Salaries to rise by 5% on average: Survey - Singapore

Salaries to rise by 5% on average: Survey  - Singapore

Bullish firms project bigger pay packets this year, but some will cut back on hiring

By Zakir Hussain 
 
WORKERS’ pay packets will go up by an average of 5 per cent this year, said a survey of local and multinational employers here.
This would be an improvement over last year’s 4.5 per cent.

At the same time, the bonus payout will average 2.1 to 2.6 months - excluding the 13th month annual wage supplement - similar to last year’s.

These findings are from a survey of 193 companies on their pay and hiring plans.

The half-yearly poll, compiled this January, is carried out regularly by the Singapore Human Resources Institute (SHRI) and wage consulting firm RDS Remuneration Data Specialists.

Their report noted that, despite the unfolding United States credit crunch, many companies continued to be optimistic about business prospects.

WORKERS’ POWER
‘It is still an employees’ market. If you are good, you can command a healthy pay cheque and you will be courted by headhunters.’ - MR PETER LEE, managing consultant with RDS
 
‘However, some companies are particularly anxious about its spillover effects and have started moderating wage, bonus as well as recruitment expectations,’ it added.

Only 73 per cent will be hiring this year, down from 81 per cent last year. They will take on fewer workers than in the past year.

But the growing economy will still need workers, noted RDS managing consultant Peter Lee.

He said: ‘It is still an employees’ market. If you are good, you can command a healthy pay cheque and you will be courted by headhunters.’

Mr Lee believed this was due to the buoyant job market. Singapore saw a record 236,600 new jobs created last year as the economy grew by 7.7 per cent.

To keep workers, 95 per cent of the companies surveyed raised wages this year, up from 91 per cent last year.

Public-sector workers got the biggest increases of 4.9 to 6.3 per cent this year, while those in electronics manufacturing got the lowest, at 4 to 4.2 per cent.

Fewer companies are also freezing wages - 5 per cent against 9 per cent last year. No one is cutting pay.

Bonuses will be at their plumpest for finance and insurance workers, who received up to 5.6 months last year .

Singapore’s economic growth is expected to moderate to between 4 and 6 per cent this year.

But companies are still hungry for workers. Among them is Maybank, which expects to pay its new hires slightly more.

‘We foresee competition for talent to persist. However, rewards will still be performance-based,’ said its head of human resources Wong Keng Fye.

But is the average 5 per cent pay rise enough to keep pace with inflation, which hit a 26-year high of 6.6 per cent in January?

SHRI executive director David Ang said the annual 13th month wage supplement would help. ‘It’s 8 per cent extra. Wage increases should not outstrip productivity and you can’t just give wages to meet inflation,’ he said.

But RDS’ Mr Lee feels that having wages lag behind productivity may not help companies now. ‘In the short term, productivity is not the issue but getting people is,’ he said.

‘The line that wages must lag productivity is a good political slogan, but not useful for companies struggling in a tight labour market.’

Source : Straits Times   - 06 March 2008

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Singapore Massive jams at Woodlands, Tuas

Singapore Massive jams at Woodlands, Tuas 

Search continues for Mas Selamat at checkpoints

By Diana Othman 
STUCK: Truck drivers stretching their legs after waiting for hours at the Tuas Checkpoint. Many are losing money by the hour and facing pressure from their bosses to make deliveries. — ST PHOTO: EDWIN KOO
 
STRICT checks for fugitive Mas Selamat Kastari have spawned massive traffic jams at the country’s two border crossings, with queues of lorries stretching up to 10km from the Woodlands and Tuas checkpoints.
Some truck drivers have been stuck in the line for over 15 hours as the authorities scour their rigs for the country’s most wanted man, who escaped from a detention centre last Wednesday.

The Immigration and Checkpoints Authority (ICA) said the checks - part of the biggest manhunt in Singapore’s history - will continue this weekend, the beginning of school holidays.

That could add to delays for commuters heading to Malaysia for the break. The rush is expected to start on Friday evening. Coming into Singapore, traffic is expected to be heavy on March 15 and 16.

The ICA has advised motorists to be patient and avoid the checkpoints during peak periods.

The queues, though, are not expected to be as long as those facing lorry drivers.

‘For two days, I haven’t bathed and I haven’t slept or eaten properly.’ - TRUCK DRIVER WAN KIM POH, 39, who shuttles between Johor and Singapore transporting construction materials up to three times a day.
 
About 400 trucks formed snaking lines from the Woodlands Checkpoint to the Bukit Timah Expressway and also to Kranji yesterday afternoon. Another mammoth queue of over 200 lorries waited at the Tuas Checkpoint.

Woodlands Road turned into an impromptu campsite, with drivers napping in their lorries and empty containers of instant noodles strewn alongside a nearby drain.

Many frustrated drivers said they had been stuck near the checkpoint since Tuesday.

‘For two days, I haven’t bathed and I haven’t slept or eaten properly,’ said Mr Wan Kim Poh, 39, yesterday.

He usually shuttles three times a day between Johor and Singapore, hauling construction material. He spent 19 hours in the jam, but was still nowhere near the checkpoint when he spoke to The Straits Times at about 12.30pm.

Many drivers are losing money by the hour and are facing pressure from their bosses to make deliveries.

‘I got such a headache explaining to my boss,’ said Mr Wan. ‘He is angry because he does not believe I have been stuck in Woodlands for so long.’

The ICA, though, said it has no plans to let up on the checks.

Source : Straits Times   - 06 March 2008

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Poor and at-risk families get more help - Singapore

Poor and at-risk families get more help - Singapore

Increase in dole money and childcare subsidies among measures

By Lynn Lee 

FAMILIES on the dole are going to get more money from the Public Assistance (PA) scheme, starting in July .
The increase is as much as $165 a month for a family of four, which will boost their allowance to $1,020.

For a person living alone, the extra is $40, raising the grant to $330 a month.

This new level of help is among five major initiatives announced yesterday to give poor, distressed and dysfunctional families more help and to strengthen the family unit.

The others are:
Giving financial aid up to 12 months to families whose breadwinners are unable to work temporarily.

Raising childcare subsidies for children of poor families as well as subsidising their nursery school fees.

Setting up a new inter-ministry committee to identify at-risk families and ways to help them.

Lifting the minimum age for marriage for Muslim couples from 16 to 18 later this year.
The announcements were made by two ministers in Parliament during the debate on the Ministry of Community Development, Youth and Sports’ (MCYS) budget.

They are Dr Vivian Balakrishnan, who heads the ministry, and Dr Yaacob Ibrahim, Minister for the Environment and Water Resources, who is also Minister-in-charge of Muslim Affairs.

Dr Yaacob, citing the rising divorce rate among Muslim couples, said that the move to raise the minimum age for marriage was made in consultation with community leaders and the Government.

Statistics show that marriages among the under-21s are twice as likely to end in divorce in the first 10 years of marriage, compared to marriages among adult persons, he said.

‘(This is) probably because their young age and lower educational levels do not give them a stable start to married life,’ he added.

Dr Balakrishnan, in announcing the extra help for the needy, underlined the Government’s commitment to making Singapore a great place for families and children.

‘Our children are our future…many of you have appealed for more investments in early childhood development,’ he said, in response to at least 13 MPs.

Many wanted more to be done to get children out of the poverty trap.

The MCYS plans to spend $168 million on poor families in the coming financial year, $20.6 million more than the previous year.

Besides giving extra to the 3,000 existing PA recipients, it will let more down-and-out people on board the scheme.

These include elderly folk whose children cannot provide for them while supporting their own families on a household income of below $1,000 a month.

Those facing temporary hardship due to illness or having to care for a family member will get help with their rent, utilities and medical expenses.

Before, they were helped on a case-by-case basis.

The subsidy for nursery fees is up to 90 per cent, capped at a maximum of $65.

At childcare centres, it is up to $20 more a month. Some families could end up paying just $10 a month but on the condition that both parents are willing to work, said Dr Balakrishnan.

The monthly income ceiling for these subsidies has also been raised from $1,500 to $1,800 to let more qualify.

As for dysfunctional families, the Government is looking at measures like letting divorced women stay on a home ownership scheme usually open only to married couples.

It is to prevent cases of ‘vulnerable’ women remarrying for financial security, and then being abandoned.
Source : Straits Times   - 06 March 2008

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Punj Lloyd Singapore unit sees orders triple - Singapore

Punj Lloyd Singapore unit sees orders triple - Singapore
(SINGAPORE) Sembawang Engineers & Constructors, a unit of India’s Punj Lloyd, said yesterday its orderbook has tripled from a year ago on a construction boom in Singapore.
The strong demand helped Singapore’s largest construction firm by sales raise its orderbook to $2.1 billion and boosted gross profit margins to 7-8 per cent from 1-1.5 per cent in 2006, said chief executive Alwyn Bowden.

‘We’re concentrating on infrastructure projects because these are bigger and more challenging, and are higher profile,’ Mr Bowden told Reuters in an interview.

He said that while demand for building homes and offices is expected to slow amidst an easing property market here, the impact is ‘negligible’, offset by major infrastructure investments in its key target markets of Singapore, India, and the Middle East.

These projects will not be derailed by fears of a global slowdown sparked by an ongoing credit crisis, due to strong economic growth in India and a spike in oil prices that are boosting Middle East coffers, he said.

Currently Singapore makes up 80 per cent of the firm’s orderbook. But the company aims to reduce that share and split its sales three ways between South- east Asia, India, and the Middle East.
 
‘We only need to grab a relatively small share of that market, to already be headed towards the same sort of levels of revenues that we achieve here and in South-east Asia,’ he said.

Shares in Punj Lloyd, India’s fifth-biggest builder, slid 6 per cent yesterday to take losses for the year to 41 per cent, underperforming an 18 per cent fall since December in the broader Bombay market.

Sembawang is currently involved in a number of high-profile projects here, including casino resorts - the Marina Bay Sands and Resorts World at Sentosa - as well as a contract to build part of a new subway line. — Reuters

Source : Business Times   - 06 March 2008

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Mixed Singapore landed housing site for sale

Mixed Singapore landed housing site for sale
CHESTNUT VILLE (I and II), a mixed landed site at Dairy Farm Crescent, has been put up for collective sale and the indicative price for the combined plot is $90 million.
 
Collective sale: The indicative price for the combined plot of Chestnut Ville I (above) and II at Dairy Farm Crescent is $90 million 
This represents a land price of $741 psf over the land area, inclusive of an estimated $1 million development charge.

The development currently comprises 11 townhouses and 34 walk-up maisonette units with a combined land area of about 122,677 sq ft.

Credo Real Estate, which is marketing the site, says that the site is zoned for three-storey mixed landed housing.

This means the site may yield a combination of conventional terrace houses, semi-detached and detached houses; or cluster landed housing with strata terrace houses, strata semi-detached houses and strata bungalows with communal facilities. Credo executive director Tan Hong Boon added that it commissioned a study by an architect and one of the possible schemes allows the site to be developed into 10 strata detached, 22 strata semi-detached and 27 strata terrace houses, together with another four conventional semi-detached houses and two bungalows.

Based on the indicative price of $90 million, the potential developer’s breakeven price for an intermediate strata terrace house and a conventional bungalow should be about $2.1 million and $3.8 million respectively, added Mr Tan.

Credo also pointed out that according to the Land Transport Authority, the planned Bukit Timah MRT Line is slated to include a Chestnut Station and a Hillview Station, both of which could be expected to be close to the site.

Mr Tan also expects good response for the mixed landed housing site as ‘they are not easily available in the market’.
Source : Business Times   - 06 March 2008

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Singapore ranked top Reit market in Asia-Pacific

Singapore ranked top Reit market in Asia-Pacific

Survey cites support from regulators to the industry as advantageous
By UMA SHANKARI

SINGAPORE has been rated as the best location in Asia-Pacific for overall real estate investment trust (Reit) potential - for a second year.
According to the second annual Asia-Pacific Reit Survey - undertaken for financial services provider Trust Company and law firm Allens Arthur Robinson - one of Singapore’s significant advantages is the support that the industry receives from regulators such as the Monetary Authority of Singapore and the Singapore Exchange.

Senior property, finance and business experts across the Asia-Pacific are confident that the region’s Reit markets will remain strong, the survey said.

However, the findings also showed that low yields, poor regulatory processes, the effects of financial engineering and adverse taxation developments will continue to be the greatest threats to Reits in Asia-Pacific.

The experts believe that most of these threats will diminish significantly in the longer term.

The survey suggests that over the next one or two years, companies will increase the size of their existing Reits rather than launch new ones, but this trend will be reversed in the longer term of three to five years.
 
According to the survey’s findings, retail, commercial/office and industrial and retail property will continue to be the main focus for market growth, even though the retail, commercial and office markets have cooled in the last 12 months.

The hotel and hospital sectors are expected to heat up while industrial and infrastructure property is expected to experience slight growth. Residential property, however, will remain cold, the survey said.

The findings also showed that China, India and Vietnam are ranked as the top three hot property growth markets in Asia-Pacific for the next five years. Singapore, which ranked fourth, was the highest placed established Reit market. Good growth is also expected in Malaysia.

Vicki Allen, executive general manager of institutional services at Trust, acknowledged that since the survey was conducted, some caution has surfaced in global Reit markets. But she said that Asia-Pacific Reit markets have fared reasonably well compared with their North American and European counterparts.

Robert Clarke, a partner at Allens Arthur Robinson, suggested that regulatory flexibility is key to staying ahead. He cited Singapore as an example.
Source : Business Times   - 06 March 2008

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Survey finds firms generally upbeat - Singapore

Survey finds firms generally upbeat - Singapore

Construction companies were the most ’satisfied’ about their prospects

BUSINESS sentiment remains strong, but caution has crept in - companies are going easy this year on wage hikes, bonuses and hiring, a survey has found.
A poll of 193 companies in late-January found virtually all upbeat about the next six months. In fact, more firms - 98 per cent, compared with 95 per cent six months earlier - described current business prospects as satisfactory or better.

Construction firms were the most ’satisfied’ about their business prospects, while the most optimistic sectors were marine and shipping, according to the findings by RDS Remuneration Data Specialists and the Singapore Human Resources Institute.

The unhappy ones, on the other hand, include electronics components traders and electronics manufacturers, as well as pharmaceutical and logistics companies.

On the whole, fewer companies plan hiring this year, the poll also found. The findings show 73 per cent of the companies - down from 81 per cent last year - intend to recruit. Those hiring also expect to take in fewer people this year.

And while attracting and retaining staff remains a key issue, the companies will not be paying a whole lot more just to woo people.
 
Wage increases this year are expected to average 5 per cent, up from 4.5 per cent last year. In 2007, basic pay rises averaged 4.6 per cent for executives and only 4.3 per cent for non-executives.

Bonus payouts are expected to be similar to 2007 levels of between 2.1 and 2.6 months, excluding the annual wage supplement.

‘Despite concerns about the unfolding US credit crunch, many companies are still optimistic about future business prospects,’ the RDS report notes.

However, the survey found that some companies are particularly anxious about spillover effects from the US and have started moderating wages and bonuses, and their recruitment expectations.

Still, starting salaries for most qualifications have risen by 3 to 6 per cent over the past six months, the survey found.

And ‘practically all companies are resorting to special measures to attract and retain staff’, it notes. These include ’selective market adjustments’ to salaries, higher bonuses, and perks such as opportunities for continuous learning and improving work-life balance.

Source : Business Times   - 06 March 2008

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‘Top lawyer to boost tax practice at Drew & Napier - Singapore

‘Top lawyer to boost tax practice at Drew & Napier - Singapore

Ong Sim Ho’s team set to add more depth and breadth to spectrum of work
By CHEN HUIFEN
HAVING run a very successful boutique law firm for about seven years, veteran tax lawyer Ong Sim Ho, 39, will soon have to adjust from being his own boss to being an employee at one of Singapore’s largest law firms.
 
Mr Ong: Building on an already strong team to meet growing clients’ needs 
Mr Ong, who is the owner of a well known tax law practice which carries his name, will be joining Drew & Napier to lead and expand its tax law practice.

With the addition of Mr Ong and his team, the tax group at Drew & Napier will be immediately beefed up to about nine, making it one of the biggest specialist tax law practices in Singapore. The law firm is already an established name in tax litigation and dispute resolution as well as trust and estate planning.

Apart from strengthening the tax litigation and dispute resolution record at Drew & Napier, Mr Ong’s team, known for indirect tax advisory - including GST, property tax and customs duties - is expected to add more depth and breadth to the spectrum of work at Drew & Napier.

Mr Ong also sees potential in tax transfer pricing work and is looking to structure a cross discipline collaboration with the competition and economics law teams at Drew & Napier.

Over the next four months, he plans to create three specialist teams in tax litigation and dispute resolution, enterprise tax risk advisory, and transactional advisory. This would add to the existing trust team that Drew & Napier already has.

‘This is going to be the first time, within a law firm, that we are going to have that broad spectrum of practice to respond to any kind of clients in Singapore - the standalone SMEs, the international direct investment groups, the funds, property developers, high net worth expatriates - all under one roof. And that was what attracted me. On our own, we could never do that,’ said Mr Ong.

Even though he says he is nervous about his new role, the man is not showing it. He is gearing up to fit into his new office at Ocean Towers, even though it means changing the ‘I-don’t-work-on-Fridays’ policy that he used to live by when running his own business.

The father of three spends time with his children on Fridays and goes to the extent of making arrangements for them to skip school. But he explains: ‘My wife is very adept at handling them, so now I can be a little bit selfish and say, ‘Look it’s my last time to chiong (make a dash).’ So I’m back!’

Although setting and building up his own company has given him immense satisfaction, Mr Ong says that the move to a bigger outfit will give him greater leverage in terms of resources and will offer the chance to build on an already strong team to meet growing clients’ needs.

‘From my point of view, there are several push factors,’ he told BT in an interview. ‘It’s very difficult to get committed, bright young lawyers to come on board - not so much for remuneration reasons, because if you’re doing well, you obviously can pay, and we have a policy of paying near the big firms.

‘Unfortunately, the ability to give young lawyers the practice space, once they reach a certain maturity and seniority, is limited in boutique firms.’

Formerly with the Inland Revenue Authority of Singapore (IRAS), Mr Ong holds both a LL.B (Honours) and an accountancy degree, and is a certified public accountant.

His boutique firm counts well-known multinational firms such as F&N, UBS, Wuthelam Group, Mizuho Corporate Bank and Samsung Asia among its clientele.

Mr Ong’s entry to Drew & Napier is part of the firm’s succession planning strategy. The head of its tax group Teoh Lian Ee is planning to retire within this year.

‘I would like to pay tribute to Drew’s tax team of seven lawyers who have contributed to the growth of the practice,’ said Mrs Teoh. ‘Although Stacy Choong is leaving the practice, Drew would like to acknowledge her significant contribution to the team’s success and growth and we wish her the very best in her future endeavours.’

Ms Choong joins Rajah and Tann in June.

Source : Business Times   - 06 March 2008

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‘Penalty regime’ to come down hard on late tax returns - Singapore

‘Penalty regime’ to come down hard on late tax returns - Singapore

Law change implications sink in for companies and individuals who drag their feet
By GENEVIEVE CUA

(SINGAPORE) Companies and individuals who drag their feet on filing tax returns are starting to wake up to the severity of the consequences. They could end up facing a penalty of up to double their tax bill.
Reason: a piece of legislation passed last year has sharply upped the ante for filing late returns. The harsh new penalty kicks in for those who fail to file tax returns for two years or longer. There could also be a fine of up to $1,000.

Given the track record of companies here, many could be in danger of attracting the hefty penalties. More than 1-in-10 companies required to file their tax returns for the Year of Assessment (YA) 2005 were two years late in filing their returns in 2007. The change in law spells bad news for outfits like these.

In an article highlighting the new ‘penalty regime’, Ernst & Young (E&Y) director (international and corporate tax service) Florence Ng and senior manager Tang Siau Yan called the change ’seismic’. The article was published in January in the firm’s bimonthly publication, You and the Taxman.

Previously, the penalty for late filing was relatively modest - a fine of up to $1,000 and, in default of payment, imprisonment of up to six months.

The new penalties are contained in Section 94A of the Income Tax (Amendment) Act, which came into force in February 2007.
 
To illustrate the penalty, an individual or company that fails to file tax returns within two years, and owes $1 million in taxes, could be subject to a penalty of up to $2 million. So the total liability could be a staggering $3 million.

In response to questions, a spokesman from the Inland Revenue Authority of Singapore (IRAS) said the new Section 94A (subsection 3) applies to late filings by individuals as well as companies. Some tax consultants have questioned whether the rule will be enforced on individuals.

IRAS said: ‘The main objective for the change is to raise the level of voluntary compliance among taxpayers. The fine of $1,000 was not effective enough in deterring errant taxpayers who continue not to file their returns despite reminders.’

The earliest date that a taxpayer can be prosecuted for an offence under Section 94A (3) would be in 2009 for the YA 2007 filing.

About 11 per cent of companies that were required to file their tax returns for YA 2005 were two years late in filing their returns in 2007, said IRAS. About 21 per cent of companies that were required to file their tax returns in 2007 had still not done so by last December.

As for individuals, IRAS said about 1.5 per cent of the 1.5 million individuals who were required to file their taxes in 2005 were two years late last year. This works out to about 22,500 people.

About 3 per cent of the 1.6 million individuals - or 48,000 people - who were required to file their taxes last year had not done so by December. The filing due date for individuals is April 15 every year.

IRAS is in the process of providing details of the amendments on its website early this month. In dealing with non-filers from this year, IRAS will inform them of the consequences of Section 94A (3).

Based on the 2006/7 annual report, there were 30,841 companies in the ‘taxable’ group and another 75,696 in the ‘non-taxable’ group. Taxable refers to those with tax payable after allowing tax set-offs.

E&Y’s Ms Ng said the difficulty among companies in filing returns on time may stem from a lack of resources as some companies may have systems from which it is difficult to extract information.

‘Previously, the penalties were light. What was $1,000 to $2,000 in fines? It would cost more to engage temporary staff. But this change is a wake-up call,’ she said. The firm has some clients who have yet to file their prior years’ returns, but the numbers are understood to be ‘not significant’. ‘Most of our clients treat their tax filing obligations seriously,’ she said. ‘Those that had been perpetually late in their filing have made efforts to bring their submissions up to date.’

In their article, Ms Ng and Mr Tang said it was probable but not certain that the aim of Section 94A was to align the penalty regime for negligent failure to file a return with that for negligently providing wrong information under Section 95(2).

The article points out that under Section 95(2), a person who makes an incorrect return or gives incorrect information ‘without reasonable excuse or through negligence’ would be liable to a penalty of twice the amount of tax undercharged as a consequence of the incorrect return.

It also raised the question of whether Section 94A was intended to be applied only in exceptional circumstances. ‘Regardless of such intention, Section 94A may potentially apply to any person who fails to file a return for any year of assessment within two years after it is due, whether he is subjectively aware that he needs to file a return or not. It is quite possible that Section 94A may, over time, be applied in unexpected ways and may subject an uninformed or careless taxpayer to severe penalties.’

Source : Business Times   - 06 March 2008

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