploma holders while 14,800 or 21% were degree holders.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update On age profile, workers aged 40 and above continued to form the largest group totalling 30,300 or 43% among the unemployed. Fifteen thousand-seven hundred or 23% were aged between 30 and 39 while 23,900 or 34% were aged below 30.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update There are increasingly more PMETs affected by this recession, partly due to their increasing proportion in our workforce. For the whole of 2008, 6,200 PMETs were made redundant, forming 37% of the workers displaced, up from 31% in the year before.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update MOM and WDA have been working closely with the Community Development Councils (CDCs) and the Employment and Employability Institute or e2i on a range of measures to help retrenched workers and the unemployed find jobs. Both e2i and

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update WDA work with companies conducting retrenchment exercises to render assistance to retrenched workers to find new jobs. The Career Centres at the CDCs and NTUC's e2i provide a comprehensive suite of services, ranging from training and counselling to job matching for the job seekers. They cater to both rank and file as well as PMET job seekers under SPUR and the Professional Skills Programme announced recently.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update As at end of February 2009, over 43,000 workers have been committed for SPUR training, including about 17,000 individuals who have signed up for SPUR courses at CET centres, ITEs and the five polytechnics. About one-third of these individuals are PMETs who signed up for training for jobs in the creative industries, community and social services, finance, landscape, process and manufacturing, tourism and educational services. In 2008, an estimated 13,300 unemployed locals found jobs through the assistance of the CDC Career Centres. This year will be more challenging but our Career Centres are gearing up to do more for the unemployed Singaporeans.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, while we can expect job losses in the externally-orientated sectors, there are still opportunities in other sectors, such as construction, pharmaceuticals, health care, education, public administration, tourism, and so on, which are still hiring.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update There will be at least 45,000 new jobs available over the next two years. This includes more than 20,000 jobs at the two Integrated Resorts; 18,000 jobs in the public sector; and some 6,000 from the pipeline of new investments, including 1,200 in clean technology and 900 in biomedical sciences. Many of these jobs are PMET jobs. There will also be new jobs in the retail, F&B and hospitality industries with the opening of new malls and hotels; as well as in the construction, security, childcare and interactive digital media industries.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update While we work with our tripartite partners to save jobs and help the unemployed find jobs, it is also important for us to continue to bring in new jobs. Therefore, we have to ensure that Singapore remains an attractive place for business and investments and our workforce remains competitive and flexible. This way, we can continue to create more opportunities for Singaporeans.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, I am heartened to hear that there are many jobs in the pipeline. But I just want to ask the Minister what is the time taken now to place workers in these new jobs because I see an increasing number of PMETs coming to the MPS session looking for jobs and they said it is hard now for professionals to find a job in the market.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, with the economic slowdown, I think it will take longer for many of the jobseekers to find new jobs and new opportunities. But it is also important for us to re-emphasise the need for them to go through training. As many of these workers have been in the same employment for many years, now that they have to switch jobs and look for new jobs, it is important to make sure we find ways to enhance their employability. There are many basic employment skills which some of the jobseekers do not possess. So I will encourage these jobseekers to approach our CDC Career Centres or they can approach e2i under NTUC. The career counsellors there will then be able to help these jobseekers more specifically – to identify their needs for training and opportunities in the various sectors. I think by doing so, we will then be able to enhance their employability and help them find jobs faster.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, I would like to ask the

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Minister whether the Government has any specific plans to help fresh graduates join the labour market. In particular, are there more schemes like what MAS, SPRING and CDAC have recently announced to subsidise fresh graduates joining the labour market?

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, I think a number of schemes have been announced recently. EDB, for example, has a number of schemes, including PREP-UP which is targeted at the Science and Technology graduates to retain their expertise within the industry and to capture the necessary manpower for our economy to continue to grow. MOM, together with the various agencies, will continue to explore ways to help graduates to secure employment and to find opportunities for them to continue to develop themselves, including further studies and further education.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Minister, I noted in your speech that the number of PMETs and polytechnic holders and above who were retrenched last year was about 37%. Are we sufficiently geared to help this group? I know the e2i and WDA, in terms of the scope, have always been geared towards the lower end of the workers' spectrum but this time around, the challenges are different. The opportunity should be different and the way to tackle the strategy should be different as well.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, indeed, I think the challenges faced by PMETs are quite different from the rank and file. We recognise that and, in fact, over the last few months we have been beefing up our CDC Career Centres, as well as our various Continuing Education and Training centres, so that we will be able to provide career counselling and support for the PMETs. I think many of these PMETs will also need to be flexible and they will have to consult our career consultants so that we can help them profile their needs, expertise and capabilities. I think by

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update doing so, we will be able to enhance the matching process between the jobseekers and the jobs.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, we have been hearing that there are jobs available again and again. But I think the real situation out there is that for those who are unemployed, they just find it very hard to find a job. I am just wondering what are the obstacles and what is preventing them from getting a job.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Second, I would like to ask the Acting Minister what is his projection in terms of unemployment rates for the next six to 12 months and would he like to comment on what is reported in the papers today by one analyst who said that our unemployment can hit 6% to 7%.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update Sir, let me first answer the first question on obstacles to employment. As I mentioned earlier, I think the challenges faced by PMETs and the rank and file are quite different and we need to address them differently. From our experience, we find that some of the jobseekers really do not possess basic employability skills and we need to train them, and to help them acquire these skills. Some of the jobseekers may need to be prepared to switch industry because the industry they were in was no longer growing so they have to look for opportunities in other industries. This conversion process will also take sometime and we will continue to help them to do so.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update There are also jobseekers who are less flexible and we need to help them and encourage them to be more flexible. I will just give Members an example. I think we read in the newspapers over the weekend that the bus companies are looking for bus captains and bus leaders. They have, I think, 280 vacancies, 220 applied and only 77 turned up for interview. I think jobs are still available at different levels and different categories of jobs. If we are

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update more flexible, we will encourage our jobseekers to be more flexible and we will be able to help them find jobs faster.

ORAL ANSWERS TO QUESTIONS - UNEMPLOYMENT SITUATION-<!--END_COL_TITLE:UNEMPLOYMENT SITUATION:::3328 - Update With regard to the second question on unemployment rate, I have mentioned repeatedly that rather than focusing on projection and estimate, it is more important for MOM, our various agencies and tripartite partners to focus on the ground on helping individual jobseekers find jobs. So we have been working together through Jobs Credit as well as through the SPUR programme to minimise job losses. Whenever there are job losses, we find different ways to help those that are affected so that they can find jobs faster, and we also work together to give them training and upgrade so as to enhance their employability. I think this is the focus of the Ministry.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER 7. Mrs Josephine Teo asked the Acting Minister for Manpower (a) how has the economic downturn impacted the number of foreigners in the workforce; and (b) whether the Ministry will review the need to fine-tune our policies on foreign manpower in light of the downturn.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Sir, with the recession and falling demand for workers, the number of foreign workers will naturally go down. Foreigners' share of redundancies in 2008 was roughly in line with the proportion of foreigners in our workforce. The impact of foreign workers is likely to be felt more in sectors like manufacturing than in other sectors like construction which still has several projects on hand.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER As I mentioned in Parliament during the Committee of Supply (COS) debate, MOM will fine-tune our regulatory framework to improve the skills and quality of our foreign workforce. I mentioned that we will raise the criteria

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER for S Pass to improve the quality of S Pass workers coming here. We have also reviewed the qualifying criteria for skilled work permit holders to ensure that only better skilled and better qualified workers will benefit from the lower tier of levy for skilled workers. We will brief the various industries on these changes.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Sir, faced with the downturn, some may think that by sending one foreign worker home, one more job will be created for Singaporean workers. This is not necessarily the case. Sending foreign workers home may mean losing the business altogether and all the Singaporean jobs along with it. Instead, it is far better to help Singaporean workers become more cost competitive and resilient so that they are more attractive to the employers and they can take advantage of the opportunities still available. The Government's assistance has been significant. The Resilience Package, which includes SPUR, Jobs Credit and WIS Special Payment, will help companies cut costs, remain viable and save jobs. It will help Singaporean workers to re-skill and up-skill so that they are better able to retain their jobs and to find new jobs. It will also build new capabilities in our economy to prepare for the recovery.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Sir, in summary, even as we address the short-term challenges of the downturn, we should not undermine our competitive advantage of a flexible labour market. Singapore has to remain an attractive place for businesses in order to retain those which are here and to continue to attract new investments and bring in more and better jobs for Singaporeans.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Mr Speaker, Sir, I thank the Minister for his explanation. Non-Singaporeans comprise about one-third of our workforce and

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER as the Minister has acknowledged, job losses have mainly come from the manufacturing sector where the proportion of non-Singaporeans in the workforce is proportionally higher, so I would have expected that redundancies attributed to non-Singaporeans would be proportionally higher than one-third. This does not appear to be the case. Could the Minister please explain why?

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Just two more questions. One is on the tightening of the S Pass criteria. Could I ask the Minister whether he would also consider not just tightening the criteria but also looking at the level? In other words, looking at the quota that is being allowed under S Passes, I would like to know whether the number of S Pass holders in Singapore has been lowered proportionally as our economy has shrunk.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Sir, let me thank the Member for the questions. The proportion of foreign workers versus local workers being retrenched or being made redundant depends to a very large extent on the sectors that are affected, as Members have pointed out. In particular where services and banking sectors are concerned, I think by and large they are manned by local workers and therefore whenever these sectors are affected, we tend to see local workers being affected. In the manufacturing sector, for example, we see a mix of local and foreign workers. We also have to take into consideration that for some of these foreign workers, their contracts were not renewed. Redundancy only takes into account contracts that are terminated prematurely. So we have to take all these factors into account. I would advise Members to take these numbers with a pinch of salt, and try to understand the factors that are affecting retrenchment process rather than looking at the numbers coldly.

ORAL ANSWERS TO QUESTIONS - ECONOMIC DOWNTURN AND FOREIGN MANPOWER Secondly, with regard to the question on foreign worker quota, as I mentioned in