Amid rising protectionism, Singapore must refresh, strengthen compact with workers: DPM Wong
AS PROTECTIONISM rises in trade and investment, Singapore must refresh and strengthen its social compact with workers, said Deputy Prime Minister Lawrence Wong on Monday (May 1), as he gave the fourth-generation (4G) leaders’ commitment to supporting workers and sustaining growth.
He was delivering the keynote address at the National Trades Union Congress (NTUC) May Day Rally – the first time a deputy prime minister has done so since 2003, when then-DPM Lee Hsien Loong spoke. Wong first spoke at the May Day Rally in 2022, after PM Lee’s keynote.
Addressing some 1,400 union leaders, workers and tripartite partners at Suntec Convention and Exhibition Centre, Wong warned of the challenges facing Singapore: changing attitudes to trade, slowing foreign direct investment as “near-shoring” rises, and protectionism in investment.
Advanced economies are rolling out “massive subsidies” to build up domestic production in strategic industries such as semiconductors and clean energy, he noted. This is even as they move to close gaps in tax competition through the Base Erosion Profit Shifting 2.0 initiative, which includes a global minimum corporate tax rate of 15 per cent.
“What this means is that competition will be much tougher,” said Wong. He stressed that Singapore cannot afford to outbid the advanced economies for investment. Even with higher revenues from higher corporate taxes, the Republic would not have enough money to match the competition.
“But what we must have enough of are ingenuity and innovation, guts and gumption,” said Wong.
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With Covid-19 having enhanced Singapore’s reputation as a reliable and trusted hub for businesses, the country must seize this opportunity to become more competitive and relevant to the world, he said.
One strategy is investing in connectivity infrastructure, which is why Singapore is pressing ahead with the construction of Changi Airport Terminal 5 and Tuas Port.
“These will significantly enhance our capacity and reinforce our status as a business and logistics hub,” said Wong, adding that these moves have already attracted more multinational corporations to anchor their regional and global supply chain operations here.
Another strategy is to deepen Singapore’s capabilities for innovation, especially in areas of competitive strength. The government is thus continuing to invest heavily in research and development, as well as innovation, and doing so with leading companies, he said.
“If we can keep (Singapore) shining bright, businesses and investors in the region and beyond will continue to want to come here,” said Wong. “The Singapore brand can continue to be a calling card for our people venturing abroad, and for local companies expanding into overseas markets.”
But even as Singapore strengthens competitiveness, it will fight the ills of inequality, said Wong. The government is doing so through the Forward Singapore exercise to refresh and strengthen the social compact, including with workers.
One focus is on workers in vocational and technical roles, especially graduates from polytechnics and Institutes of Technical Education. The government will help them deepen their skills through different pathways, so that they can secure better salaries and career paths.
Amid rapid technological advancements, the government will also help professionals, managers and executives to retrain and upskill to stay relevant. Acknowledging that many workers find it challenging to juggle work, family responsibilities and retraining, Wong said the government is working closely with NTUC to reduce costs and lower the barriers to training.
The Forward Singapore exercise is also reviewing how to do more to uplift lower-wage workers and professionalise the skills trades, support workers who lose their jobs, and help workers meet their retirement needs.
Said Wong: “We’re looking into all of these issues, and working closely with NTUC on possible solutions, so that we can provide good jobs and opportunities, and better assurance to all our workers.”
While Singapore cannot afford to provide the same scale of investment subsidies as other advanced economies, it has “something worth even more – a tripartite structure that is in working order and effective”, he said.
Unlike other developed countries, where industrial relations with businesses and the government have broken down, Singapore’s cooperative tripartite approach gives it the “best chance of overcoming challenges and seizing new opportunities”.
Wong highlighted “the symbiotic partnership” between NTUC and the People’s Action Party (PAP). In good times and bad, workers and unions have supported the PAP; the PAP government, in turn, works with NTUC to implement pro-worker laws and policies.
Wong acknowledged that besides jobs, workers worry about the cost of living. He gave a recap of upcoming cost-of-living support that is to be disbursed, adding: “We have done everything we can to lessen the stresses and strains that people feel on the ground, and we will continue to do so.”
On the specific concern of housing, he noted that supply is being increased to catch up with the pandemic-era backlog. Affordability should be considered not just in terms of the headline price of a Build-To-Order (BTO) flat, he added, but also how prices relate to income, and the proportion of income needed to service the housing loan.
“BTO flat prices have in fact moved in tandem with incomes,” he said, adding that the typical household today still uses less than 25 per cent of their income to service their loan, similar to 1980.
Concluding his speech, Wong said: “The 4G team and I are fully committed to look after our workers, to protect your interests and help you earn a better living and live a better life.”
And the team is similarly committed to its partnership with the NTUC and labour movement, working together “to secure sustained growth and good jobs for all Singaporeans”.
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