DEBATE ON ANNUAL BUDGET STATEMENT

ANNUAL BUDGET STATEMENT: **** Debate resumed.

Mr Lim Swee Say: ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mdm Deputy Speaker, the Budget for this year is a pro-business, pro-people, pro-Singapore Budget. That is why the labour movement totally supports this Budget.

We have to fully understand that the big environment we are in is a very tough one. We must keep moving forward. Otherwise, we will be lagging behind. But to go forward, is it really that easy?

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Definitely, it is difficult. Why? Because our country is very small. Our land area is small. Our population is small. Our domestic is pitifully small. However, it does not necessarily mean that Singapore is hopeless and has no future.

Although our country is really small, we are also big. In what sense are we big? Our eyes are big. We can see what other nations could not see. Our head is big. We can think of what other nations cannot think of. Our braveness is big. We dare to do what other nations dare not do. Most of all, our confidence is big. Other nations drag things along and change slowly. They are indecisive. But we look at the situation precisely and take the bold step. Overall speaking, this is a great Budget. But we must understand it does not mean that all our problems are solved with this Budget. I hope we will continue to work harder to grow our economy into a Singapore Unlimited Economy, and stay united to strengthen our society into a Singapore United Community. Together, I believe that our Unlimited Singapore and United Singapore will make our nation successful forever. In short, a big small country that other nations will look up to.

6.30 pm

Dr Fatimah Lateef (Marine Parade): Mdm Deputy Speaker, I support the motion.

In response to the comment by the NCMP Ms Sylvia Lim about the timing and decision of the GST increase, we have seen the foresight and the action of the Government over the last 42 years. And as Mr Lim Swee Say has just mentioned, we did not come to where we are by chance and we have to be fast and certainly, the decisions which have been made had helped us to sprint ahead of many competitive economies. The Government has to make decisions and sometimes, they are difficult decisions in

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response to whatever challenges we face, especially in the face of rapid globalisation. And also in response to her 60-year-old man's comment about "Love people and do not love things", let me share with her that nowhere else in the world can you get a Budget which exudes love and compassion in abundance as this one.

Globalisation is here to stay and we will embrace it as a nation hand-in-hand and adapt to the new reality. But it comes with some challenges. Whereas it is easy for some of us to identify with globalisation and its opportunities, how about the average man-in-the-street, the lower 20% of society and those who live from day-to-day and the elderly? Their question would be: what is in it for us? What does globalisation mean to them? They have to understand the effects of globalisation. It will affect their employability and, of course, their job security. In their current jobs, it is not just comparing themselves to the guy who sits at the next counter. It now boils down to comparing himself to the average worker in China, India or Russia. He has to realise the competition is now that great.

To adapt, he has to change his mindset, be more outward-looking and get a wider perspective, change some of his traditional and conventional views, even if he does not have to travel out of Singapore. Parents and the elderly will need to realise the importance of investment in the next generation because their children are the ones who are going to be immersed in this new world order. For example, investing in their sound educational grounding now will prepare them just for this. For indeed, education is the key to handling and adapting to globalisation changes all over the world. They must be encouraged to grab the opportunities. I therefore applaud the Post-Secondary Education Assistance fund. One example I would like to highlight is the Malay/Muslim community

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efforts to standardise the madrasah education. From next year, the madrasah primary schools will be taking the same national PSLE examinations as every other Primary Six child.

The lower-income, the unskilled and the elderly workers must become more proactive and vigilant. The Workfare Income Supplement scheme is a major policy change to help them. The introduction of Workfare as a permanent fourth pillar is a plus point for them. But they must identify and realise why they need training and retraining, skills acquisition and lifelong learning, or they stand the chance of becoming redundant especially in the age of high technology and mechanisation. Job security and empowerment will help them move towards being able to fend for themselves. Therefore, we must all play a role in helping them in the spirit of brotherhood. Employers and the unions must continue to bridge the knowledge of the Skills Development Fund or the Lifelong Learning Endowment Fund to them because they can now apply directly. Members of Parliament, grassroots leaders and even the media too can play a role by creating and enhancing awareness.

I move on now to healthcare. With Singapore having the lowest infant mortality rate in the world and as we rank third in the world in terms of life expectancy, which is now 81.7 years, people are living longer. The bulk of our healthcare expenditure will be attributed to the elderly as they are high consumers of healthcare anywhere in the world. To tackle this problem, we must, either, firstly, free market regulation systems by using drug-related groups (DRGs) and resource-based relative value scales, or secondly, evaluate the needs and demands of our population and structure our healthcare system and financing

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accordingly. We already are doing both, but we need more to plan for the elderly explosion we are going to face. The population over 60 years of age is going to increase from 6.8% currently to 15.7% in 2020 and 56.7% by 2050. With ageing comes along dementia-related illnesses. This year alone, there are about 23,000 elderly who are diagnosed with dementia. By 2020, the number will rise to 54,000 and by 2050, we are going to hit 188,000 people with dementia.

A report commissioned by the Alzheimer's Disease International suggests dementia-related illnesses may soon overtake heart disease and cancer as the biggest health threat in the Asia Pacific region. We need to cope with these projected numbers. We need to conduct local studies and analysis on the direct and indirect cost of managing the elderly with dementia, Alzheimer's diseases, and so on. And we need to fine-tune the ways to finance and organise care over the coming years.

If an average 60-year-old does not have enough money in his or her Medisave and healthcare insurance, what will be the options? In this context, I am glad to hear of the $200 million top-up of the Medifund and the upcoming enhancement to the Eldershield scheme. The new scheme with CPF and Medisave opportunities for the informal workers and the contract workers is indeed a plus point in this year's Budget as well. But what will be the implications to our 3M system? What will be the cost to the elderly patients and to Singapore for each additional life year? We need to take into account that medical technology will add cost for additional life year. The Ministry of Health may also want to consider doing some quality of life measurements with a focus on its future trends, looking at health priorities within an integrated framework for elderly care. We will be needing more hospitals, nursing homes and step-down care beds in the coming

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years. In the United Kingdom, guidelines for service according to the Royal College of Physicians and also the Royal College of Psychiatrists states that for an elderly population of 30,000, there must be 45 acute beds, 75 day hospital places and 75 continuing care beds, which is the equivalent of our step-down care beds.

It is time for us to project our local numbers for the coming years. Singaporeans must plan for their golden years from now, from our diets to lifestyle and the decisions that we make. Education on self-management and empowerment for the elderly can start from mid-life. A good prototype I would like to share is the Young at Heart Community College or the YAH Community College which is pioneered by the Marine Parade Family Service Centre. Here, we have middle-aged as well as the older generation being enrolled in courses as though they are going to universities which are useful in their day-to-day living. Several batches have now graduated and they have only positive things to say about the programme. Perhaps, more funding can be channelled into this meaningful programme from MCYS and also NCSS.

Mdm Deputy Speaker, in the United States, President George Bush has recently trimmed his healthcare expenditure to seek a more balanced budget. There is going to be a US$70 million cut from Medicare and Medicaid over the next five years. The democratic law-makers are calling this, and I quote, "Pulling the lifeline on the poor". We must never get to that stage. In Singapore, our healthcare financing model ensures fiscal sustainability and affordability by all, while some may need a little bit more help than others, with shared responsibility between individual and society.

With the formalisation of SingaporeMedicine, more foreigners will be seeking medical care here. The numbers are projected to rise to one million by the year

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2012. We must prepare by planning now with expansion of services, increase manpower of the various appropriate disciplines in the right proportions, increase bed capacity and outpatient specialist clinic slots. We are going to have to meet the increased demands of healthcare of these foreign medical tourist patients or our own patients of the increasing number of elderly with multiple problems that we are going to face and also the increased number of patients to be generated from our call to foreign talent to come and settle in Singapore. The time to start preparing is indeed now and I certainly see changes announced in this Budget, gearing us slowly but surely in this direction.

In research and development, the research community is delighted with the projected increment of the R&D budget up to 3% of the GDP annually by 2010. This also comes with another $500 million for the National Research Fund. This is seen as an investment for Singapore's future, planning for growth in this area which comes along with job creation, technology enhancement and also intellectual property development. I hope to see some of these monies channelled into research related to the elderly, dementia, psychogeriatrics and also psychological health. These are often called the softer sciences and they have not been given too much emphasis so far, but we would like to see that change.

Philanthropy refers to the desire to help mankind while volunteerism is the offering of services based on one's own free will. The call by the Second Minister for Finance in his Budget speech for Singapore to become a Philanthropy Hub is indeed a very fresh perspective, very different from the usual call to become a financial hub, a medical hub or a trading hub. We can be whatever we set our minds towards and strive for. His call is on target as Singapore has great potential to become the volunteer capital of Asia.

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Our position is conducive. We are at the crossroads of Asia, Southeast Asia. Our reputation is well-known in Singapore, it is synonymous with trustworthiness, action and accountability. The new 80:20 rule which we are doing away with is indeed very attractive as well, and that Asia is a disaster-prone zone may be an impetus for this. Philanthropy on a smaller scale must be promoted through the enhancement of the spirit of volunteerism amongst our people. Volunteerism promotes community bonding as well in the development of a gentle and gracious society. It will strengthen the sense of belonging - the Singapore heartbeat. The moral test of any society is how we treat our weakest, our elderly, our underprivileged or disabled, our needy and our sick. This Budget represents the heartware for us to do all these. But we, the people, need to provide the software. Our national volunteerism rate is at 15.2% at the last NVPC survey of 2004. More companies and corporations will need to recognise and participate in volunteer and philanthropic activities. Corporate volunteerism must expand. Corporations' performance is now being judged to the triple bottom line of economic, environmental and also the social contribution. Companies promoting volunteerism and also philanthropy must be given some kind of recognition. The recognition and allocation of volunteer leave need to be formalised as well and taken more seriously. Recognition and using of role models must be stepped up. We must become a more gracious society and continue to build on our heartware. Only in this way can we achieve our civil society with active citizenship through volunteerism and philanthropy, and I am sure our happiness index will improve as well and route towards becoming a top level first-world nation.

Mdm Deputy Speaker, with all these, we will grow the Singapore pie. Mr Lim

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Swee Say has confirmed that the pie is not going to grow too large. Well, we will not be able to sub-divide it into too many minute sub-segments, as it would not satisfy our appetite. Perhaps the day will come when we can actually twin the pie and even triplicate the pie, and perhaps we can have different flavoured filling as well to choose from.

6.48 pm

Mr Sam Tan Chin Siong (Tanjong Pagar): Mdm Deputy Speaker, I would like to speak in Mandarin first and in English later.

( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mr Speaker, Sir, this Budget is generally well received at all levels of the society. The general comment of this Budget is that this is by far one of the most heart-warming, humanitarian and forward-looking Budgets. Many have termed it as heart-warming because it takes special care of the low-income family and elderly people. Others have termed it as humanitarian because it gives away ang bao to all strata of society. It is forward-looking because it invests heavily in education, infrastructure services and R&D projects. This will allow Singapore to continue to be a step ahead of other countries, as well as retaining Singapore's competitive edge while facing competition from globalisation.

This year's Budget is comprehensive, so it shows concern and gives consideration to different income groups, workers, elderly people, big corporations, and small employers. But there is an old saying, "Even the wise are not always free from error." Some of the MPs have pointed out that the Budget has its inadequacy. However, one point to take note is that the comments are pertaining to the policy details. As for the overall Budget, it is worthy of praise. Even the Member for Hougang, Mr Low Thia Khiang, makes positive appraisal of this

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Budget. He feels that the Government need not increase GST and it will still be able to afford a series of assistance schemes and subsidy allowances. As my fellow colleagues have already refuted his views, I will not elaborate further on this.

Since the Government announced the Budget on 15th February 2007, I have been observing the different views and opinions of the people, especially the low-income group and the elderly group. As this is indeed a very generous Budget, it is expected that the people will give positive feedback. However, there are some people who are confused by the Budget. For instance, they do not know how much cash will be given by the Government, the amount of subsidy given to their CPF account, the criteria to be entitled for these benefits, etc. This is because the Budget can be complicated for those who are lowly educated and illiterate.

If we recall, last year, when the Government distributed the Progress Package to the people, as many as 19,000 people did not apply for it by June 2006. It was through subsequent house-to-house visits conducted by the grassroots leaders that people understand more about the Progress Package. Eventually, about 20% of the people in this group managed to receive their Progress Package. It is a pity that many more people were not able to benefit from this package. Budget 2007 provides more assistance schemes, each with varying amounts. For those who are not well educated, it may be difficult for them to successfully obtain these schemes.

Therefore, I would like to urge the Government to take into consideration the previous experience, so as to simplify the administrative process. At the same time, we should educate the people through various channels about the application procedures, as well as the deadline for application. Also, the grassroots organisations and the People's Association

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could assist those who are not clear about the application process. This will, no doubt, be a tedious process, but it will ensure that the lower income and the elderly group will benefit from the Budget.

In this regard, I would like to propose that the Government put in place some measures to prevent businessmen and hawkers from making use of this opportunity to jack up the prices of their goods. This will weaken the intended benefits of the GST offset package. In the past, I understand that the Government had set up a committee to look into this matter. But, according to past experiences, the grassroots leaders appointed by the committee had to carry out mediation and they advised businessmen and hawkers against carrying out unlawful practices. The mediator did not have the power to enforce the laws and, as such, it did not have much binding effect on the businessmen. This is like the Chinese saying, "a paper tiger" meaning it is ineffective.

The above views and comments may not have direct impact or relationship on the Budget-related assistance packages, but they are the aspirations and voices as well as the hopes of the people. Hence, I do hope that the Government can pay closer attention to the voices of these people, so that we can achieve complete success for this Budget.

Madam, I would like to continue my speech in English.

( In English ):

Watershed

Many people have called this Budget a watershed. From my memory, many Budgets have been called "watersheds" in the past. For me, this Budget is not special just because we spend money on the poor - it is of no great difficulty to know that we should help the poor, and

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our Government has always done so. This is also not the first time that the Government's Budget is pro-business or pro-worker. So, this Budget is again not special in this sense. But, for me, this Budget is very special because it is a return to the socialist roots of the People's Action Party.

Mdm Deputy Speaker, we have been called by many people as pragmatists, as if we have neither a brain nor a heart, but merely a super efficient computer or calculator to churn out the maximum output from a limited input. However, this Budget shows that we are more than a computer or a calculator. In this Budget, there is compassion beyond logic, there is warm empathy beyond cool rationality. This Budget also shows that our Government has maintained the founding leaders' commitment towards equality in opportunities and fairness in the distribution of goods.

It also shows that the idea of equity and equality needs to be clearly distinguished. We do not give everyone the same amount of help, because we are not all created equally. Some need more help than others. This is the context in which the Workfare bonus, CPF increase, GST offset package and other incentives and tax measures ought to be seen.

A new socialism

Madam, with this Budget, the Government has created a permanent structure in giving people money creatively in the name of Workfare. In the past, the Government has given out money to Singaporeans mainly under crisis conditions, such as during the SARS period, and we all know that the help packages will stop once life is back to normal.

Occasionally, the Government also gives out bonuses, such as New

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Singapore Shares, when there are budget surpluses. Now, the Government has made Workfare a permanent feature of its policy. Workfare is not a simple needs-based welfare system where "from each his needs" is the principle, like the traditional socialism. We have, I think, adopted a kind of modern socialism where state subsidies are accompanied by a preservation of the work ethic. In other words, it is work-driven and not needs-based. To me, a permanent work-driven Workfare scheme is a sound principle and a much superior approach to the permanent needs-based social welfare scheme. Even the hon. Member for Hougang has conceded this and supported the Workfare programme although his party has been advocating permanent needs-based social assistance.

Workfare does not erode the workers' motivation to work, and yet helps those whose work does not yield as much pay as they need. This is a unique and special formula which can make our society more caring without losing our competitive spirit.

New social contract

Mdm Deputy Speaker, that is on a philosophical level. On a human relationship level, we need to establish a new relationship with Singaporeans. I read some news reports on people's reactions to the Budget and could not help but had a feeling that some people are, perhaps unconsciously, beginning to take the various help packages as their rights.

For example, I read an article in a Chinese newspaper of a man whose family received almost $5,000 from the various help packages under the new Budget. His reaction to these goodies? He said that the Budget is only "okay" - hai ke yi - and more needs to be done. He further commented that his family has a few children and therefore should get more money than his friend who is a

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single. From his perspective, these feelings are understandable, but that in itself is also a manifestation of "never enough" attitude. He probably forgot that his school-going children would get other incentives while his single friend would not.

We have to guard against breeding an over-dependence on the Government which may inadvertently create a Singapore populated by citizens who think of themselves as "never satisfied" customers.

Coming out of Plato's cave

Mdm Deputy Speaker, I have said earlier that this Budget has broken new barriers but is also a return to our political roots. In a way, it is an easy decision because the social and economic problems addressed in this Budget are real and immediate.

I want to suggest another area which is quite visibly missed out in this Budget, but one that has to be done - a far more intractable area, because the problems are long term and, for now, intangible. I am talking about the environment - an issue which quite a few Members of the House had mentioned before me. I am happy for this, because it means that more of us are conscious of this urgent need. Today, I would like to add my voice to this cause.

As I speak now, we are standing, or sitting, if you prefer, on the tip of a fast-melting iceberg. The global consumption of energy, the disregard of the rapid rates of deforestation, the contamination of water, all these are unsustainable, and yet there is a relentless eating up of these resources in many parts of the world. We, the people of today, are making the decisions for the people of tomorrow. It is always hard to make decisions that will be popular only 50 years from today, when it is easier to make decisions that will win the next election.

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But, in Singapore, we have taken hard and unpopular decisions before. For example, we have looked towards the long term, and helped to break the backs of anti-business unions in Singapore in the 1960s. After that, unions and business have worked together to solve problems for the long term. It was not something that made us immediately popular then, but it was good for the long haul.

Similarly, we resettled people from their homes and farms into high-rise HDB flats from 1960s through to the 1980s. It was a very difficult and unpopular move, but we did it.

We need to build on the trust that we have established over the past four decades and ask the people to change their way of living. We all need to realise that simple but significant changes need to be made to our lifestyles if we are to conserve the fragile balance of our environment.

As policy makers, there are five simple things which I think the Government can do:

(i) Make sure that recycling bins and efforts are widespread and in every ward;

(ii) Give tax rebates for companies which are environmentally friendly;

(iii) Think twice or three times before cutting down old and mature trees;

(iv) Be less aggressive in acquisition efforts and tearing down old but still functional buildings, eg, the old National Library

was torn down and replaced by a tunnel; and

(v) Participate more actively in global efforts to save the environment. Our Ambassador-at-large Prof. Tommy Koh's efforts on this front have been exemplary.

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He has chaired the Earth Summit and the Law of the Sea. Mdm Deputy Speaker, we should give Prof. Koh a larger role and leverage on Singapore's role as an impartial and responsible world player on environmental issues. We can be the champion for environment conservation.

I would like to share a little story that has created a big impression on me. There was once a man who lived in a cave with other men. They had no idea of the world outside and were content to live within the stone walls, scrawling pictures with coal and watching the fire burn. One day, one man, wiser, braver, more curious than the rest, ventured outside. He saw what it was - the real world. He went back into the cave and got his fellow men. He told them to do the hard things that they needed to do, so that all could progress from the cave into a new reality. This is not a fairy tale from Hans Christian Anderson which I have mentioned in my maiden speech. Quite the reverse. It is from Greek philosopher Plato's Republic, which was written about 2,300 years ago. Mdm Deputy Speaker, we the people in this House are collectively that man who has wandered out from that cave. We are the ones who have the ability and capability to show and lead the rest of the men.

We know the truth and the severe cost about climate change, we know the many drastic measures we have to take, if our grandchildren are to continue to have a beautiful world to grow up in. We have a choice - either to ignore these facts or bring them up to our fellowmen. For me, this is Hobson's choice. We have emerged from the cave and we need to go back to tell our fellow men what we have seen. Not because we are any smarter, not because we have better answers, but because we have promised to be their leaders and it is our duty to lead them out of the cave and into a new and better life.

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On this note, Mdm Deputy Speaker, I support the Budget.

7.06 pm

The Minister of State for Community Development, Youth and Sports (Mrs Yu-Foo Yee Shoon): ( In Mandarin ): [For vernacular speech, please refer to Appendix A.] Mdm Deputy Speaker, we would like to thank our Second Minister for Finance, Mr Tharman Shanmugaratnam, who has prepared for our people an excellent, generous and forward-looking Budget. It has taken into consideration many factors including challenges faced from globalisation, our ageing population, etc. And just now, my fellow MPs have used different adjectives to describe the Budget. As I have been in Parliament for a long time, maybe I can make a comparison and conclude that this is the most generous as well as the most resolute Budget. Why do I say this? Just now, we heard some comments from Mr Sam Tan, and I do not quite agree with what he said. He said that this Budget is like returning to the fundamentals of socialism. Some say that the Budget is being too generous and thus it is really close to socialism. But we have done very well to help our low-income group and low-income workers through the Workfare Income Supplement (WIS) scheme. If we are not helping our people through the WIS, it will then become a form of welfare benefits for the people. If that is the case, I would be worried for our society. Hence, I feel that the Budget is worthy of our support because it is a wise move.

In the last few years, during the discussions with our leaders, it was a big headache for us because as much as we wanted to achieve economic growth, we could see that many Singaporeans were not able to catch up. Although we want to enjoy a high quality lifestyle, some of the people are not able to catch up with the pace because they are not able to cope with the rising costs. In this

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instance, what should we do? In fact, that has been our headache for many years and, therefore, I feel that this is the most resolute as well as the most generous Budget.

Under the new leadership of our Prime Minister Lee Hsien Loong, he has decided to put in place a series of measures to help the poor and needy, so as to narrow the income gap. If you had read the Lianhe Zaobao two days ago, there was an article about the United States. It is a country that many people are dreaming of and a lot of people are eager to go there. They have done well and will continue to be a country that people look forward to go to. However, in the US, they are facing the problem of widening income gap for many years. Over the past 30 years, the US is poverty-stricken, and currently they have the biggest number of poor people, ie, about 16 million people are living in poverty or extreme poverty. The Morgan Stanley report also pointed out that when there is economic growth, the people who will get the biggest share are not the labourers or workers, but the capitalists. Capital returns have increased from 7% to 12%, and that is almost equivalent to the earnings of the nation. But what the worker is getting has been shrinking and their share has been declining from 60% in the 80s to 56% currently.

Just now, Dr Fatimah said that the US is going to further decrease its health budget. Therefore, I must say that we are in a very fortunate era. I can say that this is a golden era for Singapore because we have quite a substantial sum of reserves, returns from overseas investments, and good economic progress. This is the best time for us to revise our tax regime and to help the lower-income group. This is the most appropriate time now. After hearing from our leaders and reading a lot of reports, under this highly competitive environment and wave of globalisation, what should we do to attract investments? The solution is to reduce our

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tax rates in order to attract foreign investments. I believe Hong Kong, in their recent budget debate, may also reduce their tax rates. So what should we do as a small country? We are not able to further increase direct tax, we can only lower it. As such, our corporate income tax will be lowered by two percentage points in order to attract more foreign investments. Even personal income tax can hardly be raised.

Some MPs even suggest that if we want to attract foreign talent, we should reduce the personal income tax rates. Under such circumstances, I feel that a more extensive tax regime whereby everyone can share some responsibility is a better tax system. However, we do face some challenges when we increase the GST, particularly in the area of helping the poor to cope with this pressure. In this regard, I am very glad to know that our Second Minister for Finance has announced a very generous GST offset package. It is able to offset the negative effects of GST for more than 10 years. Hence, I feel that this Budget is really very generous. It is so generous that it makes me wonder if there are any additional strings attached, or if it is subject to any conditions.

The NTUC Secretary-General has earlier highlighted that Workfare is a very good scheme to help the low-income workers. However, I would suggest using a two-pronged approach: to raise their level of technical ability, so as to help them earn higher wages. Under the ComCare scheme, the Government has recently been promoting the work support plan and it has been doing well. It means that when we try to match a job for the unemployed, we also advise them to go for training. After the training, more than 50% of the workers get a new job and their pay has increased by an average of more than $300. I think that is a very encouraging situation. Therefore, our

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challenge is to design a training programme that is linked up with the Workfare scheme. This will apply to all existing workers as well as elderly workers. As we know, we are facing an increasing life expectancy, while technology, knowledge and product life cycles have been shortening.

I have a friend who works in a Sony factory and he designs electronic products. He said that, for the mobile phone design, there will be a new product every three months. I asked him what the latest product is now. Maybe even I am not able to catch up with the new technology. This will mean that for every three months or six months, we have to learn how to use a new product. So time is not going to wait for us. This also applies to our university undergraduates, because their knowledge may be outdated in five years’ time, particularly for those who are in the engineering and technical fields. In fact, I have received a lot of feedback regarding the restructuring taking place in MOE, and many feel that it is a correct move. It is right for us to develop our only resource - the human capital - and give it 100% support. But we cannot just stop at MOE. We must also extend such training programmes to MOM and to those people who are seeking for jobs. Is it possible that we continue to have such a lifelong learning education account, so that job seekers or existing workers can apply for some form of subsidy for learning or continuing education in their profession?

In my younger days, after my graduation, I attended a booking-keeping course at the Adult Education Board during the weekend, and so I have some accounting experience. I feel that every one should recognise the fact that the knowledge they receive in school, polytechnic or university, has a limited knowledge value lifespan, and this

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lifespan is getting shorter now - it is only five years. Similarly, it is just like our doctors. After a few years, they have to go for re-examination. We must think of some ways to enhance the technical skills of our people. However, this will require the tripartite cooperation and we can only achieve this objective through joint efforts by all parties. In this regard, we have various measures in place. For instance, NTUC offers different schemes, and WDA has many such schemes as well. But the question is really whether we have personally done anything. I think what we should do is to find ways and means to encourage our people. In some countries, there are some cases whereby people are not aware, they do not want to ask or they do not want to find out. Therefore, the people must be more pro-active in this aspect and they must take the initiative to find out about the Government policies. The people need to understand the schemes that are made available to them. We should not behave "do nothing and die". Of course, we should not be "忧天忧人" [ you ren you tian ], meaning too worrisome. Also, we should not put the blame on others for our failure or our hardships.

The Government can only do this much by providing us with basic facilities, education and training opportunities and opening up pathways for us. Eventually, it is our responsibility to ask and find out, and if you think that the plan is too complicated, you do not have to learn about the details. You can make your enquiries, ask your MP during the meet-the-people session, check out at the Community Clubs or the Family Service Centres, or maybe even at the market place where there are grassroots members who can provide you with some information. Therefore, it is impossible for any one to say that they are not aware. I hope that every one of us could pay more attention to the Budget package, and

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understand how it will affect us. As such, I describe this package and WIS as tools that will help us to take off. Before the plane takes off, we will have to tighten our safety belt and not safety net, because when we refer to safety net it means giving social welfare to the unemployed, but the safety belt means that all of us will take off together. You will have to be on board the plane to have the safety belt and, therefore, we must prepare ourselves and get ready for the take-off.

Recently, I asked my friend for comments regarding the Budget announcement and was told "无为不治" [ wu wei bu zhi ] - meaning the Government should operate on a policy of non-interference. My friend said that the Government has done too much. "无为" [ wu wei ] is a Taoist saying - meaning non-interference. But, in this instance, our PAP Government will not agree to "无为" [ wu wei ] - not doing anything, because we are "有为" [ you wei ]. Most importantly, I have heard discussions on the issue of Medisave contributions: how we can encourage informal workers to open a CPF account so that it will enable them to contribute one-third to Medisave Fund, while the Government will top-up the remaining two-thirds. I believe that the Minister for Health, Mr Khaw Boon Wan, is appearing in local papers almost every day, urging us to open a Medisave account for our families, our spouses and our children. And now, the Second Minister for Finance also urges us to make use of this opportunity to make contributions to CPF as well as open an account.

Earlier on, our NTUC Secretary-General also quoted a few examples on the benefits of having a CPF account. Therefore, I believe that Singaporeans no longer can claim that they have not heard anything or know anything. I hope that all of us will do our part. It is for our own interest because one day we will fall sick

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or we will retire and it is thus necessary for us to open a CPF account, contribute over $20 every month and the Government will subsidise a portion for us. If the effort is still not enough, we may even have to launch some campaigns among the communities to raise the awareness of our residents. But if you still refuse to listen after much advice, then the description of "坐以待毙" [ zuo yi dai bi ] - meaning “do nothing and die” will inevitably happen to some of us.

During conversations with friends, we discuss about the future policies in Singapore, and how we can achieve the Prime Minister’s vision to transform Singapore into a highly efficient and vibrant global city. Minister Mentor has envisaged that Singapore will become a world-class city. Personally, I think that we have a high level of efficiency. As for harmony, my Ministry is still working hard and the Minister will be speaking on this. Sometimes, we must also think about the perception of a so-called Charming Singapore. Many of my friends gave their feedback on a "Charming Singapore" and they said that over the past few years, Minister Mah Bow Tan has put in great efforts and we must acknowledge that we have made many changes in the appearance of our city. Our roads are much more beautiful and we have more greenery. A few persons have commented that during the day time when we take a drive from Changi Airport to the city, the scenery on either side is very attractive. The water is clear and clean, the trees and flowers are green and scenic. But at night, when we drive along the same highway, travelling along East Coast Parkway, it is rather pitch-dark. Therefore, to become more charming, some people suggest that we need to have better designs for our lighting and lamp lights. Of course, we do not want to be like some countries where they have lightings in disorganised confusion. Rather, we should have more sophisticated, graceful and artistic designs. We may need to

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engage the French designers to work on it so as to make the lightings more romantic. I am not sure if this will have any positive impact on our population but we may be able to attract more tourists.

On another point, the Second Minister has mentioned earlier that for us to build a successful nation, we need to have supporting infrastructure. Some friends and grassroots organisations have reminded us of the need for a full-scale development in our creative spirit and humanities, so that when people come to Singapore, in terms of our hardware, they will feel that it is a fresh and beautiful place and, at the same time, they will also be impressed by our software. In this regard, we have earlier mentioned a few areas of development, such as human resource, technical and cultural developments. Most importantly, we have to develop our spiritual civilisation in areas such as culture, television, radio broadcasting, language, communication skills, our appearance and attire. So we must be consistent in our inner thoughts and outward behaviour. This means that we must also attain inner qualities of virtue. So whether we have achieved a world-class standard is another question.

Recently, during the World Bank conference, it was mentioned that we would like to achieve our goal of four million smiles. Have we consistently been encouraging our people to meet others with a smiling face? If we want to develop the IRs and to enhance our city as a cultural city and to attract top talents from overseas, it is important to develop this aspect. The development of these software qualities can become an enterprise itself. If we link this up with the concept of an “enterprise”, perhaps it can be more easily understood by our Finance Minister. In other words, the enterprise here is referring to an industry that specialises in grooming and packaging, so

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as to sell certain abilities. We should not say that the Filipino ladies have the sweetest smile or the Shanghainese women are the sweetest. In our context, this will also apply to the men, not only the women in Singapore. I hope that we will cultivate our students and Singaporeans to greet people with a flattering smile, and to carry oneself with ease and confidence. I say that this can also become an industry.

Another area will be the food and beverage industry, which is also considered as software. Recently, some chefs said that they want to go for overseas international competitions but there is a lack of sponsorship. Under our software development, we hope to encourage more celebrity chefs to participate in overseas international competitions, so that when they come back, they can also improve the quality of our food. I remember Minister Lim has earlier talked about a book that says that if you have to visit one thousand places in this lifetime, you should come to Singapore for the food. "吃在新加坡" [ Chi Zai Xin Jia Po ]. Come for the food in Singapore. The Chinese saying goes, "衣食住行, 人以食为天" [ Yi Shi Zhu Xing Ren Yi Shi Wei Tian ]. Among the basic necessities of life, food is termed the most important. This is our advantage in Singapore - good food. And I do believe our chefs are good at fusion cooking techniques, combining eastern and western styles. For these small industries, we should continue to encourage and reward them.

As for the performing arts, I believe that Mr Baey can put in extra efforts to promote our performing arts industry such as MediaCorp, our movies and computer animation. It seems that we are lagging behind Korea in these aspects. But I do not believe that we lack talents. We have many talented people, but usually they have to be packaged and marketed overseas. A good example is Stephanie

Column: 1987

Sun. She is a good singer but she has to go to Taiwan for packaging, before she became famous and returned home.

Earlier on, my fellow MP also asked us to consider whether or not to proceed with a worldwide exhibition on toilets. Our reply to the organiser was that the event has to be hosted successfully overseas before it is held here in Singapore. There is feedback that we should search and unearth talents in all areas by giving them scholarships to assist them with re-packaging as well as to help them upgrade their skills. These are the so-called software industry.

Another industry that I am more familiar with is education. MOE encourages the development of Singapore into an educational hub, with regard to professional training, primary, secondary and university education. We have spent more than 20 years to develop our early childhood education. And our nursery and kindergartens have plenty of experiences in the operations. But now, we are still looking forward to Australia and US as our learning model. Should we not encourage our people, schools and institutions that are experienced in this area to develop Singapore into an early childhood education hub, as well as a training hub for teachers in early childhood profession? I do believe that we have a role to play in the international arena. This will also be part of our software development, and it is also an industry.

Finally, I want to discuss about "Wow, Charming Singapore." I have briefly mentioned earlier that, to achieve this, one needs to look charming and the place must look beautiful too. Currently, in terms of development of our hardware, we have emphasised mainly on Marina South, Clarke Quay and Boat Quay. But if we are using the 6.5 million population as a standard gauge for design, we must

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consider more areas for hardware development. As Dr Fatimah has mentioned earlier, on the hardware development of hospitals, I strongly agree with Minister Khaw Boon Wan. In our effort to develop world-class hospitals, who should be the one leading this role? Should private hospitals be the key driver? Or should it be the Government hospitals? Or should Government hospitals continue to ensure that basic healthcare is provided for its people at an affordable level? Should this concept be applied to other facilities, for example, our transport system and other hardware facilities, etc?

Take, for instance, our transport system. If we are looking at achieving the target of 6.5 million population, should we look at other alternatives? Being an island surrounded by water, maybe one way is to explore having ferry service. In view of our greying population, apart from the bustling and busy areas, should we consider having a lower-tier transport system in our HDB heartland? All these are just some ideas, but how can we make them reasonable and provide alternative choices for our people, so that we make them feel that it is affordable? Maybe in some areas, we need to have two different rulings, so as to reach a world-class city standard. We talk about globalisation in all aspects, and achieving a world-class standard as well. But for certain areas, should we have a second-tier service standard? On this, I would like to applaud our leaders regarding our hawker centres. If our hawker centres are privatised, I believe it is difficult for us to get a meal at $2. So we need to make a choice. If you wish to go to an air-conditioned hawker centre or a restaurant, you will need to pay $5 for a bowl of noodles. But if you go to a hawker centre that is without air-condition - you may even have to share the table with others and it is not possible to occupy one table by yourself - you will only have to pay $2.

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Therefore, in this aspect, we may have to come to some form of consensus to see how we can coordinate with each other. In certain areas, we have to provide world-class services, so that the people are given a choice. But some other services may be of second-tier standard, for example, entertainment facilities for children. Not every one can afford to go to Clarke Quay, Boat Quay or Marina South. In future, should we also have a second-tier type of entertainment facilities at Jurong Point, Ang Mo Kio Centre and Woodlands Point?

On a last note, I am full of confidence for our Budget and our leaders. I have many things to say but, due to time constraint, I will shorten my speech. I believe that we are currently in the golden era, especially now that our economy is doing so well, we can use the very comfortable pace and logical mindset to think about it clearly. We will have a clearer mind to analyse our future directions. Therefore, I feel that this is the best time to have an increase in GST rate and to revise our tax regime, as well as to carry out the WIS scheme.

I fully support the Budget.

7.27 pm

Mr Edwin Khew Teck Fook (Nominated Member): Mdm Deputy Speaker, may I first be allowed to wish all Members of this House and their families a very joyous and a successful Lunar New Year.

Next, Madam, I would like to applaud the Second Minister for Finance for presenting what has been hailed by the business and manufacturing sectors as a pro-business and pro-SME budget. And I believe, like the Minister, that this Budget will indeed help businesses and Singaporeans grow the economic pie and

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ensure the sustainable growth of Singapore over the next five to 10 years and beyond, taking advantage of globalisation. More importantly, all are convinced that this is a serious Budget with long-term goals and strategies, compared to the stigma of last year's Budget which many touted as an election year Budget.

Madam, I would like now to share with the House my findings from two feedback sessions organised last Thursday, 22nd and 23rd February with the Manufacturers Federation and the Singapore Business Federation. I would say the response from the manufacturers to attend the feedback sessions was quite poor. So it was postponed because the Lunar New Year holidays were more important to them than the Budget. But take it as a good sign. It shows that the manufacturers in Singapore are happy with the Budget and the handful of written feedback SMA received indicated minor discomfort similar to feedback I received from approximately 100 companies and business representatives, mostly SMEs, who turned up at the SBF's conference room on Friday. The SBF Secretariat staff and myself spent two hours listening and discussing about the Budget, after assessing from the outset that all present were generally happy with the Budget.

Madam, please allow me now to summarise the issues raised.

Corporate tax

It was suggested, to be consistent with the previous exemption ratio for corporate tax, that the Government should consider raising the 75% exemption level to the first $30,000 of chargeable income instead of $10,000. The balance of $270,000 should then be at 50% exemption for year of assessment 2008.

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Early enactment of Budget

It was suggested that the Government look at enacting the Budget within six months of adoption, as this would be helpful to the business community in terms of obtaining clarity on specific changes. The Income Tax Act 2007, for example, was gazetted on 13th February 2007, ie, almost one year after the 2006 Budget was passed.

Definition and classification as SMEs

It was suggested that the Government review the definition of SMEs, as currently companies with fixed assets of greater than S$15 million and employing more than 200 people do not qualify as SMEs. In view of the Government's focus to grow SMEs and encourage SME start-ups, I would suggest that the Government look at redefining Singapore's definition of SMEs to align with more developed countries, if we want to attract these foreign SMEs to come to Singapore.

For example, the EU definition of a SME is an enterprise which employs fewer than 250 people and which has an annual turnover of less than 50 million Euros or approximately S$100 million and have a listed company that controls less than 25% of voting rights. There are, of course, sub-divisions or categories of what is a small enterprise and what is a micro enterprise.

The Americans, on the other hand, have detailed definitions of what enterprises can qualify to be a small business. They use a table of size standards which vary based on the industry sector the enterprise is in. From the size standards chart of the US Small Business Administration, it looks like they define a SME as an enterprise either employing no more than 1,500 people or have a turnover of not more than US$28.5 million or approximately S$43 million, depending on the sector, type of

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industry and size standards of the industry. For manufacturing, the size standard, for example, is based on the maximum of 500 employees. So it looks like that the definition of a SME in the US depends on which size standard is being applied, ie, turnover or employee size.

Singapore needs to look at these major economic blocs and decide on which model we should follow or come up with our own hybrid, but a revised and updated definition is overdue, if we want to encourage foreign SMEs to come to Singapore and also Singapore SMEs to grow and to be on par with their foreign counterparts. With the pro-SME Budget and incentives, I can see many Singapore SMEs being encouraged to explore joint ventures with European or US SMEs and vice versa. I will elaborate later on on how I see this SME base growing, particularly in the manufacturing sector.

GST

The sectors I represent seem comfortable with the one-step 2% increase in GST and the effective date of 1st July 2007. A number, however, requested that the 50% grant to support GST registration related costs be processed speedily by the Government agencies, such as Spring, to help them on their cash flow. There was also a request that the quota be increased to two representatives for GST registration related training courses organised by IRAS which, I believe, are free. Many SME bosses feel that they need to attend together with their accountant as they are required to sign forms committing them to administer the GST, but they need to understand the requirements of what they will be committing to, in case their accountant leaves them.

There are three or four other issues regarding investment and capital allowances that I feel are not really related to the 2007 Budget Statement which I will

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bring up at other sittings. However, Madam, I have one last issue regarding personal income tax.

Many questioned why this was not addressed in line with the reduction of corporate tax, particularly when Singapore wants to attract highly qualified foreign talents to come to Singapore. A reduction in personal income tax will further reinforce the key reasons for these talents to seriously consider Singapore and it will be on top of the advantages the Minister has mentioned in relation to why globalisation is working in Singapore's favour.

I am glad that the Minister does recognise that even though Singapore's personal tax rates are competitive, there are some other jurisdictions with lower effective tax rates compared to Singapore. I, therefore, encourage the Minister to consider lowering our personal income tax rates to attract and keep both international and Singaporean talents in Singapore.

Madam, I would like now to change gears and move on to another topic on the Budget Statement which I am passionate about. I am referring to the growing of SMEs and, in particular, SMEs in manufacturing and the sector on sustainable energy. Before I begin to discuss on this subject, I would like to declare my interest as the CEO and Managing Director of IUT Global Pte Ltd, a SME in the environment business generating renewable energy and biocompost from food waste. IUT Global can therefore be considered a manufacturer and in the sustainable energy sector. However, the comments I will be presenting on manufacturing and sustainable energy are made on the strengths of the two hats I wear as President of the Singapore Manufacturers' Association (SMA) and the Chairman of the

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Sustainable Energy Association of Singapore (SEAS).

Madam, I would like the House now to refer to a diagram called Growing SME Manufacturing that I have circulated (copies of diagram distributed to hon. Members) . As seen from this diagram, for the manufacturing SME to be successful, it needs six elements, namely, IP/technology; money; markets; well-trained management, particularly the CEO and his senior managers; well-trained and highly-skilled workers; and research and development, which is optional, depending on the technology applied by the SME. I have focused on the manufacturing SME because this is an area of SME development which I feel needs more support as it has the greatest potential to grow and succeed because of Singapore's manufacturing roots and the Singapore brand of manufactured products is well accepted today on a global basis. More importantly, if we are successful in growing this sector, it will mean many jobs being created, including jobs for the PMETs and our mature workers, as each manufacturing SME will require a wide range of technical skills on the manufacturing or production floor, and also managerial skills, including marketing, branding, process management, human resource management, customer relationship management, finance, IP/technology management, etc. In most cases, R&D and its management will be required only after successful start-up of the manufacturing process.

From the chart, we will see that in many branches of the six elements, both Government and the private sector need to work hand in hand. The incentives provided by the Second Minister for Finance on tax exemption thresholds and reduction of corporate tax will go a long way to help SMEs grow. But they do little to attract SMEs and start-ups to Singapore, as these tax benefits apply

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only for chargeable income when the SME becomes profitable.

Madam, I am however encouraged and very optimistic about the Minister's intentions to make Singapore the best location for SMEs, local and foreign, to start, grow and globalise, and that he will continue to tweak the incentives to make it a no-brainer for foreign manufacturing SMEs from niche technologies, a sound business model and interested in the large East Asian market to look at setting up in Singapore. After all, in Singapore, we already have strong IP laws, a highly skilled workforce who are disciplined and speak good English, plus we have good infrastructure, good living environment, stable Government, excellent healthcare services, educational institutions, R&D facilities, etc, all positive factors to make Singapore an attractive investment destination.

Madam, may I now share with the House what the Singapore Manufacturers' Association is planning in the next two to three years to grow manufacturing in SMEs, both foreign and local, in Singapore.

Helping local entrepreneurs source for commercialisable IP. The CEO of Nestle who serves on the ExCo in SMA as a Vice President is chairing SMA's SME Development Function Committee. Nestle has a number of IPs that are commercialisable but it is not within their core business strategy to do so. However, they are prepared to allow an entrepreneur to do so. We know of a few other MNCs in the manufacturing sector which are also prepared to allow their IPs to be commercialised by third parties. The Enterprise Development Centre (EDC) at SMA will work with Nestle and the SME Development Function Committee to find suitable entrepreneurs. Good IP is very often a major consideration for start-ups. The other major consideration is money. I will elaborate on this later.

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Attracting niche manufacturing SMEs from developed economies (DEs) to come to Singapore. SMA is doing this in a number of ways:

(1) SMA is leading missions of local manufacturing SMEs to countries like the USA, Germany, Switzerland, Austria, Japan and Australia. These missions will allow our SMEs to visit their counterparts in these developed economies where SME manufacturers are the backbone of their economy and employ a large percentage of their workforce. It is hoped that this first contact will attract return missions from these developed economy SMEs and for these foreign SMEs to finally decide to come to Singapore.

(2) It is establishing official link-ups with these developed economy manufacturing associations. SMA has already signed an MOU with the National Association of Manufacturers (NAM) in the US, and is in the process of doing likewise with the other developed economies. Each of the local embassies of these six DEs identified by SMA is working very closely with SMA.

(3) Providing technical training in SMA's workforce to the levels and standards expected of these developed economy SMEs. SMA is working closely with WDA to extend SMA's already successful training centre, where upgrading of skills training is provided to all workers in the manufacturing sector, into a manufacturing institute. This manufacturing institute will look at adopting course curriculum and standards currently used to qualify the workers required by all manufacturers, including the SMEs in these developed economies. The manufacturing institute will also be introducing WSQ qualifications for the manufacturing sector currently being designed by WDA. This will be another pull factor for these SME manufacturers to choose Singapore, as they know the qualification of our workers will meet their standards.

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Finally, tapping markets globally for SMEs. The six MOUs with manufacturing associations in the developed economies will represent market opportunities. SMA has also established relationships with many manufacturing associations in regional countries like China, India, Malaysia, Thailand, etc, and helping countries like Vietnam establish their own manufacturing associations. SMA will continue to work closely with IE Singapore and also with many of our members who have established manufacturing presence all over the world, including new frontiers like Russia, Kazakhstan and the Middle East, to ensure markets in these countries are open to our Singapore manufacturers.

Madam, what is missing from my presentation above is money or funds to help the SMEs start up or expand. I know a number of my colleagues in this House, including Mr Inderjit Singh, had brought up the subject of an SME bank. I would like to request that the Minister considers this issue seriously as even with the best plans by SMA and even with Spring, to encourage the start-up and growth of SMEs, if money not enough, then Singapore will have "SMEs no enough." Perhaps Jack Neo can produce a sequel of his "no enough" movies to show that SMEs can start up and grow in Singapore. Many of our commercial banks in Singapore provide loans based on commercial terms and standard commercial risks which do not factor in the higher risk profile of start-ups or low-asset profile of these SME start-ups. These SMEs, looking to start up or grow, will therefore not meet the collateral requirements of these banks.

Madam, my last topic is sustainable energy and how Singapore can grow SMEs in this sector, making Singapore a de facto centre of excellence for the whole value chain of this new but highly

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scaleable business. I am heartened that the Minister did mention alternative energy in his Budget Statement and that Singapore will seek to participate in this emerging industry. May I strongly suggest to the Minister that Singapore is currently in the best position to develop into an Asian centre for sustainable energy or alternative energy or clean energy which all mean nearly the same thing except that sustainable energy also includes energy efficiency.

Except for Japan and Korea, there are no structured programmes in any country in East Asia similar to the strategy I am proposing for Singapore to take the regional leadership position in this sector. The fact that a number of leading foreign solar companies like Conergy, Solar World, Solar Fabric and, more recently, Phoenix Solar have based their Asian HQ in Singapore should be a strong signal that Singapore has all the pre-requisites to attract these companies to come here. I am of the opinion that Singapore can do more so that we can take the momentum already generated by these major companies on solar energy to extend this to other technology providers in a sustainable energy sector, for example, wind, bio-mass, bio-gas, thermal, geothermal, fuel cells, bio-fuel, hydro, wave, river current, etc. The Minister has identified an alternative energy market size of US$300 billion by 2015. And I dare say that most of these is in Asia alone as 80% of the world's alternative energy projects are projected to be in Asia.

Madam, I would like now to refer the House to my second diagram which will help illustrate the tremendous value chain associated with this business which will include project financing, project development, project engineering and management, technology providers, clothing manufacturers and suppliers of systems, energy service companies or ESCOs, R&D and carbon or emission

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trading. Each of these areas of specialisation will bring foreign talent and will develop local talent at all levels.

Madam, the Second Minister for Finance and also our Minister Mentor, Prime Minister and the Minister for National Development in the media, have all painted a picture of a cleaner and greener Singapore. We must have a living environment that is the "best" in Asia. We will make Singapore a city of "Gardens and Waters", a city of "Green and Blue".

Many Members of this House have also spoken yesterday and today on the need for Singapore to be environmentally-sustainable and for Singapore to demonstrate how seriously we can take climate change. Madam, I support strongly the direction that all Ministers and my fellow MPs are taking and would like to especially applaud our Minister Mentor for being the great architect who has, as early as 1965, forged the clean and green agenda for Singapore. I would like, however, for Singapore to take one step further to not only be the cleanest and greenest city in the world, but also the most environmentally-sustainable city in the world. What this means is that, besides being aesthetically clean and green, we need to:

(1) Be the most energy-efficient city in the world.

(2) Have the most environmentally-friendly industries in the world. I would like to see all industries and manufacturers adopt ISO 14000 or an improved environmental management system or EMS programme.

(3) Have the cleanest air in the world. Our Government may need to legislate on PM 2.5 and mandate the use of cleaner fuels and bio-fuels for our transport sector; and

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(4) Emit the lowest CO2 per capita in the world.

Singapore can be a great model sustainable city, not only for Asia but the rest of the world, providing all solutions to assist our neighbours in the region to avert global warming and problems with climate change. I am confident that as a centre for sustainable energy, Singapore will achieve three of the four points that I have mentioned above and be a model city at the same time.

Madam, I would like now to share with the House an email I received from an investment banker based in Hong Kong. I asked him a very simple question: how can Singapore attract you to come here? He said:

"To move my company to Singapore includes a lot of change not only for me but also for my family, including change of social network, doctor, schools, favourite restaurants, shopping, etc. So there is a lot of inertia and challenges for the whole family built into such a move. Singapore has good schools, housing, healthcare, etc, but so has Hong Kong, Bangkok, etc, and the differences are well-known and have been discussed several times in both companies and families. To trigger a change would be a new factor such as environment and air pollution. And the trigger would be for Singapore to step up and take a leadership position amongst cities in Asia and globally in terms of addressing these issues. For example, if Singapore Government introduced not a 2% to 5% lending target by 2012, but something much bolder, such as 20% or 50% lending target by 2010, that will make headlines and profile Singapore to the general public and amongst corporates and families around Asia and globally. My son would then come running to me and say, "Now we need to move to Singapore there."

Lee Kuan Yew recently made a statement that Singapore has reached the top group of countries and cities globally

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and now need to move from the bottom of that group to the top of the group. The way to achieve this is to do what countries like Germany and Scandinavian countries have done - make bold steps and be a leader in the environmental regulation and you will find that the feared negative impact on the economy is compensated by a whole set of new enterprises and jobs created from industries developed to deal with the new regulations, and being a leader globally means that these new industries become global leaders. So I am not asking for tax holidays, better housing, etc, but a more global and general response in order to convince the rest of my family.

Living in Hong Kong, we are already sick of the air pollution and the government's inability and lack of courage to deal with basic issues. Buses on clean bio-diesel scramble for our power plants, etc. Singapore has a great chance to differentiate itself on this point by showing courage and taking bold steps. Edwin, in short, I will bring my business to Singapore when your Government takes a lead role and bold steps on air pollution."

This is one view from an investment banker. Madam, I would therefore conclude and suggest that the Second Minister for Finance and the Government consider setting up a central agency to facilitate and promote Singapore as this centre for sustainable energy. At the moment, although there is a combined committee from all Ministries looking into this sector, I would implore the Government to set up a central agency with some teeth to spearhead and to come up with policies that can help facilitate foreign SMEs who are funders or technology providers in this sector to start

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up in Singapore. The central agency should be able to facilitate and assist on all areas to do with incentives, test-bedding technologies, setting up of semi-commercial or full commercial renewable energy systems, feeding in policies on renewable energy to the grid, including perhaps mandatory percentage of renewable energy in utility mix, setting up of a sustainable energy fund with some base funding from the Government, etc.

Madam, Singapore needs to act now before we lose the chance to build up a leadership position. As Mr Lim Swee Say has just quoted, Singapore is small, but we need to be fast to survive. I do urge us to be fast to seize the opportunities I have just proposed.

Madam, I support the motion.