SINGAPORE : Singapore's labour movement has called for a restoration of the employer's CPF contribution rate in the wake of the strong rebound of the Singapore economy in the first quarter of this year.
Singapore's economic growth for this year is expected to come in at between 7 and 9 per cent.
The current total CPF contribution rate is 34.5 per cent with employees contributing 20 per cent and the rest from employers.
The CPF contribution rate was last restored in 2007 after it was cut in 2003.
Speaking to reporters after a company visit on Thursday, NTUC Chief Lim Swee Say noted that the long term target of the CPF contribution rate is 36 per cent.
However, he would like to leave it to employers to channel their feedback to the government before a final decision is made on the restoration rate.
Mr Lim hoped that a decision on this can be made before the NWC recommendations are out by the end of May.
Mr Lim explained, "In about 2003, we have set ourselves the target of keeping the CPF in the range of about 30 to 36 per cent. Since the last few years, it had been kept at 33 per cent, and the last time the adjustment was made in 2007 when we adjusted the CPF rates from 33 to 34.5 per cent. At 34.5 per cent obviously there is a 1.5 percentage point from the longer term target of 36 per cent.
"On the part of the labour movement, we feel that given the strong recovery and performance of the economy in the first quarter as well as the healthy outlook for the rest of the year, and given the healthy low unemployment situation, we think that, in a way, this is a good opportunity for us to consider some form of CPF restoration.
"In other words, as we continue to grow our economy and upgrade our productivity, wage pressure will go up, but it's important that we don't put all these wage increases into our pockets and spend them for today."
He added, "We must recognise that with longer lifespan and with programmes like CPF Life and the Ministry of Health has highlighted many times that we need to have more money for healthcare in the future, when the situation is right we should consider to increase further the CPF contribution rate, moving towards to 36 per cent.
"So on the whole, the three areas of focus as we go through this upturn is, firstly, continue our focus on productivity revival to ensure that the healthy rebound can be sustained for the rest of the year and 2011 and beyond.
"Secondly, workers deserve a better wage reward this year but at the same time let us ensure that our flexible wage system remains flexible. And thirdly, recognise that we do need to save more for the future. So given the strong performance of the economy and the healthy outlook, we hope the government will consider a partial restoration of the CPF and the employers will support this move."
Singapore's economic growth for this year is expected to come in at between 7 and 9 per cent.
The current total CPF contribution rate is 34.5 per cent with employees contributing 20 per cent and the rest from employers.
The CPF contribution rate was last restored in 2007 after it was cut in 2003.
Speaking to reporters after a company visit on Thursday, NTUC Chief Lim Swee Say noted that the long term target of the CPF contribution rate is 36 per cent.
However, he would like to leave it to employers to channel their feedback to the government before a final decision is made on the restoration rate.
Mr Lim hoped that a decision on this can be made before the NWC recommendations are out by the end of May.
Mr Lim explained, "In about 2003, we have set ourselves the target of keeping the CPF in the range of about 30 to 36 per cent. Since the last few years, it had been kept at 33 per cent, and the last time the adjustment was made in 2007 when we adjusted the CPF rates from 33 to 34.5 per cent. At 34.5 per cent obviously there is a 1.5 percentage point from the longer term target of 36 per cent.
"On the part of the labour movement, we feel that given the strong recovery and performance of the economy in the first quarter as well as the healthy outlook for the rest of the year, and given the healthy low unemployment situation, we think that, in a way, this is a good opportunity for us to consider some form of CPF restoration.
"In other words, as we continue to grow our economy and upgrade our productivity, wage pressure will go up, but it's important that we don't put all these wage increases into our pockets and spend them for today."
He added, "We must recognise that with longer lifespan and with programmes like CPF Life and the Ministry of Health has highlighted many times that we need to have more money for healthcare in the future, when the situation is right we should consider to increase further the CPF contribution rate, moving towards to 36 per cent.
"So on the whole, the three areas of focus as we go through this upturn is, firstly, continue our focus on productivity revival to ensure that the healthy rebound can be sustained for the rest of the year and 2011 and beyond.
"Secondly, workers deserve a better wage reward this year but at the same time let us ensure that our flexible wage system remains flexible. And thirdly, recognise that we do need to save more for the future. So given the strong performance of the economy and the healthy outlook, we hope the government will consider a partial restoration of the CPF and the employers will support this move."
