DEBATE ON ANNUAL BUDGET STATEMENT

ANNUAL BUDGET STATEMENT: Order read for resumption of Debate on Question [22nd February, 2010],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2010 to 31st March, 2011." – [Minister for Finance].

Question again proposed.

12.30 pm

Ms Indranee Rajah (Tanjong Pagar): Mr Speaker, Sir, thank you for allowing me to participate in this Budget debate.

Some have remarked that this Budget is bereft of goodies. It is not an extravagant Budget. That is true. It is very much a "let's get to work" budget. If one were to think of it in gastronomic terms, this Budget is not a chocolate dessert with whipped cream and a cherry on top. It is much more akin to a protein shake. The former tastes wonderful but it would not make you lean and fit. And the second does not taste as good, but it is much better for you in the long run.

This Budget identifies productivity as one of the strategies for our long-term growth. Simply put, productivity means being able to maximise the output of a particular resource in a more efficient way. And if we want to grow as a country, then we have to be productive across all strata of our society.

In this regard, I would like, in my speech, to focus on one particular group, the low income, and consider how we can help them to climb up the value chain so

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that they too can share in our strategy for growth.

This ties in with that part of the Budget which deals with "Including all Singaporeans in growth". I note the Minister's statement that we are making investments to build up a first rate system for continuing education and training with special provisions for low income Singaporeans. I also note the Minister's statement that we are assuring every child access to the best education from pre-school to tertiary level.

Whilst the Budget is well-intentioned in this regard, and has some good measures to help the low income, I think that our approach is still too broad-based, and does not address the root of the problem, which is that many of the low income are behind even before they reach the starting line of the race.

Before I go on to deal with what can be done to address the problem, I would like to say a few words on the importance of having growth opportunities for all.

In this connection, I would like to reflect on the recent case of the Pasir Ris and Tampines residents who objected to rental blocks being built next to their purchased flats. The objections included complaints like the rental flats would block their view, complaints about privacy and safety; they were afraid that rental flat neighbours would make the area unsafe and seedy and complaints that rental flats near their homes would cause the value of their properties to drop.

I was dismayed when I read of these objections.

It seems to me to be a fundamentally wrong approach. One of the things we must never forget is that our vision for ourselves as a country is that we would enable all Singaporeans to progress and prosper. Those from low income and low

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educational backgrounds start off at a disadvantage. The correct approach really should be: how do we help them to level up?

One of the most fundamental basic necessities that every human being needs is a home, a roof over their heads and a shelter for their families. This gives them security and with security, the parents will then be able to focus on raising a family, and on their jobs, and the children can focus on their studies. Rental housing is a key strategy to helping lower income Singaporeans to achieve a better life and share in Singapore's growth. MPs, myself included, have a long time been asking for more rental housing to meet the demand. The flats at Tampines and Pasir Ris would go a long way to help meet this demand and I was therefore saddened to learn of the reactions of some of the residents to the proposed rental flats to be built there.

We should not forget that the people who need rental housing are our fellow Singaporeans. Singapore was built on the vision that we would, as a team, achieve prosperity and progress for all. And there is something inherently objectionable in saying that "I do not want somebody poor to live next to me because that housing for the poor will affect the value of my property".

We should not have the attitude that we should not mind rental housing so long as it is not next to us. In other words, anywhere except in our backyard. If everyone were to adopt this attitude, then where would you put the poorer people in Singapore or house them?

Surely, it is much more important to want to see our fellow Singaporeans grow and achieve a better life.

It is true that those who live in rental housing tend to have more problems. This is because those with their income profile is such that they usually come

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from less educated backgrounds and this in turn means that they have less ability to get good jobs or to earn more, and they have all the attendant problems that come with lower income and lower education.

Singapore has a declining birth rate. Paradoxically, lower income families tend to have larger families. The better educated have fewer children. This is reflective of the worldwide phenomenon where more developed societies have lower birth rates than those in less developed countries. And the same is true at the individual level: more affluent couples tend to have few children than lower income couples. Our approach thus far had been to try to discourage the lower income families from having more children. The HOPE Scheme is one such example. A family will not qualify for financial assistance under the HOPE Scheme if they have more than two children. The message is that you should only have more than two children if you can afford it.

However, the reality is that many lower income families frequently do have more than two children. In some of the rental flats in my constituency at Henderson Heights, there are families in 2-room rental flats who have five or six children. That means you have seven or eight people under one roof. I do not agree with the approach of restricting assistance just because the family has more than two children because that only serves to compound the problem. Once born, a child cannot be unborn. Once born, a child needs to be clothed, fed and educated. Restricting assistance just keeps them locked in a poverty cycle. So once a child has been brought into this world, the question is how to try and give that child, irrespective of his or her background, the best opportunity to succeed and to become a fully productive member of our society and economy.

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In this regard, I actually see rental housing as an opportunity for us to develop our human resources and to help low income Singaporeans embark on the productivity train. I see the rental flats as a catchment area of young children where we have the opportunity to do a lot of good. Here, you have children who have potential. Just because they are poor does not mean that they are stupid. All it means is that you have a child with potential, but who is at a disadvantage. The question is how you help them to overcome those disadvantages so that that potential can be realised.

We all know that the answer to this is education. Whilst we have done a good job, especially with the ITEs, the reality is that many low income people still do not get the opportunity to achieve higher education and then cannot climb up the value chain, and consequently, get shut out from sharing in our growth.

Why does this happen? I have found in my rental estates that many of the parents labour under the misapprehension that it is enough to send the child to primary school and that learning and education begins in primary school. And we know that this is not true. Nowadays, any child who goes to primary school without adequate pre-school education or preparation ends up behind the rest of the class and it is frequently impossible for the child to catch up. So if a child is behind in Primary 1, then what it really means, for many of them, is that that child is behind for the rest of his or her life.

I have also found that for those who cannot cope, they typically tend to drop out at Secondary 2 level because this is when they hit puberty. For girls, this is the age where some become single mothers or become pregnant. For boys, this is when they hit their teens and become less willing to listen to adults. They drop out of school and do not even

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make it to ITE. These then land up in low skilled, low income jobs and eventually, they fall into the group who need rental housing, and the cycle begins all over again.

I would like to see the Government invest more resources in breaking this cycle of poverty because the children from low income families in fact represent a great potential resource if they are properly nurtured and given the opportunity to realise their full potential. I notice in the Budget that the Government would top up Post-Secondary Education Accounts. However, I did not see much in relation to pre-school. We need to do more at the pre-school and primary level because if they do not level up by Primary 6, then, in many cases, it will already be too late.

I would urge the Government to consider having, within each rental housing precinct, more infant care facilities, childcare facilities, student care facilities and tuition centres. I note that we have these facilities but right now, the infrastructure is not built such that they are altogether within a rental housing precinct. And the problem is that when it is too far away, the low income do not have the money for transport. Sometimes, it is too far to send their children and then you have a drop-out rate. But if you build an educational eco-system within the rental housing precinct, it makes it much easier for the parents to send their children down. Infant care releases the mother to go to work and it allows the child to be developed at a young age. Student care allows the child to come back after primary school and stay there. The tuition centres help them to level up. So if the Government could consider building an education eco-system around rental housing, I think it would go a long way towards helping this group to level up.

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I would also advocate that if you are going to have these childcare and student care centres, the children should be taught values, in particular, looking after their parents. Increasingly, we are beginning to see cases where children do not look after their parents. I have a case of an old lady who came to see me for an appeal for a flat. She said that she had had a 3-room flat. She sold her 3-room flat and gave the sale proceeds to her daughter. The daughter took the money and bought a 4-room flat with her husband. However, they would not allow the old lady to stay with them because the son-in-law did not get along with the old lady. So her daughter had no qualms about taking her mother's money – thank you very much for the money, but I am sorry that you cannot stay with me. And that again seems to me to be fundamentally wrong.

So the daughter was content to take her mother's money and have other people, the taxpayers' money, to support her mother. These are things which you cannot really legislate upon. If you want our children to look after their parents, it is something that needs to come from the heart. But it is not going to come from the heart unless they are taught from a young age, that is, it is imbued in them. And if children do not look after their parents, as our population gets older, this is going to pose more and more of a drain on our resources and future budgets.

I hope that the Government would place greater emphasis on teaching and encouraging these values from children at a young age and that we would build an infrastructure where we can help the lower income to level up.

Sir, with this, I support the Budget.

12.41 pm

Mr Ong Kian Min (Tampines): Mr Speaker, Sir, the Finance Minister's 2010

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budget statement will give Singapore a fresh and promising start as we take the initiatives to upgrade and prepare our economy for the new decade. By placing quality of effort above quantity of resources, our economy will be better able to tackle the challenges brought about by increasing global competition.

Some are disappointed that this year's Budget does not contain more direct financial help for individuals and businesses. But as the recovery of the world economy is still fraught with uncertainty and we remain susceptible to unpleasant surprises that may be lurking round the corners, I believe that this is a prudent Budget, prudent to keep some of our powder dry in position to respond to any financial or economic crises that may unfold.

Budget 2010 is a confident, forward-looking Budget, and by focusing resources to uplift our productivity, it will have a great multiplier effect on the entire economy. The systemic way taken by the Finance Minister to boost productivity by encouraging higher-value activities, supporting business investment in skills and innovation and investing in continual upgrading of the skills of every worker will allow us to sustain our economic growth over the next decade and further.

I am positive that with the multi-faceted approach taken by the Finance Minister in Budget 2010, Singapore will succeed in its quest for quality growth via the productivity route. Dorma, a mid-sized global German company that makes high-tech door fittings and door equipment, set up its first overseas plant in Singapore in 1979 and has since made Singapore its regional headquarters for its operations in ASEAN, Korea, Taiwan and Japan. Dorma currently employs 350 people in Singapore. As a testament to confidence in our labour productivity, a Dorma

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manager was quoted in a Straits Times' article in early February saying that if Dorma were to relocate its Singapore factory to China, it would need 2,000 people to do the same work that can be done by its 350 employees in Singapore. This gap of 350 to 2,000 is the situation as at today. But we can be sure that other countries, such as China, India and Vietnam, will not be keeping still and are themselves pressing hard to upgrade their skills and improve their productivity. With the initiatives and commitment set out in the Budget Statement, companies like Dorma may be assured that we can reap even higher productivity in time to come and stay ahead of the competition.

Increasing productivity is also one good way to overcome the rising cost of living. For inspiration, Singaporeans can take a leaf out of the book of Singaporean singer Jing Wong, popularly known as Huang Jìng Lun. In less than two years, the 26-year-old, based in Taiwan, has released two albums and played a substantial role in a popular Taiwanese drama serial. Jing Wong looks for alternatives to improve himself and works hard to stay in the industry. It turns out that one reason for his high productivity is the costly living expenses in Taiwan.

Sir, while Budget 2010 maps out a comprehensive financial strategy that seeks to transform our economy and our enterprises, I wonder how will individual Singaporeans respond to the call for greater productivity. Each and every one of us has to step up to the challenges to better our work performance and rise to the call of greater output. The desire to achieve more has to start with the "self". There must be an inner conviction within each of us to strive for efficiency, creativity and productivity.

Just look at the generally mediocre standards of service in Singapore and compare them to what we experience in our travels to countries like the United

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States, Australia, Japan or Thailand. I have observed how a waitress in a restaurant in Australia single-handedly served six tables of patrons. She greeted customers with a smile, spent time to explain the menu, darted about ensuring that glasses were always topped up, checked often on tables to see if anything else was needed, remembered the needs of her regular customers and even opened the door for the patrons as they left. The waitress anticipated the needs of her customers and attended to them even before she was asked. In that way, she kept on top of things and managed the situation very well. I am sure many of us have also witnessed how, in Singapore, a waitress may bring a dish to the table, go back to her station empty-handed and, two minutes later, another waitress may walk empty-handed to that table to clear away a few used plates that had already been sitting around. Now, if the first waitress had brought the new dish and taken away the used plates on the way back, she would have saved herself and her co-worker one trip and doubled her task performance within the same time.

The productivity message "work smarter, not longer" has become the mantra of many workplaces and organisations and yet the simple slogan carries the simple truth that "working smart" means producing better results within the same time and not simply working harder or longer.

Being more productive at work does not mean that our work-life balance will worsen nor that we should be less productive at home, that is, in producing children. Some experts are concerned that the birth rate would dip again this year, one reason being the Government’s drive to raise productivity. With all due respect, I believe that a person can be productive at work and also be productive parents at home. Raising our labour productivity need not be counterproductive to raising our fertility rate. To illustrate, let us look

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at the fertility rates in the US and France. Both the US and France enjoy a fertility rate of about two births per female. Yet both the US and France are among the two most productive nations in the world. If we increase our productivity levels by doing more, earning more and accomplishing more within the same or even a shorter timeframe at work, surely we will have more time to spend with our families and to enjoy our children.

With the recent news that our TFR is at its lowest ever and amid concerns that it may even drop further this year, I was initially disappointed not to see any financial incentives in this year’s Budget statement to boost our TFR. But after some thought, I concluded that maybe it was not such a bad thing to realise that financial subsidies and grants could only do so much. In reality, they could have reached their maximum effectiveness in encouraging married couples to have more babies and we should now seek other ways to help families who want to have more children.

My wife and I are blessed with four daughters and a son. We would not have been able to bring up our five children as well as we have, especially when they were very young, and still continued to have both our careers and carry out our public and volunteer duties if we had not lived together with my parents. We are grateful to my parents who helped and still help to keep a watchful and loving eye over our children, providing them a warm, nurturing and healthy environment and passing on their time-tested values to our children. To increase our TFR, I believe we should encourage more parents to commit to help bring up their children's children.

Unfortunately, the sad fact is that not everyone in the same family can live harmoniously under one roof. I note a worrying sign that more and more elderly parents want to apply for HDB rental flats

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because – as pointed out also by Ms Indranee Rajah – they are living with their married son or daughter and cannot get along with either their daughter- or son-in-law. It is difficult for the Government to accede to all such requests for elderly folks to live on their own away from their children. However, I can empathise with multi-generation families who are forced by circumstances to live together in an overcrowded flat. Inevitably, friction among unhappy family members will arise. Quarrels break out and living together becomes increasingly unbearable. After a certain point, the relationship sours beyond reconciliation. They may have started off on a good note – a newly-married couple having their parents live with them, and also in the example cited by Ms Indranee Rajah, some parents might even have sold their old flat to live with their son or daughter in a newer or larger flat. But, as the children arrive and there are more bodies packed in the small flat, the reality is that the family very quickly runs out of space and soon, it seems as though it is the grandparents who take up too much of the limited space, even in a 5-room HDB flat. While it is not good Government policy to provide a rental flat for all parents who want to live away from their children, and children and family members should be encouraged to take care of their elderly parents or relatives, more help should be extended to the family caregivers.

In this respect, more assistance should be targeted at the lower-income group who live in smaller HDB flats. This year's Budget provides for higher relief for taxpayers living with parents, but this is useful only to those who earn enough to pay tax. We should also extend financial help to lower-income Singaporeans who do not earn enough to have to pay tax, but live with their parents or have their parents live with them. If their parents were forced to go out and rent a room in

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a HDB flat from the open market, they may have to fork out $500 per month for rent. To help low-income Singaporeans house their parents, I would like to suggest that half of that amount – that is, $250 – be given as a grant to be credited as a top-up in the CPF Ordinary Account of children who have their parents live with them. This CPF top-up can be a great help in meeting their home mortgage loan instalments.

Sir, with that, I support the Budget.

12.52 pm

Mr Wee Siew Kim (Ang Mo Kio): Mr Speaker, Sir, thank you for allowing me to join the debate. The Government has set very specific and ambitious targets for our transformation into a more advanced economy over the next 10 years. Only when real income grows can we continue to enjoy an increasing standard of living. Only then, can we individually live better, ensure that our children live better and that, as a society, we can care for those who are less well off, those that are less fortunate. The target is to grow real incomes by one-third in 10 years' time. And this is no mere thumping on the chest and slogan-making. To realise this, the Government is committing $5.5 billion over the next five years in the form of tax benefits, grants, training subsidies and programmes to support the national effort to raise productivity.

We have much to applaud but it remains for us to convince Singaporeans to stand behind us in this effort. Productivity and Continuing Education – by themselves are not new to Singaporeans. Over the years, they have been exhorted to learn, re-learn, life-long learning and continuous training. They have seen our industrial landscape morph from sweat-shop factories to highly automated, high-tech ones. Along the way, they have seen many that are retrenched and their skills rendered

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obsolete. You would imagine that the affected would need no convincing of the need to retrain and reskill. But I am not so sure. Hence, I hope that Singaporeans realise and take to heart that the challenge from other economies is real and that the window of opportunity for us is rapidly closing if we do not all pull together and make our best efforts to see through this transformation. And even as we set 10-year goals, they are but milestones. In reality, it would be a continuous challenge. Beyond the 10 years, the effort continues. Hence, for the weary, for the tired and for those still recovering from the last recession, and some from recessions before that, this is not a welcomed message. Let us take full measure of the challenge we face, fully aware that in transformation there would be pain and disruption. But we all take comfort in that we know where we want to get to, we have the resources to get us there and we are, by many measures, still ahead of the game but we cannot afford to stay still.

It is, thus, not surprising that a number of my residents and grassroots leaders have expressed concerns that they cannot work any harder than they already are doing. In addition, many are apprehensive that the sectors or industries that they are employed in would become obsolete and they are also not confident of their own abilities to switch or upgrade their skill sets or adapt adequately to new environments. The older workers with little education are particularly apprehensive.

So, firstly, we have to convince them and their employers that it is a misconception that higher productivity equals longer hours at work. Secondly, we have to convince them that they have the ability to adapt and the changes will result in a better quality of life for themselves and their families. And this national multi-faceted approach would be the best bet for the majority of us.

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With Deputy Prime Minister Teo leading the National Productivity and Continuing Education agenda, there is no doubt that all Government resources would be brought to bear. The new three-year Workfare Training Scheme (WTS), which will complement the Workfare Incentive Supplement (WIS) scheme as intended, will address many of the concerns for workers and employers as training needs increase. Subsidies of 90% to 95% of absentee payroll, course fee outlay and cash grants to WIS recipients when they complete their training, I anticipate, would go down very well. The structured training programme for those with low skills, including those who are unemployed, will also provide hope to those who are usually caught in the vicious cycle of low/no skills and long-term unemployment.

The Budget is indeed about people and include all Singaporeans in growth, for everyone to have the best opportunity to reach further and stretch his potential. However, some clarification or enhancement of the schemes may be necessary, as I sense that for the PMETs, they learn and benefit not only from structured courses but also through attachments, overseas assignments, working alongside foreign talents either in Singapore or overseas. Under Productivity and Innovation Credit – training of employees enjoys the tax deductions. Could the remit be broad enough to cover such non-structured learning? Through these means, I believe that the capabilities of Singapore companies would further deepen and allow them to seize opportunities in Asia.

But, at the end of the day, however good the intentions, it comes down to implementation. This registered hard when I sat in a discussion of the resource panel of business leaders of the GPC several days ago. I heard some of the Members rail away saying that it would be

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better if the Government just leaves them alone with less rules and things would work themselves out, I suspect they meant for the better. Then, on the other extreme, some of the members of the resource panel said that all the well-intentioned programmes are, from their experience, very difficult and resource intensive to get any benefit from. These comments must be anchored from experience past. I think we would benefit from listening carefully to this feedback as they all have the elements of reality in them. And being aware, addressing them would result in a better outcome.

For those who say hands off Government, I think they meant less constraints. Maybe, Government agencies in their respective fields could engage the business associations even harder on this matter. Hopefully, some of the perceived minefields would be cleared. For the comments that Government money is not easy to come by, justifications, paperwork, meetings bogged them down and wear them out, many ask that middle management in the Government to be more empowered. The Government should consider means to simplify accessibility to initiatives, programmes and funding. This brings me back to the earlier plead not to impose too many rules and regulation – as mentioned yesterday by both hon. Members, Ms Jessica Tan and Mr Liang Eng Hwa – but it bears repeating, especially with the seriousness these comments were articulated by serious, well-meaning people.

Yesterday morning, service standards in Singapore caught the headline in the Straits Times . Poor standards – blame the CEO. Likewise, Government leaders, business association leaders must be bold enough such that the implementation of the schemes necessary for meaningful transformation, which in all instances are effected by many levels below them, is

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well resourced and empowered to move the ball forward. My own experience says that this is not easy as in many instances, it requires organisational culture changes and mindset recalibration.

Could the Government appoint advocates within each agency whose KPIs are to render as much assistance as possible? In fact, advocates within the system pushing for industry and for the people. The job is simply to keep asking, "Why not? Why no? Is there another way to help?"

While we must continue to push the boundaries of growth and all the good things that come with wealth creation, I think that we must continue to impress on all the virtue of self reliance and living within our means.

As we talk about improving incomes and better lives, we must also bear in mind that it is not possible to provide everyone with the same standard of living. The expectations of Singaporeans of today are much higher than those of our forefathers.

Of course everyone looks forward to the good life but this has to be within his or her means. When an individual or family's circumstances change, one must be prepared to reset the base line and take off from there.

We would not be short of examples of people who encashed their flats and live off the proceeds; people who run up large debts to upkeep a certain standard of living. Our expectations are high and many of these expectations are today far beyond the bread and butter, food and stomach issues. I know of one family with three cars that remain unhappy with me, as their second and third cars have to be parked further away from their HDB flat and require walking more than 400 metres. These are the expectations of today.

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So for many families, this message of self-reliance and living within one's means would sit well. Hence, I would not agree with Mr Low Thia Khiang's assertion yesterday that placed the responsibility squarely on the shoulders of the Government. Self-reliance and living within one's means are, after all, age-tested Asian values.

But there are two areas I feel need looking into. There is a group of Singaporeans that are less well endowed, less capable or who live with some constraints. In many cases, they would not be the pick of employers. Can we not create some incentives for employers to take on some of these people? Let us be realistic – every employer focused on competitiveness, and would go for the Aces at every level. Government agencies likewise. We are all subject to the tyranny of KPIs. Can we look into schemes to encourage employers, private and public sectors alike, to employ the aged, the handicapped, the caregivers at home that needed only short work hours or even ex-convicts? The Government should take the lead and subject each agency to do its part, to have diversity in our workforce.

I am all for the key principle underlying Workfare. You get help when you help yourself. Go earn something and it gets topped up. But there is this group that really cannot work and just fall short of qualifying for public assistance.

Today, our many helping hands – VWOs, GROs, community care networks and religious charitable organisations – all chip in. Last year's Budget also saw a resolve to raise the number of social workers and the Family Service Centres (FSCs). However, I would like to ask for a more robust social support network for those who, despite training, still have difficulties finding and holding down a job. I seek the Government to review and resource our outreach, such that it is

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pervasive enough to minimise the negative and often long-term impact on their families, particularly the children.

Sir, many speakers before me have said that this is a Transformational Budget. I agree. I believe that in this transformation, there would be pain, disruptions and that Singaporeans should be prepared for them. We may not have all the answers and may not be right – but what are our alternatives? Unless we can pull together, marshal our resources, sustaining our quality of life is but a pipe dream.

Our forefathers are no strangers to hardships and challenges. Risk taking and them are no strange bed fellows. We should be no different.

With this, I support the Budget.

1.05 pm

Mr Christopher de Souza (Holland-Bukit Timah): Mr Speaker, Sir, thank you for allowing me to join in the debate.

This time last year, we had a sombre debate in this House. The Government had to cut its forecast to between -5% and -2%. There was speculation that unemployment could exceed 30,000, a situation worse than that during the 1997 Asian Financial Crisis.

Today, it is a different picture. The Government is expecting our growth to be around 4.5% to 6.5% in 2010. This is excellent news.

The measures we have taken – such as the Resilience Package, Jobs Credit, SPUR and SRI – have made their impact and contributed significantly to our recovery. The sense of optimism among Singaporeans is palpable. Thank you, Minister for Finance and MOF for an obviously effective Budget 2009. Its boldness and determination, especially of

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the labour movement, saw us through the recession. It is comforting to see Singaporeans travelling again, chalking up sales over $63 million at the National Association of Travel Agents Singapore (Natas) Fair over the weekend, higher than the $60 million in sales achieved at the Natas fair in August last year.

Nonetheless, it would be wise to remain cautious as the global financial outlook is still uncertain. Nobel economics laureate, Prof. Joseph Stiglitz, warned recently that the "Great Recession" is not over yet. Our recovery must be carefully monitored and managed to ensure its sustainability.

Therefore, on the issue of rising private properties and HDB flat prices, I agree with the recent measures – imposing a seller stamp duty for residential properties sold within a year from the date of purchase and lowering mortgage borrowing limits – to discourage speculation in the property market. Many young Singaporean couples have expressed their concerns with the rapidly rising prices of both HDB flats and private properties due to the market recovery. Therefore, these measures hopefully will be felt soon.

On the issue of productivity and foreign talent, it is time we break away from the low productivity growth we had maintained over the last decade. Based on a UBS survey last year, since 2006, Singapore had jumped eight places to the 24th most expensive city in the world, and if rent is included, 15th place. Improving productivity and raising wages is needed to empower Singaporeans to keep pace with globalisation, progress and the rising cost of living.

In view of the resources our Government will be committing to support this major uplift in productivity, I am

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confident that the goal of 2% to 3% per year is achievable.

The greatest gains we can make in our economy can only be achieved from shifting our companies to higher-value activities and creating quality jobs in these sectors which will command higher salaries. Secondary gains can be made by upgrading skills in every vocation and at every level. This productivity growth will involve a comprehensive national effort but this transition period will also be difficult, even painful, for some, as they seek to do their jobs, go for re-training, adapt to new work environments and raise their families all at the same time. Older workers with low levels of education will find this shifting of gear especially difficult.

I am interested to hear what social support measures the other Ministries will be rolling out to assist Singaporeans and their families deal with the transition as we move into higher gear. For example, parents who need to go for extra training and further studies will require more help with childcare, student care and eldercare. Without the social infrastructural support in place, I do not think we can realistically expect more "Tiger" cubs to be "roaring" out this year, or more babies the following years. After all, the total fertility rate (TFR) must also be productive! Workers in industries being phased out may need temporary financial assistance until they find replacement jobs. The impact on their families, particularly their children, must be minimised to make this productivity exercise as "productive" as possible. So the productivity exercise must itself be productive.

As we progress into higher value sectors, we will have areas where we need the input of foreign talent with niche expertise. While we will reduce the number of foreign workers, possibly through the foreign levy hike, the number of foreign talent with niche expertise will

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most probably not be reduced and I would urge Singaporeans to accept them into our midst as they have valuable contributions to make to our country.

While I support the new "Productivity and Innovation Credit", which will provide significant tax deductions for investments in a broad range of activities, from research and development to design activities and employee training, I am concerned about driving automation overly furiously through technology or software. My key concern is that this may lead to lower manpower requirements and consequently, fewer jobs for Singaporeans. We should guard against this. The aim should be win-win – that with automation and individual productivity, more jobs across Singapore are created for Singaporeans.

On the issue of enhanced Workfare Income Supplement (WIS) and continuation of Jobs Credit Scheme, I support the enhancement which will increase maximum payouts by between $150 and $400, with more going to older workers to encourage them to remain in the workforce and the extension of WIS to workers earning up to $1,700 per month, up from $1,500 per month. As fellow Member, Mdm Halimah Yacob, and I have argued before in this House, this increase of $200 will motivate our workers as it awards people who have worked hard through the recession year and received well-earned increments which take their wage beyond $1,500.

In conclusion, Sir, it is essential that we continue to reinvent ourselves to remain relevant to the demands of the global economy and create jobs for Singaporeans. We must make our nation relevant to the world. An important key to this is to have an adaptable, motivated, skilled and productive workforce.

Therefore, I support the Budget.

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1.12 pm

Ms Sylvia Lim (Non-Constituency Member): Sir, each year, the Government has certain GDP growth targets and plans the Budget and policies around it. This year, the Government has put in place a productivity target recommended by the Economic Strategies Committee.

Whatever measure is used, the ultimate aim of growing our economy must be to forge a higher quality of life for all our citizens. Though not everyone has the same talents and capabilities, our growth must provide every person with a good standard of living and a sense of physical and economic security. We may be a small country geographically but within our borders, citizens should feel at home and valued as persons, and not just for economic contributions.

Sir, there has been growing expert opinion that GDP does not measure social progress adequately. In 2008, French President Nicolas Sarkozy appointed a Commission headed by Nobel Laureate Joseph Stiglitz to identify the limits of using GDP as an indicator of economic performace and social progress. Additionally, they were to advise on what alternative tools or information should be used which would be more relevant and helpful.

The Commission noted that GDP measured market production, but a larger GDP figure did not always mean that people were better off. For instance, more traffic jams will lead to higher consumption of petrol and increase GDP but the quality of life would have actually deteriorated due to pollution and inefficiency.

Secondly, it was important to look not just at the headline GDP figure but to analyse where the benefits of GDP were going. If GDP is ultimately for citizens' welfare, then one important question is

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how much the local population benefited from the GDP versus foreigners. To measure this, the Commission advocated tracking how much of GDP was made up of net national disposable income.

In an article in July 2009 entitled "Reassessing Singapore's economic future", economist Manu Bhaskaran noted that Singapore had one of the highest per capita incomes in the world at US$37,500 in 2008.

But Singapore also had a very unequal distribution of the high income. Profits took about 46% of GDP, which was very high in comparison to most developed countries. The available data also showed that foreign owned companies received almost half of the extraordinarily high profit share. That left, "an unusually low share" of the GDP cake for the average Singapore citizen, whether he is an employee or a business man.

Third, the Stiglitz Commission recommended a shift of emphasis from production oriented factors to focusing on the well being of the current and future generations, that is, towards broader measures of social progress. In this light, other important factors to track include living standards for families, environmental conditions, both present and future, and the levels of economic insecurity in the population. How unequal a society was, must also be watched seriously.

Sir, in our quest for economic growth, we should really reflect on what has happened to Singapore over the last five years. The Finance Minister hailed the period of so-called high growth from 2005 to 2008 as one which saw median incomes rise. However, that was also the period of overheating when business cost escalated, for example, CBD office rents tripled during the period. That period also saw nearly 700,000 more people added to the population, mostly foreigners. On a

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tiny island of 700 square kilometres, such an influx must create stresses and problems.

First, from 2006 to 2009, just a short span of three years, the percentage of Singapore citizens in the population fell from 70% of the total population to just 64% lower than two-thirds. Overnight, Singaporeans felt like strangers in their own neighbourhoods, surrounded by people with different lifestyles, habits and accents. Second, our population density, at five million currently, is about 7,000 persons per square kilometre. The crowds on public transport, the roads and entertainment outlets are overwhelming. Indeed, it was reported in the New Zealand Herald newspaper in January that the New Zealand government intended to target Singaporean migrants, using various reasons including our high population density. Do we really need to grow our population to 6.5 million as Ministry of National Development is planning for? Some of the most competitive economies in the world such as Finland and Denmark have populations of just over 5 million. Third, there is competition for jobs, allowing in unskilled foreign workers depresses the wages of the lower skilled Singaporeans, especially the older and more vulnerable.

Fourth, the surge of foreigners has increased demand for housing exponentially, pushing up flat prices as well as rentals. Though permanent residents make up only 4% of HDB flat owners, certain real estate firms report that about 20% of their business is made up of PRs wanting to buy resale flats. Private property owners too see resale HDB flats as good investments, due to the high demand for rented accommodation from foreigners working and even studying here. Such a huge inflow of people in a short space of time, showed up in surging rental costs and worsening congestion. While I agree that we need foreigners here to augment our population and talent pool, the pace

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and scale of the influx in the last few years was wrong. I had cautioned against this at the opening of Parliament in 2006. The Government should have done better planning, graduated the inflows and planned for space and resources. To many Singaporeans, the quality of life has actually fallen.

Meanwhile, there emerges a group of Singaporeans who just cannot keep up with the relentless pace of growth. Our Gini coefficient has been rising steadily throughout the last decade and is now at 0.478, or 0.453 after Government transfers. This puts us in the league of developing countries and way below other developed Asian countries, such as Japan and Korea, increasing numbers of distressed families are applying for rental housing, rising numbers are flocking to the CDCs for assistance and the number of homeless is on the rise. Poor families are also much more likely to have relatives in prison or on drugs. I have seen how some of my own students struggle to concentrate on their studies when their families run into serious financial problems and they have to sell their homes. Sir, we should not dismiss increasing inequalities as inevitable. Well, some inequality is needed to encourage ambition, greater inequalities have been shown to be linked to higher divorce and crime. If inequalities are serious and prolonged, it will reduce inter-generational mobility, leading to children born into poverty, with little hope of getting out. In a recent book entitled, "The Spirit Level", where greater equality makes societies stronger, British social scientists, Richard Wilkinson and Kate Pickett note that what makes a society cohesive is not whether it is overall rich or poor, why economic inequality fosters social breakdown by boosting insecurity and anxiety, leading to prejudice between the classes, rampant consumerism and all manner of mental and physical suffering. Singapore was not mentioned in flattering terms in the book.

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Sir, if inequalities in Singapore continued at such levels, we should seriously question whether our policies of promoting equality of opportunity are really working. So our ultimate aim of growth is to improve the welfare of all citizens. I have touched on why GDP is not an adequate indicator and how the Government's pursuit of growth in recent years has had serious side effects on the quality of life and social cohesion. We should go for a piece of growth which will enable us to remain united as a nation where we can say even our most vulnerable has a good standard of life. If Singapore aims to be a distinctive global city, Singaporeans must believe in it too.

1.21pm

Mdm Halimah Yacob: Sir, Budget 2010 is an important one for workers. For the first time, we have a Budget that boldly and clearly sets a goal of one-third increase in real income in 10 years, if we are able to achieve the productivity growth of 2% to 3%. This is a strong commitment by the Government and establishes a clear linkage between productivity and a better life for Singaporeans. Singaporeans have a clear stake in this productivity drive and equally important are measures such as help for workers to upgrade skills, find new jobs and receive interim support through the enhanced WIS and the new WTS, so that the recent pain of economic restructuring will not fall on workers' shoulders alone, a major reason for hostility towards such productivity initiatives in many countries.

Indeed, it is our credit that there is enough trust and confidence in the Government among our unions and workers that the debate has so far been on how to achieve this productivity growth rather than on why we need it and whether we are being too pro-business. The greatest dignity that we can give anyone is the dignity of having a job. That is why contrary to Ms Sylvia Lim's

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assertions, I believe that Budget 2010 will help to strengthen the position of Singaporeans, and it will have to address the needs of Singaporeans for better jobs and better incomes. And we also cannot discount the fact that although there may be a widening Gini coefficient, there are also tremendous social transfers that the Government has provided to those who need help. In particular, we heard in the last Parliament session that social transfers to Singaporeans during recession, in fact, increased tremendously in some cases for some of the schemes – more than a quarter, almost 30% to 40%.

Sir, now that the stage has been set, the script written and the players identified, the only challenge for us is whether we will deliver a superior performance that will leave everyone gasping in awe or will we end up with a mediocre and forgettable performance, and that really depends on all of us as everyone has a role to play. On the union's part, we have already started working with companies in all sectors of the economy, for example, in the electronic sector, we are working with Gemalto, which produces smart cards, to reduce its lead time by one-quarter, so that they can double its productivity and bring down costs by a quarter. Under this initiative, operators are taught maintenance skills to enhance efficiency. The plant in Singapore is already the most productive, but this move will help them to keep the edge over their other plants and their competitors and workers will benefit from higher skills and better wages.

I would like now to touch on some specific areas. I welcome the focus on building up a first class CET system. Our Government has been making heavy investments in pre-employment training, but our investment in in-employment training has been much smaller. Bearing

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in mind that we still have a few hundred workers with less than secondary education, the failure to address this gap in skills and capabilities would affect our efforts to restructure our economy and to boost productivity. As our economy shifts towards high value activities and inefficient industries are weeded out, workers without the skills and capabilities to do the new jobs will be displaced or left behind and we will face a serious structural unemployment problem.

At the same time, as our policy of moderating foreign workers takes effect, there will be lesser workers available to take on the new jobs, companies will suffer and pressure to liberalise our foreign worker policy will start to mount again. One key area, Sir, which I hope that the NP and CET Council will focus more on is job re-creation. Our focus today has been largely on upgrading workers' skills so that they can add value to companies and become more employable. However, there is now greater urgency to upgrade and recreate jobs too so that Singaporeans are motivated to go for training and they also see a clear benefit in doing so, as they will be able to enjoy better pay and working conditions as well as a more challenging job for more inclusive growth. And changing the workers' mindset towards training alone is not sufficient if companies do not make the effort to upgrade the quality of jobs that they offer to workers in order to attract more Singaporeans. It is so easy, in my view, to complain that workers are choosy, do not want to work long hours or do shift work and do not want to do dirty or hot work, but good employers know that they also need to do their part to create a challenging environment for people to work and develop and see a future for themselves. The successes that we have achieved in some sectors where unions had worked closely with employers such as in the landscape industry shows that it is possible to make over jobs to attract

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more Singaporeans. One negative by-product of having too many foreign workers is that instead of raising their benchmarks higher to create an outstanding work environment to attract and retain workers, employers lower their benchmarks to the level of foreign workers who come from countries where standards are lower and who are really captive workers as they cannot change employers, even if they are unhappy with their work environment.

Sir, we also need to share more successful examples of workers who have benefited from training, as I do suspect that some amount of training fatigue is creeping in. Training must lead to better incomes and better career development path for workers. I often hear workers complaining that after they have gone for training, when they returned to work, they end up doing the same old monotonous work and do not see the prospects improving. Let me quote two examples where workers have benefited from training. The first is Jabil Circuits and Electronics company involved in assembly of high value added engineering products. Jabil sends selective senior operators for re-skilling which includes computer skills and language courses, so that they can take up jobs with higher responsibility in administration. Operators who have successfully completed the training and are deployed to the new jobs were paid increments. Another example is Energizer Batteries, which sent 32 employees to attend technical training in the US, ranging from a few weeks to six months to learn about the new higher value lithium batteries which they wanted to produce in Singapore and which command a higher market price compared to the alkaline batteries. After the training, the company upgraded the operators to become technical operators and process technicians which helped advance their careers from production to technical, with a pay increase of between 10% to 20%.

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Such positive examples have a self reinforcing effect as workers could see the benefit of training and will motivate them to go on acquiring more new skills.

Sir, the second area which I hope that the new council will focus on is upgrading the knowledge and capabilities of our managers, an equally important ingredient, in order to boost productivity. We cannot have a superior workforce contributing to an outstanding performance, if we have poor or incompetent managers, incapable of leading their workers towards higher productivity, except through threats and wielding the stick. It is important that manager send the right message about productivity. Merely increasing targets and telling workers to work faster and longer hours will not do the trick. Merely transferring responsibility to the workers for a fall in output will also not do the trick. This is what one company did. This company wanted to improve its performance through a high performance culture system of work, which is nothing wrong by itself, but the way they implemented it was very poor. Under the system, workers are ranked under five performance bands. In order to make it painful for workers who cannot meet the performance standards, they decided to increase the penalty, as a result of which the number of workers who are exposed to terminations if they did not improve within a short time frame tripled.

What is worse, even workers on long-term sick leave or maternity leave were considered as poor performers. As a result, the workers are demoralised and I doubt very much that this company will improve its productivity in a sustainable manner.

Such examples will make workers lose faith in productivity improvements. Workers are not robots and boosting productivity does not mean that people cannot fall sick or take time-off to have babies or nurture their young children.

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Demoralised workers cannot be productive workers. If we want to see real productivity gains, we must have good managers who can create superior systems and motivate workers. Even if we have highly skilled workers, if we have poor managers, workers will not be able to perform up to their optimal levels.

The third area, Sir, that I wish to touch on is the need for greater support for our low wage workers, especially our contract workers. There are now 200,000 workers employed on short-term contracts and judging from the trend, the number is likely to increase. They have become the itinerant workers of modern times, peddling their labour across so many different employers for short periods of work. Our productivity improvement efforts will not succeed if we do not address their concerns and it will certainly not be inclusive as most employers are not keen to train people who services their need for only one or two months. To overcome this, I suggest that the WTS be paid directly to contract workers so that they can acquire better skills even if no employer wants to send them for training. Our contract workers usually hold more than one job, so there will be a real loss of income if they have to go for training on their own time and have to pay for their own fees. As we move ahead, we should make access to training more portable and worker-centric, regardless of employer support so that workers can access training at any point of time in their life journey on their own and enhance their employability.

This brings me to my fourth point, Sir. Last night, during my house visit, I met a 43-year-old PMET housewife who left her job six years ago to raise her children. She now wants to re-enter the workforce. And she related to me her frustration in getting a full-time job, despite her vast experience in managing big projects, and asked whether there are any training

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programmes to help her upgrade her skills, being more marketable and land a job. Unfortunately, I have to tell her that I do not think there are any suitable ones at the moment.

If we want to achieve inclusive growth and reduce dependence on foreign workers, we need to seriously look at how to tap the potential of women, like my resident, as a valuable resource that could meet our manpower needs. The latest Labour Force Survey shows that there are about 60,000 economically inactive women aged 30 and above who want to return to work over the next two years. About 40% of our economically inactive women in their 30-39 age group are diploma or degree holders. I hope that this will also be one area of focus of the Council and, certainly, we would be very happy to work with the Council in order to look at schemes to help women who want to return to work.

Fifth, Sir, I urge companies not to focus only on labour productivity but on total factor productivity. If workers are very productive but the productivity in other areas such as the use of land, raw materials, energy or processes is weak, then the overall productivity level will not go up. A good example of productivity in the use of land is Energizer batteries. Using the same land space, it managed to increase output from one million alkaline batteries per worker per year in the 1990s to two million alkaline batteries per worker per year today. Last year, when they brought in their new line producing lithium batteries, and Singapore is the only plant in the world outside the United States producing this battery, it further increased and enhanced the productivity in its land use.

Sir, we have seen progressive improvements in our workers' wages over the years. For example, our security officers used to earn between $800 and $1,000 previously. But now, after the Job

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Recreation Programme (JRP), they are paid about $1,500. Another example is our landscape industry where previously, the workers earned only $850 but are today paid $1,400. These are tangible improvements in wages and living standards and show that our growth has benefited workers.

Budget 2010 has further laid the foundation for a stronger future growth in wages through productivity and this augurs well for our workers.

Sir, I would like to touch on one point that was raised by MP Mr Inderjit Singh in his speech yesterday where he cited a UBS study to say that the average Singapore worker has lower purchasing power than in many other cities. I think this is somewhat also related to the point raised by Ms Sylvia Lim. The study ranked Singapore only 50th out of 73 cities in terms of purchasing power of the average Singaporean worker around the same level of Kuala Lumpur. He added that in terms of gross wage levels, Singapore's ranking was 40th, lower than Dubai and Asian cities like Seoul, Hong Kong and Taipei.

Sir, this report has been making its round on the Internet with many people taking its figures at face value. If the UBS figures are to be believed, the average Singaporean experienced a 8% drop in gross wages, from $11.85 per hour to $10.85 per hour between 2006 and 2009. I found this very puzzling as it goes against most other evidence, not just in the official statistics but also from what we actually know on the ground amongst our workers. We had significant increase in wages over that period. The median wage per hour of our workers rose by around 20% over that period 2006-2009. This is in spite of the effects of the recession last year which reduced wages. After taking inflation into account, real wages still grew by 10% over three years. How did the UBS figures end up with a 8% decline from 2006 and 2009 in the

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average wage per worker in Singapore, whereas the data collected by the Labour Force Survey indicates a 20% increase? I suspect that this has to do with the limited sample of firms that the UBS study looked at. The study, in fact, acknowledges the uncertainty of its wage data. It knows that its figures do not represent statistical averages as collection of data was limited to just a few companies for each profession and city. There were unfortunately also other problems with these figures. As the UBS study involved surveying 73 cities with very different workforces and consumption habits, the study had to make some simplifying assumptions. Unfortunately, some of these assumptions lead to a significant under-estimation of average Singapore wages as well as their purchasing power.

In trying to come up with the average wage level across 73 cities, the study gives much lower weight to PMET jobs – that is a reality for Singapore. In the UBS figures, PMETs comprised only 9% of the workforce. This may be true for many third world cities, bearing in mind the comparison is even not accurate because we are a country and not a city. Most of their comparisons are predominately amongst cities. It is true for third world cities but PMET jobs, in fact, account for 52% of Singapore resident workforce. In fact, using the data published in the report on Labour Force, the median hourly wage in Singapore is estimated at about $14.00 per hour or about 30% higher than the figure used in the UBS study.

The UBS comparison, Sir, also excluded CPF contributions in calculating net wages. However, the majority of Singaporeans use their CPF savings to pay for their homes. In fact, the use of CPF for home payments amounts to 20% of the income of the average HDB home owner. After taking into account the use of CPF for home payments, Singaporeans therefore have significantly more to spend

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out of their incomes on other goods and services. The UBS study excludes social security contributions for other cities as well, but social security contributions in those cities cannot be withdrawn for housing.

Sir, the UBS figures also assumed a Western-European consumption basket in calculating its price levels. It means including items like veal, steak, frozen pizza and even wine which are expensive but are not normally part of the average Singaporeans' consumption basket. It also includes items such as dinner in a good restaurant and tickets to an evening performance in classical theatre.

Sir, I cite this study not to criticise the UBS study. Any comparison involving so many cities, many of which without official data, will have drawbacks and difficulties. But I feel that I have to highlight the problem with the conclusion because many people, including in this House, simply assume that the UBS figures are true but which are actually not reflective of the actual situation here.

Sir, in conclusion, we have been able to get out of this recession quickly because of our strong tripartite relationship where workers and unions worked together with companies to cut costs and save jobs. I am confident that with its clear focus on increasing productivity to boost wages, particularly the very clear goal that the Budget has set of increasing wages by 30% over 10 years which I have not seen in any other Budgets at all, and if we all work together, we will be able to make the transition to an innovation-driven, higher productivity economy that is also inclusive and benefits everyone.

Sir, with that, I support the Budget.

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1.40 pm

Er Lee Bee Wah (Ang Mo Kio): ( In Malay ): [For vernacular speech, please refer to Appendix A.] Firstly, I would like to congratulate the Finance Minister for the far-sighted Budget 2010. Since the economy is growing, although at a slower rate, it is essential that we profit from the wave of recovery to put our economy ahead of the others.

Helping local firms to increase their competitiveness will enhance the economic growth of the country and the corporate sector.

The effort to encourage life-long learning and providing incentives for the elderly to upgrade their skills will help us achieve our short-term goals, that is, to increase productivity between 2% and 3% for the next decade, therefore overcoming the issue of an ageing population and a widening income gap. I support the new initiatives and the enhanced initiatives. However, I am disappointed with this year’s Budget.

*Cols. 2801-2802.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Not all sectors can provide Singaporeans with attractive jobs. Many local workers shun sectors such as construction and marine industry. This has been a predicament for a long time for us. Foreign workers are the main source of manpower for companies in these sectors, therefore we must achieve a balance to avoid the increased levy negatively impacting their competitiveness. Without foreign workers, will we be able to build world-class infrastructure such as airports and ports? Will we become the leading floating oil rig manufacturer? One of the solutions is to implement different levies in different industries. I suggest those industries not popular with locals, especially export industries earning foreign exchange for Singapore, be exempted from foreign worker levy. This way they will not lose

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their competitiveness due to our own policy.

As hiring cost raised in July, are we forcing some SMEs out of business? Is it a better way to maintain the current balance? We want those companies doing local business only to be able to survive. For those who wish to expand overseas, the Government should cultivate and fund them. Government should also develop downstream industries at the same time. Take the construction industry as an example. Government can cultivate developers, engineers, contractors and material suppliers. This will help more Singapore companies to go overseas.

We need a few success stories to showcase the benefits of innovation and increasing productivity. This is powerful persuasion for other companies to join the rank. I would like to ask the Minister: is there any difference between this round of productivity drive and the previous ones? Do we have a specific blueprint, benchmark and objective? Do we expect every single company to take decisive reform measures? Will this give the businesses a feeling of uncertainty?

*Cols. 2803-2804.

( In English ): Mr Speaker, Sir, the reaction to this year's Budget by businesses is very varied, depends on who I talk to, unlike last year's Budget where almost everyone gave their thumbs up. For those established SMEs with strong cashflow to invest in technology and venture overseas, they welcome the Productivity and Innovation Credit and they see it as an encouraging incentive. However, for many smaller SMEs, they worry about increased business cost as a result of levy increase and they may be forced out of business. They may not be able to afford incurring negative figures in their accounts over an investment that does not show immediate tangible benefits.

The costs of engaging consultants and expertise, yearly maintenance costs, the

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software and the hardware required to run the technology have to be incorporated on top of the R&D costs. To make up for the shortfall of funds, these companies may impose higher charges to consumers. Will this have a negative spill-over effect – for example, on the price of HDB flats? I have checked with a few contractors, for sure the increased employment costs will translate into higher construction costs. Is HDB going to absorb this increase in cost so that public housing remains affordable?

Our construction industry supplies the building blocks of our nation. A high-quality construction sector means safe and conducive environment for business transactions to be conducted, houses to live in, places to work, shop and play. I am pleased to note the emphasis on increasing the efficiency of the construction industry with automation and mechanisation. However, automation and mechanisation alone is insufficient. A well-skilled management equipped with the expertise and leadership skills to lead the company to design and utilise the new technology is also very crucial towards improving productivity.

The Minister mentioned a commitment of $1.1 billion a year over the next five years in the form of tax benefits, grants and training subsidies to raise productivity levels. Productivity certainly does not mean working longer hours. I remember when I first graduated as a young engineer, I worked in this company and there was this structural designer by the name of Mr Lim. He did not have a degree; in fact, he was not even a diploma holder. He would come to office at 8.30 am and leave at 5.30 pm sharp, and yet when it came to looking for team members for new projects, everybody wanted Mr Lim to be in their team. Why? Because he was very efficient, very productive and finished work on time.

Mr Speaker, Sir, I propose that training subsidies also be set aside for the staff at

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all levels – at the management and executive levels – to equip them with soft skills and awareness to utilise the new technology to the fullest potential.

The Minister said that by raising productivity growth by 2% to 3% in the next 10 years, real income will also increase consequently by one-third. I seek clarification on how higher productivity translates to higher wages to workers, especially the lower-wage workers. How to ensure that employers share the fruits of higher productivity with their workers?

Next, the omission of tax incentives and grants for companies and personal income tax cut in this year’s Budget is a let-down for many business owners and individuals this year. Considering that our economy is on the mend, I feel that businesses should be given more resources to jumpstart investments and innovative projects to move their companies out of the dark waters. By contrast, the US administration is pushing for tax cuts on jobs, wages and investments for small businesses to increase employment rates and stimulate economic recovery.

Big companies typically achieve big success stories and relatively smaller failures due to extensive resources and finances at hand. While I comprehend the rationale for the move to encourage mergers and acquisitions among small companies, I am concerned that this may lead to monopoly in the domestic market and, thus, eroding business diversity and competitiveness. Will the Mergers and Acquisitions (M&A) allowance be better placed in human resource development and tax cuts for the small businesses?

In conclusion, Budget 2010 paints a promising outlook of Singapore as a progressive globally attractive business hub that would bring in more foreign

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revenue while creating increased and better-paying employment opportunities for Singaporeans. I believe the Minister can refine areas in the Budget 2010 so that Singaporeans can indeed see more things are being done to enhance their quality of life as the economy improves.

Government agencies should lead by example. Productivity should begin with Government agencies. Generally, there are some improvements on the attitude and service of civil servants, but there is still a lot of room for improvement. I feel that our agencies are working in individual "silos", and they demarcate their turf very clearly. Just to give Members an example. Recently, quite a number of my residents feed back to me that there are a lot of bicycles parking indiscriminately around Khatib MRT station. So, I gave the feedback to LTA to see whether there is anything that they can do. And LTA told me that it is SMRT which manages the train station, so it referred me to SMRT. Fair enough, and I talked to SMRT. They told me that they can only do something that is within their boundary. For those bicycles that are chained to the trees, you go and talk to NPark; for those bicycles that are chained to the roadside barricade, you go and talk to LTA; and for those bicycles that are chained to the lamp-post on a state land next to the station, you go and talk to SLA. Is this productive? Do we need to mobilise four Government agencies to tackle one problem?

I can give Members another example. Not too long ago, in the morning while I was driving to go to work, I received a phone call from my resident. I can sense that she was very panic. She told me that there was a big python at the back of her house. So I told her, "Calm down, I will get the Police to attend to you." So, I called up the Police. The police officer was kind enough, arrived at her house very early, very fast, very promptly, but the police officer told her, "This snake does not cause immediate danger. I will

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not do anything." While they negotiated about whether it was an immediate danger or not – you know what happened – the snake crawled into a big monsoon drain behind the house. So, the Police said that that monsoon drain belongs to PUB, and asked her to please call PUB. The resident called me, and I called PUB. The PUB officers arrived and because the monsoon drain is very wide and very deep, they called in their contractors. And while they were trying to catch the snake, there was a heavy downpour. Later on, I received a call from the resident again at 6.00 pm, and she said, "MP, thank you very much. The PUB officers and the contractors have left and they are very happy." I said, "Well, good, did they catch the snake?" She said, "No, the snake has crawled up the monsoon drain and had gone to the other side of the drain and into the forested state land." So, she has to call the state land authority.

Ministers may tell me that there is such thing as "no wrong door" policy, but the devil is in the implementation details. I would like to see every civil servant to re-examine what they are doing now, how to be more efficient, more productive and how to work across Ministries seamlessly to achieve higher productivity. Our civil servants are very good in formulating policies. If they can understand the implementation challenges at the ground and attempt to overcome the obstacles together to achieve the desired end results, that will be the success of this productivity drive.

I am very intrigued by Mr Low's mathematical formula yesterday. He mentioned that there is "x" number of foreign workers in Singapore and if we were to increase "y" dollars in the levy, then Singapore Government will be "z" dollars richer. However, if we were to look at this problem sum, it does not say that "x" (the number of foreign workers) is constant. In fact, why are we driving

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productivity? It is to reduce the number of foreign workers. Maybe this will make a very good PSLE Mathematics examination question.

All of us know that we managed to grow our economy during the last few years, which were very challenging and difficult, because we have the help of foreign workers. Are we going to grow a population indiscriminately to 6.5 million? I know that the answer is definitely "no" because in my Meet-the-People sessions, I have come across many appeals from my residents because their applications of their relatives or spouses for PR or citizenship have been turned down. So, I do not think that we are going to expand our population indiscriminately to 6.5 million. In fact, we want to increase the productivity.

I wish to reinforce the points made by my fellow parliamentary colleagues that this Government, more in recent years than any other, helps the low-income workers, and I know this because of my regular engagements with my lower-income constituents. And I know this because in the course of my work, I come into regular contact with blue-collar workers and we put in so much effort to help them. Why? It is to give them a better quality of life. And do we believe that we can be a global city? The answer is definitely "yes", unless Ms Sylvia Lim thinks that it is impossible. Let me quote Robert Ardrey: "While we pursue the unattainable, we make impossible the realisable."

With that, I thank the Minister.

Mr Speaker: Yes, Mr Low, what do you want to clarify?

Mr Low Thia Khiang (Hougang): It is about the mathematical formula. I suppose Er Lee Bee Wah is better in Mathematics, I am no good, but neither can I understand her mathematical logic.

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Now I have two clarifications for her, Sir. First, she is referring to her experience about a lot of bicycles parked at Khatib MRT Station, she is calling LTA, and those bicycles chained to trees, she is calling NPark. I suppose it would be more productive for her to mobilise her grassroots to advise these cyclists on where to park their bicycles properly –

Mr Speaker: Are you clarifying her speech?

Mr Low Thia Khiang: It is a clarification. I am asking her if what she is doing is productive. On the second case where she talked about the snake, I suppose if she had advised the resident to call a pest control contractor or the Zoo, perhaps, it would not incur unproductive help of the Police, LTA or whoever. And I suppose, Sir, she would be more productive by giving correct advice, rather than becoming the source of unproductivity by getting the resident to call everybody – LTA, NPark, etc.

Mr Speaker: Er Lee, it does not sound like a clarification. If you do not wish to reply, it is up to you.

Er Lee Bee Wah: Mr Low, can you please call the Zoo now and see whether or not they respond to your snake problem?

Mr Speaker: Yes, Ms Lim. Do you want a clarification too?

Ms Sylvia Lim: Sir, I would like to clarify. I do not think the Member was listening to my speech very carefully.

Mr Speaker: On your speech?

Ms Sylvia Lim: Yes, that is right. Because she asked whether I was asking the question of whether we would be indiscriminately increasing our population

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to 6.5 million. My point was not whether it was discriminate or indiscriminate. My point was about space. I believe that even Minister Mentor himself had expressed reservation about this 6.5 million. In fact, if I recall correctly, he said that his gut feel was that between 5 million and 5.5 million would be optimal for comfort. So I think the Member has misunderstood my point.

Mr Speaker: You have made your clarification. Mr Yeo Guat Kwang.

2.02 pm

Mr Yeo Guat Kwang (Aljunied): (In Mandarin ): [For vernacular speech, please refer to Appendix A.] Sir, I welcome this year's Budget. It provides resources and financial support to implement ESC's recommendations. I feel that the past two years' Budget had to deal with economic crisis, financial tsunami and unemployment. Last year's Budget, to a large extent, was to save the market and worked as a painkiller. As the world economy recovers, this year's Budget will be more like a tonic to improve our health. So it differs from the previous Budget in that the latter is a remedy for sickness, and the current one is a tonic to boost our health. We do not see the Finance Minister handing us hong baos this year; instead he is going to fill our wallets.

Sir, this year's Budget is different from last year's. As Minister Lim Swee Say said, it is different but "same-same". In the end, the target is the same. It comes back to jobs and helping our overall employment. After last year's financial crisis, the world order has changed significantly. The good ones are cheaper and the cheaper ones are better. Now the situation is, if you do not work hard today, you will have to look for a job tomorrow. We cannot just wait for the rabbit and live our lives out of hong baos . So to progress fast, we must increase our companies and workers' competitiveness,

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so that they can move up to a higher level. Hong Kong people say that if you move fast, you will get a better world. We must be faster, cheaper and more efficient to keep income coming or better still, more income. This is what I call "keeping our wallets and filling them up".

The announcement by the Finance Minister brought disquiet to some people. However, most people would understand the Budget's intention. It may sound unpleasant but it will work, and it will benefit us for a long time. On the contrary, plausible suggestions like abolishing foreign worker levy may sound good and sweet. We must be aware that we may get killed by feeling too high. What we want is not sweet talk but workable solutions.

Many of the blue-collar workers are not happy with foreign workers, blaming them for depressing the wages. Luckily, we have the WIS to give them an extra 10%. Imagine this: if employers do not have to pay levy, resulting in even cheaper foreign workers, what would happen to our blue-collar workers? We must be responsible for millions of Singaporeans who had worked hard for Singapore's today. To do that, we must continuously build a competitive booming economy which give jobs to everybody. We cannot, like some European countries, be like an ostrich, burying its head in the sand, and not willing to recognise the reality of globalisation and the competition it will bring. It is said that "Not fire-up, you'll get fired." This is a reality. We must do our best.

So this Budget will achieve our target. "I will get even stronger when my competitor gets stronger." And everybody, men and women, young and old, should all increase their productivity and get higher pay. In fact, higher productivity does not mean asking workers to work overtime and work more laboriously. What

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it means is that companies must improve their institutional capabilities.

On 24th February, an article in My Paper , shared NTSC’s secrets to improve its productivity. There are four secrets. One, the management has to foresee the future trend and set up a good management system. Second, look for suitable technologies to reduce mistakes and save on materials cost. Third, collaboration from all levels to boost demand and increase the salaries of its employees. Fourth, constantly look for opportunities and not be complacent.

A good example is Han's. This is a local company well-known for its employment of older workers. It has also gained recognition for the steps to increase the productivity of its staff. For instance, they embarked on a service excellence journey and train their staff under the Customer-Centric Initiative. This has helped to increase their turnover by 9% and the staff have learned better communication skills, food hygiene practices, and management of F&B processes. Workers feel that they are empowered to make decisions and enjoy their jobs more. After the increase in their productivity, they also increase their staff's salaries. So this is a very good example. All our service sector can do the same.

We should not just focus on the manufacturing sector. We should also pay attention to the service sector as it provides more job opportunities for Singaporeans. Right now, the productivity of this sector is only 58% of the United States. With the opening of the Integrated Resorts, we have to do more to increase the productivity of the service sector and improve its overall performance.

For example, after Han’s adopted the Customer-Centric Iinitiative, it has since become a model cafe. As a result, their overall productivity has increased by 118%, and sales increased by 60%.

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When we talk about productivity, we should look at more than increased output. It does not mean that an increase in productivity will result in fewer workers. To use Han's as an example again, they reduced operating costs and saved $1.2 million. Even in the face of the financial crisis last year, they can still increase their staff bonus. I hope this example will remind our employers that while driving up productivity, they are not just asking the workers to work more, they should also improve the overall productivity and reward the workers fairly, which will motivate the workers to work in a better way.

As we improve our productivity, I would like the Minister to provide more incentives to encourage more employers to take on such schemes. It is said that "birds that rise early get to eat worms". We should reward those "early adopters" so that they can have more resources and more support. With more successful stories like Han’s, we can increase the productivity of our entire nation.

Sir, some people believe that increasing productivity will cause unemployment, but I do not agree. For example, in the service industry, manpower shortage has always been a problem. Our challenge lies in how to encourage more Singaporeans to work in this industry. In order to do so, we need to improve the entire productivity of the service sector; employers then can afford to pay higher wages. This will make service industry jobs more attractive to the average Singaporean. We also have e2i to help workers switch careers, giving them the choice of whom to work for. Hence, small companies will be motivated to upgrade themselves so as to retain staff.

I applaud the announcements made in the recent Budget to boost innovation and

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productivity in the private sector, but is the public sector doing the same? Some of these measures are geared towards the private sector. I heard that the Finance Minister will ensure that our public services will work to be more productive. We should not leave out the public sector and, in fact, the public sector should take the lead.

Next, I wish to talk about the construction sector. I have discussed this problem with many of my friends in this industry. They complain that the increase in the foreign worker levy will raise the cost of construction projects and they will have no choice but to pass it on to the consumers and the companies who buy their services. I feel that such a mentality has to be changed.

Recently, a Chinese company has caught my attention and surprised me greatly. The Finance Minister highlighted that Singapore construction industry’s productivity is only one-third of Japan’s to prod us to increase our productivity in the field. He used this example as a warning. What I would say is that if we do not improve, we will not even be able to compete with China. I noticed that the Chinese people have already started the process of sustainable construction. The Broad Air Conditioning is one such example. While construction time has reduced to just 20% of what it usually takes, the number of workers it employs has decreased too. Besides allowing construction time to shorten, they will also make sure that the entire process is in line with environmental regulations. Their buildings are environmentally friendly and energy efficient, therefore tenants do not need to use much airconditioning. More importantly, during the entire process, the use of building materials has decreased to just 25%. I feel that all these savings is the real breakthrough of productivity.

We should not just look at levies. What is important is the kind of foreign

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workers that come into Singapore. It is not so much the number but the quality of this workforce. What we need is talent. As such, when employers hire workers, they need to make sure that the worker has a good conduct and make suitable arrangement for him. When hiring Singaporeans, employers usually require them to have a certain level of skills. Employers have a quality control role here. They must make sure that they hire on a fair basis, whether they are Singaporeans or foreigners, by using the same hiring standard.

I heard that the Government will adopt the WSQ standard for the hiring of these workers, hoping that all employers will adhere to these guidelines, so that they will only hire those who can contribute. An example would be the service industry. Our employers have to ensure that workers in the service industry are able to converse both in English and one other language. Why? Because if they fail to communicate with the customers, they will lose these customers. I hope the Ministry of Manpower can look into this and improve the situation. There is no one solution to all the problems of course. When companies adopt a more advanced method to solve these problems, they should be given more relief and incentives.

Last, I hope that we will not see improvement in our economic productivity only. We must continue to build an inclusive and caring society, not just one that focuses on economic growth. We should grow as a people together and open our hearts to each other.

*Cols. 2805-2812.

2.16 pm

Mr Laurence Wee Yoke Thong (Nominated Member): Let me first thank you, Mr Speaker, Sir, and the House for this opportunity to speak in my first ever Budget debate. My speech is entitled "Towards a Society for All Ages" with emphasis that we want Singapore to be

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an inclusive society in line with our nation's aspiration and vision.

I commend the Government's Budget Statement by hon. Finance Minister on its key goal to grow productivity through three significant approaches. I would like to confine my speech to the one including all Singaporeans in growth by continuing to build a society where everyone has the best opportunity to reach further and stretch his or her potential and enjoy a better quality of life.

Older people are important to society. They are the repository of knowledge and experience. They also constitute an important part of the family fabric, which is the foundation pillars of any society. Older persons, regardless of race or religion, are to be viewed not as a burden but an asset to society and their well-being, aspirations and needs are just as important as the younger ones in our nation.

At the national level, one of the main initiatives in raising productivity is in building a first-rate Continuing Education and Training system. I hope the Government will pay special attention to help older workers, especially those nearing retirement, tap on this opportunity to upgrade their skills so that they can remain employable. I believe that this has been addressed in varying stages of implementation.

Sir, I would also like to suggest that perhaps the Government award further tax incentives for companies that are focused and successful in boosting the productivity and employability of older workers. On enhancing land productivity, I would like to reiterate the need to set aside land with longer lease for retirement villages to provide more residential options for older people. (This was also pointed out by the President of Active Retirees Association in the Straits Times Forum page, on 23rd February 2010, "Include an Ageing Population".)

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In a world of ever increasing divide among people, be it income, education, housing, and even digital and technological savvies, the divide between the young and the elderly in a rapidly ageing population should not be so pronounced as to cause fragmentation in our society. No one should be marginalised but all should be included in the mainstream of society, staying engaged with the community as far as possible. Sir, I have to concede that there will always be a core group of older people requiring more care and attention than the rest. Here, social support services play a significant role and funding support must grow correspondingly, especially increasing the manpower resource in social services. Here, I would also like to draw attention to the fact that labour intensive institutions like Community Hospitals and Nursing Homes will be much affected by the foreign maid levy issue as most of the nurses and aids are foreigners. The ground feedback is that our locals do not want to work in such an institution.

At present, many countries in Asia are experiencing rapid population ageing, and Singapore is no exception. By 2030, we will witness an unprecedented age shift in our population, often referred to as the Silver Tsunami. Our life expectancy has been increasing to about 80 years today. The Report on the Ageing Population by the Ministry of Community Development, Youth and Sports in 2006 cited that the number of residents aged 65 years and older will multiply three-fold, from 300,000 to about 900,000 by 2030. By then, one in five Singaporeans will be over the age of 65.

In the recently released July 2009 publication, "An Ageing World, 2008" by the US Census Bureau, it was reported that during the period 2008-2040, the projected increase in the population of those aged 65 years and above in the 52

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countries covered in the study, ranges from 18% to 316%. Singapore emerged top for this rapid growth rate, followed by Colombia (276%), India (274%) and Malaysia (269%). Sir, at the International Conference, I spoke to a very senior civil servant. At that time, there was the Asian Games table tennis match. We almost smelled the Bronze medal but I told her that we won a Gold medal. She said, "For what?" I said, "For an ageing population." We would not want that kind of medal.

Against this background, on the matter of provision of increased tax relief, the enhancement of parent and dependant relief will be especially beneficial to the sandwich generation who have to support both their ageing parents as well as growing children. Also, I believe the topping up of the Medisave Accounts of older Singaporeans, Medifund and the new Eldercare Fund is a welcome news for all. However, I note that the top up of Medisave for those age 70 and above is insufficient, considering that most of them would have depleted most of their Medisave money by then.

With this immense demographic shift, we can anticipate wide ranging social-economic implications for the country, and some of these are: the number of institutionalised and non-institutionalised elderly with chronic illnesses or dementia will swell; the need for long-term care will grow dramatically; chronic diseases are likely to be major causes of deaths; increased need for health/elderly care to be given by formal and informal caregivers; increased expenditure on infrastructure catering to the needs of elderly; family structures will be transformed and existing models of support will change.

In our quest to attract foreign talent to boost our productivity, the recommendation of the Economic Strategies Committee to make Singapore a distinctive global city and endearing home should extend to include a more

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conducive elder-friendly environment. Our very own older people will consider Singapore their ultimate home, not just our foreign talents. We hope our foreign talents will take root, start families and retire in Singapore. Similarly, we hope to reverse the trend of those who have gone from our shores to seek their fortune elsewhere, so that they will return to roost for their golden years, because there is simply no place like home. This will be a good success story for the continued growth and stability of our nation.

Sir, moving forward to a better tomorrow for the well being of older people, I would like to highlight some suggestions: greater coordination between policy makers and community partners to promote the dignity and welfare of older people; establish first world cutting-edge Research on Ageing; one-stop Ministry to focus on Elderly Affairs.

Now that we have established the Council for Third Age, it should work with all relevant organisations to do more to help keep older persons employable; keep older persons active and healthy; maintain their independence, and age in place, by providing more facilities and space.

Sir, I was told that older people find our malls so crowded. There is not even a place to sit. They like space and peace. Last but not least, for the frail needing greater care to live in dignity and respect.

As I see it, fulfilling these responsibilities is like taking a journey with Government taking the lead, and no one else. It had done so commendably and more could be done by all parties concerned, including the individual, family and the community level for the desired outcomes to a better quality of life for older people and they should be done with empathy. Sir, there will be gaps unfolding as we move forward within the next few decades. There will be gaps in care giving, affordable healthcare, housing for elderly and transportation among others. It does

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not mean we have not been progressing well, since various Ministries and stakeholders have indeed done their best in their jobs. I know of a Minister saying that we cannot do everything all at once.

The challenges that face us in the coming years are complex, requiring individual, family, community and the nation to do their parts in solving the problems of an ageing population and make Singapore a "Society for All Ages".

Finally, tiny red dot that we are, but achieving excellence as a regional hub for finance, education, healthcare and technology, we should also strive to be a nation known for its empathy and compassion. By making Singapore a caring nation, we can indeed grow old graciously and happily.

On this note, I fully support a very considerate Budget 2010.

2.26 pm

Assoc. Prof. Dr Muhammad Faishal Ibrahim (Marine Parade): Mr Speaker, Sir, thank you for allowing me to join the debate. Before I begin my speech, I would like to comment on one issue raised by the hon. Member, Ms Sylvia Lim. I feel that it is unreasonable and inaccurate to assume that permanent residents (PRs) and foreigners have caused the increase in prices of real estate in Singapore, particularly in the housing market. If one looks at the modelling process of real estate prices and values, one will find that there are many factors that affect price movements.

Thus, coming from the real estate discipline, I feel that pinpointing a single factor that causes the prices of our real estate to increase is premature, unreasonable and, thus, inaccurate.

Sir, the Budget 2010 which embraces productivity, skills upgrading and innovation encapsulates Singapore's

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forward looking and planning principle of governance. This would lay the framework for a transformation to a new paradigm shift towards the New Economy that would inadvertently bring Singapore to a higher level of excellence. Most importantly, I am pleased to note that if we achieve our objectives, this shift will lead to an increase in the income of Singaporeans and enhance their lives.

Mr Speaker, Sir, nevertheless, a Budget is still a Budget. It would be ineffective if its implementation processes are not cascaded well to meet the needs of the sectors and individuals who would benefit from it. I would like to touch on three areas for consideration that would matter when cascading the Budget to people on the ground. They are, firstly, effective implementation; secondly, the need to address the "Budget disconnect" phenomenon and the will of the employers and workers; and, thirdly, in my Malay speech, I will urge the community to achieve generations striving for excellence.

First, "effective implementation". Mr Speaker, Sir, the Government's master plan has been laid out targeted at upgrading productivity, skills and promoting innovation. To ensure smooth implementation, the Government must ensure that support is adequately given especially to SMEs that may not have the capabilities to do so. The devil will be in the details as to how the implementation would be in the spirit of the proposals. The message to companies has been clear that if they do not restructure and increase productivity, they may not fit into the overall transformation plan and become irrelevant.

Nevertheless, we should still be cautious because if companies, especially the large ones, are not able to restructure

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effectively, thousands of jobs may be lost and the impact to the economy would be catastrophic. As such, it would require both the Government and the business owners to calibrate this shift carefully in tandem with the companies potential and capabilities to ensure a smooth implementation towards the new paradigm.

Mr Speaker, Sir, we should also consider potential abuses to the system. As a result of globalisation, economic boundaries have been blurred by the advancement of information technology such as the internet.

Information today may be transferred and fluidly moved across boundaries without transparent checks. The incentives offered to companies to innovate and carry the label "Made in Singapore" may be abused. For example, companies with a global chain of command and production may claim tax incentives for innovation in Singapore and transfer the technology that was developed elsewhere. How can we detect this? Similarly, how can we also prevent such companies from transferring research and development cost to a Singapore subsidiary company to claim innovation tax incentives on the pretext that innovation projects are ongoing in Singapore?

The second issue is the need to address the "Budget disconnect" phenomenon and the will of the employers and workers. Sir, no Budget would be successful if the people are disconnected from it. We would also need to work on the will of the people, as the Budget proposal would involve a significant transformation to the way we work and affect our lives.

After the announcement of the Budget, I have met many Singaporeans who shared mixed reactions on the issues being raised. Among the many groups of people, there are three groups that I would like to highlight here.

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The first group comprises businesses and workers, such as those in the manufacturing and construction industries. They are very pleased with the Budget and are very well connected to the issues being raised. In the words of one of my grassroots leader, Ms Eileen Teo, who works with Tiong Seng Contractors Pte Ltd, I quote, "My boss has been waiting for such an initiative since 2005". These stakeholders are keenly preparing to take advantage of the improved Continuing Education and Training (CET) system, Productivity and Innovation Credit and the National Productivity Fund. We need to capitalise on this high note and make this group one of the movers in our quest towards a paradigm shift.

Another group whom I have met are those who appeared fearful and do not understand how the new economy will affect their lives. I was at a Skills Upgrading Seminar recently, and I saw many faces of uncertainty among Singaporeans in the lower skilled group. While I admire their strong passion in seeking ways to upgrade themselves, I feel that we need to reassure this group of Singaporeans that they are part of our plan.

The third group perceives the Budget as not relevant to their lives. I call this a "Budget disconnect" phenomenon. After the Budget speech, I received an SMS from a grassroots leader, among others, which read, "No cash Ang Bao from Tharman … Good for businesses". Many Singaporeans who perceive themselves to be out of the core business operations feel that the Budget does not concern them. I have also met few other Singaporeans who were invited to dialogues related to the Budget mentioning to me that the Budget does not touch their lives and only affects businesses in Singapore. These Singaporeans even shared with me that they should not be the target group to be

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invited to these dialogue sessions. We should instead target the businessmen.

Sir, I am very concerned about this "Budget disconnect" phenomenon that I have observed among Singaporeans. The Budget lays the framework for a transformation to a new paradigm shift towards the New Economy that would inadvertently bring Singapore to a higher level of excellence. All Singaporeans should feel and be involved in this transformation process as Team Singapore. I would like the Minister to develop a holistic and multi-pronged approach in reaching out to Singaporeans in our effort to transform our economy.

Sir, the vision and initiatives set in the Budget will only become reality if the will of the people is strong. Therefore, the call is for employers to tango with the Government in this journey towards ensuring Singapore's growth in the 21st century. Employers must demonstrate the political will to grasp the opportunities presented by the Government to upgrade their processes and introduce productivity tools. For companies that have the will but not the capabilities, I urge SPRING Singapore to render support by providing closer guidance especially to smaller SMEs.

The new innovation and productivity drive will help businesses and the local workers to raise their productivity levels. Companies should engage especially the lower skilled workers to encourage them to adopt new ways of working, change their mindset and embrace change. They should fully explore the potential of readily available incentives to improve income schemes for low-wage workers such as the Workfare Income Supplement (WIS) and Workfare Training Scheme (WTS).

Most importantly, Singaporeans need to be adaptive. Each Singaporean should aspire towards higher standards of

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education and tap on the opportunities available and respond positively to the incentives that the Government has offered. The Budget is not only transforming the workers but is also developing frameworks through innovation to bringing companies to meet the challenges of the 21st century economy so the call is really for everyone to respond towards realising this objective.

Mr Speaker, Sir, allow me to continue my speech in Malay.

( In Malay ): [For vernacular speech, please refer to Appendix A.] Towards generations of communities striving for excellence – Sir, we should reach out and encourage all Singaporeans and businesses to tap on the incentives that the Budget offers. Through my engagements with Singaporeans, I observed few segments of our society still grappling with the effects of globalisation.

As Singapore progresses and the pace of growth intensifies, more would be left behind if they do not upgrade and level up their performance. As such, we need a more generational approach to build our society and communities together. We should never stagnate like the proverb " kais pagi makan pagi; kais petang makan petang " (living hand to mouth) attitude.

I am happy to note of the increasing Singaporean Malays who, through their own spirit of determination and drive, have become successful entrepreneurs. One is Hajjah Roziah Adon, the owner of Nur Indah Nasi Ayam Penyet at Bedok Corner who imbues this spirit of innovation and enterprise.

Despite the hard work put into her business, Hajjah Roziah still upgrades herself by attending culinary classes to ensure that her Nasi Ayam Penyet is

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always of the best quality and she is on top of the competition.

Hajjah Roziah has worked hard to build up her mastery of culinary skills. This has been done by her since long ago. To improve her business, she takes feedback from customers seriously such as offering chicken rice and white rice knowing well that the former was popular amongst Singaporeans, especially her Chinese customers. In Indonesia, the dish always goes with white rice only. It is this spirit of determination and the willingness to upgrade that has made her a successful entrepreneur.

In the era of the New Economy, Singaporeans will have many routes to success. This can be done, in the words of the Finance Minister, "whether by growing skills on the job, entrepreneurship, academic and professional training, scientific discovery or creative flair".

We need to improve ourselves by enhancing our expertise, achieving mastery of our jobs and be the best that we can be. With this attitude, our real income will likely increase over time and we are likely to be able to grow our wealth of knowledge, skills and assets together. Nevertheless, we should find ways to safekeep and develop this wealth of knowledge, skills and assets for our next generation so that they can achieve another level of excellence. We can then achieve generations after generations of communities of excellence.

One pitfall which I observe is the inability of some Singaporeans to perceive wealth building from a long term perspective. For example, during my engagements with my residents, I observe that those who are facing problems with their housing mortgage are likely those who have bought and sold their property frequently in the property market.

While housing is a form of real estate investment, the owners will be inclined to

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increase their investment. However, I see it as a short term perspective among the residents that I met, and this can be a dangerous game particularly to those who do not have enough buffer to withstand the impact of financial stress that they face.

The financial stress from a failed housing investment may distract one from the quest building the capacity skills, knowledge and capabilities. I would like to urge the community to relook at their perspective to home ownership so that together with their skills and expertise that they are going to build in this era of the New Economy, they are able to develop a sound bank of wealth of knowledge, skills as well as assets for themselves and the future generation of Singapore.

Let us work together to bring our society and communities towards building future generations of excellence.

Mr Speaker, Sir, allow me to wrap up my speech in English.

*Cols. 2813-2816.

( In English ): Sir, although the Budget has received criticism for being "unexciting", "too broad", "not targeted enough" and "does not concern me", I would think that this Budget is about pushing us to surge forward out of the recession, to be more competitive with a stronger, more productive workforce and to achieve a higher level of excellence for all Singaporeans. Our best bet is to bring all Singaporeans on board this journey to transform our economy and enhance our quality of life together as One Nation.

On that note, I support the Budget.

Mr Speaker: Yes. Ms Sylvia Lim.

Ms Sylvia Lim: Sir, may I clarify with the Member?

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Mr Speaker: Yes.

Ms Sylvia Lim: Sir, earlier, the Member referred to my speech especially the part about HDB resale prices and the effect of permanent residents (PRs). I would like to clarify why he says that it is an unreasonable assumption and, in particular, if he could clarify the following points. First, does the Member agree that pricing is a matter of supply and demand? Second, does he not also agree that the PRs have contributed to this demand? And we know, from some real estate companies that they report that about 20% of their resale business actually comes from PRs. And, third, is he not aware that there have been very high prices paid by some PRs for resale flats in certain areas?

Assoc. Prof. Dr Muhammad Faishal Ibrahim: Sir, like I said earlier, if you look at the modelling of real estate prices and values, there are many factors that are involved. Firstly, in looking at the prices, you have to look at the property on its own. If we look at a property, it is a special asset – it is an imperfect market, relative to other assets. And there are other factors that affect these prices, locally and externally. And if you look at the real estate market, if you refer to any study that models real estate prices, you will find that there are many factors that the researchers attempt to find, on what affects the real estate prices.

As I have said earlier, if you relate to the researches that have been done, it is certainly premature and unreasonable to pinpoint a single factor – that is, PR and foreigners – and I find that it is certainly inaccurate.

2.45 pm

Mr Seah Kian Peng (Marine Parade): Mr Speaker, Sir, the Finance Minister has unveiled an uplifting Budget, achieving a

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good balance in addressing concerns of businesses and people.

Notwithstanding the impending higher foreign worker levies, a number of business associates of mine tell me they are pleased with the Government taking the lead and calling on all to innovate, and transform and up their productivity. It has made their job "easier" in that this subject can now be raised; something which most employers find it hard to tee up for serious discussion and where understanding on the imperatives of this is usually not high.

Now, all are on the same page and chances for success are higher. But in the same breath, the same business associates would also tell me that they would like to have more details on how their companies and staff can apply and tap on the $1.1 billion funds committed by Government each year for the next five years – these are practical questions which I hope the Minister will address expeditiously.

This Budget thus presents us a chance to really transform ourselves – to a quality workforce with a quality lifestyle set amidst a quality infrastructure and an efficient government. This push towards a quality and inclusive growth is achieved on the back of investing and strengthening the capabilities of our people and companies through innovation and productivity breakthroughs. These are bold targets and represent a strong vision.

Sir, a point to add here about the raising of productivity – if we want a higher productivity culture and measures to succeed, I think we need this to be aligned to a CEO's key performance indicators (KPIs), perhaps their performance bonus should be tied to productivity indicators. Otherwise there may be a tendency that the task will fall on HR managers to implement them, as CEOs focus on immediate bottomline

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considerations. This is a natural and certainly instinctive division of labour but one that would harm our cause. So, to the bosses out there, I urge you to align your own KPIs please – likewise, the public sector should also take the lead and align the performance bonuses of senior civil servants of the various Ministries and Statutory Boards to productivity indicators.

Sir, I am particularly happy with the changes in property tax structure to a progressive one. Likewise, changes to the Workfare Income Supplement and the Workfare Training Scheme which will benefit the masses and reduce social inequality, which I will say more during my cut on MCYS.

For now, I would like to speak about a United Nations report on human development which argues that there are vital gains to be made by allowing for greater mobility of labour.

In 2009, it made the case that governments "should reduce restrictions on movements within and across their borders, so as to expand human choices and freedoms". The report speaks of less developed countries and note that for "many people in developing countries, moving away from their home town or village can be the best – sometimes the only – option open to improve their life chances".

More importantly, the report said, "being able to decide where to live is a key element of human freedom". I agree that people ought to have the freedom to move, but what about my existing stake in a particular spot?

Not surprisingly, the world over, barriers have been raised in a bid to regulate the movement of people. And over the last 50 years, despite increased globalisation, cheaper communications and transport, the pull of an ageing

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population in developed countries coupled with the push of a young one in developing countries, has meant that the share of international migrants in the world population has remained at about 3%.

Why? Because governments have erected barriers. And in the past 100 years, the number of nation states has increased four times to 200. Policies for immigration have become stricter. People with low skills have very little chance of being allowed into rich countries.

The gains to the migrants and their relatives in their home country are unsurprisingly and largely positive – higher incomes and consumption, better education, improve health and social circumstances. This part does not concern me – it is almost self evidently true. And moreover, I am speaking from the point of view of Singapore as a recipient of these immigrants and the impact they have on our tiny island.

Today, I want to make a plea for us to look at the rational arguments behind immigration, taking into account the measures that we need to realise those benefits which accrue generally to this phenomenon while ameliorating the costs.

There is one aspect of the report which I found quite persuasive. It states that migrants boost economic output, at little or no cost to locals.

At the same time, there are also more intangible positive effects – for example, maids in Singapore have allowed Singaporean mothers to go out and work. At the same time, it is empirically true that as migrants acquire the language and skills to earn more, they will integrate quite naturally.

So, what is the gain to Singapore from immigrants? It has been said many times that Singapore needs immigrants because

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they do the jobs that we cannot or will not do. Senior Minister Goh Chok Tong has said that our economic growth rate would be one or two percentage points lower without foreigners.

But this is rather big picture. So, I would like to ask whetherthe Finance Minister can quantify such gains and mark them down, for example, for every migrant worker, our GDP is boosted by $X. I believe this will go a long way towards diluting some of the resentment that Singaporeans have towards foreign workers, a subject which I shall touch on later.

Sir, I have spoken on the undeniable economic benefits to Singapore from the inflow of immigrants. On the other hand, immigration is a hot political potato – from citizens and voters' viewpoint, they want fewer migrants.

The UN report concedes that there are worries – it says that while it is widely believed that these migrants fill vacant jobs, they also displace local workers and reduce wages. There is also a worry of crime, a higher burden on social infrastructure and, of course, the lack of social cohesion.

However, the report said: "The body of evidence suggests that these effects are generally small and may, in some contexts, be entirely absent." They have found that once established, migrants are often more likely than locals to join unions or religious and other groups.

Sir, I do not know if these generalisations apply to Singapore. But I think the first step would be to commission a study to estimate exactly how much of this is true in Singapore. I think that sometimes, the perception of the cost of social cohesion is a result not just of the volume of immigrants but the pace at which they are allowed in.

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The number of foreigners in Singapore has increased to more than 100,000 a year in recent years. And out of the approximately five million living here, more than a third – or 1.8 million – are non-citizens, with about half a million permanent residents.

With such a large and fast inflow, it is no wonder that there is some political backlash. I have heard many stories from my residents and of course read many online postings about resentful Singaporeans. In this case, I would argue that these can be addressed not by reducing the number of immigrants overall, but by managing the pace at which they arrive.

One of the Government’s responses has been to suggest a curbing of foreign workers and raising Singaporeans’ productivity. Now, the latter is good itself, whether or not we lower the flow of immigrants. But there is something that having fewer foreigners will give us greater motivation to improve.

But even as we push towards higher productivity, we need to be mindful of possible dislocations of certain industries and companies, especially SMEs, as this might lead to unintended restructuring of workforce and result in some Singaporeans losing their jobs. As a labour MP, I am sure some Singapore workers may not be able to keep pace with the changes – so we need to watch for such danger signs and help these workers along.

Sir, the Government has set aside a $10 million budget for national integration. Online and in the coffee shops, it has created some negative talk about use of public monies for foreigners. I will go against this flow and argue that rather than less, actually more needs to be spent to help new immigrants to integrate with us. When we acquire new

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citizens, we have new members on our team. It is up to us to make sure that these new members work with the old team and feel a part of us.

Sir, I argue that more needs to be done to integrate new migrants – in fact first we need to make sure that they are called new Singaporeans rather than new migrants. They are not even new migrants – they are an old hand at migrating, but they want a new life. They want to settle down here and want to make Singapore their new home.

Sir, to do something meaningful, we need to see what these new Singaporeans need. I believe we have not done any large scale survey, we do not know what their problems are, so what we ought to do is first – find out what new Singaporeans need, and then target funding at helping them meet these needs. If it is language skills, then we should subsidise language classes. If it is educational information or integration at schools, then we ought to target that. So we ought to spend more, we certainly ought to spend more wisely.

Now as to how much, we have around 20,000 people become new citizens each year. If a new Singapore baby is born, we reward the parents with some form of baby bonus, the lowest of which I think is $9,000 in a co-payment method.

Do your Mathematics and, roughly, you see that at $10 million for 20,000 new Singaporeans – these are adult and contributing members of society – we spend $500. Of course, the two groups are not perfectly comparable but we might want to bring the $500 closer to $1,000.

Sir, I have made the argument for national integration with new Singaporeans on the basis that they are members of the same team. What about those who are not on the team? Over the

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years, the Government has tightened rules so that the gap between citizens and non-citizens have widened – from medical benefits to Housing Board flat upgrading, where non-citizens pay the full rate. I fully support these measures.

However, for some people, all this is cancelled out by National Service (NS). This is a sore and critical milestone for many. Such cases are unavoidable – just as there are some Singaporeans who go out of their way to "escape" NS. But we will catch them.

NS is a subject which for many years has been considered a sacred cow, and to suggest anything to dilute it is considered unpatriotic. At the same time, the Government has also recognised that there is some cost to a male Singaporean in doing NS, hence the move to shorten its duration – which is good.

At the same time, I wonder if new male citizens should also be called out for some reservist duties? Maybe a short 30-day induction BMT type training in the SAF would suffice. We teach them to use rifles, fire weapons, basic physical fitness, or we put them into Civil Defence training where they could learn some rescue techniques. Civil Defence too is part of total defence and provides a vital part of Singapore’s interior strength.

Sir, this is a cool-headed look at a difficult issue of inviting strangers to our shores, and hoping they will become members of our team. I argue that we ought to adopt a rational and pragmatic approach towards the problem of declining domestic birth rates and the need for policies to make up for the shortfall.

I know, of course, that rational arguments sometimes fail, especially in the realm of politically sticky policies. But this must be where we start, so that at the end, we are sure that we have good

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reasons, one way or the other, for the path we have chosen to take.

We may decide to adopt a more isolationist policy, we may decide to let fewer people into our shores, but let us be sure that we are doing that because there are good reasons, not because we are caving in to populist pressures.

Sir, I support the Budget.

2.59 pm

The Minister, Prime Minister's Office (Mr Lim Swee Say): Mr Speaker, Sir, when I was young, I used to chase after fast ball: basketball, tennis ball, squash ball. But not anymore. Now, that I am not so young, I walk on the golf course with a ball that is not only slow but stationary most of the time. Sir, when I switched to a slow ball, it is not that there was something wrong with the fast ball. But because, at different stages of our life, we just have to adapt to our physical condition and play with the right ball. Sir, the same applies to the economy. The economy goes through different stages of growth as well and at each stage of the growth, you must make sure that the economy grow with the right strategy. From time to time, we need to shift our strategies in response to changes in the external environment and internal conditions. For example, the Singapore economy. Over the years, we have shifted many times – from labour intensive to computerisation, automation and mechanisation (CAM), to capital intensive, to technology intensive and now knowledge, skill and innovation intensive. Each time, as we make the shift, instead of asking what is wrong with the past, we should focus on what is right for the future.

Some Members criticise that our economic strategies in the last few years were wrong. There were complaints and criticisms. From the labour movement perspective, I would like to share with Members our take on this.

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Sir, we recognise fully that as we move up the economic ladder, it would get tougher and tougher for the economy to grow. We used to grow at about 8%-8.5% a year in the 1980s and early 1990s, but not anymore. For the last 10 years, our average growth rate was about 5%. More importantly, the fluctuation is a lot more as well. Some years were good; some years were bad and some years were really bad. So given that backdrop, we see nothing really wrong with the strategy of the last few years.

Essentially, what the Government had done and with the full support of the labour movement was trying to build up as much buffer as we can in our economy and our job market. We grew as fast as we could when the condition was right and at the same time, we created the buffer in the workforce by allowing more foreign workers to come in. Members should not forget what had happened to our economy last year during the global recession. Fortunately, because we built the buffer in our employment market through such projects as Integrated Resorts, even during the global recession, there was still job supply in Singapore. The Employment and Employability Institute (e2i) could still maintain a job bank of about 20,000 jobs. If we had not grown as fast as we could during the good time, do you think we could have that 20,000 jobs at e2i during the global recession?

At the same time, let us not forget that the number of foreign workers in Singapore actually dropped in the year 2009 and the number of Singaporeans in employment actually went up. In other words, our strategy of growing the foreign worker pool in Singapore as a buffer, in case of a downturn, has actually worked. As a result, Singapore today continues to enjoy one of the lowest unemployment rates in the world. Yes,

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even though some Members may criticise or take a different view but, as a labour movement, I want to make it very clear that the labour movement supports our past strategies during the last few years because it makes sense, it serves the interest of our workers. Because of the strategy, we succeeded in preventing many low-wage workers and rank-and-file workers from becoming no-wage workers, like what you saw in other parts of the world. For example, today, in US and Europe, the unemployment rate is 9%-10%. So there are many no-wage workers in US and Europe. In OECD, the average unemployment rate is now 8%. Again, there are many no-wage workers in OECD. Today, 6.4% unemployment rate globally but, in Singapore, 2.1%. Therefore, if you tell me that the strategy is wrong, I disagree.

Another point I want to highlight is that in the last few years, as we continued to build the buffer in our economy and our workforce, at the same time as we captured growth, we did not neglect the upgrading, development and preparation of our workforce because we knew that that strategy would not last forever. We knew that the day will come when it is no longer relevant. Therefore, the tripartite partners worked very closely together to prepare our workforce for the next stage of growth.

What did we do? For example, some Members will remember that we started laying the foundation for employability enhancement since 1996 with the launch of the Skills Redevelopment Programme (SRP) targeted at the lower skilled, less employable workers. We have come a long way. For the upgrading of workers, we now have the National Skills Recognition System (NSRS), Employability Skills System (ESS), Workforce Skills Qualification (WSQ), Professional Conversion Programme (PCP) and Professional Skills Programme (PSP). For the upgrading of jobs, we recognised that in order to

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minimise structural unemployment, besides making the workers more skilful and attractive, we have to make as many of our jobs in Singapore as possible to be more attractive as well. So we launched the Job Re-creation Programme (JRP) to transform the low productivity, low paying jobs through Best Sourcing Initiative (BSI) because we were against the idea of cheap sourcing. The labour movement, with the support of the Government, went on the aggressive campaign on BSI.

To improve service quality, the labour movement spearheaded the Customer-Centric Initiative (CCI), again, with the full support of the Government. Today, more than 150,000 service sector workers are participating in the CCI. In order to minimise structural mismatch, we also embarked on the concept of harmonising employment and employability. We established the Employment and Employability Institute (e2i) to match workers to jobs. The e2i was supported fully, firstly, by the Singapore Labour Foundation (SLF), chaired by Minister Mah Bow Tan. At the time when we needed the money to get e2i going, under the chairmanship of Mr Mah Bow Tan, SLF funded $5 million for us to renovate the place to get e2i going and, subsequently, the Government came in very strongly to support the expansion. As a result, last year during the downturn, the e2i played a very important role in helping workers go for training, and then matching with the jobs in the job bank.

All these are clear illustrations that on the one hand, we make sure that unemployment in Singapore will remain low and yet, at the same time, we continue to upgrade the employability and skills of the workers.

Yesterday and today, many Members have expressed their concerns for low-wage workers. Sir, I share everyone's concern. Low-wage workers in fact have received special attention in Singapore.

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Yesterday, Mrs Josephine Teo mentioned that the issue of low-wage workers is a global challenge. Member Low Thia Khiang challenged her that "Just because it is a global challenge, it does not mean that Singapore can afford to do nothing." I disagree with Member Low Thia Khiang that we as a country and tripartite partners had done nothing for the low-wage workers. It is completely untrue.

Let me give Members an example. When I attended the International Labour Congress (ILC) about three years ago, the slogan at that time was decent work, decent pay. Because as Mrs Josephine Teo said yesterday, it is a global issue. All over the world, there are just too many low-wage workers suffering from lousy jobs and lousy pay. So, ILO made it a global agenda. As we listened through the presentation, among the union leaders, we were commenting that in Singapore, we are many steps ahead of the rest of the world. We have many programmes. In 2006, there was a Ministerial Committee on Low-Wage Workers. Some Members may have forgotten. There are many initiatives targeted at the low-wage workers. Of course, the most well-known is the Workfare Income Supplement.

Let me also highlight that we recognise that the best way to help the low-wage workers is to upgrade their skills and enhance their jobs. That is the reason why the tripartite partners implemented Job Re-creation Programme and Best Sourcing Initiative. We as Members of Parliament do not just talk about Best Sourcing Initiative (BSI). We do not just talk about taking care of the low-wage workers. We act if we are serious and we are sincere about this. All the 14 PAP Town Councils today are on Best Sourcing Initiative. We employed altogether 2,500 Singapore cleaners in the 14 PAP Town Councils. Since 18 months ago, we progressively put these cleaners through BSI. Take my Town Council, for example, Holland-Bukit Panjang Town Council, chaired by Dr Teo

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Ho Pin. We have been on the BSI since day one and today, at Buona Vista, as a Member of Parliament, when I walk around, I feel very good. Everyone of our cleaners in Buona Vista is given a piece of equipment – it is a labour saving device. Everyone has proper uniform and proper training because all the cleaners must be trained in NSRS to operate the piece of equipment to improve productivity. Their wages have gone up. To the best of my knowledge, not a single full-time cleaner in Buona Vista is paid less than $1,000 because having pushed up his productivity, we are prepared to pay him the wages.

Yes, Mr Low Thia Khiang said yesterday that he does not have a Ministry of Manpower under his care. Therefore, he said it is the job of the Government to solve the many problems faced by the low-wage workers. But I do know that Mr Low Thia Khiang is also the Chairman of a Town Council. Why not ask his Town Council to embark on BSI as well, to show his sincerity in taking care of the low-wage workers.

Sir, let me move on to talk about what is right for the future. I think that is more important. Yesterday, Mr Low Thia Khiang referred to the initiatives of NTUC on up-skill, re-skill, multi-skill, cheaper, better, faster. If I remember correctly what he said yesterday, "Why is NTUC squeezing every drop of effort out of every worker?" He seems to imply that NTUC has nothing better to do but to make the life of the workers difficult. There is a Chinese saying that " zhi qi ran, bu zhi qi suo yi ran ". In other words, Mr Low Thia Khiang understands that the labour movement champions up-skilling, re-skilling and multi-skilling. We are the champion for CBF (Cheaper, Better, Faster) economy, but he does not understand why we are doing that.

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I have mentioned in this House before that in terms of capability, we are not the best in the world. In terms of cost, we are not the cheapest in the world. And yet, for the last 40 years, we were able to grow our economy. Why? Because if you are cheaper than us, we will try to be better than you. If you are better than us, we will try to be cheaper than you. So by being cheaper than better, better than cheaper; we have succeeded in growing our Singapore economy to where we are today. I have also said in this House that post-global recession, the world has changed. The cheaper is becoming better. If you go to China or India, you will see very clearly how fast the cheaper are getting better. Likewise, the better are also getting cheaper. If you go to USA today, you will see for yourself how cheap things are becoming. Why? USA is trying to grow faster than their potential growth rate so as to lower the unemployment rate. We are therefore squeezed from both sides. The cheaper are getting better, the better are getting cheaper. What options do we have? As a union leader, as a labour movement, we are prepared to bite the bullets. And we say, yes, it is not easy to survive the future, but die, die, must try. And the way to go ahead is to be cheaper, better and faster. There is no other option. That is the reason why when the ESC came up with the recommendations, the labour movement gave our full support because we believe that the recommendations of the ESC, together with Budget 2010, will enable all of us as tripartite partners to build a better economy, nurture a better workforce and at the same time create a better and brighter future for all.

Sir, under the ESC recommendations, we are aiming to improve our productivity by 2%-3% every year. As the Finance Minister Tharman mentioned, 10 years from now, we have the potential of improving our productivity by about one-third and thereby create the space for our wages to go up by the same one-third.

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The question on the ground is, "Is this good or bad for me?" Some workers are concerned, "Today, I am working up to 10 hours a day. Does it mean that by the year 2010, I have to work for 13.5 hours everyday in order to produce that 35% more in terms of productivity? Even if I work 13.5 hours a day, will my wages go up by one-third because who is going to promise that? How do I be sure that my employer will not exploit me?" The worst thing is that if every worker can be one-third more productive, then three workers in 2020 can perform the job of four workers today. Does this mean that one out of every four workers today will be retrenched by the year 2020? In other words, will unemployment go up?

On the part of the employers, some of them are also very concerned. They said, "Look, for the last 10 years or so, our productivity gain was only 1%. Now we set it at 2%-3%. But this 3% will be very hard to achieve." On top of that, they lamented that there are many jobs which are not able to attract Singaporeans to do. So with the tightening of foreign workers inflow, what it means is that employers are going to be faced with shortage of manpower. For some organisations, in particular those in the services sector, some hold the belief that better service means more workers. If you tighten on the foreign workers, and at the same time, they are unable to attract Singaporeans to do the jobs, they are going to have a labour shortage. What it means is that they will not be able to grow. Basically, they are concerned that this strategy may lead to a lose-lose-lose outcome – lose for the workers, lose for the company and lose for the Singapore economy. Sir, the question is, "Can this lose-lose-lose scenario happen in Singapore?"

To some extent, such a situation actually happened in USA in the 1990s. In 1996, there was an article in the Harvard Business Review , the title of the

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article was "The Hollow Ring of the Productivity Revival". The writer, Stephen Roach, Chief Economist of investment bank Morgan Stanley based in New York, noted that during the productivity revival in the USA from the 1980s to the 1990s, three things went wrong. Firstly, he said "a stretched workforce is delivering more because it is working more". In other words, workers are working longer hours to prop up productivity. Secondly, he said productivity was achieved as a result of downsizing. In other words, increasingly hollow companies are now unable to maintain market share in the rapidly growing global economy. According to his observation, many companies in USA actually downsized their manpower in order to achieve the productivity gain, using fewer workers to produce the same outcome.

Thirdly, and even more alarmingly, is the growing gap between measured productivity and workers' compensations. And let me quote him, "productivity dividends of the 1990s have flown mainly to owners of capital rather than to workers". According to him, yes, there was productivity gain through downsizing but whatever gain actually went to the shareholders and not to the workers. These three things that went wrong – working harder and longer, producing the same with fewer workers and pain-sharing without gain-sharing. As a result, the productivity revival did not last, it could not last.

Sir, Singapore today, in a way we are also emabarking on a productivity revival. But it is important to recognise that our same-same productivity revival will have a different action agenda. In the context of Singapore, the tripartite partners, including the labour movement, fully recognise that productivity gain cannot be driven by getting workers to work harder and work longer. If we want production workers to double their output, it cannot mean that we ask the workers to double

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their working hours. Likewise, a sales person in a retail store, if you think that his productivity is low because he is not making enough sales, you cannot simply force the sales staff to stay longer in order to generate more sales. It does not work that way. To the tripartite partners, productivity is about upping the useful outcome – whatever the workers are supposed to produce, we must find ways to help him or her up the outcome and at the same time down the wasteful input. Whatever input needed to produce the outcome, if the input does not add directly to the customers' needs, we should reduce them. Cut wasteful input, at the same time, up the useful outcome. And the best way to achieve that – to up the productivity by increasing the useful outcome and reducing the wasteful input – is to put in place a system, a culture, a process to help and support the workers. In other words, we should try to make the life of the workers easier rather than more difficult. The labour movement, working with the tripartite partners, is committed to delivering a four-action agenda for the workers of Singapore. It will be different from the USA approach.

Our first-action agenda is to pursue total productivity – not just labour productivity but total productivity. In other words, not by loading more stress on the workers, because if we keep doing that, one day, the workers themselves will become the bottleneck. Instead we want to help the workers break the bottleneck at the workplace. I will give you one example. In the services sector, how do you improve the productivity of the sales person? The job of the sales person is to generate sales. In other words, if I am a sales person, standing on the shop floor for eight hours, I may serve many customers but if none of them buy anything from me, my productivity for that day is zero. If my employer wants to help me to improve my productivity, then

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my employer – the organisation – must find a way to help me sell easier and help the customer buy faster. That is the concept. Members may say this sounds very theoretical. How can it be done? One company in Singapore has done it. Triumph is a company that sells undergarments for women. We had a Learning Journey to Triumph because Triumph is an active participant of Customer Centric Initiative (CCI). We asked Triumph, "What are you trying do?" They said, "Under CCI, our main purpose is to keep the customer happy so that we can sell more, so that we can improve the productivity of our service staff." And they observe that women like to look good and feel good but they take a long time to make up their mind. They look at the items that come in many colours. They are not so sure which will look better, when the lights are bright and when the lights are not so bright. Triumph decided that one way to help the women make up their minds faster is to have six different moods of lighting in the changing room. The women inside the changing room can try the items under the different mood of lighting. And true enough, Triumph found that the customer actually made faster decision. Secondly, Triumph realised that sometimes if the husband and wife come together, they make an even faster decision. So, Triumph converted the changing room to a couple changing room. The husband and the wife can go in together so that they can decide. Later on, Triumph discovered that, yes, when the wife is accompanied by the husband, they make a faster purchase, but if the husband comes alone, he makes the purchase even faster. So, what Triumph did was – if I am not wrong – once a month, Triumph sets aside a day just for the men. The men will come once a month to buy these items to surprise their loved ones. As a result, sales went up. This is a very good illustration. When we talk about improving productivity, we are not trying to get the workers to work longer hours and make

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life difficult for the person but, rather, make it easier for the sales persons to perform their job. Triumph is a very good example.

Likewise in a factory, the workers' job is to produce items. For example, at battery manufacturer Energizer, over 10 years ago, every worker in the factory was able to produce one million batteries a year. Over the last 10 years, they have increased the productivity of these workers by 100%. So, today, each worker is able to produce two million batteries per year. How did they do it? They did not ask the workers to work twice the duration but, instead, they asked the workers to work on the concept called "SQDC". "S" – do your job Safer. "Q" – higher Quality, make fewer mistakes. "D" timely Delivery – if you need to produce certain amount by certain date, make sure you meet the time-frame, and "C" – cost cutting. In the management terminology, "SQDC" is equivalent to cheaper, better, faster and, on top of that, safer as well. And they achieved this because they went through a process known as "lean transformation". Every worker has to come up with two small improvements every month. It is a requirement. They call it " xiao gai shan " meaning a small improvement. It is a total effort.

Mr Speaker, Sir, there are many ways to improve productivity. The labour movement combs our unionised sector and discovers many examples. In the 14th February issue of the NTUC This Week , there must be about 10 to 15 examples of productivity gains. We can send a copy to Members who are interested. The bottomline is this – when we talk about total productivity, our first commitment is to the workers of Singapore. We are committed to work at the company, the industry and the cluster levels to find ways to make workers' job easier, more effective, so that they can produce more, hopefully, without having to be like the case of USA – where workers have to

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work very long hours. We hope that all sectors of the economy, all enterprises and all workers, will come together to contribute to the 3% improvement in 100% of the things we do. What we call the "triple As" approach of "all" sectors, "all" enterprises and "all" workers. By speeding up this productivity train in Singapore, we hope to be recognised worldwide as one of the most innovative nations in the way we improve productivity through total productivity one day.

The second area of focus is pervasive innovation. Mr Speaker, Sir, it is very important that we pursue a 3% improvement in everything we do. But, at the same time, we need to go for 100% breakthrough in some of the things we do too. One company we can learn a lot from is 3M. We went on a learning journey to 3M and we found out the twin-efforts at 3M. On the one hand, they have a "LSS" strategy. "LSS" stands for Lean Six Sigma – a strategy to get every worker to improve productivity. Yet, at the same time, they have an innovation management system known as "15% time". Every worker is encouraged to use 15% of the time to think of breakthrough ideas. By bringing the two together in 3M, they are able to ensure that innovation is not an accident. Innovation is a conscious outcome of putting in place a system, a culture, a process, so that all staff are encouraged, at all levels, to come up with new ideas. So, with Lean Six Sigma, they are able to be innovative in productivity. At the same time, through its innovation management culture, they are able to be productive in innovation as well. And I think this is what made 3M so successful.

The third area is inclusive workforce. The labour movement is committed to pursuing this vision of total productivity and pervasive innovation, and to do so through an inclusive workforce. In other words – "all can". "All can" means all

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collars of workers, all ages of workers and all nationalities of workers. 3M is a very good example because they believe that innovation is a team effort. Every person in 3M, regardless of your collar, your age, your nationality, can be creative and innovative in his own way. In 3M, there is a culture to bring people together to perform. Likewise in Energizer, their slogan is that no one should be left behind as they pursue lean transformation.

Sir, last but not least, the fourth area of commitment is the concept of gain sharing. Gain sharing is very important. We must not repeat the mistake seen in the USA where the productivity dividends went to the capital owners and not to the workers. A few days ago, we had a learning journey to SIA Engineering Company (SIAEC). SIA Engineering Company is a billion-dollar company, doing very well. Member Charles Chong works there, so he knows very well. As a billion-dollar company, even though the company is doing very well today, the management and the union are not complacent. They looked ahead to the future and asked where would the competition come from? It may come from the Middle East, it may come from China. They are not taking the future competition lightly. As a result, SIA Engineering has decided to embark on a cheaper, better, faster journey. The management and the union work together to look for ways to cut costs, to upgrade capabilities and, at the same time, to be more responsive to changes in the marketplace. They came up with this idea whereby the union and management worked together to identify the areas for cost-saving and for productivity gain. In Phase One of the effort, they work on six projects – three in the areas of line maintenance, three in the areas of base maintenance. Altogether they saved $10 million a year. The management and the union then agreed that 24% to 33% of

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that saving would be shared with the workers in the form of quarterly productivity bonus. Today, the staff, having contributed to the productivity gain, are enjoying the quarterly payment. The company is now embarking on Phase Two. They aim to save another $15 million and for the whole year their aim is to save $50 million. And if they can achieve the $50 million saving for a year, the staff is expected to receive a quarterly bonus – productivity bonus – of $1,000 per quarter. This is a win-win outcome and I think it is the best way to sustain the effort.

Next, I want to share with you the views of the labour movement regarding foreign workers. Again, it is an issue discussed a lot yesterday and today. Basically, on the part of the labour movement, when we look ahead, there are three options in terms of foreign workers. First option is to send back all the foreign workers so that Singapore will be a nation with no foreign workers. If we pursue this option, the workforce of today will drop by one-third. So we will have to downsize our national workforce to about 65%. Assuming that we grow our workforce by about 2% every year, by 2020, our workforce will still be only about 80% of today. In other words, if we send back all the foreign workers and by growing local workers, 10 years from now, we still have a workforce which is 20% smaller than the workforce of today. As a labour movement, we do not think this is a good idea.

The second option is to continue to grow as before, like what happened in the past few years. Again, this is something we are not comfortable with. As ESC mentioned, if we keep growing our economy based on workforce expansion, it will not be sustainable. Therefore, the third option, which is what the ESC has recommended, is to maintain the share of foreign workers in Singapore, at about one-third of the workforce. In other

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words, we are not saying that we are anti-foreign workers and that we want to reduce the number of foreign workers to zero. That is not what we are saying. Yet, at the same time, we are also saying that we must not keep maintaining the mindset that there are many jobs that Singaporeans are not prepared to do and, therefore, as a first solution, as an easy solution, let us go for more foreign workers. Between the two, we have to find a way forward. As a labour movement, we are very concerned that if we are not able to achieve our productivity target, what will be the implication for our workers? If we grow our local workforce at 1%-2%, and in tandem, foreign workers at 1%-2%, the entire workforce will grow at 1%-2%. If we are not able to up the productivity of the entire workforce, both local workers and foreign workers in Singapore, the Singapore's economic growth will be slow. One day, we may wake up and see Singapore having a slow GDP growth and, at the same time, low productivity gain. When that happens, we think that will be a deadly combination for a small and export-oriented economy like Singapore. We must not allow that to happen.

For the labour movement, zero foreign workers is not an option and continued rapid expansion of foreign workers is also not an option. Also, low productivity and slow growth, likewise is not an option. The only option available to Singapore workers is one of going for high productivity. Just think about this. If we can rally all our workers – the Singapore workers as well as foreign workers in Singapore – rally the entire three million workers together, for every 1% improvement in productivity, we will be able to produce an equivalent of 30,000 workers. So that is the power of productivity gain. That is the power of teamwork. This is very important because by 2020, it is possible and likely that our workforce of three million today may grow to about 3.6 million. And if we can

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ensure that every one of this 3.6 million workers by 2020 will be one-third more productive than today, the 3.6 million workforce in 2020 can produce an equivalent of 4.8 million workers of output of today. This is the power of productivity gain and teamwork. If we can do that, our GDP in 2020 will be 50% bigger than today, even though workforce will only be 20% bigger. With a bigger GDP, there will be more jobs and, at the same time, workers will be upgraded and have higher salary.

Sir, in conclusion, the labour movement has embarked on the "Cheaper, Better, Faster" journey since August last year. We welcome the ESC's recommendation to pursue Skill, Innovation, and Productivity (SIP). As Mr Yeo Guat Kwang said earlier, it may be the use of different terminologies but same-same outcome that we are going for. Basically what we are working together is to achieve a healthy economic growth, a situation whereby there will be low unemployment and high employment rates across all age groups of Singaporeans. We hope to arrive at the future where there will be good jobs, better skills, higher productivity and high wages for all workers of Singapore. The labour movement will give 100% commitment to support the ESC's direction. We hope that the tripartite partners will work very closely with us because at the end of the day, let us keep reminding ourselves that job is the best welfare and full employment is the best protection for workers, and productivity gain is the best driver for wage increases in the future.

With that, thank you, Sir. [ Applause. ]

Mr Speaker: Yes. Mr Low.

Mr Low Thia Khiang: Sir, the labour chief showed us the magazine published by NTUC This Week . Yes, I have read it but I find it quite confusing because

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everything was interpreted as productivity. There is even supply and demand productivity, for instance.

Sir, the Minister also referred to Hougang Town Council. We are not on BSI but I would like to clarify that notwithstanding that, we have built the requirement into the contract with the contractor, demanding them to raise productivity by mechanisation and by employing Singaporeans. And they are given incentives for that. But we do not have to be on BSI.

Sir, the labour chief also elaborated on what NTUC has done in looking at the low-wage workers' plight and trying to upgrade them. I am not denying that the NTUC has done its part. But whatever he has done, the outcome remains that low-wage workers continue to draw a low wage and this is not satisfactory, although he has done his part.

Secondly, the low-wage workers today, especially working in certain industries, are facing a threat from foreign workers. They feel that their jobs can be taken away anytime. And that, despite whatever schemes that you have to upgrade their skills or to re-skill, that is the outcome the workers today face. Perhaps, NTUC may want to do better and work harder.

Lastly, the labour chief defended the economic growth strategy of the Government for the past five to 10 years. He said we wanted to build a buffer and whatsoever. From the economic point of view, I am not sure whether he has realised the outcome of this strategy and the impact on our people and our society. Perhaps, I should draw his attention to an article written by a Zaobao reporter, Zeng Shaopeng. I will quote part of what he says:

( In Mandarin ): "Holding onto personal memories and affections and not wishing any

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changes to the environment is a selfish and unrealistic mindset. The development speed of a place can make a person feel lost. Spectacular growth figures and grand visions will not stop people from feeling a loss of identification. What purpose does this kind of development have? At least in Singapore, this doubt is not entirely anti-foreign, instead it is more about questioning the economic development model."

( In English ): This is what I think many Singaporeans asked, whatever the defence of your economic growth model in the past.

Mr Lim Swee Say: There is a story about this little frog. In the kingdom of frogs, every year, there is a carnival/competition. They will build the tallest tower in the world and they challenge the frogs to climb up to the top of the tower. It is very difficult, challenging and very dangerous.

Every year, hundreds of frogs, would try their skills to be the champion. One year, it happened again. These frogs kept climbing, but the other frogs down there kept shouting, "It is too dangerous. Come down. Stop climbing. Come down! Come down!" And one by one, the frogs went up half way, looked up, still a long way to go; looked down, "Wow! I am quite far from the ground." So one by one, they started to retreat, except for one little frog. It just went on and on and no amount of discouragement could get him to turn his way. He went to the top and the whole town cheered, "Wow! Well done! Little frog!"

When he came down, a reporter interviewed the frog. Before the interview, the frog signalled to the interviewer to face him while interviewing him. The interviewer asked, "Everybody asked you to stop and come down. Why did you go all the way up?" The frog looked at the

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reporter and said, "Look. I am deaf. I cannot hear them."

As a labour movement and tripartite partners working on the issue of low-wage workers, we face many difficulties. We get many discouragements including from hon. Member Low Thia Khiang. But we do not look at the cup and say that it is empty or half-empty. We look at the cup as half-full. Mr Low said that low-wage workers today are still suffering the fate of low wages. But let me share with him about the progress of the security industry. Four years ago, Prime Minister launched the Job Re-creation Programme (JRP) at the NTUC. After the launch, two security guards came to me at the reception – one young man and one lady. They like this JRP, and shared that the pay of security guards was too low. They hope we would help to up their salary at about $850 to $900 per month. This was four years ago. So we invited the SIRD, MHA, the union, the association and MOM for a dialogue. We embarked on a job re-creation exercise together. Today, four years later, the starting pay of security guards is $1,500-$1,700. Why? Because every security guard under the JRP must go through NSRS. If you do not pass the NSRS, you cannot be a security guard. And the entire industry went through the test and at the end of the day, more than 90% passed the test. Today, they are enjoying a better pay and a better job.

For landscaping, it is the same. Seventy percent of landscaping workers were foreign workers because Singaporeans found the job to be tough and pay was too low. So we worked with NParks. Under the leadership of NParks, we went on JRP. We sent the workers for skill qualification under WSQ. Who launched the WSQ? The Prime Minister did. That is the kind of commitment all the way from the top to do whatever we can to upgrade the skills of the workers, to redesign the job of the workers so that they can earn a higher salary. Today, they

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are earning $1,100-$1,300. They are multi-tasked and multi-skilled. As for cleaners, as I have just mentioned, we work on BSI.

Sir, it is not easy to crack these problems faced by our low-wage workers. But as a labour movement and as tripartite partners, we never give up. We are like the little frog, we are deaf to all these criticisms. You cannot hope for big changes. To change the plight of the low-wage workers, first, there must be short-term solutions – the Workfare Income Supplement (WIS). Do not underestimate how much support we are giving to the low-wage workers. Their annual salaries go up by about 20%-25% under the WIS. This is not a small sum. On top of that, we have all kinds of training. Just two days ago, there was another announcement of the Workfare Training Scheme (WTS). In other words, we are sparing no effort. Instead of telling us that low-wage workers are having problems, why not be part of the solution?

Yes, I am happy to hear that Hougang Town Council is paying attention to low-wage workers. I hope we can engage in healthy competition – PAP Town Council running as fast as we can to upgrade skills, jobs and welfare for the cleaners. Likewise, the Opposition ward to do the same. So that at the end of the day, the low-wage workers in Singapore will gain. I hope that it is not just the cleaning sector. Every sector of the economy can go through the same process.

Ms Irene Ng Phek Hoong (Tampines): Sir, may I clarify one point?

Mr Speaker: A clarification.

Ms Irene Ng Phek Hoong: Just a short point. I just want to say that I respect the Minister greatly and I know he has done a lot for the workers and his speeches are very lively. But there was one anecdote

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he gave which I know is meant to be entertaining which is about Triumph. I have to say this because there are school girls in the gallery and I do not want them to leave the Chamber with the wrong impression. Because the Minister said that women want to look good for the men and they need their husbands and boyfriends in the changing room to help them make up their minds on the undergarments to buy. I just want to clarify to the Minister that women choose their clothes, including their undergarments to look good for themselves, not only for the men. And that for many years, women have been helping to choose shirts for their husbands as well so that it is not something new. But what will really help is to have very good sales assistants so that we can make up our minds better, both men and women.

Mr Speaker: This is not a clarification, Ms Irene Ng. Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.05 pm.

Sitting accordingly suspended at

3.45 pm until 4.05 pm.

Sitting resumed at 4.05 pm

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[Mr Speaker in the Chair]:

ANNUAL BUDGET STATEMENT: Debate resumed.

Ms Denise Phua Lay Peng: Mr Speaker, Sir, Budget 2010 is a budget of vision and courage. I commend the Minister for calling a spade, a spade and admit openly that our productivity in service, manufacturing and construction is 38% to 66% lower than the best in the world. Something big has to be done. Singapore is not at the bottom of the pile and you must remember that. But for a small country with a relatively small workforce,

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it is critical to proactively address the long-term gaps that were identified by the Economic Strategies Committee (ESC).

Sir, I have several observations and suggestions for the Minister's consideration.

Observation one – the vision of the ESC. Sir, the vision of the Economic Strategies Committee forms the bedrock of this year's Budget. But the vision of Singapore as a country must be more than that of an economic committee of highly intellectual and qualified people. We are a country populated by people of mixed abilities, ages and needs. To embrace and to be inspired by the vision, we must try to engage as many Singaporeans as possible for the vision to be a shared one. From a young age, I have been told that Singapore should be like the Switzerland of the East or a global city like London or Paris. As someone who chose to make Singapore my home and my workplace, I for one do not want Singapore to become a copy of these western benchmarked cities. One month ago, a few of us in the House had a discussion with several professionals, and there were two successful doctors. Both were educated and lived overseas but both chose to return to Singapore to work and live. In their minds, Singapore’s uniqueness is in the "fusion of East and West"; in our multi-racial and multi-cultural profile, our great food, our great schools, the discipline and a great place to raise their children. Add to that, our uniquely Singapore HDB flats, our fantastic festive light-ups at Chinatown, Little India, Geylang Serai, Kampong Glam, and our desires though less-than-perfect. But our desire to include those who are at risk of being left behind in our country as we grow. And now even a good philanthropy launch pad to serve the needy in Asia. Singapore has a distinctive culture and features of a brand that is appealing. Let us not keep trying to make ourselves the

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Switzerland, the London or the Paris of the East.

Let us engage more Singaporeans to share a vision beyond economics and get the buy-in from all, if not most, Singaporeans. Let us tell our story better to attract both investments and potential citizens to our very own unique Singapore.

Observation two – productivity and innovation. Money alone is not sufficient. Sir, making productivity and innovation second nature in companies and individuals in every sector as the Minister had said, cannot happen with money alone. As the Chinese saying goes, "you can bring the horse to the water but you cannot force it to drink".

After the Budget announcement last week, I garnered the views of SME owners in the textile, food and beverage, carpentry, food wholesale, retail and construction industries. A couple of them whom I spoke to are even winners of past years’ SME awards. I asked them how they may be able to leverage on the new Productivity and Innovation Fund and initiatives announced at the Budget. Their muted responses are indicative of many who are at a loss of where to start and do not have the in-house capability to make this Budget relevant. A popular SME website wryly commented on its landing page, "most SME owners are too preoccupied with their daily operations to think of anything else".

Singapore SMEs are awash with award schemes such as the Singapore Innovation Class, Singapore Quality Class, People Developer, Singapore Service Class and the like. Different help portals also offer free and useful information, such as the SME ToolKits and grants schemes and so forth.

As early as 2007, Singapore-based SMEs have identified leadership training,

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team building, marketing and promotion, and business planning as key need areas. To equip SMEs with talented managers, SPRING had invested $60 million in a Business Leaders Initiative (BLI) to create a pipeline of 1,000 trained SME bosses, senior executives, and aspiring executives. Similarly, to encourage innovation and adoption of new technology, SPRING launched in August 2006, a $150 million Technology Innovation Programme (TIP) to co-fund innovation projects by SMEs and even to strengthen what are called Centres of Innovation (COIs).

Sir, Singapore has been generous with supporting the SMEs through programmes. However, even our Prime Minister acknowledged last Sunday that most SMEs are still not operating at high levels of productivity, innovation or margin.

As the gurus would say, insanity is doing the same thing over and expecting different results. What happened? Why were the outcomes less than ideal, despite what we put in? What were the gaps and the root causes of our lack? What are the lessons we can learn and apply from countries who are ahead of us? How, for instance, did Hong Kong, a country whose service quality was famously low two decades ago, steered the way to its current excellent service level? How did Japan stay ahead of the pack for so long in the construction sector? Sir, these questions must form part of the new National Productivity and Continuing Education Council led by Deputy Prime Minister Teo.

In fact, it will be good to know specifically what the new National Productivity Council will do differently from what SPRING and the other agencies have done? I do not think ad hoc testimonies in the NTUC weekly will provide or develop a pervasive culture of innovation and productivity. Will the new National Council simply be old wine in new wine skin? I was told that old wine

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when stored in new wine skin will lead to the bottle cracking and the wine spilling.

Sir, unless the tools or productivity and innovation are learnt and applied by all levels in all sectors including the public sector, the Council members and the young in the schools, it is unlikely to form part of our country’s DNA. What we want to do and what we emphasise in this Budget may just fade away once the monetary incentive or pressure is lifted.

Observation three – foreign worker levies. Sir, I am glad that the pace and quantum of the much-worried-about foreign worker levy is calibrated and well-paced. I want to add to the chorus of pleas for sectors which genuinely require foreign labour for work that cannot be substituted by technology. I am specifically referring to jobs that are shunned by locals in the nursing homes and day activity centres, especially for the moderate to severely disabled, like those in the MINDS homes and even some autism adult centres in St. Andrew's and the Autism Association.

A doctor who volunteered at a nursing home shared a real-life story of more than 10 Government-sponsored trainees on a professional conversion training scheme at the home. As the training progressed over the weeks, he told me almost 90% of these trainees dropped out from the training, leaving only one who finally signed up to work at the nursing home. The daily tasks of having to carry, wash, feed and diaper-change adult disabled patients – essentially basic care for the chronic sick – are tasks that most will not find appealing.

At another nursing home, the management staff wrote to me that they are now highly anxious over the impact of the details of the scheme – the new tier system, and the levy increase on the

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impact of the home’s operational cost, and eventually may be the fees. This home is currently operating with almost 60% foreign staff.

Thirdly, in the special-needs community where I serve, many day activity centres and residential homes serving moderate to severely disabled adults are also worried about the cost impact of this new direction. Some of these homes provide caregiving to physically big adults, mostly males, who at times are difficult to handle.

Anyone who insists that the concerns of these centres and homes can be addressed if only they are more productive and innovative, should spend one week working there on the ground.

Hence, Sir, although I am deeply grateful that the Minister has retained the generous income tax reliefs for donations to charity and made tax concessions for dependants who are disabled, I seek the Minister’s attention to reassure this bigger concern and assure those who are working in the chronic sick and disability sector. For this category of employers, Sir, I would urge the Minister to consider exempting non-profit organisations from the limit quotas and increases in levy.

Observation four – other pertinent issues. Sir, I urge the Minister not to forget the other pertinent issues that Singapore is facing.

Just as productivity was sidelined in past years, please let us keep on our agenda some key concerns we have identified in the past. These include:

One, the rapidly ageing population we have. Minister Lim Boon Heng has done a commendable job on the Council for Third Age and the wellness movement with the establishment of wellness centres for the elderly all over Singapore. But what about those who are in the so-called Fourth Age who are beyond the active ageing range

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and who may be immobile? Beyond tax relief, there is a need to direct resources to develop the masterplan for the mapping of services for this group. Can there be funds directed to form a Council for the Fourth Age or whatever name that is appropriate?

The second pertinent issue is mental health. Sir, we need to address the worrisome trend that there is a growing population, including the young in the schools, who are afflicted with mental illnesses like depression, inability to stress-manage or cope with the expectations and pressures of our highly urbanised society.

Thirdly, on fertility. Sir, I am surprised that nothing is mentioned in this year's Budget on babies. Has the Minister given up hope of saving the endangered species of the Singapore Baby, especially the Tiger Baby? And what happens if one decides to heed the Government's call to have babies, and the child turns out to be less than perfect? The sad thing in Singapore is that those who are born with congenital illnesses are not even covered under the CPF-administered basic MediShield health insurance because they are considered burdens who would raise the premium rates for the rest of Singapore. Sir, if we wish to encourage couples to have babies, and since we cannot guarantee the condition of the babies, we must not deny these children who turn out less-than-perfect the rights to basic health coverage in the name of economics.

And fourth, on financial literacy and planning. Sir, we need to continue to eyeball the findings that most Singaporeans are financially illiterate and are neither keen nor equipped to plan for their retirement. We need, as part of our vision, to take specific care of the young and elderly disabled and especially those from the lower income strata. MCYS and NCSS have done a good job in trying to serve

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this group with the setting up of the Special Needs Trust. But there are families below the average income level who cannot afford even the initial premium or deposit and who nonetheless need the service. I urge the Minister to use a scalpel and not a parang when considering top-ups for those who need a leg up in Singapore, and to not forget the disabled in the lower income category in Government's annual giving.

Observation five – communication . Sir, many Singaporeans are either not engaged or disconnected, as one of my colleagues said, or unaware of how this important Budget may be relevant to them. There is definitely a need to communicate the key thrusts more effectively so that the average Singaporean, whether they are in business or work or just individuals, can easily understand, appreciate the "whys", "whats" and "hows" of this significant Budget.

Sir , as a result of the five observations I have made, I seek the Minister's consideration of the following nine recommendations to fine-tune the implementation of the Budget:

(1) Exempt VWO-run nursing homes and day activity centres which are serving the chronically sick and the disabled from foreign worker levy increases and grant them a generous foreign labour ceiling;

(2) Appoint and fund Industry Productivity Champions to share, facilitate and account for industry-specific Productivity KPIs;

(3) Pilot a nation-wide pervasive "Productivity and Innovation Suggestion Scheme" for all Singaporeans with cash incentives for suggestions accepted and applied;

(4) Extend Post-Secondary Education Account to all pre-retiring Singaporeans attending MOM-approved courses;

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(5) Finance a Council for Fourth Age and deploy resources for a Masterplan to address the needs of the aged sick, those who are not attended to by the mission of the Council for Third Age;

(6) Finance Mental Wellness Centres in school and community clusters for both the young and the old afflicted by mental health issues;

(7) Provide Medisave top-ups for younger disabled who are currently not covered under MediShield, our basic healthcare insurance in our nation. Better still, fund the premium to give them the same rights to basic health insurance coverage;

(8) Open and deposit into Special Needs Trust Accounts for disabled Singaporeans whose families are in the bottom 20% income level ; and

(9) Invest in professional services for an effective communication matrix and plan to disseminate the numerous schemes of this Budget to the different target audiences so that they will buy into the vision and they will support our "whats" and "hows" of this Budget and stop asking "why".

Sir, I ask the Minister to consider the above recommendations and I look forward to his response.

With that, I support the Budget and thank the Minister, the Economic Strategies Committee and their support teams for all that they have done for Singapore.

4.21 pm

Dr Lim Wee Kiak (Sembawang): Mr Speaker, Sir, I am glad, despite the doom and gloom of the recent financial storm, we did well to weather it with

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employment figures remaining high and a smaller-than-expected deficit. I am also happy to learn that the Government continues to put money into the Medifund, top up our elderly Medisave Accounts as well as continue to invest in our young through education and the topping up of the Post-Secondary Education Account despite the deficit.

This year's Budget is one that focuses on sharpening the saw so as to reposition Singapore for the coming decades. Instead of just repositioning the saw, we should go beyond to teach and equip our workers with skills to use an electric saw. The man-in-the-street may be disappointed with the lack of fish given in this year's Budget but most understand it is more important to teach them how to fish and equip them with the skills. Even more importantly, the Government must be able to attract fish to our country so they can continue to fish. In short, creating a stable business friendly environment so that more companies can strive and continue to provide good paying jobs for our people is the best welfare this Government can provide.

However, I have three concerns for this Budget and hope the Government can address them. I have actually colour-coded three of them. One is green, the other one is red and the last one is silver. That is why I am in green today.

First of all, it is a lack of a green focus. It seems that the Budget did not match up to what the Government has pledged for the support of the international efforts to combat climate change at Copenhagen last year. The Government has also identified green industries as a new source of growth so that Singapore companies can ride the next wave. I hope that the Government can continue as well as to further assist our companies with incentives and grants in this particular area.

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I shall concentrate on green efforts in transportation. Transportation accounts for 40% of the country's carbon emission. We have a Certificate of Entitlement (COE) system in Singapore to control the population of vehicles in Singapore. The COE dictates the type of vehicles such as buses, motorcycles, small/medium-sized cars as well as the large cc cars. We can use the COE system to encourage green cars. Like many of my colleagues, I think I have mentioned in this House before and suggested the creation of a new green COE category. Just by setting aside 5% of COEs in this category, in 10 years' time, we will achieve at least 5% of our vehicles on our roads to be green. I think I have suggested this to the Ministry of the Environment and Water Resources and they have actually said that they would like to give their support, but this belongs to the Ministry of Finance. So I hope the Finance Minister can consider that as well.

The largest fleets of vehicles on our roads are actually public buses, school buses and taxis. Already in New Delhi, all public buses and taxis run on Compressed Natural Gas (CNG) which has lower carbon emission. We can start by giving more tax incentives and grants to our public transport operators, school bus operators and taxi companies to go green.

We should encourage and promote shared transport. In our current classification, it is only public transport and private transport. Car-sharing schemes and taxis are different modes of shared transportation. There are significant savings for our nation as a whole if more car drivers give up their cars and opt for shared transport or public transport. Lowering the cost of shared transport is a good incentive. Lowering ERP charges for taxis and shared transport will certainly encourage more motorists to give up driving, reduce congestions on our roads as well as there will be less demand for our precious carpark spaces.

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Two, are Singaporeans seeing red over this productivity drive? While I agree with the strategy recommended by the Economic Strategies Committee, I have some concerns. I agree that we cannot continue our growth based on cheap foreign labour. Although, in the short term, we have all benefited and it helps our companies to remain competitive, cheap foreign labour is like an opium. It will get our companies hooked and dependent. I do not quite agree with some of the Members in the Chamber who described the levy as an opium. But I think the cheap foreign labour itself is an opium. Ultimately, if our companies get dependent on cheap foreign labour, they will ultimately pay very dearly with the erosion of productivity and lack of innovation.

We need to slowly wean the companies off their dependence. While opium is a dangerous addictive drug, it is a drug that is used by doctors in ICU to save patients as well. So, I must say that while cheap foreign labour itself can be considered as not good for us, we also have to acknowledge that they have helped us and will continue to help us in our pursuit for growth. What we need to do now is that we need to just control and contain our dependence on this cheap labour that we are enjoying. There will be painful correction and huge impact if we institute the "cold turkey" treatment, that is, a sudden withdrawal. The companies may not survive the sudden withdrawal symptoms. I welcome the calibrated and careful approach that allows our companies to adjust at the same time. But I hope that the Government will monitor this very closely so that they will not fall out. At the same time, the incentives provided by the Government to enhance productivity is a good antidote to ease the withdrawal symptoms. Certainly, I hope this will help our companies to ride through this wave.

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However, I am also concerned with the possible impact on the lives on the common Singaporeans. In the push for productivity, it is usually the repetitive, mundane and low-skilled jobs that get automated and these workers may be the first to be rendered redundant and retrenched. In a fast growing economy where many new jobs are created, there should not be a problem in absorbing them. But in a slower growth environment, as anticipated by our Government, this may pose challenges. How will the Government tackle the fallout? Will this result in a widening of the wealth divide in Singapore and increase our Gini coefficient? Will Singaporeans see red over this productivity drive?

Third, are we ready to face the silver tsunami? We have heard over the news about the tsunami warning around the Pacific Rim due to the massive earthquake in Chile. It was fortunately a non-event as the tsunami was much milder than expected. The warning of a silver tsunami has also been sounded many times in this House. Unfortunately, it will be real. In another 20 years, one in five Singaporeans will be in this silver age group. And I have a vested interest as I will be one of them quite soon. Are we prepared for the silver tsunami? While residents living in the Pacific Rim can be warned and evacuated, we cannot do so.

I visited the SWAMI Home recently during our annual ang bao and festive cheers for the elderly residents there. They are very well taken care of. The home is full. There is a long waiting list for the home and the waiting time is at least three months. With the silver tsunami, the waiting list will only get longer and the waiting time will only get longer too. Building more homes such as SWAMI may be needed but it should not be the main solution. Many elderly will

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prefer the comfort of home as well as family.

Many families send their aged parents to homes because they are unable to care for them due to financial constraints and they need to work. I would like to appeal to the Government to consider waiving or further lowering the domestic maid levy for families who need a maid to take care of their aged parents at home so that their family members can continue to work and support the family.

Caring for the elderly is a very labour-intensive event. The hon. Member Denise Phua has described part of it. The care-giver to elderly ratio at the homes is about 1:2 or 3. There is not much scope for the home to up productivity and reduce the reliance on foreign labour. I hope the Government can make an exemption for foreign worker levy for the aged homes so that they can remain affordable to the low- and middle-income Singapore families. The clock is ticking fast and the silver tsunami is real. We cannot afford to ignore the warning. I hope the Government can act fast to alleviate the problems faced by many families caring for their aged parents.

Last of all, in conclusion, I would like to discuss whether the Singaporean standard of living is too high for us to sustain. Singaporeans have been enjoying a good and high standard of living for many years. This is in part due to the good economic progress we have achieved collectively over the past four decades but it is also artificially propped up by the presence of abundant cheap foreign labour recently. The source of cheap foreign labour will not last forever. They will start to dwindle as their own home country progresses. It is time for us to wake up to the reality and make adjustments now so that it will be less painful and there will be fewer withdrawal symptoms.

If we reduce the reliance on cheap foreign labour, Singaporeans will

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have to pick up the slack and fill those roles but we need to do them more productively so that we can continue to enjoy a high standard of living and moderate the increase in costs. This is a painful adjustment as there will be increase in costs and our cost of living is likely to increase further with this move. But with innovation and smart working, I am confident we can embark on this productivity journey together and emerge as a leaner, more efficient and competitive nation.

With that, I support the motion.

4.31 pm

Mr Viswa Sadasivan (Nominated Member): Mr Speaker, Sir, I thank you for this opportunity to speak on the Budget Statement. This year's Budget Statement is predicated on the recommendations of the Economic Strategies Committee. I would like to comment on the strategy of boosting productivity and deepening corporate capabilities of SMEs. But before that I would like to talk a little bit about whether the Budget provides for inclusive growth and a broad-based increase in the incomes of citizens which was an expressed goal of the ESC report.

Mr Speaker, Sir, while it is logical and sensible for the annual Government Budget to facilitate economic growth and the creation of jobs – better jobs – it is also a reasonable expectation that the Budget will provide for the here and now concerns and welfare of Singaporeans who are struggling to make ends meet. I am afraid that for this group the Budget does not to provide sufficient comfort. I am talking, of course, of those in the lower-income households. Many in this group do not have jobs and find it hard to gain employment, they are unskilled or very lowly skilled and are therefore barely earning enough to make ends meet given the rising cost of living. They might have disabilities or are suffering from chronic ailments that are physically, emotionally

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and financially debilitating or have to care for elderly parents and/or disabled persons even though they barely earn enough to support themselves or their immediate families and do not own a property because they simply cannot afford to.

The latest Household Expenditure Survey released by the Department of Statistics highlights three findings (between the years 2002/2003 and 2007/2008) that are instructive:

Firstly, when you compare the average monthly household expenditure according to type of home, those in larger homes have a significantly higher level of expenditure that increased over the years. For example, for landed property residents the expenditure increased by 3% from about $7,000 to $8,000. But for residents of 1- and 2-room HDB flats, the average expenditure dropped by 0.7% over the years from about $998 to $950.

Secondly, households in 1- and 2-room HDB flats spent proportionately more on healthcare – 8.2% – compared to households in other home types which spent between 4.3% and 6%. According to the Department of Statistics, "this reflects the higher proportion of households with at least one elderly person in the 1- and 2-room flats than other housing types".

Thirdly, when you look at the average monthly household income, those in the lower income quintile saw a significantly lower income appreciation over the years compared to those in the higher income quintiles. For example, the average monthly household income of those in the 81st to 100th quintile grew by 6.8% from about $13,000 to $18,000 while that of those in the lowest category, ie, 1st to 20th quintile, grew by just 2.9% from $1,104 to $1,274.

In gist, what this tells us is that the lower-income households were forced to

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tighten their belts over the years even though their average monthly expenditure was already low to start with – barely one-seventh that of landed property households. Yet, the lower-income households have been shouldering a proportionately higher responsibility in caring for the elderly in their households, as evidenced in their much higher share of healthcare expenditure. And to add to this, the average monthly income of those in the lower-income group, which in 2002/2003 was just one-twelfth that of the top earners and it rose by a much smaller percentage over the years compared to the top earners.

The question is what does the Budget have that would give the lower-income households comfort, not to mention, relief? Property tax savings of $240 or in that ballpark, a year – this applies only if you own a property. Increase in parent relief for taxpayers who are living with and/or supporting their parents, grandparents or handicapped dependants though the quantum of the relief itself is significant, it is not likely to translate into significant dollar savings as it is a relief and not a rebate. Also, it is unlikely that this would benefit the less well off as the lower 70% of Singaporeans have not been liable for income tax with the introduction of GST. Increase in course fee relief or expansion of wife relief to spouse relief; this is useful only if you are eligible or are in a position to attend a course or are employed.

The point I am making is that the Budget did not go far enough in meeting the objective of being more inclusive and ensuring we do not end up leaving fellow Singaporeans behind. They, too, have their aspirations, if not for themselves, for their children. I would have liked to see more initiatives that will give some form of direct assistance to this group of Singaporeans as they are

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struggling to catch up or simply get on their feet. And this assistance should not be restricted by one's ability to get employed or own a home. We already have some forms of direct assistance. We need a broader range of such interventions, and they should be more substantive. Examples of such direct forms of assistance are: cash grants, restricted, albeit that can be used in the payment for essential services such as healthcare, water and electricity; monthly coupons for rations, transportation or other necessities and rental rebates.

Even though I am aware of our Government's belief that it is better to teach one to fish instead of giving him a fish, I must admit I was surprised not to see any of these direct forms of assistance in this year's Budget as we used to have them in some form or other in our previous recession Budgets.

Mr Speaker, Sir, I would now like to talk about what appears to be the key thrust of this year's Budget Statement – raising productivity through upgrading skills, innovation and economic restructuring. The core argument for this is intuitive and the initiatives appear well thought through and should be supported. The question is, will these measures work? Why will it work this time if, in spite of all the systematic measures in the past 38 years, we have only managed to get productivity up to 1% and then appear to have hit a stone wall? The National Productivity Board (NPB) was set up in 1972 and according to the website this was its mandate: to improve productivity in all sectors of the economy. Increasing individual and company productivity at all levels was a Government priority. Given Singapore's full employment picture and relatively high wages, the National Productivity Board followed a "total productivity" approach, which emphasised productivity measurement, product quality, a flexible wage

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system, worker training, and assistance to small- and medium-sized enterprises.

How different is this, in substance, from what we are seeking to do and achieve today? And true to form, our Government has been relentless in pushing productivity growth over the decades with initiative after initiative being fired at the Government and private sectors. From generous funding for training through the Skills Development Fund (SDF), to incentives for technological upgrading, to a mushrooming of Suggestion Schemes and Quality Control teams that appeared to be in a constant state of competition using the proverbial fish-bone diagram, which many of us were part of and, of course, Teamy, the Productivity Bee. It is a pity I missed Dr Ahmad Magad's rendition of the jingle yesterday which I hear was delivered in perfect pitch, one go, he informed, educated and entertained – that is productivity, I guess.

Singapore was clearly the leader in the region, if not on a broader ambit, in identifying productivity as a key determinant of sustainable economic growth. Yet, despite this formidable first-mover advantage and sustained, intensive total productivity approach, we have not managed to push beyond 1%. According to the ESC Report, the USA, UK, Sweden, the Netherlands, Finland, Japan and Hong Kong have done better than Singapore from 2006 to 2008 in productivity, whether it be in the services sector, manufacturing or in construction. From what I have gathered, with the exception of Japan, these countries have not invested as much resource per capita and certainly have not had such structured programmes and initiatives as Singapore in promoting productivity. So, what is it that they seem to have done that we have not or are not? I believe the answer may lie in three words: culture, attitude and self-efficacy.

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The many initiatives spelt out in the Budget are certainly useful and will contribute to turning the tide in productivity. They are at best a sufficient condition. The necessary condition, in my view, for Singapore to achieve the desired productivity growth would be a fundamental shift in the culture, attitude and self-efficacy of our indigenous workforce. Again, it is not that our Government has not highlighted the importance of this in the many reminders of taking ownership and workers being empowered and the need for us to think out of the box as we innovate. But it has not seemed to work on the ground. Why? In my view, it is most likely because when we think out of the box, we end up thinking within a larger box and, quite often, this is a result of group think and fear of consequences of being too radical. While we desire to empower, the workplace culture does not quite celebrate the spirit of taking charge when not anointed, or speaking out-of-turn which is often seen as being out-of-line. There is not much incentive to take initiative and do more than your fair share at work, and worse, risk screwing up. In fact, when you volunteer for a task you are not assigned, there is a good chance you could be seen as trying to suck up, " sabo ", which in local parlance is short for sabotage, or simply being a " yaya " which means show off. We are only now beginning to feel comfortable asking "why", but still a long way off from asking the crucial question for innovation, "why not". We have a modest, almost self-effacing culture where we are told that if our product or idea is good enough it should speak for itself. There is no need for us to sell or even explain its value proposition. But today we know that if you cannot persuade on the value proposition of an idea, it is as good as not having the idea in the first place.

So, the question is how do we imbibe this culture, attitude and self efficacy in our workforce? Yes, we can send them for training in lateral thinking and taking

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charge. This may help but certainly it would not do the trick. Firstly, we need to imbue a culture in organisations that encourage ownership, risk taking, and a genuine desire to improve oneself. This will happen if it is an empowering work environment where the employee feels a greater sense of ownership of the larger process and the organisation instead of just his task. The leadership role of CEOs and top managers is crucial in being exemplary and setting the tone. I recall how the late Mr Nithiah Nandan, who was an iconic leader in our union movement, motivated a large number of workers to upgrade their skills by setting the example and going for training himself. More recently, Mr Liew Mun Leong, CEO of CapitaLand Group, in a recent speech, entitled "Fish Rots from the Head", lamented poor service standards. He asserted that it is leadership that makes the difference. I quote him, "The workers in our Japanese banks, at McDonald's, IKEA, BreadTalk, Toast Box and SIA are mostly Singaporeans. What makes these local workers perform better in their respective roles than their counterparts elsewhere? I think it is because their CEOs and top management have taken the lead to make it happen." Therefore, it is important that we pay a lot more attention in imbibing these values and putting forth the message that it is absolutely important for CEOs to take the lead and set the example.

The second thing that is needed is to single out employees who display the desired spirit – they must be celebrated, not just recognised. Finally, these values must be imbibed in our young through our education system where they are encouraged to be curious, to question, challenge, take charge and lobby for what they believe in. This could be inconvenient and possibly disruptive – but this is what we need to do if we are serious about pushing productivity and if our economic

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survival depends on it. I urge Deputy Prime Minister Teo's Council to look seriously into some of these factors.

Mr Speaker, Sir, the third and final aspect of the Budget Statement that I would like to comment on is building capabilities through partnerships. The Minister for Finance said, and I quote him, "We must build and maximise the synergies amongst companies in Singapore, both local and foreign. The MNCs, as well as smaller global enterprises, are growing their base in Singapore and expanding out from here into Asia. They are valuable partners to our local firms, helping them to plug into world markets and thereby scale up their operations, while collaborating with them to develop new, cutting-edge competencies."

This is an excellent initiative and something that needed to be articulated. The Singapore Government, especially in recent years, through SPRING Singapore and IE Singapore, has demonstrated commitment in helping SMEs.

While one could argue that there is room for improvement, we must acknowledge that the Singapore Government does significantly more than many others to help SMEs grow. In fact, I feel our Government is doing this almost to a fault – to an extent that we could unwittingly be creating a "handout" mentality on the ground. Too much of Government help can blunt creative impulses and much needed survival instincts in entrepreneurs. Organisations, such as SPRING Singapore and IE Singapore as well as EDB have, in their own ways, been connecting SMEs and MNCs based in Singapore and abroad. Likewise, industry-based statutory boards, such as MDA, IDA and MPA, have been playing their part. However, these efforts have been ad hoc and not part of a larger, strategically driven plan. This initiative spelt out in the Budget, I believe, is designed to do exactly this.

In this regard, I have three specific suggestions. Firstly, I feel it is critical that

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Singapore’s Temasek-linked companies (TLCs) become the standard bearers for this initiative. We have TLCs in virtually every sector of the economy. I believe each of them can do more in proactively seeking out local SMEs to invest in, undertake joint projects with, or partner when pitching for deals overseas. From what I understand, this hardly happens. Is it because we do not have enough SMEs which are good enough to partner? I do not believe so. I believe in every industry cluster, there is today a critical mass of home-grown SMEs that have the calibre or at least the potential to grow. What many of them need is that crucial break. I am certainly not talking about charity or national service here. These should be commercially driven business decisions, by and large, but with a conscious effort to seek out promising local SMEs to groom, invest in, or partner. In fact, experts argue that larger companies benefit from partnering smaller firms. Beijing-born Professor Huang Yasheng, an expert in political economy and international management from MIT, was in Singapore earlier this month to give a lecture at the Civil Service College. He had this to say, " …academic research shows overwhelmingly it is the small companies that create new technologies and new products. Big companies are innovative only when they acquire small companies …"

Secondly, the Government, through SPRING Singapore and IE Singapore and other industry statutory boards, should develop a "match-making" system – this should be the role of Government, to be the facilitator. The various chambers of commerce and the industry associations should come on board to contribute to the "match-making". It would be useful for two other types of bodies to be co-opted to help propel this MNC-SME partnership initiative: professional associations that can provide the leadership in some of the partnerships; and management consultancies that could be on retainer to

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help in prompting and structuring the partnerships which can be complicated. To make the process exciting, there could be a quarterly forum where SMEs with bright business ideas can pitch them to interested TLCs and other MNCs for investment or partnership.

The third suggestion is to innovate value by tapping on the specific strengths of entities in the MNC-SME value chain. There are essentially three critical components in the enterprise value chain that are related but autonomous activities:

(a) Idea generation – some of the best ideas come from individuals or companies that are less corporate in the way they work. There must be a process of generating bright, exciting ideas and, very importantly, ensuring that bright ideas do not go unspotted;

(b) Idea execution – a fundamental difference between creativity and innovation is that the latter is about execution which in turn requires discipline, drive, and a sense of realism, something which MNCs and larger SMEs are likely to be better equipped for; and

(c) Idea selling – in today’s crowded, noisy environment, innovative marketing often decides whether the product lives, dies or is stillborn. This is an area where SME ideas combine well with the financial and distribution muscle of MNCs.

Having said all this, I must caution against overly structuring the process or even making them too linear – a good measure of chaos is good and should not be meddled with. And I am certainly not advocating the creation of a steering committee to oversee this process to ensure results. What I am saying is that it is useful when you have different players, for all to know and accept the role of each player. And this role is based on the strength of each player. This could be articulated clearly in the initial meeting

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after which it becomes a round-table working mode that will allow leaders to be thrown up naturally.

Let me end this discussion on MNC-SME partnerships by cautioning that it should not result in the entrepreneurial spirit in promising SMEs getting stifled – and this could happen if we are not careful, and especially if we push too hard in order to meet KPIs and targets. As Professor Huang Yasheng puts it, "… the 'orderly' environment here dulls the incentive to think out-of-the-box. Everything is too well organised. Entrepreneurship typically happens in a more chaotic environment …"

Mr Speaker, Sir, let me conclude my speech by reiterating that the Government is on the right track by focusing on productivity as a key means to putting the Singapore economy on a different growth curve, less dependent on foreign workers. Similarly, the initiative to promote MNC-SME partnership is a good one that will give results if well managed or, more accurately, if not overly managed. But in both cases, we need to go beyond creating practicable measures – we need to deal with the social and psychological barriers that inhibit or, worse, prohibit the players from participating. We need to be wary of the temptation to deploy technical solutions and gain a false sense of accomplishment when the problem is attitudinal in nature. The truth is we need both – technical measures as well as ways to shift attitude and culture for the long term.

Several years ago, I attended a conference at Raffles City on Knowledge Based Economy (KBE). There were many presentations to explain to the audience of CEOs what KBE was all about. For me, the penny dropped when Minister George Yeo in his speech described it as an attitude, an orientation, and less about

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harnessing the power of technology and computers. To illustrate his point, he used an analogy that has been etched in my mind since. He said, and I paraphrase, it is about making the bricklayer feel he is building a cathedral, and not just a wall.

This is where the solution lies. Whether we want to push up productivity, or encourage MNCs to seek out local SMEs to partner and grow together, or find ways to provide relief to our less fortunate fellow Singaporeans – we need to go beyond technical definitions and create an environment that inspires people; instils enough pride in them to want to do better, to want to become better. And this translates to a desire to upgrade, to challenge oneself, to reinvent and innovate, and yes, to have the conviction to ask "why not" and to do the right thing – and all this because you genuinely want to do it and not because of incentives, because incentives cannot and should not always be there.

For our economy to grow, indeed, for our society to ride through the challenges and come out stronger and flourish, we need more bricklayers feeling they are building cathedrals, not just walls. We need to create the environment for this to happen naturally.

On that note, Mr Speaker, Sir, I support the Budget.

4.53 pm

The Deputy Prime Minister and Minister for Defence (Mr Teo Chee Hean): Mr Speaker, Sir, the Government has accepted the Economic Strategies Committee's recommendation to set a target of 2%-3% productivity growth per year over the next decade and to make skills, innovation and productivity the basis for economic growth moving forward. While this is much higher than our average productivity growth of 1% per year over the last decade, it is an

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achievable goal so long as we put in a sustained national effort. We have done it before and we can do so again.

The Prime Minister has asked me to chair the National Productivity and Continuing Education Council to drive this national effort to boost skills and productivity. The Council will focus on two main areas.

First, it will drive efforts to raise productivity at the individual, enterprise and sector level.

Second, it will oversee efforts to develop a world-class National Continuing Education and Training System and entrench a culture of continuous learning and upgrading in our people.

I will announce the exact composition of the Council later but it will be an inclusive one, reflecting the comprehensive nature of the productivity drive. This will allow us to tap the knowledge and energy of all the partners in this effort. The Council will comprise private sector representatives across a range of industries, big and small companies, both local and foreign. There will also be representatives from the unions who are a key partner in this effort. It will include Ministers and Ministers of State in charge of the key Government Ministries and agencies involved in this effort.

What does productivity mean to us? Of course, productivity is not a new idea for Singapore. Many of us, like Dr Ahmad Magad who recalled the rallying call of the 1980s' productivity movement to be "good, better, best". I will not try and repeat his performance. We formed Work Improvement Teams to come up with process improvements. We had Teamy the Bee which embodied the virtues of diligence and teamwork. The result of this concerted effort was productivity growth of 4.7% per year over the 10-year period of 1981 to 1990. Productivity was a key

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driver of growth contributing to 65% of GDP growth during that period. We can do this again.

Three decades on, productivity remains an enduring imperative. While the objective of productivity growth is the same, the means to achieve it will change. We are now a more developed country, further up the productivity curve. The competitive environment has also changed. We have made progress but those ahead of us have also progressed and moved up as well, and those behind us have made rapid advances and are catching up with us. New strategies and methods will be needed for this steeper climb.

In the 1980s, the focus was on raising the basic levels of training and education to support our developing industries. Today, we need to equip ourselves with more specialised expertise in specific fields to tap on new growth opportunities, eg, in areas like bio-medical sciences and clean technology. Today, many countries, such as China, have mastered efficient low-cost production systems and they can do so more effectively given their scale. Hence, it is no longer sufficient to focus on optimising or reducing production costs to improve the bottomline. In addition, we must also look at new ways of improving the top line, looking harder at new and innovative ways of creating new products and services and going into new markets to capture greater value.

At this point, it is worth clarifying what we mean by productivity as it could mean different things to different people. Productivity is essentially a measure of how much output we can get for our inputs. Positive productivity growth means that we are able to grow our outputs faster than we grow our inputs. As Mr Ong Ah Heng, Mr Christopher de Souza and others mentioned, raising productivity does not necessarily mean cutting the number of workers but could

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also come from raising the output which I think is much better.

Labour productivity is the most common measure of productivity used internationally. But this does not also mean that the responsibility for productivity improvement lies with the worker alone. It is not working harder or longer at the expense of families and other aspects of life, as emphasised by Mr Seng Han Thong, Ms Irene Ng, Dr Amy Khor, Assoc. Prof. Straughan, Mr Ong Kian Min and Er Lee Bee Wah. It is also not just about automating existing processes.

There are many factors working together to determine productivity. These include the quality of the systems, processes, technology, organisation and workforce within enterprises, as Mr Christopher de Souza pointed out. It is also about the attractiveness of the products and services to their markets, as pointed out by Mr Lim Swee Say in his usual graphic style, and moving to higher value activities.

Finally, as Mr Seah Kian Peng and Ms Irene Ng stressed, leadership and management are crucial to bringing all these factors together.

As Mdm Ho Geok Choo points out, even as we focus on productivity, we need to keep in mind that we should not pursue productivity as an end in itself.

Er Lee Bee Wah asked about the relationship between productivity and wage growth. We are pursuing productivity to raise value added per worker, because this ultimately determines whether our workers can receive higher wages. Higher productivity enables us to generate the additional value that then can be shared between companies and workers, provide good jobs and higher

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incomes for workers and generate higher profits for companies.

Ultimately, productivity is the basis for our future economic competitiveness. I would like to reassure Mr Heng Chee How, Dr Lim Wee Kiak and Mr Laurence Wee that we are not about to let the pursuit of productivity blindside us to the over-arching objective of inclusive growth. Even as we move forward in this productivity drive, we must provide the support for all, including and especially the lower-skilled and the older workers to move together with us in this journey.

Our existing skill upgrading and training programmes, especially those at e2i, are targeted at precisely these workers, and in our review of the continuing education framework, we will continue to see how to assist these workers upgrade themselves. Several members, such as Mr Liang Eng Hwa, Ms Jessica Tan, Mr Sin Boon Ann, Mr Michael Palmer, Mr Calvin Cheng and Er Lee Bee Wah, have highlighted concerns regarding the impact on the foreign worker levy changes and its impact on businesses and living costs. The Minister for Manpower will address this issue in greater detail in the debate on the Manpower Ministry's estimates.

Enterprises must take the lead in this next phase of our productivity efforts. Enterprises, ultimately, make the decision about what value they want to create and how they would go about doing so. While workers can upskill themselves, the systems, processes and technology that they work within, sets the context within which they can apply these skills to generate higher value and these are put in place by the enterprise. Likewise, workers can offer suggestions about new products or markets to expand into, but enterprises must have in place a culture and a system that can nurture and harness such creativity.

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We have many progressive enterprises that have already taken the initiative to improve their productivity. Over the past week, Members have read many examples in the newspapers of companies, both here and abroad, that have done well on the productivity front and created better and more rewarding jobs for their workers. So it can be done and we hope that through their exemplary conduct and practice that other companies and other CEOs and leaders will follow them and do so as well. We need more enterprises to do the same. I would like to highlight three examples here just to add to the list.

Hyflux's story is one of generating value by growing the top line through constant innovation to come up with new products and new uses for their products, and internationalisation to capture opportunities in new markets beyond Singapore. Hyflux is a homegrown company that was founded just over 20 years ago with a start-up capital of $20,000 and just three staff. Today, it is one of the world's fastest growing water solutions companies with $1.87 billion in market capitalisation. At the heart of their business strategy is an innovation team responsible for the R&D of new products and applications and the commercialisation of technology. They operate the largest commercial R&D centre for membranes and materials technology in Asia outside of Japan. Today, Hyflux's products are installed in more than 1,000 plants in over 300 locations globally, providing water solutions in markets ranging from Southeast Asia, China, India, the Middle East and North Africa. So that was improving the top line.

I will highlight another example from an SME again. This time, in process innovation. Mr Sam Ho is the Managing Director of Vac-Tech Engineering. It is a local, industrial cleaning and environmental company. Mr Ho is passionate about innovation and he is constantly looking out for new and better ways to

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work smart. For example, he had this idea that instead of removing waste sludge from the oil storage tanks manually, they could raise productivity by mechanising the process. He hired a consultant to help design the automated conveyor system and bring the concept to realisation. With this innovation in place, they are now able to complete the job four times faster. Mr Ho has also put in place a pay structure that rewards learning and upgrading among his workers. So a sharing of the gains. For example, those working as drivers are able to get an increment when they learn to operate the machines and double up as machine operators when necessary.

There is also great potential for productivity improvements at the cluster level. So it is not just individual companies or individual workers but at a cluster level. A good example of a cluster level project is when the Container Depot Association of Singapore, Singapore Logistics Association and Singapore Transport Association came together to undertake a project to set up a computerised tracking system for containers and prime movers. Before the system was in place, prime movers brought containers in but came out empty-handed or they went in empty to bring out containers. This new system enabled trucking companies to share their prime movers – going in and out of the port, minimise the number of empty trips, optimise the use of the prime movers and reduce the congestion in the port. It looks like an obvious solution but it requires companies in the sector to come together, to work together in order to make it happen. At last count, more than 1,400 prime movers from 66 companies have benefited from the new system.

There are three broader points that I want to draw from these examples which will inform the Council's approach. First, there is no one-size-fits-all solution, as Mr Zainul Abidin Rasheed noted. The context for each enterprise and sector may differ

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significantly and require different customised strategies. Second, to achieve sustained improvements, strategies and solutions must be integrated and supported by a culture of constant innovation and improvement. And I agree with Assoc. Prof. Koo that we have to look at productivity improvements on a system-wide level. There is no point in investing in new technology, for example, if you do not train up your workforce to exploit it at the same time. And as several Members have pointed out, there is no point in sending workers for training if they come back and the company continues to work in the same way as before and the training just goes to waste. It is about applying creativity and imagination to improve even the smallest thing that you do. Third, as Mr Zaqy Mohamad shared, this effort can be sustained only if we see enterprises gaining from higher efficiency and effectiveness and workers gaining from higher skills and higher wages. In short, our productivity drive will require concerted tripartite effort involving enterprises, workers and the Government.

Enterprises must take the lead to invest in improving processes, like Vac-Tech Engineering, enhancing the value of their products, like Hyflux, and across sectors like our container trucking industry. Workers, with the support of our unions, must take ownership for upgrading. They must want to upgrade themselves. The public sector too must play its part to be more productive and innovative in itself, across the whole of Government, as well as to facilitate the National Productivity drive. And in this, I agree with Members, including Ms Jessica Tan, Ms Ellen Lee, Mr Seah Kian Peng and Er Lee Bee Wah, and the public sector will do its part. Overall, the Government is not in a position to pick and choose winners and neither do we have all the answers but we can certainly help those who want

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to help themselves. Bring all the parties together and do the facilitation.

The Government, working with companies and workers through the Council, will facilitate the transition from the current level to the next level of productivity in a company or a sector. To enable broad-based and sustained improvements in productivity, we need to go beyond driving productivity. As many MPs have pointed out, we need to nurture a productivity culture. It is about building productivity into a deeply ingrained mindset that permeates the entire business process and model and the workers' outlook and the whole nation. We will have to build capability and develop tools to help both employers and workers at all levels to constantly look for opportunities for productivity improvement. This means that we will need to train them on productivity-related skills in addition to job-related skills. The Council will have various tools and schemes that it will use in driving the productivity movement.

Enterprises can already leverage on the suite of capability development programmes at SPRING – be it technology improvements, human resource capabilities or even design and branding. SPRING will work together with enterprises to assess their needs and support them in addressing these capability gaps in an integrated and holistic manner. We will see how SPRING can streamline its processes in order to make the various schemes more accessible to SMEs in particular. Enterprises can also draw on centres of innovation at our polytechnics and research institutes for technology consultancy and advice. I am keen for the Council to study how our companies, especially our SMEs, can work more closely, in particular with our polytechnics and ITEs but also with our universities to come up with product and process innovations and associated worker training.

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The Minister for Finance has announced an additional boost in the form of the productivity and innovation credit. In the past, companies have felt that only those who are involved in the very high tech esoteric sectors can benefit from schemes to encourage R&D and capital investments. The small and medium enterprises also felt that only big companies can qualify for such benefits and schemes.

The new Productivity and Innovation Credit (PIC) is different, in that it is a broad-based scheme that is open to all enterprises across all sectors. It does not merely cover investments in equipment to automate processes. It also incentivises investments and innovation, such as R&D, design and acquisition of intellectual property such as patents and trademarks, to revamp its processes, products or business model. So businesses which invest in making themselves more productive and innovative will get to enjoy an unprecedented 250% tax deduction benefit of up to $300,000 per activity. The PIC is capped at $300,000 for each approved activity. So the benefits accrue mainly to SMEs. Also, recognising the SMEs often are cash-tight or have not yet generated sufficient profits to benefit fully from a tax credit, the PIC can be converted to a cash grant of up to $21,000. Beyond this broad-based approach, the Council will focus on selected sectors that employ a significant proportion of the workforce and have the most potential for productivity improvements. This is to ensure that our efforts make the greatest impact at the outset. One sector clearly is construction. We have spoken about that a lot these last two days. The sector has great potential for productivity increases and also employs many workers, including foreign workers, but we will look at other sectors as well, and other key sectors we will look at include retail, food and beverage, hospitality, transport and logistics, general

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manufacturing, precision engineering and business services industries.

Mrs Josephine Teo highlighted the need to go beyond the broad 2%-3% productivity target, and Mr Teo Siong Seng also said that the Council needed to have an understanding of what is happening on the ground for effective implementation. So to facilitate this, the Council will take a sector-specific approach. The Council will identify Government agencies that will work with industry partners, such as business associations and/or the more progressive leading companies and industries and, of course, the unions in that sector, to develop strategies and solutions to raise productivity in their respective sectors. Together, they will study the nature of their sector, develop customised productivity strategies and propose new initiatives to complement existing ones, especially to complement the broad-based ones. I will illustrate an example of how this could be done.

NParks has been working on the productivity issue since 2007. They began by conducting a five-month labour productivity benchmark study for seven landscaping companies and developed a matrix of performance and process indicators customised for the landscaping industry. So we have taken a broad productivity indicator and tried to customise it to something that is meaningful for that sector and the companies in that sector. This was accompanied by a work trip to Australia to learn more about best practices in productivity in the landscaping industry. The study not only allowed companies to gain awareness of how their own productivity compared with group average, it also gave them insights on implementing new projects to improve their companies' management and work processes.

NParks also obtained a clearer understanding of the productivity gaps within the industry and NParks is now

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working with the industry on other initiatives to bring their capabilities and productivity to another level. For example, they are conducting an analysis of the value chain to identify room for synergies, developing a training framework for the industry and conducting industry dialogue sessions to bring industry players on board for benchmarking initiative and to share and promote best practices.

To support the national productivity drive, the Minister for Finance announced the setting up of a $2 billion National Productivity Fund to complement existing industry development programmes. Agencies like NParks can come to the Council to seek funding for their sectoral initiatives. Business associations can also take the initiatives and work with their members in coming up with sectoral strategies and initiatives for the Council to consider. The Council will also review existing programmes and consider introducing new ones to support sector-specific strategies. The Council will also direct funds towards developing infrastructure and tools that enterprises can use to support their productivity efforts. These will include setting up sector-focused resource centres to do applied research into productivity, identify international best practices and develop productivity benchmarks.

Over the past few decades, we have built up a world-class education system starting with mass basic education through the 1960s and 1970s in primary and secondary schools to high-quality mass further and higher education from the 1980s onwards, including our network of ITEs, polytechnics and universities. The vast majority of our students today come through a solid basic education and go through further and higher education.

We are now embarking on a similar journey in building our continuing

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education and training system to give our adult workers a comprehensive slate of opportunities to develop their potential, raise their competitiveness and spur their mobility throughout their working lives. This is a key prong of our strategy. As highlighted by Mr Yeo Guat Kwang, we can enable workers to be more productive only if we provide the training and the systems for them to be trained to do so.

The Council will oversee the development of a world-class national CET system that caters to everyone and is customised to the needs of different workers and companies. This includes the older, low-wage worker who wants to gain basic literacy and numeracy skills, a technician who is mastering new areas of technology, an executive who is looking to develop cross-functional skills and the professional acquiring specialised expertise in his field. The Council will identify and develop new focus areas of growth for the CET system in line with the skills needed to support the productivity drive. We have a variety of training providers and qualification systems today. We must leverage on this diversity; yet, also build stronger linkages between different qualifications and institutions. We will study models from various countries and learn from their best elements, at the same time, retaining the strong linkage between our CET and economic strategies that has always been a hallmark of our system.

Ultimately, developing a world-class CET system is not just about putting in more resources or setting up more institutions or programmes. What drives the success of CET is whether our employers and workers have a strong culture of life-long learning. The Government can develop the system but employers must recognise that investing in their people is a key competitive advantage for their business. And workers need to keep an open mind about different job opportunities and must have the desire to

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improve their skills to meet new trends at work.

Training must be a way of life, not a burden nor an imposition. Lifelong learning is a means to an end and that end is to add value. The ability to add value will bring about better employability and better income for workers. In this regard, we can learn from the Scandinavian countries where CET is a long established tradition and there is a very strong culture of lifelong learning. In 2007, about a third (32%) of the workforce in Singapore underwent training. Not bad. But when compared with Denmark when nearly half (45%) of the workforce underwent training, we have some way to go. And 45% need not be our ultimate target either. In Denmark, they also have a high degree of job mobility, whether it is to take on jobs that require more or higher skills in the same or a different field.

As our enterprises and sectors move towards higher productivity, the skill-sets and skill levels of our workers will need to move up in tandem. Developing this world-class CET system will help our workers create greater value in their current companies and enable them to cross over into new, higher value work areas and industries as these come on stream in Singapore. Already many of our workers and companies recognise the value of CET in increasing their mobility and have benefited from it. Let me illustrate with three examples.

The first shows how a company's strong culture and support for training has enabled its workers to move up the ranks. Thirty-one year old Mr Gerald Tan started working as a driver at Toh Kim Bock CE Contractor Pte Ltd in 2001, earning $1,300 a month. He was promoted to foreman two years later with his good work attitude. Recognising his interest and talent for landscaping, his company sent him for WSQ landscaping courses with the Centre for Urban Greenery and

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Ecology and a safety supervisor course with BCA Academy. He got another promotion, becoming a landscape supervisor in 2006, earning $2,000 a month. In 2009, Mr Tan completed the International Society of Arboriculture's certified arborist programme and is now a certified arborist who supervises 30 workers from five sites. He now earns $2,600, twice his starting salary several years ago.

Second, is a lady who has made a mid-career switch after CET. Miss Siaw Ruifan, 25, graduated with a diploma in chemical engineering from a local polytechnic and was working as a sales coordinator in an export company. In 2006, she took up a professional conversion programme for registered nurses – a two-year nursing diploma course. She is now working as a nurse in SGH, and I am pleased to learn that she finds the job helping patients a very rewarding one.

The third is a professional who has made a diagonal move, across and up through CET. The first was moving vertically in the same company, the second was moving horizontally. Miss Fatimah Moideen Kutty rose through the ranks to become Head of Pharmacy from 2000 to 2008. With establishment of the new Khoo Teck Puat Hospital, she was asked to help drive the transition as a Deputy Director of Human Resources. She took the WSQ Chief People Officer programme at Human Capital (Singapore). The training has equipped her with the HR skills to progress and succeed in a new role.

We need to work together to make the productivity drive a sustained effort at every level. We will face challenges but there are also plenty of opportunities. Each sector, each enterprise and each individual must take collective responsibility for sustaining productivity efforts and proactively take the initiative to

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improve in their respective spheres. I have confidence that Singapore will rise up to meet the challenge as we have always done. The strength of our unique tripartite partnership will be a critical success factor as we continue on this journey.

In other countries, the call to raise productivity and transform the workplace may have caused unions to rise up in alarm, but our unions are different. We have risen up already. They have taken it upon themselves to lead the labour movement in meeting this productivity challenge. They know that this is for the long term good of our workers; in fact, they have already started work.

Minister Lim Swee Say, Secretary-General of NTUC, is leading the "Cheaper, Better, Faster" movement to rally the unions and the workers behind this national productivity drive. We have heard Mdm Halimah Yacob, Mrs Josephine Teo, Mr Yeo Guat Kwang and other of our labour MPs, speaking passionately about this in this House. I would like to commend their efforts and encourage them to continue in this effort as we need to bring everyone on board, and the workers especially.

There is no easy road to success. This is an effort for the long haul. Results will not come in months or even within the year but, through this journey, we will build a resilient economy that will give us sustained inclusive growth, nurture highly competitive sectors and enterprises and workers who take pride in maximising their potential through a passion for lifelong learning and upgrading. Working together steadily, steadfastly and, in a practical way, drawing on the collective knowledge and energy of all our partners, we will be able to achieve our goals and build a better future for Singapore and Singaporeans. [ Applause. ]

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Assoc. Prof. Paulin Tay Straughan (Nominated Member): Thank you, Sir, for this opportunity to share my views.

The key thrust of Budget 2010 is to build up capabilities needed to transform the Singapore economy over the next 10 years. Fundamentally, the message is: we need to level up on productivity for each worker as we learn to maximise the potential from every available Singaporean while we wean ourselves from the dependency on surplus foreign labour.

As a family sociologist, I am acutely aware that while the Budget highlights the issues of a limited and fast-ageing workforce, it does not address directly the root cause of this predicament and that is sustained ultra-low fertility and delayed marriages among younger Singaporeans.

When the economy performs poorly, as it has done in the past year, the effects are easily quantifiable through indicators like the negative GDP, budget deficit and unemployment statistics. The reaction from state is also swift and focused – as detailed in the recommendations of the Economic Strategies Committee (ESC) and the subsequent endorsement of the ESC’s key thrusts in Budget 2010. But as a nation, we must be cognisant that the Singapore family may also be in crisis. The key indicators of this are clearly illustrated in population trends: increase in age at first marriage, sustained ultra-low fertility, increase in the proportion of singles and a fast ageing population. While these indicators may not be measured in fiscal terms, the consequences on the sustainability of Singapore society is just as critical.

[

Assoc. Prof. Paulin Tay Straughan (Nominated Member): ]

5.28 pm

If we had not opened our doors to contributions from our foreign friends, the

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Singapore population would have shrunk – just as it has in Japan and South Korea. But augmenting our numbers through immigration has also resulted in social tensions, which has dominated much of the discourse in both the print and new media in the past year. So now, we have decided that we need to slow down the inflow of foreigners and learn to level up on productivity of the workers we have.

All in, Sir, I agree with this strategy – that we must maximise our potential and not rely on the availability of surplus labour from outside to sustain economic activity in our country. But we must never lose sight of the root cause of our predicament, and that is, why are we suffering sustained low fertility? Therefore, as policy makers, we must continue to make investment in family attractive and a primary life goal. And wherever possible, we have to minimise personal costs and opportunity costs when Singaporeans choose to place family first.

Given that we are still recovering from a recession, I understand and appreciate why Budget 2010 did not prescribe more fiscal aids for growing families. The last enhancement to the pro-family policies was done in 2008, and they were a generous and expansive package.

In my own research on the Singapore family, a key barrier to early marriage and having children that surfaced is the perceived lack of time.

It takes time – to find the right life partner, to learn how to love, and to nurture children. It seems that Singaporeans have very little time, especially our younger Singaporeans. Why is that so?

Singaporeans work very hard. I looked at the Singapore Yearbook of manpower statistics published in 2009. On average, we clocked 47.1 hours per week in 2008, and these are paid hours. The hours registered in construction, manufacturing

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and administration and support services were the highest – 52.5 per week; 50.4 per week and 49.7 per week respectively. So what does this translate to in real terms? On average, we clock nine hours of paid work. There are 24 hours in a day. So nine hours, we take away two hours for transportation, that is 11 hours. We take away another two hours for basic necessities – nutrition, cleaning, personal grooming, etc – and that would be 13 hours. Let us say that we sleep eight hours, as prescribed by the physicians, you add that up together, that is 21 hours. That leaves us a miserable three hours to find your soul mate, to nurture relationship, to procreate and to nurse the baby. The average number of hours we work is higher than that of many other nations, including Japan and South Korea. So this call for productivity. To work smarter is indeed timely because I look forward to when we can increase productivity so that Singaporean workers can cut back on paid work so that they can focus on family which is just as important.

Madam, my main concerns on Budget 2010 relate to the implications on how we do family in Singapore. Broadly, they cover two key areas: how we can achieve a sensible work-life balance and the place of family in our value system.

I will address concerns relating to achieving a sensible work-life balance first.

As we heed the call to improve productivity at the workplace, across all sectors, how can we ensure that productivity is understood and measured accurately, especially in service industries and where cognitive processes are involved? I think that is rather tricky.

Will middle-managers and supervisors be sufficiently trained themselves to recognise quality output of their supervisees? I think all of us in this House

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agree that, in principle, the ideology set out in the Budget and the ESC Report is sound and we stand solidly by it. I think the trick now is how do we operationalise it so that it filters down accurately through the workforce.

How will training programmes be validated? We certainly do not want to send our workers to training for the sake of fulfilling the call to train. We must be able to validate that every training session adds value to the way we do our work. How will we ensure that this call to work smarter will not be operationalised as working longer hours by ignorant managers? This, I think, we have to really seriously watch. The Singapore worker is already clocking maximum hours at work. The only way we can be more productive is if employers are willing to invest in training and infrastructure.

But when push comes to shove, employers may resort to squeezing even more out of each worker without first investing in improving their skills. I am especially concerned for those employed in smaller enterprises which are highly dependent currently on foreign workers. Will they be able to downsize their labour force and concurrently upgrade existing labour while watching closely their profit margin?

What is the recourse for employees when demands from the workplace clearly disadvantage them and make it difficult for them to carry out their responsibilities in their families?

In these challenging and exciting times of transformation at the workplace, may I suggest that we track work hours systematically and that we track informal overtime work as well because I think this is the culprit that locks us in the office.

One key thrust recommendation of the ESC is to make Singapore an attractive

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global city and an endearing home. We can only be such a city if we have a good work-life balance in our everyday life.

We must recognise that Singaporeans may have varying social obligations in the family, and in this climate where work demands dominate, I will appreciate assurance from the Minister that there is a place for supplementary wage earners in a transformed economy.

Mature workers and workers with care-giving responsibilities may be able to only work part-time. With an ageing population, this pool of workers will likely increase. We must ensure that these Singaporeans are not perceived of as liabilities in the workplace and that part-time workers continue to receive opportunities to upgrade their skills, receive a fair wage for their labour and sufficient benefits in kind.

One way to facilitate a satisfactory marrying of paid work and home work is to allow employees the flexibility in where and when they can conduct their work. Wherever possible, we should encourage organisations to embrace a flexi-schedule and make flexi-work options available.

My second concern, Madam, relates to how we position the family in Singapore. In all that we do, we must reiterate the importance of family. The Budget is a powerful ideological statement. It sends strong messages of what constitutes core concerns for our nation. I would like to see noted in a progressive Budget the sacredness of family time, and how family time must never be treated irreverently as surplus work time. Every time we expect our workers to stay beyond office hours, we must be mindful that there is a gap in his or her family.

We must accord due respect to family work, especially the important work of care givers. We must, as a nation, set the norms that support Singaporeans who

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embrace the social and moral responsibility to care for their family members. One way we can do this to provide time-off from work for Singaporeans to take care of their dependants. We have in place childcare leave for parents of young children. As our population ages, I believe that it is timely that we should broaden that to include leave for eldercare. While ensuring a sustained level of productivity in the economy is important, it is equally important, if not more important, that we uphold productivity in the family. Family time is not surplus work time. It is time to nurture marital bonds and inter-generational relationships.

We are at an all-time low TFR of 1.23. This is also the Year of the Tiger, which some perceive as not so auspicious for having children. More importantly, there is still uncertainty with regard to the economy. Now, more than ever, we need to assure Singaporeans that growing families and nurturing family ties is important. And that they will not have to suffer personal costs when they favour a sensible balance in their work and family life balance. For if family ties are not secure, there will be few who will benefit from the enhanced parent and grandparent relief that is one of the bright sparks for me in the Budget.

As I rise in support of this Budget, I note the critical role of the new Productivity and Continuing Education Council. As we navigate through the demands of our new economy, the challenge is in how we define and recognise productivity. I think the key lies in how we conceptualise labour. It cannot be viewed simply as a commodity and manpower cannot be dissected simplistically into hours of labour. I believe we are able to rise to our potential and maximise output only when we are able to claim ownership of our jobs and we find satisfaction in the way we conduct our work.

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I look forward to the able leadership of Minister Teo Chee Hean in the new Council and I encourage fellow Singaporeans to embrace this new phase of our development. We must step forward, take ownership of our jobs and be proactive in contributing our inputs on what we need to help ourselves increase our productivity.

This morning, I had the privilege of being with my undergraduate freshmen class – my students. I told them that I had prepared the Budget speech over the weekend and for inspiration, I had reflected by my pond. I shared with them the story of my pond. Four years ago, we moved into Glentrees Condominium and there is this little pond. So my indigenous fish population was two small catfish and nine kois . Over the four years, I think the catfish died – I never saw them again – but the kois were beautiful. They grew, they were so colourful and they cleaned the pond, but they never procreate. I was interested in breeding fish. I watched and watched for four years, nothing I did helped. Maybe I just do not know enough. So I got bored and lost interest in my pond. When I went to Ghim Moh market, I found that they sold cheap fish – three packets for $5. So, I gathered three packets. Two were red fish – I do not know what they are – and guppies. I released them into my pond. That was fantastic – it added colour and vibrancy to my pond and they breed, the guppies especially. I had little guppies – they were wonderful. So I started to do a lot more to my pond. I bought plants, protected the guppies and created an environment that was conducive to growing all the fish. And all of us would go up there each evening to just enjoy the variety of fish swimming up and down.

On Saturday, while I was reflecting by my pond over how I can value-add to this debate, I was staring at the pond and the base of my pond moved. I had a shock

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of my life. It was my catfish – I thought they were dead! But two little catfish, which were maybe two inches long, have now grown to about eight inches. I was so pleased. So I looked to my undergraduates and asked, "What is the moral of the story?" And they said, "We are the catfish?" I said, "No. You don't even work! You are the kois . You will give us problems when it comes to getting you married and having kids." The catfish represent the Singapore workforce. So the pond was a conducive environment. We introduced different kinds of fish that also motivated me to get the pond going, measure the water, make sure that it was a happening place and, meanwhile, silently, but reliably, my little catfish grew, cleaning the pond, working really hard and flourishing because the environment was conducive.

5.43 pm

Mr Terry Lee (Nominated Member): Mdm Deputy Speaker, I thank the Minister for addressing our pressing need for training in the Budget. I am confident that unions will close ranks with Government, and urge workers to press towards our goal – to improve productivity. Productivity is vital to sustain higher wages, and better lives. Like building a house, productivity is the foundation Singaporeans should build on. Continuous training are the bricks we use. But how well we build this house depends on the quality of our training, and its implementation – our cement. Lastly, the builder's skill is important. Not just the tripartite partners, but all Singaporeans have a role to play. We are all building towards a common brighter future.

The link between being more productive and training must first be clearly established. Being better skilled does not mean I am doing my best. Doing my best with better skills does not mean I

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get a better pay too. But if everyone is doing their best, with better skills, then I think it makes a big difference to the nation as well as our pockets. This is because of the collective effort. Therefore, we need to ask ourselves: how can we inspire people to learn, and make the best of what they have learnt? How can we facilitate learning, so that people want to do it, and not feel forced to do it? How can training and being more productive be meaningful to workers, especially low-wage earners?

The call to improve productivity is not new; we have heard it since the 1980s. But what has changed is our situation, especially after the recent global crisis. Companies have sped up their reorganising, and the world is evolving rapidly. As more companies re-engineer, some functions are offshored, and jobs are displaced. During the downturn, we lost 19,000 jobs. We saw some heart-wrenching cases within the labour movement. Many are low-wage earners, and with only one skill in their working lives. They became victims of structural changes – and along with them, their families, children, and parents who are often of age. I know if they could provide a better life for their families, they will do it. And we know, from our early years, that better skills and knowledge is the key that unlocks the door to a world of opportunities. But some workers are trapped in a vicious cycle, trying to make ends meet is a daily question. What long-term aspirations could they have?

Low-wage workers face a multitude of challenges in reality. They need to juggle between earning a living and time to care for their families, especially those living with aged parents with medical needs or those with young children. To some, one job is just not enough, they need another income. So the time and money needed to train, naturally becomes secondary. But "enlightened" employers who value training can help them overcome these

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challenges. It will be helpful if employers sent them for training during working hours, and help them with the cost. But we know employers, especially SMEs, also face difficulties with a lean workforce. Still, there is the need to train workers where possible, and employers are responsible for it. We can do more to help companies, especially SMEs. Through the years, we extended many helping hands to financially support employers to train their workers.

I strongly believe training gives us the ability, capacity and confidence to be better at what we can do. But can you really train someone to be more productive? Or is it a question of attitude and corporate culture? Companies that are successful will testify that a better equipped workforce reaps handsome profits, and create happier customers. They will also tell you, skills alone is not enough; you need a good corporate culture to support it too. A culture where people want to excel and improve, and are not afraid to make mistakes and take chances. They must not feel the threat of being thumbed down, or sidelined.

The fear of failure and shame often hinders people to learn new things, and try new ways of doing things. But people must also understand that there are consequences to making mistakes. But if consequences are devastating, no one will "rock the boat", nothing will improve.

There is a multitude of factors for success such as how learning costs are absorbed, and how companies recognise these efforts. Such factors drive home the point that management is serious about training, but they are also serious about putting what you have learnt to good use. At the end of it, good performers are promoted, while those who really tried but missed the mark, are given a second chance. These are important to spur a learning culture and innovation. But, a culture can only become successful when

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it leads to tangible benefits. For people to feel that upgrading and being their best is important, it must lead to better wages and better lives.

Madam, changing cultures take time. They are long processes that must be managed carefully. If rushed through, the results may be worse from what we first imagined. And it will take double the effort to undo it. But positive starts lead to positive results. And to start the things right, we must put people first; we must look into their concerns, problems and feelings. The emotional state often gets missed when we race against time to see results. But it is a key area of concern, it decides how well or how badly people take to changes. In other words, the buy-in from everyone to give it their best shot, makes or breaks. It also decides if the changes are sustainable in the long-run.

For a start, we can promote learning. Let us make learning easy, practical and bring it to the doorsteps. Learning need not happen in classes alone. It can be in our neighbourhoods, walkways and byways. We can free up our neighbourhood schools when there are no classes. Various social groups, educational groups, even businesses can use them to speak and introduce their area of expertise. We can use void decks to hold exhibitions too. There is a social purpose behind this, it promotes the corporate social responsibilities of organisations. But it also makes commercial sense, as it offers a cheaper way of promoting goods and services. But it must benefit Singaporeans. I know People's Association and the community centres are doing a lot to introduce courses, but more can be done to reach out to people, especially the low-wage earners.

Madam, the idea is to allow learning to happen everywhere. But this should not compromise our efforts in stepping up on-the-job-training (OJT). Since workers face

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multiple challenges to go for training, let us bring training to them. Intensify OJTs in breadth and depth. This means programmes can be customised to build competencies as well as generic skills. Besides learning to be better in what they are already doing, they can be trained to take on higher-valued work, or to be more productive in what they do. There must be strategies for implementation, follow-ups and improvements. So we may also need to help management and HR practitioners to do this. Our unions are already engaging employers on how to raise productivity and help workers see better days ahead. But this is largely within the unionised sector for now.

We need to bring experiential learning to a new level, and the idea is to integrate a learning culture with work. For example, in the past, work is done manually. But as technology improves, work gradually moves online and on softcopies. But while learning certain software like Microsoft Word or Excel, there will be spillover in learning. People pick up other knowledge as well, like emailing or surfing the Internet.

Madam, to effectively integrate a learning culture with work, especially for low-wage workers, we need to be focused, and practical in our approaches. We need to show our workers, how all this talk and being more productive and training makes sense to them. Not only at national level, but at a very personal level too.

We need to make learning and learning communities a widespread reality. We need to integrate a learning culture with work. We can develop these ideas further. But it is crucial to recognise that the productivity we knew in the 1980s must evolve today. And it calls for us to find more creative ways to reach our goal. We are no longer dealing with labour intensive

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industries and work, but we are gradually moving into a new age of imagination and innovation. We need to remind ourselves that whatever we do, there is always a more efficient, faster, and better way of getting things done. As we call it in the labour movement, our CBF way. Unions believe there is always a cheaper, better and faster way of doing things. But we do not think that by lowering wages or cutting jobs is sustainable. As companies benefit from the Budget, embark on automation and training. I hope workers will see better pay and secure jobs. This is crucial also to the man-on-the-street that we are doing all this to benefit Singaporeans.

I believe we can do it, and help workers, especially low-wage workers. I am confident in the resolve of our tripartite spirit, but I am even more confident in the spirit of our fellow Singaporeans. We have proven that we have a strong will to survive since independence, and we have done well all these years. We have come far as a nation in a short time. This is not credit only to competent and clean leadership, but it is all the effort of every Singaporean.

I believe Singaporeans understand that there are no magical solutions, and there is need for hard decisions sometimes. It is not always easy. Those affected are unhappy and that is natural. But I believe our track record in serving Singapore and Singaporeans stand unchallenged. Our children today have better lives, better future than many of us had in the past.

But I hope all Singaporeans see both the opportunities and threats before us. We do not decide what they are. We alone cannot change the world. But we can decide how we react to them. And that decides how bright our future will be. We need everyone to do their part because a brighter future does not belong to a few. It belongs to all Singaporeans.

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Madam, I support the Budget.

5.59 pm

The Parliamentary Secretary to the Minister for National Development (Dr Mohamad Maliki Bin Osman): Mdm Deputy Speaker, over 40 speakers before me have provided various labels and descriptions to this year's Budget. Keywords that have surfaced include productivity, innovation, raising real incomes, bright future for Singapore. Far from the regular Budget where goodies are distributed, this is not a " hong bao " Budget as expected by ordinary Singaporeans.

The Budget sets out the framework for a conducive environment for enterprises to emerge and succeed, leading to better growth and job opportunities for Singaporeans. Funds are being injected to incentivise businesses to innovate and improve their work processes to enhance productivity. And the new buzz word for Singapore is productivity.

Many in the House have reminded us of the productivity movement of the 1980s with "good, better, best" and of late we hear "cheaper, better, faster". We tell Singaporeans that this is important as we compete with workers from other countries in the globalised world. Madam, in any competition, we must ensure that the competitors know where the starting block is and arrive there on time. The starting block for workers is thus to ensure that they have the jobs in the first place, and jobs that will ensure that they earn decent wages to support their dependants. Only then will the issue of productivity appear in their radar screen.

Much has been said over the past two days about low-wage workers and how much needs to be done to improve their circumstances both in the workplace and in their families. The unions have asked them to up-skill, re-skill and multi-skill to

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compete. Madam, but is it an uphill task for our workers, particularly the low-wage workers? As mentioned, for the Government's productivity movement to work, the workers must be in a job. Not too long ago, we were faced with the issue of structural unemployment where Singaporeans aged 40 years and above risk not being able to find jobs despite jobs being available. They did not have the requisite skills nor are able to quickly acquire those skills. They struggled to fit into the new employment landscape. The result – they struggled with low-wage jobs which continue to be at risk of being obsolete, rendering them unemployable again.

Madam, that experience is still fresh in my mind and what I am seeing in my meet-the-people sessions is beginning to worry me. I am beginning to see younger Singaporeans – those in their 30s – particularly men who are heads of households – sharing with me their struggles in securing jobs. Whether it is their unwillingness to take up jobs that are available or their unsuitability for these jobs, it is still uncertain. But what is certain is that they remain unemployed at an age which is typically known as the prime age for workers. A quick check with labour force data published by MOM shows some indicative trends that need closer attention.

Comparing the unemployment rate of male residents between 2008 and 2009 showed that the men with lower education, aged between 30 and 39 years are more vulnerable to unemployment. The unemployment rates of men in this age group with primary education and below rose by 4.7 percentage points between 2008 and 2009. That means the unemployment rate for this group was 4.0% to 8.7% in 2009. The percentage point increase for men aged 40 to 49 years old with the same educational level was much lower, only 0.5 percentage point increase from 4.9% to 5.4%.

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Similarly, for those men aged 50 years and above in the same educational group, the increase was 2.9 percentage points (from 3.6% to 6.5%), lower than the younger group of aged 30 to 39. What this means is that those who with primary school or less education, 30 to 39 years old, had a percentage increase of unemployment of 4.5 percentage points. Those in the 40 to 49 group, only 0.5 percentage point increase, 50 years and above 2.9 percentage increase. Now, what does it say? The picture is consistent for men in all other lower educational profiles – lower secondary, secondary and upper secondary. That is, between 2008 and 2009 when we went into recession, proportionally, more of the younger males with less education became unemployed and had difficulties securing jobs compared to their older friends in the same educational profile.

It begs the question of how older men with lower education have a better chance of remaining employed compared to their younger counterparts. Perhaps, it is the outcome of the effort at encouraging employers to employ older workers.

As heads of households, with a higher possibility of having younger dependants, each day of being unemployed means each day of financial instability for the family. How does this year's Budget address this group of younger heads of households and help them fit into the future landscape that the Budget sets out for Singaporeans? For them, ensuring that they secure a job is critical, that is, getting them to the starting block for the competition before we can even discuss issues of increasing productivity. These are the very workers we must pay attention to as they have at least 30 plus more productive years ahead of them to contribute to Singapore's growth. If they are not able to fit into the new

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employment landscape, and continue to compete for low-wage, low-skills jobs, we will be faced with a potentially severe problem down the road. How big is this group? I am not sure but, anecdotally, evidence and preliminary data that I highlighted earlier, suggest that MOM and the Government should study this group more closely for the measures in the Budget to be effective for them.

Madam, the 30-something group were born during the 1970s and the 1980s, a period where Singapore underwent rapid development and strong growth. They grew up with the productivity movement of "good, better, best", seeing their parents and elder siblings work in factories, often times working in shifts. I experienced that too, often accompanying my mother to wait for my elder sister when she returns home from shift work late at night, particularly when it was pay day, acting as added security to protect that pay packet. Working three shifts to me then, was a way of life, and everyone was prepared to do it. Thus, it is hard for me to understand why some of these very 30-somethings shared their unwillingness to work shifts, particularly the night shift when offered jobs. They did not internalise values of hard work displayed by their parents and elder siblings. Have they enjoyed relative comfort of life in the 1990s that these values disappeared? Madam, these are important values if we want to succeed in making productivity the cornerstone of our next economic development.

Madam, we will probably have to distill this productivity message clearly and simply to this group. In the education system, we seem to have moved from "teach more to learn more" to that of "teach less-learn more". Would the productivity drive for low-wage workers mean to move from "work more, earn less" to perhaps "work less, earn more"? Is it possible? Or should it be "work smart, earn more" implying the need for

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them to acquire new ways of work, including acquiring new skills, to get better output and thus increased income.

Next, productivity – a value. Madam, much of the discussion on productivity centred on the worker and the economy. For productivity to be the cornerstone of our economic strategy, we need to really make it part of our value system – a way of life. This is particularly important for the younger generation. It will be too late to expect productivity to be internalised only when the individual starts working. The value should be imparted and internalised right from the very young, in schools. In this regard, MOE can look into how it can translate productivity messages into the school experience – through curriculum development and process learning.

Madam, this is critical as the Budget is deemed to be the budget for Singapore's future – thus the stakeholders in this future are the current younger generation. They must know what is being prepared for them. They must start the process of fitting into the future that we are laying for them, now. If we fail to do that, then we may be seeing another group of perhaps by then the 20-somethings, low educated, facing problems of structural unemployment, not aware of what productivity is.

Madam, one of the driving forces behind this emphasis on productivity is the challenge we have been facing with regard to our reliance on foreign workers. The apparent tension felt by Singaporeans became more significant last year during the recession when Singaporeans feel the heat of not being able to secure jobs yet seeing foreigners serving in restaurants (even fast food restaurants) and manning petrol stations. The cries that foreign workers are depriving Singaporeans of their jobs became louder. While the proposed new economic strategy is not to be totally independent of the foreign

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workforce as has been explained repeatedly by Ministers, the new economic landscape is to moderate the reliance of the foreign workforce – thus the need for Singaporeans to respond to fill in the gap left behind by this reduction of the foreign workforce – through higher productivity.

I think the true acid test will be for Singaporeans to come forward and answer this call. They have been called upon to play their part – acquire new skill-set if necessary, work hard and smart, to continue re-skilling themselves and where necessary have multiple skills to value add to their employers and thus the economy.

Madam, allow me to quickly continue my speech in Malay.

( In Malay ): [For vernacular speech, please refer to Appendix A.] Madam, the Government’s Budget statement this year is a budget that gives encouragement and hope to Singaporeans on a bright future with a progressive and successful economy. The economic and social infrastructure needed will be provided. What is important is the willingness of Singaporeans to answer the Government’s call for them to improve their productivity – which is a critical aspect of this year’s Budget.

I am concerned with the implication of this Budget on our Malay community. Our community is always associated with social problems. But we are aware that one of the main reasons is that the household income is insufficient to look after the needs of the family which usually has a lot of children. If we take a closer look, we find that the head of the family is not so educated and unable to increase the household income because of insufficient skills. What worries me more is that I am beginning to see a trend where more and more of them are young families. Some of them are in their 20s and 30s.

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This group is less educated, does not have any skills and, therefore, finds it hard to find jobs. The lack of economic resources within the family will bring about further problems, like being unable to pay their monthly payments for their flat, utilities, and so on.

Sir, the state of this group is more alarming if we look at the strategic direction of our country’s economy. This group must understand the opportunities that are available from the Budget presented. But they must come forward and seize the available opportunities.

What they must do? Firstly, they have to take the first steps and accept the fact that they must upgrade themselves and obtain new skills that can ensure that they are suitable for the job opportunities available.

With the Government reducing our reliance on foreign workforce, the door is open for us to retake the jobs available in the service sectors, among others. The local workforce must obtain new skills that can increase their productivity. The low wage segment of the Malay community must answer this call for the sake of their children’s future.

What worries me is that some of those who are trapped in poverty are quite young. In the context of our economic progress, such a situation should not exist as they grew up with a top-rated education system. What is important now is that they understand what they should do to secure their future and their children’s future. Their low educational level should not be a barrier for them to ensure that their children achieve excellence in education. There are many programmes and assistance for this group. Many of them require careful handholding. The challenge is their desire and readiness. What is also important is

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the role of other community members – parents, relatives and friends. We must ensure that the value of improving productivity will be the cornerstone of our community. We need a movement among the Malay community, where the message and value of productivity become the part of the community’s discussion and way of life. If not, we will continue to be left behind, and the problem of low-income families will continue to hamper us and become more complex, since those involved are at a younger age.

( In English ): The Government has laid the foundations and called on Singaporeans to be partners in the effort in bringing our economy and society forward. The ride will not be an easy one – the road will be bumpy with humps and pot holes. But we have shown that we have overcome many of these challenges previously often coming out more resilient and stronger. With this clear vision of the future and as the end point, I urge Singaporeans to come forward and answer the call and head towards that vision.

I support the Bill.

*Cols. 2817-2820.