I refer to the article “NTUC calls for twin actions on CPF rates” (Straits Times, Feb 13).
Increase CPF employee contribution rate?
It states that “Employers should contribute the bulk of the hike, he said at a conference. For workers, their contributions should go to their Ordinary Accounts, which can be used to pay for home mortgages”.
Reduce disposable income?
Does this mean that the take-home pay (disposable income) of workers may be reduced?
Real wage growth?
With hardly any real gross and basic wage growth (excluding employer CPF contribution) over the last 15 years or so, the subject call to increase CPF contribution rates may lead to further dampening of real wage growth.
Trend of more to Medisave and SA?
Over the years, the proportion of CPF contributions going to the Medisave and Special Accounts has been rising, relative to the Ordinary Account.
This has further reduced the CPF amounts that can be used for housing and education.
As to “Specifically, the National Trades Union Congress (NTUC) is urging the Government to increase employer contribution to the Medisave account in anticipation of rising healthcare and health insurance costs, raise Special Account savings for older workers aged 55 and above so they have more retirement savings” (“CPF rates should be enhanced: Labour Movement“, Today, Feb 13)
– it would appear that the trend of all the recent CPF contribution increases going to the Medisave and Special Accounts is likely to continue.
Who wins?
So, the bottom line for Singapore workers may be:
… less disposable income
… less real wage increase
… higher costs to employers – pressure to give lower wage increase to workers
… higher prices for consumers
And of course, even more CPF funds that can be utilised by the Government.
Labour movement?
In the final analysis – don’t you find it wonderful that we have a union movement that arguably, keeps fighting for more CPF contribution to help workers pay for healthcare and retirement – instead of lobbying the Government to change its current policies of – from a cashflow perspective, not spending a single cent on healthcare, CPF and HDB?
Uniquely Singapore!
Leong Sze Hian
