CPF Cuts Won't Improve Job Market
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The recent CPF cut was but another big and UNNECESSARY SACRIFICE by the average Singaporean Worker, a cut that is forced WITHOUT any protesting voice from the Singaporean Worker.
Despite the cut in wages and CPF, employers have generally felt - what is already common knowlege - that this is too little too late.
Yet the propaganda machine is in full swing to creat a "feel good" atmosphere about the general situation with the "right policy".
Contradiction in report that reveal such propaganda attempt is unashamedly blatant, as seen below in green.
The CPF cut has affected the Older Workers, and the Mortgage Payers - homes and cars.
While on the one hand the Government has increased GST, fees and direct or indirect taxes - (to hospitals, education, utitilities, telephone, petrol, cigarettes, cars) - it has offered financial packages to supposedly help those in trouble.
However, such offers of help do not cover everyone in trouble, especially the larger middle income group of workers will fall outside of the planned safety net, due to their income bracket that places them in the twilight zone of governmental classification.
We are still waiting for the Government to make some cuts that will take a bite out of their own revenue collection machinery, so that it will have a major impact to the entire population - both to the average Singaporean Worker and the Buisness Community.
CPF cuts won't improve job market, says survey
By Karamjit Kaur
A FEW years ago, she could easily rent out a mid-sized Nissan or Toyota for up to $150 a day. Today, Ms Beatrice Yeo, managing director of Pacific Rent-A-Car, collects only $50 or $60.
For small businesses like hers, the cut in the Central Provident Fund (CPF) rate from 36 to 33 per cent from next month is little more than a nice gesture.
She said: 'The impending cut is not significant enough to make a real difference, so forget about hiring more staff.'
Ms Yeo, who has fewer than 10 employees, contributes $2,400 a month to their CPF, and will save $450 with the cut in employer's share from 16 to 13 per cent.
Her staff will continue to contribute 20 per cent to their CPF accounts.
Her views mirrored those of 200 employers surveyed by Mercer Human Resource Consulting.
The findings, reported in The Business Times yesterday, showed that many employers do not believe the three-point CPF cut, announced by Prime Minister Goh Chok Tong in Parliament on Aug 28, will help improve the job market.
Eight out of 10 companies said it would not help them save jobs and nine out of 10 said they would not hire in the future.
But there is some good news: 15 per cent said they would not sack employees, and 50 per cent felt that the changes would improve competitiveness.
Their views did not surprise the four human resource analysts The Sunday Times spoke to.
The CPF cut, they said, was never intended to make companies recruit more employees.
Rather, it is an important signal to investors that Singapore is serious about boosting its competitive edge.
Mr David Leong, managing partner of ManpowerCorp International, said there were four factors at play - rent, utilities, labour costs and taxes.
He said: 'The CPF cut is only a significant first step in the right direction.'
The Government has said it was also cutting income tax rates, lowering rentals and its charges.
Mr Adrian Tang, 40, who owns a software business, said: 'Hopefully the total package will make more of a difference.'
At the very least, it could help companies stay afloat a little longer, said Associate Professor Michael Heng, a human resource lecturer at Nanyang Technological University and a consultant with the International Labour Organisation, an organ of the United Nations.
He said: 'If you imagine that a business is a jet on its way down, a three-point CPF cut will lift the nose a little but the jet is still going down.
'A six-point cut, in my view, would have kept the jet steady, but it would still be flying low and you had better watch out for those mountains.'
http://straitstimes.asia1.com.sg/topstories/story/0,4386,208567,00.html?
OLDER WORKERS NEED HELP
http://straitstimes.asia1.com.sg/singapore/story/0,4386,208253,00.html?
UPGRADING EXERCISES GET REALITY CHECK
http://straitstimes.asia1.com.sg/commentary/story/0,4386,208300,00.html? -
It looks like the 'brilliant' Acting Minister of Manpower is polishing his delivery style by trying to convince the "poor" students about the necessity of CPF cuts - even before any of them has any CPF Account.
Is he intending to take the easy way out in getting the students to convince their parents about the necessity of CPF Cuts, despite the fact that the parents have suffered cuts to their Wages and CPF - if they are not already retrenched.
Monday September 8, 4:17 AM
Acting Manpower Minister addresses students on CPF changes
The CPF changes also took centrestage at a lecture organised by the Central CDC.
But this time, Acting Manpower Minister Ng Eng Hen had a very different audience.
Most of those attending the lecture do not even have CPF accounts, so it was not suprising that Dr Ng first put his audience of more than 500 students through a simple general knowledge test.
"Put up your hands how many who know that we have a CPF system...not too bad, not too bad," he said.
But Dr Ng soon found the tables reversed during the question and answer session.
One student asked if the CPF cuts might create more quitters than stayers, as Singaporeans seek greener pastures.
Dr Ng's answer - people don't stay in a place because it's economically viable, but because of emotional ties.
He also took pains to explain the rationale for the cut, and the consequences of not retuning the CPF system.
One student later said: "After I came here, it is more clear why we should have the CPF cut."
Another student said: "I realise it might bring temporary discomfort to our pockets, it's good for us in the long term."
http://sg.news.yahoo.com/030908/5/singapore48513.html -
regarding jobs creation for our locals..our garment seems clueless or maybe they don't care..some kind souls please advise here. -
It was mentioned in my comments with the first article of this thread, that Government Financial Help - to provide a "Safety Net" to dampen the blow - has left out the Middle Income Groups that are classified into the "Twilight Zone".
Here is an article that belatedly show the Government is aware of this, and is probably leaving it to the supposedly "wealthier" Middle Class to resolve their own difficulties - (this Class consist of both the Lower and Upper Middle Income Groups, earning an average monthly salary of $3K to $6K).
While the Upper Class can easily afford to cushion themselves from most Government Direct and Indirect Policies, it is the Middle Class that is severely affected.
The Middle Class is largely resentful in silence as all the Government policies implemented, have largely resulted in taking wealth back from this very large group of Middle Class.
Govt's priority is 'helping the most vulnerable'
Swee Say: It's not that we don't care about pain of middle class
By Clarence Chang
ENVIRONMENT Minister Lim Swee Say yesterday took pains to deflect criticism by middle-income Singaporeans, the hardest-hit group, on the wide-ranging changes to the CPF system.
Speaking to reporters after a Chinese Development Assistance Council (CDAC) event, he said: 'The Government's philosophy is that people don't care how much we know, until they know how much we care.
'As a community, we need to extend greater help to the weaker group, the less employable group. So it's not so much whether we know what the middle-income group is going through.
'I think everyone understands that we all must go through some pain.'
He believes that, by and large, Singaporeans have accepted that some personal discomfort is inevitable if the country is to remain cost-competitive and responsive.
He also noted: 'We must continue to reinforce the message that we care for our people. That everything we do is actually to solve the problems of the future, so that our people can lead a better life.'
He added: 'There's no running away from us extending a different extent of help to different segments of the community.'
One avenue to give a leg up to the most vulnerable group, the lower-income, is education, through programmes run by the community self-help groups.
Mr Lim, who is also the CDAC Education Committee chairman, urged them to step up and even customise their tuition programmes to fit today's changing circum- stances.
'We want to make sure the younger generation ... has a strong foundation, so they can compete in the new economy,' he told reporters.
'At the same time, the CDAC will continue to step up its efforts in skills training, so our older, not-so-young workers can gain new skills and re-enter the workforce.'
Earlier, he presented commendation and long-service awards to more than 100 CDAC tutors, some of whom had already heeded his call to be creative in inspiring their young charges.
Former Singapore Polytechnic lecturer Ng Sok Hoon, who tutors about 30 upper secondary school students in English, is one.
The self-confessed movie addict in her 40s said she likes to use the 1999 Bruce Willis thriller, The Sixth Sense, to drive home that in creative writing, making a big impact equals big grades.
The audience finds out Willis' character is dead only in the show's final minutes.
Madam Ng explained: 'I tell my students that if their story has an ending like that, it would come alive and they would score.'
http://straitstimes.asia1.com.sg/singapore/story/0,4386,208716,00.html? -
This time it is the PM beside the DPM that is addressing the clear issues related to the Middle Class, which has been the group that has contributed the most to the Government Treasury for much too long time.
The Middle Class forms the largest size of the Singapore Population, probably larger in income tax paying group than the Upper Class put together, and form the largest paying consumer group to the services provided by the various GLCs.
It is surprising that the DPM could state that the Middle Class has been looked after with the tax relief given out in 2002.
Yet, it is so quickly forgotten that the Tax Relief was part of the tax review when the GST is put in place.
So what has been given as Tax Reduction in 2002 has largely been taken back by the Government in the various taxes paid by all Singaporeans when they consume the Goods and Services provided by GLCs, Public and Private Enterprises.
Perhaps this post should have been placed in the thread -
"Clear Example of Twisting the Facts by Cabinet Ministers"
Enough being done for middle class, say PM Goh and DPM Lee
By S. Ramesh
More than 1,800 community leaders attended the second dialogue with Prime Minister Goh Chok Tong and his cabinet on working towards economic growth at the Kallang Theatre.
Among the questions from grassroots leaders - is enough being done to help the middle class who are asset rich but cash poor?
Both Mr Goh and Deputy Prime Minister Lee Hsien Loong said yes.
Mr Goh said: "When there is a problem, when there is a crisis, I would expect that we should pay more attention to those who are at the bottom, who are much more vulnerable which is what we do. So our asisstance plans are geared more for those at the bottom.
"I appreciate of course that the middle income and younger Singaporeans who have bought homes may feel that they are neglected. But when you don't have enough to share, you got to know the priorities.
"For those who have less income to go buy, in the future when you have to do income tax revision exercise, we do pay particular attention to the income paid by members of this group."
Mr Lee said: "For the middle income, for the people buying private property they are the ones who are already paying income tax and when we brought down the income tax rates last year, they are ones who have benefited very considerably. so I think it is not fair to say we have forgotten them."
http://www.channelnewsasia.com/stories/singaporelocalnews/view/48589/1/.html
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Both the PM and DPM answered "Yes" to the question asked " is enough being done to help the middle class who are asset rich but cash poor? "
When reading through the answers given, there do not seem to be any clear explanations as to what the Government has done for the Middle Class; except for the ingenious reply from the DPM concerning the Tax Reductions handed out in 2002. -
A very well written piece published in the Straits Times Forum Page on Friday, 19 September 2003:
Time to give domestic economy a boost
THE recent three-point cut in CPF has drawn much debate.
Whether it is right, wrong or half-right, it is done and water under the bridge. It is crucial that one looks forward as value is created by our future actions.
Therein lies the concern - are we still fighting the last war? Are we doing things right but failing to see that we are doing the wrong thing? Is our national business model relevant?
My fear is that our response appears to be like that of the buggy makers of the last century when the first cars hit the road - make better buggies.
Our business model is essentially that of a base for multinational corporations (MNCs) from the major economic powers of Europe, Japan and North America - known as the G3 - to export goods and services to the rest of the world.
These are essentially in the area of capital equipment and durables - the more volatile segment of the G3 economies.
Our domestic economy has been a poor cousin. This manifests itself in low domestic consumption at about 40 per cent of GDP - it is more than 50 per cent in Hong Kong - but current-account surpluses of about 24 per cent of GDP, one of the highest in the world - Hong Kong's is only 6 per cent - and rapid growth in foreign reserves.
Indeed, according to published data, our official foreign reserves grew by about $10 billion in the first six months of this year, Sars and GDP implosion notwithstanding.
Is our current business model of being primarily an export base for MNCs sustainable? Mathematically, it is impossible for everyone to have incessant current-account surpluses. This is possible now because the United States is willing to import far more than it exports.
Also, being a base primarily for the volatile capital goods and durables segment of G3 economies makes our GDP more volatile and riskier.
Our economy needs to be more balanced and I believe we have the resources to afford such a domestic stimulus. In our rush to be more 'competitive' we have ignored the domestic economy.
Indeed, by insisting that we move GST to 5 per cent next year, we are putting one more nail into the coffin. The argument goes like this: the country needs to restructure the tax system and we need to avoid having structural deficits. Anyway, the domestic economy is too small.
I agree that we need to restructure the tax system eventually. However, do we need to force it now? An overweight man with a broken leg must eventually lose weight but do we put him on a treadmill before his leg mends?
Scrapping GST for now would stoke domestic demand and this is what some of my businessmen colleagues tell me - we need demand to come back. No point having low income taxes when one is losing money because of poor demand.
Secondly, would we have a real structural deficit even if we ran yearly operating deficits of $2.5 billion, as projected for this year?
One could argue that the ballooning of our reserves in the first half of this year is a one-off event, a consequence of the authorities intervening to weaken the Singapore dollar.
Nevertheless, our reserves are substantial and they should be producing substantial real income even if invested passively and conservatively; $150 billion in reserves ought to at least generate about $3.3 billion in real (after factoring in inflation) income annually or about $6.4 billion in nominal terms.
The investment performance of our reserves is not published but if we took it into account, I reckon that we could easily afford a big shot of fiscal stimulus without impairing the real value of our reserves.
Maybe, instead of raising GST to 5 per cent, let's slaughter a sacred cow by cutting it to 0 per cent for the time being, issue consumption vouchers to the unemployed and offer business incentives to bring forward capital spending and entrepreneurship.
Thirdly, our paradigm has always been that we are a small economy. Is this true? Our GDP is larger than Malaysia and the Philippines' and only 25 per cent smaller than Thailand's. Indeed, we are about 60 per cent of Indonesia's.
Thailand has done a pretty decent job of keeping its economy buoyant by encouraging domestic demand.
Economic management cannot be just focused on accumulating current-account surpluses and stashing them away as reserves. In the long run, it has to be a productive balance between investment, savings and consumption, with the goal of full employment and sustainable increases in the standard of living for all.
Stimulating domestic consumption might seem like throwing the proverbial kitchen sink at the enemy but with unemployment rising so quickly shouldn't we try anything that might work?
Moreover, I believe we need a vibrant domestic economy for entrepreneurship to flourish. Virtually all the large MNCs that we are courting today were once small companies selling to the domestic community around them.
JOSEPH CHONG THIAM FOOK
CEO and Founder
New Independent Financial Advisers
http://straitstimes.asia1.com.sg/forum/story/0,4386,210555-1064008740,00.html? -
So finally a reply from the Ministry of Finance, to a Straits Times reader's letter to its forum page.
While the reply is polite, it is the typical response that one will get from a Government that is already fixed on their decision made, and will hardly consider any other views given.
It is surprising that the Government is hinging the economic recovery of Singapore based on Income Tax cuts, lower wages, lower CPF contribution burden to the Employers - (these are the most significant changes to-date).
Will the jobs return to Singapore, so as to re-ignite the economic engine, with such cuts - when GST will be increased to 5% that will affect all types of purchases that these new Factories will be transacting in Singapore or Importing of Raw Materials and Equipment for their production needs - (the costs of maintaining books to get GST Refunds for Exported items) ?
The keynote of the Reader's Point was to re-ignite the economy by increasing domestic consumption; while income tax maybe reduced and GST eliminated or reduced as well, any Fiscal Imbalance will be short term.
However, the reply lean on the typical Government strategy of using a scare story to justify their position.
Scrapping GST won't help
I REFER to the letter, 'Time to give domestic economy a boost' (ST, Sept 19), by Mr Joseph Chong Thiam Fook. The writer suggests that we should scrap the Goods and Services Tax (GST) to stimulate domestic demand and revive the economy.
If only it were so simple. If we really scrapped the GST, not all the tax savings would be spent. Higher-income Singaporeans who pay the bulk of the GST are not likely to increase spending by much.
Furthermore, any extra spending will mostly leak overseas, because most of the things we buy in Singapore are imported. The result will at best be a transient but expensive relief for the retail sector.
There is no short cut to revive and sustain economic growth. We must strengthen our international competitiveness, attract new investments, and boost external demand for our products.
Lowering income taxes and raising the GST rate to 5 per cent will help us to do this, because exports do not attract GST, and companies will go where they can earn the best after-tax income for their efforts.
We cannot cut income tax and yet put off the GST increase. We would risk a serious fiscal deficit and a loss of confidence. The Singapore dollar would depreciate, and so would the value of Singaporeans' savings. Our economic position would not improve.
To minimise the impact of the GST increase on the lower-income group, we have instituted a comprehensive package of offset measures, including the Economic Restructuring Shares. As a result, for the next few years Singaporeans will have more, rather than less, money to spend. There should therefore be no reason for the GST increase to 5 per cent to cause people to cut back on consumption next year.
The writer's comparison of the GST increase to putting a man with a broken leg on a treadmill before his leg has mended is wrong. In fact, we are carrying out urgently needed surgery on his leg, while providing the patient with a plaster cast so that he will recover as soon as possible.
GOH CHYE BOON
Director (Fiscal Policy)
Ministry of Finance