ANNUAL BUDGET STATEMENT

[Mr Speaker in the Chair]

Debate resumed.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin): Mr Speaker, Sir, every year on Chinese New Year's eve, the Finance Minister and his grassroots leaders will go to the bank of Singapore River to perform a ritual of releasing live fish into the river. That was why over the last few years, we had a surplus because the word "yu" (fish) in Chinese sounds the same as yu (surplus). The Chinese say nien nien you yu, meaning there is fish (surplus) every year. However, this year our economy has been hit by the financial crisis in the region, and we have a budget deficit.

Just now, the Member for Hougang said that our deficit this year is not a genuine deficit. To me, a deficit is a deficit. There is no such thing as genuine or not genuine. If you have a bank account and you spend more than what you have in your account, you run into a deficit.

One thing worth mentioning is that there are not many countries which can still increase education and defence expenditure when impacted by a financial crisis. Singapore can. While we are moving towards a knowledge economy, we increase our expenditure on education and training so as to look after the interest of our workers to ensure their life-long employability. At a time when our neighbouring countries are facing turbulent political unrest, we increase our defence spending. This is something which everyone in Singapore can understand. Our deficit is not one of consumption type. It is a development expenditure. In the long run, it will enhance our competitiveness.

Sir, just now, the Member for Hougang said that the PAP Government should apologise to the people. In fact, over the last one to two years, our political leaders, from the Prime Minister to the Ministers, and from the labour MPs to the NTUC leaders, have been explaining to our people the impact of the economic crisis on us, and that many people may face retrenchment and unemployment. We have worked very hard to explain to our people the problems that we would be facing and all the external factors that would have an adverse effect on us. The people understand. When the crisis hit us, they did not ask us for an explanation. Nobody has asked the Government to apologise. We were able to implement the CPF reduction and wage cut without a hitch. The foreign media were amazed. They could not understand how we managed to carry out such a delicate exercise so smoothly, and with hardly any resistance from the workers.

Just now, the Member for Hougang also said that the Government did not care whether the people live or die. I would like to ask how many people had died because of this crisis. On the contrary, the PAP Government has shown great care and concern for the people. Our leaders have been making door-to-door visits to the residents and anyone found to be in hardship, assistance will be on hand to help him out. We are helping our people when help is most needed by them. This is like sending hot-burning coal to a freezing person in the snow. I think if the Member for Hougang cares to make a visit to our PAP constituencies he will understand what we are doing.

He also said that this Budget is "good to see but not good to eat". In Chinese, there is a saying that good medicine may be bitter to the taste but it cures your sickness. In a way, he is right. This Budget may not be "good to eat", but it heals. So it is good medicine.

Just now, the Member for Potong Pasir tried to link democracy with economic prosperity. If the superpower USA is hit by an economic crisis, can he then say that there is no democracy in the United States? I do not know how he came to the conclusion that Taiwan is more democratic than we are. Perhaps, he was referring to newspaper reports on how Parliamentarians fought in Parliament. They even went up to the Speaker and threatened him. Such an incident will never happen in Singapore. Is that what he meant when he said Taiwan was more democratic than Singapore?

Mr Chiam should know that our economic situation is different from that of Taiwan. In our economy, 73% comes from external demand; 12% from domestic consumption, and 12% from investment. But Taiwan is different. Their market is mainly confined to Europe, the United States and mainland China. They are not so much affected by the regional crisis. I hope the next time when Mr Chiam wants to make such a remark, he should pay a visit to Taiwan first. I do not know how many times he has visited Taiwan (twice or three times or never?). He should go there and find out for himself what the actual situation is. Take a look at the Philippines. They are supposed to be very democratic, but is their economy better than ours?

In this crisis, many people are beginning to realise that they need to go for training, retraining, and skills upgrading in order to enhance their employability. However, I feel that the public sector seems to be "half-a-beat behind" in the promotion of training plans for its staff. Now with many Government departments corporatised or privatised, very often the staff have to be transferred to the other departments or organisations, and many of their existing skills could not be utilized. So, I feel that we should speed up the training programme in the public sector so that more civil servants may benefit. I also feel that the Government should allot more funds for training so that every Singaporean could benefit from the training and be geared to face the challenge of transforming into a knowledge-based economy.

A few years ago, Prime Minister Goh Chok Tong remarked that Singaporeans were not so good in singing, unlike our ASEAN counterparts. At many public functions, when asked to sing, our Singapore officials had nothing in their repertoire, and ended up singing Majulah Singapura. But nowadays, I notice that most Singaporeans can sing at least one or two songs. One of the main reasons is that in all our RC centres there are karaoke facilities. Perhaps we could make use of these RCs to encourage Singaporeans to go for continuing learning by conducting various courses at the RC centres. For those training courses which do not involve the use of large apparatus or equipment, they could be conducted at the RC centres for the convenience of our people. At the same time, ITE and the various polytechnics should also conduct more part-time courses so that Singaporeans who are willing to learn could have more opportunities to improve themselves. The admission criteria can be relaxed, so that more Singaporeans can qualify for admission to these courses, and work for some sort of diploma. Of course, the students must attain a certain standard in the course of their studies before they can be awarded the diploma.

From this year onwards, many Singaporeans have accepted a 10% CPF reduction and their salaries were also reduced by 5%-8%. I think this is a very good manifestation of the Singaporeans' trust of our Government. Our people are beginning to realise that they have to go for training. Because if they do not, they will be in trouble. This crisis has made this problem more acute. Just now, Dr Tan Cheng Bock mentioned that Government should be very cautious and tone down our efforts to attract foreign talents. He was right and I agree with him. As a member of the Singapore 21 Committee, with particular involvement in the sub-committee on attraction of foreign talents, I fully agree that we should be cautious in dealing with this matter, so that we would not make Singaporeans feel that the foreigners are coming here to take over our jobs. We should explain to our people that when the foreign investors come, they set up new establishments and create more job opportunities for our people. When the foreign workers come, they take up jobs that Singaporeans could not do or do not want to do. They do not actually deprive us of our job opportunities.

During the good years, we have good economic growth and the Government has been giving a lot of rebates to our people. That is to share happiness with our people. It is something good to eat. However, there are many successful Singaporeans who do not need such rebates. Even in this difficult time, not everyone is affected. In fact, many Singaporeans are still enjoying life. They are still having a good life. Therefore, I suggest that the Government should review our rebate policy. For those who do not need such rebates, they can choose to donate them to charitable organisations. In fact, in this economic downturn, the charitable organisations are having problems raising funds. Our successful Singaporeans are generally very generous. They will be willing to donate their shares of the rebates to the charitable organisations, and by so doing, the charitable organisations will greatly benefit.

As for those who are facing difficulties, the rebates given by the Government are giving them a shot in the arm. With the help given by the CDCs and the town councils, many Singaporeans are beginning to feel the care and concern given to them by their community organisations.

Mr Speaker, Sir, the NWC recommendations have already been implemented this year in order to restore Singapore's competitiveness. There are signs that the economy is turning for the better. However, our measures of wage restraint should be continued so that we can ensure that we still retain our competitiveness. I think the most important thing is that Singaporeans should actively take up training courses.

However, there is one thing I am concerned with, and although many companies and property owners have enjoyed the various rebates given to them by the Government, they do not pass on the benefits to the people by revising their charges and rentals. I feel that the Government should take active steps to ensure that the people would also benefit from these cost-cutting measures.

Mr Speaker, Sir, I support the motion standing in the name of the Finance Minister.

Mr Low Thia Khiang: Mr Speaker, Sir, may I have your permission to clarify certain matters mentioned by Mr Seng?

Mr Speaker: Yes.

Mr Low Thia Khiang: (In Mandarin): Mr Seng was asking me how many people had died as a result of this crisis. I can say at least two people in my constituency have died. One committed suicide because of heavy losses in the stock market, the other became very ill when the property market plummeted, and eventually succumbed to his illness. Mr Seng said that the Government had attempted to explain to the people, but many people still could not understand. This is because, just two years ago, at the General Election in 1997, the PAP was full of confidence that Singapore would enjoy 5% to 7% growth for the next few years. One of the important platforms of its election manifesto is to create wealth for the people. Now, not only no wealth is created, in fact, people are losing their wealth. So many people do not understand. I think perhaps Mr Seng should cause more publicity to be made through our media on this point.

Mr Seng Han Thong: (In Mandarin): Mr Speaker, Sir, Mr Low told us that two people had died in Hougang - one committed suicide because of speculation in the stock market and the other fell ill when property prices went down. This may not be the only cause of their demise. Perhaps they did not have regular medical check-ups and they had heart attacks. There may be other factors. They cannot blame the Government for their losses in the stock market or the property market. I do not think the Government should be made to apologize to them. In fact, it is Mr Low who should apologise to his voters. We have been working so hard to explain to the people about the vulnerability of our economy. Why did Mr Low not explain to his constituents that they should not speculate in the stock market or the property market? He should apologise to them.

As for creating wealth, I think we have to look at the whole cycle. In everything, there are always the ups and downs. We have our downs because we are affected by the regional crisis, but this is only a short-term matter. So long as we work hard, we can see the light at the end of the tunnel. But for the other countries in this region, they do not know when they can recover. As to creating wealth together, the target is still there. So long as we put in a concerted effort, we can go through the tunnel and we see light at the other end of the tunnel. It is not like what Mr Low said that there is no hope at all. We cannot see any light at all. I do not think so. So long as we can tide over these difficult times, our increased investment in education and national defence will lead us into the 21st century with better lives for our people.

Mr Low Thia Khiang: (In Mandarin): Of course, Mr Seng said there are ups and downs. We all understand that at the end of the tunnel there is light. But we do not have to publicise that this is due to the efforts of the PAP Government. During the General Election, the impression was that you have more prosperous years ahead, more good years ahead. So when there is a crisis, you cannot put the blame on others and say that it is because of the regional crisis that our economy takes a downturn. When times are good, you say, well, it is the PAP Government which is very efficient and very good, and therefore you have these good results. How do you reconcile these two arguments?

Mr Seng Han Thong: (In Mandarin): Mr Speaker, Sir, as you know, Singapore is a small country. All the time we have been emphasising that we have to venture outside. Before and during the election we had been telling our people that our target was to venture outside Singapore. We have to go for a bigger market. Now the world market has weakened. So definitely we would be affected. Singapore has and must be affected by the regional crisis. We are not the only country that has been affected. But as for Mr Low, he mentioned that the PAP Government has made a promise and it cannot be fulfilled and the PAP Government must apologise. He must understand that during the last one year, how many political leaders in this region were forced to step down. Why is it that the political leaders in Singapore need not step down? This is because we have proved to the people that we have the fundamentals right! In other countries, when the workers' salaries, or even the bonuses, are reduced, there would be demonstrations and even riots. But our wage reduction exercise was carried out smoothly and peacefully without a hitch.

Mr Gerard Ee (Nominated Member): Mr Speaker, Sir, I support the Budget Statement presented by the Minister for Finance.

In his review of the economy, the Finance Minister stated that while the Government was deliberating over policy options, they identified that the critical issues were to maintain the framework for continued economic activity; help companies tide over the crisis and minimise unemployment; and enhance our capabilities and competitiveness for future growth. In his Budget speech, the Finance Minister stated that the expenditure would be focused on fostering future growth by investing heavily on developing our human resources, in economic infrastructure and other areas which yield lasting returns.

I agree with the issues identified - the need to invest for the future and the basic thrust of the Budget. And I take comfort that the proposal is to maintain the same level of expenditure on defence and to increase expenditure on education. My concern is principally on whether enough is being done to help those who are now in a desperate financial situation. I am concerned about those who have tried to help themselves and are now at wits end. Last year, some 28,000 people were retrenched, and expectation is that another 20,000 people will be retrenched this year. The number of people joining the rank of the bankrupts is growing. The rebates on rental and S&C charges will certainly be a big help to many. However, there is a need for direct assistance to those in a desperate financial position. Some of these people are those who have lost their jobs and are having difficulties getting re-employed. It is too easy to sweepingly assume that those who remain unemployed are being fussy. There are people who, because of their age, lack of paper qualification or some other discriminating reasons, are forced to live off their savings, if any. Their family members are affected by the sudden loss of income.

With just one of the schools in which I am serving, there has been a request for financial assistance from nine pupils in just the first two months of 1999. The Ministry of Education does assist with waiver of school fees but assistance is still required for things like supplementary fees. In some cases, help is being sought for bus fares, books and meals. We are right in investing in our people for they are our resources. However, whilst we focus on the future, we should not lose sight of the present. For all those who are having difficulties making ends meet, the future is but a vague dream. It is heart breaking to hear of students who decide to abandon their education and leave school to find work to help the family deal with finances.

There have always been people with difficulties and they are being helped by a network of voluntary organisations. The current economic downturn has added stress to the operational capabilities. Many VWOs have had their budget slashed by at least 10% across the board because of the difficulties in raising funds. During these difficult times, there are people who have contributed to our economy in the past and who are now pleading for help, help to survive the present and thus creating hope for the future. In helping people to survive the present, we are but investing for the future. It is clear that something extra is required. The total budget expenditure is $29.1 billion of which only 1.66% is allocated to Community Development, or 0.34% of GDP. The statistics would hardly be affected if $10 million could be found to act as a safety net fund against which people in desperate need could apply for some help. This would be a one-time contribution and such a fund, if administered purely as a safety net, would go a long way to helping a lot of families and could last until the economy turns around. I urge serious consideration for this appeal.