|
67. As I said in the Budget Statement, our major
taxes are at about the right levels. On the other
hand, there will be new spending needs in healthcare,
education, training and R&D which will put
pressure on our finances.
68. So, we have to keep the Government lean and
trim to manage these new spending priorities.
Over the years, we have introduced various initiatives
to help do this. To drive discipline, we have
the Manpower Management Framework (MMF), the
headcount freeze and other schemes. To get value
for money, we have best sourcing, demand aggregation,
the Centre for Shared Services and so on.
69. Dr Ong Seh Hong has raised concerns that cost-cutting
efforts such as the Manpower Management Framework
should not come at the cost of poorer service
levels, or worse still, drive agencies to outsource
services at an increased cost to the public.
70. We are mindful of these concerns. The MMF aims
to achieve headcount reductions through productivity
improvements, job redesign or by re-prioritising
functions. Where there is additional manpower
required, the framework is responsive to the
circumstances of the ministries. For example,
for the Budget Terminal at Changi - it is a new
service. We are providing additional manpower
headcount. Or, because the IR is coming, MHA
needs to set up a Casino Regulatory Authority
of Singapore - we are studying how we can increase
MHA's baseline in order to account for this new
function so that there will be appropriate manpower
recruited for this.
71. Best sourcing results in outsourcing only if
the private sector can do the task more cost-effectively
and, therefore, cannot be the cause of increased
fees. Since we launched Best Sourcing in February
2003, we have market-tested 218 functions. We
have outsourced 59 percent of them. The annual
operational cost savings is S$25 million or 25
percent of in-house costs. Still quite small,
but I think there is further potential. Outsourcing
has resulted in direct savings for the public.
For example, the Ministry of Finance itself has
reduced the fees charged to suppliers for registering
as government suppliers by at least 10 percent
as a result of outsourcing this service.
72. Madam Halimah has raised concerns that MMF
should not inhibit public sector agencies from
employing older workers and she has warned that
best sourcing should not simply become “cheap-sourcing”,
because private companies may cut back on staff
welfare and benefits to win jobs.
73. The public sector's approach is that we employ
the candidate who best fits the job requirements
regardless of age, sex or race. But when we outsource,
we outsource to reliable vendors - we should
not assume that outsourcing achieves lower costs
simply by having the vendors cut the workers’ salaries.
There will be, in some cases, specialized private
sector providers which offer lower costs simply
because the business which is best sourced to
them is their primary business. So, they can
achieve greater economies of scale and innovation.
Also, I would say that we want to outsource to
a reliable company, not one which submits a ridiculously
low bid and then is unable to meet its obligations
or pay its workers and then runs into trouble
halfway, leaving the Government to pick up the
pieces.
74. Madam Halimah has suggested that the Government
considers stipulating in outsourcing contracts
that providers must comply with labour laws and
pay the employees decent wages on time. I recognise
this concern and there have been some cases which
have run into problems. But, the solution lies
in enforcing the labour laws. I do not think
a contract obligation stipulated by the Government
as the buyer of the contract will solve this
problem, because really it is a legal obligation
that the vendor pays its workers, pays the CPF,
meets all the legal rules which he has to meet.
Anybody who does business with the Government,
or with anybody else, is expected to do that.
If they do not, there will be penalties. From
time to time, employees complained that they
have not been given their pay. In such cases,
if they have missed out on the rightful employment
benefits, they should seek the union’s
advice or they should approach MOM for help.
75. Specifically on the change on headcount arising
from the MMF, Mr Chay Wai Chuen has questioned
the apparent increase in the public service headcount
despite the MMF. May I clarify that the increase
which he saw in manpower in the FY2006 Budget
- 1.6 percent increase in the headcount - is
actually an increase in the establishment posts
and not the actual headcount, because often the
establishment posts are left unchanged for some
time while agencies work out how to cope with
fewer personnel by, for example, streamlining
or modifying processes when they have natural
attrition, resignations and retirements. On the
other hand, when agencies undertake new functions,
they introduce additional posts. So, overall
headcount numbers have come down although the
establishments have not yet.
|
