Siren call from Singapore grow
WHILE Hong Kong politicians were pondering whether to postpone the scheduled debate on the Mandatory Provident Fund last week, they may have overlooked a significant shift in policy by the Singapore Government on its own Central Provident Fund.
Foreign companies, from August 1, need not enrol their workers in the CPF, although they may do so voluntarily. This change, hardly noted in Hong Kong, is of greater significance than might be apparent.
It adds to the competitive position of Singapore versus Hong Kong. Multinationals and other foreign corporations based in Singapore have so far been forced to contribute 20 per cent of employees' salaries to the CPF, which is much more than a mere state pension scheme. It can be used for health care, house purchase and stock market and gold investments.
This could have been, effectively, a pay-roll tax, adding considerably to the cost of keeping staff in Singapore.
Another shift which surfaced this week was the move by World-Wide Shipping to relocate its operating and ship management team from the territory to Lion City.
The argument for putting tanker managers closer to its main operating area is logical, but the significance of part of the late Sir Y K Pao's empire making a further leap-frog from its roots in Shanghai will not be lost on those monitoring the one-way traffic between Hong Kong and Singapore.
Anecdotal evidence is increasingly supporting the view that Singapore is finally being seriously considered as a destination of choice by a growing number of corporations and individuals.
Television advertisements being aired in Hong Kong by Singapore might appear vague, but taken as a siren call to relocate they begin to make sense. The opening of a Singapore resource centre in the territory also fits the picture.
The decision to cut the CPF might prove a winning argument with corporations undecided whether to relocate operations to Singapore, although those already in place may well have to compensate their staff a 20 per cent cut in financial benefits.
For many Hong Kong companies, shifting operations is never going to be an option, but for those who have the choice, the allure of Singapore is being subtly increased all the time.