May Day Message 2010

Recovering Strongly, Looking Ahead

Thanks to the efforts of Singaporeans, our economy stayed resilient during the global economic crisis last year. We were hard hit, especially in early 2009. But unions, employers and government worked closely to help firms and workers ride the storm. Our focus on saving jobs paid off. Singapore’s employment actually grew amidst the downturn, a remarkable achievement.

The economy is much better this year. Our GDP went up 13% year-on-year in the first quarter. Given this strong result, the Government has raised our growth forecast for the entire year to between 7% and 9%.

We must see this remarkable performance in perspective. This quarterly growth figure reflects the volatility of our small, open economy. Some sectors like Electronics and Biomedical Sciences expanded sharply, but others have not done quite as well. Furthermore, the jump represents a transient rebound from the sharp dip last year, and is not a sustainable long-term growth rate.

Nevertheless, we have emerged from the storm in a strong position, and can look forward to a good year this year. We must make the most of this opportunity to push forward our longer term plans: transforming the economy, upgrading our workforce and raising our productivity.

Other Asian economies are also progressing rapidly and catching up on us. But if we make a concerted effort, we can maintain our lead. Only then can we achieve our target of 3-5% annual growth over the next decade, and continue to improve the wages and lives of all Singaporeans.

Firms will be at the forefront of the productivity effort. They need to be well-managed, and focus on quality, not quantity. They need to restructure their own organisations – cut waste, streamline processes and automate routine work. We live in a world where firms have to constantly innovate and invent new products, fight for market share and strike out into new, unfamiliar territories. There are numerous ways for businesses to do things “Cheaper, Better, Faster”. Only when the firm is in the right business and is operating efficiently, will its workers be able to work productively.

To support this effort, workers need to update and improve their skills, pick up new abilities, and achieve greater mastery at their jobs. Worker upgrading is a marathon without a finish line. Singapo¬reans are already working hard, and it is important to make every working hour count. During the downturn last year, workers actively attended training programmes. We must keep up such efforts now that the economy is growing again.

The Government will do its part too. We will spend $5.5 billion over the next 5 years to boost productivity. We are building a first-class Continuing Education and Training (CET) system, which will do for adults what our schools and post-secondary institutions do for our young. We will provide tax benefits, grants and training subsidies to support skills development, innovation and economic restructuring. We are also raising foreign worker levies, to encourage businesses to improve their productivity and not rely excessively on cheaper foreign workers.

The National Productivity and Continuing Education Council (NPCEC) chaired by Deputy Prime Minister Teo Chee Hean is overseeing this national effort. Each sector and industry will have its unique challenges and priorities, and we must tailor our efforts to fit each of them. Employers and workers should take full advantage of these schemes and resources.

More immediately, with the strong pickup, many companies are restoring the wage cuts and shorter work-hours introduced during the downturn. Others are awarding bonuses and increments, depending on their improved performances. These companies have remembered the sacrifices made by workers during the crisis. Their actions are strengthening the trust between workers and employers. They should work with the unions to look beyond the immediate optimism, to build up variable bonuses and structure their wage systems to be sustainable and flexible over the longer term.

The Government will pay special attention to low wage workers. We have enhanced the Workfare Income Supplement and raised its income limit from $1,500 to $1,700. The new Workfare Training Scheme will encourage employers to send workers for retraining, and workers to complete their training programmes. Workers should take this opportunity to develop new and deeper skills, and contribute more value in their jobs, or move to higher value jobs.

Singapore has successfully tackled past challenges because of our strong tripartite partnership. Unions work with employers and the Govern-ment to enlarge the pie so that all will have more to share. Investors and businesses value highly our collaborative spirit, facing difficulties and solving problems together. Our track record of tripartism is a key competitive advantage that wins investments and brings in jobs for Singaporeans.

Our union leaders understand what Singa¬pore’s prosperity, and our workers’ well-being, depend upon. They know that there is no substitute for hard work, ingenuity and enterprise. They have done much to help workers understand the economic trends affecting them, and to encourage workers to go for retraining and upgrading.

The Government will continue to give the unions full and mutual support in our tripartite efforts. We must maintain our cohesive spirit, in order to meet our goals for the next decade. We have to work together, uphold tripartism, focus on productivity, and give special attention to low wage workers. Then we can we improve workers’ lives and sustain inclusive growth for all over the long term.

I wish all Singaporeans a Happy May Day.