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12/19/2006

To raise CPF or not not to raise CPF

The trade union leaders have called for some restoration of the CPF. Good times are here, it is time to bring out the champagne and have a party. Surprisingly several analysts were out in arms against such an idea. Obviously the memories of hard times and bad times were forgotten. During those dark hours, many lamented and regretted the high CPF and the rigidities of our wage system. There were calls for CPF cuts and flexible wage systems. The decisions were tough and hard to make but were made. CPF were cut, flexible wages were introduced. All to make our system less rigid and competitive. The wage system needs to be flexible to change with the highs and lows of the economic cycles. We have done well and live with an increasing portion of flexi wage components. Do we want to go back to cast more increases into stone again and have the same problems of breaking them when the hard times are back? Or do we want to continue to input further increases into the flexi portion of the wage to allow companies and organisations to vary them according to their performances and the economic trend? And there were talks that we can manage international forces, have no fear of competition from low wage countries, and can create high value jobs again. Now that is really good news and a great thing to know.

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