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52,000 workers earn less than S$1,300 a month, including Workfare payouts and CPF contributions: Zaqy Mohamad

SINGAPORE — Some 52,000 workers earn less than S$1,300 a month, including Workfare payouts and Central Provident Fund (CPF) contributions, Senior Minister of State for Manpower Zaqy Mohamad said in Parliament on Tuesday (Nov 3), adding that it is “not meaningful” to have a discussion on wages that strips away these two contributions.

The Workers' Party recently argued in Parliament for a minimum wage of S$1,300 to be implemented in Singapore, but the Government rebutted that this could lead to higher unemployment as businesses here may face unsustainable higher costs.

The Workers' Party recently argued in Parliament for a minimum wage of S$1,300 to be implemented in Singapore, but the Government rebutted that this could lead to higher unemployment as businesses here may face unsustainable higher costs.

  • Mr Zaqy was responding to a question from Sengkang MP Jamus Lim
  • He said a holistic understanding of income should include CPF and workfare payouts
  • He asked whether WP’s call for a S$1,300 minimum wage referred to gross or take-home pay

 

SINGAPORE — Some 52,000 workers earn less than S$1,300 a month, including Workfare payouts and Central Provident Fund (CPF) contributions, Senior Minister of State for Manpower Zaqy Mohamad said in Parliament on Tuesday (Nov 3), adding that it is “not meaningful” to have a discussion on wages that strips away these two contributions.

After all, he said, payouts from support schemes such as the Workfare Income Supplement (WIS) are also part of one’s income and can be used for necessities, while money saved in the CPF can be used for healthcare and housing.

He was responding to questions from Workers’ Party Member of Parliament Jamus Lim.

Dr Lim had asked how many Singaporeans earn S$1,300 or less a month on a take-home basis, excluding employer and employee CPF contributions and other deductions of income.

Mr Zaqy said that including Workfare and CPF contributions, there are around 30,000 full-time employees and 22,000 self-employed workers who earn less than S$1,300 a month. 

He added that these lower-wage workers receive support from the Government, such as Silver Support, ComCare, Goods and Services Tax vouchers and U-Save rebates.

Dr Lim, an MP for Sengkang Group Representation Constituency (GRC), then asked again for the number of workers whose take home wages are S$1,300 and below, excluding CPF contributions and all supplementary schemes such as support schemes. 

In response, Mr Zaqy said it was not meaningful or accurate to focus only on take-home pay and CPF and WIS payouts should be considered too.

He noted that 75 per cent of WIS recipients own their own homes, and so “there is a direct impact of CPF on home ownership”. 

“That is still income,” he added. “In other countries you would have to use your cash to pay for your own homes or mortgages.” 

Almost all minimum wage systems internationally also stipulate that minimum wages are subject to taxes and social security contributions, he pointed out. 

“So this means that minimum wage levels are also before deductions,” said Mr Zaqy. “Given these considerations, it would not be meaningful nor accurate to consider income according to the parameters of the Member’s query.” 

He then turned the question back on Dr Lim, asking whether WP’s call for a S$1,300 minimum wage refers to a gross or take-home pay.

The WP recently argued in Parliament for a minimum wage of S$1,300 to be implemented in Singapore, but the Government rebutted that this could lead to higher unemployment as businesses here may face unsustainable higher costs.

Mr Zaqy noted that WP’s manifesto published earlier this year, called for a minimum take-home wage of S$1,300 per month for full-time work, which could be pro-rated for part-time work. 

He said that last month, Dr Lim reiterated the call and Leader of the Opposition Pritam Singh had asked Holland-Bukit Timah GRC MP Edward Chia, who is also the co-founder of Timbre Group, if he was willing to pay his workers S$1,300 as a business owner.

“These statements suggests a gross minimum wage of S$1,300 a month, but (Dr Lim’s) current query seems to suggest that the WP is now proposing a minimum take home pay of S$1,300,” Mr Zaqy said. 

“If this is the case, then the gross wage inclusive of CPF contributions should be higher — between S$1,600 to S$1,700,” he said, asking Dr Lim to clarify the WP stance.

Dr Lim responded that the premise of his question had nothing to do with the minimum wage. 

“The question did not specify anything about minimum wage, it was about the idea of S$1,300,” he said.

“The reason why we raised S$1,300 was because that was the notion of how much a reasonable basket of goods and services for adequate living in Singapore would entail.”

He added that Mr Zaqy had “imputed an inference of the S$1,300 take-home pay”.

“An inference of what I was asking in the question was actually attributed to me, whereas I did not make that claim,” he said. 

To which Mr Zaqy replied: “If we keep with the convention, it is easier to make for good meaningful benchmarks in discussions and debates in future.” 

He asked Dr Lim to confirm if the S$1,300 minimum wage that WP is calling for refers to gross income before deductions. 

“Yes, that’s a fair characterisation,” Dr Lim said. 

But after the exchange, Dr Lim made a clarification, saying that he had made an error in his response to Mr Zaqy.

“The WP’s position on the minimum take-home wage is for S$1,300 a month for full-time work and pro-rated for part-time work, and not gross income,” he said. 

 

Related topics

minimum wage Jamus Lim MOM Workfare Timbre

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