Truth about S’pore’s public policy administration

January 24, 2005
Singapore Democrats

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Mellanie Hewlitt
Singapore Review
21 Jan 2005

Government led “Family Friendly” benefits and “Flexi-work” arrangements often look good only on paper but find very limited application outside of the civil service in the real pressure filled world of private sector firms and MNCs. This was the bitter lesson learnt by Ms Lim Ai Ling when she attempted to cash-in on her “Family Friendly Benefits” and instead opened a can of worms. Ms Lim found to her horror that a “Flexi-work” public policy does not mean flexi-work arrangements in practise.

Ms Lim’s mistake is quite understandable. Many of us assume that public policies are more than mere rhetoric and take them at face value especially when they are enthusiastically reported in the local government owned papers. We mistakingly assume that a “Family Friendly” public policy translates into more quality time with our loved ones. But the truth is hard to swallow in Singapore. Few realise that most of the policies are mere publicity stunts devoid of actual substance and one relies on them at his or her own peril.

To be fair, many firms and Multinational Companies (MNCs) will endorse these government led “family friendly” % “flexi-work” packages as part of their standard employee welfare program. But they are also faced with budget constraints and the constant pressure of keeping costs down and achieving a larger workload with the same (or even smaller) number of workers.

Family Friendly = More Time With Family = Less Time in Office
What the PAP and Singapore’s highly paid ministers fail to realize is that we cannot eat our cake and have it. For every choice made there is an underlying opportunity cost. Most private sector MNCs have already optimized workflows and streamlined work protocols so only very little room is available for further rationalization exercises. In a fast moving work place like this, the opportunity cost of implementing a family friendly work environment translates into;

a) Shorter Work hours;
b) Lighter work loads;
c) Employing more staff to do the same amount of work;
d) Increased labour costs and head-count;
e) And ultimately a less competitive Singapore work force (and infrastructure).

The logic behind the above is part of Introductory Economics 101;- When a company is given fixed (and limited labour resource units), if one factor of production is increased while the others remain constant, the overall returns will relatively decrease after a certain point. http://www.encyclopedia.com/html/d1/diminish.asp

The bottom line is that many department heads, and employers are unwilling to accept the above costs which will ultimately eat into the net profit and overall financial performance of a firm. The accepted norm in Singapore’s MNCs is to “over leverage” on fixed labour resources so that the department is actually operating on the declining segment of the Total Productivity curve. Needless to say this is an inefficient allocation or resources as the mix of resource units are not optimized. But this is of no consequence to most department heads as their only sole objective (to the exclusion of all else including worker welfare) is to keep labour costs down.

In this flawed strategy, worker welfare (and Family Friendly Benefits) are interests that directly conflict with the balancesheet / P&L needs of the company (and the state).

Unfortunately, the same flawed strategy is adopted by the Singapore government albeit on a larger scale. On a small island with no natural resources, the only “resource” which is saleable in order to attract foreign investments is HUMAN LABOUR. But if this is the case and the average worker should be of prime importance to the overall well being of Singapore Inc, Management should implement more friendly work policies. Instead, the average worker is exploited and they seem to be intent on killing the goose that lays the golden egg.

Past examples of the PAP Government’s “Family Friendly” policies include:

1. Cutting Employer’s CPF. Implementing across the board wage reductions (in the form of unilateral cuts to employers CPF contribution). This was a policy which the PAP government imposed harshly with the full knowledge that government census figures showed that most Singaporeans workers are still dependent on CPF contributions to pay-off their mortgages. (See: http://groups.yahoo.com/group/Sg_Review/message/618 and also http://groups.yahoo.com/group/Sg_Review/message/638)

2. No CPF Restoration in Good Times. During a subsequent economic recovery, this same government did not restore Employers CPF contributions. The ministers of cause restored their own salaries (though it was highly questionable if they ever took a wage cut in the first place. (See http://groups.yahoo.com/group/Sg_Review/message/1234) But the buck literally stopped before it reached the average Singapore worker.
Singapore is a very expensive place to call home. Its ok if you are just “passing through” as an expat, but the story is different if you try settling here for good. (See: http://groups.yahoo.com/group/Sg_Review/message/1074)

3. Singapore Workers Over Paid. Inspite of para (3) above, this same government also came to the rather far-fetched conclusion that Singapore workers were more well paid than their counterparts in the US, UK and Australia (see: http://groups.yahoo.com/group/Sg_Review/message/577
Singapore Workers Cannot Retire: Contrary to the assertions of the government in para (4) above, it is a fact that Singaporean workers will not have enough in their savings to retire on. (See: http://groups.yahoo.com/group/Sg_Review/message/1413)

4. State Enterprises Live Off Workers. Decades of huge hidden fiscal surpluses enrich the Singapore government and state enterprises but impoverish the private sector and tax payers. (See Far Eastern Economic Review: http://groups.yahoo.com/group/Sg_Review/message/1153)

5. Its a Crime Not To Top-Up CPF. This same government has made a crime if you do not top-up your CPF. Only in Singapore is it possible to be taken to court if you owe yourself money. (See: http://groups.yahoo.com/group/Sg_Review/message/1305)

The list goes on and on but for the sake of brevity we will stop here. From the above mix of policies the overall picture is clear. Actions speak louder than words. In the grand scheme of things of the PAP government, there is no place for workers welfare and “Family Friendly Benefits”. Of cause it would be political suicide (even in Singapore) to publicly admit this truth so in true PAP tradition policies are drafted and the government controlled press is enlisted to show case to the public that worker’s welfare feature prominently in the ruling party’s priorities.

Of cause the problem here is that there maybe afew kind unsuspecting souls who actually swallow this entire sales pitch, hook line and sinker, which brings us bad to the sad story of Ms Lim Ai Ling.

Then again, with Human Labour as Singapore Inc’s only available product, do you honestly believe that management of Singapore Inc will endorse policies which will degrade the quality and standard of its sole product (and life line)? This government’s unspoken stand on bread and butter issues is that the welfare and well being of the average worker is subordinated by those of the “larger” and more “pressing” concerns of the state. Like the usual Stalin and Marxist model, the average Singaporean worker is expected to make sacrifices for the “larger good” of the state.

This perspective also sits well with the government’s current anti-labour policies which favour labour representation by a sham labour union (NTUC). The existence of strong and real labour union representation would not agree with a management strategy which has the objective of keeping Singapore Inc’s sole product price competitive (i.e.cheap) and attractive. There is a negative correlation between quality of life and attractiveness of Singapore Inc’s prime product.

In order to placate workers, what we get from “Management” of Singapore Inc are a series of measures which look good on paper but were never intended to see real actual application in the real work place in the private sector. This also explains the reason why there is the very conspicuous absence of any real bona fide labour union representation here. (See: http://groups.yahoo.com/group/Sg_Review/message/1399)

With unemployment rates remaining at 4.5% p.a. (which sit strangely beside reports by the local press of a local economic recovery), the status quo in the job market is decidedly in favour of the employer. Unlike other developed countries like the US, UK, Australia etc, Singapore is not a welfare state, so in the absence of real tangible labour union representation the employers hold all the cards on the negotiation table. In view of the current conditions desperate workers with mortgages to pay are willing to accept lower pay, longer work hours and more stressful work conditions.

The Singapore government has never been a strong proponent of human rights (and free speech) so this Stalin/Marxist styled mentality in public policy administration is also hardly surprising. However, this imperfect state of affairs might be easier to accept if Singapore’s Ruling Elite also led by example. But this was not the case as Singapore’s current ministers have conveniently exempt themselves from the same policies on wage restraint which they cavalierly impose for the rest of the population. (See: http://groups.yahoo.com/group/Sg_Review/message/1373
http://groups.yahoo.com/group/Sg_Review/message/1360)