Dear frens,
TT must not be the president of Singapore and here is why
http://forum.channelnewsasia.com/viewtopic.php?t=441913&sid=87354786cbbe54aeaee1f2647a47910f
Wage cost burden heavier than in US.
27 August 2003
Quoting a Perc global survey, Deputy PM Tony Tan tells why it is urgent that costs are brought down through CPF rate cuts
SINGAPORE'S workers have become more expensive than those in the United States and Australia, according to an international survey.
It shows Singapore is not just ahead of developing countries but also developed cities such as New York and Sydney.
This 'alarming' situation worries Deputy Prime Minister Tony Tan, who brought it up yesterday to show why the Central Provident Fund (CPF) rates must be cut swiftly and substantially.
The survey issued by the Political and Economic Risk Consultancy (Perc) firm on July 2 shows that on a scale of zero to 10, with zero being the lowest labour cost country, Singapore stood at 5.5, the fourth highest among 14 countries surveyed. This puts it ahead of the US (5.07) and Australia (4.Cool.
'To me, this is a profoundly important statistic. It's a simple one but it gets to the nub of the problem. We have priced our labour out of the market,' Dr Tan told reporters, elaborating on a speech he made later at a dinner to celebrate the 35th anniversary of Sembawang Shipyard and its employees' union, and National Day.
He made it plain he was not expecting workers here to match the cheap wages of China and India or those of neighbouring countries.
'But it is crucial that we do not price ourselves ahead of developed countries which are also our competitors in the global market,' he said.
He acknowledged that obtaining a correct reading of the economic situation was difficult.
However, a meeting in June with US businessmen in New York led him to realise there was something amiss here. The Americans were confident of a resurgence in their economy but back home, he found companies continued to retrench.
'There was something more than the Sars' impact or other transitory factors. It must be a structural factor.'
The Perc report crystallised the problem: high wage costs.
Its labour cost index is derived from a survey of expatriates working in Asia, asking them to rate the country's labour cost. The finding is checked for consistency against its data on other labour costs.
The Perc survey also looked at overall costs of doing business, prime rents and utility costs, and Singapore did relatively better.
As Dr Tan pointed out, measures are in place to ease other business rigidities: Corporate tax will be cut to 20 per cent by 2005, many government charges have been cut or removed, and land prices are kept affordable.
The need now is to remove the rigidity in wage structure - the CPF rates, said Dr Tan.
It makes companies less flexible because it is 'a tax on cash flow'. By lowering it, more money is immediately available to keep companies viable, thus saving jobs.
'We have no choice but to reduce our CPF rates substantially and quickly if we want to save jobs,' he said, echoing similar calls made on Sunday by Prime Minister Goh Chok Tong and Deputy Prime Minister Lee Hsien Loong.
Mr Goh had said the current 36 per cent could be lowered to possibly 30 per cent.
Yesterday, Dr Tan said: 'The more substantial the cut, the more likely you don't have to make another cut down the road.'
He assured Singaporeans of help: 'No Singaporean will lose his or her home or be denied medical care because of the cut in CPF. We will help Singaporeans to meet their mortgage payments.'
Poor families will also get aid for daily needs, he added.
Dr Tan's call for a CPF cut was supported last night by Mr M. Ramasamy, president of the Sembawang Shipyard Employees' Union.
He said: 'It's for our survival and we should have done it much earlier.'.
Do you want such a person to be our President? I remember this argument putforward by TT at that time.