RP's Response to PM's National Day Message

The Reform Party was disappointed with the PM’s speech. This was an opportunity for the PM to address some of the pressing issues facing this country and his failure to do so has demonstrated once again that our government is out of touch with the people.  Here is the Party’s view on some of these issues and our proposed solutions.

Economic performance

The PM praised Singapore’s economic performance this year. However this has been built on the back of a vigorous US recovery, which is now fading fast. Singapore’s performance is just a leveraged version of what most of the other Asian economies have experienced. Given that imports subtracted 2.4% from US GDP growth in the last quarter it is clear that we are fast approaching the limits of what can be achieved by reliance on US demand. There are few signs that Asia has replaced the US as a source of final demand. So we can expect a dramatic slowdown in growth for the second half of this year and perhaps even a technical recession where growth is negative over two quarters. And let’s remember that while unemployment may have been contained, Singapore workers have suffered real wage cuts that are a long way from being restored. The wage guidelines for next year of a 3% pay rise would still be lower than expected inflation of 3-4%. In other words real wages will continue to fall.

The Reform Party is of the view that our level of net saving is unnecessarily high and we would do more to stimulate domestic consumption by reducing taxes or increasing transfer payments to the less well-off.

Foreign worker/Immigration policies

Buried in the PM’s speech was the eye-opening detail that 400,000 Singaporeans (or about 20% of the domestic labor force) are receiving workfare of an average $1,000 each (most of which goes into CPF). This is the segment of the population which has suffered most from the PAP’s open-door foreign worker policy, yet there were no policy measures announced to help them.

The PM relied on isolated anecdotes to downplay the level of anti- foreign worker sentiment that threatens to spill over into xenophobia. He provided no reassurances on immigration policy  and no evidence of how the PAP policies have benefited the ordinary Singaporean or older retrenched workers. The folksy stories of aunties do however concur with our experience that Singaporeans are not xenophobic by nature but have been pushed that way by PAP policy.

The Reform Party supports the policy of allowing easy access to foreign workers with special skills, but we should ultimately be looking to provide Singaporeans with the skill sets to take their place over the longer term. We do not agree that this country needs foreign workers to compete directly with Singaporeans on all levels of the workforce.

It is difficult to see how Microsoft’s need for skilled software engineers translates into the necessity of having foreign chambermaids or shop assistants. Nor indeed why any MNC (such as Microsoft) if it lacks skilled engineers should not reciprocate for the benefits of being based in Singapore, by running training courses to bring our local engineers up to the specification that they require. It is difficult to see why we should fight so hard to retain industries that employ 80-90% foreign workers as it just increases the competition for domestic inputs whose supply is inelastic, such as land.

The Reform Party is pleased that the PM has responded to our call for the need to raise productivity. Unfortunately PAP policies such as the current excessively liberal foreign worker policy are antithetical to productivity growth  as they only serves  to keep cost of labour low. The government has yet to show any real commitment or clear cut long term strategy to increasing productivity.

National Service

The only concrete initiative was to reward NS men with a grant of $9,000. Few details were provided other than to say that it could be used to pay for further education (which the Reform Party would make free for NS men) and for housing (where sky-high prices are the result of deliberate government policy in restricting the supply of land and growing the population at an unsustainable rate).

The Reform Party believes that $9,000 in a restricted account does not come close to reflecting the economic cost Singaporean NS men face with two years of lost earnings. Furthermore, the PM said that future education fees will have to rise, presumably to cover this additional expense.

The Reform Party continues to propose, in this regard:

• Lower taxes for NS men
• Obligation on  foreign students on Singapore scholarships wishing to work here  to serve NS
• Cutting the NS period down to a year at maximum within 5 years
• A target for zero death in training

Education

On education, the Reform Party has repeatedly called for a reduction in the weighting given to PSLE in order to provide a more holistic education. We have also called for an abolishment of streaming at the early stages of education, between N levels and O levels as we want to offer opportunities for late bloomers who do poorly at PSLE to move up if they do well.

The party is disappointed with the PM’s 30% target for enrollment and his excuses for not expanding further. Again the PAP demonstrate their inability to formulate any long term innovative strategy for increased enrollment in institution where learning is targeted at the skills required in the workforce. The Reform Party has also called for the need to increase the percentage of university enrolment up to advanced nation standards.

The PM failed to touch on any measures that would ensure all of Singapore’s children receive an equal right to an education, including the physically challenged, those with learning difficulties, or other issues such as familial economic hardship.

Conclusion

It is interesting to see yet again how much Reform Party thinking is now reflected in Government policy but this begs the question of why we need a PAP government in the first place. In response, I reproduce below the Reform Party’s 19 policy pledges so the electorate can judge who has the welfare of ordinary Singaporeans at the heart of their policies. It is all very well to talk of the Singapore spirit but this is a government which continues to insist on running Singapore as a business and has downgraded Singapore from Sovereign Nation status to International city status.

Our Pledges

• Providing Cheaper and Better Lower-Income Housing by releasing more land for house-building and allowing the private sector a greater role
• Universal health insurance to be funded through current CPF contributions replacing current Medisave and Medishield schemes
• Basic Old Age Pension payable to all provided they have worked and paid into CPF for a sufficient number of years
• Reform of CPF to make contributions above those necessary to fund health and unemployment insurance and basic pension voluntary
• Universal child benefit scheme (as part of Guaranteed Minimum Income) to replace current tax breaks that heavily favour women on higher incomes
• Guaranteed Minimum Income for those in work to replace current Workfare system and to be integrated with child benefit and tax system
• A Minimum Wage to encourage businesses to raise productivity
• Reforms to Foreign Worker Policy to ensure that business gets the skilled labour it needs but that our own citizens come first
• Reductions in or exemptions from GST for certain categories of goods like food that form a higher proportion of total expenditure for those on median incomes and below
• Universal free and compulsory education from pre-school through to secondary level
• Expanded university enrolment and increased investment in improving quality of education for everyone
• Increased assistance for older workers and women re-entering the labour market to retrain and acquire new educational qualifications
• Reduction in NS to 18 months initially with aim to reduce it to one year as soon as feasible
• Requirement for new citizens and PRs to do NS or to pay lump sum tax instead
• Privatization of Temasek and GIC and distribution of equity to Singaporean citizens of more than five years standing
• Continuing Business and Foreign Investment Friendly Environment coupled with low tax rates
• Greater help and support for local SMEs to grow world-class companies
• Abolish restrictions on freedom of expression to encourage creativity and innovation necessary for a 21st century knowledge-based economy
• Reduce waste and inefficiency in government starting with slashing ministerial salaries and replacing it with performance-linked earnings tied to indicators directly related to your welfare

Released by Kenneth Jeyaretnam on behalf of the Reform Party, August 30^th 2010