DEBATE ON PRESIDENT'S ADDRESS

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PRESIDENT'S ADDRESS:

Debate on the Address:

(Fifth Allotted Day): Order read for Resumption of Debate on Question [8th November, 2006],

That the following Address in reply to the Speech of the President be agreed to:–

"We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the First Session of this Parliament.". – [Mdm Halimah Yacob].

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Question again proposed.

The Senior Parliamentary Secretary to the Minister for Manpower (Mr Hawazi Daipi): Mr Speaker, Sir, thank you for giving me the opportunity to join in the debate. I support the motion in thanking the President for his Address.

Singapore has seen significant changes and events over the past few years, many of which were unexpected. We managed to overcome a number of major problems since 1997: economic downturns, the threat of racial and religious polarisation, if not conflict, following the 911 incident, SARS and the Avian flu. With everyone working together, we managed these difficult times and have emerged stronger today. Our economy is doing well, and job creation is expected to reach another record high this year.

Going forward, the only constant we can expect is change. The President, in his Address, has highlighted four key changes affecting Singapore: (a) globalisation bringing shifts to the economy; (b) ageing society; (c) generational changes; and (d) the need for a new social and political compact. These changes, if not carefully managed, can be unsettling and even create friction in society and amongst Singaporeans. Let me touch on some potential hotspots which will need greater attention.

First, the widening income gap. Globalisation brings opportunities for the higher-skilled workers, but the lower-skilled face downward wage pressures and higher risk of structural unemployment. In the last few years, the income gap has widened. The Gini coefficient, which measures inequality of income distribution, has risen from 0.490 in 2000 to 0.522 in 2005. This is not unique to Singapore, but we must acknowledge that the widening income disparity is a looming issue which can

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cause social friction between the haves and have-nots if it is not properly tackled. The Government has already taken steps last year to help the lower-income group through the Workfare Bonus and other recommendations of the Ministerial Committee on Low Wage Workers. I am glad that, as announced by PM and Ministers, the Government will do more to help those who have difficulty coping, so that no one will be left behind.

However, in extending the helping hand to the needy, we must always emphasise three fundamental values: personal responsibility, hard work and self-reliance. It must help people to level up and seize opportunities for self improvement. Workfare is thus a very important approach.

Like all good things, it must have the strong support, in this case, financial support and to ensure that resources that are needed to help the poor and the needy will be there to help them. The Prime Minister yesterday announced the need to increase GST by up to 2%. I think Singaporeans are bracing for that but, more importantly, Singaporeans are waiting for the GST offset package to be announced in July. Like all Singaporeans, I do hope that the offset package will be helpful enough to Singaporeans, particularly those who are needy.

Second, amidst dealing with the challenges ahead, we must continue to be mindful of the need to maintain our racial and religious harmony. Members may recall the publication of the Danish cartoons of the Prophet Muhammad in Europe. That incident caused racial and religious tensions to soar and even sparked off protests and violence in some countries. In Singapore, we were able to sit down and discuss issues and deal with them peacefully due to our strong racial and religious relations and mutual understanding. However, it was a good lesson on how an insensitive act could stir

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things up and, if not managed carefully, it could spiral out of control. Maintaining an environment of mutual understanding and tolerance of differences thus remains fundamental to ensuring Singapore’s continued social harmony and stability. We must thank our community and religious leaders for having guided their communities towards mutual understanding and tolerance, and help them to strengthen the foundation further.

Third, managing young and old workers. In the 60s and 70s, as a young nation, one of Singapore’s value propositions to investors was our relatively young workforce. Today, with an ageing resident population, our workforce is also ageing. About one in three workers is expected to be above the age of 50 in 10 years’ time, compared to around one in four today. This means that we will have a much more age diverse workforce, with younger and older workers working together.

There are benefits from having an age diverse workforce, as younger and older workers have different strengths that employers can tap on. However, just as some families face problems of generation gaps between the young and old, potentially there could also be similar frictions between younger and older workers at the workplace. I recently visited Japan to study the law for the re-employment of older workers, and met some unionists there. They told me that this is one of the workplace issues that they have to grapple with as their workforce ages. I suggest that the Government, employers and HR professionals as well as unionists look into the workplace challenge of managing age diversity and address any potential issues before they affect workplace performance.

Fourth, influx of foreign workers. With an ageing population and not having enough babies to replace it, we need

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foreign workers to augment our workforce to meet labour demands of our economy. However, some Singaporeans continue to have reservations over the open-door policy to attract foreign talent. They are concerned that the foreigners will deprive Singaporeans of jobs. Recently some residents in Jurong East had complained about empty flats being rented out to foreigners. Others had also expressed concern over foreign worker dormitories being built near their homes. As we need more foreign workers to meet the needs of growing industries, we will have to build more foreign worker dormitories. So we will have to manage this.

Without a doubt, we will need foreign workers in our workforce to create more jobs for Singaporeans. However, the challenge here is for the Government to strike an appropriate balance between meeting the economic need of workers and putting in place the control measures to ensure that the foreign workers are deployed in the right numbers, in the right places and with the right skills. At the same time, we need to allay the fears of Singaporeans. The key safeguard for Singaporeans is not in protecting jobs for locals, as this may not mean more jobs for Singaporeans if there is a skills mismatch. Protecting jobs could ultimately also affect the competitiveness of our companies and their ability to grow and create more jobs. Instead, the key safeguard for Singaporeans is to continue to grow the economic pie and create more jobs for locals to take up. We also need to work on removing the suspicions towards foreigners by building up a better mutual understanding between locals and foreigners. Otherwise, the fears and concerns will infest and create rifts, tensions and misunderstanding, which will disrupt social harmony. Here, we can encourage grassroots leaders to work with residents to ensure that this understanding of the need for foreign workers and working with foreign

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workers can be driven at the grassroots and community levels.

Fifth, relationship between employers and workers. Globalisation has created a new business environment - one which requires companies to face competitive and rapidly changing markets. To survive in the new economy, companies need flexibility and innovation. Some will restructure their organisation or reduce costs to keep pace with the changes. However, workers ask for job security and fairness in treatment and reward. As workers feel insecure, they are also less engaged, resulting in lower productivity and quality. Therein lies the dilemma between company’s needs and the workers’ needs, between flexibility and security, and between security and the ability of workers to adapt and innovate.

To address the tension and with the view of enhancing workers’ productivity, employers will need to place greater importance on managing their relationship with their workers, share with them information on company's performance, tap on their ideas and improve the workplace environment and safety. Workers, on the other hand, would also need to be flexible and open to change. Here lies the importance of tripartism. With our strong tripartite relationship and continued support from the Government, employers and unions, I am confident that we can manage the dilemmas and workplace issues, and continue to maintain a peaceful industrial environment. The key point is, we must help strengthen further this three-party partnership.

The PSA is a good example. Members may recall that several years ago, PSA needed to retrench workers and adjust wages to stay competitive. It was a very difficult period faced by the management and the union, but with strong labour

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relations, they worked together to tide through. Today, it is a very different picture. I read in the Sunday Times last weekend that PSA had done well and rewarded the staff generously. The Singapore Port Workers' Union (SPWU), where I had the privilege of serving as Executive Secretary some years back, is now getting thanks and a pat on the back from its members and PSA workers, quite unlike the brunt of workers’ unhappiness that it had to bear during those difficult times. Just last weekend, I attended the 60th anniversary of the SPWU and I saw the mood was different, compared to about four or five years ago. There, I saw unionists, members of the union as well as management staff and other union leaders got together in a very friendly atmosphere.

Mr Speaker, Sir, I have outlined five potential hotspots in our society as we venture into the new future. The key to addressing the various differences and potential frictions and conflicts in our society is to facilitate mutual understanding and tolerance among the different groups of people, and the Government will need to play a major role here. Our strong tripartite partnership is a workable modus operandi that can be adapted to address other differences and reaching win-win for all. I would like to suggest that we use this approach in all our endeavours to improve the quality of life for Singaporeans, whether it is on specific needs of Singaporeans or on the needs of people on the ground for better facilities and services, which means that everyone in Singapore will have a role to play in ensuring that the environment they live in and the relationships they establish can be improved further.

Sir, let me continue my speech in Malay.

( In Malay ): [For vernacular speech, please refer to Appendix A.] Like other Singaporeans, Malays have enjoyed great

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benefit from the development and stability of Singapore. The challenges faced by Malays in Singapore are similar to those that are faced by other communities, whether it is a result of the effects of globalisation or the relationship with employers or problems at work. The challenges faced by the Malay community as workers and as Singaporeans are the same as others. Malays can and should be confident of their opportunities to progress in future based on the progress that they have achieved so far, whether in terms of education, employment, home ownership or in other social aspects. The Malay community, however, also has its own problems, just like other communities here. However, other than being able to benefit from the various programmes and assistance offered at national level, whether by community organisations or the Government, Malays also benefit from various self-help programmes and efforts within the community itself. I believe this will bring a very good effect to the community because it improves their confidence and self-esteem as they are able to assist each other or assist those who are facing problems and difficulties. This, I think, is not a small matter because it shows the desire to progress, the desire to improve ourselves based on the principles and values that we hold high, which are hard work, responsibility for our own welfare and self-reliance.

At the community leadership level, I am proud that the Malay community leadership has advanced far in their effort to assist the community to help them progress, particularly in facing social problems and enhancing their progress in education. For the past number of years, the Malay community leadership has worked together with the Malay political leadership in the People's Action Party to move self-help efforts in four main areas - improving educational achievement, encouraging skills upgrading and work assistance, strengthening family relationships so that the family has a strong

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foundation to ensure that children grow up healthy and active and benefit from all the opportunities in Singapore, and, fourthly, to overcome social problems. As I said earlier, self-help efforts which were initiated together with Malay community leaders, Malay organisations and the Malay political leadership have been a source of strength and self-confidence for me and the Malay community in general because this shows an inner effort within the Malay community to progress together, taking advantage of the opportunities that exist in Singapore. This also helps Singapore to progress because, in line with other communities, the Malay community also contributes to the national and community development of Singapore.

I think in many aspects, the less skilled, less educated within the community need more help. In this respect, the Malay community will always rely on the support, understanding, assistance from the Government and also the other communities so that, together from within the community itself and also in cooperation with the other communities, the Malay community will also be able to assist in enhancing the progress and development of Singapore.

Mr Speaker, I would like to conclude by saying that what we have achieved so far in overcoming our problems at the national level, overcoming internal problems within certain communities, including the Malay community, give us a sense of satisfaction because this further improves our community strength in overcoming new problems. This will of course further strengthen our foundation to achieve continuous progress in future.

*Cols. 903-906.

3.20 pm

Mdm Cynthia Phua: Mr Speaker, Sir, I stand among the ranks of those who have risen in support of the motion to thank the President for his Address at the

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Opening of the 11th Parliament. The President has presented the framework in which our Government will tackle the various challenges confronting us and I am pleased that, among other things, we will be committing more resources and efforts to help especially the elderly and the disabled, together with the low-income group.

Sir, I am happy to hear also from Prime Minister Lee Hsien Loong's address to this House yesterday, outlining the new social measures to help the lower and middle-income earners, in particular to include more help in education and more regular Workfare Bonuses within reach of the poor. I am sure the middle-income earners are also pleased, as they have always been in the sandwich group, that attention and care are given to this group as well.

I fully support the idea that we must do as much as we can to help the lower-income move up the economic ladder, particularly through assistance in education rather than handouts. Nothing beats a good education and employment, if we want to help raise the household income and free a family from the malignant effects of abject poverty. The curative effects of education and regular work are far more effective in getting the intended results.

However, I would like to voice my concern with regard to the proposed increase in GST tax. Our economy is just beginning to breathe a little easy and many workers in the lower wage group are beginning to enjoy the blue sky. There are some whose visions are still shrouded by hazy conditions. Many of these workers with monthly wages hovering at $1,500 and below are still trying to get a helicopter ride to safety. For this group, efforts must be made to understand their needs, and the new

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package of social measures to be reviewed during the next Budget debate must be able to lift them from the tailspin of the intended increase of GST. I urge the Government to carefully review and weigh the impact of its package on the lower and middle-income group; also, that the delivery must be accurate, as the doctor making a surgical incision on a patient to give him long-term relief from his pain and suffering. This would enable them to catch the wind and stay on course. Better still, if they fly above the storming clouds and, at worst, be exposed to only minor short-term turbulence.

If I may also make reference to a recent speech by PM Lee Hsien Loong when he addressed the 7th Asian-European Editors' Forum on 6th October. One of the points mentioned was the changing global environment and how political leaders must be able to respond creatively. Each country, including Singapore, would have to make changes in its own way, with its own balance, taking into account its unique circumstances. He also spoke of the opening up of our society to encourage frank debate and diverse views.

Sir, I am pleased to hear PM's views and I hope it permeates down to the other policy makers. We should continually review old policies and make bold revisions if it is for the better of our society. In the last five years, much has been done in education, health and CPF. I am glad for that. I would like to congratulate two Ministers - Mr Tharman Shanmugaratnam and Mr Khaw Boon Wan - for such great work done within the span of five years. In education, we have tackled important issues so that our children are happier in schools and outside schools, as they no longer belabour. Many parents, including myself, are indeed grateful that the sacred cow of streaming had been slaughtered and not just sent to the veterinarian. For health,

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we have brought comfort to our residents with the review of the 3Ms, especially so for the coverage of MediShield and its payout. It is now not so frightening to be in a hospital, and residents will not need to suffer another shock when the bills are subsequently received.

For this 11th Parliament, I sincerely hope to see more changes being made to the following areas of transport, housing and our paid broadcast media.

Our public transport system. I sincerely hope that we could look deeper into our public transport system, especially with regard to the creation of a healthier competitive environment. I feel that not enough is done to look deeper into our public transport system though the Minister for Transport has somewhat cleverly deflected the rising tide of calls for action when he made public the review that his Ministry was going into.

My issue is competition or, more rightly, the lack of it in our public transport. The strength of any business is its ability to survive competition. Competition challenges the whole organisation from the top management to the shop floor to be efficient and responsive to market needs. In Singapore, we have many examples of healthy competition which have benefited both the industry and consumers. Take McDonald's or KFC, they all compete on equal footing. There is no such thing as private turf, gated community, or safe haven.

But in our public transport sector, the rules of engagement are somewhat different. There are special flight paths where each of the operators carves out one sector. This is not competition. This is not serving the best interest of the community. I know in the Budget debate we were told that because of the large commitment of public funds, the

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Government would not want to see a duplication of services. I feel that it is precisely because of this large commitment of public funds, the public deserves a good competition from these companies so that they can get the best services.

Next, these transport operators are not willing to overlap or cross each other's routes. Presently, the transport system for nearby estates is not only time consuming but also costly, especially when one crosses between the two transport operators, for example, between Upper Serangoon and Upper Paya Lebar estates. If you are in Upper Serangoon area and heading for Boundary Road, you would have to change buses as most of the buses would bring you to Serangoon or Hougang Central bus or train interchange, instead of to the Boundary Road area. There are too many transfers. For some, it means a six-bus or train rides daily. The cost of transportation is high as the transport fares are geared towards longer distance and from the same company. Can we then not have free feeder or shuttle bus services?

At this juncture, let us see what competition can bring to the people. Look at the shopping malls. They are providing free shuttle bus services. If shopping centres can provide free shuttle bus services, why not our transport operators? I know "free" is a four-letter word. But it is also not a dirty word. I know our Government is sensitive to providing anything for free. However, these transport operators are not the Government. They are commercial private sector entities. If the shopping malls can do it, then why not the transport companies? The answer is lack of competition.

I urge the Transport Ministry to do away with the existing rules which have derailed the true spirit of competition. Do

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more for the commuters. Do more than just aesthetic changes. The ultimate goal should be how to get efficiency, not only in terms of operation, but in the context of creating savings for commuters. Each time, there is a route rationalisation exercise, the commuters are left at the losing end. They end up having a longer travel time and having to spend more on fares, as highlighted in an article in the Sunday Plus 20th July issue.

Each year, commuters have to hold their breath as these bus operators seek for upward revision in fare prices. Sir, taking it in isolation, 1 to 3-cent fare hike last October is not a big issue. But when you take the accordion effect, then the rise becomes like a virus, embedded in the computer system and taking up the memory space and slowing down your computer time, this is serious. For the needy, $1 a month is $1 less food on the table. And, as if to show remorse for their actions, the operators come up with all sorts of schemes to try and mitigate their cases. Then why ask for a fare hike in the first place? Why must the poor go through the entire form filling and be subjected to scrutiny of their savings or earnings to get travel discount?

These operations make profits but they said the money is not from the same operation. So do we deal with a transport company or a department rendering domestic services only, and that the account has to be isolated from its other operations overseas? Is it not because of the special opportunity granted locally that is given to them that they are able to source for their business overseas?

Sir, what is the motivation behind the public transport service? Is it to serve the public or the shareholders? As there is a biblical saying, which I would like to borrow and rephrase it, you cannot serve two masters at the same time.

If being a

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public-listed entity creates a conflict with its duty to serve the public, then we should even consider delisting this company, run it as a consumer cooperative, or the Government may also consider allowing more bus operators to run parallel services to give the push to draw the best out of these operators so that they can better serve everyone's interests.

Sir, in the last few years of economic doldrums and structural unemployment, when people's salaries had been cut, we still had fare increases. I do not see under what situation there can be a case when the fare would not increase.

Let me use an example of how a local cooperative handled the situation of an egg supply shortage. Here I would like to declare my interest as an employee of that local cooperative, ie, NTUC Fairprice. When there was a ban on the import of eggs from Malaysia due to avian flu, supply from Australia was sought immediately and the eggs were sold to consumers at the lowest price among all retailers. The cooperative could have increased prices by a few cents more for each egg as it is one of the main egg retailers. But it did not. Moreover, the cooperative was the first to reduce the price of eggs when the ban was lifted and normal supply resumed. Will a private transport company embrace the social mission and serve the public interest role?

To wrap up this section, let me visit this question: Why are people not taking to public transport? Would the transport companies be able to achieve the service standards as set out recently by LTA to improve overcrowding and long delays - loud calls from the commuters for a long, long time? Any private company would argue that the higher service standards you demand, the more it will cost the commuters. We do not want a situation where the cost goes up in view of the demand for higher service standards from

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the operators. Price affordability must still be the key factor.

Mr Speaker, Sir, I will address my next concern in Mandarin.

(In Mandarin) : [For vernacular speech, please refer to Appendix A.] Mr Speaker, Sir, I would like to talk about our public housing policy. Our public housing policy seems to be affected by the public transport policy. Prices for public housing are rising all the time. The HDB has no objection to residents upgrading to bigger units, but when they have financial problems, not being able to pay for their instalments and utilities bills, and wanting to downgrade to smaller flats, HDB would not allow them to apply for concessionary loans, and it says each case will be considered on a case-by-case basis.

When the resident applied for his flat, his affordability was based on his financial situation at that time. But over the years, circumstances could have changed. His financial position could be different. He could have been retrenched, downgraded to jobs with a lower income, or suffered from ill health. Anything can happen. Then, he finds that he can no longer afford the flat that he is occupying, as he is unable to service the loan that he had taken in his better days. He has no choice but to downgrade to a smaller unit. But he runs into difficulty with HDB when he is refused a concessionary loan. I would ask the Ministry of National Development to review this policy so that home owners would have an option of downgrading to a smaller flat with a HDB loan.

Mr Lee Yi Shyan mentioned last week that we should provide more education and skills upgrading opportunities for our workers to enhance their employability. In other words, in our job, we have to meet with a lot of changes and the circumstances will change and our financial situation will also change. From

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the time we were married at 30 years old to the time we retire at 62, many things have changed in our life.

One of the main policies of the Ministry of National Development is for everyone to own his own home, and it provides security for his old age. So, if this is your property, then you should be able to sell it and realise it for cash so that you do not become a burden to others. We should adjust our policy to take into consideration the affordability of the people and their changing circumstances. Undoubtedly, we have a Government that is ready to help the people to create wealth. But sometimes we should allow the people to exercise their own options and to choose the lifestyle that they would like to have, so that they do not have to worry so much about the cost of living.

The Minister mentioned last Friday that senior citizens can sell their bigger flats to move to the studio apartments. But they should still be able to afford it before they can think of buying these studio apartments. I think it is fairer if we allow our people to sell their property so that they can get cash for their living expenses. They have such a need. So I think we should allow them to downgrade and still be entitled to a HDB loan.

I have three children. If they are unable to get into the local universities and they want to go overseas for further studies, I would have to pay for all their overseas expenses. According to my own estimation, my income will not be increased substantially in the foreseeable future, and there is even a possibility that my income will be reduced, so by the age of 55, I may have to change my lifestyle. So, we need to look after the interests of our senior citizens. I know that the Minister had reiterated that his Ministry will provide the studio apartments for the elderly citizens, but I think we need to do more and better for them.

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Recently, I met an officer in charge of public housing in Hong Kong. He told me that the Hong Kong government is building apartments for its senior citizens. Anyone who has reached the age of 60 will be entitled to apply for these apartments. These apartments are comparable to our studio apartments for the elderly. A lot of Hong Kong senior citizens are living in these apartments provided by the government. But in Singapore, only 0.26% of our senior citizens are living in these studio apartments and now we have only 1,030 units. Should we not provide more such apartments for our senior citizens?

Yesterday, the Prime Minister gave us the projection of our population profile by the year 2020. In a few years' time, we would have to feel the pressure of an ageing population when we have more and more people above the age of 65. Recently, in Bishan Street 11, a development known as Golden Jasmine was launched. There were 176 units altogether, but during the soft launch, more than a thousand applications were received. We have not been able to meet the demand. In five or 10 years' time, the demand will be even greater. I hope that the Ministry of National Development will have more innovative ideas and breakthroughs so that they could build more flats for our senior citizens and also allow our lower income people the choice of the flat that they can afford.

(In English) : Mr Speaker, Sir, I now come to the FIFA World Cup 2006. I know that this event is over. But it is really concerning paid broadcast media and sports. There are many major sporting events that will be coming on-stream. The European Cup and the Beijing Olympics are just two. I hope the Government will do something about live broadcasts so that we do not repeat the debacle during the World Cup 2006.

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Except for the opening match and the final matches for the first, second and third placings, it is regrettable that our national television failed to broadcast this once-in-four-year event to our people on the free channels.

I was in Cairns, Australia, when the FIFA soccer matches were going on. I could tune in any time of the day. When I was back in Singapore, I had withdrawal symptoms and really had to insist that my husband subscribe to the paid channels. But how many Singaporeans can afford that?

Sir, the national television stations of other countries, such as Malaysia, Indonesia and even Kosovo, were able to provide the matches to their public for free. We want to make our country a sporting nation. We know soccer has a pull among the local people and it is one of the best platforms for bonding the masses. Yet we threw away this opportunity. Do we have to again be so commercialised in our considerations, even at the expense of bonding the people together?

Sir, the points I have made on transport and public housing are but some of the issues tossed up by the heartlanders and others in Aljunied GRC. We really need to strike a right balance when making policies so that the needs of the people and the state are adequately addressed.

Sir, I support the motion.

*Cols. 907-910.

3.42 pm

The Minister for Health (Mr Khaw Boon Wan): Mr Speaker, Sir, last month, my wife and I explored the northern Honshu region of Japan. We went from Sendai to Matsushima facing the Pacific coast. In between, we crossed the mountain range to the western side of Honshu, spending some time in the mountains, hiking and

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visiting ancient temples. Mr Speaker, Sir, that was how I geared up for the 11th Parliament.

We re-traced a section of a long journey made by Matsuo Basho over 300 years ago. Basho was a Zen practitioner and one of the most popular poets in Japan. He left behind many poems or haiku , and is well-loved by the Japanese. He is the equivalent of Li Bai in Japan.

At Yamadera, which is a village in Yamagata Prefecture, among the temples and mountains, we paused at where Basho wrote his famous haiku , in English translation:

"Silence
Penetrates the rocks –
The cry of the cicada"

I was grateful for the opportunity to savour that wonderful moment when Basho, the rocks and the cicada all melted into one. Mr Speaker, Sir, after 50 speeches, I am sure you wish for such a moment of tranquility in this Chamber, too! But please hear me out first.

The Japanese villages and towns that we explored are no longer like what Basho experienced. The population has grown and, in particular, it has aged considerably. In the villages, the old visibly outnumber the young. Conversation topics are distinctly elderly: "How is your knee? Does it still hurt?"; "Are you sure that mochi is good for you? Is it not too sticky for your dentures?"

Active ageing

During those few days, I had a glimpse of what Singapore may be like in the future when our population would be as elderly as Japan is today. Though on holiday, I asked my Japanese friends to arrange for us to visit a nursing home and we did. Very high standard, top-of-the-

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range, very good facilities, with happy residents. As a typical hospital administrator, I asked how long do the residents stay. He said, "Well, until death do us part."

It was buzzing with activities, both indoors and outdoors, day and night. Of course, it comes with a high price tag. The residents co-pay about 10% of cost, with the rest paid for by long-term insurance.

I asked the home for the admission criteria because, as far as we could see, the residents did not look sickly or frail at all. They said that all applicants were interviewed. The main criterion is that their children were unable to care for them at home. But I said that would surely qualify practically everyone. In a typical Japanese way, they answered "no", but I think they meant "yes". There is, therefore, a very long waiting list. But all this while, demand was still manageable because most Japanese consider it shameful to put their parents in nursing homes. But my Japanese friends told me that, unfortunately, that attitude is eroding.

I commented that the long-term funding prospects for such a model must be poor.

They confirmed that this is in fact their biggest challenge going forward. Meanwhile, Japan's shrinking birth rate does not help and the Japanese attitude against immigration further compounds their problem. But the Japanese are actively thinking out solutions to their demographic trend, and they are trying out various experiments, pilots and different approaches. They have not got all the answers but some of their approaches offer useful reference for us.

First, the elderly in Japan work longer years. You see them in their late 60s, the women, many hunched up because of osteoporosis, manning counters, sweeping floors, cleaning spas, directing

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traffic, ushering tourists. They work, keep busy, stay active both physically and economically.

Second, their elderly are well-represented among the self-employed, running small businesses, like mom-and-pop shops, ramen stalls. They keep the cost of living low for the consumers, while allowing the elderly themselves to make a living.

Third, shops and businesses are responsive to the needs of the elderly clientele. The mini-marts' items reflect elderly needs, while the stores have wide corridors for wheel-chairs and the price tags are large in font size, really huge ones. I asked them, "Why so?" They said that sometimes for "8", they thought it is "3" and they got into trouble at the counter.

Fourth, there is an active programme to develop devices and systems to allow the elderly to be home alone, while giving peace of mind to the children who have to work outside. They have bracelets or wrist watches which monitor heart beats, blood pressures, body temperatures and transmit the readings wirelessly via the Internet to a central monitoring centre. This way, if an elderly suddenly appears to be motionless, like there were no readings or abnormal readings, an alarm will sound and the operation centre can alert the neighbours to quickly pop in to take a look.

Fifth, the community builds on the traditional Japanese sense of neighbourliness to help support each other as a system. They help to check on one another, cook and buy groceries for the frail, clean the house. I help you while I am okay; you reciprocate when I am frail. The community self-help spirit is strong.

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Stronger 3Ms

Sir, I went to Japan not to study how they cope with ageing. I went there to enjoy the autumn leaves with my wife and to be inspired by Basho's poems. But I return reminded that we too should prepare early for a future when ageing will be even more pronounced.

As PM put up yesterday, today, Singaporeans above 65 are less than 8% of our population. But by 2015, it will be 11%, but still not yet quite like Japan’s 21% today. But one day, we will be. By 2030, one in five (18%) will be above 65. And there will be a significant number of the "old-old", people living beyond 90.

What does ageing mean in our context? How can we make ageing a smooth and graceful process in our society? We cannot wait until it hits us. We need to intensify our planning efforts and begin the process today.

In the Health Ministry, we are acutely aware of this demographic trend as most of our clientele are elderly. Our 3Ms framework was put in years ago, precisely to address ageing. Medisave is growing at about $1 billion a year. MediShield, after last year's reform, is building up its reserves again. And we are steadily topping up Medifund and Eldercare Fund as and when we have budget surpluses. All these efforts are in anticipation of the day when we will be drawing down Medisave, MediShield, Medifund and Eldercare Fund faster than we put in. Hence, I worry each time I hear requests to me to use Medisave for this illness or for that condition. I have to be the unpopular gate-keeper that says "no". But I do not say "no" all the time. Where appropriate, I have said "yes". In that way, I am not that unpopular.

Several Members have commented on the 3Ms' enhancements which we have

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made over the last three years. Mdm Cynthia Phua just did that. I thank her for her kind words. I am glad that you appreciate the efforts. I am not through yet. There are still some more enhancements that I want to do.

First, Medisave will cover three more chronic illnesses (stroke, high blood pressure and high cholesterol) from next January, ie, in a few weeks' time. The pilot for diabetes has gone well. Last month, over 7,000 diabetic patients have benefited from this Medisave enhancement. But my interest in this scheme goes beyond just funding. I hope the scheme will raise the level of care for these common chronic illnesses so that patients can avoid severe complications in the future. Today's medical science offers no cure for diabetes, so we cannot eliminate diabetes. But my ambition is to make Singapore the best in the world for diabetic patients, where there is early detection of the disease and effective long-term care of the disease in the community. The science for this is well-known but turning it to reality requires full cooperation and compliance from the patients.

Second, I am planning a sequel to last year's MediShield Reform. If there is public support, I hope to further increase the MediShield payout for patients with large hospital bills. Preliminary sounding suggests that patients are prepared for such an enhancement if the premiums do not go up by too much.

Third, at each budget cycle, I will apply to the Ministry of Finance for top-ups to Medifund and Eldercare Fund. So far, I have been successful because they have been very understanding. I will continue to try, but I know that this assumes healthy budget surpluses.

Fourth, I will press on with greater information sharing so that patients can make informed choices and hospitals can learn best practices from one another.

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We have published hospital bill sizes for the common illnesses. The public hospitals do so systematically because I require them to do so, but the private hospitals less consistently. I am thinking of making it a requirement for all hospitals to disclose the hospital bill sizes if they want to claim from Medisave. I think that is a reasonable request. This way, patients to private hospitals will also benefit from greater transparency.

Fifth, I plan to publish service standards of our hospitals and how well they are being met, to help our hospital CEOs focus on the key concerns of our patients. How long do patients have to wait for their new clinic appointments? On the day of an appointment, how long do they have to wait before they get to see the doctor? Standards vary between specialties and between hospitals. We do not have comprehensive data yet, but I will publish what we have compiled so far and improve on the data collection as we progress.

Sixth, we have implemented in polyclinics this year the policy of differential subsidies among citizens, PRs and foreigners. This way, we keep heavy health subsidy as a citizen's privilege while requiring foreigners to pay for their own cost. PRs continue to be subsidised although slightly less than citizens. We will look into extending this policy to hospitals. The Government will work with employers of foreign workers and require them to buy medical insurance for their foreign workers. As the workers are generally young and healthy, the premiums will be affordable. We will announce the details when available, probably next month.

_Focusing on the unglamorous
_

These enhancements are largely for the acute care sector, where patients receive treatment in hospitals and specialist clinics. The enhancements will ensure that Singaporeans continue to

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have access to high-quality care, without causing severe financial strain to themselves or to society.

But with the continuing ageing of the population, I will now begin to spend more time focusing on primary healthcare and step-down care. Unlike tertiary care, this is the unglamorous cousin. But for the elderly, this is a more important sector. The better a sick elderly patient is cared for by his family physician or in the step-down care sector, the better off the patient will be. We will study how best to strengthen and grow this sector. This sector ranges from care at home to care at day centres, to GPs, to nursing homes, hospices and community hospitals.

We do not yet have all the solutions, but some of the problems are known. First, the care is not well-integrated. When patients move from one care provider to another, they often encounter obstacles. Patient flow across facilities and institutions is certainly not seamless or hassle-free. To make proper chronic disease management happen, our doctors, nurses and other professionals need to work together, in a different, improved manner across inpatient, outpatient and step-down care. We need to have public sector specialists collaborate with private sector GPs. We need VWOs running community hospitals and nursing homes to work with acute care institutions and family physicians, to deliver better patient care. Ideally, all care providers should regularly share information and consult each other, but the reality is not quite there yet.

Second, the care quality varies over the range of providers. While some providers do provide good care and service within their facilities, there are places which do not do as well.

Third, information on this sector is incomplete and hazy. Patients do not

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know the full range of step-down care choices that are available to them. Some feel that they are stuck with no option other than their current provider. Last month, we published the key data on nursing homes and community hospitals. It is a first step, a small step but I will refine the publication as we go along.

Fourth, we do not know if our range of step-down care services is comprehensive enough. Probably not. Are there gaps? I am sure there are. Are there niche services which are absent today but can usefully meet a real need? Some of these services go beyond my Ministry’s portfolio, and we will work with other Ministries to ensure that genuine needs are adequately met.

Sir, our population will continue to age. We will try to slow it down by raising births and stepping up immigration, but we cannot avoid it. The better prepared we are for this inevitable demographic change, the better we can ensure that elderly Singaporeans face old age with confidence, calm and peace of mind. My Ministry will do its part to anticipate rising demand for healthcare services, both at the acute and step-down care sectors, and marshal resources to ensure that there will be sufficient beds, manpower and expertise.

Today, we spend about 4% of our GDP on healthcare services. Considering the high standard of our care and Singaporeans' health status, this is quite an achievement. But to meet the future needs of our population, it is not possible to keep healthcare expenditure in this region of 4% indefinitely. It is bound to increase. This increase will have to come from all stakeholders: Government, employers, insurers, patients and their families. This is part of the reason why GST has to go up. But I will recommend to the Ministry of Finance to fully offset any GST increase on medical costs incurred by subsidised patients.

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Happy ageing

Last week, inspired by what I saw in Japan, I decided to visit two elderly day care centres here in Singapore even though they do not come under my Ministry’s portfolio: one in Tampines run by Tampines PCF, another one in Marsiling run by NTUC Eldercare. They are doing very good work, caring for the elderly whose option is otherwise home alone in front of the television, counting the hours and minutes. I know of a group of bank managers who do voluntary work, visiting the old folks at nursing homes and checking out what they need. It turned out that the single biggest issue with old age is loneliness at home and loss of dignity when they feel that they are no longer useful and sometimes unable to even control their bodily functions. There is a lot that the Japanese are doing that we can learn from.

Basho certainly had much to teach us about ageing and living. As his own health deteriorated, he continued to work, composing poems. In Osaka, he penned this famous haiku :

"This autumn
Why am I ageing so?
Flying towards the clouds - a bird"

Although he was ageing, his spirits remained free. He knew he was dying but he remained calm to his last days. And before he drew his last breath, he wrote his final haiku :

" On a journey, ailing

My dreams roam about

Over a withered moor"

This is a more difficult piece, but if you reflect on it, you know that his message to mankind remains optimistic, free, high spirited. He died, what I call, a happy death, at peace with himself and the environment.

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I asked my Japanese friend - there are so many Basho haiku - which is his favourite haiku. He rattled it off without hesitation: " kono michi ya; yuku hito nashi ni; aki no kure" . Let me translate for Members:

"All along this road

Not a single soul - only Autumn evening"

It appears, in spirit, to be similar to the Chinese poem "the beauty of sunset, unfortunately it is fleeting" ( xi yang wu xian hao, zhi shi jin huanghun ). But it is not. Basho was a serious Zen practitioner and had realised the road of poetry, the road of Zen and the road of life itself. He was not lamenting his impending death. He was sharing his insight when he was confronted with the solitude of an autumn evening. We came to this world alone and we will leave the world alone, whether we are rich or poor, strong or weak. But how we live this life makes the crucial difference to our final eventual exit.

When he undertook his journey over the mountains, the journey itself was the destination, as he wrote in his own words, and I quote, "in old age leading a tired horse into the years, every day is a journey, and the journey itself is home".

Basho was not rich, in fact, far from it. He was a wandering poet, with merely [his own words] "a traveller’s hat on my head; straw sandals on my feet"; Seng Han Thong's "soft shoes". But he left behind a rich legacy of wonderful haiku which immortalised him. He lived a full life doing what he loved, and taught us how to live, how to age gracefully and how to make a wonderful exit when the end is near.

Few of us have the talent and the spiritual strength to live and achieve as

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Basho did. But all of us can strive to be a good person, a responsible spouse, a caring parent, a good child, a helpful neighbour. Different people play different roles in society; some achieve more than others; some have greater responsibilities than others. But all can do their best to be kind and helpful to all fellow human beings and make this world a better place. I will do my part. [ Applause. ]

Dr Lily Neo: Two clarifications, Sir. I concur with the Minister for Health on his plan of actions, especially on the care of the elderly, and I wish him success. I would like to request that he looks into the holistic care of the elderly, ie, looking into the physical, mental and social well-being of the elderly.

My second clarification: does the Minister agree that many Singaporeans, despite our effective 3M healthcare financing, still live in fear of falling seriously ill? How is he going to solve this problem? Does he intend to better inform the public and help to reassure Singaporeans on this?

Mr Khaw Boon Wan: Sir, I wish to thank Dr Neo for bringing me back to reality. For a moment, I was out there.

Yes, certainly, I can understand why people worry. I worry too about the future, what will happen to me? Will I be hit by a serious illness? And whatever savings I have may just disappear. All of us have that kind of worry. But do not stop worrying. I think we should convert worry into action. I will continue to nag - healthy lifestyle, do not eat too much salt and too much fat, do exercise, do not over eat - but still prepare for eventuality. Therefore, please sign up for MediShield. Just now I answered a parliamentary Question by Mr Yeo Guat Kwang. For the housewives who are uninsured, the husbands should insure their wives and

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children. The 56% of the uninsured are children - insure for them.

I have read Ms Denise Phua's report on parents with special needs children. They worry that MediShield does not cover pre-existing illnesses. For a congenital problem, it is a bit difficult because a person is born with it, although we are looking at it. But for pre-existing illnesses, one can protect himself by buying insurance very early. As soon as the baby is born, please buy insurance for your baby, so that if anything happens, you are secured. After all, it is only $30 per year. I think this is what we need to do. We will continue to reassure and I will do my part.

Dr Lam Pin Min (Ang Mo Kio): Mr Speaker, Sir, I would like to thank the Minister for such an inspiring speech. I felt as though I have just come back from Japan.

With the anticipated ageing of the population, I would like to request that the Ministry actually look into enhancing the manpower requirements to handle the increased demand in the areas of geriatric medicine as well as rehabilitation medicine. Because I understand that there is a shortage of geriatricians as well as geriatric nurses and other allied health professionals. Moreover, it takes at least 12 years to train a medical specialist in those areas.

Mr Khaw Boon Wan: Sir, Dr Lam is correct. Certainly, there is a shortage of doctors who are interested in geriatric care, and we will try and build them up. But I think more important than having more doctors are also large numbers of allied health professionals. When I visited the day care centres, they are not manned by doctors or nurses, because most of the time, the care is out of the heart, a lot of counselling work, attitudes, social workers. In these areas, the allied health professionals have been neglected for too

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long, and part of my job is to assess, if ageing continues at this pace, what sort of manpower do we need. And I suspect we need a huge pyramid with doctors sitting on top, but we need a large number of nurses and non-doctors and non-nurses in the supportive group providing this sort of care all round. I have been looking at the labour statistics from the US for many years, and we know that the top four or five jobs are all in this category of how to look after the elderly frail or semi-frail. Because we are still a very young society, we have somehow not paid sufficient attention, but it is never too late.

Ms Lee Bee Wah: Mr Speaker, Sir, I am very heartened to hear from the Minister that there will be extended usage of Medisave. One of my residents told me that he could not use Medisave for radiotherapy for his nose cancer. I would like to urge the Minister to consider this treatment for further extension of Medisave usage in future.

Mr Khaw Boon Wan: Sir, yes, I have heard her maiden speech a few days ago when she mentioned this. I was a bit surprised because we do allow Medisave to be used for cancer care - radiotherapy, chemotherapy. However, we do set limits, and probably it burst the limits and therefore her resident got into trouble. Probably that was the reason.

In any case, if the Member could let me have the specifics, I would be happy to look into it.

Ms Ellen Lee (Sembawang): Mr Speaker, Sir, I am sure many people would be grateful to the Minister for wanting to speak to the Ministry of Finance to waive the GST. I think they will be even more grateful to the Minister if he could also request MOM not to impose any administrative charge when Medisave is being used.

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The other thing is that, just to follow up on my colleague, Ms Lee Bee Wah's question, I have come across a resident who had to undergo MRI scan but, unfortunately, he could not use Medisave, as a result of which he had to give up that treatment. Perhaps this is something that could be looked into as well.

Mr Khaw Boon Wan: Sir, I should clarify that on GST, it is not to waive or to exempt, but it is to offset. There are good reasons why we have minimal exemptions for GST implementation. But for subsidised medical care, it is possible to arrange for an offset package, so that it makes no difference to the patient.

As for administrative charge for Medisave withdrawal, the administrative charge is just like the credit card charge. When one uses his credit card, the credit card company will charge a certain percentage for handling the particular transaction. So it is part and parcel of operating a business, because a person either pays cash or pays through his credit card. Every transaction costs money. So there is a need to impose a fee, and it has been imposed ever since Medisave was introduced 22 years ago. I do not think it is wrong to have such a pricing policy.

Mr Seah Kian Peng: Mr Speaker, Sir, I just want to add on to Ms Ellen Lee's point. On the administrative fee that we are talking about, I think it is great that we allow part of Medisave to be used to pay for the treatment of some of these chronic illnesses, up to $300 a year. But for a $30 bill, to impose $3.17, if I recall correctly, is a big percentage. We understand the need for some of these administrative charges. The request is to see whether the charge could be lowered. I think $3.17 out of a $30 bill, percentage wise, it is a hefty sum. For the lower income group, this is very difficult to absorb.

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Mr Khaw Boon Wan: Sir, I am sorry to be a bit long winded on this matter. I happen to be quite familiar with this topic because, years ago, when I helped Senior Minister Goh when he was my boss, the Health Minister, to design Medisave, we were very careful because every Medisave withdrawal transaction costs money. And that is why we discouraged outpatient usage for many years, because we know that outpatient transactions are low - $10, $20, $30. But the cost of handling that $10 or $20 transaction is indeed a couple of dollars. Percentage wise, it is big. Therefore, for that kind of transactions, it is far better for the patient to pay out of pocket in cash. That is the reason for having to impose the administrative fee. It is actually to discourage small Medisave claims. But if the hospital bill is $3,000, then, of course, a few dollars of administrative fee makes sense. That is the reason. But we have been negotiating with CPF to bring the rates down, because now the transactions are in such big numbers, and we are spreading the overheads. So the cost per transaction can be cheaper, but it cannot be zero. There is a cost to it.

There are ways around it, and that is why I allow for the Medisave diabetes package to include a package fee. In other words, a patient pays per year, say, $200 package fee which allows him maybe six or eight visits

in between to have all sorts of blood checks and so on. But you transact it once so that your transaction fee of a few dollars is spread over this $200 or $300. So there are ways around this.

4.15 pm

Mdm Halimah Yacob: Sir, I want to thank the Minister for his very comprehensive and detailed explanation as to what his Ministry intends to do over this current term. In the Ministry of Health, there has also been a lot of buzz over the last few years. There is a lot of

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buzz and activity, and I think there have been a lot of changes that are very useful to Singaporeans as a whole. I can see that he is making great efforts to try and improve in so many other areas. I am really happy with the Minister's announcement that his Ministry's budget will increase because I really think 4% is too little, considering the rapidity with which our population is ageing. But in doing so, in the reviews that he is doing, which I think are important reviews, in my view, particularly Eldershield which is right now not as effective as it should be, in terms of achieving his goals, it can be a much more important tool in terms of ---

Mr Speaker: Mdm Halimah, not another speech, please. Just seek your clarifications.

Mdm Halimah Yacob: My question, Sir, to Minister Khaw is in the review of the MediShield, please keep the premiums low and not too high so that it becomes unaffordable.

My second question is there are people who are caught in between - they are not too poor, but they are not too rich either - so we need to address their concerns and this has become quite a big area of people and there is currently a gap .

The third area I would like to ask the Minister is mental illness. I think there are not enough attention and resources allocated. I do not know what is the hierarchy in terms of priority for the Ministry, but I think this is a growing problem. So I hope that the Ministry would give it enough priority as well.

Mr Khaw Boon Wan: I will just give a short reply. On mental health, yes, it is a topic which I feel important enough that I inserted that sentence in this particular Addendum, because I do intend to take a look at it. The numbers are growing. It depends on how you define mental illness.

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I was in Auckland, New Zealand, a few months ago and they happened to have just published a survey on mental illness. The newspaper's front page headline screamed out: "Half of New Zealanders are Mad!" I read similar reports that say that mental illness applies to everybody, 100%. We have to be practical, but let us also acknowledge that the mental illness management programme this year compared to, say, 10 years ago is vastly improved but there is still scope for making progress, and I will do so.

On the other two points about reforms to MediShield and Eldershield, these are my priorities too, and we will get it done within 12 months.

Mr Speaker: Mrs Josephine Teo, last one.

Mrs Josephine Teo (Bishan-Toa Payoh): Mr Speaker, I also like to thank the Minister for Health for his very beautiful speech, in my view.

Many voluntary welfare organisations are involved in the care of elderly sick. The VWOs often face difficulties in recruiting, training as well as retaining manpower. Could the Ministry of Health please consider ways in which it can help the VWOs to perform their roles more effectively so that, as a society, we are more able to provide holistic care to our elderly sick?

Mr Khaw Boon Wan: On this subject, the best help I can offer is to assess what the industry needs, project future requirements and really step up the training, because the need for those manpower and different grades will grow. Part of the problem that VWOs face today is because there is no active training programme for this group of allied health services. So, when you are short of workers, and everybody is pinching from the same limited source, it is trouble all

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round. This is certainly one area of priority.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 4.40 pm.

_Sitting accordingly suspended
at 4.20 pm until 4.40 pm.
_

Sitting resumed at 4.40 pm

[Mr Deputy Speaker (Mr Matthias Yao Chih) in the Chair]: Debate resumed.

The Minister of State for Defence (Assoc. Prof. Koo Tsai Kee): Mr Deputy Speaker, Sir, if you were a refuge from Neverland on a boat with a radio, listening to the speeches from this Parliament over the last four days, you will not set your compass on your way to Singapore. You might turn back and go back to Neverland. Sir, that will be a shame, because who knows one day, you might be the real Speaker.

Sir, there are problems in Singapore and this House has ventilated many of the problems here. But this is an active Government, with lots of resources committed to solving some of these problems. Singapore is a fair society, it is not a perfect society. In an imperfect world, Singapore could well be utopia because everybody is treated "equally" and "fairly". The two key words that I like to go back again and again are "equally" and "fairly". Our stations in lives do not depend on our race, language or religion, nor does it depend on our accent, dialect or breeding.

Those looking for a true utopia have to look elsewhere. Where will they find it? They will not find it in Communist China where everybody is supposed to be equal.

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Yet, in China, income gaps are widening much faster than in Singapore. Mr Mah and I travelled to China quite often to a place called Chengdu in Sichuan in the centre of China. It used to be a poor place. Today, it is a relatively rich place, not on the scale of Shanghai or Guangzhou but rich enough. But income gaps have grown apart enormously. Recently, I went to Chengdu and I spoke with a high official ( gao guan ) and I said, "Wah! Chengdu has become so beautiful! It has become so rich, with so many condominiums." And I said that the problem is that they are so expensive that the ordinary persons ( xiao shi min ) could not afford these flats. The official said, " Bu shi xiao shi min , shi wo men gao guan ye mai bu qi zhe xie lou fang ." In others words, he said it was not just the small people, but high officials also could not afford the apartments that I saw around Chengdu.

Where will you find utopia? Certainly they will not find it in Europe where welfarism is supposed to be the heart of a compassionate society. Unemployment rate is extremely high all over Europe, ranging 10%-15% in the worst countries. Even in America, known as the land of the dreams, the American dream is elusive for many Americans, particularly blacks, Hispanics and many Asians. Martin Luther King said in the 1960s, "I have a dream." But many blacks in America, in the deep south, for example, will tell you that even Martin Luther King was merely saying it because he knew it was a dream, nothing more, just a dream! Clever Asian children in many parts of America suffer from reverse affirmative action, even though affirmative action was planned to protect the minority, and Asians are the absolute minorities in America.

Sir, in recent days, we have heard that Singapore has become a society divided by wealth (the rich and the poor), the

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talented (gifted and mainstream), and jobs (professionals and unskilled). The mere existence of Singaporeans with different jobs, talents and wealth does not point to a divided society. This existence does not point to a stratified society. In any society, wherever you may be, there will be the rich, there will be the poor, there will be the developmentally advanced and ordinary children, there will be professionals and unskilled workers.

So the issue which we should look at is whether Singaporeans work and live in totally different universe oblivious to the existence of each other. The issue which we should look at is whether special privileges are extended to the rich and denied to the poor. The issue is whether we are schooled in separate systems where the rich can buy influence, power and positions. The issue is whether the system is fair, transparent and meritocratic. The real issue is whether there are formidable and permanent barriers to social mobility. The issue is whether the masses are given a fair go at the system.

When you look at these issues separately, or together, we have to conclude that we are not a divided society. Because there are no impermeable barriers which permanently put us in separate class or caste. When you look at Singapore and compare it to many societies around the world, you will see two great social equalisers here, not found in many places. Together, I think they are unique. First, National Service; and second, our education and scholarship system.

First, National Service (NS). In Singapore, all 18-year old Singapore citizens and PRs do National Service, whether you are rich or poor, whether you are the Prime Minister's son or a rental flat's child, whether you are gifted or mainstream, all of us do two years of National Service. Next year, this

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institution will commemorate its 40th year of anniversary.

Why does NS work? Because we treat everybody as equals. The rich and gifted cannot buy their way out of this system. The powerful cannot ask for special privileges. And no special groups can lobby for cushy postings. In fact, we find the best and the fittest to go to the best units - the commandos, the naval divers. Everybody in NS eats the same food, which is not bad I must say, wears the same army uniform, which is quite comfortable, sports the same four-by-two crew cut, which is shorter than mine, sleeps in the same bunks, does the same tasks and dreams the same Singapore dreams. National Service is a unique experience that unites and binds us. It unites across cultures, races, religions and social stratums.

From National Service, strong bonds of friendship are forged. I did my NS in 1976 after I had come back from overseas. Today, my combat engineer buddies still hold regular get-togethers. They had one recently. I could not join them because I was involved in an official function. All of us have finished our tour of duties. Everyone of us has arrived at a different station in life, but none of us feels excluded in our combat engineer alumni.

Sir, the National Service experience is not just a rite of passage for our males, because that will divide us into males and females. Our males in Singapore do not travel alone. Our women folks are with them - behind them, supporting them. Our own folks share the same NS experience in a different way. Every time, I go to Pulau Tekong, which is the place where we train our recruits, we call it the Basic Military Training Camp (BMTC), I see mothers, sisters and girlfriends accompanying these anxious young boys. Always, there are more women than men.

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Why? The fathers may not be there, but the mothers are always there. NS unites and brings the families closer together.

The second great social equaliser I want to talk about is education and scholarship. This underpins our whole society. This is a unique equaliser because it is inclusive; it is secular - secular means you are allowed to practise any religious faith you want; it is equal, not 100%, but very close to it and I will explain why; and it is very inexpensive - this is one time, the word "cheap" carries a special significance. I heard the Prime Minister yesterday in this House wanting to invest more in education, making it more open and accessible for the lower income group.

Here, in Singapore, we take our education system for granted and do not realise that it offers the greatest social level playing field. This point is often lost on native Singaporeans. In America, Australia, Britain, New Zealand and Canada, education is not equal, and I say it again, it is not equal. The rich and the poor are schooled separately. For how long? For as long as 12 years of their formal schooling - 12 long years. By which time, the boys and girls could have formed permanent prejudices against the other communities. The rich goes to private schools and the rest goes to public schools. In the UK, private schools carry a different name, euphemistically called public schools, to give the illusion, the grandeur that these schools are open to the public. Everybody is welcome, but only the rich need to apply. The typical average fees of a private school in the UK are around 20,000 sterling pounds. The last time I looked at the so-called "good ones" they carry a price tag several times higher than 20,000 pounds. And where do the poor go? They go to the poor inner sub-urban schools where facilities are lacking, teachers have low morale, because they are poorly paid. They live separate lives for as long as 12 years. The rich go there

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because they come from a rich family background and are well-connected.

In Singapore, all of us - the rich and the poor, and there are rich people and there are poor people, private estate dwellers or HDB heartlanders - have access to good and very affordable public schools. While admission to primary schools is not screened for scholastic aptitudes, or special talent like sports, leadership, admission to secondary schools is determined on merit. And this is a very fair system. It gives everybody a fair go. It levels the playing field.

Many public secular schools like RGS, RI and RJC have gained enormous prestige and appeal for excellence and meritocracy. In an article on world talent about one month ago or so, The Economist magazine made special mention about RJC and singled it out as the college in the world that sends the most number of students to the Ivy League in the States. And this magazine does not even bother to mention that RJC sends too many students to the top five colleges in UK.

So closely associated with the open access to public education system is the scholarship system. Thousands of sons and daughters of working parents have gone to universities locally and abroad on these state-funded scholarships. Mr Sam Tan told us last week that without the PA scholarship, he would not have been able to go to university. Ms Chua Mui Hoong chronicled her humble journey from a rental flat to a place in Cambridge University on a Government scholarship. Today, she lives in a condominium. There are many Sam Tans and Chua Mui Hoongs around in Singapore. There are so many of them around that their stories do not make compelling reading anymore. That is a shame because every story like Chua Mui Hoong and Sam Tan serves to

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remind us that this system works, this system levels the playing field. It can only work because the people support it and people know it. People like Sam Tan have come back to serve.

Still, many lamented that the Gifted Education Programme (GEP) and the scholarship system breed elitism and entrench the power of the few over the lives of many. These perceptions are misleading and the accusations are wrong. If we remove these programmes, the people who suffer more are the poor, and not the rich. The rich have resources. They do not need these schemes.

Sir, examinations and scholarships are not the perfect solutions to finding the most able to govern a country or any corporation. Examinations are not even the second best method to find the most gifted. But they are one of the best available methods to bring out groups of talented people, not individually, but groups of talented people to an organisation or a country.

Sir, it is useful to look at examples elsewhere to seek some inspiration, some confirmation, to see whether our system is flawed. Western civilisation, as we know it today, is triumphant. But it is a relatively young civilisation, barely a few hundred years old, as we know it today, in its successful triumphant form. In this system, aristocrats ruled over the masses. In the words of Shakespeare, these are people "To the Manor Born". It was absolute in ancient Europe, it is still true in modern Europe and, to a large degree, the land of dreams - the USA. If you do not believe me, do a "Google" search of the profile of the Democratic and Republican party leaders in the House and Congress and the Labour and Conservative party leaders in Westminster.

At a recent Oxbridge alumni meeting, ex-civil servant Ngiam Tong Dow spoke of different systems of selecting mandarins

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to govern a country. Clearly, there is no one single system which is perfect. But some systems lend good examples for us to learn. What system we choose, a system which is fair and wins the hearts and minds of the people will endure and produce results for the country. Sir, there is no examination and scholarship system that has endured longer than the Imperial Examinations of China. It survived for not 10 years, not 100 years, but a millennium. It survived for 1,300 years across dynasties, from the Sui Dynasty, 650 A.D. all the way to the Qing Dynasty, 1911. Please remember that each dynasty lasted about 250 years, and beyond - translated in election terms, it means more than 50 elections, something we should think about.

When we look at the Imperial Examinations, we will find useful and important examples - some good, some bad, some absolutely rubbish - which we can take away for a small and young country like Singapore which is barely 41 years old. It is a baby.

In ancient China, a system of Imperial examinations (the Chinese call, ke ju kao shi ) served two important purposes. There are many others, but there are two important ones. First, it allowed the Emperor to recruit officials and Ministers, the best people, to serve him, to keep his vast empire from north to south, east to west. If you travel from north to south, it may take one or two years, east to west, it may take many more years. So he needed good people to keep the ground for him. Second, it determined social mobility for the masses. Most people are poor in China. They needed to make these people happy, otherwise there would be revolutions. This system is very different from the aristocrat-led system in the West where the King appointed his knights and bishops, all in a very closed fashion.

Anybody in ancient China who wished to be a civil servant or a Minister had to

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pass several standard examinations at different levels, because then, they would know relatively who was better, more determined or more diligent. Different examinations led to different posts. The harder the examinations, the bigger the prizes and the ranks. Is that fair? I think it is fair. The number of posts was distributed proportionally to districts, provinces and national levels so that everybody everywhere would get something. There were three classes of examinations: the sheng yuan , let us call it the Bachelor's level, just to benchmark it; the ju ren , let us say, the Master's level; and then the jin shi , let us say, the PhD. The most difficult examination being the jin shi . This examination was held every three years in the capital city. The top scholars became the zhuang yuan . The zhuang yuan became a Minister - but Ministership is only a side benefit - and he took a beautiful princess as his wife.

These examinations were tough and most failed. But what did it do? It gave hope to the masses because it was open to people from all stratums of society. It was very egalitarian and meritocratic. Poor peasants had a chance to become the gentry class. It was a fair system, never mind that the pass rate was dismal, less than 5% of the people passed. But what happened before the Imperial Examinations? The Chinese history lasted before 650 AD, way back 2000 years BC, 3000 BC.

Before the Imperial Examinations were introduced, appointments to the courts were determined by recommendations from prominent aristocrats, like the European system. Who did they recommend? They recommended each other's friends, their children, in-laws, etc. This system was totally corrupt. The Emperor could not avail himself of the best talent. Those who came before him were incompetent, corrupt, lazy and selfish, and they all undermined his prestige and influence. Worse, the system

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antagonised the masses who resented a closed and exclusive system. It was a totally closed system.

What is even more remarkable about the Imperial Examinations is the fact that even the Mongolians under the Yuan Dynasty and the Manchus under the Qing Dynasty decided to implement this essentially Han, ie, the Chinese system. The Mongolian empire stretched huge and far. It was bigger than the Roman Empire at one time. The Mongolians did not need the Chinese system but they decided that this system served them well too.

When the Manchus came into power, they abolished the Imperial Examinations. But they soon found it impossible to get good, honest and clever men to keep the empire. So what did the Manchus do? They restarted the Imperial Examinations, but excluded the Han Chinese. But what happened? There were not enough talented Manchus to run the empire. They decided that they had no choice, so they reopened the Imperial Examinations to the Han Chinese.

Herein lies an important lesson for us. A small country like Singapore will have a small talent pool. We can exceed the universal average, but no matter how we improve the education system, the talent pool will be small. This will not be enough for the kind of growing economy that we aspire to. Thus, we must do two things. First, we must seek out our own talent in every school, family and community and help them along. The rich can get along. The poor, we can and must help them. At the same time, we have to attract even more people from outside of Singapore to serve our goals. If we exclude foreigners from our education system and deprive them of scholarships, we will be the poorer for it.

It is no coincidence that the Qing Dynasty lasted for a long time, ie, 270

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years, from 1644 AD to 1911 AD, one of the longest surviving dynasties in China, because towards the end, it went corrupt, as all dynasties do at some point. The Manchus came to power on the battlefield. They were the barbarians from the north east, but it could not rule over the Han Chinese with mere swords and spears. They needed good men - sorry, only men because in those days, no women - to help keep the empire against a restive population who resented the barbarians from the north. The Han Chinese were the majority, but the barbarians had come down and there were constant revolutions small and big, against them. The Manchus decided to work with their enemy, the Chinese. They opened the Imperial Examinations and gave the Hans jobs and opportunities. In other words, they practised what we call today an "inclusive system", a system that brings in talented people and let them see where the differences lie, reconcile them and work towards the benefit of the nation.

But the Imperial Examinations were not without faults, like all examination systems or any system. There were plenty of problems which we should avoid. First, it excluded women. It was a very sexist system. Our schools and scholarship systems include women and, increasingly, we find more and more women at all levels or strata. Perhaps, more can be done too in this direction. Even though the Imperial Examinations were fair, it was clear that the rich had more opportunities. Many Members in this House have said that our system is good but the poor needs extra help, and that is always correct. In Imperial China, books, brushes and private tuition - yes, they had private tuition in those days - cost lots of money. The journey to the capital was long, treacherous and arduous, and many could not even make it to the examination halls. That is the reason why there were fewer southern Chinese scholars than northern Chinese -

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giving the illusion that southern Chinese are stupid - because they could not cross the rivers and the mountains. But the rich did not have an absolute advantage. The rich could not cream it all and take all the good seats in the palace. Why? Because talent runs deep in the heartlands. Many poor scholars overcame adversities and became zhuang yuan. There was a whole range of scholars, but zhuang yuan means those at the very top.

In the Qing period, up to one-third of top scholars came from remote villages and from families with no educational backgrounds. We may say that one-third is still a minority, but one-third was quite substantial. The provinces of Zhejiang and Jiangsu had the most number of scholars, even though they were very, very far from Beijing.

In our system, because education is very, very cheap, poor students are not at a severe disadvantage. As we are a small country and a close-knit community, it is easy to identify, find and help them. On top of that, our students are helped with a whole battery of schemes, eg, Edusave bursaries, Edusave Merit Scholarships, School Pocket Money Fund, transport vouchers, CCC scholarships and bursaries, and various MOE assistance schemes. And yesterday, the Prime Minister said he wants to do more for education. NTUC Fairprice also chips in with free old school textbooks, and many organisations, like the Tanjong Pagar Town Council, donate good second-hand used computers to poor families. Students here are not short of assistance. Our National Library membership is free.

But why are some Singaporeans still angry at our system, suggesting that we are divided in two classes? I think, again, the Imperial Examinations can tell us something which we can learn and avoid. The Imperial Examinations were exhausting and challenging. It was so exhausting that it took years to prepare

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and many failed. Some of those who failed the examinations channelled their energies creatively and positively, while some channelled them destructively. But not all is lost. Some of the best classical talents in China came from people who failed the Imperial Examinations. Du Fu, for example, is one of the most famous poets of China. Some people call him the modern Shakespeare. He failed the Imperial Examinations. He abandoned dreams of becoming a scholar and became a wandering poet. Today, anybody who knows Chinese classics would have come across Du Fu and many of his poems. Another famous person who failed the examinations but channelled his energy creatively is the author of the Dream of the Red Chamber - Cao Yueqin. Many others had written beautiful poems because they failed. But this is a plus. It is like some Singaporeans who decided not to opt into the system and became top entrepreneurs and bankers.

Some, however, channelled their energies destructively. The most famous failure and frustrated individual was Hong Xiuquan. He failed the Imperial Examinations four times, ie, a total of 12 years. He was a talented person who found himself marooned by a system which marginalised him. He channelled his energy into starting the Taiping Rebellion. This revolution supposedly cost the lives of 21 million Chinese. The take-away for me at least is that we must create space for the talented who failed the system, because the system is not perfect. A good system allows us to collect groups of talent, but individuals slip through the net and we must not forget the losers who tried. Those who failed but tried must be rewarded.

The Imperial Examinations also tell us that examinations are not everything. It is worth mentioning that not many zhuang yuan made a mark in Chinese history, not

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many at all. The people who left big footprints in Chinese history are usually the jinshi jidi , ie, those who passed the examinations but who were not ranked in the top 10%-20%. Li Bai is an example. He was one of the top poets in China. Many Members would have heard of his poems. In fact, last year, when there was a calligraphy exhibition by some Ministers, Mr Tharman Shanmugaratnam wrote this piece " tian sheng wo cai bi you yong ". That was Li Bai. One of the sentences in the poem is jiang jin jiu .

The lessons for me are clear. Our system, Sir, is fair. This system gives everybody a fair chance. It may not - and I think it does not - always identify the very, very best students. But, as a group, our scholarship system and the school system allow us to bring out the best in the population and give everybody a fair chance. But this does not mean that those who have succeeded from this system can lord over the people. They have no such right. They need to remember that they owe it to society to serve with humility and gratefulness. Our system should be a source of pride rather than envy and anger. We should celebrate rather than condemn it. This is a system which does not entrench old power. Instead, it provides a level playing field for the determined and the talented to reach the highest office, regardless of his or her breeding and background. It cleans up the old power and brings in people power.

5.12 pm

Mr Cedric Foo Chee Keng (West Coast): Mr Deputy Speaker, Sir, first, I would like to address some issues regarding transport.

Singapore has an excellent transport infrastructure. Our seaports and airports are truly world-class, thanks to the many people who work in these sectors - the

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stevedores, the gantry crane drivers at PSA, the staff at CAAS and the immigration officers at Changi Airport. They work with utmost dedication 24/7 to maintain Singapore's pole position as a major sea and air hub.

Sir, the President, in his Address, emphasised the importance of investing in infrastructure to meet future business needs. The Prime Minister has also spoken to that effect. Sir, I support these positions.

The reason why China is today the factory of the world while India is not can be largely explained by their different approaches to infrastructure development. In 2004, China invested 20% of its GDP in infrastructure and received US$60 billion in foreign direct investments (FDI). In contrast, India invested only 6% of its GDP in infrastructure and received only about US$5 billion in foreign direct investments, ie, less than one-tenth of what China received. This underscores the importance of infrastructure development in attracting FDI and jobs. With globalisation, supply chains are getting more complex. To remain relevant, we must continue to invest in infrastructure and be plugged in as a major node in the global supply chain.

On the maritime front, we are expanding the Pasir Panjang container berths. In the air sector, we will soon witness the opening of Changi Terminal 3 in 2008. These are all welcomed. In land transport, the Transport Minister has announced a major study this year and I welcome the study. Like my GPC colleague, Mdm Cynthia Phua, rather than working at the edges or making marginal changes, I would strongly encourage MOT to undertake a fundamental review of our land transport sector. The URA, in its Concept Plan 2001 has projected a resident population of 5.5 million people in Singapore in the long-term. That is a 40% increase. Last year, Singapore

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Tourism Board set for itself a target to double tourist arrivals to 17 million by 2015, up from eight million in 2004. That is more than a hundred percent increase. With the two IR projects and the IFC, I believe that these projections would be exceeded.

The future demand on our land transport will put considerable strain on the existing network. If we are to avoid the "congestion tax" that the Minister talked about, then we would do well to invest in advance of demand. Since 12% of our land area has been committed to roads, there is a limit to constructing more roads. One way is to consider the construction of underground roads. This is not a new idea. In fact, it was written in the Public Transport White Paper 1996. In that document, the LTA said that it is seriously studying the feasibility of the Singapore underground road system. It even had an acronym for it: SURS (Singapore Underground Road System). The SURS is said to be able to increase road capacity by 40%. I would like the Minister to update us on the findings of the feasibility study of the SURS.

Another alternative to increase the use of our roads is "reversible lanes". For many in this House, if you are motorists, you would have noticed that in the morning rush hours, the ECP, for example, is jammed up for lanes towards the city and in the evening rush hours, jammed up again for lanes towards the east. Road congestion occurs mostly on one side whilst motorists on the "reverse commute lanes" whisk by.

If lanes can be made more reversible to cater to peak traffic, then we could relieve road congestion without having to invest in more lanes. In fact, such a system has been done successfully in Canada and elsewhere. The George Massey Tunnel, the Lion's Gate Bridge and the Pitt River Bridge in Vancouver are

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some examples. I urge the Transport Minister to consider "reversible lanes" in the proposed study. Another idea is water taxis like in Venice. But in our case, say, from the Kallang Basin to the city, that could also be an alternative mode to road transport. I think that is what the Environment Minister is also encouraging - active use of our water space.

Sir, I agree with the Transport Minister that we should increase the share of public transport commuters. At 63%, Singapore trails behind Zurich which has 75% public commuters, Hong Kong, 72% and Tokyo, 80%. The Transport Minister has said that he is aiming for 70% by 2020, that is, some 14 years away. But in 1996, some 10 years ago, that White Paper I talked about had a target of 75%. I urge MOT to be more ambitious because in land scarce Singapore, the only way we can solve this problem is by increasing the share of public commuters. Unless the public transport mode is made more comprehensive with more stations, more convenient and also more accessible, then this target may yet be revised again.

Sir, finally on transport issues, we have two main public transport operators - SMRT and SBS Transit today. Their routes do not overlap and so effectively, they do not offer commuters with choices. It would also be very expensive if we were to operate two overlapping networks. For example, to lay two MRT tracks east and west; two MRT tracks north and south, and so forth - in a small island state like Singapore. If we cannot achieve 'true contestability', we should not rule out the possibility of a single operator. I know my GPC colleague, Mdm Cynthia Phua has asked the Minister to study whether we can have a more competitive system rather than have a system where there is a single operator. The GPC, even within itself, has many diverse views and we encourage that. We also have all the bases covered so whatever the Transport Minister may

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decide, it would be a suggestion of the GPC.

I think a single transport operator has merits and we should consider it. It would enjoy economies of scale and there would be less inefficiency at the boundaries of the two operations. I understand that operating an MRT system is an expensive affair and it is a very specialised affair. So if you have two MRT operators keeping two sets of skilled technicians, keeping two sets of stock and so forth, I think it may not be the most efficient way to go. Also, for some years now, there have been talks of a bus arrival information system at our bus-stops. But this has remained just talks. I have been urging SMRT to follow in the steps of SBS Transit to offer seasonal passes so that commuters who buy these passes can use them not only for SBS Transit routes but also for SMRT routes and use them islandwide. Apparently, the two operators cannot come to terms. In the meanwhile, commuters are worse off. I hope that the Minister could help correct this.

Sir, I would like to move on now to discuss issues other than transport. We have heard that from many Members of this House over the last five days of debate. Members have spoken passionately about many issues close to their heart. The Prime Minister also spoke yesterday on the dos and don'ts when reviewing our safety net. I am in broad agreement with the PM and would illustrate some of his points from my own experience as a business executive. I see the problem this way. Ultimately, it is about Singapore making a choice - a choice between two different paths; each of them seemingly compelling and both promising a better Singapore.

Let us take a look at the first path. The first path begins with the premise that the State takes sole responsibility for the well-being of all citizens. Such a

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proposition sounds reasonable. And why not, since Singapore has built up a large reserve and if you add to that, funds held by the statutory boards and Temasek, there is plenty to go around? Along this argument, the State should also provide a permanent unconditional and needs-based welfare system. You have heard these famous five words many times. So that poverty in Singapore is eradicated once and for all. For good measure, this path also suggests that since globalisation results in off-shoring, we should reject it, stop our companies from venturing abroad, lest we lose jobs to China, India and elsewhere. And we should also be very careful when bringing in foreign workers or immigrants into Singapore because they will compete with Singaporeans for jobs, space and so forth. Also, to protect Singaporeans, let us impose a minimum wage and this will be really helpful to the lower strata of society.

So what is the proposition? A country with no poor people and happiness all around? Quite an appealing proposition. Why not? If it can be done, I say we should do it. But let us pause. Can it be done? I think if we put such a proposition to the crucible of the realities in the marketplace, we will quickly realise, Sir, that there are many unintended consequences. Consider first just human motivation itself. If the State rushes in to provide, without even expecting an 'effort test', why would citizens work hard? And if more and more of them become dependent on the State, who would be left behind to pay the taxes needed to fund the many welfare schemes? So I say a permanent welfare system in Singapore is a myth because if our safety net is too wide and if it is too entrenched, we will lose competitiveness eventually and, at some point, the system will self-destruct.

But we were consistently reminded that we have a large reserve and here, I

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am more conservative than the Prime Minister. I think the reserve is similar in some ways to defence capability. When we have a strong reserve and a strong defence capability, if they are working well, they act as effective deterrents. What does that mean? Effective deterrents mean you wait, nothing happens, because the deterrents are effective, nothing happens. But over a long time, if nothing happens, then some people will start to question whether we are doing too much in terms of reserve or defence. If we yield to such questions and we allow either one of them to dwindle, then it will be way too late when something does happen.

So I was listening very carefully to the PM when he spoke about changing the formula as to what constitutes NII. I think his proposal is a reasonable one since 'capital' gains are normally recognised as investment returns in most funds. And also, the capital value of the reserves will remain largely intact because the other 50% of the NII would be under the President's care. Therefore, after adjusting for inflation, the real value of the reserve would be preserved. But I am sure that during the debate for the Constitutional amendment regarding the reserves and changing of the formula, the Prime Minister would enlighten us about the amount of funds available and the kind of checks and independence that the GIC would be put to in order that they make correct economic decisions about when to realise a capital gain.

Consider next, Sir, the economic competition from other countries and Singapore's externally oriented economy. Singaporeans enjoy a high per capita income. We are the envy of the world. But in aggregate, our economy is actually quite small on the world stage. Singapore recorded a GDP of US$117 billion last year, ranked 41st in the world. Wal-Mart, a retail company in the US had an annual sales of US$285 billion last year - for a

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single company, compared to Singapore's entire economy of US$117 billion. Wal-Mart purchased more than a quarter trillion - I am not talking about millions or billions - more than US$250 billion worth of merchandise in a single year. If Wal-Mart were an economy, it would be China's eighth largest trading partner, just one company.

I chose Wal-Mart as an example because it is a company that was born in Bentonville, Arkansas. Bentonville, Arkansas is a small town without a large local market and not much resources. Actually, it is a little bit like Singapore. So it is not unlike us. Yet, Wal-Mart was one of the first company to embrace globalisation for competitiveness. Suddenly, with globalisation, the local factor inputs become unimportant, whether you have land, capital or labour. It does not really matter because the whole world is your oyster, as the PM puts it. For these reasons, I share PM's views that globalisation is also good for Singapore and it can be done because, if a company like Wal-Mart, which is similarly situated can do it, I think Singapore can do it. Because if Wal-Mart does not take advantage of outsourcing and off-shoring, then companies like Carrefour or Tesco would do so and over time, by trying to protect jobs in the US, there will be no jobs left at Wal-Mart. Given the smallness of our economy, it is not possible for Singapore to resist the forces of globalisation. As in the case of Wal-Mart, as a company without much resources in Bentonville, Arkansas, if they can do it, as a nation, we can do it just as well.

Indeed, our companies must venture abroad in search of better factors of production and larger markets. Indeed, foreign and local enterprises in Singapore must be given access to cheaper foreign labour. The more we distort market forces as a Government, the more violently these forces would come back; would boomerang to hit us.

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I want to talk a little bit about minimum wage. Last month, I visited a garment factory in Cambodia. It is a well-run factory, medium-sized, and employs about 8,000 workers. The Managing Director told me that although they were satisfied with the operations in Cambodia, they had recently opened up another factory across the border in Vietnam. The plan is initially for this factory to take over some of the load from Cambodia in the peak periods but they have actually prepared the Vietnam factory to be scaled up in a matter of weeks to totally replace the output of the Cambodian factory. When I was there, I watched the 8,000 workers working very hard and very diligently in the factory. So I was a bit concerned on the part of these workers. Why did the garment factory now wants to have a replacement factory in Vietnam? I am told that apparently, some international NGOs were lobbying the Cambodian Government to impose a minimum wage for all these workers in the Cambodian factory. The minimum wage proposed was US$50 per month per worker. And the garment factory owner told me that at that level, Cambodia would be priced out and be uncompetitive compared to Vietnam, especially when you adjust for the productivity levels in Vietnam, the higher political stability and the vast pool of workers that you can find in Vietnam. So if the NGOs do succeed, I would like to ask Mr Chiam, what would be the realised minimum wage of each of these 8,000 workers in the Cambodian factory? The answer must be zero. They would be out of jobs.

Sir, the most important challenge for Singapore, in my opinion, is our shrinking and ageing population. In scenario planning, this is not a critical uncertainty. This is called a trend, this is something that will definitely happen. So for Singapore to continue on with its current trajectory of growth, we need a large

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base of economically-active citizens to support our ageing population. The preference, of course, is to have more Singaporeans born of Singaporean parents. That way, we preserve the values that would have made us successful - meritocracy, reward for productive work, corruption-free and so forth. But we all know the limits of such a strategy.

The next answer lies with immigration. Here, we must first realise that Singapore is not the only country that is resorting to immigration. For many years, the US has been using immigration policies to very good effect, including attracting Professor Linda Lim, who was cited by Ms Sylvia Lim some days ago in this Chamber. Professor Linda Lim is a Singaporean who now lives in the US and works for the University of Michigan in Ann Arbor. So competition for talent is not new but now more than ever because of globalisation and our ageing population; it must be Singapore's top priority.

As a multi-racial country with a large number of foreigners working in our midst, with English as the working language, I think our people are adaptable so we are, often-times, a target for countries who are seeking talents. At the same time, because English is our working language and with the large number of foreigners in our midst, we also have a competitive edge in attracting talents. So we will do well to capitalise on this. I think Japan will find it a little more difficult to attract and assimilate foreign talents.

Sir, so if this first path is not viable, what then is a viable path? I think the viable path begins with the premise that the State expects its citizens to be self-reliant, to uphold the highest work ethos

and intervenes only after an "effort test". The "safety net" is calibrated carefully to help only those who "cannot", rather than those who "would not" help themselves.

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We are not starting off from a bad base. In fact, we are starting off from a good base. Yes, there are stresses and uncertainties. But in Singapore today, we do not find homeless people in our streets as compared to even the most successful economies. Hospitals do not deny anyone who needs healthcare. No child will go without schooling even if their parents could not afford it. It is not the case everywhere. I read in the Herald Tribune, for example, that a student in suburban China offered to sell his 'blood' to help his classmate enrol into college. We must not allow Singapore to become such a society.

There is more that we could do and we should do to help the structurally unemployed, the disabled and children from disadvantaged families. Many in these groups need help despite their best efforts. Sir, I fully embrace the President's call for a more compassionate society. But let us be watchful, as the Prime Minister has warned, of the traps and the trip wires as we go down this path.

Sir, the 11th Parliament has inherited a stronger Singapore. Our foreign relations are warm all round. Our national defence has grown from strength to strength, and our economy is chugging along nicely. Jobs are abound, and we have every reason to be optimistic and, yes, even very happy, as Mr Chan Soo Sen has reminded us. So, by all means, send the cow to the vet, refine our welfare delivery systems but, most of all, ensure that the cow comes back fit, strong and competitive, so that the "milk of kindness", as Dr Vivian Balakrishnan puts it, will continue to flow for generations to come.

Sir, I thank the President for his Address and I am confident that through robust debates as we have heard in the last few days, the laws and policies coming out of this 11th Parliament will

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make for a bigger, stronger, more competitive and compassionate Singapore!

5.35 pm

Mdm Halimah Yacob (Jurong): ( In Malay ): [For vernacular speech, please refer to Appendix A.] Mr Deputy Speaker, Sir, we have been speaking for five days on Government policies presented in the President Speech. Fifty-one Members of Parliament, three Ministers and the Prime Minister himself have taken part in this debate.

The President has touched on our economic growth and the need for a stronger network for the lower-income group and the less capable. Yesterday, the Prime Minister has given a comprehensive response to a number of issues raised by Members.

On the whole, the debate has been appropriate and very important. We can say that we unanimously agree that globalisation benefits the economy and the people of Singapore. We also agree and are concerned that not all of us can enjoy the same level of success and that we need assistance. Members are concerned about the widening income gap and has asked the Government to review whether it needs to change how the assistance is currently being given out so that no one is left behind, just because they do not have the ability or the resources.

The Prime Minister himself yesterday admitted that we need to consider a more holistic and continuous form of assistance. However, whatever assistance is given, it must be intended to strengthen our spirit and determination to be self-reliant. One example is the Workfare scheme which will be set up by the Government, according to the Prime Minister yesterday. If someone is working

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and is resourceful, he will be given assistance.

Attention will also be focused on education to ensure that every family can seize the available opportunities and is not left behind.

Sir, I hope our Malay community has been following this discussion carefully because we also need to understand the problems of globalisation, what are the implications, what are the strategies that the Government has set out in facing challenges, such as the income gap, and how we, as a community, family and individuals, can play our part for a better future for ourselves and our children. I am confident that our community will also enjoy better benefits with changes in the Government policy to build a more inclusive society.

( In English ): Mr Deputy Speaker, Sir, over the last five days, many Members had taken part in the debate on the President's Address. The debate had been lively and engaging. Many spoke with great passion and conviction on many of the policies outlined in the Address of the President. A total of 53 MPs and three Ministers spoke. We also heard the Prime Minister's response yesterday to some of the points raised by Members. Now, Sir, I have the privilege to sum up the debate.

The focus of Members' speeches over the last five days was largely on the two challenges raised by the President, which is the building of a competitive economy and an inclusive society. I know Members of this House will appreciate that it is extremely difficult to sum up after the Prime Minister had spoken and given such a comprehensive and substantial speech yesterday but, nevertheless, I will try to do so.

First, building a competitive economy. MPs Mr Inderjit Singh, Ms Grace Fu, Mr

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Iswaran and Mr Liang Eng Hwa touched on the economic pressures facing Singapore as a result of globalisation and stressed on the need for Singaporeans to adapt quickly in order to remain employed and take advantage of new opportunities. Mr Inderjit Singh also stressed on the importance of instilling greater confidence in Singapore's future among Singaporeans. The Prime Minister, who addressed Parliament yesterday, dwelt extensively on measures taken to invest in the future, and described the Government's plans to invest in education, R&D, development of infrastructure and building of a first-class public service, leaving no doubt at all that this is a Government that knows where it is heading and what it is doing, and Singaporeans should have no doubt about our future prospects.

Sir, a number of MPs touched on immigration and the influx of foreign talents into Singapore. With an ageing population and low fertility, MPs like Mr Inderjit Singh, Ms Grace Fu, Mr Alvin Yeo, Mr Christopher De Souza and Ms Jessica Tan supported the need to attract foreign talents to grow the economy and create jobs for Singaporeans. Mr Christopher De Souza and Mr Alvin Yeo also called for more to be done to integrate them into our society. Dr Amy Khor stressed that even as we attract foreign talents, we should make more efforts to develop, grow and retain our own talents. Ms Irene Ng suggested dual citizenship as one way of retaining talents. Ms Sylvia Lim, NCMP, asked for greater clarity in our population and immigration policy. Addressing the issue, Minister Vivian Balakrishnan explained that despite huge amounts expended to encourage procreation, we continue to face severe shortfalls in meeting our population targets, which have to be made up through immigration.

Sir, some Singaporeans have expressed concerns that foreign workers will take away their jobs and depress their wages. However, as Mr Ong Ah Heng

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had said yesterday, we know that the reality is that even if we stop the influx of foreign workers, Singaporeans will continue to face competition for jobs with foreigners, because we are competing in a global marketplace. This year alone, Sir, we have seen two big manufacturing companies - Maxtor Peripherals and National Semiconductor - retrench thousands of workers because of relocations. Even the services sector is not spared. I was speaking to our Singapore Banks' Employees Union last week and they were telling me that in the banking sector, billings in many banks today are now done overseas.

We also know of cases where it is difficult to get local workers to fill up the vacancies, such as jobs in the wafer fabrication plants which are not popular with Singaporeans for various reasons - long hours, 12-hour shifts, bunny suits. I have tried some of these bunny suits, it is actually not that bad. I think we need to do a much more intensive campaign to get our workers to understand that it is not difficult to put on the clean suits.

For jobs which are not popular with Singaporeans, stopping the inflow of foreign workers may even be detrimental to our interests. In one article, one Prof Norbert Walter, who is the Chief Economist of the Deutsche Bank Group, estimated that the working-age population of Singapore is likely to decline by 16% by 2050, reducing the share of 15-64 year olds from 72% to 56%. All things being equal, according to him, this would lower Singapore's growth potential by half a percentage point. In addition, according to Prof Norbert, the quality of the labour supply could decline, as it is usually the young workers who are likely to generate technical expertise and they are also usually the most active in many countries in setting up their own businesses and start-ups.

Nevertheless, Sir, the concerns of Singaporeans are not completely without

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basis. As a trade unionist, I have to say that as well, as there are fears that some employers may take the easy way out and employ foreigners when there are locals available to do the jobs. Hence, I would like to urge the Ministry of Manpower to continue to monitor the situation carefully to maintain a proper balance. We also have to make sure that Singaporeans are able to take on the better paying jobs that are created by our economy, which is the real challenge confronting us. It is not that the jobs are not available but that Singaporeans must be able to take on these jobs that are created by our economy.

Sir, judging by the sentiments expressed in this House, I feel that Singapore also suffers from a paradox. In order to ensure that our people do not become complacent and understand the harsh realities that we face as a small country with no natural resources, we constantly remind Singaporeans of how vulnerable we are and the threats that we face in our economic survival. While this has helped Singaporeans to remain vigilant, nimble and prepared for change, it has also caused a certain amount of anxiety and insecurity over our future. Looking at how other small countries have succeeded, such as Finland and Denmark, I think the Prime Minister is right in that we too can have a secure future so long as we continue to have the right fundamentals. And looking back at how we had managed to overcome the last few economic crises, much better than our neighbours, be it the Asian financial crisis or SARS, we have good reasons to be optimistic about our future.

Next, Sir, is building an inclusive society and strengthening our social safety nets. Many MPs supported the President's call to build a more inclusive society and to strengthen our social safety nets to assist the low-income, elderly and needy. Many expressed

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concerns over the widening income gap and its impact on our equity and social cohesion. MPs like Mr Sin Boon Ann, Mr Zainudin Nordin, Mr Lim Biow Chuan, Mr Seah Kian Peng, Dr Teo Ho Pin, Mr Ang Mong Seng, Dr Muhammad Faishal Ibrahim and even our Opposition MPs, Mr Low Thia Khiang and Mr Chiam See Tong, made various suggestions and asked for more to be done to help the needy and poor, although, of course, our Opposition MPs have suggested a different path as to how to help our needy and poor.

At the same time, MPs also recognise that the critical factor contributing to the widening income gap is globalisation, as there is a global demand for talented and skilled workers but a global over supply of unskilled workers, causing incomes at the bottom to decline.

MPs acknowledge that the Government has done a lot, but stressed that more could be done. MPs Mr Seng Han Thong, Mr Yeo Guat Kwang, Mr Sam Tan, Mr Liang Eng Hwa, Mr Lee Yi Shyan and Mr Hawazi Daipi asked for more to be done to upgrade workers' skills, particularly our older workers and low-income workers and to tackle structural unemployment.

I note from MOM's Addendum that it recognises the importance of having a good adult training infrastructure to help workers upgrade their skills and build careers or switch industries and change careers to adapt to economic restructuring. In fact, schemes like the ESF and WSQ are some of the schemes that are already in place to effect this. In my view, Sir, ensuring that there is greater mobility between low-paying to better-paying jobs is important if we want to have a flexible workforce. If job security is no longer possible, as we cannot stop economic restructuring and retrenchments, then we must help every

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worker to remain employable and move easily between occupations and sectors. Without this mobility, workers will resist change and we will have a rigid workforce. This can only happen if, as the President said, everyone changes their mindsets. Workers must see re-skilling and re-training as an investment and be prepared to change and learn new things all the time. Employers must be prepared to train their workers

*Cols. 911-912.

and the Government should continue to invest heavily in education and skills upgrading. As Mdm Ho Geok Choo had said, mindset change is an important factor in ensuring employability.

MPs Ms Denise Phua, Dr Maliki Osman, Ms Ellen Lee and Dr Lam Pin Min stressed on the need to identify and plug the service gaps that currently exist in the delivery of social services to the poor, needy and disabled. MP Ms Denise Phua felt that the role of the State, VWOs and volunteers need to be redefined. Minister Vivian stressed the importance of preserving and strengthening the many helping hands approach while acknowledging that the existing system could be improved. Some initiatives that MCYS would be rolling out to improve service are the ComCare Local Network and ComCare Database System.

A number of MPs also touched on the importance of keeping our healthcare costs affordable and accessible. Dr Lily Neo and Mr Hri Kumar asked for better communication of the 3M scheme. Dr Fatimah Lateef wanted more help for persons with mental illness. Our healthcare system has undergone tremendous changes beneficial to Singaporeans, particularly the changes to the MediShield to help pay for a bigger portion of large bills and Medisave to help to allow outpatient use for four chronic illnesses. In the Addendum to the President’s Address, the MOH has also sketched areas that it would be looking at to keep costs affordable. Minister Khaw

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has also earlier on today given a more detailed outline of the measures that the MOH will be taking over the course of his term. I also welcome MOH’s announcement that expenditure on healthcare will be increased, although I accept the point that it is not a question of only expenditure increasing but cost effectiveness is also an important consideration.

Sir, education is one of the issues raised by a few MPs (Mr Masagos, Dr Lily Neo, Mr Michael Palmer and Ms Indranee Rajah) in order to reduce the income gap and help poor families break out of the poverty cycle. Mr Masagos stressed on the importance of reducing the number of school dropouts and ensuring that all children go through pre-school education. Dr Lily Neo and Mr Michael Palmer called for common standards and improvements in the quality of pre-school education. I feel that we need to pay more attention and allocate more resources in order to stop the leakages in our education system as there is a real danger that many of those who dropped out will end up as the future wave of low wage workers, thus perpetuating poverty and low income among segments of our population. Even if only 5% drop out every year, every dropout is one too many, particularly as people are our only asset. But I would also like to echo Mr Masagos’ sentiment when he said that community involvement and support are crucial in this effort to reduce the attrition rate and, if I may add, parents particularly have an important role to play in this effort.

Many MPs, such as Mr Wee Siew Kim, Mr Arthur Fong and Mdm Cynthia Phua , also called for greater support for our elderly, as well as cheaper housing options for our needy. Addressing Parliament, Minister Mah announced last Friday that more rental flats would be made available to needy families. The Prime Minister had also explained that the

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Government is looking into measures to help our elderly monetise their flat and unlock the value of their asset so that they have enough cash to take care of their needs after retirement.

_Strengthening the role of families
_
A couple of other issues were also raised by MPs. On strengthening the role of families, MPs Mr Seah Kian Peng and Dr Lim Wee Kiak called for more support for families. Mr Seah Kian Peng and Mr Liang Eng Hwa also asked for more part-time and flexible work options to be made available. I note that all those who spoke about the need for stronger families are our male MPs, and this is a refreshing change. It used to be the women in this House who were always calling for strengthening of the role of families. It also shows that roles are changing in our society and men too want a bigger say in parenting and shaping family values. I note that there are many initiatives in place to promote work life balance under the MOM’s tripartite committee as well as under the MCYS’ National Family Council, but certainly much more can be done to get employers to support work life balance initiatives.

I hope that the MPs in this House, who are employers or corporate leaders, will set a good example by being more family-friendly to their employees. Of course, that applies to the Government as well as all the Frontbenchers, the Ministers, as well. I hope that they will also be family-friendly to their staff as well, ie, civil servants. I do not know the prognosis of the current state of our family, but judging from the rising divorce rate and declining birth rate, our families could do with a dose of vitamins. Maybe the Government could consider giving tax incentives to companies that are truly family-friendly, as we all know that the carrot and stick approach can work quite effectively in Singapore.

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Strengthening values and engaging the people

Sir, a number of MPs spoke on the importance of strengthening our values. RAdm Lui Tuck Yew felt that our education system should not only focus on examinations but should be more value-based. But I think that can only happen if that is the basis upon which we also assess people, and that is not likely to change for a long time. Mrs Josephine Teo and also Mr Chan Soo Sen encouraged Singaporeans to be more positive in their outlook and to celebrate our achievements more. Dr Fatimah Lateef supports a greater role for volunteerism and community involvement to ensure greater rootedness among Singaporeans.

On engaging the people, Ms Jessica Tan felt that people must be made comfortable that differing views are heard. Mr Zaqy Mohamad felt that there is a need for the Government to listen more. Mr Baey Yam Keng wants to harness the power of both new and old media to communicate more effectively. Both Mr Baey and Ms Irene Ng also spoke passionately about promotion of the arts, and, in the case of Mr Teo Ser Luck, it is sports, as a means to develop a greater sense of belonging and rootedness among Singaporeans. Many MPs, such as Dr Ong Seh Hong and Ms Penny Low, talked about building greater resilience among Singaporeans. Mr Zainul Abidin Rasheed and Mr Hawazi Daipi also reminded us that the constant nurturing of strong multi-racial ties is important and should never be taken for granted.

Sir, the Prime Minister announced yesterday that the GST will be increased to 7% in order to finance the increased cost of running more programmes for our low income workers and the needy. As a trade unionist, I have seen workers displaced due to restructuring, such as

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the 5,000 Maxtor workers who were retrenched throughout this year, and I was there at the factory where the workers were retrenched to catch them in the morning shift and to talk to them. So I am acutely aware that such workers need all the support that they can get to be retrained, as well as other assistance where necessary. I am certain that even with good economic and job growth, people will continue to be displaced as companies restructure, relocate or outsource. However, these additional programmes will obviously cost money and if we tax companies too much, then more may pack up and leave, which is detrimental to all the other workers. So, increasing the GST would appear to be an option that is difficult to avoid, painful though it may be. At the same time, I am glad to hear the Prime Minister saying yesterday that a comprehensive offset package will be put in place to help Singaporeans and that it will be tilted in favour of the low income. We do not know the details yet, but I certainly welcome the Prime Minister's reassurance and I would like to urge the Government to be generous towards the low income earners so that their cost of living will not increase because of the increased GST.

Sir, I also welcome the Government's decision to redefine the net investment income to take into account the realised capital gains. This means that there will be more resources available for the Government to mobilise to help our low income and needy Singaporeans as we navigate the very choppy waters of globalisation.

Mr Deputy Speaker, Sir, this has indeed been a very important debate in a sense it is a debate about globalisation, how it has impacted us and what we need to do to move ahead. I am really glad that it has taken place in his august Chamber, as it should be. As their elected representatives, we owe a duty to Singaporeans to guide and lead them

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effectively in facing the challenges brought about by globalisation. We can do so only if we ourselves are clear of the issues and challenges that we face and the strategies that we will employ to progress forward. If we are unclear and confused, we will create greater confusion and alarm on the ground to the detriment of everyone. What we are clear about is that globalisation is beneficial to us for the reasons clearly explained by the Prime Minister yesterday. I am not quite sure I agree completely with Mr Cedric Foo's view about globalisation the way Wal-Mart has done it. As we know, that is not a very good example of globalisation or a global company of corporate social responsibility. But I subscribe to the vision and framework that our Government has put forward in our efforts to adapt to globalisation because I think in that agenda, the way the Government has outlined its framework, as defined by the Prime Minister yesterday, it at least gives us a clear idea that both economic and social development will be in tandem. There will be displacement, there will be difficulties, but people will not be left behind, and everyone will be given a helping hand and not just a promise on the part of the Government. Because listening to many debates in many conferences that I attended, governments are always long on promises but short on delivery. But I am quite confident that our Government, judging by our past records, will deliver its promises.

What we are clear too is that it will cause our income gap to widen, as not all Singaporeans can run at the same speed. We also recognise that our population is ageing very rapidly, bringing about new needs and demands from our elderly which have to be addressed. Although we have many schemes and have spent billions of dollars to help needy Singaporeans, as Minister Vivian mentioned, over a period of between 2001 and 2005, our expenditure has gone

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up by 300%, which is an extremely significant amount. The Prime Minister himself mentioned yesterday that what we needed was a sustainable and holistic approach in providing assistance, a new social model to help our needy, and he had outlined some elements of this model. I welcome the Government's announcement that more workfare schemes will be implemented. I am sure that the other MPs in this House welcome it too. I am glad that the Government has come up with a comprehensive plan to help our low-income and needy, in recognition of the vastly changed situation, particularly after 1997, and I wish to applaud the Government for its efforts. We also agree with the Government that we should not blindly follow the system in other countries, particularly when they are also facing difficulties. We should shape our own model based on our own needs and context, ensuring that people are self-reliant and want to help themselves, key tenets which should not be undermined.

Sir, helping the low-income, the poor, the needy and disabled is not the responsibility of the Government alone. The labour movement, together with our social partners and working under the umbrella of a small strong tripartite relationship, will do our part to help the low-income workers. I would also like to take this opportunity to call upon all Singaporeans to also do their part to contribute towards building a more inclusive society.

Let me end by telling Members the story of three taxi drivers. Why taxi drivers? Because I take taxis a lot to move about and also because I always find taxi drivers a very interesting group of people because they provide a thermometer of the temperatures on the ground. So I spoke to one as I was taking a taxi to move from a meeting place to the office, and I asked him how were things, and he said, “Not bad. If you work hard, as I do, you can earn $2,000 a month. Not too bad. All my colleagues

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complain a lot, but that is okay for me.” I was a little bit sceptical about what he said because he recognised me. He said, “You are the MP Halimah.” I said, “Yes.” His name is Mr Lee, but I cannot remember his full name. He then gave me a piece of paper and said, “Can you just autograph? My daughter is a teacher. I want to say that you took my taxi.” So I did that. I thought he recognised me, so he expressed a lot of optimism. Then, over the Hari Raya holiday, I met a relative of mine who also drives a taxi, and I asked him the same question and he gave me the same answer. He said, “Well, if you work hard, you are able to earn $2,000.”

So that is the caveat, you have to work hard. But whether you are a taxi driver, a manager, a CEO, or a production worker, everyone has to work hard, not only in Singapore, but in other parts of the world as well. The only difference is that when we work hard, at least in Singapore, we can see the rewards. So, that is the second taxi driver.

But I remember most poignantly and significantly the third taxi driver whom I met some time ago. I took his taxi and, because it was a long journey from my office to home, we had a long nice conversation, and when I asked him about his family and so on, without prompting, he told me proudly that he has three children who are graduates, two of whom are scholars - one is doing a PhD overseas, one is doing his Masters and another is doing a local degree. He was very proud about it. To me, this is a very clear example of social mobility in Singapore that, if we put in our efforts, we do our best, there are rewards which the system provides. These rewards do not apply only to those who are at the very top, but those who are at the lower end also have the chance to move up. I think the dream and the hope for Singaporeans must be that, as we

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globalise and get plugged into this global economy, our Government will continue to provide that hope, will continue to help us to fulfil those dreams of our people. I think that is very important.

On this note, Sir, I wish to thank all the speakers who have contributed to this debate, in particular the new MPs who are making their maiden speeches. I would, in particular, also like to thank the Prime Minister for his speech which, I am sure, has filled Singaporeans with a great deal of confidence in our future and in our efforts to build an inclusive society. And I would also like to thank the President for his excellent, inclusive and very important speech. [ Applause .]

Question put, and agreed to.

Resolved,

That the following Address in reply to the Speech of the President be agreed to:-

"We, the Parliament of the Republic of Singapore, express our thanks to the President for the Speech which he delivered on behalf of the Government at the Opening of the First Session of this Parliament.".