00 Cover MrNgaiFong WF.indd - SBF Download Area - Singapore ...

7NWC WAGE-RELATEDGUIDELINES1COMPANIES GRANTBUILT-IN WAGE INCREASESFOR 2012-2014.MAS: To allowSingapore dollarnominal exchangerate to riseSingapore needs to rely on productivityimprovements and innovation todrive sustainable growth.The latter is currently thehottest topic of discussion amongpolicymakers, businesses as wellas workers.As HSBC economist FredericNeumann put it in an April 2012report, productivity gains inSingapore is grounding to a halt,threatening the republic’s longertermsustainable growth.Amid the many dire indicators ofdeclining productivity in Singapore,a major proposal emerged recentlyto suggest that those earning below$1,500 a month should have theirsalaries increased by 50% over threeyears, while the wages of thoseearning $15,000 or more should befrozen.This would enable those in thelower income group to raise theirproductivity levels and help therepublic address a growing problem– that of bridging the nationalincome divide.In response to this proposal, theNational Wages Council completedits deliberations on wage and wagerelatedguidelines for 2012/2013recently and recommended that:1 Companies grant built-in wageincreases for 2012/2013, takinginto account the prevailing labourmarket conditions, as well as theirrespective business performanceand prospects.2FIRMS REWARD EMPLOYEESTHROUGH VARIABLEWAGE COMPONENTS.2 Firms reward staff via variablewage components whereappropriate, in line with thecompany’s performance andworkers’ contributions.Reflecting the broader voiceof the business community, MrHo Meng Kit, CEO of SingaporeBusiness Federation (SBF), who hasbeen assisting the SBF-led SMECommittee, noted: “Businesses arenot against lower-income workershaving a wage increase, especiallywith the rising costs of living inSingapore.“However, it is important howthis wage increase is anchored.We believe we should press onwith the current approach, wheretrade associations and chamberswork closely with the unions andgovernment agencies to spur groundlevelproductivity improvementsin companies. This requires moreeffort, but the result would bemore sustainable.”Broader initiativesAt the 54th session of the AsianProductivity OrganizationGoverning Body meeting inSingapore, Mr Lee Yi Shyan,Minister of State for Trade andIndustry, said the republic isnow redoubling efforts to raiseproductivity among its workforce.Going forward, Singapore willneed to rely less on factor inputsuch as labour supply; and more onproductivity gain and innovation todrive sustainable growth, he said.In 2010, Singapore set a targetof achieving productivity growthp.8Given that inflationary pressurescontinue unabated in Singapore,the Monetary Authority ofSingapore said in April that it will“continue with the policy of amodest and gradual appreciationof the Singapore dollar nominaleffective exchange rate”.In sharing its latest policy stancesince October last year, the de factocentral bank said that it expectsinflationary pressures to remainelevated over the next few months.“This policy stance will helpanchor inflation expectations,ensure medium-term price stability,and keep growth on a sustainablepath,” it added.DBS has maintained thatinflation risks are still the concernfor Singapore, with the republichaving the “worst inflation profilein the region”.With this view, the bank isexpecting the US dollar to trade ataround S$1.26 at end 2012.Mr Ho Meng Kit, CEO,Singapore Business Federation“We believe weshould press onwith the currentapproach, wheretrade associationsand chamberswork closely withthe unions andgovernment agenciesto spur groundlevelproductivityimprovements incompanies.”SPH Library