SUPPLEMENTARY SUPPLY (FY 2008) BILL

SUPPLEMENTARY SUPPLY (FY 2008) BILL: "to provide for making supplementary provision to meet additional expenditure for the financial year 1st April 2008 to 31st March 2009, both dates inclusive",

recommendation of President signified; presented by Mr Tharman Shanmugaratnam; read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2009/2010; and to be printed.

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ANNUAL BUDGET STATEMENT: Order read for resumption of Debate on Question (22nd January, 2009),

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2009 to 31st March, 2010." – [Minister for Finance].

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Question again proposed.

12.18 pm

Mr Inderjit Singh (Ang Mo Kio): Mr Speaker, Sir, I rise in support of the Budget 2009/2010.

First of all, I want to say that the $20.5 billion Budget before us is a good budget that attempts to balance short and long-term issues while having the right intent of assisting companies, retaining jobs as well as building long-term competitiveness. The Government's reaction so far has been one of prudence, recognising that there are more bad news to come and has indicated that it has some cards in reserve, to deal with when the time comes. But the question is: should we be prudent or aggressive with the Budget?

Sir, the 1% cut in the headline corporate tax rate will mean little to companies facing losses and cash flow crunch. Similarly, incentives to invest in R&D may not be first on the wishlist of CEOs facing pressure to shrink their operations, lay off staff or find financing for work in progress. These measures have their place, and will work to strengthen our economy in the long term. The challenge, however, is to ensure that when these measures start to kick in, we will still have many more players in the economy that we now have. These measures could have waited until we have stabilised and helped companies survive first. Then we can quickly introduce the same initiatives in which, I believe, we would still be ahead of the curve and better-placed to benefit from them, perhaps one year from now.

In the short term, our well-intended long-term moves may only have a marginal impact on our economy. The real downside to unveiling these now is that it distracts us from the current problems that all of us are facing.

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Sir, in a downturn, there are no heroes, only survivors. So, in this year's Budget, I do not think we will be rewarded or thanked for doing so much for the long-term competitiveness of our economy. We must be focused on helping Singaporeans and companies in Singapore survive, leaving the long-term planning later. What we need is a survival-focused budget.

We have built an economy on strong foundations, but today these foundations are under pressure. Worldwide, banking and financial systems are failing or foundering. Confidence and demand are at a low ebb, and cost competitiveness has become a major issue. We should bring ourselves back to the basics today with a survival Budget, as our founding fathers did when Singapore became independent.

So what does a survival budget look like? First and foremost, a survival budget must carry with it a mindset that extraordinary times need extraordinary actions. Most of us alive have never seen such a synchronised melting down of the global economy. It is a downshift of epic proportions. This is not time for business as usual.

Sir, I would like to applaud the Government for taking the extraordinary action of digging into the reserves to help defend our economy in times like this. The reserves, as we have been educated, are meant for a rainy day and it cannot get worse than this day, and it cannot get worse than this day. I still remember the lesson I learnt in this House from Minister Mentor Lee during my first term as an MP, "that the reserves are not for the past, neither are they for the present but are meant for the future." And today, we are talking about surviving the future. We must thank all the past Governments for operating with this principle because had we been too quick to dig into our reserves in the past downturns, we would today

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have less to help us when we really need it. The fact that we are able to use our reserves today to help us, gives us greater confidence that we have enough resources to weather the storm that is coming our way. Had we depleted our reserves in our early years, today we would be losing hope, and hope is something Singaporean cannot afford to lose in this environment.

I support the Government's move to use the reserves for only extraordinary one-time actions and not to fund ongoing operating needs. This is the principle that has been clearly laid out. We cannot get into that habit of spending it for operating needs because if we do, in no time we will deplete all our reserves and erode our capability of defending ourselves from future turmoil. For all other Government expenses, we had the foresight to change our Government revenues from the reserves from Net Investment Income (NII) to Net Investment Returns (NIR) last year. I believe that by using the NIR approach, we should have more than enough to fund the future needs and also to support the needs that we have right now. If the NIR becomes insufficient, instead of digging to the reserves again, we should question if our reserves are well-managed by GIC and Temasek and change the way they operate to make sure that we get the returns that we need to help the Government operate in the future. This is an issue that I will raise again during the MOF Committee of Supply.

While I am happy about the Government's boldness to use the reserves as an extraordinary action, I am afraid the approach taken by some Government agencies and Ministries appears to be business as usual. The standard operating procedures (SOPs) used in the past, we must understand, will not work and may even hurt us in our efforts to try to recover quickly from this downturn.

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Sir, the Nobel-prize winning economist Paul Krugman explains that when depression economics prevails – I am not so sure whether we are in a depression yet but it looks like it – the usual rules of economic policy no longer apply: virtue becomes vice, caution is risky and prudence is folly. We must take this to heart right now.

Let me explain with three good examples of how some of the Government agencies are operating like business as usual. First, in the 4th quarter of 2008, JTC, HDB and SLA were still increasing rentals effective 1st January 2009. I can understand that they operated based on lagging indicators of market rates, but such agencies should have taken the lead by stopping any increase in rentals as early as possible. They may even have been applying the well-intended 15% rent rebate based on the new increased rent, which would nullify the purpose of this measure - the 15% rental rebate. As lead agencies, they should have stopped rent increase; in fact, even reduce it as early as the 4th quarter last year.

The second example of business as usual seems to be the one on financing schemes. They first announced some changes in November to help companies have better access to financing. In an ordinary downturn, these measures would have helped. I have looked at this many times while I was doing work on financing. They would have helped in ordinary downturns. But in a downturn like what we are seeing, these do not seem to be effective. Therefore, the Government-supported lending schemes had to be tweaked two times; once, after November and again, during this Budget. In an extreme financial meltdown, we should have been bolder from the start to do it all the way, rather than doing it three times.

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Similarly, with the area of training. After first announcing SPUR, the Government had to announce two more enhancements in two months, indicating again that we were too conservative in the first place. We will need to be bolder than this to survive. Sir, I am not criticising all of these things that we have introduced. The SPUR and the financing initiatives are all very good initiatives. What I am saying is that we should have been bolder and done more right from the beginning, and take it seriously that the environment ahead of us is a lot tougher than what we think.

Sir, the Budget should have focused more on survival than longer-term issues, as I mentioned earlier. We should have perhaps call it a "survival and building resilience package", which will immediately shift the focus to the pressing need for survival.

The Economic Restructuring Committee of 2001 was convened in response to a series of downturns and the Government felt that we needed to find a more sustainable model for growth as we developed as a nation.

Today's challenge is perhaps as severe a test as we had faced since our independence. By the time the world comes out of this downturn, the global landscape would have shifted drastically. Old models and development strategies will have to be significantly altered. We need to anticipate this and do what it takes to succeed in this new world order that is about to come.

The Government has been quick to say that this downturn is not caused by structural issues in Singapore. In part, I disagree. Some of our costs issues have been neglected for some time in the boom years of 2006/2007. In the restructuring effort, we should be open to, as far as possible, correcting the policies that may

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have created these issues. We will then be better able to compete and pull ahead when things are back to normal. I urge the Government to take the lead to quickly convene a 2009 Economic Restructuring Committee. I think it will do us good to help us survive and also to prepare for the future.

So, what should be our policy priorities during this downturn? As I see it, there are three main areas that require our urgent focus: demand or income for households; costs for all; and, lastly, cash flow, which is mainly for companies but also for households.

Let me first begin with demand. It seems counter-intuitive to be thinking about stimulating demand in such an open economy as ours because of leakage of import payments. However, although our growth is built largely around external demand, we can rely on domestic demand to contribute to overall GDP growth. Even if it will have a small impact, it will still be useful. How can we do this?

It appears to me that the most effective way to stimulate local demand would be to temporarily cut GST by the 2 percentage points that we had introduced in 2007. This will be more effective than the additional GST credits announced in this Budget. A recent article in the Straits Times by an economics professor explained that for Singapore's GDP, the 2% GST increase in 2007 resulted in 1.5% increase in CPI, and therefore, eroded the real value of assets by the same proportion. This was computed to be about $6.6 billion of capital spending loss for a GDP of our size. The additional GST credits of $580 million appear small compared to this loss. The GST increase has produced a negative effect on spending and if its cutback can produce even a modest stimulus to consumption, it should be considered.

Tourist spending should also follow the same pattern should we temporarily

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roll back the GST increase. Every small stimulus must be explored and the benefits of a temporary GST roll back are worth our effort. In one to two years, we can restore this, so that we do not overly compromise our long-term fiscal restructuring and the tax structure that we have put in place.

Sir, I applaud the Government's plan to spend more to boost demand. We should, however, diversify the demand throughout the economy. Most of the infrastructure projects that have been announced, as I have read from the papers, which is close to about $11 billion in value, will benefit mainly the construction sector. The surge of projects now will keep construction costs high, but may lead to a huge drop in the future for this industry as projects for the future are brought forward. In fact, the pipeline of projects for the construction industry are already full for the next couple of years. So adding more may not be effective. It may be better to spread projects over a longer period of time.

The same Government dollar should, in fact, be spent in a diversified manner to spread the benefit to other industries. For example, spending on the IT and energy sectors could additionally lead to future savings, especially if we work on renewable energy type of projects.

Sir, Government agencies should tweak their procurement policies to give more businesses to local SMEs. This will be the fastest way to boost demand for many companies. I am not suggesting protectionism but instead to level up the playing field so that our smaller companies can get a greater pie of the Government's business. This change made now will go a long way in helping companies survive this downturn.

Sir, the second survival issue is one of cost. High costs are now a problem that would have hurt us even had the

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recession not come. In the two years preceding this downturn, our "growth at all costs" policy led to structural cost issues in Singapore. This will worsen the impact of the recession for our companies and households.

At the recent Singapore Perspectives Conference, organised by the Institute of Policy Studies, one of the consensus items that came up was that Singapore's cost structure should be reviewed. Living and doing business in Singapore need not necessarily mean putting up with high costs. High costs do not have to be inevitable here. We now have a unique opportunity to fix and decide what is the right structure for Singapore's economy is for the next 10-20 years. Sir, the 2009 ERC is convened to make this its priority.

We can also implement meaningful cost-cutting measures now. But what I really like about the Budget this year was the savings that were achieved through the job credits. This, in addition to being a wage saving for employers, was also a move to save jobs. This key initiative is timely and helpful. I do not agree with some who had commented on this, who prefer a CPF cut as a blunt tool to lower wage cost for companies. I think CPF is already insufficient for retirement for most Singaporeans and I believe it is at the right level now and we should not touch it. The NWC has announced recommendations for wage cuts and, together with the Job Credits Scheme, we should try to make things work and incentivise companies to retain jobs. I notice, however, that President Obama in the US had recently dropped a similar US$3,000 per worker annual Job Credits Scheme. We need to understand why the USA dropped their scheme so that we can strengthen ours and ensure that our Job Credits Scheme is effective as intended.

Sir, aside from wage costs, we need to deliver additional cost savings to

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employers and to companies. Assuming that the Job Credits Scheme saves about 9% of costs for companies, which is about the effective CPF savings, that is 12% of job credits, they will still need higher cost reductions to survive because, for many businesses, the demand has dropped by up to 50% in some cases, and not just by 10% or 20%. I believe we could have reduced costs in a number of ways. The proposed temporary GST cut will lower costs for companies and households across-the-board. In fact, I favour a 2% to 3% GST cut more as a lever for cost reduction than as a demand driver although it should achieve both. The UK has responded in a similar way as they have cut their VAT by 2.5 percentage points. Additionally, the impact on revenue of a GST rate cut will be negligible if one considers the savings from not having to give out more GST credits and the expected increase in spending by individuals and companies had the GST been lowered by about 2%.

I applaud the move to help reduce rentals by giving the property tax rebate. If fully passed to the tenants, the rentals savings are expected to be around 3-4%. There is, however, much concern that the property tax rebates given for commercial properties may not translate to lower rent for tenants. This has been part of the experience in the past. We did give this kind of tax rebate to landlords who mostly did not pass it on to their tenants. And I fear that the tenants may not see the full impact of this property tax rebate. And if this were to happen, we will not help companies save costs and could even lead to companies not able to survive because rents are already very high. I therefore suggest that the Government modify the scheme to give rental rebate coupons directly to tenants who could then use these coupons to pay part of their rent to the landlords. The landlords will in turn encash these coupons from the Government as part of their property tax

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rebate entitlement at the same level that was announced.

Of course, another way to ensure that the benefit is not swallowed by landlords would be to pass an edict to landlords to reduce rentals - and this was a move recently taken by the Dubai government. I do not favour this. I prefer the first approach. But we could do that to help our tenants.

Also, we could have taken a more bold measure in cutting Government fee charges instead of just freezing them. A good place to start will be to look at all the rates and charges that have been increased over the past two years, and peg them back to, say, 2005 and 2006 levels. This will help de-escalate the cost increases imposed by Government agencies over the past two to three years.

What else could the Government do to help reduce costs to companies and Singaporeans? Well, we could have, perhaps, for Singaporeans, introduce foreign maid levies for the next one to two years. We could have given U-Save rebates to companies like what we did for individual households. And I think the Public Transport Council (PTC) could have been fast to recommend reduction in transport charges. We could have reduce ERP temporarily. There were a list of 18 cost increases that were announced last year. I will not go through the 18 reductions this year. But the point is: we could have done a lot more and all of them may have had a minimal impact, but if taken together, they would have been very significant for businesses.

I feel that the cost, as an issue, has been underestimated as a problem by the Government. I hope to see the cost issues dealt with more urgency in any off-budget measure the Minister may be planning, and I hope it happens soon. I point out that cost reductions will also have the

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effect of increasing available cash in many cases. This, if spent, will circulate in the economy.

The survival issue 3 is on cash flow and this is especially for companies, but also for households. To ensure that our companies survive this crisis, we need to increase their cash flow, and to help them increase it. Not every company can be saved, but there are companies that still have viable businesses and, through financing, can remain alive. For these deserving companies, we must ensure they get the financing they need. Other companies that are weak, unable to compete and without visibility of demand returning back soon, may not be worth saving.

Sir, despite the two enhancements made since November last year, banks are still not lending the way we want them to. These measures did not address the core problem that banks' lending patterns have changed.

I hope that the SRI announced in the Budget 2009 will make things better. Although the Government has avoided direct lending, this is increasingly being seen as the only way to get liquidity out and flowing again. In UK, for example, the credit guarantee schemes did not work and Prime Minister Gordon Brown is now considering direct government involvement in lending. In Japan, the government is almost directly involved by providing 100% guarantees on loan losses. This is targeted specifically at SMEs, who have seen among other things a significant drop in profits. Loans of up to about JPY 280 million (which is about S$4.75 million) per company is available and the Japanese government had put aside 6 trillion yen for this scheme. This is as close as the government lending directly but is done through banks.

While I can understand why the Government is sticking to tried-and-tested

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methods to lend money through the financial institutions, we must be mindful that the banks and financial institutions are all facing restructuring issues and will not go back to being aggressive lenders very soon. In fact, lending to companies whose profit is dropping is anathema to private lenders. Even though I support market-driven lending, and I have said it many times in this House, we cannot wait for the banks and the financial institutions to get their act together to restart lending to companies. There is a strong case for Government being more actively or even directly involved in lending.

Sir, in today's world, many countries, including developed nations like Canada and Taiwan, still have government-owned banks and institutions involved in lending to companies, particularly to their small and medium enterprises. In our early days, when the banking system did not work in Singapore, we had a development bank to help finance companies. Today, our financial systems also do not seem to work. We may have to go back to the basics again, but whether we start a SME bank or do it another way, the way the Japanese government did, I am sure that we can all come up with a solution that is equivalent to it. The goal is that all deserving companies must get the financing that they deserve.

Sir, there are also companies that have strong capabilities that Singapore should keep but which, because of the extraordinary situation that we are facing right now, may not survive, even if we extend to them short-term loans. As an example, the semi-conductor industry, I believe, is about to see an unprecedented number of failures. The Government, I suggest, should set aside a rescue fund to rescue such companies by investing directly in some of them. Any Government rescue package, which may involve both direct investments and

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lending, should be tailored to allow the stakeholders, especially the entrepreneurs, to earn back their ownership, with the Government's return on investment being revenue neutral, if possible. In this way, we will encourage the stakeholders and incentivise them to remain in the trade. Otherwise, they will exit the trade and the core competence that we have developed over the years may be lost and it may be very difficult for us to rebuild these things again. I understand that the Government is not the best judge of which companies to lend to or to invest in or to rescue. I therefore suggest that we set up a Corporate Rescue Task Force to assist the Government to decide which companies to rescue. This kind of groundbreaking measure will be appropriate for the challenges that we are facing. Sir, corporate rescue is going on all over the world and I think we have to start thinking of doing down here too.

In fact, Temasek, which has suffered significant losses in the past few years investing overseas, could perhaps be tasked to help rescue local companies and re-focus locally, a role that it has traditionally excelled in.

Sir, what about households? For households, particularly the middle-income, I had wished that we had removed the $2,000 cap on the tax rebates that we had given. We did it last year when times were still good - we did give a $2,000 rebate. But in this extraordinary time, I think we should not have done the same as what we did before. I think it is a right time to let such households have more cash in their pockets, whether to help them save for a rainy day in case they run into trouble with their jobs or to spend as necessary.

Sir, one of the biggest worries I have is the foreclosures by banks, especially on HDB flats. I would like to propose that HDB consider deferring the principal mortgage payments of homeowners who

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lose their jobs. Private lenders should also be tasked to do the same, ie, the banks who are lending on the HDB properties. This will relieve the unemployed Singaporeans from their single largest drain of income, and they will only need to pay interest payments, and this will help them a lot. Any foreclosures, whether by HDB or private lenders, should be reviewed by the Government at this stage to ensure that the people who are coping with the sudden job loss, do not also lose their homes undeservedly. To assist the private lenders, the Government perhaps would like to consider insuring some of these loans as we are doing for the corporate loans.

Sir, the best way to help Singaporeans is to help them secure a reasonably well-paid job. We must tweak our employment rules to help Singaporeans become preferred employees. This was an issue we discussed during Question Time just now. In the last two years, we have gone a bit too far in allowing many foreigners to take up jobs that Singaporeans could do. This has also eroded the wages for such jobs as foreigners are able to live with a much lower wage. We need to curb the rampant influx of unskilled and semi-skilled foreign workers so that we keep wages for such jobs attractive for locals who can also do these jobs. I am not saying that we reverse on the foreign talent policy. I agree that we need to have foreign workers and foreign talent but when you have a petrol pump attendant who is a China national versus a job that was done by our senior citizen, I would have preferred a senior citizen to do that job, even if the service is a bit slower. So we need to think about how we can reserve some of these jobs for Singaporeans.

Sir, in conclusion, I think that the Budget is both pro-business and pro-people because cash flow issues have been addressed and the Jobs Credit will

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help save jobs and it goes some way to help reduce cost. The Budget could have been even more pro-business had the Minister placed greater focus on cost reduction. It could also have lowered the cost of living for all Singaporeans with additional help for the middle-income, making it even more pro-people. Sir, we must address all the three key areas of demand, cost and cash flow if we want to be resilient and come out stronger. While the real issue of the whole meltdown in the world is demand and loss of confidence and the collapse of the financial industry, cost and cash flow are starting to be very important factors that we also have to look at. Sir, we need to be bolder and be prepared to err on the side of being too aggressive than of being too safe.

Sir, as I mentioned, on the whole, the Budget is a good one. I support the Budget and I look forward to more off-budget measures to address some of the issues that I have raised.

12.45 pm

Ms Jessica Tan Soon Neo (East Coast): Mr Speaker, Sir, thank you for allowing me to speak on the Budget. I rise in support of the Budget Statement FY 2009 presented by Finance Minister Tharman.

Let me first say that the Budget is well thought through. I personally thought it was thoughtful, decisive, innovative and simple to understand. The focus of this year's Budget addresses the immediate challenge of helping viable businesses keep their employees in jobs, support businesses facing cash flow issues, as well as help them stay competitive. This will prevent the situation from getting worse, as rightly pointed out by Minister Tharman. Keeping people employed will increase confidence during these troubling times.

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The measures proposed are innovative and bold to address the current economic conditions that we are facing. I must commend that the jobs credit really was something I thought was really very thoughtful, as it was direct and simple. I hope that as we execute it, it will also be simple in terms of ensuring that the impact is felt.

Early feedback from companies that I have spoken to has been that many of them, large and small, are actually very impressed as well as keen to see the impact, and how direct it is to their bottomline and therefore helping businesses and, more importantly, helping people stay in jobs.

I would also like to say that the focus, apart from just looking for more measures or to be more extensive is really about execution. I think the focus needs to be on execution to ensure that we achieve the intended impact. We talk about confidence. We talk about demand generation. I think decisive execution will build the confidence. Whatever measures that are in the Budget, I think what is important now is that we ensure that it is executed and the impact, whether we are talking about rental rebates or whether we are talking about jobs credit, really go where they are intended for.

Sir, I think the continual focus, as my colleague, Mr Inderjit has talked about, is on cost, I am not going to elaborate more on this because he has covered quite extensively on the possible areas to further address the cost challenges. I think this is real. It is not an easy area to solve but it is real for companies operating in Singapore. We have had feedback and this is an area, I hope, that there will be continued focus to ensure that we address and continue to improve the cost of doing business in Singapore, as this will not only help drive confidence for

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businesses operating in Singapore but also encourage more investments.

Sir, we recognise the grave economic conditions we are facing today and that they are unprecedented, given the impact, not just locally but world wide and globally. Hence, the decision to draw on the past reserves is justified. However, as much as I would like bold measures to be taken, I want to say that I am also concerned about whether this is going to set a precedent. I do want us to ensure that prudence will be exercised, as it previously has been, to safeguard the reserves and ensure that this does not become an easy option for future challenges that we face.

The Budget seeks to enhance business cash flow and competitiveness through the tax measures, grants, jobs credit and training. Besides helping viable businesses weather the storm, the primary focus seems to be, to some extent, on maintaining the current businesses. The bias seems to be on keeping jobs. But is this sufficient if demand is not forthcoming?

Sir, striving to maintain the status quo , despite some challenging times as well as waiting for the economy to recover, is not going to be good enough. We do not know how long and deep this downturn will last. So, while we must do what we can do to preserve jobs, we must also create jobs. We must find new ways to drive new markets and increase confidence and spending. Companies will still need to reinvent. The question many ask is: can Government intervention help drive demand in consumption and spending, apart from the infrastructure projects, and can these be sustainable? Will giving subsidies or giving vouchers or having more tax cuts encourage spending and sustain demand? Will people increase consumption if they had more cash or would they be more inclined to save during these tough economic times?

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Sir, I think one of the ways is – again, I go back to the question of confidence – building confidence so that we ensure that there is confidence in our workforce, our companies and our goods and services to stay attractive, and hence attract investments in Singapore and therefore drive demand.

I must also comment that the current daily dose of bad news does drive the reality of the severity of the recession. I think many of us have recognised that and it is registering in all aspects of the Singapore economy. I think it is time that we also drove hope and confidence in this climate, while maintaining a sense of realism of the current situation.

Sir, I support the fact that the Budget looks to keep people in jobs, as I believe that this will help the confidence for spending and hence drive demand, which is necessary to sustain the economy, as I have touched on earlier. The Budget does have a strong emphasis and bias to those in the workforce, and to keeping people in their jobs. This is understandable as people, by staying employed, will be able to continue to support their families. The jobs credit, however, cannot be expected to keep everyone in their jobs. Businesses must, however, remain viable to keep their workforce.

We have to also keep in mind that there are those who are not in the workforce, eg, retirees, new job entrants. We have many university and polytechnic graduates who will be coming out, raring to go, looking for jobs. I think that this is an area that we really need to seriously consider as to how we are going to address this segment, because it is not just about keeping those in the jobs, but it is how do we ensure that there is sufficient demand and that there will be jobs for the supply that is coming out.

Sir, let us now switch gears. A point that I would like to touch on is about

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resilience. I am glad to see that the Budget also looks at investing and building for our future. As we continue to build for the future and the heartware of the Singapore society – I think we have also touched on that in the Budget about building the software of our society – I also hope that we build the hardware of our society. The Budget speaks of efforts to enhance quality of both education and healthcare. I think it is important that efforts in these areas be focused more, not just on the expertise and the technicalities of education and healthcare, on quality of education and healthcare and also include the experience of the patient as well as of the student going through the education system.

For the patient, quality care is about getting the right treatment. However, the well-being is more than just receiving the right medical treatment. It is also dependent on how patients receive the care. Let me give Members a very stark example. If a patient is left to wait for treatment without information or attention while waiting, this not only can be upsetting for the patient but, more often than not, can cause stress and anxiety and affects the end outcome of the well-being of the patient. So, as we look at the hardware and the software, let us also make sure that we look at the quality of the care that is given and that the Budget be put to look at that as well.

Similarly, for education, while we strive for excellence and a well-rounded education, how do we ensure that it is inclusive and that it helps reach as many students as possible? Let me just use a sports example to illustrate this point. The emphasis of excellence in sports can, at times, limit the reach. Say, if students want to take a CCA, given limited resources and the emphasis on excellence, they have to go through trials in order to qualify for the CCA. What this means is that those who are not exposed earlier to that particular sport but may

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have the aptitude but never got the chance to take the CCA, would never be able to contribute or learn the sport.

I would like to share an example from my own secondary school days. Netball was a popular sport in my school. Although resources were limited, both in space and in the netball courts that we actually had, those who wanted to play the game and take it as an ECA – at that time, they called it the ECA and I am dating myself here – were given the opportunity to do so. This has had a positive impact on enlarging the talent pool and the appreciation for the sport. The sport and the resources were not limited to only those who play the game well or who made the school team. At the same time, our school team competed and still did well. This analogy applies as well as to the school system and the curricular. So, as we look at building the character of individuals in schools, I hope that we also look at enlarging that reach, not to limit the numbers that we are able to reach, given limited resources.

Just to emphasise the point, let me just use another analogy of the marathon. The thing about the marathon is that everyone, no matter how slow or how fast a person runs, he gets the ability to run his own race. I hope that as we move forward in looking at how to survive in these difficult economic times, we do not just look at saving the few, but we take as many along as we can, because when the economy does recover, that will stand us better in terms of being able to also ride the new wave.

Sir, the Resilience Package is not just about resilience of jobs and employment, we must also look at the resilience of a society. We must move from the individual and independence to interdependence. Independence is necessary but there must be a fabric of

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interdependence in our society. Do we ask the question of what is in the Budget for me versus what is in the Budget for Singaporeans and the Singapore society? Resilience is more than keeping the economy going, but keeping the Singapore society going. This calls for more than the Government and the Budget making an impact and difference. It calls for all Singaporeans to come together to make a difference, especially in the challenging times that we face with the recession and the uncertainty of when we see recovery, all the more it is important that we are inclusive. With this, we will, as a society, be able to drive greater impact with our limited resources to build capability for Singapore and ensure that we have a deeper change to come out of this even stronger.

Sir, with that, I support the Budget for FY 2009.

12.57 pm

Mdm Halimah Yacob (Jurong): Mr Speaker, Sir, I rise in support of the Budget.

For many of us who have gone through previous crises before, this is probably one of the worst. I would not say probably, I think it is definitely one of the worst. The speed at which things have unravelled and the severity are clearly unprecedented. And I want to tell Members that that is probably the single most common words that we frequently heard when we spoke to companies.

Only a few months ago, we met a number of big electronic MNCs to discuss with them about the future growth of their companies, and almost all explained to us their plans in order to grow their companies. But, today, the same MNCs that we spoke to are facing severe capacity problems. Many of them have seen their volumes gone down a lot – in some cases, almost 70%. What is even

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more worrying is that many of them were not even sure when the upturn will take place. Some even shared with us their difficulty in making projections for this year, as there were no orders coming in.

Workers, too, have been badly affected by this recession. Many have had to take pay cuts. Overtime, which constitutes about 20% of total wages of workers, has been slashed. And about 20,000 workers in the electronics sector, for instance, are now on shorter work weeks and others are affected by either temporary layoffs or by rescheduling of their work. As there are about 90,000 workers in the electronics sector, this represents about one-fifth of the entire workforce. From the last quarter of 2008 to the end of March 2009, companies have projected that the total man days lost will be about 189,000.

But we need not lose heart because we hear so much of gloom and doom everyday, like Ms Jessica Teo mentioned, in the newspapers and in this House as well. I think we need not lose heart. We are entering this recession, in my view, with a lot more of gunpowder and ammunition compared to the recessions in 1997, 2001 and 2003. Why do I say that we are entering this recession with a lot more gunpowder and ammunition? It is because of the two very important Budget measures, and that is the SPUR programme and the Jobs Credit Scheme. These are two very important key pillars under this current Budget and which will help us a great deal in terms of helping us to save jobs as well as to overcome the recession.