Why she would rather forego $50 pay raise

SINGAPORE - When the National Wages Council accepted a proposal by the National Trades Union Congress (NTUC) to give a $50 pay hike to workers earning less than $1,000, many among these low-wage earners cheered.
But not this 66-year-old cleaner. Instead, the proposition worried her.

Madam Tan (not her real name) said she had actually turned down a pay increase offered by her company last year.

She earns $800 a month and lives in a one-room rental flat. She said the raise would have pushed her into a higher salary bracket, causing the rent of the flat to go up from $26 to $111.

According to HDB's website, those earning between $801 and $1,500 will pay rent of between $90 and $123, instead of the $26 to $33 that those earning below $801 pay.

"It's not that I don't want to earn more and pay higher rent, but maybe the (rent) increase could be smaller," Madam Tan said.

"I'm very thankful that the authorities are giving this increase, but I'll be $35 worse off."

The divorcee, who has been a cleaner for 10 years, lives alone. Her two children, who are in their 40s, are unable to support her, she told The New Paper.

Social workers told The New Paper that many others have fears similar to Madam Tan's.

Flexible

But responding to queries from TNP, HDB said that it exercises flexibility to make sure that those getting a pay increase don't end up worse off because of higher rent.

Madam Tan's current lease expires in January next year.

So what will her rent be if she renews her tenancy?

An HDB spokesman said: "Based on Madam (Tan's) last reported income in February 2011... Her rental fees will remain at the same rate of $26 per month, since her increased household income would still be below $800."

HDB declined to reveal her reported income because of confidentiality issues, but Madam Tan told TNP that she had earned $650 a month as a polyclinic cleaner for six years.

She started earning $800 when she joined her present employer, a global provider of facility services, in April last year.

If she renews her tenancy next year, HDB will re-evaluate how much rent she has to pay.

The HDB spokesman said that even if Madam Tan's household income exceeds $800, her rent may not go up to $111 (as Madam Tan claims).

Said the spokesman: "HDB does exercise flexibility to ensure that any rental increase will not result in a worse-off situation for the tenant."

Madam Tan also gets payment under the Workfare scheme and assistance from various organisations.

She gets groceries, free meals and vouchers from voluntary welfare organisations.

Govt closely monitoring inflation: DPM Tharman

SINGAPORE: Deputy Prime Minister and Minister for Finance and Manpower Tharman Shanmugaratnam has assured Singaporeans that the government is closely monitoring inflation including prices of everyday goods and services.

Speaking at the May Day dinner, he noted that inflation remains an important challenge and one that union leaders are most concerned about.

This year's May Day dinner comes at a time of continuing uncertainty in the global economy, caused especially by the problems in Europe, said Mr Tharman.

In Singapore however, he said the economy is not in a bad shape.

"Our unemployment rate remains lower than in most other countries. This is due to the very large number of jobs created last year. With the economic slowdown, we have seen a pick-up in redundancies since the last quarter of 2011, and can expect a slight increase in unemployment in the short term as displaced workers take some time to find new jobs," said Mr Tharman.

Singapore's Consumer Price Index (CPI) rose by about 5.2 per cent in March 2012 compared to a year ago and he said this is a high figure.

However, he also explained that this does not mean that the average Singaporean will feel this high inflation.

That is because more than half of the headline inflation rate of 5.2 per cent came from higher COEs for cars and the effect of higher market rent on houses.

Mr Tharman assured that the vast majority of Singaporeans who already own their homes and are not buying new cars will not feel the effects of these sharp increases.

Mr Tharman also said the increase in prices of daily necessities and essential services such as food and clothing have actually been much more moderate at three per cent or lower.

"The vast majority of Singaporeans, who already own their homes and are not buying a new car, will not feel the effects of these sharp increases. The increase in prices of daily necessities and essential services, such as food, clothing & footwear and education, has actually been much more moderate, at three per cent or lower. The inflation in actual household expenditures for most Singaporeans is hence lower than five per cent," said Mr Tharman.

He added: "Nevertheless, we are closely monitoring the situation, including prices of everyday goods and services. MAS has been strengthening the value of our dollar to reduce the impact of imported inflation. The government has taken actions to cool the property market. Although property prices are not part of the consumer price index, in an overheated property market, many other prices can also go up. We will keep a close watch on the property market.

"In the meantime too, the government is providing some help for Singaporean households to cope with the rising cost of living. This year, we introduced GST vouchers, which will help lower income Singaporeans and especially our older folk with their expenses."

Mr Tharman noted that the National Wages Council has been discussing the wage guidelines for 2012 and 2013 and he is sure that they will consider all factors carefully before making their recommendations, expected by June.

Mr Tharman hopes that the guidelines will allow workers to get their fair share from the growth over the past year and get wage increases that can be sustained while still ensuring that businesses in Singapore remain competitive and continue to generate good jobs.