Government Accepts National Wages Council's Revised Guidelines (16 January 2009 - 30 June 2009)

1.   The Government has accepted the National Wages Council (NWC)'s revised Guidelines.

Managing the Downturn and Overcoming Adversity Together

2.   The Singapore economy has been adversely affected by the deteriorating global economic environment. For three consecutive quarters starting from the second quarter of 2008, Singapore experienced negative quarter-on-quarter growth. The economy is estimated to have grown by 1.5% in 2008, down from 7.7% in 2007. In 2009, MTI has estimated a GDP growth of between -2.0% and 1.0%, amid the weakened and uncertain outlook. Resident unemployment rate rose to 3.3% in September 2008, up from 3.1% in June 2008. Unemployment and retrenchments are expected to rise in 2009.

3.   The NWC's release of its revised Guidelines is therefore timely. The Government strongly supports NWC's call for companies and workers to work together to reduce and manage costs to save jobs, which may include a wage freeze or wage cut. Companies should implement this recommendation based on their individual circumstances and taking into consideration the impact of the downturn on the company. Where companies face excess manpower, they should adopt the various cost cutting measures outlined in the Tripartite Guidelines on Managing Excess Manpower, including making use of various wage components in the flexible wage system to reduce wage costs. Retrenchments should be considered only as a last resort.

4.   On its part, the Government has already responded earlier to help companies and workers cope with the downturn. The Skills Programme for Upgrading and Resilience (SPUR), launched last December and costing $600 million over two years, is a key measure to help companies manage excess manpower and upgrade manpower capabilities. Companies are urged to make use of SPUR to send workers for training. Workers are also strongly encouraged to upgrade their skills so as to stay relevant and employable.

5.   The Government has also enhanced the government financing programmes for companies and lowered corporate taxes in 2008. To help Singaporeans cope with the downturn, there are assistance measures in place from the 2008 Budget package including Growth Dividends, S&CC and Rental Rebates, and the Workfare Income Supplement (WIS). In the upcoming Budget package for 2009, the Government will announce further measures to help companies reduce business cost and Singaporeans tide over the difficult period.

6.   The Government agrees with the NWC that there should be no let up in pushing ahead with long term initiatives even during the downturn. It will work closely with the tripartite partners on initiatives for the re-employment of older workers, helping women to return to the workforce, helping low wage, contract and informal workers and in improving productivity to raise our competitiveness.

7.   The revised NWC Guidelines will provide important guidance to employers and unions/workers as they work out ways to manage costs in this downturn. The consensus and understanding reached at the NWC reflect a strong spirit of tripartism in Singapore and our willingness to deal with difficult situations for the long term benefit of businesses, workers and the economy. The Government is confident that with such strong tripartite partnership based on trust and co-operation, the revised NWC Guidelines will be successfully implemented to help companies manage the downturn, preserve jobs for workers, and for Singapore to emerge stronger in the upturn.