HEAD U - PRIME MINISTER'S OFFICE

Head U - Prime Minister's Office

The Chairman: Head U - Prime Minister's Office. Dr Ahmad Magad.

Population Policy

Dr Ahmad Mohd Magad (Pasir Ris-Punggol): Sir, I beg to move,

That the total sum to be allocated for Head U of the Estimates be reduced by $100.

Singapore continues to face huge challenges in population issues. The Government has adopted three strategies to address the population problems, which are by encouraging marriage and parenthood, engaging and bonding Singaporeans overseas and attracting suitable foreigners to work and settle here.

While all three are equally important, I wish to focus on the efforts made to encourage Singaporeans to marry and reproduce, as I feel this would be the most advantageous and sustainable approach for Singapore in the longer term if we do it right and creatively.

Sir, population creation remains one of the biggest challenges for our nation. Even with the introduction of the Baby Bonus in 2001 and several enhancements thereafter, the scheme has not produced any significant difference in raising national birth rates.

Our total fertility rate remained a dismal 1.25 babies per resident female in 2005, way below the replacement rate of 2.1. This is also a decrease from the 1.4 babies per resident female in year 2001, when the Baby Bonus was introduced. Even the birth rate for Malays - a community which traditionally had higher birth rates - is falling below the replacement level when it declined to 2.07. This shows that the Baby Bonus policy, thus far, has not been that successful in encouraging procreation.

In this light, I would like to suggest that the Government takes a more radical and holistic approach on this matter. While the Baby Bonus offers many financial incentives to couples, it is apparent that money, though important, is not necessarily the only deciding factor.

With more women in the workforce, many feel that the burden falls on them when they have children. I would like to suggest that the Government allows the flexibility for men to take longer paternity leave and also share the responsibilities of having children. Such a move has led to an increase in birth rates for Iceland, where fathers can have up to three months' paternity leave on 80% of their salaries. I am not suggesting that we fully embrace the Iceland model as this will dramatically increase business cost, but the idea is to consider and allow greater flexibility at the workplace for men to shoulder greater responsibility in tending to growing family needs. This will, hopefully, help women who worry that having more children means sacrificing their career development when they have to take maternity or longer leave to look after the new additions to the family.

I would also like to urge the Government to involve more sectors in the drive to promote having children. In the past, the predominant religion of a country was a big factor in determining high birth rates. So far, barring a few family related organisations, the drive to spread the message on having babies has largely been done by the Government. As societies world wide become more religious, the Government should adopt a more integrated approach and consider working with the religious sector to encourage more Singaporeans to have babies, as it is in the interest of everyone to sustain the existence of a future generation of Singaporeans.

Sir, the number of marriages in 2005 saw a slight increase but much more can and should be done. With the announcement that the Social Development Unit's role as cupid coming to an end, this leaves the task of match-making largely in the hands of the private sector. This is a good move as it destigmatises match-making from being something that is initiated and led by the Government. This will also spur private companies to become more innovative in getting singles together. SDU's new role in accrediting these programmes and providing funds will turn match-making into an exciting industry.

However, Sir, I am worried that SDU's withdrawal from playing cupid may mean an end to affordable match-making services. It used to cost only $50 a year for premium membership in SDU which included targeted match-making, but private companies now are charging hundreds of dollars for services and some even thousands of dollars for 12 dates.

While price is dictated by market forces, I would like to urge SDU to keep check to ensure agencies do not over-charge customers. There should also be a wide range of services at different prices to cater to the population at large so that it can be accessible for singles who do not want to spend thousands of dollars to meet Mr or Miss Right.

Sir, reverting back to the Baby Bonus scheme which was implemented in 2001, I would advocate that a comprehensive survey is quite overdue to measure the effectiveness of these efforts so that we can plug the gaps. I believe one area is sorely lacking, and that is an approach in raising awareness of these issues amongst our youths.

I feel that more focus should be given to educating them, especially those at tertiary levels, on marriage, procreation and related responsibilities. The intention is not to preach or get them to marry at a young age but to raise their awareness on the need to balance career ambitions, economic goals and marriage or having a family, and the impact it can have on the country should more and more people put off marriage or having children.

Developing and Managing Talent

Mr Gautam Banerjee (Nominated Member): Sir, for a small city state that has embraced globalisation, the development and management of talent must be a top priority. So I am very encouraged that this important area is receiving attention at the highest level - the Prime Minister's Office. If I draw parallels with the commercial world, this is in line with the best practice in the world's leading corporations where the CEO's office typically takes charge of attracting, retaining and developing talent.

I fully support the two-pronged approach we are taking to ensure that we have an adequate talent pool to support our economic ambitions. Firstly, our educational infrastructure at every level is continually being improved so that we impart the right skill sets to every Singaporean in order to develop them to their highest potential. We are also reaching out to Singaporeans living and working overseas through the Overseas Singapore Unit. The objective being to keep our citizens abroad abreast of developments and opportunities back home. As a result, hopefully, some of these well-qualified Singaporeans will return home while others will be informed ambassadors of Singapore.

However, with our falling birth rate and because increasingly value creation in our sophisticated economy is based on intangibles such as knowledge, ideas and innovation, we have to look to immigration to boost our population.

The Government's policy to substantially increase Singapore's population is supported by research which indicates that by almost any measure, the larger a city's population, the greater the innovation and wealth creation per person. These research findings are the subject of an article in this month's Harvard Business Review by Geoffrey B. West of the Santa Fe Institute.

Sir, this research suggests that as Singapore's population increases, we can expect a more than proportionate increase in economic and creative output measured by such criteria as patent activity, number of super creative people, wages and GDP per capita. This is good news, particularly as Singapore's infrastructure can comfortably support a much larger population than the present 4.5 million.

However, as we open our doors to new migrants, we must manage the sentiments of some Singaporeans, who feel that the influx of foreigners will threaten their jobs and career opportunities. It is important that we calm such emotional responses by reassuring our citizens that incoming foreign talent, in most cases, will not be competing with them for jobs. In fact, new migrants help to fill important gaps in the workforce and even create new jobs for Singaporeans by attracting new types of industries and businesses to Singapore.

However, we have to face the fact that there is a segment of our population whose jobs are most at risk. They are the lower-skilled and lower-wage workers. But they face competition for their jobs not from fellow Singaporeans or new immigrants but from workers in low-cost offshore centres. Technology, better communication and the development of new business models has meant that their jobs are capable of being shifted to the country with the lowest wages.

The Government has responded to this problem not by cutting down immigration but by assisting this group of workers by introducing measures such as Workfare and providing generous training opportunities to upgrade skills.

Managing Talent

Dr Loo Choon Yong (Nominated Member): Sir, we all know that to globalise our economy, we have to really grow our population. Prof Richard Florida in the Flight of the Creative Class talked about three things - 3Ts - technology, talent and tolerance. Well, America has benefited from successive waves of immigration in the last 100 years, from Europe, Latin America and Asia, and that is why they have Wall Street, Silicon Valley and also Route 128, and have prospered.

Singapore will need to attract more creative individuals from all over the world. Otherwise, we will not be able to grow. But we hear of disturbing trends developing in Singapore - landlords slamming their doors on foreigners when they try to rent their flat. We know of mothers who complain about bright PRC students competing against their children for academic prizes in schools. We even hear of professionals complaining about foreign talents taking over their jobs.

I am concerned that all these tendencies are appearing even when we have growth of 7.9% and a tight labour market. We wonder what will happen if there is an economic downturn - the scene may get ugly.

All of us came from migrant stock - from China, India and the Malay Archipelago. Let us remind ourselves that it was not too long ago that signs outside Singapore Cricket Club said, "No dogs, no Chinese allowed". And it was not too long ago when we were regarded as second class citizens in our own country.

So, to be a first-world economy, we need a first-world mindset and matching habits. The tolerance in cities like New York, London, Paris and Boston helps welcome foreigners, and that is why they are vibrant, diverse and that is why they thrive. We must do the same. Let us not forget that this is a multi-racial, multi-religious and multi-lingual society, and inter-racial harmony and inter-religious tolerance will move us forward. We must not forget that.

Foreign Talents

Dr Lily Neo (Jalan Besar): Sir, in view of the unfavourable demographic shift of an ageing population, immigration can help to slow down the process of ageing and the shrinking of the population and mitigate the negative economic impact. What is the progress on the attraction of foreign talent to Singapore? Are there better plans to bring in more foreign talent, especially those that contribute to Singapore's economy? Where are we targeting them? Is there a conscious effort to maintain our current racial mix? Is there a concern

on future strain on the society should there be too many ethnic compositions? What are the efforts to integrate new foreign talents well into society, as it is vital to preserve a cohesive and harmonious society?

Integration of Immigrants

12.15 pm

Mr Inderjit Singh (Ang Mo Kio): Sir, many Singaporeans feel that we are a little too aggressive in accelerating the influx of new Singaporeans. While I understand the need for a bigger population, the ground reactions have been a little unsettling as Singaporeans are now seeing many of these people in their neighbourhoods. The recent survey reported in the Straits Times about how Singaporeans perceive the Chinese from China, which was mainly negative, is an example of the reactions from Singaporeans. Similarly, the new Indians are better educated and wealthier and are keeping among themselves and Singaporean Indians by birth feel a bit threatened. We have yet to successfully integrate the new Singaporeans into the Singapore society.

The issue of massage parlours which popped up in our HDB neighbourhoods, employing study mamas and also those who are here on study passes are social issues that we have to grapple with. Many Singaporean middle-aged and older men are getting into trouble with these foreigners. These foreigners know of a famous number - 5562 - these are the two CPF withdrawal ages. Some men are losing money which they freshly withdrew from the CPF to some of these foreigners, and this is happening in our neighbourhoods.

Sir, what worries me most is the issue of racial integration. While in Singapore we have put in a lot of effort since independence to ensure racial and religious harmony becomes the bedrock of the Singapore society, I am not sure the new immigrants will immediately come on board on this. Particularly those coming from China where the society is almost homogeneous, I do not think we can expect them to immediately understand and appreciate the other races in Singapore. Similarly, those coming from India may have a history of religious conflicts and may view people of other races and religions differently from the way the various races and religious groups in Singapore look at each other.

How can we properly integrate these new immigrants into Singapore without the related social problems? I would like the Prime Minister to assure Singaporeans that these immigrants will not create a big social problem for Singaporeans.

Community Integration and Bonding

Dr Teo Ho Pin (Bukit Panjang): Sir, Singapore is planning to be a First World nation with a population of 6.5 million people. With the present total fertility rate of 1.25 and our Government's efforts in attracting global talent to Singapore, we would expect the majority of the additional two million citizens to be migrants from various countries. I presume that these new citizens will be professionals or specialists of different talent from different ethnicities and cultures. These new citizens will be adults who have lived in different political systems and experienced different sets of country governance.

As a multi-racial and multi-religious country, Singapore is constantly faced with the challenge of bonding our people. We are still developing a sense of belonging and identity among our people. We need to do more to develop a sense of pride among Singaporeans so that our people can carry our flags high to be a top First World nation. Therefore, integrating new citizens of different backgrounds into our multi-racial and multi-religious society will pose immense challenges to the Government and its people in the future. This would also have to take into consideration the political, economic and social aspects of citizenship integration.

Sir, politically, I wish to find out from our Prime Minister whether the Government has plans to help new citizens and also new migrants and PRs who could be our future citizens, understand our political system. We need to ensure that these new citizens understand our Government's policies and will support the Government to take Singapore to new heights. The key question is whether these new citizens will support and vote for a strong and stable government with little or no opposition.

Economically, it is easier for these new citizens to fit into our economy as many would be able to secure good paying jobs. The challenge will be whether they will pose intense competition to other Singaporeans in competing for good jobs. This may result in unhappiness among Singaporeans.

Socially, it would require many hours of community engagement before these new citizens can gain acceptance by residents in our society. This is particularly so in the HDB heartlands as many of our residents may not understand the cultures of these new citizens.

Sir, community bonding is a complex task. In a fast-paced and cosmopolitan society like Singapore, bonding will need a more structured approach to achieve success.

I wish to ask the Prime Minister the following questions:

(1) What policies and measures are in place to bond the 6.5 million Singaporeans?

(2) What are the plans to integrate new citizens into our community?

(3) How can we further strengthen the family and community ties among Singaporeans?

New Citizens and Permanent Residents

Ms Indranee Rajah (Tanjong Pagar): Sir, I wish to speak on the topic of integration of new citizens and PRs.

Like Mr Inderjit Singh, I have noted in feedback with the Indian community that Singapore Indians are concerned about the Indians from elsewhere who either work here or are new citizens and PRs. There is concern that they do not mix with the local Indians and they stay apart and, in some cases, consider themselves superior to the local Indians. I wondered whether this was something that was peculiar to the Indian community. But on asking around, I understood that the Chinese community also felt the same way. And this highlights an important issue - the need for integration and the potential faultlines within the ethnic communities. Rather than cover up the issue, it is best that we address it openly and transparently and with sensitivity.

It seems to me that we must go back to the basics, which is this: what does it mean to be Singaporean? The late Mr S Rajaratnam put it best - being Singaporean is not a matter of birth or race; it is an act of will. And that is the reason why we say the pledge because it is a conscious act of pledging yourself to be Singaporean. When you say the pledge, you commit to being a Singaporean, meaning you commit to be one united people; you commit to do this irrespective of your race, religion or ethnic background. Both current Singaporeans and new citizens and PRs must understand what this means in the context of being Singaporeans today and trying to grow our population.

For Singaporeans, we must remember that we must always be an open society, welcoming visitors and welcoming those who want to be more than visitors, who want to stay here and become part of us. We must never become a closed, ossified, stratified society - because that is the surest way to decline. Singapore, when founded by Sir Stamford Raffles, was founded as a free port, a crossroad of the trade routes between Europe, India and China. Singapore was a place where people all over the then civilised world could come to trade, to do business and, in some cases, to stay. Our strength is in our openness and diversity.

For new citizens and PRs, it is important to remember that once you become one of us, citizen or PR, you embark on the great enterprise of being a Singaporean. When you become a new citizen, our vision becomes your vision, our hopes become your hopes, and our dreams become your dreams. You will also contribute to that vision, those hopes and dreams by contributing your ideas, talent and energy. We have a journey to make, a destination to reach, and we have to do it together. And to do this, the need for integration is extremely important.

I would, therefore, like to ask the Deputy Prime Minister what steps and initiatives can be taken to facilitate greater integration between Singaporeans, new citizens and PRs.

Citizenship and National Pride

Miss Penny Low (Pasir Ris-Punggol): Sir, for a 17-year-old teenager born into a population of 2.7 million in 1990, he would be one in 6.5 million people by age 35. Rapid population increase via the influx of immigrants can stress our social fabric. Can a young Singaporean cope in boom and bane cycles? Recent Straits Times surveys revealed some xenophobic reactions and a lack of national pride. With a highly demanded Singaporean workforce, Singapore must develop itself into an attractive home, not a hotel or revolving door for talents, lest we lose our own talents to overseas.

Some questions:

(1) What steps can we take to foster trust and empower our own citizens, making sure that citizenship has its privileges? Imported solutions - talents, SMEs, MNCs and even NGOs are fast and easier solutions, but nurturing and empowering local talents would signal a new social compact and foster national pride.

(2) How can we expedite efforts to communicate, collaborate and nurture local entities so that our people, including new citizens, know that the Government is a compassionate one that radiates care and partnership? The mutual suspicion and scepticism between the public and people sectors that seem to be building can also be converted into a common space of trust and mutual cooperation.

(3) What about our overseas Singaporeans? How are we strengthening our ties with them and bringing them home one day? Any updates on the Overseas Singaporean Unit under PMO? And what is the status on overseas voting and what can we anticipate in the next election?

Measures to Promote Procreation

Mdm Halimah Yacob (Jurong): Sir, population policies to improve our fertility rate have been in place since the 1980s. In 1987, the new population policy to promote procreation was launched with the slogan "Have three or more, if you can afford it". In 2000, supplementary procreation measures were introduced. And in 2004, a Ministerial Committee made many recommendations to arrest the falling fertility rate. The 2004 package of measures which cost $300 million a year provided for longer maternity leave, childcare leave, five-day work week, Wow! fund, HDB top-up grants, enhanced use of Medisave, enhanced Baby Bonus and a whole slew of tax benefits.

However, the generous monetary incentives did not bring about a bonus of babies as expected, as our fertility rate did not improve much. This suggests that a more holistic approach is needed, including quality and accessible childcare, effective work-life balance and more support for young families; also, greater tolerance of pregnant mothers from employers is absolutely essential.

I would like to ask the Prime Minister how successful were these measures to promote procreation, how much has been disbursed under the various schemes, and what more can be done? Does the failure in improving our fertility rate suggest a change in priorities in young couples? Does the fall in fertility rate reflect changes in social trends and individual attitudes which influence procreation behaviour? Do these trends indicate the need to look beyond money matters in tackling procreation issues? Is there a need for a more comprehensive approach beyond the current measures?

Procreation Policies

Mr Charles Chong (Pasir Ris-Punggol): Sir, we have already heard Singapore's fertility rate is among the lowest in the world. And we heard from Mdm Halimah that our procreation policies introduced in 2004 have not had the desired impact on our population. Could the Minister advise if the experiences of other developed nations, such as France, Australia, the Nordic states or even Iceland, were taken into consideration in developing our latest procreation policies and, if so, which countries' policies were considered?

A study conducted for the European Commission in 2004 revealed that government policies can slow fertility declines. The specific example of France was cited. France was the first European nation to experience a decline in its fertility rate. But with the implementation of an aggressive set of pro-natalistic policies, it now has the second highest fertility rate in Europe behind Ireland. The fertility rate in France has increased from 1.65 in 1993 to 1.9 in 2002. French women workers are offered mandatory paid maternity leave, job-protected leave for up to 42 weeks and parents receive an allowance if they interrupt their employment to care for a child under three years of age and they have to care for at least two children. Other benefits which are available are the single parent allowance, an adoption allowance, a parental education allowance, a special education allowance for handicapped children and an annual school allowance. Beginning at the age of two or three, French children can attend all day pre-school programmes for which families pay on a sliding scale. This can range from nothing for the low-income families to 15% for high-income families.

The French experience shows that with an aggressive government policy, it can have an effective and positive effect on the fertility rates. I would like the Minister to consider policies adopted by the developed countries that have been successful and adapt them to local needs to improve our fertility rates.

12.30 pm

The Deputy Prime Minister and Minister for Home Affairs (Mr Wong Kan Seng): Mr Speaker, Sir, first of all, I would like to thank the Members for raising very important issues concerning our population growth, immigration and integration between Singapore-born citizens and new residents this afternoon, as well as the 15, or so, MPs who raised similar issues during the three days of the Budget Debate. Members have raised many key issues including the impact of significant increases of foreigners in our midst competing for jobs with Singaporeans, the impact of immigration on the social fabric of Singapore and the value of citizenship. Many Singaporeans have also given suggestions on how to deal with our population challenge. I am very encouraged by the responses and the personal interest they have taken in facing this challenge together with us.

First, let me explain by putting the population challenge in the proper perspective.

Dr Ahmad Magad said that we face a huge challenge in population issues. And Mr Gautam Banerjee and Dr Loo Choon Yong talked specifically about the need to attract and manage the right talents to come and sink roots in Singapore. Indeed, attracting the right talent into Singapore is an important part of our population strategy.

We have developed our economy rapidly, and very successfully, in the past 40 years. Now, we have to scale new heights and multiple peaks; to keep our economy growing, to create more jobs and to provide a better life for Singaporeans. The only way for this to happen, and that is the only way to happen, is to ensure that we have continued economic growth. There is no other way. To do this, we need a critical mass of able and willing Singaporeans, able to adapt and meet the changing needs of the global economy; and willing to do what is needed to ensure a better life for themselves, their children and fellow citizens.

Singaporeans are indeed able and willing. But, there is just one problem - there are not enough of us and our population is fast ageing. We have not been able to replace ourselves through local births since 1976 - 31 years ago. Even assuming current immigration trends with an average of 8,000 new citizens a year between the years 2001 and 2005, the number of deaths each year could outstrip births by as early as 2030. In fact, if we do not have an inflow of new immigrants, our population will start to decline even earlier, by 2020. Japan started to have its population decline in 2005. This is why we have decided that encouraging immigration has to be a key strategy in tackling our population challenge.

Indeed, we are now in what I call a "BBC" world. What is "BBC"? One that is "Boundless, Borderless and Competitive". There will be "Boundless" opportunities for many in an increasingly "Borderless" world; at the same time, the stakes are much higher and a lot more "Competitive". Many countries are trying hard to attract people to sink roots in their country. Why? The answer is very simple - immigrants have helped many economies grow beyond their inherent potential.

The United States, for example, attracted waves of immigrants since the 17th century. Europeans, Africans, Latin Americans and, in the last few decades, Asians - they have all come to call the US home over the years. What have they brought to the US? First, more jobs - a Pew report found that in most states in the United States where immigration levels were high, employment prospects were above national average. Second, a stronger economy - back in 1997, the National Academy of Science had already concluded in its report for the United States Congress that immigration had brought a net benefit of $10 billion to the US economy. Third, more births - the United States Centre for Immigration Studies estimated that 23% of all babies born in the US in 2002 had a foreign-born mother.

Second example, Australia. Australia's net overseas immigration has accounted for more than 45% of its population growth since 1998. In 2005, 24% of Australians were born overseas. Yet in the same year, it embarked on its biggest recruitment drive for skilled workers, like hairdressers, mechanics, pharmacists and accountants, in more than 40 cities worldwide, including Chennai, Seoul, Manila, Bangkok and, of course, Singapore - targeting not only our university and polytechnic graduates, but also our ITE graduates.

What does this mean for Singapore, or more to the point, can we afford to close our doors to immigrants? People are our key and only resource. Let me put it bluntly this way - we need all the talents we can get, be they locals or immigrants. We are not producing enough babies; we do not produce enough engineers, bankers, technicians, artists and even chefs of our own.

Who gets to benefit at the end of it? Locals. Look at our wafer fabrication industry. As of 2005, there were 15,000 positions in this industry - 8,000 operators and 7,000 engineers. Singaporeans and PRs could only fill 80% of the higher-skilled engineer positions and one-third of the operator positions. If we did not have enough qualified engineers and operators here, these wafer fabs would have located elsewhere long ago.

Thus far, the outcome of our open-door policy to support and stimulate economic growth has been positive. Many Singaporeans have benefited from this. In 2006, a record of more than 170,000 jobs was created. Locals took up more than half of them. With the upcoming IRs, we can expect more job opportunities in the services sector, such as tourism and entertainment, finance and hospitality. In the maritime sector, the labour shortage is so acute that Keppel Corp - Keppel Corp is our largest maritime ship repairing and servicing company - had to tie up with MediaCorp to profile this industry in a local TV serial, just to show Singaporeans what shipyard workers do. There are jobs available - but we must have the critical mass of able and willing people. Where we lack local manpower, we have to bring in immigrants. Even if we do not bring them in, they can and will still compete against us from their home countries.

I empathise with the Singaporeans who have lost their jobs to foreigners or who cannot find a job. Our economy today is different from that of 10 years ago. Some Singaporeans found it difficult to compete or adjust. Their concerns and frustrations are completely understandable. But they are not forgotten. Although the Government cannot insulate them from competition, we will do our best to mitigate their problems. They must skill up and keep up. The Ministry of Manpower has facilitated various skills upgrading and training programmes. Some of my residents faced problems finding jobs too and when they came to see me at MPS, I advised them to go and upgrade and do something else. Those who heeded the advice were appreciative.

There are those who say that Singapore is constrained by our physical space; we are after all just a "little red dot". Can we cater to a larger population size of 6.5 million, for example? This was a question posed by many in the last few days. In early February, MND announced a planning parameter of 6.5 million people for its new Concept Plan. In order to accommodate 6.5 million people some time in the future, we need to make our plans now.

Let me emphasise that 6.5 million population is not a target. Since MND had released its planning parameter, many Singaporeans have assumed that the Government has set a 6.5 million target population size going forward. This interpretation is incorrect. Instead, it is an assurance from our town planners that we remain two, three steps ahead of the game - if our population grows, because we start producing more babies or because we are successful in attracting more immigrants to come here and set up their home, we will be ready. While our population growth will continue to be fuelled by both local births and immigrants, it is unlikely that we will suddenly face an influx of foreigners into Singapore. Even as we welcome more foreigners or immigrants, the Government will monitor our population growth closely to ensure that the quality of life and well-being of Singaporeans will not be compromised.

Many also asked how many immigrants should Singapore bring in. I think the more pertinent question is: how many immigrants can Singapore attract? My bigger concern now is that we are not even replacing ourselves and we need to prevent our population from ageing rapidly and shrinking quickly. We now have a window of opportunity to attract immigrants who can contribute to Singapore. We had a good run of economic growth in the last three years. We are well-positioned to ride on this momentum to create an even more positive and exciting future. But we cannot just sit back and expect that new immigrants or foreigners will automatically come, work and settle in Singapore if we do not make an effort to attract them.

Just about 10 days ago, on 21st February, I hosted a lunch for a group of about 20 Chairmen and CEOs in our companies. One of them told me that it was now increasingly difficult to attract middle-level managers coming into Singapore from India and China. Why? Because many of them now believe that their own countries would offer them better long-term prospects. The ones who are at very top positions will want to come because the pay is very good; and the ones who have just freshly graduated or those with a few years of working experience will come because they can get international exposure. The ones at the middle-level feel that their future can be made in their own country. So, it is not a given that we can attract good people to come here. We must try our level best. We have to be open and welcoming.

I do not share the view of those who fear that immigrants are going to overwhelm us. I fear that the foreigners will instead bypass us and go to other more attractive countries. There are plenty of them also competing for talents - United States, Australia, even Europe and China, and you will be surprised that while China has a big population, many are unemployed and they still want foreign talents. We are only a small country. We are competing against the big players. So we have to do what we need to do to attract them here.

Do we care about the quality of immigrants? Of course, that must be so. We do not want to bring in any Tom, Dick or Harry who says, "I want to work in Singapore and live here and bring up my family." To do so indiscriminately will simply do ourselves disservice. We have to be selective and choose what kind of people would settle here and contribute.

What do we need? We need people with the relevant skills, experience and know-how to come to Singapore. We do not need all of them to have PhDs or Masters degrees. They can be specialists like aircraft technicians, or have other skills that will add value to our economy. That is why we have broadened our eligibility criteria to attract more skilled immigrants to sink roots in Singapore.

We need to move beyond simply attracting talent to retaining talent. It is not just bringing them here. It is keeping them here so that they will stay here, marry here, bring up the family here, and eventually sink roots here. I think you know Steven Spielberg, creator of ET and countless well-known Hollywood movies and classics - his parents were Hungarian immigrants in the US. All over the world, immigrant talents have in turn contributed significantly to the community that first welcomed them to stay. This is also true for Singapore. For example, we have Mr Wong Ngit Liong. I think you may have heard his name, if not, you will have heard his company. He is the Chairman and CEO of Venture Group. Venture Group employs about 13,000 staff and has operations throughout Asia, America and Europe.

In Singapore alone, Venture employs some 2,300 staff. We have an example in this Chamber - Mr Gautam Banerjee, who came here many years ago. We also have Mr Harish Nim from Emerio Corporation, an IT services company employing 1,000 people, with a strong presence in the Asia Pacific and Europe. For some, it is not just about the economic value that they bring to Singapore, but also the culture and tradition. If you are a carpet lover, you may have heard of Hassan's Carpets, one of the oldest carpet shops in Singapore, set up in the 1930s and it is now run by the third generation in the family - Mr Suliman Hamid, the grandson of the founder. When asked why he took up Singapore citizenship, Suliman's, who was born in Pakistan, immediate response was that "This is home!" Immigrants, such as Wong Ngit Liong, Harish Nim and Suliman Hamid, have made Singapore their home, and added much to Singapore. We must welcome more of them to come here.

12.45 pm

Dr Lily Neo also asked about the progress of attracting immigrants to Singapore. We have done well so far in the last few years. In 2006, about 13,200 new Singapore citizens and 57,300 PRs were granted citizenship. We must continue to attract the right people to join our team.

We have taken steps to pro-actively reach out to potential PRs and Singapore citizens. ICA recently launched an online self-assessment eligibility test. We call it the Naturalisation Eligibility Tool for interested PR and Singapore citizenship applicants. Information packages to promote naturalisation will follow in the middle of the year. Using the Naturalisation Eligibility Tool, anyone, whether in Singapore or overseas, can answer questions according to the questionnaire in the Tool and assess their chances of being considered to be eligible to apply for PR and citizenship. We are making it easier for those who are outside also because, for those already here, we have plenty of time and there are opportunities to publicise it to them. We also want those who are outside to be able to do this. If they choose to come here, what are their chances? They can also assess what are the chances of being accepted as a PR and as a citizen.

ICA has also been sending personal invitation letters to suitable working adults to apply for PR and citizenship since 1994. We also have grassroots leaders who actively encourage those who are interested to take up PR and citizenship by welcoming them to the neighbourhood and sharing relevant experiences with them. Here, I want to thank Mr Banerjee for his suggestion of formal channels for potential citizens and PRs to provide feedback and inputs to the Government. Indeed, this is important, because we value feedback from all Singaporeans, and there are many channels now, eg, REACH, chaired by Dr Amy Khor, and there are many other avenues for anyone, including our new citizens and PRs, to provide feedback or seek information. And if there are other better ideas to do this, I will consider them.

Let me now talk about the need for Singaporeans to welcome immigrants and for immigrants to integrate into our society. This is an important subject. It has received extensive publicity in the press, particularly after the Straits Times' survey that led to all kinds of remarks being made about foreigners and surfaced all kinds of prejudices and stereotyping among Singapore citizens and foreigners. I want to talk a bit about this.

Singapore is a multi-racial country. To maintain this harmony, all of us must learn how to accommodate and adapt. So the concerns shared by Ms Indranee Rajah, Mr Inderjit Singh, Dr Teo Ho Pin and several other Members are taken in.

The Sunday Times' survey published on 14th January 2007 on Singaporeans' attitudes towards foreigners revealed that Singaporeans do not mind foreigners coming here to work. But some continue to harbour certain prejudices against them, while some foreigners have also not adapted to our local conditions and norms. I have heard and read of accounts of how some Singaporean landlords refused to lease their properties to some foreigners. Ms Sandhya Reddy related her unhappy experience in the Today newspaper on 31st January 2007 that a landlord refused to rent her the flat because she was an Indian immigrant. There was also a case of a new immigrant who moved into a private estate and held a housewarming party with loud music late into the night, not a weekend. Of course, the neighbours were disturbed and understandably upset.

There were also instances of stereotyping and social prejudices of foreigners against Singaporeans. It happens the other way round too. I was told of a road rage incident where a Caucasian, who drove into a yellow box junction and blocked the path of other motorists, started swearing in an exaggerated Singlish accent, only to be retorted by an equally vocal Singaporean who spoke in an equally exaggerated foreign accent. Of course, we can all laugh at such stories and frown at all these behaviours, but we should not condone them, whether it is about prejudices against renting properties to somebody not of your race or of somebody else's behaviour that you do not like, such as the Straits Times' survey talking about Chinese being too loud, noisy and dirty. I think they forgot what our own forefathers were like. It just goes to show that both sides need to make the right effort to build a shared community that we can call our very own.

Sir, the issue of integration, ie, of welcoming new immigrants and of them adapting to our local environment, is not something unique to Singapore. Yet, as a former immigrant and now a multi-racial society, we should be able to adapt, accommodate and handle such relationship issues and have a higher level of understanding and tolerance for this.

If we look back into history, when our parents, grandparents, great grandparents first came here from wherever, eg, India, China, Indonesia, the Philippines or anywhere around the region, they were all here to make a living, and seek economic opportunities, and they wished one day they would go home, retire and die there. Members must have heard of your mother, grandmother, etc, who would tell you the same stories. But in the end, many chose to remain in Singapore and make this their home. That is why we are here. If they had been dissuaded from sinking roots in Singapore because of some remarks or unwelcoming gestures by the locals at that time, I think Singapore would not be what it is today.

So acceptance, tolerance and integration take time and effort, and we must all make the effort. But we also do not have to pretend that there are no differences between new immigrants and the native Singaporeans. It happens everywhere too. Such differences existed even during the times of our forefathers when they were immigrants. They, too, found it hard to integrate into the local community. So what did they do? They formed clan associations and mutual help associations, etc. But, over time, they and their children integrated. We should acknowledge that there are differences between Singaporeans and the new immigrants. We may speak different languages. But one thing will hold us together, ie, our common destiny as Singaporeans, new or native. It is not an easy decision for someone to come here, sink roots here and choose to make this his permanent home. We must support and encourage them. In that way, we will accelerate their integration into our community and, soon, the differences that seemed so stark before, would diminish. This is especially so for the children and grandchildren of immigrants here, as they would have grown up in the Singaporean milieu.

The Government, therefore, takes the issue of integration seriously and recognises that more efforts are needed to focus in this area. And there are many ongoing efforts already. The People's Association, for example, has, through its grassroots network and leaders, organised many activities at the community level to facilitate integration between locals and new citizens. Marine Parade GRC, for example, has a sub-committee to reach out to new citizens by organising gatherings for them and sharing information. There are also expatriate clubs and communities that will cater to the expatriate community, eg, the Kowloon Club, Hua Yuan, India Club and many other associations formed by the Indian immigrant community. The MOE also plans to enhance the integration of foreign students with Singaporeans.

To encourage all Singaporeans, whether they are newly-minted citizens or indigenous citizens, to embrace our common identity as one community, we are studying the possibility of having a "Citizenship Day", like what the Australians have. Miss Penny Low raised the issue of citizenship and national pride. A "Citizenship Day" will mark and celebrate our coming together as citizens of Singapore. MCYS will drive this effort as part of its mandate to build a cohesive and resilient society.

Citizens, of course, will be valued more than foreigners. Miss Penny Low also asked about the value of being a citizen. Singaporeans can rest assured that they would always come first. In fact, in all our policies, they are targeted at improving the lives of our citizens. We have recently reduced healthcare and education subsidies granted to foreigners and PRs to ensure that citizens enjoy the fullest support from the Government. We have many Government surplus sharing schemes, eg, CPF top-ups, New Singapore Shares, Economic Restructuring Shares, and now even Workfare. They favour only citizens. But let us also remember that the value of citizenship cannot be measured in dollars and cents. Singapore is our home; it is what we have to call our own. We cannot put a price on the feeling of being in a place that belongs to us, where we belong. Home, as it is often said, is where the heart is.

We care for Singaporeans who are overseas too. Some of our best and brightest Singaporeans are similarly attracted to study and work abroad. Some even migrated. It is not necessarily a bad thing that Singaporeans go overseas to work and study. One day, they will come back. And when they come back, they will add value to Singapore.

Miss Penny Low asked how the Government intends to strengthen its ties with these overseas Singaporeans. She mentioned the Overseas Singaporean portal. We have an Overseas Singaporean Unit too, specifically just targeted at engaging

Singaporeans who are overseas. Mr Michael Palmer yesterday raised problems faced by Singaporeans overseas. But let me put it this way. The Government will do its best to engage Singaporeans while they are overseas. While they are there too, they should do something for themselves and take the initiative to organise things for themselves, to reach out to others. They cannot wait for the Government to do everything. I have been to many cities and met many Singaporeans. Those who are active indeed found many ways of making sure that the Singaporeans who are there found ways to engage with one another. And that is a good sign. Some even do social service. I know, for example, one of them raised money to provide bursary and so on to children in that country. And in a way, they become our ambassadors. While we want our embassies to do more, we must also bear in mind that every embassy has very few officials and Singaporeans themselves have to work hard and engage themselves and publicise what they do.

1.00 pm

Mdm Halimah Yacob asked for an update on the measures to promote marriage and parenthood in Singapore and Dr Ahmad Magad also urged the Government to do more to boost the birth of more Singaporean children. Let me now touch on this other key strategy on our population challenge. I would ask the Clerk to give out some data on what the Government has done so far with regard to the population package. [ Copies of handouts* distributed to hon. Members .]

*Cols. 2433-2436.

The parenthood package was first introduced in 2001 and enhanced in 2004. In FY2005, the Government spent $575 million to support the various incentives and benefits in the package. The take-up for the various schemes has been encouraging. The table that I just circulated contains all the details.

Since the Baby Bonus scheme was introduced in April 2001, the Government has disbursed $420 million to the parents of 133,000 newborns, and co-funded 89,000 co-savings accounts that were opened, which amounted to another $270 million. And that is a lot of money. Since Government-paid maternity leave was extended from eight to 12 weeks in August 2004, 28,000 mothers have benefited from it.

For the year of assessment 2006, 46,000 parents have claimed $70 million under the Parenthood Tax Rebate; 131,000 mothers have claimed Working Mothers' Child Relief amounting to $111 million in forgone revenue; and 26,000 parents have claimed Grandparent Caregiver Relief amounting to $4 million in forgone revenue.

Started in August 2004, the Work-life Works! or the WoW! Fund of $10 million is expected to be fully committed by the middle of this year. The Government will study how to encourage the companies to create more work-life balance in the workplace. The Manpower Minister will give Members more details on this.

Overall, there have been some positive indications in birth figures. Although we have not increased our total fertility rate (TFR) from 1.25 to something higher, at least, we have arrested the decline that we have seen just before 2004. In 2005, 35,500 babies were born - 400 more than in 2004. In 2006, 36,200 babies were registered - 570 more than in 2005. A survey by MCYS also showed some encouraging signs: 56% of married persons indicated that they would consider having more children earlier and 83% indicated that the package has helped to make Singapore a more family-friendly place.

But, we still have very worrying trends. What are these? First, more Singaporeans are now remaining single: 37.4% of male citizens in the key age group of 30-34 were single in 2005, and that was an increase of 33.9% in 1990. The same figure for females was 26.3%, up from 20.9%. 22.2% of male citizens in the age group of 35-39 were single in 2005, up from 17.8% in 1990; that for females was 17.2%, up from 14.7%. In other words, more males than females remain single, and the worrying trend is that more are remaining single in the age group band of 30-39.

Second, Singaporeans are marrying later: the median age of citizen males getting married was about 30 in 2005, up from 28 in 1990; that for females was close to 27, up from 25 in 1990. Singaporeans are having their first child later. The median age of a Singaporean mother at first birth had also increased from 27.5 years in 1990 to 29 in 2005. Singaporeans are also having fewer babies. On average, a married Singaporean woman had 2.2 children in 2005, down from 2.8 in 1990. While it is still above the replacement level of 2.1, it is clearly on a downward trend.

Among ever-married female Singaporeans aged 40-49 years, 6.6% of them were childless in 2005, and that is up from 4.4% in 1990. So having to juggle work and family life, and the cost of raising a child, remain the key considerations for many in deciding whether to have children. From the data, it seems that a typical Singaporean has a high probability of staying single, and if he or she does get married, is getting married later, and will have his/her first child at a later age and have fewer children.

Mr Charles Chong asked what we could learn from other countries to raise local fertility. Indeed, every country has its own policies and plans. We will study all these policies that they have and see what works for Singapore. What the French did may not necessarily work for Singapore. In fact, some of the social practices there may not be what Singaporeans want to have. I would not go into details on what they do, but I can tell Mr Chong and Members that we are studying our population package. We review them all the time. For now, we will keep the present package but we are looking at every item and see where we should put more money in. What we know is that we have to do more to encourage more and earlier marriages and births. We will monitor the implementation of the current package. We will also study how we can be more targeted in some of our incentives.

I think we can do this through a more targeted approach in three areas - better support for Singaporeans to achieve work-life balance, creating opportunities for more socialisation, and providing more targeted incentives for earlier marriages and earlier first births. I would like to thank Dr Ahmad Magad for his specific suggestions on how to increase our baby population. We are also open to other ideas and would welcome suggestions from the public as well. This has to be a collective effort, not just the Government putting on its thinking cap.

Sir, we have an enormous strategic challenge ahead of us. Our population challenge is not to be taken lightly. It is easy to be lulled into complacency; our economy is doing well, many Singaporeans are better off today than they were 10 years ago. We need to look forward, but only if we are able to keep going as a vibrant and productive community and economy. We know what needs to be done. Three things. One, get married and have more babies. Two, welcome suitable immigrants and help them integrate into our society. And three, keep our overseas Singaporeans connected. I hope all our people will work together with the Government to achieve these objectives.

Overseas Voting

Ms Sylvia Lim (Non-Constituency Member): Sir, the first attempt at overseas voting was carried out last May. A total of 1,017 voters registered to vote at the eight overseas missions gazetted. After Nomination Day, the number of those eligible to vote in contested seats was 553 and the number of valid overseas votes eventually cast was 335.

Sir, the very small numbers must be a disappointment. The Government estimates that there are about 145,000 Singaporeans working or studying overseas and 1,017 out of 145,000 is less than 1%. Has the Prime Minister's Office assessed why the catchment was so low?

Secondly, Sir, we should review the strict qualifying criteria under the Parliamentary Elections Act, in particular, the requirement of living for at least two out of the five years preceding the cut-off date of the Register of Electors. I shall call this the residency requirement which is waived if one is abroad for a longer time on Government business or with approved international organisations.

Sir, the globalised world may require entrepreneurs to be away for several years and I do see a contradiction in the Government lavishing praise on Singaporeans who have ventured abroad on their own and broken new ground, and yet, restricting them from voting. These are the very people we risk losing. We should do away with the residency requirement so long as the overseas voter has a local address.

Sir, it is also timely to consider increasing the number of overseas missions which accept overseas voter registration. Can we not prepare to use all our overseas missions and consular offices and not just the eight which are restricted to the five countries - China, USA, Australia, UK and Japan? The Ministry of Foreign Affairs' website currently lists missions in 38 cities across 28 countries. So we have a few years before the next Elections, and I believe that there is ample time, if we are minded, to extend overseas voting centres to include all our overseas missions.

Sir, at the last Elections, the overseas votes were counted separately four days after Polling Day. Since there were only about 335 votes, the results, when split by constituencies, involved very small numbers. In the single-member seats especially, the numbers for the constituencies were tiny, down to two voters at MacPherson and three for Nee Soon Central.

The reporting of the overseas results separately raises concerns about confidentiality. For instance, in MacPherson, both voters voted for the People's Action Party. For Nee Soon Central, there were three voters; two voted for the Worker's Party and one for the PAP. These persons' votes, while secret, are thrown into the spotlight and they are obviously much less anonymous than local voters who are one vote among thousands.

To prevent this from recurring, I would like to suggest that the overseas voting at our missions take place early enough so that the overseas votes can be mixed with the local votes and counted together on Polling Day. This way, overseas votes would be as anonymous as local votes.

According to press reports, the overseas votes last year arrived only one day after Polling Day. As such, I feel confident that we can make it in time for Polling Day with a little adjustment. If needed, the Returning Officer can gazette Polling Day to be more than nine days after Nomination Day, say, 11 or 12 days later, to allow for the overseas votes to be couriered back in time for Polling Day.

Sir, we should not underestimate the effect of facilitating overseas voting if we are serious about keeping our diaspora connected to Singapore. I hope the Prime Minister's Office will consider my suggestions.

The Chairman: Mr Wong, you have hardly five minutes left.

Mr Wong Kan Seng: Sir, I thank Ms Sylvia Lim for raising the issue of overseas voting by Singaporeans overseas.

In fact, following the 2006 General Election, I formed a Committee to review the various processes concerning overseas voting, as well as local voting. And one of the issues we looked at, of course, is how to make it easier for people to register to vote and how to make it possible for more Singaporeans to also be eligible to vote overseas.

On the registration process for overseas voters, we will try to make it more user-friendly. The time window for registration, publicity for registration using not just the media, but also as many channels as possible - we will study all these issues.

On the registration procedures, the Elections Department will also simplify them without sacrificing the integrity of voter identification and information authentication.

The important issue is about the qualifying criteria to be eligible as an overseas voter. Right now, the law says it is two years out of the five years of residency before a person can qualify. When we set this, we studied the examples in other countries and we found that since it is the first time we are doing it, we have taken this approach of two years out of five years of residency as a requirement.

Having first experienced our overseas voting in the last Elections and having learnt how to operate it better, we are now reviewing how to ease the criteria for overseas voting. We know that more Singaporeans are now going overseas to work and study

or even to accompany their spouses, and many will not be able to meet the present criteria of having to spend two years out of the last five years in Singapore. But we know that they also return regularly to Singapore during their annual leave. So, the Government will study how the criteria can be eased and made more flexible so that more of them will qualify to vote while maintaining the spirit of the law that only those Singaporeans who maintain their links back home should be entitled to vote overseas.

1.15 pm

Whatever we do to improve the processes for overseas polling or counting, we must still safeguard the integrity of the electoral process. The problem cited by Ms Lim regarding the counting of votes in Singapore, being four days after the close of poll, is limited to a small number of constituencies, particularly the single constituencies but, otherwise, there should not be any problem. We hope that in time to come, we can find a way to resolve this.

Whether we will extend the number of days for campaigning or have people overseas to vote early or not, I think there are other implications to do this as well. So we have to be very careful in changing the present system.

The present election system is very simple. It is fair. It is transparent. It is well-tested. And the overseas voting system will follow the same system. The polling and counting of votes will follow the same system, as I said. Overseas voters will, therefore, continue to vote at the polling centres. Can we expand more? Well, we have to see where we have a critical mass. Not every city in all the 38 places where we have a consulate or a mission have enough Singaporeans to making voting practical. Also, for practical reasons, our overseas polling stations will have to be in a mission where we have a large concentration of eligible overseas voters, and in the premises where we have a mission which will enjoy diplomatic immunity and, at the same time, security. These are the key considerations on how we set up our foreign polling stations.

World Class Civil Service

Mr Zainudin Nordin (Bishan-Toa Payoh): Sir, in the Budget Speech, the Second Minister for Finance had laid down the broad plans to transform Singapore into a truly world-class city state. It will boast of a delightful living and working environment as well as the best place to start, grow and globalise SMEs. This is really exciting.

Critical to the success of this plan is the openness, responsiveness and helpfulness of our civil service. While we recognise that our civil service is a cut above the others, good may not be enough for a competitive world-class city. A proactive and helpful civil service which operates with great insight, ground sensitivity and attention to quality of service would certainly help our cause in developing a truly wholesome living and working experience in Singapore for Singaporeans, visitors and investors.

Feedback often points to a disjointment of leadership directions to the implementation woes. An entire movie named "Just Follow Law" was dedicated to this subject. Yes, Sir, the movie is fiction. Nevertheless, some of the scenes and depictions resonate among fellow Singaporeans because of personal experiences. My question is: how can we enhance the quality of our civil service and foster social compact of trust between civil service and the people?

Talent Development in Civil Service

Ms Denise Phua Lay Peng (Jalan Besar): Sir, except for teachers, one out of every 10 graduate civil servant is a scholar. Many are groomed to take on top leadership roles. Many scholars are fast tracked and, in very short time periods, are parachuted into high-level and high-paying positions in the civil service. The PMO has told me that to prepare these scholars for their roles, they are given rounded exposure to the national challenges and issues facing Singapore. These include joining community attachment programmes, eg, I believe the People's Association or attachments with the voluntary welfare organisations, so that "they have a better understanding of concerns and issues faced by Singaporeans."

Sir, I submit that although this method might have worked in the past, in today's world, this old way is an inadequate way of developing talents in the civil service. I hear of a number of scholars and high potential civil servants who were assigned jobs they neither have a passion nor preparation for.

Since the Government is not yet open to the idea of scrapping the scholar programme, I urge the Government to consider doing two things in developing these talents in the civil service.

(1) Install a more structured framework of assessing the talent - what one is good at; passion - what one loves to do; and then match these profiles with the organisation's needs. Where the three areas intersect, this presents, I believe, the career sweet spot for the civil servant talent.

(2) Instead of parachuting scholars too fast into positions writing papers and advising on national policies, let them go through what normal executives go through.

The Chairman: Your time is up, Ms Phua. Mdm Halimah Yacob.

Public Sector Salaries

Mdm Halimah Yacob (Jurong): Sir, the Singapore public service is widely regarded as one of the most efficient and uncorrupt bureaucracies in the world. It is one of the key contributors to the success of Singapore since independence.

The public service has improved in quality over the years in line with the general population and demand of the economy. As we move ahead, the public service will have to become even more innovative and market savvy to help us take advantage to deal with new opportunities and challenges in an extremely competitive environment. For this to happen, it is important to attract and retain the best talents in the civil service. Salary is certainly a key deciding factor that will determine whether or not the public service can attract good people. The last time that public service pay was adjusted was in 2000, in order to narrow the salary gap between the civil service and the private sector, and to curb the stampede of talent to the private sector.

The labour market has been tight over the last few years, and this year will be no exception. With so many new programmes, including many more announced in this year's Budget, there is certainly a need to ensure that we continue to have the best people in our public service. I would like to ask the Prime Minister whether public sector pay is competitive and in line with the private sector. Will there be any revision of public sector pay to ensure that it can attract and retain the best people? When will such a revision be completed? And also, to ensure that the revision will cover all sectors, all grades and all categories of public servants, and not just the elite or the scholars.

Mr Siew Kum Hong (Nominated Member): Sir, our Government's policy is that Ministers and top civil servants should be paid fair and competitive salaries. I support this. Ministerial salaries and Administrative Service salaries are directly benchmarked to top private sector salaries as declared to the IRAS. The Staff Grade 1 salary is pegged at two-thirds of the income of the 24th highest earner among the two eight earners from six professions. The Superscale G salary is benchmarked using a similar formula. I also understand that Legal Service salaries are pegged, albeit not directly, to the private sector.

Sir, the private sector salaries used as benchmarks will already include annual bonuses, such as performance bonuses, since these bonuses are assessable income. I would like to ask whether these officers, in particular, Ministers and Administrative Officers, are entitled to additional bonuses, including performance bonuses and, if so, how they are assessed and fixed.

I would also like to ask whether the award of such bonuses is consistent with the fact that the salaries used as benchmarks already include performance bonuses.

The Chairman: Mr Teo, the time allotted for replies has been exhausted, but I am being very generous since we have up to 2 o'clock. Please carry on.

The Minister for Defence (Mr Teo Chee Hean): Sir, thank you very much for your generosity.

I would like to thank the Members for their interest in the public service. Ms Jessica Tan, Dr Magad, Ms Penny Low and Mr Alvin Yeo also spoke about this during the debate on the Budget.

I fully agree with Mr Zainudin that an effective public service is crucial to the implementation of the vision and plan set forth in the Budget Speech for a first-class city, a first-call country. Building a first-class public service has been and remains a high priority of this Government. A good public service plays a key role in a country's stability and economic development.

In the latest comparative country risk report just published by the Political and Economic Risk Consultancy, better known as PERC, the quality of the public service is one of the key factors. Singapore was rated best among the 14 countries on the quality of the civil service, quality of government policies, effectiveness of the government in implementing economic policies and freedom from corruption. This is strong testimony of quality and reputation of our public service.

To maintain the quality of the civil service, we must continue to attract and retain a fair share of talent. Mdm Halimah and other Members have asked what is being done to retain talent in the public sector in a tightening labour market. The civil service is beginning to feel the impact of this tightening labour market. Our resignation rates have increased from an average of 4.8% in 2005 to 5.7% in 2006. Some segments of the service are experiencing much higher attrition. For example, in the Management Executive Service, which is for graduate officers employed across a number of Ministries, the resignation rate has risen from 7.4% in 2005 to 10.6% in 2006. The attrition rate is higher at the entry level grade at 25%.

In several services, even though attrition rates are not yet high, there is evidence that the market has become much tighter. We should not wait till these services are bleeding badly before we move to retain and maintain competitiveness.

The civil service has to remain an attractive career option for good calibre people. As private sector wages rise, the wages of civil servants cannot remain stagnant. We do not aim to lead the private sector salaries but we must keep pace. If we are not responsive, we will lose our ability to recruit and keep able people. This will do great harm to Singapore as we would have lost one key advantage over other countries - a clean, competent and effective civil service.

Mr Siew asked how we benchmark civil service pay. Each scheme of service is benchmarked to its equivalent in the private sector. For example, the salaries of accountants and lawyers in the private sector serve as benchmarks for the same professions in the civil service. If there are no directly equivalent jobs, we look at jobs in the private sector that are held by employees who have similar types of backgrounds and educational qualifications, eg, graduates or diploma holders. The salary comparisons are based on the total annual salaries which include all annual and performance related components. There are no other additional components.

The last major salary revision for the civil service, as pointed out by Mdm Halimah, was in 2000. But, since then, we have reviewed and made adjustments to specific schemes that have fallen behind their market benchmarks and to improve their career structure to make them more competitive. For example, last September, the Education Service revised its starting salaries, added promotional grades and increased the retention payment for teachers. Such recently reviewed schemes of service are not too far from their private sector benchmarks. Nevertheless, some services have fallen significantly behind the private sector, especially in the last two years. An example is the Administrative Service which is the key service, from which most top public sector leaders are drawn. Administrative Service salaries have not been reviewed since the year 2000 nor have salaries for the political, judicial and statutory appointment holders which are pegged to the Administrative Service salary structure.

We must ensure that public sector salaries stay competitive. Hence, the Government is currently reviewing public sector salaries. We expect to announce the revisions in April. Unlike the last round in 2000, there will not be

a uniform, across-the-board large revision. Those services which are lagging significantly behind the market are likely to receive larger adjustments while those which are closer to the market will receive smaller adjustments. We will not just be adjusting salaries, but would take the opportunity to bring salary structures more in line with our philosophy of linking pay to performance. I would like to see as much as possible of the revisions paid in the form of performance-related components. This way, we reward deserving civil servants and sustain a high-performance culture in the civil service.

1.30 pm

Besides paying competitive salaries, the civil service also develops our officers for higher levels of contribution. Ms Denise Phua is not here. But we welcome new ideas - like those that Ms Denise Phua is going to suggest - on how we can do this better, and I would be happy to listen to her when she is able to.

Graduates, including scholars, who join the service do a variety of jobs which put them in direct contact with citizens, customers and businesses. Examples include negotiating a free trade agreement, counselling a juvenile delinquent, handling a criminal investigation or mediating a labour dispute. These are real jobs where they meet people and have to solve problems together with citizens and customers. Officers who handle policy work are expected to pay attention to ground concerns and involve themselves in the implementation and delivery of the policies. Many Ministries have a job rotation system to give officers a rounded experience.

All Administrative Officers undergo an attachment programme to grassroots organisations to better appreciate the issues and needs of ordinary Singaporeans. But the experience and exposure are not limited to just attachments. Officers in the Administrative Service could be seconded to statutory boards, Community Development Councils, NTUC and even the private sector.

The public service recognises that there is always room for improvement in policies, systems and processes to be more citizen-focused and customer-centric. Let me give some examples.

In 2000, the public service established a Pro-Enterprise Panel to identify and review rules that pose unnecessary constraints and costs to businesses. Two thirds of the panel's members are actually from the private sector. We draw in private sector expertise to help us and to tell us what it is that we can do better. The panel has made headway in getting public agencies to change their rules for the better. Indeed, PERC assessed Singapore civil service as the best among the 14 countries surveyed in terms of red tape and how we have resolved the issues of red tape and bureaucracy as impediments to business.

I have not watched Jack Neo's movie "Just Follow Law", which Mr Zainudin mentioned. But I have enjoyed some of his earlier movies. I like Jack Neo's movies because they make us look at ourselves - own attitudes and behaviour towards others. If this movie helps Singaporeans and public servants to be more self-aware and improve themselves, I think that would be good. But, of course, when you watch the movie - you are not watching a tutorial - do remember to enjoy yourself, after all, it is meant to entertain, and one can expect it to exaggerate for effect.

The public service recognises that there are always rules that can be improved or need to be changed. Since 2002, all public agencies are required to review their existing rules every five years, including regulatory issues that cut across agencies.

I do agree though that, ultimately, it is not just rules but people who implement those rules that matter. The service has, therefore, put in much effort to educate public officers to adopt the right mindset. Officers are required to attend the Cut Red Tape workshop at the Civil Service College, where they learn to understand that what matters is the intent and spirit of the rules, rather than merely rigid implementation per se. But I will be the first to admit that we have some way to go yet.

Sir, we have a first class public service that is the envy of many other countries. We should not be afraid to criticise it and should feel free to make suggestions to improve it. After all, this is our public service. But we should also be proud of it and give credit where credit is due. Our civil servants afterall are human too, and a simple 'thank you' from time to time will, I am sure, be appreciated and motivate them to do their jobs even better.

We will strive to upgrade the service's capability and quality to move it to a higher league. We will improve processes, service delivery and our ability to anticipate and respond to changes and opportunities. But, most importantly, the service must remain attractive to high calibre people. We must pay competitive wages and provide challenging careers for those who join us. With this, we will be better placed to achieve our vision for Singapore to become a world class city state.

SESDAQ and Capital Market

Miss Penny Low: Sir, to position Singapore as the best place to start and globalise SMEs, we need a strong capital market. If you refer to the handout, we are slipping behind Hong Kong and Taiwan listings. I have asked industry experts why this might be so, and they cited two reasons: (i) inadequate understanding of the local fund managers and bankers, resulting in poorer valuations; and (ii) regulatory and compliance costs scare investors. The same Sarbanes-Oxley requirements applied here in US were also cited as the reason for the capital flow from the US to the London Stock Exchange (LSE). In 2006, LSE's AIM had US$40 billion, while NASDAQ had US$30 billion. In the last two years, London scored 11 of the biggest international IPOs while New York scored only four.

Perhaps, the Minister can enlighten us on:

(1) How can we improve SESDAQ?

(2) What is our weakest link?

(3) How can we encourage greater capital market liquidity?

The Minister for Trade and Industry (Mr Lim Hng Kiang): Sir, I agree with Miss Penny Low that we need a competitive capital market to promote entrepreneurship and to develop our SMEs. Miss Penny Low said that there could be a lack of deep understanding and localised knowledge among our local fund managers and our bankers, resulting in poor valuations compared to other capital markets.

Sir, the reasons behind market valuations across markets are varied and complex. Direct comparisons across markets are often not meaningful. I would find it hard to believe that our analysts, fund managers or bankers are less knowledgeable or lack depth of knowledge or understanding or are less sophisticated than in other markets. Perhaps, for some of the smaller market capital SMEs where there are less investor interests, there could be a smaller following of analysts and, therefore, that could result in a lack of knowledge of these companies. But, by and large, I think our markets are sophisticated enough.

Miss Penny Low also asked whether our regulatory requirements and compliance costs could be another reason. Let me assure the Member that the regulatory authorities continue to monitor our regulatory oversight and make sure that compliance costs are not too high.

In 2005, MAS introduced two "safe harbours" in the Securities and Futures Act to allow private placements and small offers to be made without prospectuses. These safe harbours provide legal certainty for capital raising by our SMEs and help them raise funds more efficiently without incurring unnecessary regulatory costs. In fact, one of our local broking firms has developed an over-the-counter platform to facilitate trading in shares of SMEs which take advantage of these safe harbours.

The Singapore Exchange (SGX), through its mainboard and SESDAQ, has flexible admission criteria that allow companies with shorter, or no profit track record, to be listed. SESDAQ has served its role as a local SME market and some SESDAQ-listed companies have, indeed, grown and upgraded to the mainboard. Nevertheless, SGX is keenly aware of the competitive environment among exchanges and is studying the different regulatory models in the US, London and Asia for listing SMEs, with a view to introduce changes to the marketplace.

Let me assure Miss Penny Low that the situation is probably not as bad as she perceived it to be. Firstly, we have no indications of local SMEs going abroad to tap capital in a significant way. Secondly, the Milken Institute which compiles the capital access index which ranks countries around the world, in terms of financial infrastructures that support entrepreneurial activity by providing access to capital, Singapore, indeed, has been ranked second in this year's index, up from third place previously. So, by and large, I do not think we are doing badly. But I can say we can always improve.

The Chairman: We have some time left before the "guillotine" time at 2 o'clock. I will allow clarifications from Members. Dr Lily Neo.

Dr Lily Neo: Sir, can I seek clarification from the Deputy Prime Minister? May I ask him where are we targeting our foreign talent? Does he foresee any social strain should we end up with heterogeneity?

Mr Wong Kan Seng: Sir, we target foreign talent from wherever they are if they would like to come. Of course, our big markets, so to speak, are China, India and the region. But now, we also have people coming from Europe, America, Japan and the Middle East. There are a few also from Africa. We want people who can contribute to Singapore, who can fit into our Singapore society, and who can integrate with us. In that way, it would add diversity to our economy and it also makes Singapore a more cosmopolitan society. In big cities around the world, we find that that is the case. We cannot be a homogeneous single race society. We never can be. We are already multi-racial. But whoever comes here must learn how to adapt to the local norms and to adjust and also integrate with Singaporeans.

Ms Denise Phua Lay Peng: Sir, a clarification from Minister Teo Chee Hean. In order that we do not waste our civil service talent, would the Minister consider letting them go through what normal executives go through in Singapore? For example, pay for the payroll of these scholars, send them out for at least two years, put them in different types of working environment, go and work in local SMEs, work in multi-nationals, get a bottomline orientation or go and run an organisation in VWOs so that they have a taste of how to ---

The Chairman: Please do not launch into another speech. Just ask your questions.

Ms Denise Phua Lay Peng: --- do it with lesser resources and knowing how to deal with the Government agencies. So I would like the Minister to consider that.

Mr Teo Chee Hean: The short answer is, yes, we will consider that. We will consider all these possibilities. We actually do have a scheme now for young officers when they are management associates in the first four years. We have a gap year scheme where they can apply to do that.

Mdm Halimah Yacob: Sir, I would like, first of all, to thank the Minister for informing this House that there will be a revision of public sector pay and an announcement will be made in April. But I would like to seek a clarification from the Minister because he said that it would not be across the board. And he said that - if I catch him correctly - it would also depend on the market demand for that category of officers. But I would like to say that in the public sector, because of the nature of public service, there are segments of people who are doing jobs which you may not find comparable examples in the private sector. Therefore, I hope that in doing a review and being dictated by that

parameter, that you would look at what are the categories of officers where there is a weak market demand, and the Minister would not overlook these categories and grades of officers as well.

1.45 pm

Mr Teo Chee Hean: Sir, in fact, Mdm Halimah is right. There are quite a number of jobs in the public service where there are no direct comparables in the private sector. As I explained earlier, where there are direct comparables, we would take the salaries of those types of jobs in the private sector and use those as benchmarks for the public sector jobs. But where there are no direct comparables, what we would do is we say, "A person has a choice. He can either work in that kind of job, or this kind of job if he has this type of qualifications." And if a person with this sort of qualifications is working in the private sector and is earning roughly that amount of money, then if we want to attract the same sort of person to work in the public sector, which has no comparison in the private sector, then we should pay him around that amount of money as well. So we use that principle. It is important that for all our services, all our jobs, we try to find such market comparables or, at least, a way of making a comparison, so that when we pay salaries, we have some basis for doing so. Some have risen quite sharply in the private sector, and others have risen, but it may not have risen as quickly as others.

Dr Loo Choon Yong: Sir, the back-of-envelope calculation shows that the lifetime contribution of the average citizen is in excess of $100,000, and half of them are males doing National Service which is priceless contribution. When I look at the list of goodies for babies, totalling up to $10,000 to $15,000, would the Government not think it sensible to expend more money in various forms, either more leave, more aid, or more bonuses? So I think it is quite justifiable to double or triple the Baby Bonus packages.

Mr Wong Kan Seng: Thanks for bringing this up. If we have only that size of the cloth, we will have to decide how we want to cut the cloth. It is not a limitless amount of money that we can put in resolving the population problem. We can put all our money in this, but we have no money to spend in other programmes. So the Government will decide on how much money is sensible to put into the programmes for marriage and procreation. Then we will decide on how to divide this sum of money, whether it is in the form of more maternity leave, more childcare centre subsidies, more Baby Bonuses, or more work life balances for companies, and so on. These are the issues that we are now looking at, whether to have maternity leave, for example, as some have asked, or whether they have just maternity leave only and leave it to the mother to look after the child. These are hard decisions that we have to make. In life, we know that we have to make hard decisions and, ultimately, something has got to give.

Mr Inderjit Singh: Sir, I would like to ask the Deputy Prime Minister about our attitude towards attracting back former Singaporeans, whether citizens or PRs. We are doing quite a lot to attract new citizens but the feedback I had got is that we are making it actually very difficult for those who give up their PR or citizenship to reapply for a PR or residency in Singapore. Could the DPM please explain?

Mr Wong Kan Seng: I think there is only one key issue that we consider before we will decide whether to allow a former citizen or PR to come back to settle and work in Singapore, and that is the National Service account. If they have done National Service, I think that is not an issue. We will look at what the person can bring to Singapore, having decided earlier to leave Singapore for better or greener pastures, or for whatever reasons. But if the person has not done National Service, that would be a different matter altogether. All citizens and PRs who are here have to do National Service. If they chose not to, then they cannot regain their PR, and that is a price that they have to pay much earlier.

Mr Charles Chong: Sir, I would like to ask the Deputy Prime Minister what he intends to do to foreigners who take up Singapore PR but refuse to take up citizenship after many, many years of staying in Singapore. Does he intend to set a minimum period where if they do not take up citizenship, the PR status would be reviewed?

Mr Wong Kan Seng: Sir, we also have to decide whether these PRs who have remained here for a long time and, for various reasons, do not want to be a citizen, and say, "Now, please pack up and go home." If they do, then are we going to lose anything or not? And if we do not, then why force them to go away? If they can continue to contribute, why not? They can be PR for whatever the reason. But of course, in our policy, we will try to make a distinction in giving whatever surplus sharing schemes, and so on, to favour citizens. Members can see that already in our healthcare and, in fact, also in our education policy. But at the same time, also bear in mind that the wider the gap it is between the citizen and foreigners and PRs, the less attractive we make Singapore as a destination for them. So do not make it difficult for us to attract people to come here while, at the same time, recognise the contribution of Singaporeans. As I said earlier, the value of citizenship is not in how much money they will get from the Government. It is really how they feel for the place where they are born.

Ms Ellen Lee (Sembawang): Sir, I would like to ask the DPM, now that we are attracting more foreigners and foreign talents to live and work in Singapore, would there be any changes made to our language policy, particularly, the mother tongue policy because our composition is no longer just Chinese, Malay, Indian and others. Because the others would comprise a lot more other nationalities as well and some of these people feel that perhaps their own languages should be made official as well.

Mr Wong Kan Seng: Sir, there is a difference between what we treat as official languages and what languages we want to promote and allow the individuals to learn while in school or within their own community. Right now, in our schools, we already allow children, eg, if they come from a Sikh family, to learn Punjabi, or any other language, if they can find a significant number of students to form a class. But as far as the national language policy is concerned, we have four official languages in this Chamber. If one day, we have somebody who comes from somewhere else and he does not fit into these four-language policy, then we wonder whether the person should be in this Chamber.

Mr Christopher de Souza (Holland-Bukit Timah): Can I ask Minister Teo why is it that the preferred method of pegging a civil servant's pay to market rate be through the tool of performance bonus? Why not choose the method or joint method of increasing the basic pay or raising the band the civil servant is in? I would submit that this will translate into a better chance of retention because the civil servant is able to predict what he will get whereas he is unable to predict what performance bonus he will get.

Mr Teo Chee Hean: I think it is an issue of where we have come from, because in the civil service, we did not have, say, 10 years ago, a history of the salary being in performance-related pay. So whenever we have the opportunity, say, a salary adjustment, preference is to put as much of this as possible into performance-related pay so that we actually come closer to, say, what is the market practice where a considerable percentage, maybe 25% or half a person's annual salary typically, is performance-related. I think that is a good principle to follow in the public service too because it encourages public servants to work hard, to do well, to perform well and it also enables the public service bosses to reward those who are working harder, to motivate them so that we can attract and retain those who are good officers and, at the same time, those who are not performing so well, they also get the correct signals.

The Chairman: Last intervention, Ms Jessica Tan.

Ms Jessica Tan Soon Neo (East Coast): Minister Teo, with regard to performance-based pay for the civil service, what is being done to also encourage outcome-based? As you know, in the civil service, there is a lot of focus on doing more of the same, of being perfect and effective in decision. What is being done for creativity, for risk-taking, not ruthless risk-taking, but risk-taking such that new ideas are created, and also, in terms of providing an environment for retention of talent because it is really then that it promotes creativity and excellence?

Mr Teo Chee Hean: I would say that these are factors which will be built into the performance appraisal of the individual. For example, if a person has good ideas and he is able to have practical good ideas which can be carried through, then I would say that his boss would probably assess him higher, and that would work through in his individual performance bonus. But, in terms of outcome, the civil service very often does not have the same kind of bottomline as, say, a private company has, where if you look at the final numbers and accounts, you can see what the bottomline is. And the closest approximation which we have found to that is really the GDP growth rate. So we actually do have for some of our officers, especially the more senior officers, a GDP-linked component. If the GDP grows more quickly, there is a larger component. If the GDP does not grow so quickly, that may fall to zero. And we feel that that is also a good way of getting a senior civil servant, particularly as a collective, to focus on outcomes of that type.

The Chairman: Dr Ahmad Magad, are you withdrawing the amendment?

Dr Ahmad Mohd Magad: Sir, I would like to join Minister Teo in echoing the very good job done by our civil service and take this opportunity to also thank all officers in the civil service for the sterling job performance to put Singapore where it is today. I would also like to thank the three Ministers for their extensive and detailed clarifications that they have given throughout this session. With that, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn .

The sum of $193,252,110 for Head U ordered to stand part of the Main Estimates.

The sum of $25,870,800 for Head U ordered to stand part of the Development Estimates.