Government Accepts National Wages Council’s Guidelines for 2009/2010

1.   The Government has accepted the National Wages Council (NWC)'s Guidelines for 2009/2010.

2.   Since the NWC released its revised wage guidelines in January 2009, the global outlook has remained weak. The first quarter of 2009 saw GDP contracting by 10.1%, compared to a 4.2% dip in the fourth quarter of 2008. MTI has forecast the GDP growth for 2009 to be between -9.0% and -6.0%. Preliminary estimates show that total employment declined by 1,000 in the first quarter of 2009 as the economy continued to worsen. The seasonally-adjusted unemployment rate rose to 3.2% (overall) and 4.8% (resident) as of March 2009. 12,600 workers were made redundant in the first quarter of 2009, compared to 9,410 in the previous quarter. The labour market is expected to remain weak for some time.

3.   In view of continuing risk of a severe and extended downturn, the Government agrees with the NWC's recommendation that companies persist with the focus on cutting costs to save jobs. The Government strongly supports NWC's call for employers to look at ways to manage costs, stay viable and save jobs, including implementing wage freeze/cuts and other cost cutting measures recommended in the revised Tripartite Guidelines on Managing Excess Manpower issued on 17 May 2009. Employers should also be responsible and fair to their workers. At the same time, workers should play their part by being adaptable and flexible, willing to make adjustments, taking on different jobs and having realistic expectations.

4.   On its part, the Government has implemented measures to help companies and Singaporeans cope with the downturn, such as the Jobs Credit Scheme, Skills Programme for Resilience and Upgrading (SPUR), enhanced government financing programmes for companies, lower corporate taxes and the Workfare Income Supplement (WIS) Special Payment. The Government has also been expanding the CET system and increasing the reach of SPUR, to help job seekers reskill and upskill, and take up jobs available in new and expanding sectors. These measures have helped to buffer companies and workers from the impact of the downturn. The Government will continue to monitor the situation to see if further measures and assistance are needed.

5.   The Government also supports NWC's call to use this downturn to strengthen Singapore's competitiveness and prepare for the upturn. A taskforce led by MOM and MTI is working with industry on sectoral productivity issues. Companies and unions/workers should work together to raise productivity by innovating, streamlining operations and strengthening workforce capabilities.

6.   The Government is confident that with close tripartite co-operation and partnership, the NWC wage guidelines will be successfully implemented to help companies ride out the current downturn, preserve jobs for workers and emerge stronger in the upturn.