SINGAPORE – Greater clarity on Singapore’s approach to skills upgrading and uplifting wages was sought by MPs on Feb 26, even as there was across-the-aisle support for the $131.4 billion Budget unveiled by Deputy Prime Minister Lawrence Wong on Feb 16.

The first day of the Budget debate saw 29 MPs speak on the Government’s spending plans for the upcoming financial year, with many welcoming the financial support to help Singaporeans tackle immediate needs, even while they prepared for a more uncertain world.

MPs such as Ms Denise Phua (Jalan Besar GRC) lauded the “bold and potentially game-changing investment” to provide financial support for mid-career workers to upskill full time, and to help Institute of Technical Education graduates attain diplomas.

“However, the devil, as they say, is in the details,” said Ms Phua, who asked if there will be career guidance to ensure that such upgrading will be aligned with market needs.

Other MPs such as Ms Ng Ling Ling (Ang Mo Kio GRC) queried the Government on why much of the additional financial support applies only to diploma courses, and if that was the best way to help older workers stay employable.

The continuation of temporary schemes such as CDC vouchers prompted MPs such as Mr Louis Chua (Sengkang GRC) and Mr Lim Biow Chuan (Mountbatten) to raise concerns about fiscal sustainability, while Progress Singapore Party (PSP) Non-Constituency MP Leong Mun Wai proposed a streamlined, permanent scheme approach in place of what he called a “patchwork” of vouchers, rebates and top-ups.

Here are seven areas where MPs raised suggestions and concerns:

Helping lower-income workers

Lower-wage workers in manual trades are crucial to Singapore’s clean, safe and green living environment, said Nominated MP Raj Joshua Thomas.

While Budget 2024 moves such as increased co-funding under the Progressive Wage Credit Scheme help to uplift wages, Mr Thomas expressed concerns that increments under the Progressive Wage Model (PWM) for jobs such as security officers are still not enough for a good standard of living here.

The PWM stipulates wage increments tied to upskilling and better productivity.

Mr Thomas called for average wages for workers in PWM sectors – which include waste management, security and cleaning – to be pegged to what fresh university graduates earn, citing Sweden, Switzerland, Japan and Australia, where the average wages of such jobs are not far from those of fresh graduates.

Meanwhile, Mr Leong called for the consolidation of more than 60 government support schemes, especially those that provide short-term payouts, into a few permanent schemes aimed at raising the living standards of lower-wage workers.

He cited high administrative costs as one reason for this, and also said that some people may face challenges in understanding and applying for the support.

He lauded the increase in the local qualifying salary for full-time Singaporean and permanent resident workers to $1,600, which is the minimum salary that employers hiring foreign workers must pay their local workers from July.

“We recognise this increase in (local qualifying salary) as a step closer to the minimum living wage concept that PSP has proposed.”

However, Mr Leong also expressed hope that the Government would cushion the impact of the increase on the business viability of small and medium-sized enterprises (SMEs) as costs rise.

Unemployment support

Several MPs sought more details on an eagerly anticipated re-employment support scheme for involuntarily unemployed Singaporeans.

Mr Henry Kwek (Kebun Baru) said that while most people agree with the central idea, given that the job market is changing rapidly, there are many questions about the scheme, such as who will pay for it and how much taxpayers will bear.

He proposed a multi-tier approach to unemployment support, which includes risk-pooling through insurance, sufficient government assistance, as well as instilling personal responsibility by allowing people to choose to have their housing loans frozen for a limited time to help with cash flow.

He also suggested the support scheme be started modestly, to avoid further tax increases to fund it.

Echoing Mr Kwek’s sentiments, Mr Saktiandi Supaat (Bishan-Toa Payoh GRC) said more details are needed to scrutinise whether the scheme can be implemented without eroding work ethic, and if it will “mitigate the moral hazard of financing unproductivity”.

Workers’ Party MP Gerald Giam (Aljunied GRC) asked how much more time was needed to flesh out the scheme fully, while Non-Constituency MP Hazel Poa said she was disappointed that it was not ready yet.

The scheme was announced by Prime Minister Lee Hsien Loong at the 2023 National Day Rally. He had said then that it is intended to enable those who are laid off to attend skills courses, rather than having to seize whatever job is offered out of desperation.

Meanwhile, Nominated MP Keith Chua asked if the Government would look at how help can be delivered to cover individuals who become involuntarily unemployed not through retrenchments and redundancies.

Skills upgrading

Given the rapid pace of change, Mr Darryl David (Ang Mo Kio GRC) welcomed the $4,000 SkillsFuture Credit top-up for mid-career workers, and subsidies to help them obtain another diploma.

These are part of the new SkillsFuture Level-Up Programme unveiled by DPM Wong. It also includes up to $3,000 a month in allowances for workers aged 40 and above who undergo full-time training.

Mr Liang Eng Hwa (Bukit Panjang) noted that the new programme will greatly reduce the economic costs of training, which have been a perennial pain point for mid-career workers.

Mr David asked that such diploma programmes be shaped with industry and tailored to the needs of adult learners, who have different experience levels and needs from teenagers and young adults.

Ms Foo Mee Har (West Coast GRC) and Ms Ng noted the low usage of SkillsFuture credits to date – about three in 10 Singaporeans have used their credits since the scheme began in 2015 – and asked how else the Government might support workers to upskill. 

Ms Poa was among those who stated their support for the new SkillsFuture programme.

Ms Poa, who recently became PSP chief, said full-time training will be more effective in enhancing employability, and would help middle-aged workers switch careers more easily.

Housing

Changes to annual value bands that reduce property tax rates for owner-occupied homes were welcomed by Mr Saktiandi, who noted that such home owners would not have directly benefited from higher rents.

Mr Saktiandi asked if it is time for the Government to stop pegging property tax for such properties to annual value, as this is, in turn, pegged to market rents.

Mr David supported the Government’s move to allow single Singaporeans above the age of 55 to claim a refund of the additional buyer’s stamp duty on their second private property when they downsize. This would help them better meet their retirement needs, he said.

He asked if the Government would consider extending such refunds to younger single Singaporeans, so they have greater flexibility to meet unexpected financial needs.

Mr Yip Hon Weng (Yio Chu Kang) also spoke on the property tax system. He asked if banks could be encouraged to offer reverse mortgages that would help to monetise home leases.

Mr Gan Thiam Poh (Ang Mo Kio GRC) asked if more could be done to help young married couples get their flats sooner.

He called on the Government to consider building more Housing Board flats ahead of time, so that they could be delivered within 1½ years.

Helping workers cope with impact of generative AI

MPs such as Dr Tan Wu Meng (Jurong GRC) and Mr Kwek highlighted the need for workers to upskill to keep pace with advancements in artificial intelligence (AI), such as Sora, an Open AI model that can generate videos based on text prompts. 

Mr Giam also noted that technologies such as AI and robotics can boost Singapore’s productivity, but can also cause job losses. 

He highlighted the need for measures to protect Singaporeans from AI-driven job redundancy, and suggested that the use of SkillsFuture credits be allowed for subscriptions to AI-based tools to support hands-on learning. 

Such practice with AI and robotics will better ensure that the benefits from these technologies are distributed more widely, he said.

Singapore has set out plans to advance in the field through its National AI Strategy 2.0. In his Budget speech, DPM Wong said Singapore will invest more than $1 billion over the next five years in AI computation, talent and industry development.

CPF changes

Some MPs expressed concerns over the closure of the Central Provident Fund (CPF) Special Account (SA) for members aged 55 and above.

Ms Foo said the sudden change has disrupted the retirement planning of some middle-income seniors, and suggested that the current scheme be allowed to continue for those already aged 55 and above.

Mr Yip asked about those who would not be eligible to transfer their SA savings to their Retirement Account, and how these individuals would be informed. He also highlighted residents’ concerns about accessing emergency funds from the Retirement Account, which has less flexibility than the SA.

“Conversely, leaving funds in the Ordinary Account means lower-interest earnings and retirement savings, impacting our seniors’ long-term financial security,” he added.

Mr Louis Chua proposed that the interest rate paid out for CPF savings be raised.

He called for Singaporeans to be allowed to participate in the long-term returns from sovereign wealth fund GIC, which has higher historic rates of return than the prevailing Ordinary Account rate. This has been proposed in the past by MPs, including from the ruling party, he noted.

Mr Chua also asked if the Lifetime Retirement Investment Scheme, which was mooted in 2016, could be urgently implemented to better support Singaporeans’ retirement needs.

Support for SMEs

Mr Ang Wei Neng (West Coast GRC) and Mr Kwek raised concerns about the challenges businesses face in meeting their manpower needs. 

Manual jobs and roles outside air-conditioned environments are not favoured by Singaporeans, and companies sometimes have no choice but to hire foreigners.

Yet the strict foreign worker quota and continually rising minimum salary requirement for S Pass renewals are pain points for SMEs, Mr Ang said. 

He called on the Government to maintain and not tighten the foreign worker quota and foreign worker levy for the next three years for sectors that are not favoured by Singaporeans. 

Mr Kwek suggested allowing companies to hire more foreigners at a reasonable levy in exchange for creating more job opportunities with flexible work arrangements, which would benefit local seniors, stay-at-home mothers and caregivers.

There were also proposals on more government support for SMEs to adopt technology and innovate.

Nominated MP Mark Lee suggested a tiered grant model for SMEs keen to start using AI. This would enable businesses eager to innovate beyond basic “plug and play” solutions to do so, without being constrained by cash flow issues.

Mr Lee, who is chief executive of apparel company Sing Lun Holdings, also suggested that the Government provide SMEs with support beyond technology access, particularly in developing governance frameworks and ethical guidelines for the responsible use of AI.