Josephine Teo and Workers’ Party MPs on minimum CPF payout age, and more

SINGAPORE — Reiterating the rationale for cutting the quota of foreign workers in the services sector, Manpower Minister Josephine Teo on Tuesday (March 5) pushed the Workers’ Party (WP) to state its position on this policy change.

During his Budget 2019 statement last month, Finance Minister Heng Swee Keat announced that the Dependency Ratio Ceiling for the services sector will be cut from 40 to 38 per cent next year, and further cut to 35 per cent in 2021.

Mrs Teo said during the debate on her ministry's budget that the decision to tighten foreign worker policy was very carefully considered.

“In the end, we decided we need a stronger push to restructure and be more manpower-lean. This will sustain business growth for our companies, and help to improve job quality for our workers. In the longer term, it will make our labour market more resilient." 

On Tuesday, Mrs Teo also had a pointed exchange with Mr Png Eng Huat, WP’s Member of Parliament (MP) for Hougang, on the payout eligibility age of Central Provident Fund (CPF) savings.

Here is what transpired.

ON CUTTING THE DEPENDENCY RATIO CEILING FOR THE SERVICE SECTOR

Mrs Teo: Many MPs spoke on this. The notable exception was members from the Workers’ Party. I wonder why, given how important this is for workers. I’m really interested to know: Do you support it?

WP chief Pritam Singh: A similar question, I believe, was asked by Minister of State Zaqy (Mohamad) during the Budget debate and I rose at the end of the debate to say that the Workers’ Party supports the Budget, but subject to our position on the GST (Goods and Services Tax).

Let me be clear about the position on the Dependency Ratio Ceilings once again. I think, as a matter of principle, we support the lowering of the Dependency Ratio Ceiling. We feel that we should reduce our over-reliance on foreign manpower where we can and this is so that we can look to raise and improve the job prospects of Singaporeans.

ON LOWERING THE PAYOUT ELIGIBILITY AGE OF 65 FOR CPF SAVINGS

WP MP Png Eng Huat: The recent public disquiet over the allegation that the CPF Board had quietly moved the payout eligibility age to 70, though unfounded, goes to show how much we look forward to the day when we can finally see and touch our CPF money. So any attempt to change that day, regardless of intention, will be met with disgust and anger, and rightly so.

Thus, the call to set the auto-payout at the payout eligibility age by default should be considered seriously, because it sends a clear message that the Government does not intend to, and will not, keep the (CPF) members’ hard-earned savings beyond what is mandated by law…

Members can still choose to delay their payouts to earn more interest if preferred. CPF is like a fixed deposit (FD) instrument. Upon maturity date, you can expect to see your money deposited into your account unless you have instructed the bank to roll over the deposit.

No members will quibble with the Government when they see their hard-earned money deposited into their accounts automatically at their payout eligibility age unless instructed otherwise.

Mrs Teo: Mr Png, you compared CPF savings to… (an FD). Meaning whenever you want, you should be able to take it out… At the end of the maturity date, you should be able to take it out with interest. That is exactly what the practice is.

Members can withdraw their payouts anytime from 65. When the member is about to reach 65, we remind him. And if he does not instruct us, we roll over his FD because it earns him more money. Then we write to him again and we remind him year after year.

And if we don’t do that but instead, the moment he turns 65, I terminate his FD and let his savings go into the current account, which earns him much less interest and will cause him to earn less money. So Mr Png, which bank will you be more happy with? The one that rolls over for you automatically because it earns more? Or the one that quickly terminates it and lets it earn less?