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ECONOMY | Tony Chua, Singapore
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Government okays recommendation for sustainable wage increases

NWC's suggestion aims to raise productivity growth to 2%-3% per year over the next decade.

The Singapore government has accepted the National Wages Council (NWC)'s wage recommendations for 2010/2011, according to a Ministry of Manpower report.

Singapore stays resilient amidst the economic downturn in 2008/9. The economy grew strongly in the first quarter of this year. The 2010 GDP growth forecast is 7 to 9%. Employment is expected to expand by over 100,000 this year. The seasonally adjusted unemployment rate has come down to 2.2%P (overall) and 3.2%P (resident) in March 2010. However, some uncertainties remain in the global economic outlook, including the potential impact of the sovereign debt crisis in Europe.

Given the above data, the Government supports the NWC's recommendation of granting sustainable wage increases and making continuous productivity improvements. With good economic performance and a tightening labour market, wages are expected to rise. The Government would like to emphasize the need for wage increases to be sustainable and to be supported by productivity improvements, so as to maintain competitiveness. Companies should also make use of the flexible wage structure and consider making variable payments if built-in wage increases are not sustainable.

Going ahead, the Government is committed to transform the economy by focusing on productivity growth. The goal is to raise Singapore's productivity growth to 2% to 3% per year over the next decade. The NWC's call for the tripartite partners to work together to make productivity improvements is therefore timely. The Government will work closely with companies, unions and workers in driving productivity at the industry, company and worker level. The National Productivity and Continuing Education Council has been established to oversee and drive efforts to boost productivity and expand continuing education and training (CET). As announced in the 2010 Budget, the Government has also introduced the Productivity and Innovation Credit and the National Productivity Fund to incentivise and support companies to invest in productivity improvements.

The Government also supports the NWC's call to continue to push ahead with initiatives to help more vulnerable segments of the workforce. The Government is working closely with the tripartite partners on various initiatives including implementing re-employment for older workers, and encouraging more women to join the workforce.

To help low wage workers, the Government has enhanced the Workfare Income Supplement (WIS) scheme and will be introducing the Workfare Training Support (WTS) scheme to encourage them to upgrade their skills and to incentivise their employers to send them for training. Singapore will continue to work closely with the tripartite partners to help the more vulnerable groups of the workforce.

The Government is confident that the NWC wage guidelines will be successfully implemented.

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