Translated by Donaldson Tan

On 3 April 2011, MediaCorp telecasted the first mandarin General Election debate in 20 years. Appended below is the English translation.

There are 3 segments to the debate. The first segment is on the long-term challenges faced by Singapore. The second segment focuses on the impact of foreign labour and the cost of living. The third segment is on policy solution proposed by each political party.

This is the second segment. Click here for [Part 1] and [Part 3].

Impact of Foreign Labour & the Cost of Living

Moderator: Welcome back to the Political Forum on Singapore’s Future. In this segment, we shall be discussing short-term challenges. According to a recent MediaCorp survey, every 1 in 2 Singaporeans considers the cost of living is the next most pressing issue after housing and foreign labour; and it will very likely have an impact on their voting choice. We now enter into an unmoderated caucus with a total time of 6 minutes. Now, timing begins.

Koh Choong Yong [WP]: The WP believes there are many areas the government can intervene in curbing the rise in cost of living. For example, the supply of land, the collection of rent, taxes and other administrative charges by government agencies, Electronic Road Pricing, Goods & Service Tax, Road Tax, etc have some effect on the price level, so the government should not use the excuse of external factors to shred its responsibility on curbing inflation. Therefore, it should be a question of whether the government has the political will to combat the rise in the cost of living.

Alec Tok [RP]: One in every two Singaporeans finds the cost of living here too high. I can understand. Let me share my experience of living in New York City (NYC). Although the rent in NYC is much higher than that in Singapore, the purchasing power of New Yorkers are also much higher than Singaporeans. That’s why the Singapore Dollar (S$) is a lot smaller than the currencies of Europe and the United States. I would like to ask the PAP how it would respond to this comment.

Sebastian Teo [NSP]: Cost of living encompasses food, shelter, clothing and transport. Housing and transport seem to be most pressing factors while various signs pointed out the problems of housing and transport arise from monopolies. For example, public transport is dominated by 2 operators while the Housing Development Board (HDB) is responsible for over 80% of the housing supply.

These 2 factors combined together make it increasingly difficult for Singaporeans to cope with the rising cost of living. On top of that, Singaporeans face wage depression due to labour competition by foreign workers. As such, life is especially difficult for the lower income group.

Lim Swee Say [PAP]: Are you saying that the HDB in fulfilling its mission to provide housing for majority of Singaporeans is actually a bad thing?

Sebastian Teo [NSP]: No, it is not a bad thing, but the only 2 beneficiaries of high HDB prices are the government and foreign immigrants. To Singaporeans, high HDB prices doesn’t mean anything because we have to buy a new flat to replace the old flat we had sold to meet our housing needs. On the other hand, foreign immigrants can cash out on their residential properties when they return to their home countries. For the government and HDB, higher prices translate to more profit and stamp duties.

Koh Choong Yong [WP]: The Workers’ Party believes that it is a good thing that 80% of Singaporeans are living in HDB flats, but finds that HDB flats are getting too expensive. Many people have told us they find HDB flats unaffordable. We believe there is a big gap between the cost of building a HDB flat and its market price. The selling price of a HDB flat should be based on a multiple of the median household income instead of utilising the market mechanism. Under such a non-market pricing regime, the price of HDB flats becomes regulated.

Alec Tok [RP]: I would like to add to Choong Yong’s point that the government is not only responsible for supplying land to HDB, but also provides housing loans. Under such an arrangement, it is inevitable that HDB price will go up.

Lim Swee Say [PAP]: The PAP’s view and approach on housing policy consist of 3 points. The first point is that home ownership is the cornerstone of the housing policy.

The second point is there must be gradual appreciation in property prices. Why is this important for hdb price to appreciate gradually over time? Consider the hypothetical situation of a Singaporean who bought a HDB flat for $200,000. In 20 years time, would he benefit if the selling price is less than the price he bought today? If the Opposition thinks depreciation of HDB price is good, it can use this point as a platform to fight for more votes.

The third point is housing must affordable for young couples.

Moderator: Time’s up, Minister, but you will be allocated time to reflect on all the comments spoken in this segment. Now it is time for you to share your position on the cost of living and the impact of foreign labour.

Lim Swee Say [PAP]: Inflation is indeed a key problem faced by Singapore. This year’s inflation rate will be higher than that of the last few years. The long-term outlook for inflation is expected to be higher than the inflation rate of the last 4 years. That’s why the PAP is very serious about this problem.

There are 2 ways to tackle the problem of inflation. Water located too far cannot be used to put out the fire nearby, so the government, through various mechanisms, put up assistance to lower income groups under the Grow & Share Package (Budget 2011). The rebates and the GST credits they receive would be able to offset the impact of inflation. The second way to tackle the problem of inflation is to boost productivity, so that the income level would rise. Job security, salary increment, sharing benefits and discipline enable Singaporeans to cope with inflation.

Moderator: Thank you minister. Now we proceed to next sub-segment on the impact of foreign labour. According to the same MediaCorp survey, 7 out of 10 voters expressed their concern on competition from foreign labour. We now enter an unmoderated caucus of 6 minutes to discuss this topic.

Alec Tok [RP]: On foreign immigrants, they are not only competing with Singaporeans for jobs, but also residential properties. Earlier on, Minister Lim said that the PAP would like to achieve steady growth in property prices, but the reality isn’t so. For the last 2 years, the lax foreign labour policy has resulted in many immigrants qualified to purchase HDB flats, thus HDB prices grew by 60% over the past 2 years.

Moderator: Now, it is time for Sam Tan of the PAP to speak.

Sam Tan [PAP]: Singapore’s progress is intrinsically linked to its economic development. The key reason for Singapore’s stellar economic growth for the last 10 years is twofold: (1) the government has been assisting workers to upgrade their skills, so they can earn higher salaries; (2) foreign talent and foreign workers take up the jobs that Singaporeans reject. These 2 factors are complementary and cannot do without each other. Hence, the crux of the question is not how many foreign immigrants are competing in our domestic labour market, but rather how we can achieve economic growth.

A more important point is when a country achieves excellent performance, how do we share the fruits of the economic growth among our workers and the rest of the electorate? This is why the Finance Minister was very generous in Budget 2011 to hand out S$66M to Singaporeans. We are able to do this because we are able to synergise the 2 pillars of economic growth – (1) Singaporean workers; and (2) Foreign labour.

Koh Choong Yong [WP]: Fundamentally, the Workers’ Party does not oppose immigration and foreign labour. Foreign labour should make up for jobs that Singaporeans don’t want to fill. However, many Singaporeans now feel their jobs have been stolen by foreign labour. Moreover, the rate of absorbing immigration shouldn’t exceed the rate at which our basic infrastructure can cope with growing resident population. Singapore is so small. If we continue to take more immigrants, then basic infrastructure such as MRT and HDB flats would not be absorb the stress due to the growing immigrant population.

Moderator: Mr Teo, now it is your turn.

Sebastian Teo [NSP]: If we don’t tighten the influx of foreign labour, there is no way we can rise the productivity of Singapore’s workers. Minister Lim’s approach of raising productivity level is actually quite difficult to comprehend. Firstly, competition from foreign labour leads to wage depression for Singaporean workers. Secondly, there is an impact on the quality of life here because the basic infrastructure wasn’t designed to cope with so many users considering the resident population increased from 3M to 5M. Did the ruling party take this into consideration when it liberalised the immigration policy? Inflation is also partially due to higher demand because there are more foreign immigrants in Singapore.

Moderator: Now, it is time for the PAP to respond.

Lim Swee Say [PAP]: Mr Teo has mentioned that HDB price has rocketed in the past 2 years. The PAP is also very concerned on this development. This is why the Singapore government has implemented measures to cool the red-hot housing market and there appears to be sign of cooling in the housing market. It is impossible to avoid short-term turbulence in the housing market, but it is okay as long as there is long-term stable growth in housing prices.

Moderator: Would any of the Opposition like to speak?

Sebastian Teo [NSP]: I would like to ask why the government does not tighten the regulation on how local companies hire foreign labour. For example, the employer may have to prove that he is unable to hire a Singaporean worker before he is allowed to hire a foreign worker. The Australia government requires the employer to prove there he cannot find a domestic resident to fill the job before he is allowed to hire a foreign worker, while the foreign worker may find himself eligible to apply for Australia citizenship.

Alec Tok [RP]: Since Minister Lim is here, I would like to ask him this question: Residents feedback to us that it is baffling that the Reform Party calls for minimum wage legislation despite objection from the National Trade Union Congress (NTUC). Why does the NTUC object minimum wage legislation?

Moderator: Now we can invite the Minister to respond to the questions raised.

Lim Swee Say [PAP]: There are many problems with the minimum wage legislation. If the minimum wage is set too low, many low-wage workers will continue to face many problems. If the minimum wage is set too high, many low-wage workers will loose their jobs. Hence, our approach is not to raise the minimum wage, but to raise the minimum skill level through retraining and skill upgrading, thus providing low-wage workers opportunities to earn higher wages.

On labour, the PAP and NTUC are unified in its view: if employment rate is high, then there is job security and prosperity. On one hand, we work to ensure unemployment rate is low. On the other hand, we work to ensure employment rate is high, so that job opportunities are abundant. There is a question I hope everyone here can consider calmly and rationally: while we can ban companies from hiring foreign labour, can we stop these companies from relocating overseas? In another words, it is a question of more or less foreign labour, and not zero foreign labour. There is no free flow of foreign labour into Singapore. On the contrary, the government’s approach is to raise the skills and productivity of Singaporean workers while raising the skill profile of the foreign labour in Singapore so that as a whole the Singapore workforce becomes more competitive.

Moderator: Time’s up. Thank you, Minister. Let’s take a short break. In the next segment, each party representative will summarise what has been discussed so far.