TACKLING THE ECONOMIC DOWNTURN

Debate resumed.

Mr Yeo Guat Kwang (Cheng San) (in Mandarin): Mr Speaker, Sir, first of all, I do not understand Mr Low Thia Khiang's remarks. I think we should not give the wrong impression to our people. The important point here is that during a recession, when any citizen cannot afford to pay for his or his children's education fees, we have all kinds of financial assistance schemes to help him. There are always various kinds of bursaries available to the students, to ensure that they are not deprived of the opportunity to be educated just because they could not afford the fees. I can say this with full conviction because in the 1980s during the economic recession, I was one of those who depended on a bursary to complete my studies. For others who require help to pay for their utilities bills, HDB rentals, loans, etc, we are also providing them with various kinds of assistance. We must make them feel assured that help is on the way or has been given to them. We should not exacerbate their worries and concerns or they will not be able to sleep properly.

Mr Speaker, Sir, I welcome the DPM's $11.3 billion package. It is a comprehensive and wide-ranging help package. From the big businessmen to the small-time stallholders, from management staff to ordinary workers and so on, to students, undergraduates, graduates, they have all been considered in this package so that everybody can benefit from it. I believe that this package can allow all our people to pull through the crisis and preserve their energy so that when the economy turns over, they will emerge stronger.

Mr Speaker, Sir, there is a story that goes like this: an intelligent person came across a fish which was caught in a small puddle of water. The fish pleaded with the man, "Please save me! Give me the water that you have in your container." The intelligent man replied, "The sun is so strong and it is so hot here. Even if I give you the whole container of water, it will not last long as it will dry up soon, and you will die in due course. So, I am going to dig a canal all the way from the seaside to here so that you will be able to swim to the sea and stay alive." The fish sighed and said, "By then, I would have become a dried fish." In this story, the thinking of both the sage and the fish was not wrong. But, a well thought out plan that takes ages to be implemented will not save a man in immediate distress. When we are in a predicament, we need immediate reliefs to solve our immediate problems. But, of course, we must not lose sight of long-term effective solutions. So, at this time, we must depend on the Government to look after us in the short term, and at the same time, plan for long term strategies to keep us in good stead.

In the present circumstances, our tripartite partners should stay united to maintain our competitive edge, in the hope that we can see the happy situation of full-employment again in the not too distant future.

Mr Speaker, Sir, right now we are facing an economic crisis which is quite different from the past. Apart from workers from the manufacturing industry, particularly the electronics industry, employees in financial, banking, airlines and all the various logistics companies - even our white-collar workers - are affected. There is a Teochew saying to the effect that where the shade is, you sit and enjoy the cool. To that, I want to add: wherever there is a job, you will go and grab it. How do we help our workers go to where the work is? The important thing is that we must strengthen our work-matching efforts, that is, train our workers to turn to other jobs where they can have better prospects. In this package, the extension of the period for the wage subsidy will also be a piece of very good news to our workers.

For the lower income group, the high utility bill driven by increasing oil price is a perpetual headache. So this is a good time to lower the electricity tariff to help them lighten their burden. The Government understands workers' difficulties by giving them a 10% rebate for their medical bills. I am particularly moved by the Government's effort to further give the retrenched workers another 40% off their hospital bills. This is really xue zhong song tan - sending hot burning charcoal in snowy weather.

For the $20 million in the package to help the unemployed workers, I think it is a very timely help. It gives them three months' help in their daily lives. In the past few months, during our meet-the-people sessions, we frequently come across workers who come to us for help. I do not agree with what Mr Low Thia Khiang said that the $200 subsidy was a pittance and useless in helping the unemployed. In fact, the $200 can ensure that we have a continuous supply of water and electricity in our flats. It can give us a basic livelihood. At this time, I think this subsidy is very timely. It is welcomed. I do not understand why some people feel that this package is not necessary.

The Government has done so much. I hope to see that the people in the grassroots also show more care and concern for the people. For example, the coffeeshop and restaurant owners can pass down some of the benefits they will receive in the form of rental and utilities rebates to their stallholders. The coffeeshop owners should also adjust the prices of their beverages and food so as to help our people tide over this difficult period.

Sir, in the past eight months, from January to August this year, the HDB has helped about 8,000 residents tide over their difficulties by adjusting their housing loan repayment period. I hope that the HDB can also consider the plight of the shop tenants by giving them similar sympathetic treatment. Do not pressurise them too much when their rentals are in arrears. Recently, one shop owner came to me and told me that he was in financial difficulties and had received a lawyer's letter from HDB threatening him that if he failed to pay up the rental arrears immediately, he would be liable for all legal costs to be incurred subsequently. I believe HDB should be more sympathetic towards the small-time businessmen who are in genuine financial hardship.

Finally, Sir, in 1997, during the economic crisis, we also had provisions for every sector to help their workers tide over the difficult period. In 1998, we appealed to the public transport operators to pass on the benefit of rebates to their commuters to help workers tide over the difficult times. I was glad that the Government effected a 5% rebate on public transport charges for the whole year of 1999, so that commuters who take public transportation to work, would enjoy lower transportation cost. I hope that this time round, during this present recession, which is more serious than that in 1999, similar arrangements can be made to help our workers. I hope that the bus companies will seriously consider this point.

Sir, the Government has addressed the issues of many people and many workers have taken the heed to upgrade themselves. Now it is for the business community to look into ways and means to cooperate in the tripartite spirit so that we can come out with more effective solutions. I would like to appeal to the employers that before they retrench their workers, they should consider other means first, as was the agreement among the tripartite partners in 1997. At that time, the three parties agreed that during the recession, retrenchment of workers would be the last resort. I also hope that, in the unfortunate event the company has to resort to retrenchment, the employer should be more sympathetic and compassionate to the workers, by giving the workers more time and longer notice before they are retrenched. You cannot just give them a phone call and kick them out. I hope that the employers will be able to reduce that kind of grievances and pains to the workers.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): (In Mandarin): Mr Speaker, Sir, this off-Budget package of $11.3 billion is better than the $10 billion as predicted by many. It is better by some 13%. Compared to $2.2 billion of the previous package, it is about five times more. It can be seen that the present recession is indeed very, very serious. It also shows that the Government has the determination to help the people who are affected by this recession.

The package basically comprises four main points. First, it reduces business cost to keep the businesses from collapsing; secondly, it helps to preserve jobs and help those who have lost their jobs to go through the difficult period; thirdly, it enhances and accelerates our infrastructure construction to stimulate the economy; and, fourthly, it prepares us for the future challenges.

As it is, unemployment rate has been climbing from last year's 2.2% to the present 4%. By the end of this year, it is likely to reach 4.5%. I believe some 20,000 will be workers retrenched this year. There are so many people who have lost their jobs. At a time like this, I believe those affected workers really do not know where to go.

Having heard the Deputy Prime Minister's statement, I feel as though I have been given a shot in the arm. With all the various measures announced in the package, he has certainly given something for everyone, and the much needed help to the workers to tide them over for the time being. On the one hand, opportunities for retraining are provided to the workers to prepare them for better jobs to come, and on the other hand, more money will be pumped into the Skills Development Fund to finance training programmes and pay training allowances to the workers. I think if the people are interested in upgrading themselves, by undergoing these training courses, they will certainly benefit from them.

On the individual side, the Citizens' Consultative Committees (CCCs) are vested with the authority to disburse a subsidy of $200 per month to every deserving resident in the constituency, under the Economic Downturn Relief Scheme. This subsidy will help to defray the expenses of the unemployed individual and help him go through the training. Once he falls sick, his hospital bills will be reduced by up to 50%, and beyond that, there is the Medifund which can help the very bad cases. So medical expenses should not be a problem, even to the unemployed. With the utilities rebate, HDB rental rebates and deferred payment of housing loans, etc, in the short-term, those who are retrenched or who are unemployed will heave a sigh of relief. But no matter what kind of package you offer, there is bound to be some categories of people who are not covered, for example, the old people of 50 or 60 years old and above. Perhaps, our Community Development Councils (CDCs) can find some ways to help such people on a case-by-case basis, according to their individual circumstances. I believe if we can do this, then this package would have covered almost the entire population. Anyone who needs help will get help under this package.

At this point of time, some companies may feel that they have too many workers in hand. Their expenses are too high and they have no choice but to cut cost in its struggle for survival. These people can make use of the various measures in the package to save their costs and help tide over the difficult times. As for those companies with redundant workers, apart from retrenchment, they can resort to SDF to get about 50% subsidy to send these workers for training to get ready for the good time when the economy turns around. Then they will have a choice to retain their workers or to retrain them for future use, and they will have a better future. So on this side, this series of measures can help our businessmen in cost-cutting and provide subsidies to pay for their workers' salaries. It is very beneficial and will help the companies to survive. It will also help our workers to keep their jobs.

To bring forward our infrastructure construction is the normal practice in times of economic downturn to create jobs and to stimulate the economy. This time round, some $3.5 billion worth of projects are in the pipeline. This is very important to our construction industry. I hope that when we have so many projects available, amounting to $3.5 billion, we can go step by step, with numerous small projects to benefit more contractors. Some people may have no idea what is the magnitude of $3.5 billion worth of infrastructure development. Let me tell them that you can build two Chua Chu Kang new towns with that amount. So it is a very massive amount. Within a short time, it can stimulate the building construction industry and bring it out of its doldrums.

The HDB has certain regulations for the purchase of flats. This package has made provision for the payment of the 20% downpayment to be spread over a longer period. On the other hand, the private property buyers, especially foreigners, can use Singapore dollar loans to purchase their property and the exemption from capital gains tax for property sales. I think this will also give a boost to the building industry. Basically, the building industry is in the doldrums for a long period. There are many reasons, one of which is man-made. Although this man-made deterrent factor is not completely removed by this package, the other concessions given can stimulate our building industry, thereby giving our building industry players and the construction workers a ray of hope.

With the global trend of globalisation and transition into a knowledge-based economy, we have to prepare our workers for the future. As we know, the economy of Singapore is in a restructuring phase. This is the time for our workers to go for training and retraining. The unskilled workers should go for training to become skilled workers, while the skilled workers should go for further retraining to enhance their skills. Those with low education should go for enrichment studies to raise their educational level. We should use the low period to retrain our people. I think it is very important that we prepare and equip our workers and enterprises so that when the time comes, they will be in a position to seize the right opportunity.

The criteria for issue of employment pass and work permit have been reviewed. I believe this is a step in the right direction to prepare us for the future. As for the New Singapore Shares, not much details have been given. The total amount is $2.7 billion. I have made a mental calculation. With a population of 3 million, on the average, each citizen should get about $1,000. For a small family of four, you get about $4,000. If they stay in a small flat, with a lower income, they get more. It may well be double the amount, say, $8,000. On the average, each family should get about $5,000. You get a guaranteed 3% dividend on the $5,000. Then, with economic growth, you would get extra bonus shares. So, every Singaporean family would get a direct benefit of $5,000, plus interest of some 5-6% per year. The New Singapore Shares are indeed a great gift from the Government, by their conscience, to the people. Even at this difficult time, the people are able to share the benefits of the Government.

From the other angle, during the recession, people need a lot of money. The market also needs injection of money and funds. So when the New Singapore Shares are issued and by March next year, some of the recipients will cash it. Let us say, in the next six months, some 50% of the shares are cashed, there will be $1.35 billion of cash flowing into the market. This will surely stimulate consumption in Singapore.

For the entire package, we can say that the Government has really taken into consideration all the difficulties and hardship of the people in various stations of life, and has given them a very strong stimulus and a shot in the arm. After the package has been implemented, we will get our own shares or benefits. In the process, the people who are suffering from the impact of the economic downturn can be given a helping hand to prepare themselves for future opportunities when the economy turns around.

Dr Ong Chit Chung (Bukit Timah): Mr Speaker, Sir, I believe that we must thank the Government for this very generous, comprehensive, bold and far-reaching package of $11.3 billion. I agree with my colleague, Prof. Low Seow Chay, that it is a good economic package. It is definitely not an election ploy, as alleged by the Opposition. I believe that this package deserves the support of all Singaporeans regardless of party line.

Sir, we are facing a crisis of enormous proportions, and where the people are crying out for help, it would be wrong not to do something about it. It will be wrong not to support such a package. We should do what is in our national interest and what is good for the common good of all Singaporeans. I am therefore glad that the Government is leaving no stone unturned and taking all necessary steps to assist the lower income families, the unemployed and the elderly. In particular, I welcome the Economic Downturn Relief Scheme which I believe will bring immediate and practical assistance to affected families, and help them to tide over the current recession. The involvement of the CCCs and grassroots leaders is a plus point, as I believe that the grassroots leaders know the ground well and they can better administer such a scheme. They can follow up by visiting the families and take follow up action.

I also welcome the more stringent criteria for the issue of employment passes and work permits. This will help to address the concern of some Singaporeans on the competition for jobs in the recession. However, we must bear in mind that there is no doubt that we need good foreign workers to ensure our economic competitiveness. The world is changing. If we do not have good foreign workers, we may not get the investments that we need to produce better results for all Singaporeans. At the same time, the higher criteria for such permits will ensure better selection and give a balance to the situation.

Finally, I hail the move by the Government for a voluntary monthly wage cut of 10% for senior civil servants, political office holders and Members of Parliament. I commend the Government for the sacrifice that it is undertaking for the common good of our people, and setting an excellent example of selfless service to the people. By this move, the Government demonstrates clearly that it understands the problems of the man-in-the-street, that it stands shoulder to shoulder with the people and bond with the people, in this moment of crisis.

Sir, the Government has shown the way for us in this crisis. All Singaporeans must rally and unite as one people behind the Government. Then our future will be secured.

Sir, Singapore has weathered many storms before, since our separation from Malaysia in 1965. This crisis is no different. We shall overcome, but we must keep faith and run the race. No problem is insurmountable if the people and the Government work closely hand in hand to face the challenges ahead. Sir, make no mistake about it. We, as a people, will emerge stronger from this crisis and we will have a deeper sense of common destiny and nationhood. 4.08 pm

Mr Sin Boon Ann (Tampines): Thank you, Mr Speaker, for this opportunity.

Sir, we are faced with the worst recession this country has seen in more than 30 years. With unemployment now hovering at about 4% and potentially rising, there is an air of uncertainty that hangs over us. For the many who are employed, they are now less confident that their jobs will remain for the future; and for those who have recently lost their jobs, there is less certainty that their jobs will return when the shower of recession passes.

We know that this recession did not come about from within, but from without. Economic forces not within our control have buffeted us since last year, beginning with the slowdown of the US economy. And it did not help that the September 11 terror attacks on America accelerated and deepened the recession. Indeed, one would say that the September 11 attacks had hastened the slide of the world economy. For Singapore whose economic well being is much dependent on exports to the US and the other developed countries, this is bad news indeed.

I was not surprised therefore when Ministers George Yeo and Richard Hu informed the people that the economy would shrink by perhaps more than 3% this year. This is perhaps unprecedented as our people cannot remember a time, since independence, when the economy did so poorly. For the post-65 generation, accustomed to robust growth, these figures bring home the reality of our vulnerability - a vulnerability that tells us that we too can be as badly affected as our neighbours were in the last Asian financial crisis of 1998.

We have been told to be prepared for the long haul. The economy does not look like it is going to recover before the second half of next year. And beyond that, many have their doubts as to whether or not there will be any signs of recovery if the global situation remains unchanged.

Beyond these figures, for the people of Singapore, the teeth of recession will begin to bite when people get retrenched and when there is less money to bring home. These are real concerns, as with unemployment and salary cuts, the pressures of paying their bills will surely mount. How will the utilities bills be paid? Will there be money to pay for conservancy charges? How will the fees for the children's school and tuition be provided for?

Against this backdrop, Sir, I am gratified that the Government has come up with a second round of off-Budget measures. The series of measures are clearly aimed at providing relief for the individuals and businesses. What Singaporeans must know and realise is that the Government cares. Earlier this year, when the first round of measures was introduced by Minister George Yeo, he mentioned then, if I may paraphrase, that there was a drizzle, but we should nonetheless have our umbrella ready in case there is a shower. Now that the shower is upon us, the umbrella, represented by these measures, should provide Singaporeans with much relief and protection from the rain.

Have we done enough? Should we do more and can we give more? Are all Singaporeans covered by these measures? There are no doubt questions that have been asked and no doubt will be asked by many Singaporeans. These are legitimate questions. However, even before we begin to ponder on these questions, we should sit back and appreciate what the Government has done, ponder on the greater challenge and the greater worries ahead of us, and think of our response as a people.

In accepting these measures, we must look at the horizon and beyond. We must realise that Singapore has a narrow export base that is concentrated on electronics manufacturing. Over the years, our global share of the electronics market has been dwindling because of keen competition from emerging economies. Both India and China and other emerging economies are increasingly competing directly in our export turf. Our present cost structure makes it difficult for us to compete effectively. The result, as we are beginning to see, and we are seeing elsewhere, is a hollowing out of our manufacturing industry. With the hollowing out of our manufacturing industry, there will be a greater displacement of jobs. How do we ensure that our people can continue to stay employed in a meaningful manner in the face of these challenges ahead of us?

Unless we succeed in economic restructuring, our very own economic survival may be at stake. When we are confronted with questions like our long-term survival, the other questions relating to civil liberties and human rights pale by comparison. Just so that I will not be misunderstood, Sir, I am not saying that these issues are unimportant. Indeed they are. What I am saying is that we need to maintain a proper perspective and balance to the issues at hand. The reality is that no one speaks philosophy on an empty stomach. The basic physical needs must be provided for now and secured for the future. There is a choice to be made. We can either close ranks in uncertain times and collectively seek to bring in more grains for the family or we can choose to bicker and stay divided, while the result is the family goes hungry. We can either choose to be grateful for what we have and treasure the present for the future, or we can gripe about what we do not have and gamble the future with what we have for the present.

The Government has announced a series of measures that seek to help Singaporeans stay the course for the moment. No doubt, we will have to restructure the economy to deal with the challenges of the future and, no doubt, our people will have to be retooled to meet the demands of tomorrow's economy. But for the moment, against a bleak economic landscape, we will have to dig in and stay united as a people, believing as always that we will ride through the rough economic weather together. We have done this before, in 1968, in 1973, in 1985 and, more recently, in 1998. Now, more than ever, we face the biggest challenge yet. I have no doubt that if the people's confidence remains reposed in the Government, as they have done in the past, we will ride through this stormy weather together.

Mr Chiam See Tong (Potong Pasir): Sir, thank you for allowing me to join in the debate.

I see that Mr Sin Boon Ann has given a Churchillian speech here, but I am afraid that the Opposition do not agree with him. It is true that this round, the downturn of the economy is unlike the others. In 1963/64, we had the oil crises. In 1985/86, we had the economic downturn, and then recently in 1997/98 we had the financial crisis. So this time it is apparently quite different and it is quite serious because it is not purely on costs alone. It is a cyclical effect. From what I know of cyclical effect, world economy rises like waves. Now we are apparently in the trough. So we have to wait for things to turn around and get into the crest again. I suppose the $11.3 billion off-Budget measures can help Singaporeans and Singapore businesses to tide over this period. Hopefully, it would not be too long.

I believe Prof. Low Seow Chay has given four reasons for these particular off-Budget measures. But I can think of the fifth reason. I think the fifth reason is also political. Election is just around the corner. It has a bearing on the off-Budget measures.

We have a targeted approach to those who are unemployed. What does it mean by "targeted"? It is quite surgical actually. Of course, Government's main policy is it does not believe in giving away handouts. But when it comes to the Government's purpose, the PAP's purpose, their own rules are all not taken account of. I mention this because I am in the Opposition and we feel it. The Government MPs, of course, do not feel it. How do you like, if you are in a constituency like Potong Pasir working very hard, trying to do a lot of things for the people, when your prospective candidate comes along, knocks at the door and asks, "Are you in some sort of trouble? Here you are, $200."? Or, "Here is a coupon ($40) for you to buy your rice and your bread." [Interruptions.] No, these are Government funds he is giving away. CDC is Government fund. So when I read about this targeted help for certain people, I begin to wonder how does it affect us and the Opposition. And then giving away New Singapore Shares free of charge! I think Prof. Low Seow Chay again has made it very clear, in fact, about a small family in an HDB flat who is very poor, and here you have somebody coming along to give them $1,000 or $2,000, and in the end, they ended up with $5,000 shares. How do you think this family will feel? You give him the money, of course he accepts. What do you think? He is not going to say "no". Surely, he will definitely accept the money.

But the point is this: we are not supposed to give away things free. You have to earn your money and if somebody comes to give you something free, obviously you are obligated to him. So, to put it more frankly, I think this is buying votes. No doubt, these schemes are all supposed to be quite altruistic to help people tide over this very difficult economic situation in Singapore, which, I believe, the Government wants to do. But the way they do it is a very great disadvantage to the Opposition. So, obviously, politics has a part to play in this $11.3 billion off-Budget measures. At first, it was only $2.2 billion - that was not many months ago - and suddenly this amount has increased five times. I was wondering why suddenly it has increased to five times. So they must add in all these things, like giving away shares free of charge, giving away money to targeted people who are in need of money. So probably you add them all up, it comes to $11.3 billion.

This budget is basically, from what I have heard from many speakers here, to tide over this very difficult period. I have never heard this will improve our economy. I suppose even with the people in the PAP think tank, we cannot improve the economic situation at this point. We just have to sit and wait. It is just like a flu. There is no cure apparently for flu. You just have to let it take its course. So I hope the Government will admit that this is a kind of flu, an economic flu, where they cannot do anything. They just have to sit tight, give some financial help to the unemployed, people who are sick, old age and those in the HDB flats who are given lower rentals. Just sit and hang on until the whole thing is over, until good weather comes again. My point is that even how smart the PAP is, they cannot do anything about it.

I think Mr Inderjit Singh has mentioned about taking away the anti-speculative measures in land. I agree with him. The Government believes that land value just cannot escalate sky high all of a sudden. That will cause a bubble effect, people become multi-millionaires overnight. It shows that the Government wants land prices to be high. And then the suspension of land sales makes land become more rare, thus the prices will go higher. The point is this: if land prices go higher, and with all these off-Budget measures given to, say, an HDB dweller, and he saves a bit of money, and when the time comes to upgrade himself, when times are better, all the prices of land will shoot sky high and all that the savings that he has been given by the Government will go into the purchase of a new flat. So where does he stand? He is still not much better, despite the $11.3 billion off-Budget measures that are supposedly given to him. All these tens of dollars that he can save from all these off-Budget measures will be used up when he buys a new flat which costs hundreds of thousands of dollars. So I do not know. It seems that this policy counter-cancels each other.

Again, I hear training for the retrenched. I have heard this many times. Whenever there is a problem, it is always retraining. We have so many retraining programmes. What is happening to all these retraining programmes? Are they doing any good at all to the workers? I personally think that there is something wrong with our education system. I think we should start in our schools. We should teach them to read, write and converse properly in English, and let them understand the language. Without an understanding of the language, you can learn nothing. So we should go back to the basics - teach them the 3R's, teach them the right attitude towards work and the willingness to change their work when it needs be. I think that will save a lot of these retraining programmes that we have been speaking of many times in this House.

The other thing is I do agree that we should have pump priming. But in your pump priming measures I see that there is no pump priming in building more schools. I have objected many times in this House and said that our classes of 40 are too large. You cannot teach a class of 40. No wonder so many of our students leave school without even knowing how to read and write proper English. I think there is no opportunity to teach them properly. So we must have smaller classes. If we have more smaller classes, you just have to build more schools. I do not see any of this money going into building more schools. I wish they did. I think we need at least another 25% more schools built. Then you can have one-quarter less of our school size. At the moment, we have got about 40. I think 30 should be a manageable size. And I wish some of this money will go to activate the economy, pass the money around a bit to go into building more schools - 25% more schools than what we have today. I see the Minister for Education is not here today.

I welcome, of course, lowering of rentals in HDB flats. HDB shopkeepers are for many months now in a bit of a fix with very, very poor business, mainly because young people have changed their style of living and they do not believe in shopping in their own neighbourhood shops anymore. They prefer to go to the supermarket and nice air-conditioned shops to do their shopping. So I think anything that they can do to help the HDB shops are welcome by me.

I also welcome the rebates given to HDB flat dwellers. In the first place, why should water and electricity bills be so high? If you keep them low, you do not have to give them all these rebates. So I hope that after all these rebates have been given, like what Mr Low Thia Khiang said, all these utilities bills should remain permanently low. It shows that with the need to give rebates, all these bills and charges are definitely too high.

Mr Low Thia Khiang: Mr Speaker, Sir, may I have your permission to clarify what Mr Chiam said?

Mr Speaker: All right.

Mr Low Thia Khiang: Thank you, Sir. Mr Chiam lamented in his speech just now, complaining that the prospective PAP candidate is giving money in his constituency. He said that the Opposition could feel it. I am afraid I have to clarify that I have a different view, because he said "all Opposition". Sir, I have no complaint if the prospective PAP candidate in my constituency gives away assistance and money. I think he should give more, the more the merrier. I welcome it. I would be worried if he is not giving. Then I would be asking: "Is the PAP Government treating every constituency the same and fairly?"

I strongly believe, and I am confident, Sir, that the voters in Hougang cannot be bought over just by giving them money.

Mr Ong Kian Min (Pasir Ris): Mr Speaker, Sir, we have just heard from Mr Low that Mr Chiam does not speak for the Opposition in this House and I wonder whether Mr Chiam speaks for his constituents in this House. He has said that we should not give away anything for free. The Deputy Prime Minister has given out a list of the measures just now. Perhaps Mr Chiam would like to tick off what he thinks his constituents should not be getting. I am sure the Deputy Prime Minister would be quite ready to oblige him by taking this off and not making it available to his constituents.

On my part, Sir, I rise in support of the Ministerial Statement by the Deputy Prime Minister to tackle the economic downturn. At a recent dialogue, someone asked me in reference to the emergence of China as an economic power to the US as a magnet for talents, and to Singapore for our lack of competitive advantage. He asked me, "Have we gone beyond the limits of our development? Have we over-reached our potential?" He went on to say that Singaporeans have been told time and again that we are, or can be, the best in this and that. Perhaps it is time that we be realistic and teach our young to lower their expectations of the good life and accept being not the best. I told him in no uncertain terms that that was not a viable option for us to build a secure future. That kind of spirit will be the start of the end of Singapore as we know it. We may be a little down for now, but we are certainly not out. As a nation, we have overcome enormous difficulties in the past. We must not lose heart, and we will prevail.

Sir, these off-Budget measures are comprehensive, broad-based and touch on the concerns of Singaporeans across-the-board. They must also be considered together with all the other prudent policies, programmes and measures that the PAP Government has been putting in place all along, both in good times as well as bad times. These measures can be grouped into two main categories: first, those measures that will help affected Singaporeans, both businesses and individuals, to tide over this difficult period by way of cost cutting and income support; second, measures to help Singapore as a nation, and this requires both businesses and individuals to do our part to adjust, restructure and upgrade our skills and capabilities so as to be more competitive in the changed economic environment that will emerge from the present economic downturn.

This is the worst recession since Independence. Contrary to Mr Chiam's opinion that it is only cyclical, I think it is a very structural and very fundamental change in the economic environment. It is made worse because many industries and companies have barely started to recover from the last financial and economic crisis when their businesses were hit again early this year. The decline was too quick and devastating. Many people were expecting a recovery, whether described as "V-shape" or "U-shape", as one would normally expect after the downturn. Many did not expect another recession to come so soon after. Many did not expect the severity of this recession. Measures to help affected businesses and individuals in the near term to alleviate some of the pain and hardship are therefore very crucial for their survival.

Cost-cutting measures give us some breathing space. Income support schemes lighten our financial burden for the time being to tide us over while we consolidate and wait for the dark clouds to pass. I am happy to find in this package measures that many people have been asking for. These include improved access to funds for local enterprises, reduction of business costs through property tax rebates and lower petrol prices, diesel tax and utility charges, extension of HDB loan scheme and S&CC rebates and the New Singapore Shares which are free and pay a guaranteed minimum of 3% per annum. I welcome this scheme which is unlike previous sale of shares in Government companies where people have to pay for those shares and have been disappointed by the inadequate returns or the losses from such investments. Further, the New Singapore Shares pay bonus dividends pegged to the preceding year's GDP growth. This is important, especially in a downturn, as people will find the extra money most useful.

[Mr Deputy Speaker in the Chair]

4.35 pm

Mr Ong Kian Min (Pasir Ris): Sir, I cannot disagree more with Mr Chiam's opinion that we should just sit and wait. We cannot afford to simply sit tight and wait for the storm to pass. While cost cutting can reduce our expenditure and income support can alleviate our burden, this must not distract us from the need to take other painful measures, painful decisions to adjust and position ourselves to be more competitive in the future. All businesses and individuals must actively look out for new opportunities and seize them. To be in a better position to achieve that, some may need to reorganise and acquire new capabilities. This package contains important measures on People for Jobs Traineeship Programme, Skills Redevelopment Programme and the SDF funding. To just rely on cost cutting and income support alone is like surviving on your accumulated savings. Someone who has been retrenched may have some savings in cash. He may live on this for a while. But these savings are finite and would soon be depleted unless he is able to replenish them by earning wages and making profits. His old job may never come back again even when times are better. To gain a new income, he must see where the prospects are, reorganise his skills and acquire new ones to fit into those prospects.

Sir, this recession is the most severe economic crisis since Independence. The economy shrank a devastating 5.6% in the third quarter. It is estimated that the number of unemployed may hit 80,000, or 4% of the workforce. Our near term prospects are bleak. This has prompted the implementation of this package worth a total of $11.3 billion. I am very relieved to note that the present Government is able to finance this entire package from surpluses accumulated since it took office in 1997. But some people said times are so bad that we should dip into our past reserves. I would like to take a moment here to reflect on this point. Some said things cannot get any worse than this. But is this the worst case that can happen?

In recent times, it is hard for us, especially for the young, to fathom the financial cost of armed conflicts. Wars and conflicts occur in far-off places, like Bosnia, Chechnya and Sri Lanka. We see pictures of the dead and the injured and can empathise with the human suffering. But what is the financial cost of the devastation? What is required for repairs and rebuilding? Consider for a moment the damage caused by the recent terrorist attacks on Manhattan and the collapse of the World Trade Centre. The financial cost to New York city runs into more than $100 billion and the city is seeking US$54 billion in Federal aid to help its recovery. We can then just begin to imagine how much more is required to rebuild an entire nation if some form of conflict were to occur. The conflict on the other side of the world has only just started. The definition of "war", in this instance, is not clear. The physical arena may not be contained. How it will develop and end, no one can tell. We do not have a Federal government we can look to for aid. I think we should be very prudent before dipping into our protected reserves too early.

Sir, on that note, I support the off-Budget measures.

Mr Chiam See Tong: Can I have the opportunity to clarify with Mr Ong Kian Min? Sir, I certainly did not say that I want Mr Goh to stop the residents at Potong Pasir from accepting the shares. In fact, I did say that if shares, or anything free is given to a resident, it will be most welcomed. But I also did say that the receiver will certainly be obliged to the giver.

Mr R. Ravindran (Bukit Timah): Mr Deputy Speaker, Sir, I welcome the Government's announcement of this package. It costs $11.3 billion, and it is a lot of money. In fact, I was very happy at the size of the package that was announced. And I was even happier that I am going to explain to my constituents how helpful the Government was until I heard the speech by the hon. Member for Hougang. His basic point was that the Government was not doing enough. He highlighted the instance of the $200 financial assistance package and that the Government could do more. What I wanted to hear from him, perhaps later on, is whether he will clarify how much the Government should help each individual Singaporean. Perhaps, he has the figure in mind. Similarly, the hon. Member for Potong Pasir said that the utility charges should be as cheap as possible. Perhaps, he could tell us how cheap should the utility charges be. If it is a possibility, then he should go on and set up a utilities company and offer these cheap services. I am quite sure the relevant Minister can consider the cheapest utilities service for all Singaporeans. But, Sir, what is frightening is this tendency to highlight that we must try to give as much to Singaporeans as possible.

Sir, my interaction with Singaporeans shows that Singaporeans are people with dignity. And at times, they feel very shy even to approach the relevant agencies for assistance. This sense of dignity is something important and it is something that the Government has worked very hard to ensure that everybody keeps it and every Singaporean walks with his shoulders raised.

Sir, it is very easy to call upon the Government to spend the reserves because we have built up a sizeable reserve. But we must be very careful and always have the long picture or the long path ahead of us in mind whenever we consider measures. It reminds me of a classic case which is highlighted in many management studies where a person is flying on a plane across a desert, the plane crashes and the person survives with a bottle of water. The choice that he has is that when he is thirsty, he can take several gulps and continue the uncertain journey without any water in the bottle, or he can take sips along the way, or even forgo the water for the time being and hope that he will reach an oasis, or a town, or some other resourceful place, very soon. If everybody were to take the choice that has been offered by the hon. Member for Hougang, whereby everybody takes the immediate gulp and finishes the water immediately, then I think what we will have is a lot of dead Singaporeans in a very short period of time.

Singaporeans are very thoughtful. They are aware that this Government cares for them, but it cares with great prudence that we have to conserve our resources for the long run because the path ahead is uncertain. Everybody thought that the 1997 crisis was the last crisis. But, here, we have another crisis. In the last four days, some people have become optimistic and they said that things have turned around. But the FBI has just issued another warning that terrorist attacks can be expected and we may have a further economic crisis. So we need all these resources and we must dispense them prudently and judiciously. While the call of the hon. Member for Hougang looks very attractive and very easy, I think that is not the slippery path that we, as a country, should take.

Sir, let me move on to the package. The present economic crisis has a different impact on different sectors of society. The measures have been expected for some time and I am glad that the Government has chosen to introduce these measures immediately. I am happy that the measures that have been announced today have something for everybody. It is both substantial and far reaching. Sir, businessmen I have met have clamoured for tax rebates, lower property taxes and increased access for Government funds, bank loans and other assistance.

Sir, I am indeed glad that the Government has chosen to give help to businesses in the various areas. This will certainly help companies to retain or raise new working capital. There was some good news for the property sector, like the suspension of the land sales programme, deferment of sale of industrial land, the removal of capital gains tax for properties which have been held for three years, or less, and the lifting of the restriction of Singapore dollar loans to foreigners for property purchases.

Sir, I am equally pleased that the Government has acted prudently in not removing the 80% cap on housing loans. There is a sizeable number of Singaporeans who feel that property prices still remain high and the removal of this 80% cap will lead to another speculative property boom cycle. Sir, I am very happy that the Government has decided to retain this 80% cap on housing loans.

Sir, let me now move on to the programmes offered for the lower income and the unemployed. Sir, I am thankful that the Government has shown its usual concern for the lower income and the unemployed. The extension of the utilities rebates, reduction of electricity tariffs and extension of the HDB rental assistance scheme will certainly be much appreciated by this group of Singaporeans who need Government's help most. At a time when people are worried about jobs and retrenchment, the Government's decision to give a 10% rebate for C and B2 hospital charges for all citizens is timely. The added 40% assistance on hospital charges will certainly be a big help for families of citizens who have been retrenched.

Sir, the setting up of the Economic Downturn Relief Scheme for Singaporeans is certainly a very welcomed effort. The provision of $200 per month for three months is very helpful for families where the breadwinner has been retrenched or cannot find employment. Sir, the Member for Hougang said that $200 does not go any way in helping families because the amount is too small. What he fails to understand is that this is one of the many programmes that are made available to Singaporeans who are in difficulties. He himself highlighted that in his constituency there are schemes also. For example, in Jurong constituency, we have a CCC fund, a Jurong Needy Residents' Fund and, on top of that, we have various other schemes under our CDC. So it is not a case of the $200 being an isolated assistance package for residents. There are various other programmes and various other NGOs out there which are all coming together to offer assistance to Singaporeans. This is a formula which has worked in Singapore, and we should stick to this successful formula because we want to encourage this spirit where every Singaporean feels that he has a part to help each other in overcoming any crisis.

Sir, this package, combined with various other assistance schemes made available to our people, will go a long way to show that the Government and the community care for the downtrodden.

I am happy that the Government has initiated a novel scheme to grant all Singaporeans a share in our future growth and prosperity, ie, the New Singapore Shares. It is simply a money-in-the-bag scheme designed to ensure that Singaporeans receive the fixed money value and dividend for the shares. This is a welcome scheme as it avoids the pitfall of granting Singaporeans listed-company shares whose prices are volatile in a free market. It also avoids a situation where the Government is blamed for share price downturns. Sir, in short, this scheme is beneficial to everyone who will receive these shares.

The additional measures designed to pump-prime the economy, eg, increased infrastructure spending, will certainly create both new business and new jobs.

Sir, I am equally happy that the Government will look at the quality of Employment Pass applicants and adjust the minimum wage for Employment Pass holders to $2,500. This will go some way in preventing companies from employing foreigners because they are cheaper than their local employees. This has been a particular ground of complaint from many Singaporean executives who have been retrenched. I hope that this small move will tilt the balance in favour of Singapore executives who have been at times unfairly displaced by foreign Employment Pass holders.

Sir, as I listened to the package being unveiled earlier, I was reassured that the Government did not go to the other extreme of putting forward a very lavish package which will give Singaporeans a sense of total reliance on the Government. I think the package is well-balanced. It gives the right dosage of help to Singaporeans. I think it is a very good package.

On that note, Sir, I once again welcome the package.

Mr Chandra Mohan K Nair (Nominated Member): Mr Deputy Speaker, Sir, the package of measures offered by the Government is most welcome and should give fairly sufficient comfort to various sectors of our society, including employers and employees, property owners and tenants, and also our senior citizens.

There may be certain sectors of our society which may not benefit from this package. This will probably be announced by them, in no uncertain terms, through Members of Parliament or through the press, and I hope the Government would hear them out and help them, if possible.

For Singapore, in order to tackle the economic downturn, as expressed by the Deputy Prime Minister, we must generate wealth. How? There must be more investments in Singapore, both foreign investment and local investment. There must be more opportunities for the manufacturing sector to be increased and enhanced, both locally and globally. More markets must be located and nurtured, both in the ASEAN region and in the world at large. For this, we need more joint ventures and good relations between partners in industry and corporations of various nations, and also between various governments.

The financial services and professional services must also find new areas to expand into. Various professions, including the banking sector, must liaise more with our neighbours to form liaisons and joint ventures, and the Government could come in to play a major role in this.

Like Mr Inderjit Singh and other colleagues in this House, I am also concerned about the swift downturn and the overall economic crisis in Singapore and, no doubt, in many other countries in ASEAN and the world as a whole. The question is: what are the fundamental areas which we need to address as soon as possible to arrest or, at least, to minimise the problem? I hope the Government and the private sector would work hand in hand in a symbiotic fashion and revisit basic policies, review these policies critically and come up with fresh ideas in order to keep pace with all the changes that have taken place globally and locally for the last few years. I am sure, if given the opportunities, Ministers, parliamentarians, the civil service, the private sector, including businessmen, professionals, academics and non-governmental organisations, could all discuss and come up with some concrete and consensual ideas.

We need to ask why Singapore is doing, on a relative basis, a lot worse in terms of GDP growth. This year, we are told, it is minus 3%, compared to our usual competitors, eg, Hong Kong, Korea, Malaysia or Taiwan, despite our understanding that we have stronger fundamentals and policies in Singapore, as we are told by the authorities.

Our Government is constantly stressing on the need to retrain our workers. Whilst this is necessary and prudent for our economic progress, is there any clear direction where the new and growing industries are so that workers can get useful guidance and, thereafter, make a more intelligent move as to where they want to be retrained? How much is the Government willing to shoulder the cost of such retraining in these uncertain areas?

Those aged 40 to 50 are especially vulnerable when they have families to feed and mortgages and other payments to make. Our citizens and persons working in Singapore have paid taxes, both direct and quite a lot of indirect taxation. This is indeed a rainy day today. If it is necessary to dip into our nation's reserves, the budget surplus or the interest from the nation's reserves, the country should assist its citizens to retool and tide over this difficult period. There should be more money pumped in for the following areas, including job retraining, temporary child relief for families who are struggling to pay for school fees, food, uniform, textbooks and transportation to and from school. These are sectors I am sure the authorities can look into.

Due to the economic crisis, there may be more cases of bankruptcies and company liquidations. Professionals, including architects, doctors, lawyers, etc, are not allowed to practise if they are pronounced bankrupt by a court of law. Can the laws be reviewed to make Singapore a more forgiving society, because persons may go bust and be bankrupt not because they are immoral, corrupt or lazy, but due to economic circumstances beyond their control? Can we relax our bankruptcy laws if we want to have a more creative and risk-taking society?

Could I also raise the issue of Goods and Services Tax? The GST is presently 3%. Can we not temporarily suspend it or reduce it to 1% or zero, with effect from November this year to December 2002? The GST was introduced, I believe, in a sense, with a lot of flexibility. So, if the demand is there for flexibility in times of crisis, this is one sector where the Government could seriously look into and, if need be, increase it back to 3%, and hopefully not more, when times are better.

What are the national duties of banks in terms of times of crisis? The Monetary Authority of Singapore gives limited licences to very few entities for them to practise banking. In that sense, it is the state's asset that is being given to these banks to practise banking. So when a national asset like that is given to banks, the banks have to now turn around and contribute to the nation's interest in times of crisis. I would suggest, in this instance, Mr Deputy Speaker, Sir, that they must reduce interest rates to tide things over. They, I believe, would have made fairly huge profits in the last few years, and now it is necessary for them to be generous and help their customers by reducing interest rates on mortgages, loans and overdrafts.

Overall, we must work hard and work hand in hand with other countries, because we live in an inter-dependent world. I would like to commend the Government's kind gesture and care shown to our citizens and people staying in Singapore. If more could be offered in future, it would be most welcome.

I do hope and pray all these measures are sincere and that it is a genuine gesture and not too related to the coming General Election. Singaporeans will have to judge that, not just during General Election time, but in the months and years ahead.

Wisdom requires that the Government of the day review our current economic policies. Global events are beyond our control. It could be said that Singapore can do little about that and, therefore, there is little our Government can do about major crises when they arrive on our shores. Be that as it may, let us all do our best, both the proposition, ie, the PAP Government, and the Opposition too, and also the academics, the professionals and the citizenry as a whole, and come up with new ideas. And concrete steps must be taken to tackle as best as we can and minimise our economic and social problems.

Assoc. Prof. Toh See Kiat (Aljunied): Mr Deputy Speaker, Sir, I congratulate the Government for its generosity in presenting this $11.3 billion off-Budget package announced by the Deputy Prime Minister. We have been thrown into exceptional times, and the adverse conditions created by the terrorist actions of 11th September need exceptional measures of succour. This package is comprehensive, covering big business, SMEs, white-collar and blue-collar workers, the retrenched and the unemployed, the ill and the underclass. As my colleague, Dr Ong Chit Chung, said, it leaves no stone unturned. What is distinctive about this package is that it acknowledges as well the woes of the middle management middle class worker, the so-called "sandwich" class. This is much to be lauded. Innovative measures, such as the New Singapore Shares and the Economic Downturn Relief Scheme, are also praiseworthy.

Referring to the NWC recommendations, the Deputy Prime Minister said, "... we should expect wage settlements to be restrained, or in many cases frozen. Workers should be prepared for lower bonuses, wage cuts through the variable component, or at best minimal wage increases." This is a very important message to give at this time when we realise too that even profitable companies may need to preserve a little bit of fat for the bad times ahead, and we should not have workers who unrealistically push for higher increments at the risk of losing their jobs in future.

I read recently about some people calling our middle class the "New Poor". Some people would like us to think that this so-called "new poor" need exceptional help. I do not deny, Sir, that they need some help in these unprecedented circumstances. But in times like these, the ones truly deserving of exceptional help are not the middle class. The middle class workers who still have jobs can learn to moderate their expectations and spend more frugally on necessities and not luxuries. And they are better able to pull through than the truly poor that I will be describing.

Sir, this package is indeed good and we should not criticise it like the Opposition, who, as usual, leaves no stones unturned. Sir, while it is true that we will always have the poor with us, that should not stop us from helping them. Some are poor because they are idle or irresponsible; some are poor because their skills or education levels are low; some because of unplanned events, commitments or tragedies have drained their resources; some because of sickness or disability; and some because of lack of opportunity. I will deal with each of these classes one at a time.

First, the idle. The Government must continue to create jobs. This package may not exactly promise that, but it at least enables the bulk of companies to stay afloat so that more jobs are not lost in the days ahead. If people are idle because there are no jobs, the Government is to blame. If they are idle because they shun work, they need to wake up. No amount of financial assistance will help them if they are irresponsible, if they spend more than they earn. The Government cannot help such people. They must first help themselves. As the Book of Proverbs says, "A little sleep, a little slumber, a little folding of the hands to rest - and poverty will come on you like a bandit and scarcity like an armed man." There should be no handouts to those whose only activity is to stir themselves out of their sleep to open their hungry mouths or stretch out their empty hands.

Despite increasing retrenchment, the Ministry of Manpower has found some jobs still going a-begging. Perhaps, this may be due to the imperfect dissemination of job information, and I welcome the efforts to beef up the CareerLink service and CDC services to find jobs for those who want to work but perhaps are looking at the wrong places. On the other hand, if the jobs go a-begging because job seekers are still picky, they must be shaken out of their unrealistic expectations. With a perfect storm brewing, the fishermen cannot afford to sit down and do nothing. They may not have the luxury of waiting out the storm, as Mr Chiam would like them to do.

Next, the skill-less. Some jobs have left Singapore, never to return. Some people have no education nor skills to take up the jobs available. Retraining and re-education are indeed very important to give these poor ones hope. The package has a very extensive scheme of help for those who need to improve their employability. Yet, at the same time, the Government, as the policy implementer, must realise that some people may really be too old or too intimidated to learn new things in unfamiliar circumstances. Aptitudes therefore have to be considered. I may know that aircraft technicians are in short supply but I may not have the aptitude for that. And what if I choose to upgrade to a skill which, in itself, would become obsolete before I complete my retraining? Financial help to pay for courses and training is good, but not enough. I think the Government must make an effort too to match the right people to the right courses of training, and actively encourage them to keep them on course through counselling and motivational measures. This need not always be in the form of money. In service jobs, for example, and many service jobs are crying for workers, it could be in the form of upgrading the image of professionalism of certain jobs and changing the mindset of both the served and the serving.

Next, the unfortunate. This category of people includes those who are struggling to set up new businesses or striving to keep old ones above water because of September 11th; people who face untoward tragedies like the recent deaths of breadwinners, people who have been retrenched and people who have been impoverished by an unexpected turn of events.

Many of these just need short-term help, a booster which will heave them over the unexpected hump. For some of the retrenched, the retraining and re-education being given to the skill-less may be relevant too. But for others retrenched, perhaps the only help required is provision to weather the storm till the jobs return.

I believe that another way of helping such people is to work out a scheme which allows them a moratorium on debt repayments. The previous speaker, Mr Chandra Mohan, mentioned the reform of bankruptcy laws and I think we could look into this too when we reform those laws. Viable businesses may be cash-strapped and close up because they are unable to resist the creditor pressure. My colleague, Mr Leong Horn Kee, referred to banks, for example, who take away the umbrellas when the rain starts coming down, the umbrellas that they lend to you when the sun was shining. Judicial management procedures are costly and not available to all forms of business. If businesses close prematurely, more jobs will be lost and more pain inflicted. In these exceptional times, when even the mighty Swiss Air can fall, how much hope do the small businesses and hawkers have? The business cost reduction exercise announced is wide ranging and very welcome, but my point is that more non-financial measures will also be helpful.

I will venture to raise the difficulties of another group of the unfortunate. These are the property owners whose most costly asset has gone into negative equity. The amount they owe CPF and the bank is more than the amount they can recover from sale of their asset. If they sell, they will not be able to find the cash to top-up their CPF and the balance of what they owe to the bank. Hence, while they realise that it is better for them to downgrade their residences, and though they are willing to do so, many in fact cannot.

There is assistance aplenty for HDB householders with schemes which include the Reduced Repayment Scheme, Staggered Downpayment Scheme, extension of loan payments and the contra-facility scheme. Would it be possible for the Government to add to its package a scheme to allow householders to downgrade to reduce their commitments and postpone their repayment back into their CPF accounts (with interest of course) till the sun is shining again? Could the HDB contra-facility scheme, or some sort of bridging loan scheme, be extended too to landed and HUDC property owners, so long as what they are selling is their own residence and not some investment properties?

Next, the sick. The category of poor who most need help are those who cannot help themselves. We have the reputation of having a hard-headed, no-nonsense Government. Many even think that we have a hard-hearted, no-sensitivity Government. As this package shows, this is an undeserved perception. There is a whole gamut of assistance measures for those who face medical emergencies at this time. The 10% rebate for class B2 and C charges and subsidised day-care surgery and the 40% additional fee assistance for the families of retrenched citizens is a very huge load off their shoulders.

We need a rational, level-headed Government when all around us is gloom, panic and paralysis. We need it to be decisive and firm. Yet, all these do not mean that Ministers do not have EQ (emotional quotient). Perhaps, we just need Ministers to wear their hearts more obviously on their sleeves, more visibly at this period of time. And I think 17.3% pay-cut is one such gesture. Is enough being done to help the sick, disabled and elderly in this new package? Maybe, though I feel the assistance schemes could also be extended to those whose family members are not just retrenched but others who are severely, chronically or terminally ill. These are burdens which are beyond the ordinary citizens even in good times but at times like these, they become onerous and can drive many to desperation and deep despair.

Perhaps, to put a soft edge to our policies, we need more representation from the gentler sex in policy-making. As they say, women hold up half the sky. God made men and women complementary and a softer touch is lacking perhaps because we have too few women involved. On this count, I am very heartened to hear rumours that the Government party has indeed selected many women candidates for the next election. Some seats in this House may, of course, be vacated for them, but that is the way of things, the political eco-cycle at work.

As for the softer touch, and here I am just giving an example, should we not have, for example, waived maid levies for those who are quadriplegic, or severely handicapped, especially if this encourages them to be economically productive? I know of a quadriplegic who earns his own keep painting with his mouth. A large chunk of what he earns is swallowed up by the maid that he employs to look after his needs. He does not have any family members to help him and, in fact, does not want to because he is trying very hard to be independent and to stay away from an institutional home.

Last, Sir, the deprived. We have some who are poor because they are deprived or bereft of opportunity. These include single mothers with young children, who cannot leave home to work; elderly persons who are physically and/or mentally active but not trusted with most types of work; young and old in between jobs, perhaps as they are in the throes of a long course of study; and well-educated, well-trained people who have come out into the job market at the wrong time.

I am glad that there are many loan suspension and grant and aid schemes for such people, especially those in full and part-time courses and for the new graduates. But, Sir, I would like to suggest some more ways of creating opportunities and I hope the Government will consider these.

First, for those who can work at home, can we find some ways of providing that work to them, such as the setting up of cottage industries? For this, perhaps more relaxed rules for home offices/businesses. For those who are elderly, some special schemes for job matching, jobs that allow them to keep their dignity and also schemes to encourage employers to look for these elderly. There should be more publicity for job-matching schemes. There should be continued efforts at pump priming and job creation. One popular refrain from many small businesses is the request to downsize the Government-linked companies' (GLCs) preserve so that they do not soak up all the available opportunities, and perhaps, even to get the GLCs to boot-strap the SMEs as they go into new fields together. Lastly, give more Government contracts to SMEs by tendering out Government jobs in smaller chunks so that they can manage it and, together, we can rebuild the economy. 5.12 pm

Mr Thomas Thomas (Nominated Member): Mr Deputy Speaker, Sir, when the DPM was giving his Ministerial Statement, he rounded up with the remark that it was the people working with the Government that helped Singapore overcome the past crisis. I completely agree with this sentiment. If we look at all the crises, not just in Singapore, but throughout the world, for every crisis, it is the ordinary men, women and children that suffer the pain and misery. It is the ordinary people and citizens of the country that have to make the greatest and most painful sacrifices. When times are good, when the economy booms, they are the forgotten lot. We think of the rich and the successful in terms of accumulation of wealth and position, but not the ordinary people.

The September 11th incident is one example. Within hours of the collapse of the World Trade Centre, US companies were announcing lay-offs. They knew the buildings had collapsed but they also knew how many people they have to retrench, in terms of thousands. Retrenchment, throwing people off to the streets, was the first option for many US companies. Workers had to bear the brunt for the sake of capital and capitalism. I hope Singapore employers will not follow the US example. Retrenchments must not be the first option. It must be the last. I hope people understand that retrenchment does not only affect the worker, it affects his family and himself or herself, both emotionally and financially. I am therefore happy that this package actually has a focus that addresses the concerns of many citizens in this country. The concerns are a sense of job insecurity, fear of losing their jobs or retrenchments, fear of difficulty in getting another job, and the fear that they will not have enough money to meet even their basic needs. In that light, assistance to make businesses remain viable without resorting to retrenchments too easily is welcomed.

As regards job creation, I would like to ask whether it is possible to give additional tax incentives to businessmen who start business investments now in this most difficult time. I also hope that the implementation of this scheme will be hindrance-free and administratively easy, just as it was announced.

Many of the things that I wanted to say have already been covered. So I just want to talk about one other aspect. When we tackle the present crisis, we must not lose sight of life beyond this crisis. And one of the important lessons that we can learn from this crisis, or even the US system, is that even with the best of technology, with the best of things that the Americans have, technology alone was not able to help them when real disaster and difficulty happened. All the talk about high-tech, small government, was not there. When people are in deep crisis and who suffer most, they look to the government for help. They look for ordinary chaps, the unsung heroes, the underpaid people, the teachers, the nurses, the policemen, the firemen, the counsellors. They were important in their lives. The churches, the church leaders and other religious practitioners were the ones whom people turn to.

When we do a review of our policies, in terms of economics, it is not just important to look at enhancing economic wealth - it is important, we need money, we need a good life - but we also need social cohesion, we also need welfare. So we have to strike a balance between economic and social needs, and I hope we keep it that way. And in this light, I wish to compliment the leadership for showing example by taking the lead in taking a pay cut. I think this is important.

It is also important that the Government remains flexible. One of the main things I hear for years was that there would be no unemployment benefits. There would be no welfare benefits. But today, in this package, there is some relief for people who lose their jobs. You do not call it unemployment benefit. You call it by another name, but it still meets the need, and this is the flexibility that is needed. And I hope this flexibility will be reflected in many other things when we do a review.

It is true that the present crisis has reduced our economic capital, but it does not mean that we will have to reduce our social capital. With this package in this crisis, we can actually review our policies and increase our social capital, and to come out stronger. Again, I want to say that I hope that our employers will take advantage of this relief to strengthen their businesses. I hope they will not use this relief as an example to lay off workers and add on to the pain and misery of the working people. And I am sure, just as we had overcome all past crises, we can work together to reduce pain in this crisis and come out stronger in the world after the crisis.

Dr S. Vasoo (Tanjong Pagar): Thank you, Mr Deputy Speaker, Sir, for allowing me to join in the debate.

Sir, the economic measures taken to deal with the downturn are indeed a booster to our economy. There are also measures that are taken to deal with the across-the-board problems and challenges that we will be facing. I would have thought that the DPM would try and see whether we can put a bit more money into the pockets of individuals, so that they will be able to boost the economy. I would have thought that he would have considered, say, rebate on maid levy, rebate on child care and other indirect taxes, which would have given an immediate boost to the economy. I hope that he could tell us why he has not considered giving rebate on other indirect taxes.

Sir, what is really important in the prolonged recession that we are going to face is the question of social strains, and I think this is a very important issue that we must bear in mind because, in economic recessions, a lot of people are going to be affected. It will cut across ethnic, religious and class lines. Therefore, I think it is very important that we have to watch out for these strains. Especially in Singapore's multi-racial society, we will have to be sensitive and to respond effectively to deal with such issues that could be played up by the Opposition parties. I thought Mr Chiam would be around, but he is not around. As an Opposition leader, together with other Opposition party leaders, I hope they will join the Government to look at it from a united way in tackling this problem. It is not a problem of the PAP itself, the Government in power today. It is the problem of Singaporeans, and I think this is very important because we are all in the same boat, and we cannot afford to rock the boat. If Singaporeans are going to be divisive and to hear the Opposition say that this is a vote buying ploy that we are doing, then I think they are seriously wrong. This is a very serious problem that we are all facing in Singapore.

So I would urge Singaporeans to stand united in tackling this problem in a most cohesive way, because if we do not do this, then we will fall apart and Singapore will crack up. And who will lose at the end of the day? Singaporeans themselves will be the losers. So I would urge Singaporeans to stand behind the Government and tackle this problem concertedly. And with the will that we have, I am sure we will be able to brave the storm. So I hope the Government would encourage voluntary organisations and other community groups to join the CCCs to tackle the problem at the grassroots level. Because this is a problem of the community and everybody has a role to play, and if they can join hands and funding support can be given to these organisations to also tackle the problems of the unemployed, then I think we will take a concerted approach to deal with the issues at the local level.

Sir, I hope that we could look at it from the point of social cohesion, and in the Singapore context, this is very crucial for the survival of Singapore. And in hard times like this, we must stand united and look forward to tackling various complex problems and challenges that we are facing at this juncture.

Sir, the other issue that I would like to bring up is that the number of unemployed people will increase. And for them, unemployment may be prolonged, because it will take some time for the economy to pick up. With the hollowing of the manufacturing sector, the older workers and perhaps even younger workers - professionals, semi-professionals and technical persons - will all be affected. It will be for the first time that we will see more long-term unemployed workers in Singapore. I think this is likely to happen and I would like to find out from DPM what are the long-term contingency measures that we will take should there be long-term unemployment faced by workers. I think this is a very important issue that we need to look at.

Sir, I feel that the Economic Downturn Relief Scheme, which has been introduced, would provide temporary relief to workers who are currently unemployed. I feel that the scheme should be a bit more generous than the $200 monthly assistance provided. It could be reviewed and I hope that DPM could look at whether the public assistance scheme, which is based on the number of persons in the household, could be applied. It could be calculated on the basis of up to four persons per household. In fact, the public assistance scheme is a bit more generous than the $200 which is at the moment set aside to help the unemployed. Sir, I think we need to look at the longer term measures to deal with prolonged unemployment affecting workers. This needs to be addressed and I would like to ask DPM whether Government has thought of long-term measures to tackle this problem.

Sir, the other issue we need to look at is the issue of job creation. With the economic recession, jobs are very unlikely to be created in the next one year or so. But there is a need to look at how we can absorb some of the older workers into the job sector. I would like to ask DPM whether the public as well as the Government-linked companies would be looking at some ways in which jobs could be created to absorb some of the older workers. In the longer term, I think job creation will become an issue, especially when many of the industries in the manufacturing sector are going to hollow out. I would like to find out whether the Government has any long-term plans to look at how we could create more jobs for people who are coming on stream.

Sir, those are some of the issues that I would like to bring up. The other issue that I would like to raise is the waiver of income tax on retrenchment benefits. Workers who are retrenched or given a golden handshake have to pay tax on their benefits. It will be indeed helpful if tax on these benefits could be waived. I would like to ask DPM if the waiver of income tax on benefits given to workers upon golden handshake or retrenchment could be considered, and this will be indeed helpful for the workers.

Mr Simon S C Tay (Nominated Member): Mr Deputy Speaker, Sir, Singapore is clearly in crisis. This is largely caused by external factors. But I think besides the cyclical downturn, there are also some structural problems that will need to be addressed. I have read through the materials and after listening to the Deputy Prime Minister, I find the present package to be rational, targeted, realistic and quite substantial. I think it is clearly a sincere attempt to try to help, although there must be recognition that the Government cannot cure all the problems.

The first question, therefore, which has been raised in this House, is whether this is a General Election ploy. Speaking as a non-partisan Member of the House, I think there is only one thing that I could see that is potentially and perhaps inadvertently political, and this is in using the CCCs to administer assistance for the lower income. These grassroots organisations, as I understand it, do not come under the Opposition Members of Parliament. But beyond this one point, I really think that the package is not a General Election ploy. In that sense, I would encourage the Opposition not to play political football in this game. Singaporeans, I hope, will vote by conscience, even if they do take money from the CCCs. More than that, I disagree with the hon. Member for Potong Pasir, Mr Chiam. This money would not be easily handed out because it is targeted, it is not something that the CCCs can just give to whoever says, "I would vote PAP." So I do not think we should take too much of this.

I do think we should look at the package rationally and see whether it will help people. I also, on the same token, want to say that I acknowledge the effort to lead by example in the political leadership taking a pay cut. Let me then turn to the package. Many things have been said. I find it generally good but I have some questions I should like to put to the Deputy Prime Minister. The first of these are rather itty-bitty, specific points.

The first is on property market. Of all the anti-speculation measures, it has been chosen that the 80% cap on loans remains. I would like to ask the Deputy Prime Minister whether we should not instead trust the market. The banking sector, Sir, has been chastened by what has happened, so have purchasers largely. I think it should be left to them to evaluate risks and that the market and the purchasers have a free play with this. If anything, it should be the capital gains tax that is a better tool to keep. This 80% margin should not, in a sense, be a sacred cow, I hope.

The second measure I welcome very much is the People for Jobs Traineeship Programme. When it was first announced, there was a cap on salary assistance of $600 and now it has been moved to $2,000 as the maximum, and I welcome this. This is something really that people in Parliament called for and it has now been reconsidered. And I think the contrast to the first point, Sir, is that here we are willing to reconsider it.

The third point is on the mismatch of jobs. Sir, it is true that with structural change, there may be unemployment in some sectors while jobs go wanting in the other. I welcome the Ministry of Manpower in taking a much more proactive role in trying to match people. But I wonder whether we should also think of using the private sector to help us - employment agencies, head-hunters, especially for the managers and professionals who may find themselves unemployed. I think this is not a sector of the market that the Ministry of Manpower has much experience, as compared to the private sector.

My next point, Sir, regards foreign talent. I too welcome the adjustment in policy. I generally believe that we should have an open-door policy for foreign talent but I appreciate the need to tighten the criteria. As far as I understand it, one change is that the employment pass criteria will now be $2,500, up from $2,000 per month. I am not here to debate on the $500 with the Deputy Prime Minister. But the principle of the peg is something that, I think, might be reconsidered. In the Deputy Prime Minister's remarks, he mentioned that the $2,000 figure was approximately the salary of a new graduate. I would put to him that this is probably the wrong peg because this pegs the entry point for foreign talent to exactly the people who are most vulnerable - new graduates. These are people who have spent a lot of money and time to get educated but have no track record to show and they want that first job. So I think, in principle, that peg is wrong.

My next disappointment, Sir, is about the New Singapore Shares. I am confused why it should be tied to CPF. While I welcome it so much as a concept, I think that this must go beyond the CPF top-up. This is particularly so because CPF top-up, as at previous sittings of the House, was clearly demonstrated not to have worked for all. There was a sizeable number of CPF account holders who did not do the necessary things that would have availed themselves of this top-up scheme. I think the challenge of the New Singapore Shares as a new idea is to instead value all Singaporeans, and here I join the minorities of Members of the House who have spoken out in favour of home-makers, and I would add retirees too, who contributed to the country in the past. Home-makers really will play an essential role when the breadwinners lose their jobs. They may be the ones who will hold the family and therefore the society together. And they will be the ones, I hope, who make sure that children get to schools. I think in this situation, Sir, if we do not recognise the home-makers, we are doing them and ourselves an injustice.

Sir, if I may broaden the points now. I would like to turn to the nature of the response that is revealed in the off-Budget measures announced. In some cases, the measures are largely incremental, adjustments up or down by a few percentage points, and, in other cases, a longer time line is given. The first point about the nature of these measures is that they create more complex rules. I think there may be a need to explain and facilitate the new programmes for those who need them. I am thinking particularly of the small and medium enterprises and the less well-educated. If we make these rules too complex, then only those who can understand and get their act together could apply for them and maybe, Sir, perhaps they do not need our help if they can navigate very complex rules.

Sir, putting the package together is one thing. But I would call on the Deputy Prime Minister to muster the civil servants and others and task to bring this to the ground level to make sure that they do effectively reach out.

More than this, Sir, I think that the challenge for us is to see that the structural change may need Singapore to take a deeper and longer term look at our strategies. In this sense, it is like the oil crisis of the mid-70s. The USA and USSR had very different reactions. The USA saw the need to cut and prune, not subsidise oil as the USSR did. Of course, we know now who won out in that one. Crisis demands a reaction but it is a vital question how we react and deal with problems. For many social problems, tensions are inescapable. We need to come out of this stronger than we went into it. So I do tend to agree on the danger of welfarism. But, Sir, I would welcome a trust that people in Singapore are now prepared to help themselves. And, in this sense, I do appreciate such measures as the wage support for training being raised from $600 to $2,000. I think this is a good sign of something bigger. Helping Singaporeans is therefore not a question of cost but of getting essential things done, with whatever cost it takes.

Let me turn then to what is not here in the off-Budget measures, which I hoped would be there and thought could be helped. Comparing these measures to those taken in 1998, there is an absence of efforts to lower cost of operations in areas such as Telecoms and port charges. Sir, I realise that these are, of course, free markets and players can set their prices. But there are few players in these sectors and I am asking the Deputy Prime Minister if he believes they are competitive enough worldwide or, if not, why were these cost-cutting measures also missing from his package.

Secondly, Sir, for the longer term, I would ask the Deputy Prime Minister if it is not timely for Government to take efforts to review various measures such as: (1) Government costs and practices, for example, customs, stamp duties by Government in different agencies; (2) the long-term economic strategy, especially regarding SMEs, the development of services and, of course, strengthening of our domestic economy; and (3) to think consciously of constructing a social safety net, not a traditional welfare scheme nor widespread subsidies, but targeted and sufficient help as we seem to be coming to in these off-Budget measures.

We perhaps need to articulate our social safety net better to understand what it is, what we are trying to do. Otherwise, the Nominated Member of Parliament, Mr Thomas Thomas, suggested that we are actually giving "dole" but by different name. I think we really need to conceptualise what it is we are trying to build. My own instinct is that we are trying to create not a safety net which may entangle people but a sort of trampoline that can help people, down on their luck, bounce up again.

Let me, therefore, in this context set out some wishes of what I would like to have seen added to the list and perhaps Government might consider if the recession is prolonged. I do not want to break them out into little bits and pieces but to see them in terms of broader strategy.

The first is, I think, the strategy must be for solidarity in our society. And here the first item on my wish list is something that was mentioned by the Prime Minister as a possibility during his National Day speech. This is that he might give double tax deductions for those who give to Institutions of Public Character and charities. Sir, I do believe that it is good to encourage many-helping hands even in this time of crisis. Companies and individuals can, despite the crisis, find it in themselves to give money to charities to help others. If so, I think they should be recognised by the Government doubly, literally doubly.

Second, Sir, in terms of solidarity, I do share a concern that race or religious discrimination might rise. Looking back again to the downturn in 1998/1999, there were some concerns that there were some incidents of racial discrimination in hiring. Again, when jobs are scarce, people may take all sorts of criteria into consideration, some of which are relevant and some of which may be irrelevant. Here, I would ask the Government to be prepared again to use moral suasion to change the minds of employers, to monitor complaints and to even, if the problem persists, consider legislation.

As for the third item on solidarity, I believe that children should be our focus. I hope, Sir, we are beyond the point where young people will come out of school early in bad times, in order to try to find a job. We should have enough that the young will have enough reserves to really invest in their own education and Singapore's future. And I would call on the Ministry of Education to especially target schools to monitor and recommend special assistance programmes if any child should face problems.

Turning, Sir, next to the professionals. I do believe that the professionals need help, and I have mentioned how the private sector should be used for job placement. Additionally, we need training, counselling, and to really recognise the fact that we are going to deal with a whole new category of people who are out of a job. There are people who used to earn, perhaps, I do not know, $10,000 to $20,000, and we need to cater to them in a whole different way to encourage them to take on new roles in society.

My last point, Sir, is whether it is now timely to start to fund necessary risks and new directions. Under this broad thrust, I would suggest that one of the things we may need is a Small and Medium Enterprise Bank or Venture Fund. I appreciate that these off-Budget measures have got an item to enlarge the existing scheme. But I share the concern that the scheme presently works through banks which, in their effort to be prudential, may not understand SMEs fully and therefore there may be a need to have a SME Venture Fund that can give more focus and is willing to take more risks. I believe this is a real need, Sir, because small and medium enterprises are often being a source of new job creation when an economy is restructuring. An example of this, of course, is the USA in the late 1980s and early 1990s. Therefore, the SME Bank can certainly help create jobs, not least for some of the out-of-work bankers.

The next thing I would like to make is about export insurance. Some countries, such as USA, do underwrite risks to a much larger degree than Singapore. If in this time of crisis, Singapore companies are to be emboldened to find new markets and find new products and to go out, I think we should go further. The present scheme of ECICS insurance companies, I think, is not enough. We should be prepared not to subsidise them but to share risks with them. And I think a major Government statutory board, such as the Trade Development Board, is better able to do this.

Additionally, Sir, if the strategy is to go towards a new economy, this crisis may be a good time to help the new economy and the Internet companies which have been so badly hit. Government has done a very good job in creating an e-Government. I would ask them now whether we should invest in efforts to make an e-private sector for productivity and gains in the long run. Here, Sir, it is beyond infrastructure but rather to underwrite efforts in training as well as to align the Government's procurement and approval systems so that companies which use Internet might get preference. And so we could create a market for Internet and companies that use Internet.

Two last challenges, Sir, and how we can use this downturn. The first again is a challenge put up by Prime Minister Goh during his National Day Rally speech. This is whether we can improve our service in Singapore. Really, I think that this is a good time for training and that people will suddenly wake up to the idea that their job is something they value and they should be doing much better than they are. And we should take advantage of this to help change attitudes of service staff. There is after all a higher expectation of people who are willing to spend money in times like this.

My last point, Sir, which may seem a little light hearted, is how to make productive time of this crisis. This is that we need to cater to leisure in Singapore. With the downturn, people have less money to spend. With the concern about air travel following the events of 11th September, they want to travel less, but there is still need for families, for singles, for everyone, to have a good time. And this time, Sir, is a good opportunity for Government to think of how to synergise and offer Singaporeans to have affordable good times in Singapore. Work with the private sector hotels, with statutory boards like Sentosa, and other things should be undertaken to this end. We should aim to offer Singaporeans, especially in the coming December holidays, special theme promotions, so that we can have some of that good mood at affordable prices and also help our domestic economy.

With that, Sir, I would say that I support the off-Budget measures.

Mr Deputy Speaker: Order. I will take the break now and will take the Chair again at 6.15 pm.

Sitting accordingly suspended at 5.47 pm until 6.15 pm. Sitting resumed at 6.15 pm