SINGAPORE, Feb 22 — Employers reluctant to let their workers go for training stints will soon “feel the pressure” to improve their practices, Deputy Prime Minister and Finance Minister Lawrence Wong said. He stressed that the recently announced SkillsFuture top-up credits were to help employers invest in their workers in view of “accelerating” change in the economy.

“I think the employers who have embraced this new mindset will find that... it may cost more in the short term because they do have to put in some investments into their workers’ training but in the end, they will emerge much better as a company.”

He was speaking at a pre-recorded forum titled Ask the Finance Minister, hosted by CNA news channel in relation to Budget 2024. The session, hosted by CNA presenter Steven Chia, was telecast at 9pm on Wednesday (Feb 21).

Last Friday, in his Budget statement, Mr Wong said that Singaporeans aged 40 and above will get a S$4,000 top-up in SkillsFuture credits, and should they take time off to do selected full-time courses, they will get training support of up to S$3,000 a month for up to 24 months.

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During the forum, he was speaking to two entrepreneurs, sociologist Pauline Tay Straughan, and Mr Abdul Samad Abdul Wahab, vice-president of the National Trades Union Congress (NTUC).

The forum also touched on support for lower-income families, and the closing of the Central Provident Fund (CPF) Special Account, a move that had raised eyebrows since it was announced also during the Budget speech.

Driving employers to support training

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Asked by Mr Chia about the rationale behind the S$4,000 addition to the SkillsFuture credits, Mr Wong said that it was done in recognition of the pace of change in the economy.

“Technological advances will mean that some job roles will become obsolete but new job roles will continue to be created,” he replied.

“And that’s why, it’s very important for workers — especially (those who are) mid-career, particularly (those aged) 40 and above — to have a significant reboot in their skills, and that’s what this SkillsFuture enhancement is about.”

Mr Chia said, though, that some workers are willing and able to make use of the SkillsFuture credits, but it is employers who are sometimes reluctant to give the workers time off to go for skills training.

Mr Wong said that this is why the Government will continue to work with different businesses and unions across different industries to encourage them to do more for their workers in this area.

One way is through funding to set up company training committees, a grant that supports companies by co-funding their proposals to redesign jobs and upskill workers, for example.

“We provide additional support for employers... hopefully, more will join us in this endeavour,” Mr Wong added.

“There may be a few who will take a bit longer but I think in the end... the market will sort itself out because individuals will know where the better employers are and they will want to gravitate towards these better employers.

“And the ones who don’t change will feel the pressure, hopefully through market competition to (boost) their human resource practices, improve their employment practices and support their staff in training.”

Agreeing with Mr Wong, Dr Straughan said that given Singapore’s low birth rates, having older workers with relevant skills will become more crucial.

“So if you think about it, if you can expand the work life of an ordinary worker from 65 to, let’s say, 70 or 75, and you add all that up... you can (consider) them in terms of the number of new workers they can actually replace,” she added.

Extending help for low-income families

On a different topic, Dr Straughan wondered whether short- to medium-term government handouts would be “sustainable” in the longer term, especially when it comes to tackling “that big elephant in the room”, which is income inequality.

Mr Wong said that the Government makes sure that whatever support it provides is fiscally sustainable, and that it strives to maintain a balanced national budget.

The Government also designs its schemes so that it will not “lead to inadvertent consequences because we can see that happening in so many other places”.

“We don’t want to diminish the ethos of self-reliance and individual efforts,” Mr Wong continued.

“There’s a lot to be cherished in that kind of ethos of responsibility, both at the individual level and at the family level, and we will continue to design our schemes to encourage that.”

Dr Straughan suggested that there are other aspects of inequality that she believes people “do not necessarily have to always turn to the Government to plug the gap”.

“We should be empowered to unlock community assets so that communities can help themselves,” she said.

For example, a family need not be rich, but if it has a community of more well-to-do neighbours who can care for members of that household, this could go “a long way to uplift lower-income families”.

Mr Wong agreed with her point about going beyond inculcating responsibility at the individual and family level.

“Others indeed can play a role... Others outside of the family, community, philanthropists, people who have done well — and that’s what we are also trying to do in this Budget by doing more to encourage a culture of giving,” he said.

During his Budget speech, Mr Wong announced more customised support for lower-income families, by getting coaches and volunteer befrienders to work directly with them.

Among other measures under the new ComLink+ Progress Packages, for instance, donors may provide more financial support to these families, and contribute in other ways to help them get back on their feet again.

“So we are trying to pair up high-net-worth individuals, philanthropists, people who have done well to where the needs are in the community,” Mr Wong added.

He said that these individuals could provide assistance to families not just in the financial aspect but also in needs beyond that.

“It could be in befriending, it could be mentoring, it could be providing the children of these families with new opportunities that they have never been able to access before.

“These are ways in which we can continue to uplift our families in Singapore.”

Closure of CPF special account

As for what Mr Wong said last week that from 2025, the CPF Special Account will automatically close when CPF members turn 55, Mr Chia noted that this has raised some concern among some of those in the affected age group.

CPF is the national social security system for Singaporeans to build up retirement savings and there are three accounts, namely Ordinary Account, Special Account and Retirement Account.

With the change, which Mr Wong said last week was part of a move to “rationalise” the CPF system, money in the Special Account — up to the Full Retirement Sum — will be transferred to the Retirement Account; the rest will go into the Ordinary Account.

The Enhanced Retirement Sum will be raised to four times the Basic Retirement Sum instead of three times now.

Mr Wong said on Wednesday that the changes are “very much in line with the purpose and intent of the CPF”.

“Instead of now having Special Account and Retirement Account, we are streamlining it into just one — the Retirement Account, which is for the long term, for your retirement needs.”

He added that for people who have excess money in the Special Account, they can transfer it into the Retirement Account, all the way up to the revised Enhanced Retirement Sum, and still earn the same interest rate as the Special Account.

The interest rate is now 4.08 per cent.

“So the vast majority of Singaporeans will be able to do so... And if they do so, they will get more in their Retirement Account and eventually when they retire, they will get higher CPF payouts for life.” — TODAY