March 25, 2017

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by Lee Chin Wee

CAN you imagine a Singapore where students aren’t defined wholly by their grades?

ST ran a thought-provoking piece on Mar 16, calling on the G to be bold and take in all students through aptitude-based university admissions. The proposal runs completely against the grain of our grades-centred university admissions model, but that’s the entire point. If we are to be serious about transforming education and skills acquisition in Singapore, it’s time for some sacred cows to be slaughtered.

Many of the world’s top universities have already implemented a holistic, aptitude-based admissions model. Among employers, there is also a growing recognition that academic performance is an insufficient and inaccurate barometer for professional success – Google, for instance, has moved away from hiring based solely on GPAs and IQ tests.  As Senior Education Correspondent Sandra Davie points out in the ST article, “(Imagine) choosing our doctors based on grades alone. Considering how expensive medical training is in terms of taxpayers’ money, wouldn’t society want future doctors to be compassionate and caring?”

As the G seeks to prepare young Singaporeans to face the varied challenges of our future economy, it makes sense to distribute talent to where it can be best developed rather than sort students to universities based on test scores. Why, then, am I not optimistic about change?

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“If it ain’t broke, don’t fix it”

Our political and civil service leadership are the least likely to take issue with the current model. Why would they, if they have been (and will continue to be) the largest beneficiaries of a highly-intense, elite-tracked, grades-centred education system?

There exists a cognitive effect known as Survivorship Bias. It simply means that, when we are evaluating the success of a policy, there is a tendency to concentrate on the people or things that “survived” the process and inadvertently discount those who did not due to their lack of visibility. Mr Michael Shermer explains this effect in an article written for the Scientific American, where he discussed the public interest in Walter Isaacson’s 2011 best-selling biography of Steve Jobs:
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Want to be the next Steve Jobs and create the next Apple Computer? Drop out of college and start a business with your buddies in the garage of your parents’ home. How many people have followed the Jobs model and failed? Who knows? No one writes books about them and their unsuccessful companies.

.Similarly, no one listens to someone who failed to enter university under a grades-only system. The people who are heard are the survivors: the 21-year-old Public Service Commission scholars who scored perfect grades in their youth and went on to be Deputy Secretaries, Permanent Secretaries, and Ministers.

The simple fact is that there is a lack of educational and academic diversity within the ranks of our top leadership. How many of them studied in polytechnics, or barely made the cut for university? The homogeneity of their experiences may blind them to the harms of a grades-only admissions policy.

 

Parents, social attitudes and the politics of education

Miss Davie admits that she “can already hear the howls of protest from parents paying thousands of dollars to top tutors to ensure that their kids ace the A levels.” And she’s right – Singapore is not called the “Tuition Nation” for nothing. It is estimated that over S$1 billion is spent on tuition each year, with the figure steadily increasing.

Many parents have bought into the Confucian ethos that hard work and good grades will lead to a well-paying job. It is a mantra that the G has reinforced over the years, from aggressive academic streaming that began as early as in primary school (remember the now-discontinued EM1/2/3?) to public sector scholarships awarded to top exam performers at ages 18 and 19.

Particularly for the older generation of Singaporean parents, grades are a non-negotiable aspect of school life. Co-curricular training can be missed, enrichment activities can be skipped, but exams must be passed, if not aced.

It’s more than just the idea of shifting values. Many parents and families have been financially and personally investing into a future-by-the-grades for their children. If they realise that a grades-based future is no longer as good as it used to be, you can expect some outcry.

For the G to overturn this deeply-ingrained orthodoxy is to invite backlash and scepticism – parents want less stress for their children, but they also want a fair and meritocratic university admissions process. It is easy to see how an aptitude-based system, with its numerous interviews, focus on interviews and portfolios, and discretionary admissions policies could be seen as subjective and opaque, even though it need not be.

 

The irritating, but simple, cost argument

A final consideration is that of cost. A 100 per cent aptitude-based admissions system is not going to come cheap – it means expanding the university admissions office, more time spent interviewing prospective candidates, longer hours reviewing each application.

MOE statistics indicate that in 2015 alone, the six autonomous universities in Singapore received a combined 70,000 applications from A-level and polytechnic diploma holders. Assuming that an aptitude-based admissions system increases the time taken to assess each student by 15 minutes (a conservative estimate), that is 17,500 hours of additional work in total.

This subsequently gets priced into university application costs. American colleges, which recruit students on a holistic and broad-based set of criteria, are an example. As someone who applied to a number of American colleges in 2014, I know first-hand how expensive these costs can be – even as a domestic US student, applying for one college costs around US$60 (S$85). Imagine if you applied to six colleges! That’s S$510 down the drain before you even go for any interviews.

Application fees in Singapore are, on the comparative, very cheap. A local student applying to NUS, for example, only need to pay $10. It is entirely possible to apply for all six autonomous universities in Singapore for the price of applying to one or two US colleges.

 

Change is still worthwhile

Such considerations, however, should not prevent us from seeking real change to the university admissions process. While it may mean that change progresses at a slower rate – the quota for discretionary admissions could be gradually increased over a period of 10 years – it should not detract from the key points made by Miss Davie. The world will not wait for Singapore to change. If we continue to drag our heels instead of trying to find new ways to maximise our human capital, then prepare to be left behind.

 

Featured image by Sean Chong.

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by Bertha Henson

WE’LL all be hearing more from Mr Peter Ho, the former head of Civil Service, because he’s been picked to give the Institute of Policy Studies series of lectures. TODAY ran an interview with him on aspects of the civil service. Perhaps, he could expand on some points he made in his interview when he gives his lectures.
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1. Mr Ho said that increasing complexity of policies and higher order needs of the populace means coming up with new ways, such as more risk management, to solve problems.

”It’s not that traditional tools are no longer important; tools like cost-benefit analysis are still relevant. But cost-benefit analysis in a complex environment, in and of itself, may not provide you with the complete answer. Cost-benefit analysis is quite linear, and traditional tools don’t help you get your arms completely around complex problems.”

(What traditional tools are less important then? Can he cite instances when the solution did not address the problem because traditional tools were used? Was there a moment of epiphany for him?)

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2. We don’t know when the interview was conducted, whether before or after the Prime Minister said that he didn’t want to be surrounded by naysayers. But clearly, he agrees that the rules-bound culture has to change, going by his message to the younger generation of civil servants.

”Your job is to find ways to improve Singapore’s position and the lot of Singaporeans in a period of accelerating change and uncertainty. Of course, you’re not going to be criticised for following the rules, but if you want to lift the quality of your policies and plans, and raise the level of good governance practised in Singapore, then it cannot be just about saying: “I followed the rules.” Instead, it should be that “I tried to make things better.” The basic misconception some younger civil servants may have is that what worked well in the past will be what propels you into the future successfully. Our civil servants must be able to keep up with the pace of change. You have to ask yourself if the rules, plans and policies still serve the purpose for which they were designed, or if we need to change them in order to do things better. ”

(There’s no point speaking in generalities. Can he enlighten with examples when sticking to the rules is to the detriment of policy outcomes? Or when rules work against the desire of the public service to be emphatic or to “have a heart’’. Can he also tell what rules have been changed because they are no longer relevant. Would policies on single mothers be one of them?)
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3. Mr Ho talked about the need to be bold which is more difficult now because the basics have been achieved and Singapore is now “competing at the top’’.

”Today, of course, you still want that spark — that ability to think boldly about the future. But the big challenge now is, how much risk are you prepared to take? These are serious risks because we’ve achieved so much, that a bad miscalculation can mean losing it all. The stakes are much higher.”

(Can he give examples of what areas require bold but risky changes? Would the report of the Committee of the Future Economy or the reserved Presidential Election be among them? If so, what are the risks involved? Also, the general perception is the G prefers to make “tweaks’’ rather than take bold steps – or is this the wrong perception?)
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4. Mr Ho talks about how many ingredients go into making a judgment call.

“…every major decision and every major policy are not an exercise to find the right answers. They are always an exercise in making the right judgment — not a hard right or hard wrong — but a balanced one that serves the best interests of the majority and the country. You cannot make everybody happy. Also, judgments always have to be revisited now and then — to go back to my point that things are changing. What seems to be sensible now may in a few years’ time no longer be sensible. You have to be prepared to constantly change.”

(Again, examples are needed. But there’s another point to consider: The public service shouldn’t think that a change is an acknowledgment of a mistake and therefore paper over the “change’’ as something that is a natural follow through of the old policy. When policies make a sharp turn, the people must be brought on board in understanding the changed circumstances or even objectives. Would he consider that enough explanation was given for the sudden announcement of the increase in the water price? Could Hong Kong’s seizure of the Singapore’s Terrexes be better explained to the people as an example of the changed geo-political realities that Singapore faces?)
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5. This wasn’t touched upon but hopefully, Mr Ho will pick up the subject in one of his lectures. The civil service has always been accused of “group think’’ with its top echelons being a closed circle of like-minded individuals. That so many top civil servants cross into the political sphere doesn’t add to people’s confidence that radical or bold ideas can surface from the G. One example is how the Committee for the Future Economy is stuffed with Old Economy members. Singapore’s Establishment seems to be a closed rank of people who went to the same schools and move in the same circles with very few gaps allowing for “mavericks’’. Please do not use the sole example of Mr Philip Yeo. He’s just one man.

 

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by Bertha Henson

a. IT’S the end of Housing and Urban Development Company (HUDC) because the last bastion, Braddell View, is going en bloc. Don’t remember HUDC? It’s the predecessor to the executive condo, except that it’s still built by HDB. It’s for those who just missed out of a new flat because they earned too much to be eligible for one. Oh, and if you’ve been to a HUDC flat, you know the apartment sizes are bigger than those in exec condos. Seriously worth paying for…then.

b. Paying for a taxi ride is going to be a different experience soon. You can pick to pay by the meter or have a fixed payment set at the start of the ride. The cab companies, minus the biggest player ComfortDelGro, are joining up with Grab to launch JustGrab for the fixed payments. There’s still the usual GrabTaxi if you want to pay by taxi. So you’d better have the app on your phone because you might just be standing along the road, hoping to flag a taxi down and finding that they’re passing you by. 

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c. UniSIM is now SUSS. This is not a joke. The former little private institution which is gearing up to be Singapore’s sixth university will be re-named Singapore University of Social Sciences to reflect its focus on social courses. Not everyone is enamoured of the name change with some people pointing out that SUSS also has finance and business degree courses. Seriously, that’s a small thing. Look at Nanyang Technological University which keeps adding non-tech courses all the time…

d. Businesses are getting more help. More than 85,000 employers here will receive about S$660 million in Wage Credit Scheme (WCS) payouts, with small and medium-sized enterprises getting 70 per cent of the sum disbursed the end of this month. Not a big deal you say because you’re just a paid grunt? Well, you’ll have to remember that some of this money should go into supporting the wages of those who earn $4,000 a month and below. For them, it’s something.

e. We’re into fake news big-time. Thirteen People’s Action Party politicians, including a Cabinet Minister, have had their Facebook profiles faked. They look like them but aren’t by them, in what is known as a phishing attempt to get data. They’ve all been taken down so you can’t see what the fake Chan Chun Sing said and how it compares to the real Chan Chun Sing’s tone of voice. It isn’t known who’s behind this prank/attack. Needless to say, the politicians AREN’T laughing.

 

Featured image by SmrtBusesLuver from Wikipedia Commons. CC BY-SA 3.0

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A group of employment pass workers at Changi Business Park during lunchtime.

by Suhaile Md

SINGAPORE is too small a base for global-minded businesses to experiment and refine innovative ideas. At least that’s the view of tech entrepreneur Mr Tan Min-Liang and venture capitalist Mr Isaac Ho, reported the Business Times (BT) on Monday (Mar 13). If entrepreneurs intend to expand beyond Singapore, they should test-bed in larger markets from the start.

Simply put, a test-bed is a space to experiment and develop innovative products before bringing to market. Last month (Feb 7), the Committee on the Future Economy (CFE) proposed in its report that the G set aside “special test-bedding zones” for Singapore based enterprises to develop products that can be exported.

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But there are three reasons why Singapore might not be the best place to test-bed.

First, you need entrepreneurs and Singaporeans are not “hungry” enough, said Mr Ho. “Most entrepreneurs know there’s always another job for them… Singaporeans are well taken care of by the government.” Which is why he proposed that the G focus on youth exposure to technology and innovation through overseas attachments for instance. That way they “will be exposed to real hunger and passion, and see how fast the other countries are racing ahead”. Mr Ho is the CEO of Venturecraft, a Hangzhou based biotech and medtech incubator.

Second, to grow the business, an entrepreneur will eventually have to enter larger markets like the United States (US) or China.”By the time you’re done with test-bedding in Singapore, somebody’s already tested” the same idea in China or the US. So “you’re better off starting in the US or China from the get-go”, said Mr Tan. In other words, being based in Singapore could make startups too slow to capture a large global market share. Mr Tan is the CEO of Razer, a San Francisco based gaming hardware company.

Third, a product catered to the Singapore market may not be suited for larger markets. “If startups test-bed here, they will need to expend effort to undo what they’ve built for use in other markets,” said Mr Ho. This raises business costs. Besides, delivering products in Singapore does little to develop a start-up’s capacity to handle “large volume transactions”. This could “result in under-building a product”.

Contrary to Mr Ho and Mr Tan, the G sees Singapore’s size as a selling point. Said Prime Minister Lee Hsien Loong at the Founders Forum Smart Nation Singapore Reception in 2015: “It’s (Singapore) compact… If you can make it work in Singapore, you can have the chance to adapt and apply to other contexts. If it doesn’t work in Singapore, it’s probably worth a rethink.”

More recently, the CFE report stated that Singapore’s small size has its advantages. Similar firms are found close to each other and so, can “attract talent, create critical mass for shared infrastructure, and generate knowledge spillovers among firms and people”. In other words, it’s easier for ideas to cross-pollinate. When new ideas arise, there’s better coordination between different firms and G bodies to make it work.

Mr Kevin Foo, head of investment at venture capitalist firm Cap Vista Singapore, agreed with the G on this, reported BT on Monday: “The level of infrastructure development within our small cityscape allows for close cooperation between different organisations, public or private, to co-develop and test technologies.”

Last October for example, Straits Times (ST) reported that the Economic Development Board together with national water agency PUB successfully completed the initial stages of its renewable-energy test-beds.

10 different floating solar panel systems, from both foreign and local companies, were installed at Tengeh reservoir. The test-bed will establish how viable the 10 systems are – both in the economic and environmental sense. If viable, then the systems can be scaled up for large-scale use.

There are other test-beds underway too, in water technology, and maritime and port services for instance. As the CFE report states, Singapore can be a “living lab for innovative urban solutions” like experimenting with new modes of transport, sustainable energy usage, and water and food resilience. Read more in the report here.

Test-beds are not to be confused with the regulatory “sandbox” the Monetary Authority of Singapore (MAS) proposed last June.

The financial world is kept in check with numerous regulations. But these can stifle the growth of innovative financial technology, or fintech, startup firms. A sandbox relaxes, for selected fintech firms, certain rules like credit ratings, minimum paid-up capital, and so on, to encourage innovation.

That is not to say however, that the sandbox is exclusive to the financial sector only. The CFE report cited this regulatory innovation by the MAS positively. It suggested that like MAS, the G “design a regulatory environment that supports innovation and risk-taking, even as it balances this against risk” such regulations are meant to reduce.

At the end of the day though, is Singapore’s small size a boon or a bane as a test-bed for global innovation?

It’s hard to answer definitively. But the fundamental issue, it seems, is market access. A mass market app based product like Uber for example, would likely do better to test-bed in a larger market like the US and not in Singapore. Here, the arguments of Mr Ho and Mr Tan would make sense.

But if the product is more complex, requires the coordination of multiple sectors, and the main customers are not mass market individuals, Singapore is likely to run ahead. Singapore helping build the new capital city of the Indian state Andhra Pradesh comes to mind.

 

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by Ryan Ong 

LATEST tweaks to property rules are not going to cause prices to shoot up again. There, everyone can relax now. Contrary to the rumours you’ve heard, the cooling measures are not lifted, banks are not giving out loans like door prizes, and you are not going to get a mortgage by replacing your income statement with a pinky swear. The changes will have a positive effect on property prices, but nowhere close to the sudden surge we saw between 2009 to 2013.

Photo by Shawn Danker. Shared Copyright.
A corridor at the campus of NUS Yale.

by Ong Lip Hua

UNIVERSITY admissions season looms again, and as a university admissions professional with over a decade of work experience (in NUS and SIT), I get plied with questions from would-be students and their parents.

What I’ve come to realise is that the questions that potential students ask are usually off the mark. Perhaps it has to do with the media’s fascination with rankings (which reflect research, not teaching quality), graduate pay, and employment numbers.

While these may form a part of the answer to the question “why should I choose this university”, most of us go to the university to pave the way for a future career and the career prospects of a graduate are not sufficiently represented by these metrics.

A successful career is sustained more through a university’s “after sales” service, which most applicants are not aware of. This “after sales” service is performed by several offices in the university that often go overlooked.

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Here’s what else you might want to ask about at the next admissions talk:

The Placement Office: This is the department that organises career fairs, gives you job advice, and teaches you how to write your resume. They are known by many other names. How strong is the University’s Placement Office? Which sector do they have hiring partners in? What type and amount of assistance does the Placement Office provide?

Internship programmes: The Faculty Office or Placement Office typically handles internship placements. There is only so much you can learn about the working world and an industry from the safe confines of a lecture hall or tutorial room. Before we graduate, we need to be “inserted” into the industry network. An early foray into the environment where you’ll be spending the next 40 years of your life can pay off more than an impressive Grade Point Average.

Internships get you into the network and industry lingo so you can better know what and why is that thing on page 1905 of the reference source number AI76. Great internships put you in the same office as industry leaders and key personalities: distinguish yourself there and you’ll have the makings of a priceless industry network.

The Alumni Office: Getting our first job is only the first step in what we hope will be a long career. Good pay prospects and employment ratios are good to have, but the more important question is: where do I go from there?

Strong Alumni Offices are also good after-sales service centers. They provide you with the network to get into higher level positions, make business connections for you to start or expand your businesses, and can give you access to ideas, funds and links for your project or research break-through.

How active or strong are the university’s Alumni Offices? What events or activities are held? How committed is the alumni community? What are this office’s beliefs and objectives?

One more question: What is your student profile? This is a question especially for universities abroad, or for locally-awarded degrees from overseas institutions. This tells you who you get to network with while you are in school. If you can’t get a straight answer, spend some time roaming the campus talking to, or observing current students.

At some point in life, co-operation becomes much more valuable than competition. The friends and frenemies you have made during your school years can translate into doors that are open or shut to you later in life.

These “after sales” functions of universities will become increasingly important as the world churns out even more graduates, as work/jobs become more transnational, as technology, mergers and acquisitions reduce number of jobs and increase competition.

So at your next university admissions talk or open house, don’t just ask about cut-off points, or why this course is better than another. Ask questions that span 40 years into your future, because that’s probably what you are getting an education for.

Ong Lip Hua was in University Admissions for a decade and being passionate about the career of students he admits, decided to pursue a career in HR Recruitment. He was a minor partner in a recruitment firm before going in-house. He is still crazy about providing education and career advice.

 

This article is part of a series on SkillsFuture, in collaboration with MOE and SSG. Read the other pieces here:

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by Lee Chin Wee

THE Labour Market Report 2016 released today (Mar 15) revealed that the annual average resident unemployment rate rose to 3.0 in 2016, after holding steady at 2.8 per cent for the last four years. This is the highest figure since 2010, when the resident unemployment rate was 3.1 per cent.

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Compared to data from 2015, residents aged 30 – 39 (2.3 per cent unemployed, up from 1.9 per cent), and 50 & over (2.7 per cent unemployed, up from 2.4 per cent) were particularly affected, while those aged 29 & below saw the unemployment rate decrease from 5.1 per cent to 5.0 per cent.

 

Taken from Labour Market Report 2016, Ministry of Manpower

 

Part of the high unemployment rate can be explained by seasonal and frictional unemployment due to the cyclical nature of the global economy. Singapore tends to be buffeted by forces outside our control. The manufacturing sector, for instance, shed 15,500 jobs in 2016 because of flagging global demand for products. This figure would have been far worse, had it not been for the manufacturing sector unexpectedly expanding by 6.4 per cent in Q4 2016. Plunging oil prices have also badly affected the offshore marine industry, with retrenchments picking up in 2015-16. One would expect unemployment figures to improve as the global economy recovers.

However, the unemployment rate can also be attributed to structural unemployment: As Singapore adjusts to the disruptive impacts of new technology on traditional businesses, people’s skills no longer match up to market demand. Singapore’s continued economic transformation, therefore, may lead to underskilled or wrongly-skilled workers left by the wayside. As firms reorganise and restructure to become manpower-lean, longstanding jobs like accounting and secretarial work may be cut, while new business interests – financial technologies, for instance – are developed.

There are now 17,000 long-term resident unemployed (refers to those unemployed for more than 25 weeks), compared to 12,700 in 2015. This figure is the highest since 2009, when the 2008 Financial Crisis led to thousands of Singaporeans losing their jobs.

 

Taken from Labour Market Report 2016, Ministry of Manpower

 

Most worryingly, the long-term unemployment rate for degree holders rose to 1.0 per cent in 2016, the highest since 2004. Does this mean that more university graduates now hold paper qualifications that are ill-suited for the modern economy? Possibly. A bachelor’s degree in programming or software engineering received 10 years ago, for instance, may bear little relevance to the sought-after skills of today. Without a constant push for skills upgrading and on-the-job training, many graduates will find themselves either underemployed, or out of work.

As the economy becomes more complex, the need for specialised skills has soared. This has challenged the traditional view that higher education guarantees a stable career, as demand for specialised skills can change overnight with the introduction of new technology or sudden industry transformation. Professionals, Managers, Executives and Technicians (PMETs) formed 75 per cent of all residents made redundant in 4Q 2016 – a disproportionate figure.

Statistics seem to suggest that there is a growing mismatch between employee skills and job requirements; especially at white-collar managerial and technical levels. And even when tertiary-level education does meet market demand, the rapidly-evolving jobs landscape means that employees must be willing to continually upgrade themselves. Given this context, policies to help workers gain new skills or encourage businesses to leverage new technology are extremely important.

Whether Singapore will be able to bounce back stronger from this period of slowing growth and higher unemployment depends on how well we can react to technological disruption. If our workers and businesses do not stay ahead of the curve, one should be prepared for more grim news ahead.

 

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by Lee Chin Wee 

BUCKLE in, because public transport fares are likely to rise. Transport Minister Khaw Boon Wan hinted as much during his Ministry’s Committee of Supply debates last week (Mar 8). Addressing Parliament, he said that the Public Transport Council (PTC) was reviewing the current fare formula, which is due to expire later this year.

In December last year, the PTC had revised fares downward due to lower energy prices. However, Mr Khaw noted that “the PTC cannot always bring good news, sometimes they have to adjust fares upwards. And when they do, I hope commuters will be understanding.”

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Many Singaporeans, especially those in lower income brackets, will soon be feeling the pinch. A month ago, Finance Minister Heng Swee Keat announced a 30 per cent hike in water prices – the first time water prices have risen in 17 years. It also comes on the heels of increased Service & Conservancy charges in 15 PAP-managed town councils, and higher parking charges at public car parks across the island.

Of course, every fee increase must be evaluated based on its own merits. It is not enough to say that the cost of living has gone up – in the case of public transport fares, any increase should be measured against real wage growth in Singapore and the trend pattern of public transport operating costs.

 

Is it expensive to keep trains and buses running?

To obtain a better understanding of public transport operating costs, we studied SMRT’s annual reports from FY2011 – 2016 as a case study.  Of particular interest were the rail/light rail and bus businesses. We isolated the annual figures for operating revenue and operating profit in these areas.

 

 

Operating profit for core public transport services is not high; in fact, it is a negligible portion of SMRT’s overall profit. In 2016, SMRT recorded an operating profit of $138.5 million. Out of this sum, only $13.3 million was from the rail/light rail and bus businesses – barely 9.6 per cent of total profits. The other 90.4 per cent can be attributed to SMRT’s other business interests, such as advertising and property rental. For instance, SMRT owns Kallang Wave Mall.

Not only is operating profit already low, it is decreasing due to operating costs rising at a marginally faster rate than operating revenue. Why might this be the case? Because in recent years, SMRT has been investing in renewal works for key infrastructure, and the acquisition of operating assets. For instance, from August 2013 to December 2016, 188,000 timber sleepers were replaced with more durable concrete sleepers. To prevent further power faults, SMRT is also replacing the third rail system which supplies electricity to trains. The cost of financing these projects is not directly passed on to the consumer, as fare prices are set by the PTC.

 

Can Singaporeans afford a fare hike?

When fares rise, consumers end up shouldering more of the operating costs. The key question is, can Singaporeans afford it? In comparison to other countries, our public transport fares are very affordable. A 2016 study by UniSIM showed that, for a 10km train ride, Singapore’s train fare was the sixth lowest out of 35 major world cities. It costs a commuter SGD$1.33 to travel 10km on train, whereas the global average (after Purchasing Power Parity adjustment) is around SGD$2.30.

Tracking real wage growth against changes in public transport fares, it also appears that public transport fares are reasonable. Since 2011, real wage growth has broadly kept pace or surpassed increases in fares. This, however, does not account for the period of 2012 – 2013, where fare changes were temporarily suspended as the PTC reviewed its pricing structure.

 

 

Should public transport fares be going up?

Someone’s got to pay for the cost of running our trains and buses. When SMRT was still a publicly listed company, there were three parties who could do this: (1) the consumer of public transport, who pays through fares; (2) the G, who pays through taxpayer monies; and (3) the retail investor, who buys SMRT stock. Since SMRT was acquired by Temasek Holdings, we are now left with options (1) and (2).

Clearly, consumers of public transport are also taxpayers. But not all taxpayers are consumers of public transport. Hence, when the G subsidises operating costs, people who are under-consuming public transport will be cross-subsidising those who use public transport frequently. Some view this as good, because those who under-consume public transport tend to be rich anyway, and their taxpayer dollars should be used to make sure others can have cheap MRT rides. Others view this as bad, because people should contribute based on how much of a service they consume.

Another point of view is that SMRT and other transport operators should use their profits from more profitable business sectors to cross-subsidise rail and bus services. The argument here is that instead of raising fares, transport operators should be willing to take losses on its core business (that is effectively a public service) in exchange for making large profits on advertising, overseas consulting, and retail business. However, there is a limitation to this model – transport operators only have secondary interests in these other business areas, and cannot sustain such an internal cross-subsidy if operating costs continue to mount.

Regardless of what one believes, everyone would agree that high operating costs for public transport are unavoidable if we want to ensure our trains and buses become more reliable and less fault-prone. And even if public transport fares were held steady, taxpayers would still feel the pinch – either directly in the form of higher taxes, or indirectly as money that would otherwise have gone to other G services is now used to subsidise public transport.

Come this April, though, when the PTC convenes to announce changes to fares, I’ll still be hoping that my daily MRT rides get cheaper. One can dream, right?

 

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by Bertha Henson

WHO would have thought civil servants would feature so much in the Budget debate? You have MPs who think the system (not civil servants) lack heart and more can be done to improve empathy levels. This, coming after several luminaries, including the Prime Minister, talking about the need for naysayers in the public service rather than people who respond with “three bags full”.

This time, they feature prominently in the debate on the Town Council Amendment Bill, with opposition MPs suggesting that G officials in the Ministry of National Development will be less than neutral over the operations of town councils.

I suppose the mental image that the Workers’ Party has is this: A bunch of civil servants barging into Aljunied-Hougang town council office, rifling through cabinets and accessing computer records because of some suspected wrong-doing on the town council’s part. Or entangling the town council in reams of red tape by asking endless questions because they have oversight powers. And leaving the wards of Ministers alone because, as civil servants, they wouldn’t want to get into the bad books of their political masters.

WP’s Pritam Singh said : “The MND risks becoming a tool of the ruling party of the day to fix the opposition.”

With MND oversight, allegations of partisanship would naturally arise given that a PAP minister is overall in charge. The perception of bias will always be there despite the PAP’s efforts to deny it.

His fellow WP MP Sylvia Lim said: “It is not possible to argue that the ministry is a politically neutral body as recent history unfortunately belies that claim.”

She gave the example of the General Election campaign in 2015, when the Ministry was “an active campaigner against the Workers’ Party, issuing statements practically daily on the alleged misconduct of AHPETC”.

She also said, without elaborating: “To take another example: we have also seen past records of how the Ministry advised a PAP TC how to make good a breach of the Town Councils Financial Rules, quietly behind closed doors, without any media release on the same.”

That is so intriguing.

Of course, the People’s Action Party side came out hammer and tongs accusing the WP of impugning the integrity of the civil service. Senior Minister of State for National Development Desmond Lee had a wonderful quote about how Ms Lim seemed to think that civil servants are “timorous souls” who would “kowtow” to their boss’ bidding.

AHPETC signboard
Aljunied Hougang Punggol East Town Council

No one would dispute that the Act needed updating. The still on-going saga over the finances of the Aljunied-Hougang-Punggol East town council showed up the loopholes on conflict of interest and corporate governance. The G suddenly realised that it couldn’t move on certain things, like order a TC to yield up records and submit information. There was also no “stick” it could wield.

Mr Lee made an interesting point about how AHPETC broke the “unspoken compact” which began when town councils were formed in 1989: That town councillors and elected MPs would proactively fix problems that arise or report suspected misdeeds to the police or Corrupt Practices Investigation Bureau.

In other words, that TCs would “ownself check ownself” just like Ang Mo Kio town council did when it reported its general manager to the police. So if the WP’s finances had been in fine shape, there would be no need for more oversight measures? Hmm.

At the heart of the debate is whether town councils are political bodies. Taken to the bitter political end, MND shouldn’t intervene in a TC’s affairs at all and let residents live with the consequences of their choice. But the G realises that people think it is an administrative issue and expect the G to deal with problems everywhere, including opposition areas.

It’s a tricky balancing act. With MND oversight, allegations of partisanship would naturally arise given that a PAP minister is overall in charge. The perception of bias will always be there despite the PAP’s efforts to deny it.

In fact, it might add fuel to the view that the management of housing estates should go back to the way it was.

According to the feedback given to REACH which had a public consultation process on the Bill, some people had suggested that HDB or MND take over the functions. Or if there must be a regulator, the role could be given to the HDB “so that regulatory decision are one-step removed from political office holders”.

There was also an interesting suggestion that TCs be merged with HDB branch office with chairmen appointed by MND. The elected MPs could form separate committees to guide the work of the new set up to implement infrastructure projects. “This would ensure that the towns are managed fairly, regardless of the party in power.”

Such suggestions, however, would mean unpicking the whole town council structure. It’s like making the elected presidency an appointed office.

I wish that there was a direct response to Ms Lim’s proposal that Auditor-General’s Office could be tasked with auditing town councils on a rotational basis as a substitute for MND’s oversight. There is also her suggestion that an independent Housing Tribunal, chaired by a judge and experts in housing matters, be authorised to mediate and adjudicate disputes relating to the management of public housing.

These are political approaches, of course, to safeguard the independence and autonomy of town councils. They might well be cumbersome and there’s no guarantee that “bias” charge will be overcome.

Do voters really care though?

It’s clear that the WP was tardy and less than transparent about its finances. This might have led to its loss of Punggol East and its shaved margins for Aljunied and Hougang in the 2015 general election. But it can be also argued that if its offences were so egregious as the G makes them out to be, then voters would be moved to eject it altogether. They didn’t.

The amendment Bill actually gives voters less reason to care about who runs their town council. That’s because the law gives the G more powers to supervise, provide oversight and pick up the pieces. Even lift upgrading and replacement are penciled in

HDB residents can really have their cake – and eat it.

 

Featured image by Sean Chong.

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by Lee Chin Wee

DURING the Committee of Supply debates on Mar 6, Manpower Minister Lim Swee Say clarified that if you work in the gig economy, it doesn’t necessarily mean that you are a freelancer.

Mr Lim explained that there is “no official definition of the gig economy”. The Organisation for Economic Co-operation and Development (OECD), he said, instead uses the term “platform economy” to refer to workers who use online platforms such as Uber and Airbnb to find “short-term, piecemeal jobs”.

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So who is, and isn’t, protected by labour laws?

Not all gig economy (or platform economy) workers are freelancers. An employee of a transport company who uses Grab to find customers, for example, can be considered a gig economy worker but is not a freelancer. These workers are entitled to labour law protections, such as mandatory minimum leave days.

Hence, in terms of labour protections, it does not matter whether you use an online platform to find work or use more traditional avenues like taxi company rental. What does matter is your contract status – if you are a freelancer, you have entered a contract for service while if you are a contracted employee, you have entered a contract of service.

As employees are, in theory, subject to an asymmetric employer-employee relationship, a greater scope of labour laws applies to them. In contrast, freelancers are considered to be self-employed and are therefore not legally entitled to statutory protections and benefits accorded to employees. The legal rights and obligations of freelancers are largely dependent on the terms and conditions of the contract they enter into with their hirers.


What are the differences between freelancers and employees?

The Ministry of Manpower (MOM) website sums up the differences in this convenient table:

 

Contract of ServiceContract for Service
Has an employer-employee relationshipHas a client-contractor type of relationship
Employee does business for the employerContractor carries out business on their own account
May be covered under the Employment Act Not covered by the Employment Act
Includes terms of employment such as working hours, leave benefits, etc.Statutory benefits do not apply

 

  1. Central Provident Fund (CPF) contributions: Freelancers earning an annual Net Trade Income (NTI) of more than $6,000 need to contribute to Medisave. There is no legal obligation to contribute to the Ordinary or Special Accounts, but freelancers can do so on a voluntary basis. Comparatively, employees are entitled to monthly employer CPF contributions and also are obliged to pay into their CPF accounts themselves.
    • The median Medisave balances of self-employed persons was $21,700 in 2014, compared to $14,300 five years ago. This is still lower than the median Medisave balances of employees, which was $27,700 in 2014.
      .
  2. Employment Act: Freelancers are generally not covered by the Employment Act. This means they do not get paid public holiday entitlements (min. 11 days per year), sick leave (min. 14 days of paid outpatient leave and 60 days of paid hospitalisation leave per year), paid annual leave (min. 7 days per year), timely payslips (monthly salary within 7 days, overtime pay within 14 days), etc. Freelancers must instead seek recourse through the Small Claims Tribunal or Subordinate Courts instead.
    .
  3. Work Injury Compensation Act: Freelancers are generally not covered by the Work Injury Compensation Act. This means, if they get injured while performing a task or job, their client does not have to pay the legally stipulated amounts corresponding to the work injury. Freelancers must instead seek recourse through a civil suit.
    .
  4. Union Membership: Freelancers can still be NTUC members. This means they enjoy membership benefits such as subsidised skills retraining workshops run by NTUC partners and rebates on grocery shopping at NTUC FairPrice. However, the Trade Union Act, along with the Industrial Relations Act and the Trade Dispute Act, does not apply to freelancers. NTUC will not engage in collective negotiation or mediation on behalf of freelancers, as there is no traditional employee-employer relationship.


What is the problem?

Some will no doubt argue that freelance workers in the gig economy were not coerced into taking up these jobs. The lack of labour protections, the argument goes, is not a problem as one is not subject to the same employee-employer relationship that is characteristic of contracted full-time work.

In the particular instance of companies like Uber, the question is whether the driver-Uber relationship is that of a freelancer-client or employee-employer. Uber drivers do exhibit many employee-like characteristics such as working for only one contractor, and have “fixed” working arrangements – not contractually, but in terms of the minimum hours or peak periods one must work to remain marginally profitable. It is arguable that these workers are freelancers in name but employees in substance.

The legal lacuna created by Uber has given rise to a number of lawsuits filed against the company in other countries. The claimants argue that Uber misclassifies drivers as independent contractors, rather than employees.

In 2013, 385,000 current and former drivers in California and Massachusetts launched a class action lawsuit against the company, alleging that Uber was legally obligated to give them employee pay and benefits. Uber settled for a $84 million ($100 million if the company goes public) payout, to be distributed to drivers based on how many miles they had driven. More recently, the London Central Employment Tribunal ruled that Uber drivers should be classified as employees, earn at least the national minimum wage and get paid vacations. Uber appealed, and the case is still ongoing.

Moreover, recent Ministry of Manpower statistics show that out of the 200,000 freelancers in Singapore, 19 per cent do not consider freelancing their preferred choice. This means that, in some cases, the gig economy is substituting rather than complementing the traditional economy.

In other words, someone working as a contract employee of a private transport company may have little choice but to drive an Uber: In today’s slowing economy, either he keeps his existing labour protections and takes a pay cut, or he potentially earns more by joining the gig economy but loses his employee benefits.

A further problem is that freelancers do not pay into their CPF Ordinary or Special Accounts. As the number of gig economy freelancers grows due to the proliferation of online platforms that disrupt traditional industries, the G will have to deal with increasing retirement insecurity among older workers. What this means for national savings and government investments remains to be seen.

 

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