Drawing lessons for Singapore from the current face-off between the management of Qantas Airlines and its staff, Prime Minister Lee Hsien Loong said this highlights the importance of business competitiveness as well as a close relationship among companies, unions and the Government.
He was speaking to Singapore media at the close of the Commonwealth Heads of Government Meeting (Chogm) here on Sunday.
Asked if there were any takeaways from Qantas' situation for Singapore, he said: 'It shows how important it is for all companies to be competitive and for employers, unions and government to work closely together to manage the problem.'
Qantas, he noted, faces a competitiveness problem - it is losing A$200 million (S$266 million) a year and its operating costs are 20 per cent higher than those of other airlines.
When the management could not resolve the issue with unions, they took the 'drastic step' of grounding flights.
On its part, the Australian government has been unable to resolve the situation, and can only order workers back to work while giving them more time to talk.
'It is a very painful adjustment and they have not been able to reach an agreement,' Mr Lee observed.
In recent weeks, Qantas employees have gone on strike over wage and job cuts, work conditions and outsourcing of jobs.
On Saturday, the management retaliated by taking the unprecedented step of grounding all its flights worldwide.
An unhappy Australian government called for an emergency arbitration hearing by an independent tribunal to resolve the matter. Early this morning, the tribunal ordered an end to the dispute.
'We have to make sure we stay competitive because if we allow ourselves to become non-competitive, we will be in as unhappy a position,' said PM Lee.
Asked about Singapore employers' complaints about the Government's recent curbs on foreign worker supply, he said he was aware of their pain and the business opportunities lost.
He acknowledged that it would be particularly painful for the many small and medium enterprises and local companies which had previously depended on foreign workers.
But there is no easy choice, he said.
'Because it's not as if you send away all the foreign workers or keep out all the foreign workers, then we live in paradise. There is a price, and it's a quite a high price to pay. As we try to manage the population in Singapore, we are going to also accept a lower growth rate,' he said.
Emphasising the trade-offs, he said that having fewer foreign workers in Singapore will lead to slower growth - if Singapore achieves 3 per cent or 4 per cent growth in a year, 'we should consider it not a bad year'.
'We've been used to 5, 6, 7 per cent, or even more, in the past, but it's (now) a different phase. When you're an adolescent, you grow and shoot up inches every year; but when you're mature, you hope to grow, not necessarily taller, but wiser and better. We have to make that change of gear,' he said.
Last week the Monetary Authority of Singapore (MAS) predicted that Singapore could grow below its potential rate of between 3 per cent and 5 per cent next year.
It also said economic growth over the next few quarters would stall, before picking up late next year.
PM Lee, however, cautioned that this did not mean things would be smooth sailing after next year.
'MAS is being optimistic: They say hopefully by the end of next year, things will pick up. But even if things pick up by the end of next year, the longer-term problems in Europe are not going to disappear.
'I expect a period of several years of difficulty in the global economy and we have to be prepared for that,' he said.
European leaders last week agreed to boost the euro zone bailout fund and banks would have to raise more capital. Banks holding Greek debt would also accept a 50 per cent loss.
But this solution is only temporary and addresses only part of the problem. It has not been implemented and leaders are not sure how big the problem is, said PM Lee.
Even if these problems are addressed, the long-term structural issue is a fundamental difference between the Mediterranean economies and those of Germany and France, in terms of productiveness, fiscal balance and the amount of inflation they can tolerate.
'The way forward is to go for a closer political relationship, a more cohesive Europe.
'And that depends on countries feeling for one another, but for the Germans to feel for the Greeks, never mind like the Greeks, and vice versa, I think that's a work of many, many years,' he said.
Before flying back to Singapore on Sunday, PM Lee attended a final round of talks with Commonwealth leaders.
They agreed to a third of 106 recommendations by the Eminent Persons Group, which was tasked to find ways of reforming the Commonwealth.
Among other things, governments have committed to improving gender equality and combating human trafficking.
But they have taken a rain check on two of the more controversial proposals, such as repealing anti-homosexuality laws and appointing a human rights commissioner, leaving these to Commonwealth officials to evaluate.
On Singapore's stance on the proposed commissioner, PM Lee said it would depend on the scope of his duties and whether he would be productive.
'If you proceed in a dogmatic sort of way, it's not likely to change the world.
'But if it's something of value, then we'd be happy to go along. But obviously matters have not been cleared, and it couldn't be decided here,' he said.
- end of ST article. Reprinted with permission.