Former National Wages Council Chairman Lim Chong Yah calls CPF annuities “meaningless”

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Photo Credit: Economic Society of Singapore

In an interview with Channel News Asia, former National Wages Council Chairman and economist Professor Lim Chong Yah aired his disagreements about the CPF scheme as it stands, stating that the CPF scheme “may not be that satisfactory as a real pension programme because the sum for quite a lot of people would be still very, very minuscule; very, very small to take care of their old age.”

When prodded about his ideas to improve the scheme, he said, “It’s still too early. I am still contemplating, studying the best possible option, being quite unhappy that the annuities are still very, very low for a large number of people. They can be just quite meaningless.”

Prof Lim further added that his views on the CPF scheme had garnered attention from the government. When he was about to publish the CPF Study Group Report in the 1980s, Prof Lim  received a phone call from a minister asking him to reconsider publishing the report: “Yes, I couldn’t understand it myself. Why one minister rung me up and said it’s better not to publish the report. I couldn’t understand…one minister passed the buck to another minister, another minister passed the buck to another minister. I decided just to publish it, as a special volume of the Singapore Economic Review publication, because I was the editor and it was a publication of the Economic Society of Singapore.”

A champion of minimum wage, Prof Lim has not been one to shy away from airing his views on how such a scheme should be implemented in Singapore: “My intention is to have growth with equity, which is to have inclusive growth. In technical terms, the Gini coefficient, which is used to measure income inequality, should not be allowed to deteriorate too much.”

Prof Lim recognises that the government has taken measures to transfer incomes to aid lower-income groups. In spite of this, he flags low compliance of companies to follow the flexible wage guideline system as a problem: “That is the problem. The problem of implementation. The compliance rate is very low. That’s why I came up with the minimum wage proposal.”

The Singapore government has been vocal against minimum wage schemes. Prof Lim says, “I hope the Government would change its mind. I still think we should have it.”

Why Singapore should have minimum wage

"It would not damage the economy, provided the minimum wage level is linked to the national productivity level": Economist Lim Chong Yah on why he stands by his suggestion of implementing minimum wage in Singapore. Full story: http://cna.asia/2snMNr4

Posted by Channel NewsAsia on Saturday, 10 June 2017

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23 comments

  1. ******
    Why is NEW PAP agst Minimum Wage? Just look @ the salaries they r paying their Ministers & MPs, then tell me/us which Minister/MP deliver the proportionate returns when compared agst their foreign peers.
    For eg. look @ AMK TC; so many lift mishaps (2 in last few days), & look what happened to the MP LHL who’s i/c….. go on leave instead of doing a public review why his TC is even worse than AHTC on lift maintenance.
    NEW PAP think Minimum Wage is sky-high salaries….
    1. They are against minimum wage because our government has got their hands in lots of business through GLCs, NTUC and the likes. Putting minimum wage will definitely affect the bottom line and their bonuses.

  2. CPF has lost its original purpose. It was meant for retirement but now it is an an investment fund and fund the government can tap on at very low interest and no obligation to becoming accountable.

    1. Unless there is a law compelling employers to comply. But a minimum salary policy must be balanced with policies controlling the rise of property prices, in fact a re-calibration of property prices to lower overall cost of operation.

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