Tharman: S'pore on track to raise productivity growth

Deputy Prime Minister Tharman Shanmugaratnam speaking at a dialogue on Jul 3, 2015. PHOTO: LIANHE ZAOBAO

Singapore is "well on track" to lifting productivity growth, targeted at 2 to 3 per cent per annum over the decade from 2009, said Deputy Prime Minister Tharman Shanmugaratnam yesterday at the launch of a new cash-payment system at Cold Storage supermarket.

"If you take us for the first five years, which is 2009 to 2014, we are well on track... In fact, we are at the upper end of the 2 to 3 per cent range," he said.

Asked if productivity targets would be revised due to poor performance, he added: "We are getting endless repetition of the fact that productivity has not worked. Actually we are very much on track."

"It would have been crazy to think that you'll get the same growth rate every year. It's not that way in any country, for any length of time. It jumps up and down and it's highly cyclical," he said. "(But) productivity today is significantly higher than when we started in 2009."

However, Mr Tharman, who is chairman of the National Productivity Council (NPC), pointed to two disappointments: that a lot of the gains were front-loaded in the first two years, with little progress since; and that while the export-oriented part of the economy has had very good productivity growth, the purely domestic sectors - like construction, retail and food services - did not fare as well.

Labour productivity, as measured by real value-added per worker, grew at a compounded annual rate of 2.5 per cent between 2009 and last year, according to figures from the Ministry of Trade and Industry.

Much of this can be attributed to the 11.6 per cent growth in productivity in 2010 when the economy rebounded from the global financial crisis. Between 2010 and last year, productivity growth was 0.3 per cent per annum.

Referring to Cold Storage's new cash system, as well as its other moves to lift productivity, he said: "Which is why what is happening here is so important."

Mr Tharman painted a future scenario of self-checkout and automated cash systems replicated across the retail scene, including at shopping malls. He called on shoppers here to "shift their habits" towards the self-service route.

"We have to think of this ambitiously. This store is now 50 per cent self-checkout... we have to take the national average well beyond 50 per cent and aim for at least 75 per cent within a few years," he said. "It will require some incentive... but the more people switch to self-checkout... the more the savings will be."

To nudge shoppers to use self- checkout systems, which are available at 31 of its 51 stores here, Cold Storage is giving shoppers who do so a 3 per cent discount on purchases.

At the event at Cold Storage's Sime Darby Centre outlet in Dunearn Road, Mr Tharman pointed to another issue that needed fixing: The use of three card terminals at the checkout counters of retail stores here - one for credit cards, another for Nets cards and a third for contactless payment cards.

He said the norm in many overseas markets is a unified system - just one payment terminal for all cards. "We want to get that fixed. It is backward to have to rely on three different card terminals," he said, adding that this is something that the Monetary Authority of Singapore and Spring Singapore are working on.

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A version of this article appeared in the print edition of The Straits Times on October 30, 2015, with the headline Tharman: S'pore on track to raise productivity growth. Subscribe