http://www.channelnewsasia.com/stories/singaporelocalnews/view/253833/1/.htmlManpower Minister says govt looking at tweaking CPF rate
By Wong Siew Ying, Channel NewsAsia | Posted: 21 January 2007 2011 hrs
SINGAPORE: The government is studying unions' suggestion of tweaking the CPF contribution rate to help low-wage earners cope with the higher cost of living, says Manpower Minister Ng Eng Hen.
Dr Ng also touched on the topic of the proposed hike in the Goods and Services Tax (GST), and the Workfare scheme during a forum which will be aired on Channel NewsAsia on Monday.
It was a lively and candid session as the Manpower Minister took questions from a panel comprising Singaporeans from all walks of life, from taxi driver to economist.
The discussion centred on the proposed 2 percentage point hike in the GST.
The panel wanted to know how the move would affect small businesses, and what is in store to help the low-income workers cope.
Dr Ng said the move to raise GST will provide the resources to invest in Singapore's future.
And the government is looking at ways to cushion the impact of the increase for low-wage earners.
He said: "We want to ensure that the take-home pay of the bottom 20 percent of income earners will increase. I think one way which NTUC has suggested is to
reduce the CPF contributions by the employee. NTUC has also suggested that we should also
reduce the employers' contribution so that it cost less to hire. That's also, I think, a good idea, which we are studying very carefully."
Dr Ng maintained that such adjustments in the CPF will have to be coupled with the Workfare scheme.
This is to ensure that the workers' long-term needs are not compromised and that they still have sufficient CPF for housing and healthcare.
The Manpower Minister said: "We have to find ways to help many of these various groups with different needs and this is why we're looking at how we can reduce some of the pain that the GST increases will cause on the CPF."
Dr Ng highlighted that the Workfare scheme, which was introduced last year, is here to stay as pressure on wages continues to mount with competition from emerging economies.
His assessment is that it will take some 10 to 15 years for wages of the low-income workers to go up.
But he remains optimistic about the future as Singapore workers still have a competitive edge. - CNA/so
argh!!!!!