Post-pandemic world will be different, but Singapore's fundamental goals don't change: Lawrence Wong

Life will be different from what it used to be, with greater uncertainty and volatility to be expected.
Life will be different from what it used to be, with greater uncertainty and volatility to be expected.ST PHOTO: KUA CHEE SIONG

SINGAPORE - As different as the post-pandemic world may look, Singapore's fundamental goals - staying valuable to the global economy and building a fairer and more inclusive society - remain the same.

This was the message Finance Minister Lawrence Wong sought to get across on Tuesday (July 27), in his speech wrapping up nearly five hours of debate on the Government's latest support package for businesses and workers affected by the Covid-19 restrictions.

Life will be different from what it used to be, with greater uncertainty and volatility to be expected, Mr Wong told the House.

"So, we must continue this important work of transforming our economy, and equipping our people with the skills they need in an age of change," he said.

"As we transition to this new normal, we must go beyond support measures towards building strength and resilience for the future. We must continue to invest in growing our economy, strengthening our society and greening our home."

He was responding to suggestions and views after 25 MPs spoke on two rounds of support measures, announced in May as well as last Friday, to help workers and businesses cope with two rounds of tighter restrictions that were imposed following spikes in Covid-19 infections.

At present, several emerging global trends threaten Singapore's value proposition as a hub economy, Mr Wong said. Countries are moving to reshore their production activities, while a growing consensus on a global minimum tax rate is likely to blunt the impact of Singapore's own tax incentives for foreign firms.

Like Venice after the Middle Ages, these external developments could spell decline for Singapore, he warned.

Mr Wong, who visited Venice earlier this month for a Group of 20 finance ministers meeting, recounted how the Italian city had once been a vital trading hub, but failed to adapt to changes in the wider world. With the invention of ships that could sail for months without ever making landfall, traders bypassed Venice and the city-state fell into decline.

"What happened to Venice can happen to Singapore, too, if we are not careful," he said. "We must never take our hub status for granted. We must continue to stay open and double down on our connectivity as a trusted hub for commerce, trade and talent."

As rapid technological change causes waves of disruption, Singapore must continually strengthen its value proposition of being a gateway to Asia and the wider world, he added.

To do this, it will work to anchor more start-ups and nurture innovation here. At the same time, existing companies will have to relook their business models.

For instance, Singapore is currently considered an established base for the aviation industry in terms of engine maintenance, repair and operations. "But we cannot assume that this lead is going to be with us forever," Mr Wong said.

With the industry shifting towards sustainable fuels, the country must actively pursue new opportunities for growth and help its small and medium-sized enterprises (SMEs) develop the capabilities to partner larger firms in the aviation ecosystem.

"This process of restructuring and transformation is vital to keeping our economy vibrant and strong," Mr Wong added. "And so the focus of our support measures will over time shift from providing pain relief, as we are now, to building deep capabilities for companies to innovate and transform."

Acknowledging criticisms that such government schemes can be difficult for companies to navigate, the minister said Enterprise Singapore will take all feedback seriously and work to improve things.

On the employment front, Mr Wong assured Parliament that more jobs will be created as the economy recovers and demand for workers goes up.

"I understand the concern amongst those in temporary jobs, because they're worried that once Covid-19 is over, they may not have jobs," he said. "We are monitoring this carefully, to ensure that those in temporary jobs now will be emplaced into permanent positions."

The country is also working to equip Singaporeans with the skills needed for jobs of the future, he added.

"Singapore will never be a large market or the cheapest place to do business," Mr Wong said. "But what has made Singapore an attractive value proposition for investors is our overall system's competitiveness."

This includes elements such as the rule of law, strong intellectual property protection and an innovative and skilled workforce, he added.

With Covid-19 having revealed vulnerabilities in the social fabric, work must also be put into building a fairer and more inclusive society, Mr Wong said. This involves strengthening social safety nets for the unemployed, as well as boosting support for caregivers and those in the gig economy.

"We want to progress not individually, or for our own families, but for all in our larger Singapore family," he stressed.

But efforts to build such a society must go "beyond redistribution and the provision of social assistance", the minister added. "We must put maximum effort to help every worker earn a fair wage and be accorded due respect for their contributions."

This is why the Government, unions, and employers have been working to raise wages and enhance the employability of lower-wage workers, he said.

A tripartite workgroup looking into issues faced by such workers is also studying how Singapore can move faster on this front. This includes increasing the number of workers covered by the progressive wage model (PWM) and offering progressive wages to workers in occupations not covered by the mandatory PWMs.

The authorities are also reviewing the Workfare Income Supplement scheme, which tops up the wages of lower income workers and helps them save for retirement.

Mr Wong pledged to continue protecting the livelihoods of the most vulnerable workers, adding: "We all have a part to play to ensure social mobility, opportunity, and importantly, dignity, for every worker."