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MOM COS 2018 Minister’s Speech

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COS 2018 – Min’s speech

With your permission, Mr Chairman, I have asked the Clerk to place the MOM COS-in-brief on the MP seats at the start of the sitting.

WHY CHANGE

Employment landscape has changed in past 3 years from 2015-2017  Compared to the previous 3 years from 2012 to 2014

With your permission, Mr Chairman, may I display some slides on the LED screen?

(Slide on) Net Job growth slowed o From >100k a year o To <10k a year (slide off)

Retrenchment went up o To 19k in 2016

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Resident unemployment rate increased o To 3.2% in Dec 2016

Long-term unemployment rate went up to

o To 0.8% in Sep 2016

The reasons were partly cyclical

But mostly structural

Externally  Faster pace of technology and innovation  And keener and stronger global competition

Internally  Ageing of local population  And changing profile of local workforce

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Manpower driven growth of the past  Was no longer sustainable

Low productivity growth  Will weaken our economic competitiveness

Fast growth of foreign manpower  Will increase social tensions  And weaken social cohesion

This is why we have to transform our economy  To be more innovative  Manpower lean and productive

As we transform, we are mindful that one main concern out there is about jobs  Will technology destroy more old jobs  Will foreigners take away more new jobs

Will we end up with “jobless growth” for our people?

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WHERE NOW

Ms Jessica Tan, Mr Lee Yi Shyan, Mr Desmond Choo and Associate Professor Faishal Ibrahim asked whether our locals have benefited from the economic growth and transformation efforts.

Again, comparing past 3 years (2015-17) with previous 3 years (2012-14)

 (Slide on) Even though growth of foreign employment has turned negative

 [click]Local employment growth has rebounded o To 21k last year (Slide off)

Quality of local employment has improved too

 PMET share of local workforce went up faster in past 3 years, than previous 3 years

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In terms of wage growth

(Slide on) Annualised real income growth of our residents for previous 3 years is shown in grey  For past 3 years is shown in pink

We can see that real income grew faster  Across all income groups  Up from 2.3% to 3.7%

We can also see that wages at P20 and P30  Not only grew faster than before  But also higher than most income groups (Slide off)

Sir, economic and workforce restructuring is never painless  But we have to do what is necessary

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We are certainly in better shape today  In the past 3 years, manpower growth has slowed from an average of 4% to 1%  While productivity gain has grown o From 0.4% previously to 1.8%

(Slide on) Having transformed  From 4 + 0.4 = 4.4 (2012-2014) [click]  To 1 + 1.8 = 2.8 (2015-2017) [click]

We are now much closer to our future growth strategy  Of 1 + 2 = 3 (Slide off)

Sir, 1+2=3 is not a rigid formula for future growth  It is a framework to remind us to become  More manpower lean and More productive  If we want our future growth o To be more sustainable

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We have made good progress  But transformation is uneven  Not pervasive enough across all sectors

Mr Desmond Choo asked if the productivity growth is sustainable

To make transformation and productivity growth  More sustainable  We must press on with four key thrusts

These are:

 Better job growth in our economy

 Better employment outcomes for our people

 Better protection for our workers

 Better capabilities in our Singapore Workforce

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First, better job growth in our economy

(slide on) Average net job growth of <10k a year in past three years was not high enough

 We need to bring it up to 25k to 40k a year  To provide enough jobs  For a 3.4m workforce growing at about 1% (slide off)

We must also keep improving the quality and attractiveness of jobs  To meet the higher aspiration of our people

So instead of developing Lean Enterprises individually  We need to develop Lean Industry collectively

Especially for sectors that are less attractive to locals today

Min Josephine Teo will elaborate on LED Scheme

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Second, better employment outcomes for our people

Last year, under Adapt & Growth initiative  We helped >25,000 jobseekers to secure jobs successfully

Even though resident unemployment rate has declined since Jun last year

 We are still concerned that  Unemployment in future is likely to be stickier

Not due to shortage of jobs  But shortage of skills  And job-skill mismatch

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We have enhanced the national Jobs Bank  Into an online job portal o Known as MyCareersFuture

We are also strengthening Adapt & Growth Initiative  To minimise missed matches and mismatches

Minister Josephine Teo will elaborate later

Sir, as we make our economy more innovative  We must also keep our workforce inclusive

o Young and old o High and low (age and skill profile) o For both genders

For our older workers

 Re-employment age was raised o From 65 to 67 in 2017

 Employment rates for mature workers

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o Age 55 to 64 o And 65 and over o Has continued to improve

We are also actively promoting  More companies to make better use of technology  To make jobs ESS (Easier Safer and Smarter) o For our mature workers

Mr Zainal Sapari and Dr Intan suggested raising their CPF contribution rates

Mr Heng Chee How suggested to review the need for statutory retirement, and to raise re-employment age further beyond 67

The Tripartite Committee on Employability of Older Workers was set up in 2005

Issues raised by Mr Heng, Mr Zainal Sapari and Dr Intan are important issues

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 The Tripartite Committee will study them

For low wage workers, I agree with members that  We must do more to improve  Their skills, productivity, careers and wages  In a more sustainable manner

We introduced PWM for cleaning in 2014  Followed by landscaping and security in 2016  Outcome is positive

Few days ago, I came across a Straits Times article by NUS’s economists Kenneth Ler and Ivan Png titled “Impact of Progressive Wage Model”

 “In sum, as a unique kind of ‘minimum wage’ policy, the PWM has succeeded in raising wages without apparently reducing employment.

 More importantly,

as a tailored, structured and progressive policy,

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it provides a wage ladder for low-skilled Singaporean workers,

holding out its promise of growing income over time.”

Sir, we will make the adoption of PWM more widespread to benefit more workers

MOS Sam Tan will elaborate later

Third, better protection for our workers

Our workforce is changing fast  We now have more PMETs, fewer RnF

This trend will continue

Our employment landscape is changing too  With growth of platform economy  We can expect to see more freelancers and SEP

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We are concerned for their  Skills upgrading  Fair treatment  Loss of income due to injury or illness  And savings for healthcare and retirement

Minister Josephine Teo will elaborate on this later

For the vast majority who will still engage in jobs with employer-employee relationship, Mr Patrick Tay and Dr Intan call for a review of the Employment Act.

I agree

Currently, Employment Act covers three group of employees  First, all workmen who are manual workers or blue collar workers o Including most technicians

 Second, all non-workmen who are non-manual workers or white collar workers

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 Third, some but not all managers and executives o With a salary cap of $4500

With PMETs making up 56% of local workforce now  Going up to 65% by around 2030 It is timely to make a more fundamental change  To the coverage of EA

In consultation with tripartite partners, we have decided to enhance our current EA framework

First, we will remove the salary cap of EA to cover all employees, including all PMETs (Patrick Tay must be happy to hear this. He has been advocating this for some time)

Exceptions are  Public servants, domestic workers, seafarers  Who are covered separately, such as by other Acts due to their nature of work

All core employee benefits in EA, including

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 Minimum 7 days of annual leave  11 paid public holidays  14 days of paid sick leave and  60 days of paid hospitalisation leave

And other protection  Such as timely payment of salary  Maternity protection and childcare leave  Statutory protection against wrongful dismissal

 And right to preserve existing terms and conditions for employment transfer o Resulting from sale of business o And business restructuring

 Will be extended to all employees

This will cover an additional 430k PMEs

Mr Patrick Tay asked for more clarity on the types of transfers within or outside the scope of Section 18A

 We agree that more clarity is useful

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 We will work with tripartite partners to update our guidelines on this

Second, we will extend additional protection on hours of work and overtime pay to more workers

 For Workmen o Current salary cap of $4,500 o Already covers >99% of workmen

 For Non-workmen o Current cap of $2500 will be raised to $2600

 This enhancement will extend coverage to half of our workforce

As for Overtime Pay  Salary cap for non-workmen o Will be revised upwards o From $2250 to $2600

 About 100,000 non-workmen will benefit from this increase

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The third and final change to EA  Concerns dispute resolution  Relating to salary disputes or wrongful dismissal

Currently, all salary related disputes  Are mediated at TADM  If unresolved, claims are heard at the ECT

But wrongful dismissals  Are adjudicated by MOM  Not ECT

We will shift it over to ECT  To provide both employers and employees  With “one-stop service”

We will seek parliament’s approval of these amendments to EA  Later this year  For implementation by 1 April 2019

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Mr Daniel Goh spoke about protection for contract workers

Tripartite partners launched  The Tripartite Standard on the Employment of Term Contract Employees in July last year

For contracts of 14 days or more, it calls for companies to treat contracts renewed within 1 month from end of previous contract

 As continuous and cumulative o In terms of length of service o For the computation of leave benefits and notice period for early termination or non- renewal

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It also calls for companies to provide training to ensure that their contract workers can perform their roles effectively

A/P Daniel Goh asked for an update  As of end February, more than 550 employers o Covering >30,000 term-contract employees have adopted this Standard

A/P Daniel Goh suggested conducting audits and survey, and to include retrenchment benefits in the Standard  Being a new standard, our focus now is to increase the adoption by more employers

 Will look into suggestions when we next review the Standard

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Another important area of protection for our workers  Is their safety and health

Through joint efforts of tripartite partners  WSH performance has improved

Fatality rate has dropped to lowest level  Ever recorded for our workforce

Our next target, under WSH 2028 to be formulated  Is to bring it down to below 1 per 100,000 workers

We are also committed to reduce workplace injuries  And enhance workplace health  By embracing a mindset of o Total Workplace Health and Safety

MOS Sam Tan will elaborate later

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Last but not least, our fourth and probably one of the most critical challenges  Is to ensure that slower growth of our Singapore Workforce Will not become the bottleneck  In the future growth of our Singapore Economy

Today, Singapore Workforce of 3.4m is made up of  (Slide on)2.3m locals (2/3 of total workforce)  [click] 1.1m foreigners (1/3 of total workforce)

“2/3” Local [click] + “1/3” Foreign [click] = “1“ Singapore Workforce” [click]

With slower manpower growth  We need to maximise the potential o Of our 2/3 local, 1/3 foreign So that together, we can maximise the potential of our Total Singapore Workforce We must strive for 2/3 + 1/3  not just =1, but >1 [click]

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First, we must not allow 2/3 + 1/3 to be <1 This could happen if unfair employers discriminate against our locals (Slide off)

To prevent this from happening  We are pro-business  But only to those who are pro-worker

We have identified 500 companies so far

They have the pre-conceived ideas that local PMETs  Are either unable or unwilling to do the job

So they write them off  Without even considering them fairly

We therefore put them on our FCF Watchlist  Their EP applications are subjected to additional scrutiny

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This is to eradicate “nationality bias” as described by Mr Patrick Tay

In respond to Mr Patrick Tay and Mr Chong Kee Hiong These companies on our watchlist come from various sectors, including employment agencies and placement companies

Mr Patrick Tay, Ms Jessica Tan, Mr Chong Kee Hiong, Mr Lim Biow Chuan and Associate Professor Faishal Ibrahim asked for an update

Since we started in Feb 2016, a total of 1,900 EP applications  Have been withheld or rejected by MOM  Or withdrawn by the companies

TAFEP worked with them  To improve their HR practices

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WSG, NTUC-e2i and IHLs worked with them  To recruit fresh graduates and mid-career local PMETs

As a result, >2,200 Singaporean PMETs were hired

One of these companies is an IT services firm  With > 1000 PMET employees  It was placed on Watchlist in Feb 2016

The company worked with TAFEP and IMDA  To attract and retain locals  And hired about 200 more Singaporean PMETs

After exiting from the Watchlist

 Company continues to adopt fairer and more progressive HR practices

Win-win outcomes for business and workers

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Another example  A private wealth management firm with o 80 PMET employees

 Used to hire mostly foreign PMETs o To serve mostly expatriate clients

It was placed on our Watchlist in Feb 2016

Since then, it has re-positioned to serve  Both local and expatriate clients

It hired 30 Singaporean wealth managers and PMETs  Train them here and overseas

After being removed from the watchlist  The company continues to hire and develop  More local wealth managers and PMET  To grow their business

Again, win-win outcomes

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So far, 150 companies have improved their HR practices  And exited from the Watchlist

Of the remaining 350 companies  60 have not been cooperative o And showed no sign of improvement

We have curtailed their work pass privileges

 No new EP applications  No renewal of existing EPs  Until they adopt fair HR practices

Sir, we will continue to fight this win-lose mindset  Of 2/3 + 1/3 < 1

Because it results  In a waste of our precious human capital

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(Slide on) Second, for 2/3 + 1/3 to be >1, we will make “2/3 Local” better and strengthen our local core. (Slide off)

I agree with Ms Jessica Tan and Mr Lim Biow Chuan We will continue to enhance employment and employability of Singaporean PMETs

We will create more jobs of the future for them  Through Industry Transformation

More skills of the future in them  Through SkillsFuture, and

More careers of the future with them  Through Adapt and Grow

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To ensure fair access to more jobs and better jobs, we will strengthen FCF further as suggested by Mr Patrick Tay

We will expand the requirement to advertise jobs on national Jobs Bank before EP application To cover more employers

Not just those with >25 employees  But also those with at least 10 employees

It will also cover more jobs  With salary of up to $12000 at today o To jobs with salary of up to $15000

This will take effect from 1 July 2018

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(Slide on) Third, for 2/3 + 1/3 to be >1, we will make “1/3 Foreign” better, a point made by Ms Jessica Tan (Slide off)

As we moderate the intake of foreign manpower  Especially foreign professionals

Employers say  They cannot find enough locals o Who have the skills o And are willing to do the jobs

They say this has slowed down  Their pace of business transformation o And growth

They feel our foreign manpower policy is too tight

To them, MOM is not pro-business enough

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But on the other hand, we hear ground feedback that  There are still too many foreigners, too much competition here for jobs

They feel our foreign manpower policy is too loose  To them, MOM is not pro-worker enough

Sir, the policy objective of MOM  Is to strike a fine and dynamic balance  Between the two

Open enough  To be Pro-business  To support business growth

Yet, tight enough  To be Pro-worker  To enhance local employment growth

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We therefore stay open to the intake of foreign professionals  But continue to tighten the criteria for EP  In 2014 and 2017

This is to calibrate the growth of EP holders  And enhance their overall quality  Both at the same time

A/P Faishal Ibrahim asks for the outcomes In the past 3 years, on average  We approved about 50k new EPs each year

But at the same time, a similar number of EPs  Were not renewed

The growth of EPs therefore slowed  To an average of 3k a year in the past three years This is significantly lower than the peak  Of 32k in one year, in 2011

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On the whole

Local share of net growth in PMET employment  Improved from an average of 68% in the previous 3 years (2012-14)  To an average of 78% in the past 3 years

Out of every 10 net increase in PMET jobs  7 to 8 went to our local PMETs

Sectors where locals accounted for  A large majority of the net growth in PMET employment include

o Professional Services o Infocomm o Healthcare o Financial & Insurance

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In short, we were able to draw on foreign professionals  To help meet the manpower needs of the industry

While at the same time  Strengthen our local core

By working together  Complementing each other more o And competing with each other less

Our Singapore workforce of  2/3 local and 1/3 foreign

Will be able to support a faster pace of industry transformation  For us to compete better globally o For better investments and jobs

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Mr Lee Yi Shyan asked for flexibility for employers to hire foreign PMETs, especially those with skills in great shortage locally

Sir, let me clarify that the tightening of EP criteria  Should not be an issue for most foreign professionals with skills

o In great demand globally o And in short supply locally

 These include AI, data analytics  Advanced Manufacturing, Digital Services

Expertise often cited in the media by various business groups

Such professionals would command a salary premium  And should be able to meet our EP criteria – in terms of salary, qualification and experience

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With the exception of those on our FCF Watchlist  As long as the employing companies  have complied with our FCF  In giving fair consideration to our local PMETs

They should generally be able to obtain approval for work pass applications  For such specialists in short supply globally  And in critical shortage locally

In the exceptional situation where the EP applicants with the skillsets much needed here and yet are not able to meet our EP criteria

 We do allow sector agencies to exercise some flexibility but only in a highly selective manner

 On the condition that there is indeed a shortage of such skills and that these foreign professionals are needed to help speed up our industry transformation and growth

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Sir, on balance, our manpower policy is  Both Pro-business and Pro-worker

It is designed to improve the quality of both our local workforce and foreign workforce in Singapore, and  Enhance the complementarity with each other

This is so that we can  Meet the manpower needs of businesses o For them to transform and grow

 And the career aspiration of our people o For them to adapt and grow

Guided by this policy objective, we will introduce further changes to make “1/3 Foreign” better

For S Pass holders  Who are mid-level skilled foreigners  Their minimum qualifying salary o Was last updated in 2013

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I agree with Mr Patrick Tay that it is timely to review

We will increase entry level salary by $200  Up from $2,200 to $2,400

As per current practice  Those with more years of experience  Will need to meet higher salary thresholds

To allow companies more time to adjust  The increase will be done in two steps o $100 from January 2019 o Next $100 from January 2020

We will also provide a transition period for existing S Pass holders

For Work Permit Holders  There will be no further tightening for now  Hence no change to dependency ratio ceiling (DRC) and levy

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As pointed out by Mr Melvin Yong and Mr Thomas Chua - Our focus is to enhance quality and productivity

Work permit holders at basic skill level (R2)  From non-traditional sources (NTS), PRC  Are now allowed to work here for maximum of 10 years

Those with higher skills (R1) in Services and Manufacturing  Are allowed to stay up to 18 years

22 years if they work in Construction, Process and Marine Shipyard

In response to feedback from the industry We will extend the maximum period of employment  By another 4 years

This will apply to all sectors, and for both R1 and R2  To take effect from 1 May 2018

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We will also give employers more path ways to improve the quality of their foreign workers  Besides skills certification  Those who are more experienced with higher pay can also be upgraded from R2 to R1

This is currently allowed for Construction, Process and Services sectors  We will now extend it to Manufacturing o And Marine Shipyard sectors

We believe this will be helpful to companies  That want to hire and retain  Their better work permit holders

It will take effect from 1 Sep 2018

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(Slide on) Fourth, for 2/3 + 1/3 to be >1, we need to make the “+” better [click]

To recognise and spread the adoption of progressive HR practices  We launched HCP in Feb last year (Slide off)

134 HC Partners are now on board  They are from various sectors  Ranging from MNCs to SMEs

Together, they employ over 140,000 locals

Mr Patrick Tay, Ms Jessica Tan and Associate Professor Faishal Ibrahim asked for an update

Sir, HCP companies believe in transforming HR into HC  Not consumption of HR but investment in HC  Turning HR into their most precious HC

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First, they have strong local core at all levels

 Collectively, local PMETs account for

o About 90% of total PMET workforce o Not just >90% at entry to middle level o But also >80% at senior to top levels

Second, their workforce is highly inclusive

 Jobs are redesigned o To be less physically demanding o For the older workers

 Flexible Work Arrangements are offered

o To allow those with care responsibility at home to share job

o For employees to go on sabbaticals

. And pursue new opportunities within the company when they return

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o To pursue part-time studies to upgrade themselves

o Or enable retired employees to return to work on part-time basis

Third, HCP companies believe strongly in strengthening local-foreign complementarity

 They transfer skills from foreign experts to our local workforce

 And build up local core in their senior management team

One HCPartner which left a deep impression on me is  Keystone Cable

A local SME (with 140 employees)  It is a maker of power and control cables  With a strong foothold in the region

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Plant is located in Senoko  Not easy to attract locals

It has to work doubly hard  To compete with MNCs for talent

As a flexible and nimble SME  It embraces the mindset of HC development

Started off as a delivery driver  Mr Jimmy Wong is now a Sales Executive

 He brought in $1m sales o In just 6 months in his new role

 He is now being groomed to take on clients in overseas market

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The company was able to  Attract20% more job applications in 2017

What is even more impressive is that  100% of those they offered jobs to  Accepted their offers!

Sir, we will keep growing the HCP community  As suggested by Mr Patrick Tay

We will also promote adoption of TS, as reminded by Ms Thana

(Slide on)Fifth and last, we must  Strengthen the synergy  Between “2/3 Local” and “1/3 Foreign”  So that the outcome will not be “=1”, but “>1” (Slide off)

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Globally, there is big concern that technology will take away many jobs  Yet, we see an amazing race to embrace technology  China is the world’s #1 user of industrial robots

Globally, there is big concern that foreigners will take away jobs from the locals  Yet, more countries are opening up even more  To attract foreigners with skills and expertise to offer  Including China and Japan

This remind me of the story of two men walking in jungle

In the global village  It is not possible to out run technology  But we can out run the competition Those running slower  Will see more jobs being destroyed by technology

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Those who run faster  Can create new jobs with technology  More than the loss of existing jobs to technology

This explains why China is running fast with robots  Japan is not slow too

With the help of Robots and AI  Honda Motor, Canon, Pioneer

 Bring production o Of car components o Car navigation system o Digital camera

 Back to Japan

“Made-in-Japan” is making a comeback  With the help of not just robots  But intelligent robots and human co-workers

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With the world out there running fast  Just imagine, what if one day

 A “cheaper” China becomes better by using technology faster than us

 A “better” Japan becomes cheaper also by using technology faster than us

If this happens  They would become CBF than us

What future will we have then?

So Singapore must run too  The faster the better

And we are

We are running fast in Advanced Manufacturing

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At Bedok Industrial Estate, Panasonic is building a Smart Factory there  It will have machines fitted with sensors o Inter-connected to work with each other

 Operation will be more manpower lean o Local workers will be retrained to take on new and better jobs

 The adoption of predictive management o Will mean near-zero operation incidents o Such as no machine breakdown, no product defect

We are also running fast in AI  We now have AI Singapore o Our National AI programme o To anchor deep national capabilities in AI

 We also have AI Business Partnership Programme o To encourage and facilitate AI adoption

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And the AI Apprenticeship Programme  To develop AI professionals  In key skills such as machine learning o And deep learning

In Digital Services

 MAS is promoting FinTech o To realise our vision of becoming a Smart Financial Centre

It is working with industry to push through ground- breaking initiatives  Blockchain, cryptography, quantum computing and big data, AI

We move so fast that today, we are one of the top global FinTech hubs

 Alongside London, New York and Silicon Valley

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We are running fast too in becoming a Smart Nation

 In the 80’s, we became an Intelligent Island

o Through National Computerisation o Office Automation o And Computer Integrated Manufacturing

 This time round, we aspire to become

o A Smart Nation o And a Digital Government

 Through Internet of Things o National Digital Identity o Smart Urban Mobility o Cybersecurity o And more

Sir, all these are important and strategic initiatives to bring and keep us at the forefront of global technology and innovation

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However, to truly succeed in becoming  A pervasively innovative economy and society,  We need to do more

We need to speed up the development and transfer  Of new and better global capabilities o To our local workforce  A point made by Mr Chong Kee Hiong

Not just in high tech, high profile and high impact sectors  But in as many sectors as possible o And as quickly as possible

This is why we are piloting the CTP  Because the potential scope for transfer and development of new capabilities  Is limited only by our focus and determination

Mr Patrick Tay asked for an update  I will illustrate with a few examples

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In Precision Engineering

 Smart phone o Is getting bigger o But also flatter, lighter

 Hence, our local industry needs to use softer alloy o And fit in more chips and components

 Company need high speed, high precision machines o To prevent cracking and warping

 Local engineers and technicians are also required to have new skills o To advise on product design o And materials selection

To compete well, our local industry needs to acquire new technology and new capability to offer o Lower cost (cheaper) o Higher accuracy (better) o Shorter cycle time (faster)

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Under CTP - over 15 months  We support them to  Install High Speed High Precision machines

And to bring in Foreign specialists from Germany

 To train local trainers (local + remote coaching)  Who are now training local trainees o From several companies in the industry

In Pharmaceutical Transportation

Today, more than 20 tonnes of global pharmaceutical cargo go through Changi Airport annually  Global marketing is still growing, fast

But out of 209 companies certified by IATA to handle such cargo

 We have only 10

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To grow Singapore’s market share in a global industry that is growing fast

SAAA@Singapore, CAG, CAAS, industry  Want to bring in IATA certified trainers (UK, Dubai)  To train a group of local specialists  Who will then multiply this capability by training other locals

In total, we aim for up to 25 companies to obtain IATA certification

CTP is relevant to domestic sectors too

Lift Maintenance  Current approach is to  Wait for breakdown o Than Repair, then  Wait for next breakdown

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A better approach is to  Make our lifts “smart lifts”

Use predictive data analytics & maintenance

 To shift from Corrective Maintenance o Wait for failure

 To Preventive Maintenance o Periodic maintenance before failure

 To Predictive Maintenance o Reduce probability of failure

Under CTP – We will partner with leading global vendors

 To bring in overseas specialists o Send local trainers overseas o Return to train local trainees locally

 In this way, we can anchor “smart lifts” capability in Singapore

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Furniture Manufacturing

Not many of us know that  Our local furniture industry o Is a S$6b industry o With over 1,900 companies

 Manufacturing facilities here o Focus on made-to-order furniture

Today, we can design and make furniture  Using 3-axis Computer Numeric Control (CNC) machines o Left – Right, Up – Down, Front – Back

 In the words of the industry, we are still at Industry 2.0

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To upgrade the industry to 4.0

 We will help them bring in 5-axis CNC machines

o Tool can twist and turn o Cut in different directions o To create contours, complex shapes

This will make the job of Craftsmen ESS

Under CTP, Singapore Furniture Industries Council (SFIC)  Together with WSG  Will bring in specialists from Italy  To train local trainers and local craftsmen

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Another example of domestic industry is Car Maintenance

 Market for Hybrid Cars o Grew by 200% in past 2 years o From 6k to 20K

New capability needed for repair and maintenance of hybrid car

 No longer just changing oil and filter o Checking and replacing battery o Lights and brakes

But have to handle a completely different system  Carry out battery load test  High voltage cable inspection  Front motor test  Hybrid transmission test etc

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Currently, independent third party car workshops  Have no access to certifiable training  To improve skillsets of local technicians

Under CTP – we will partner Singapore Motor Workshop Association  Bring in specialists from Germany  To train local mechanics  And to transfer the capability to our local industry

Sir, these are just some examples to illustrate the point  That the scope for capability transfer is tremendous

o Hi Tech to Hi Touch o MNCs to SMEs o Domestic to export oriented industries

We will support good projects  From any company and any industry

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 Beyond those currently supported by economic agencies for specific sectors

Mr Patrick Tay asked for details of CTP

To achieve real transfer of capability

 Project duration is mostly in months and years o Not days and weeks

 Specialists have to do more than just training o But also coaching and working alongside our local workers

o Be their trainer, mentor and guide

 Costs can often be the obstacles o Especially for local enterprises

Under CTP, we will co-fund the cost of capability transfer  For foreign specialists to train our locals here

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 Or for local trainers to be trained overseas

So that over time  We will be able to anchor more capabilities here  To upgrade our local workforce and industries  As we transform, adapt and grow

In reply to Mr Low Thia Khiang

In our project evaluation  We will consult sector agencies  And be guided by the ITM

Mr Patrick Tay asked about the funding levels.

Funding support will range from 30%, 50% and 70% of the cost of capability transfer, including

 Salary cost of expert trainers o Both local and foreign

 Cost of living allowance

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o In Singapore and overseas

 Airfare

 Training equipment for the industry

Projects with higher impact at the industry level  And those benefiting SMEs  Will receive higher level of support

Total funding per project is currently capped at $300k

In exceptional cases as highlighted by Mr Patrick Tay  Where cost of capability transfer is higher  And local expertise is much needed but lacking

 Funding support of up to 90% o And project cost of more than $300k o Will be assessed o On a case by case basis Mr Desmond Choo said we should scale up CTP and accelerate the acquisition of new capabilities

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I agree

We started the pilot late last year

 We will reach out extensively o To create more awareness o And generate more interest

We hope our sector agencies and tripartite partners  Including LM and various industry groups  Will make good use of CTP  To fill the many capability gaps o In a more pervasive manner

We hope to doing this across all sectors, all sizes of companies  As quickly as possible

Sir, our strategy of 2/3 + 1/3 >1

 Will help ensure that our Singapore Workforce

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o Can better support the growth o Of an innovative Singapore Economy

 And also create better skills, jobs and careers o For an inclusive Singapore Workforce

2/3 + 1/3 >1 may be bad mathematics  But if we all work together

I am confident that even bad mathematics  Can be turned into good policy  For the benefits of all

(Mandarin speech)

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Conclusion

Sir, we firmly believe that job is the best welfare  Full employment is the best protection  For our people

Together with our tripartite partners  At the national and sector levels

We have to do our best to transform  Across all sectors  For our economy to transform and grow  Pervasively, as One Singapore Unlimited

We also have to do our best  To create better jobs, better skills  And strive for better employment outcomes  For everyone to adapt and grow  Inclusively, as One Singapore United

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Advances in technology  Will destroy many old jobs  Globally and here in Singapore

But if we do more together  To build new and better capability  Faster than our competitors

We can move ahead and stay ahead  To make every enterprise a better enterprise  Every job a better job  Every worker a better worker

Together, we can strive  Innovative, inclusive and sustainable growth  For everyone

And ultimately As Minister Heng said in Budget 2018: Together, A Better Future

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