PM Lee Hsien Loong at May Day Rally 2022

Sister Mary Liew, President of NTUC
Brother Ng Chee Meng, Secretary-General of NTUC
Brothers and Sisters

A very happy May Day to everybody! It is such a joy to come back together again, celebrate in one large group, side by side, here at Downtown East, D’Marquee. Also wishing our Muslim brothers and sisters a blessed Ramadan and an early Selamat Hari Raya Aidilfitri!

COVID-19

It has been a long battle, and we are just emerging now from COVID-19. It is still not quite time to rejoice yet, but I think we have reason to feel relieved. We have done our best, protected lives and livelihoods, and we have come through alright.

As in past crises, the Labour Movement provided vital support to our workers. During the worst days of the pandemic, NTUC partnered the Government to extend lifelines to workers. You helped displaced workers find new jobs through the Job Security Council; you provided financial assistance through the NTUC Care Fund (COVID-19) and the Self-Employed Person Income Relief Scheme (SIRS). NTUC also worked closely with the employers, supporting companies to keep their businesses afloat, avoid retrenchments, and save jobs.

With everyone’s hard work and cooperation, we averted the worst impact of COVID-19. Many workers still suffered reduced earnings as we tightened Safe Management Measures (SMMs), especially during the Circuit Breaker but throughout the pandemic, we kept job losses down, and now the unemployment rate has almost fallen back to pre-COVID-19 levels. I thank Brothers and Sisters, all of you, for helping to see us through.

Strategic Outlook

At the start of this year, we were cautiously optimistic about our post-COVID-19 recovery. With the recent reopening of borders and relaxation of SMMs, the F&B and aviation sectors are rebounding strongly. SQ planes are flying again, and Changi Airport should recover to 50% of pre-COVID-19 passenger levels this year. Our hawker centres and restaurants are getting crowded once more. Our construction industry too is recovering, with contractors catching up on their delayed projects. But since the beginning of the year, the outlook has clouded, and the risks have grown considerably.
In particular, Russia’s invasion of Ukraine is having a far-reaching impact on the world, and on Singapore. The war continues, and there is no good outcome in sight. The Ukrainians are fighting fiercely and bravely, and have done better than anyone expected. So the Russians are unlikely to swiftly defeat and subdue the Ukrainians, but neither can the Ukrainians beat and expel the Russians from their territory because the Russians have much larger forces. So the fighting will likely go on for quite a while longer, and the stakes are rising. The US now says its aim is to weaken Russia’s military capabilities, to prevent Moscow from invading other countries in future. America and NATO countries are stepping up supplies of weapons and military aid to Ukraine, including heavy weapons like tanks and artillery. On the other side, Russia now sees this not just as a fight in Ukraine, but as a struggle against many Western countries. It has accused Western countries of conducting a proxy war against it, in other words, using Ukraine to fight Russia. It has threatened “a lightning-fast response” and “unpredictable consequences” for those intervening in Ukraine. It has even stated ominously that there is a real danger of World War III. The longer the war continues, the greater the risk of this conflict escalating. Already, more destructive weapons are being used. There have been reports of possible Ukrainian attacks on Russian military bases across the border, in Russia itself. If the war spreads beyond Ukraine’s borders, or if unconventional weapons are used, no one will be able to control how the situation unfolds. This is deeply, deeply worrying. We hope that the fighting will stop, but even if a ceasefire is negotiated, I think peace will still be elusive. Too much blood has been spilt for Russia and Ukraine simply to sign a peace agreement, shake hands, and become friends and brothers again, and it is now not just between Russia and Ukraine. Relations between Russia and the many countries supporting Ukraine have also been severely damaged. More of Russia’s neighbours now want to join NATO to protect themselves. Russia is angry, but these countries are afraid. Tensions and hostility will persist for a very long time.

Most fundamentally, and what matters to us, is that Russia’s attack on Ukraine has undermined the global order: the basic rules and norms for countries, big or small, to interact properly with one another. That means not invading somebody else, claiming to put right “historical errors and crazy decisions”, because that is a flagrant violation of the UN Charter. It is bad for every country, but especially for small states like Singapore. Our security, our very existence depends on the international rule of law. That is why Singapore has taken a strong stand, condemned the attack and imposed targeted sanctions against Russia.

Beyond our security, these international tensions will affect Singapore in many ways. The ongoing conflict has made it extremely difficult, if not impossible, for countries to pursue win-win cooperation, whether at the UN, the G20 or at APEC. In particular, it will further complicate US-China relations, which were already strained. In the Asia Pacific, where we live, jostling between the US and China will result in a less stable region. It will become harder for countries to remain friends with both powers. Globally, countries will be unable to make progress on the many complex and urgent problems affecting all of us, including Singapore. For example, pandemics and climate change. These are global problems, no single country can deal with them alone. But if countries are fighting with one another, there is no hope of them cooperating with each other to solve such problems.

To us, one global cooperation framework is particularly crucial, and that is the multilateral trading system. Already, before the war, countries were restricting trade and investments with other countries that they no longer trusted. With COVID-19, there was further disruption to global supply chains and the vulnerabilities of these supply chains were exposed. Countries started talking about “re-shoring” supply chains to boost self-sufficiency, or “friend-shoring” to work only with trusted friends and allies. Now with the war in Ukraine, these trends are going to be pushed even further. But it is bad for us because Singapore’s economy depends heavily on international trade and investment. If countries no longer accept the rules of free trade, that makes it harder for us to continue to attract investments, to expand our export markets, to grow our economy, and to earn our keep in the world.

More immediately, Singaporeans are already feeling the impact of the war on the cost of living. This is a problem all over the world, not just in Singapore. The French have recently held presidential elections, and the cost of living was the hottest issue, hotter even than immigration. Even the US, which is a net energy exporter, is experiencing the highest inflation it has seen in 40 years. Even before Ukraine, inflation was already a problem, but the war has made it worse. Russia is a major exporter of oil and gas. Now that supply is being disrupted, European countries are trying to stop buying energy from Russia and Russia is also cutting off supplies to punish European countries for supporting Ukraine, and that is causing a worldwide energy crunch. That is why our electricity and petrol prices have gone up sharply. Food prices have gone up too. Ukraine is among the world’s largest exporters of cereal crops (like wheat, maize, barley) and vegetable oils. Because of the war, the Ukrainian farmers are running short of seeds, fertilisers, and even fuel for their tractors, that is assuming they can even tend their fields and farm at all. This has disrupted global food supplies and pushed food prices up, which is why our bread prices have gone up in Singapore for example.

The Government is doing all it can to cushion the impact on Singaporeans and alleviate the cost-of-living pressures. This year’s Budget included the Household Support Package which contained many direct measures to help households. There are U-Save rebates, there are CDC vouchers, there are S&CC rebates; these will reduce the out-of-pocket expenses for nearly all households. Lower- and middle-income households, who need more help, will get more. MAS has tightened our monetary policy to reduce imported inflation. That is why the Singapore dollar has appreciated, and that is why when you go overseas for weekend shopping trips, you find that it is attractive because the Singapore dollar has gone up. Fairprice is also making special efforts, I see they are having eggs at a discount so as to make a difference to the cost of living. And we are taking steps to secure our food and energy supplies, just in case the supplies are disrupted by the ongoing war.
All this will help, but we must be prepared for more economic challenges in the year ahead. Inflation will remain high. Central banks in the developed countries are tightening their monetary policies, raising interest rates. Global growth will be weaker, and there may be a recession within the next two years.

We have to face up to these realities. Singapore is tightly integrated into the global economy. Given our small size, in world markets, we are always a price taker, we have very little bargaining power. If the prices go up, our prices go up; if supplies are short, we are squeezed. We cannot avoid these global headwinds.

Take energy for example. We import nearly all the energy we use, except for the solar electricity that we generate ourselves. HDB rooftops and other buildings, but that is maybe 5% of our electricity consumption at most. When oil prices were around US$50 per barrel, every year our annual imports of crude oil and natural gas cost us about S$30 bn¹. When the oil prices doubled to US$100 per barrel, which they have done since the beginning of last year, we have to pay double too – which means we all have to pay an extra S$30 bn a year for our crude oil and gas. We can recover part of this because some of it is transformed, we refine the oil, we make petrochemicals, we sell it overseas, and we charge more. But the rest we consume, we turn on the lights, we turn on the air conditioner, we drive our cares, we have to bear that cost –Singapore households, businesses, and the government. How much is that part which we have to swallow? MTI’s estimate is our hit is about S$8 bn a year. That is 1.5% of our GDP. That means that in Singapore, we have become collectively S$8 bn poorer off every year. There is no escape from this.

In the short term, government support schemes will help to share the burden fairly, and ease the hardship on households but in the long term, this does not really solve the problem. We can share the burden, but the burden is still upon us.

We must address the fundamental issue: which is that higher energy and food prices have made us collectively worse off. And the fundamental solution to this is to make ourselves more productive, to transform our businesses, to grow our economy, to uplift everyone. Then our incomes can go up, and that can more than make up for higher prices of energy and food. Then we can all become better off, in real terms.

There are limits to what Singapore can do to influence broader international trends. We will push back against deglobalisation, we will speak up to encourage the US and China to constructively engage each other. But ultimately all these matters depend on the major powers themselves, and the relations between them, and how the war in Ukraine unfolds. We have speaking rights, but we are a small voice. Singapore has to take the world as it is, and develop a strategy that works for us in this troubled environment. Bigger countries can turn inwards, they can rely more heavily on their domestic markets, and produce more things onshore. The Chinese talk about double circulation (双循环) – circulation within their country, circulation doing business overseas. We only have the overseas part, but they can do it because it will cost them economically, but it is a viable strategy for them. However, that is not a choice open to Singapore.

Our strategy can only be one – and that is to stay open, to make our economy stronger, more resilient, and to keep on seizing opportunities for growth, developing new capabilities and becoming a more competitive economy. Because if we do that, then despite the uncertain climate, despite the pressures against globalisation, investors will still find it worthwhile to put their projects in Singapore, our exports will still find foreign markets, and we can still earn a living for ourselves in the world.

But economic success alone is not enough. Our growth must be matched by social and political cohesion. There is war in Europe, there are major troubles in the world, and great power rivalry in our region. Facing all these external troubles, if Singaporeans are not strong and united, if we allow ourselves to be split and divided, we will be done for.

Tripartism – the Singapore Way

Our tripartite partnership has made a big contribution both to our economy and to our cohesion. It is our uniquely Singaporean way of conducting labour relations. Where Government, employers and unions are close partners, working together for a common cause, coming up with win-win solutions across many different issues over many decades. It is how we have come through uncertain times and crises in the past, and it is what we will continue to need, to remain united and successful in the future.

I am happy that the Labour Movement has been such an active and valuable partner in recent years, working hand-in-hand with its network of tripartite partners to strengthen our unity and cohesion. Several major policy changes have involved tripartite partnerships: it was the Labour Movement which proposed and helped to develop the Progressive Wage Model (PWM). Now we are expanding the PWM to more sectors, and that will boost pay and progression for many more lower-wage local workers. The Labour Movement gave valuable input to the new COMPASS framework for approving employment passes. This will ensure that foreign professionals granted employment passes (EPs) will complement our local workforce, and our local PMETs can continue to compete fairly. It will help us to stay open to talent and skills from the world, and thus create more opportunities for Singaporeans. The Labour Movement also worked with its tripartite partners on a long-term roadmap to raise the retirement and re-employ¬ment ages, and increase CPF contribution rates for older workers. These moves will support older workers who want to continue working and save more for their retirement years. The Labour Movement is also involved in other major projects, including the upcoming workplace fairness law to protect workers against unfair treatment, and the Advisory Committee on Platform Workers, to look after this precarious group and prevent them from falling through the cracks.

Besides contributing ideas, the Labour Movement has been deeply involved in the hard work of transforming and upgrading our economy, and improving the productivity of our businesses and workers. This does not just depend on having the right national policies. To make it happen, every business and every worker needs to make the effort.

Business transformation and upskilling, the two of them must go hand in hand, so that when new jobs are created, workers are equipped to take them up, when there is technology and progress, workers are not displaced. We have been pushing hard – digitalisation, automation, upskilling and training – every May Day we talk about it for years now. But I am glad we did that, because when the pandemic forced the pace, our businesses and workers were not caught by surprise.

There are many bright spots in our economy. Even while the pandemic was raging, quite a few businesses were doing alright. That is why although some workers suffered pay cuts, overall, and after the SMMs and Circuit Breaker, wages have increased and household incomes have risen in these past two years. We must build on this momentum. Keep our eyes open for new opportunities, press on with transformation efforts, and strengthen our resilience for the future.

Recently, I met some union leaders and their partner companies. They spoke about the challenges which they were tackling, and how they are pivoting and adapting to capture new opportunities. I was glad to see the positive changes happening – union by union, company by company. Let me share with you three examples.

My first example is a precision engineering firm – Certact Engineering. Their main business used to be producing metal parts for semiconductor manufacturers. Their Managing Director is Ms Ellis Eng. She told me that two years ago, the company already felt it was losing market competitiveness, that it needed to pivot. The company had a small department doing plastics. It saw an opportunity to grow its plastics engineering arm, which was seeing high demand amid the pandemic, particularly to manufacture plastic parts for medical equipment like ventilators. But it needed help to make this major move. Certact decided to join NTUC’s Company Training Committee (CTC) initiative. It worked closely with the union – in this case, the Advanced Manufacturing Employee’s Union (AMEU). Together, they mapped out the operational and technology changes necessary, and the jobs that needed redesigning. The company took the plunge and invested in these, and these new capabilities made the difference. With full union support, employees came onboard. Business has since doubled, and the company continues to expand and employ more staff.

I hope more companies will follow Certact’s example. Come onboard with NTUC as it scales up its network and its support for CTCs over the next few years.

My second example is a recycling and waste management company. All of us are familiar with the blue recycling bins in our neighbourhoods, and the trucks that come around to collect and bring them back to recycling facilities. One of the companies doing this is Wah & Hua Pte Ltd, together with its partners. Not many locals find waste management jobs attractive, so the company relies heavily on foreign workers. During the pandemic, foreign workers were harder to hire, so the CEO, Ms Melissa Tan, decided that the solution was to rebrand the sector. Her company and their partners invested in smart garbage trucks from Germany. The trucks have solar mats on the roof and dust filters to clean the air. Other trucks come with a device which automatically covers the top of the rubbish with a net, easing the job for workers. The trucks and the devices are operated by truck captains – it is a small change of title, but it is a meaningful gesture to recognise their skills, and instil pride in themselves. These efforts are part of the company’s Operation and Technology Roadmap (OTR) developed together with NTUC to improve productivity, and to boost workers’ skills and prospects. Melissa’s next goal is to build an automated waste-to-energy plant, which will deploy robots to sort the recyclables, and incinerate the contaminated pieces to produce energy.

Wah & Hua’s efforts to refresh the profile of this sector have made it more attractive to locals and eased its labour crunch. With the new technologies, productivity will go up, the company can raise wages, and meet the PWM requirements for the waste management sector. This will prime the company for future growth in our green economy. We need more employers like Melissa, who have the passion and drive to reimagine their sectors, and open up better growth and job opportunities for Singaporeans.

My third example is in the Traditional Chinese medicine (TCM) sector. TCM is traditionally a male-dominated business. But Oriental Remedies Group’s CEO, Ms Beatrice Liu, she took a different approach. The company wanted to attract and retain more women. It partnered NTUC U SME to implement workplace policies to reduce gender discrimination and harassment. It made flexible working hours the default arrangement, and redesigned job scopes to support working mothers. It also developed a scorecard to help staff focus more on delivering outcomes while working from home, instead of just putting in the hours. Today, 70% of the company’s workforce is female, and its revenues have grown almost seven times in the last two years.

Companies with worker-centric practices will do well in the future labour market. The pandemic has shifted work norms. Telecommuting has become common, workers are putting more weight on flexibility and autonomy. We need to maximise the potential of our domestic labour force. Our resident population is hardly growing. Our workforce is ageing. The economy is generating more jobs than we have workers for. I was just talking to Brother Robert Yap just now, he says there is a desperate shortage of workers in logistics, in F&B, across the board. Labour will be a permanent constraint for Singapore. The upcoming tripartite guidelines on flexible work arrangements will help us respond to these trends. It will involve some adjustments, it will require discipline from both employers and employees. But if we can implement flexible arrangements well, then more people, especially mothers and caregivers, will be able to continue working or to come back to work after their babies are a bit older, and achieve work-life harmony. We should see other benefits also, like less peak hour travel and congestion. And maybe, a little boost to our TFR!

These three examples demonstrate different ways to realise business transformation: by pivoting a business to ride on industry trends, by rebranding an industry to attract more workers or by creating more flexible work arrangements to improve retention. Coincidentally, I do not know if you noticed, but all three companies I talked about had CEOs who were women! I did not do it purposely, it so happens that this has been the year of honouring SG women, but maybe that is exactly what we need to drive change. It shows how much talent and potential we have in our workforce, and the women are half our workforce.

These are also three examples of unions working with management to transform businesses. This happens in very few countries, only in Singapore – and only thanks to the NTUC. This is tripartism in practice – a huge competitive advantage for Singapore.

I deeply appreciate the many contributions of the Labour Movement. It represents the interests of a broad range of workers, beyond the traditional rank and file. It helps bring Singaporeans together, so that people know they are not alone, and no one is left behind as our economy progresses.

I urge companies to nurture this strong partnership with the Labour Movement, and to encourage more workers, including PMETs and freelancers, to join the Labour Movement. This is our best strategy to continue progressing together. In Singapore, unions are good for business. I should add, it being May Day in Singapore, businesses are good to unions too.

Leadership Renewal

Tripartism is the result of our long history of collaborative trade unionism, and the deep bonds of trust that we have forged through successive crises. Tripartism must always be a stabilising and anchoring force for Singapore. We must continually reaffirm the bonds, and sustain them from one generation to the next.

Leadership renewal is crucial to this. At the national level, in the political leadership, our succession preparations recently took a major step forward. This issue has been on my mind ever since my timeline for succession was disrupted by the virus. Last year, after DPM Heng Swee Keat decided to step aside, the 4G team asked me for more time to reach a consensus on the matter. I said, “don’t take too long”. Once the COVID-19 situation started coming under control, I resumed the process. I asked Mr Khaw Boon Wan to help facilitate it, and I am very happy and relieved that the process has been successful. As you know, Brother Lawrence Wong emerged as the overwhelming consensus choice, and has been unanimously endorsed by all his Cabinet colleagues and then by all the PAP MPs as the leader of the 4G team.

I congratulated Brother Lawrence, I told him you will be in the hot seat. He is taking on a very heavy responsibility. He will have to lead Singapore in a very different and uncertain world. He will need the full support of his Cabinet colleagues, and also must be able to rely on all our brothers and sisters to work with him and his team, and to continue partnering them to take Singapore forward. Brothers and Sisters, this is your team, I ask you to give Brother Lawrence Wong and his team your fullest support.

Conclusion

The imperative to move forward, to renew, to endure and to transform ourselves has never been stronger. We are emerging from the pandemic, into a world that has not only been altered by COVID-19, but threatened by significant security challenges. We can feel the headwinds, even as we sense the new opportunities opening up. For us, change and transformation is an unending task, as we continually reinvent ourselves to maintain our place in the world.

But having fought COVID-19 together, we can be confident of overcoming these challenges, and making the most of all the chances that will come our way. The Government will do our part to safeguard our national interests, we will work with Singaporeans to find the best way forward. We will continue to cooperate closely with the Labour Movement to invest in every worker, to look after every worker, and to uplift every worker. Employers have to grow their businesses, nurture their workers, so that they can give their best in their jobs. The NTUC must remain a strong institution, working shoulder to shoulder with the PAP Government to secure the trust of our people. This is the symbiotic relationship that has served Singapore well since our founding. Together, let us keep Singapore safe and thriving for many generations to come. Happy May Day! Thank you very much.

[1] We also import many other oil products.

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