ANNUAL BUDGET STATEMENT

Debate resumed.

The Parliamentary Secretary to the Minister for Education (Mr Hawazi Daipi): Mr Speaker, Sir, earlier, Mr Chiam told us a long tale on the construction of the pyramids, but I think he missed the point. While the Pharaohs were interested in building edifices, we are building a cohesive and strong nation in which every Singaporean has a stake, and I think the Budget addresses this point.

Sir, I am not a businessman, but I acknowledge the need to see their major concerns. I see the strong and clear need for us to focus on the future of our people in a balanced way. Sir, I think this Budget is fair and a balanced one. Of course, employers would expect more concessions. But by the same token, employees expect more give-aways. So, too, are retirees and others who are now not in the workforce. But the business of government in raising revenue is not to punish its people, but in order that we have more resources to do more things for the common good of society.

Of greater concern to me is whether the Government will do more in the area of skills training. All too often, we hear of people who find it difficult to get alternative jobs after they are retrenched. When I was in the NTUC, I was deeply involved in the business of job matching. Believe me, it is an unenviable task! Yet, it has to be done, and the NTUC is now expanding much resources to improve job matching. There is even a centre in Trade Union House, now located at Bras Basah Road, dedicated to job matching.

It is true that if the Government releases more money for training, more can be done to run even more courses, not only to equip retrenched workers for new jobs, but to upgrade the skills of those still at work, so that they can better preserve their jobs. The figures given by the Manpower Minister earlier indicate that retrenched workers above 40 years old face more difficulties in securing jobs. To me, the most important task is to change the mindsets of workers as well as employers. We need to also address the concerns of retrenched workers who turn down job offers.

What kind of training should be offered? Experience tells me that workers are better prepared psychologically if they are given training when they know it will benefit them. In other words, if a worker is told that at the end of the course he will have a job, he will be even more motivated. I am therefore calling on the Government to spare no efforts and resources in having a closer link between job training and job placement. We should even consider farming out such training-for-job placement schemes to private sector companies which can do the job more efficiently.

In my view, the media has a big role to play in helping to encourage workers to switch from one kind of work to another. Yes, there have been some examples - in the print media, on radio and over television. But more can be done.

Various constituencies have their own newsletters. They are an excellent avenue to let residents know of success cases. These are people in their own neighbourhood who have benefited from breaking with the past.

Let me now deal with another area of training. This is the preparation of young Singaporeans yet to join the workforce. In particular, I would like to talk about those who take the ITE path. I would like to put particular stress on this because, as we are tackling the problem of employability of older workers, we do not want to see the younger generation face the same problems because they do not have a good education foundation. Parents whose children may not be academically inclined should consider seriously about sending them to ITE. Here, I would like to commend the Government for continuing to give substantial allocations for education, from which our ITE campuses and students have benefited.

Some parents and Singaporeans in general appear to think that ITE is an inferior institution, and that if their children end up in ITE, then their job prospects will be less promising. No, this cannot be true. Statistics show that 88% of ITE graduates get jobs within three months of finishing their courses. According to the recent release from ITE, the average salary is about $1,222 for fresh graduates and $1,423 for post-NS graduates. This is not bad for people on their first job. The salary is just $300 short of the starting pay of people with diplomas. These are strong indicators which reaffirm the employability and the value of ITE graduates, even during economic downturns.

ITE has, over the years, made a conscious effort to develop in students skills that are needed in the industry. So parents as well as young Singaporeans should look at ITE in better light.

Indeed, ITE increases the employability of young Singaporeans. It gives them the foundation to upgrade their skills. Some ITE graduates have gone on to the polytechnic to further enhance their employability.

Sir, there is also considerable debate over the need to raise GST from 3% to 5%. Of course, if we look at it from a mathematical perspective, it is almost a 100% jump. But is this so? Of course, not. Nevertheless, we have to intensify public education so that our people are not unduly worried. One good example of how the GST works can be found in the latest issue of NTUC News. I recommend that Members look at the latest issue of NTUC News in our attempt to explain to our residents and the public about how GST works and how they should not be unduly worried about the increase in two percentage points.

However, we have to be on guard against possible profiteering. Those who try to take advantage from the GST increase by hiking their prices unjustly will only be damaging their businesses. The Committee to Combat Profiteering, chaired by Mr Chan Soo Sen, should expose such companies.

When GST was first introduced, NTUC cooperatives were among the first to declare that they would absorb GST for a period. Other trades followed suit. NTUC cooperatives also decided not to round up prices. Again, this was emulated by other traders.

This time round, NTUC cooperatives have again been the first off the mark, to say that they will absorb the extra 2% that is to be levied. And, as in the first exercise, this will be for a period of time. This is a commendable initiative by NTUC cooperatives.

Sir, there is an impression in some circles that the Government has been over generous towards those who are better off. Now, they pay less in taxes - both company tax and income tax. This will lead to widening of the income gap. But has the Government done this to deliberately fix the lower income? We all know the answer is No! The Government has adjusted taxes to make Singapore an even more attractive place for people to do business, and to create jobs.

Sir, in general, I find the Budget generous and fair. It may appear to be pro-business, but it is actually pro-people because it attempts to create more jobs for the future.

Sir, I support the Budget Statement.

Dr Tan Boon Wan (Ang Mo Kio): Mr Speaker, Sir, thank you for allowing me to join in this debate. I support the efforts by the Government to remake Singapore for a changed world.

For a long time, driven by technology and globalisation, the world has been changing. The pace, initially slow, has speeded up in recent years. It was just a matter of time when the cumulative effects became visible. September 11 precipitated its unveiling. Everyone was thus abruptly awoken to a changed world. However, if one has been discerning with the works of the Government over time via the changes made to policies, systems, values, processes, institutions, infrastructure, he would have noticed that our leaders have always realised the changing landscape.

The effect of September 11 thus demanded a sudden step change, ie, a major response. The luxurious gradual change of yesteryears was no longer enough. The tax changes just announced emanated from the recommendations by the Economic Review Committee's sub-committee on policies related to taxation, the CPF system, wages and land, headed by Senior Minister of State, Mr Tharman Shanmugaratnam, and reflected the gravity of the situation. These are significant changes. I know. I have sat over five budget sessions in this august Chamber in the past years. To get Minister Richard Hu to agree to a tax change was a major battle, very few of which were ever won. But in the Budget just announced, the shift was tectonic. The changes could only have been dreamt of. The degree and extent of change clearly reflected the seriousness with which the Government viewed the changed world and our need to respond. These are brave changes, which though taken with calculated risks, are fraught with great uncertainties, but change we must if we want to give our children and grandchildren as good a future in Singapore as we had of our lives and opportunities. My more senior colleagues with more years in this Chamber may feel even more strongly of these changes than I.

Sir, in view of the tectonic shift, some may ask, is it enough? Hong Kong has a corporate tax of just 16%. Ireland has reduced its corporate tax even lower to 12 1/2% taking effect next year. I would say that it is enough for now. By raising our GST rate by 2%, from 3% to 5%, it has already aroused so much distress and discomfort in our people. A reduction of both corporate and individual tax rates to below 20% would necessitate an even higher GST rate. In any case, tax, though an important factor, is not the only factor in the decision whether Singapore is a good place to do business. We require a holistic response to the new circumstances.

Sir, very few worthy changes are easy or painless to achieve. More often than not, sacrifices are needed to achieve the desired goals. The changes in the tax regime will shift and redistribute responsibilities. Some will contribute more, others less. This is inevitable, but this is not the purpose of the change. These are unintended effects. It is vital to constantly bear in mind the primary purpose of making the change. But it does not mean that we should merely accept the pain and not do anything to soften the adverse consequences.

GST affects every Singaporean. This means that increasing the GST rate, all Singaporeans will pay more GST. Singaporeans who pay income tax and thus benefit from the decrease in income tax will be better off in the changed regime, but those who do not pay income tax and thus do not benefit from the decrease in income tax will be worse off in the changed tax regime.

The GST offset package of economic restructuring shares and rebates is thus very reassuring to the people. I have spoken to several of my residents and they are reassured.

It is important for all of us to realise that by making changes, we can grow the pie. The intended result is not that of a zero sum game where one gains at the expense of another, but that of a win-win situation where every Singaporean benefits. Let us say that if we have $100 to spend with the GST rate of 3%, we have effectively $97 to spend. If we do nothing and become less competitive, we may end up with just $50, and taking into account 3% GST, it means that we have effectively $48.50 to spend. But with the change and the economy grows, we could have $150, and taking into account 5% GST, it will still leave us with effectively $142.50 to spend. So compare the value of $48.50 without change to a value of $142.50 with change, the brief pains of change are clearly worth the while. Some may disagree with my choice of numbers, but this illustration makes clear the intended dynamics of the change.

At this point, let me join my colleague, Mr Leong Horn Kee, to plead with the Government for the public assistance recipients and pensioners. The Minister has said that both the amounts of public assistance and Singapore Allowance are under review. This is good. I have spoken to several pensioners who ask for more sympathetic understanding of their situation. Their pensions are tied to their salaries. The current salary has galloped way out of sight, and the Singapore Allowance which is to adjust for this hardly keeps pace. They had contributed to the growth of the nation during their productive years and now depend on the State for the remaining years of their lives. Like them, the public assistance recipients, less able to help themselves, are also dependent on the State for help to live. On this basis, I hope that the Government, in the current consideration, will be more generous in its assistance to them.

Immediately after Senior Minister of State, Mr Tharman, announced the recommendations of his Committee, changes to income, corporate and goods and services tax rates caught the attention of the public. Many saw the changes as benefiting the rich and taxing the poor. After the Budget was announced and the package of GST offset was made known, the fervour quietened. The purpose of the GST offset package was achieved. It was thus evident that to many, the changes quickly boiled down to who gained and who lost. Every group saw the specific impact upon itself. The raison d'etre of the effort was missed. Should this be the case, the purpose of the change would be defeated. We cannot merely assume that the people will understand, or that they will eventually understand. The changes, with many more on the way, are intended to remake Singapore for a changed world. The world will not wait for us to be ready. The world will just move on. Hence, the quicker we get the people to understand the seriousness of the situation, the better prepared will we be to face and surmount the challenges, and the faster we can respond to the changing environment. We need to get our people to understand and focus on the big picture, on the long-term benefits to all, than merely harping on the immediate gains and losses to individuals and groups.

Sir, we cannot just assume that a few announcements by Ministers and the discussion in this august Chamber will inform the people of the purpose and the seriousness of the change. Like Mr Heng Chee How, I believe we need to sell the needed change to the people. We must engage our people. To succeed, we must try to get everyone to come on board - the quicker, the better. To succeed in the remaking of Singapore, we need the population to understand and support the changes that are needed. We need a deliberate focused effort to do this. But let me also quickly add that we must let our people know that we are not making these changes from a position of desperation or panic, but one of proactivity. By moving before others do, we get a headstart in the race. We must not be complacent like the proverbial hare. But it bears repeating that we do not oversell the change to the extent that we appear desperate, as this will cause the people to lose confidence, when we are really taking off from a position of strength, of confidence and in command of our pace of change.

I am repeating myself here in elaborating the rationale for change. There is a tendency to view the change in tax rates as a key point of change. It is not. It bodes us well to remember that a zero percentage of nothing is still nothing. Whereas some percentage of something is real, no matter how small that something is. For if there is no work, there is no pay, so what, if the tax is zero?

I am confident that our people will rally round if they are aware of this. The changes are efforts to ensure that there will be good, well-paying jobs for us and our children now and in the future. I am sure that we will happily pay our taxes for there is something to pay from.

Will more changes be necessary? Unfortunately, the answer is yes. Besides the increase in pace, change will also be relentless. The number of players in the field has increased and they have also become more sophisticated. Competition in the future will be like treading on a conveyor belt, constantly on the move. We have to keep on moving just to keep up. Hence, we have to be constantly on our toes - changing and, at the same time, proactively anticipating changes to keep ahead.

Besides rapid changes, the cycle of change will be short. Booms will follow busts, in quick succession. The pace of technological advances will force us to learn and relearn our knowledge and skills to remain relevant, quickly discarding those no longer useful and replacing them with newer useful ones. Furthermore, the downturn will be sectoral. In other words, simultaneously, while some economic sectors boom, others may be in recess. It appears that this will be the typical economic landscape of the future.

To cope with such a dynamic and parlous future requires a sea change in our mental attitude, in how we should plan and do for the future. Our thinking of what we need to do to survive must change. Because of the last 40 years of nearly continuous prosperity, we are not well prepared for adversities. Over committed in assets and low in savings, two economic downturns in quick succession, resulting in high retrenchment and exhaustion of savings, led to financial difficulties for many. Here, we can learn from the proverbial ant who starts to prepare for winter, as soon as spring begins, through autumn, knowing that winter will come and life will be tough. Unlike the happy-go-lucky grasshopper, the ant tempers his enjoyment during spring, summer and autumn, keeping something aside and accumulating its larder for the winter. Singaporeans must do the same. We have till now saved for just one winter in our life - our old age. Some do not even do that. We must now begin to set aside a part of what we earn to build a larder for the next downturn, so that we will have the resources to weather through it while waiting for the upturn. It is better that we prepare for such a future than to look forward to others, like the Government, each time for help when a downturn occurs.

Sir, when we first began as a nation, our leaders, with less resources and experience and under equally daunting circumstances, overcame the odds to develop the country to what it is today. They succeeded because the people understood the situation and what needed to be done, supported the Government and worked together to achieve our common goals. Today, we come yet again to another watershed in the life of our nation, but now equipped with more resources and experience. The unknown is the support, commitment and resolve of our people. Like our parents, if we understand our situation, share a common vision, and are prepared to support the Government and work hard and smart, we will succeed.

We must not fear competition. As much as we desire to grow, so also do others. Economies grow as societies and nations prosper. With the growing pie, competition can result in a win-win situation. Under fair competition, everyone improves and the pie grows in size. We must not particularly fear our neighbours, for competition can and will also come from afar, especially with increasing globalisation as an irreversible trend. But this does not mean we simply give up our share. We will fight to keep what is ours, and our competitors will have to convince the buyers that they can do better.

I am convinced that my fellow countrymen share with me that we have the means and the resolve to overcome the challenges that we face. We can have our place under the sun. We will, if we work together as a people, thinking not just for ourselves but also our relatives and friends, all our fellow Singaporeans and, importantly, our children and their children.

Sir, the People's Action Party and its leaders have remained true to its ideal to serve the people of Singapore to the best of its ability. As long as the people of Singapore keep faith with the PAP, we will work our fingers to the bone for them. With the support of all Singaporeans, we will overcome our challenges and our nation shall prosper.

Sir, I support the motion moved by the Minister.

Mdm Halimah Yacob (Jurong): Sir, over the last one week, I have been asked many times how I would describe this Budget. Many also asked whether the tax measures would help to create jobs as promised, or is this just a Budget to take care of the rich in our society. These may sound like simple questions, Sir, but there are serious issues which underpin them.

This Budget reinforces the shift that has taken place over the last few years in our tax and regulatory systems. It is not something new, as many other countries are also doing the same. Among the OECD countries, for instance, most have been reducing their corporate tax rate since 1990. In fact, concerned by the revenue consequences of tax competition, the OECD has even established a task force to look into the matter, as it recognises that capital mobility opens up the risk of competitive bidding between countries for mobile business.

Sir, the key words here are capital mobility. Companies can vote with their feet and will relocate to countries where they can reap the most returns. It is a serious challenge for states limited by geographical and manpower constraints to draw and retain capital within their boundaries. To do so, they have to create attractive tax and regulatory systems. We know that capital mobility is due to a convergence of factors, such as globalisation and deregulation of trade and investment and technological advancement.

But, Sir, having an attractive tax and regulatory system alone is insufficient to sustain our long-term progress and prosperity. We can have an attractive tax system, but we will still not be able to attract and retain investments if there is no support for such initiatives, because people do not understand nor appreciate how these measures can improve their well-being. We have seen how globalisation has come under attack world-wide. Abating somewhat only after the September 11 incident, the debate on globalisation has not ended. In many countries, people feel that globalisation and free trade have not benefited them. The fiasco in Seattle is a case in point and it is not likely that such objections will disappear if the key issues of inequity are not addressed. The real problem though is not globalisation or free trade. Rather it is the failure of many governments to invest in their people and have an effective social safety net. Without heavy investments in human capital and programmes to help those who are displaced to cope with the transitional adjustment problems, there will be strong reactions to change and the chorus of protest will grow louder.

Sir, we, in Singapore, are no strangers to change. Over the last few years, the pace of change has in fact quickened considerably. Many of us have had to revisit our old assumptions and beliefs. Job security and life-long employment no longer carry the same meaning as before. Today, nobody can reasonably expect to retire from the very first job that he or she was employed in after school. Individuals now have to take on the responsibility of managing their own careers and ensuring their own employability. Many companies today do not wait to retrench until they are in the throes of death, but regularly review their cost structure in order to stay competitive. In many ways, individuals now carry more of the risk of labour market downturn and a company's poor performance compared to the past. Workers can no longer afford to remain indifferent to issues of cost and returns to shareholders, as these have a direct link to their job security and wages.

Often, Sir, we question whether there is any meaning to the word "loyalty" at all. What is the meaning of loyalty when you cannot even be assured of a job? As the business environment becomes more competitive and companies come under pressure to reduce cost, the social compact with their workers can weaken. Not so long ago, I remember we had a different discussion about loyalty. The debate then was how to penalise job hoppers by forfeiting their CPF contributions if they leave a company after only a short period of service. Today, we have to deal with issues of outsourcing, contract work and part-time work, all of which are on the increase and are temporary in nature.

The fact that we are having this discussion shows how dramatic the changes have been. We are no longer talking about how to retain people but instead our focus is now on how to educate and train people to manage frequent changes in jobs and careers. We know that change is inevitable. But we also know that the impact of such changes on Singaporeans will have to be managed, so that those who are affected during the transition will not bear the cost of such changes disproportionately. In a free market and an open economy like Singapore, the Government has a very important role to play. Openness is clearly good for growth and employment. But for such openness to benefit everyone, there must be a comprehensive policy on human resource development and a social floor in the form of effective labour legislation and social protection.

This is because labour markets are different from markets for goods and services. Labour markets are about people, their skills and competencies and their aspirations and motivations. An employment contract cannot be treated as purely commercial contracts due to the unequal bargaining strengths of individuals as against companies. In Singapore, we are fortunate to have a farsighted Government that understands these imperatives. We have a comprehensive social safety net in the form of subsidised education, health and housing. And there is heavy investment in human resource development. Although the social contract with companies has weakened, the social compact between our Government and the people has strengthened.

I am pleased, Sir, to note that in this year's Budget, 45% of the expenditure will go to social development. I agree entirely with the Minister for Finance that the substantially increased budget allocation for education, health and community development are necessary foundations for a strong, cohesive and resilient society. I believe that without such heavy investment in human and social capital, changes will be more bumpy and there will be greater social disruptions which, at the end of the day, will impoverish everyone.

I also note that the allocation for the Ministry of Manpower's operating expenditure has increased by 22%. Of this, the largest percentage, or 28.4% of the total budget allocation of $220 million allocated to the Ministry, will be spent on life-long education and skills upgrading programme. I strongly welcome the Minister for Finance's statement that, despite budgetary constraints, the Government will not stint on its support for workers to upgrade themselves. We are on the right track, Sir. Our priorities are well-placed. The way ahead for us is to make sure that everyone who aspires is given a chance to be placed on the ladder and, thereafter, he or she decides how fast or how slow he or she wants to climb up the ladder.

Sir, the question which I raised at the beginning of my intervention, has been answered. Yes, the 2% GST increase will be painful. But the offset package of measures will take care of the adjustment needs of low income Singaporeans in the short term. And in the long term, the heavy investment in developing capabilities through education and skills training and upgrading will enable all Singaporeans to acquire better jobs and a better life. This Budget is clearly not for high income Singaporeans only, but will benefit all Singaporeans today and in the future.

Sir, as we move ahead, there will be serious challenges faced by all Singaporeans. For the Malay community, the challenges will be even more serious. As it is a known fact that the community lags behind others in education and skills upgrading, there is anecdotal evidence to suggest that there are more Malay workers in low-end and unskilled jobs.

Sir, there are many training opportunities available and funds is not an issue. The Minister in charge of Muslim Affairs has also outlined a vision for the Malay community. In this vision of a community of excellence, upgrading the skills and employability of Malay workers is a key focus. For this community of excellence vision to take place, there must be a quantum leap in the thinking in the Malay community about the importance of learning and skills upgrading. I must stress that, over the years, we have seen some progress. Many more have enrolled in the various training programmes. IT and computer literacy courses run by NTUC see a larger number of Malay workers attending them. Higher educated Malays are now no longer contented only with basic degrees. Many have gone on to acquire post-graduate degrees and post-diplomas in various areas. Self-help bodies, like MENDAKI and AMP, have also rallied around this cause and have been actively promoting skills upgrading courses. But more remains to be done, as I fear that, as the economy moves into higher gear, there will be more displaced workers.

Sir, in this respect, I call upon the community to focus on the key points mentioned in the community of excellence vision outlined by the Minister in charge of Muslim Affairs. They should avoid getting side-tracked by specific issues of how to interpret some of the points made in the vision statement. Instead, focus on the core issues, believe that change is necessary, galvanise all our resources and work together with one heart and one mind.

Sir, before ending, I would like to urge the relevant Ministries, statutory boards and GLCs to exercise great restraint before increasing the prices of their services. We are not out of the woods yet. We still have 100,000 people unemployed and, therefore, I think this call for restraint is necessary and pertinent. The recent increase of HDB car park charges by $15 to $90, for instance, has created a lot of unhappiness, because it has also affected the small time businesses and the retailers. The dust on the GST has not yet settled and people are still trying to digest the impact when this increase comes about.

Sir, of particular concern to Singaporeans will be healthcare cost. I note the Minister for Health's explanation on this recently, but I am not clear whether the assurance which he had given is in relation to the GST specifically, or whether it was on healthcare cost as a whole. There is also a concern expressed over the proposed means testing of subsidised healthcare. I hope that this will not make it much more difficult for those who are really in need of help to get subsidised medical care.

Before I end, Sir, there is one old ghost which I would like to revisit since this is a new Parliament, I think it is only appropriate that we must look at some of the old ghosts and resurrect them for some discussion. The policy which I would like to see changed is the medical benefit policy for female civil servants. I must declare my interest because we do have many female civil servants in our membership in the NTUC. Presently, unlike their male counterparts, family members of female civil servants do not enjoy subsidised medical benefit. With a high percentage of women now in the workforce - we have two women Permanent Secretaries, we have many women Judges, we have several women Lieutenant Colonels - I really do not see why we need to continue with this policy which is quite unsustainable and the rationale for which is becoming more and more murky as we go on.

Sir, I certainly think that it sends a contradictory signal about the Government's position on women. On the one hand, the Government encourages and supports women's full participation in the labour force but, on the other hand, it continues to preserve outdated policies. Sir, I am quite sure that the new Minister for Finance is a very progressive, in fact, fair-minded person and that perhaps, this time, we will actually see a change in this policy.

On this hopeful note, Sir, I thank you and I support the motion.

Mr S. Iswaran (West Coast): Thank you, Mr Speaker, Sir, for allowing me to join in the debate.

Sir, several European businessmen I met last week, when discussing the Budget, felt that this is a rather bold, even audacious Budget. They were very impressed by our commitment and political will to implement fundamental changes to our fiscal infrastructure. They admired, even envied, our financial capacity and commitment to help Singaporeans adjust. But they also pointed out that, after all, the core proposal is to cut taxes for corporates and those at the higher end of the income spectrum whilst increasing the GST, which will affect the man-in-the-street. And in their countries, such a fiscal mix would make for a very volatile cocktail. That is perhaps why Singapore is different.

I think a close analysis of the Finance Minister's speech and specific measures within the Budget should dispel any misconceptions. Because this Budget addresses both the needs in the immediate term of businesses and talented individuals so that they will come here but, at the same time, also sets in place fundamental changes which will benefit Singaporeans as a whole in the long term. The aim is to create economic growth and jobs. The strategy is to put in place fiscal measures that will ensure Singapore's long-term competitiveness whilst maintaining essential Government services. The short-term impact on Singaporeans is cushioned by a slew of offset measures. And if we are successful and with a modicum of luck, the average Singaporean will be a significant beneficiary, through more and better job opportunities as well as higher wages.

Sir, over the past week or so, I have also had the opportunity to discuss the Budget with Singaporeans from all walks of life, through numerous feedback and dialogue sessions, and I must say I was very inspired by their feedback. In general, Singaporeans accept and support the principle that underpin Budget 2002. They understand the need to attract and retain businesses and talent to foster growth in our economy. And they also appreciate the heightened competition that Singapore faces and the need to reposition our economy. They also understand the role they have to play through training, skills upgrading, and maybe even absorbing some short-term pain.

Ultimately, Sir, the Singaporeans I have spoken to, and they are reflective of Singaporeans in general, they are concerned about jobs and job security. They have put their trust in this Government's judgment that Budget 2002, and other recommendations of the Economic Review Committee, will best serve their long-term interests. It is critical that we live up to this expectation and fulfill our obligations.

Sir, I wish to make specific comments on one or two aspects of the Budget, drawing on some of the feedback I have received so as to represent some of the views many Singaporeans have conveyed to me. One pertains to the GST, and it pertains to the timing and extent of the increase. Many have raised this question and I believe some of my colleagues have done so earlier as well. Why increase the GST? Why now? And if any increase in the new financial year is necessary, why not adopt a more graduated approach? These questions come from different segments of the community, stemming from varying concerns. Small businesses are concerned that an increase in GST in the current economic environment will have a further negative psychological impact on consumers and cause contraction in spending. They are also worried about an increase in business costs, even though GST-registered businesses can claim input taxes.

Individual Singaporeans welcome the Government's comprehensive offset package to ease the impact of the GST on them. But they also asked whether the whole exercise could have been deferred till the economy is more firmly on the path to recovery and the employment situation has stabilised. They are concerned that many sellers of products and services might use this opportunity to raise their prices. We have the legendary examples of coffee prices going up by more than the 2% implied by GST increases. Perhaps the rises in prices may not be high enough to be deemed to be profiteering but, nevertheless, it could be significantly higher than the 2% implied by the GST rise, and that, in turn, they fear would have a greater impact on their own spending.

Sir, from a broader fiscal perspective, the question is also whether the desired corporate and personal tax cuts, which are essential for repositioning our economy, could have been absorbed without a concomitant rise in the GST. In particular, the increase in GST from 3% to 5% is expected to yield additional revenue of $1.3 billion annually. The offset package costs nearly the same amount. The ERS alone will cost the Government about $1.2 billion a year for the next three years. So, that being the case, the question is whether we could have deferred the decision on the GST.

Singaporeans accept the need for Government to compensate for revenue lost through tax cuts in order to meet the growing demand for essential Government services. The Finance Minister elaborated on this point extensively during his statement on the need to maintain Government services in education, health, housing, transport and defence, and I think the point has been well taken by Singaporeans. The question is whether there is a need to implement the GST immediately, in the short term, especially given the economic situation today and cost of the offset package. I do hope the Deputy Prime Minister and Finance Minister will elaborate on the Government's thinking on this matter.

Sir, the other aspect that has come up for some degree of commentary is the Economic Restructuring Shares. Sir, the ERS is a welcome and effective means of cushioning the impact of the GST increase on average Singaporeans. The ERS, together with the S&C and rental rebates, will go a long way towards helping Singaporeans adjust to the changes, especially those in financial difficulty. However, some questions have been raised on the ERS scheme.

The first pertains to its coverage. Many have asked whether the ERS scheme's coverage need be so wide. For example, even those who benefit from the corporate and personal tax reductions and, for that matter, the other reductions for vehicle related taxes, will be receiving the shares. Is that necessary or should the scheme have been confined to those in the lower income brackets or those who do not benefit directly from the tax reductions? Sir, unlike 1994 when the GST was first introduced, in this instance, it is being raised to compensate for revenue lost from other measures which already favour those who are better off.

The second question pertains to the criteria for allocation. By using the annual value of properties and setting it at $10,000, the Minister for Finance has erred on the side of generosity, and I suspect deliberately, and captured all HDB households, and then some. But property value is a relatively blunt instrument to gauge a household's financial situation. There are, for example, many retirees who may be living in terrace houses bought 20 years ago, and they certainly do not fall within the higher income bracket, but they would probably get the lower tranche of ERS shares. At the same time, there are high income individuals, some owning several properties and driving luxury cars, who live in HDB flats. Could we therefore not use income, based on income tax returns or other sources of data, as the allocation criteria instead? I know the Minister has to strike the tricky balance between efficiency of the process and equitability of the outcome. There is also a need to ensure privacy of personal data such as income. But given the sophistication of IT systems and the civil service's experience with previous schemes in this genre, could we not try to have a more equitable outcome based on a more reflective allocation criteria?

Sir, from the SME perspective and on business cost, several small businessmen have opined that the Budget appears to favour the larger and more profitable companies. They pointed out that a tax cut is useful only if one's business is profitable in the first place, and the reduction in personal income tax does not really help them in attracting the necessary talent to drive their businesses so as to get them into new areas of growth. They therefore urge the Government to take further measures to reduce business costs which will be of the greatest significance to them, and the key components they highlight are the cost of land and rentals. This would also apply to many MNCs who have to pay corporate taxes at the rates applicable in the countries where they are headquartered regardless of Singapore's tax rates. Many are aware that the Economic Review Committee is studying this aspect of the economy and are anxiously awaiting the recommendations on these other measures.

Sir, finally, a word on intellectual and social capital. I was very inspired by some of the measures announced by the Finance Minister to promote and grow both aspects of our country and economy. In times of economic difficulty, there is a tendency for companies to cut back on R&D expenditure, because it has an immediate impact on expenditure and cash flow, and the benefits are only realised in the long term. I am therefore glad that the Minister will be liberalizing the tax deduction for expenses incurred for R&D, leading to ownership of intellectual property in Singapore. This, together with our laws protecting intellectual property, will certainly encourage Singapore's development as a hub for intellectual capital and knowledge-based industries.

Another casualty of economic hardship is philanthropy. I am aware that many charities and volunteer welfare organisations are finding it hard to raise funds in this climate. Yet, we would all acknowledge that their work is essential if Singapore is to be cohesive and united. Sir, the introduction of double tax deductions of donations to IPCs and allowing such tax deductions to be carried forward for five years is a welcome investment in our social capital.

Sir, I support the motion.

Mr Othman Haron Eusofe (Marine Parade): Mr Speaker, Sir, thank you for allowing me to join the debate.

Sir, in my discussions with my community and grassroots leaders, many have expressed concerns about Singapore's future. Can Singapore continue to remain competitive in the long term, especially with the entry of China into the World Trade Organisation, the uncertainties in the global as well as the regional economies and our neighbours' intent to challenge our competitive position, pulling away some of our businesses? As for GST, there is a concern that there may be more GST increases at shorter and more frequent intervals in the future, especially when we reach the limit of our ability to reduce corporate and personal income tax.

Sir, I am glad that the Budget has addressed some of these fundamental concerns. At the same time, the Economic Review Committee and the Remaking of Singapore Committee are considering what more need to be done to strengthen Singapore's capacity to keep ahead of our competitors.

Sir, our effective economic management and prudent fiscal policy have enabled us to accumulate a healthy reserve, and we have the resources to decisively restructure our economy and be ready for the tough challenges ahead. Sir, the recent General Elections have shown that Singaporeans are solidly behind our leaders in their move to chart new directions to be a more vibrant and successful Singapore.

Sir, to overcome the challenges before us, it is clear that we cannot afford to be complacent and soft. The world is changing fast and we will have to make changes and adjust, regardless of how painful they may be, so that we continue to be relevant. We cannot become a low-cost business centre, but we can be a reliable and flexible place to do business. We must also be ready to accept measures that will enable a fair share of global talents to join our team. Above all, we have to strengthen inter-racial and religious confidence to enhance our social cohesion and national unity.

Sir, on this point I would like to stress that the Malay community in Singapore has a bright and sunny place here. The educational attainments of the Malay students have shown remarkable and steady improvements. Most of our Malay students have strong grasps of English and their mother tongue. We can therefore continue to be relevant to the global new economy. In fact, some of our Malay students have shown that they can attain high rankings in international competitions in Science and Mathematics.

Sir, the new Minister in charge of Muslim Affairs, Dr Yaacob Ibrahim, has spoken on his vision of a Community of Excellence. Sir, I am confident that the community will have the confidence to move ahead and reach higher heights of excellence, and we can make significant contributions to push Singapore ahead to a higher standard and quality of living. In this connection, Sir, I share entirely what Madam Halimah has said of the need for us to be ready to make changes and adjustments so that we can continue to excel.

Sir, with those opening remarks, let me now move to certain specific issues. First, employability of older workers. Sir, the experience at the CDC's Employment Centres is that it is difficult to find jobs for older workers, even for those with skills, education and relevant work experience. This situation is likely to continue even when the economy improves. Sir, employers' first preference is for younger workers. Hence, there is a need to provide urgent measures to help older workers and make them more confident. I think it is necessary to provide more financial incentives to employers to encourage them to consider more employment of older workers.

Sir, the Ministry of Manpower's People for Jobs Programme is helpful but I think much more need to be done. Can we provide funds either in the Ministry of Finance's budget, or for SPRING or EDB, so that they can provide help to senior and experienced employees who are now redundant, to enable them to set up businesses, say, consultancies, to help local businesses to improve their organisations or even to venture overseas? Sir, the EDB may have the Industry Assistance Scheme, but the criteria are perhaps too stringent. Could we also encourage our banks to open a sympathetic window to provide loans to persons who want to open businesses, provided they come up with some good business plans?

Sir, the South-East CDC has set up job creation opportunities. For example, we provide the Domestic Training Scheme and the Ministry of Manpower is providing us some financial provisions. We will consider more such facilities in the informal sector and I believe my other Mayor colleagues are also doing the same. But we certainly can do with more funds.

Next, more assistance to the small business enterprises and on this point Mr S Iswaran has provided some inputs.

The feedback which I received is that the SMEs are rather disappointed with the Budget. They find that the cost of doing business is high, eg, high rentals and also high statutory charges, and many experience cash-flow problems. They also find it difficult to get good staff. Hence, there is a need to help them to tap finance, recruit good talent and also to help them expand their business overseas, especially beyond our troubled region.

Next, let me touch on the CPF. Many older workers are concerned about their ability to meet their housing commitments if the employer's contribution rates for older workers are reduced. So I think it is important and necessary to quickly clarify and remove this uncertainty. Older workers have planned their commitments on the current rates and they therefore fear changes. Perhaps the new CPF rates should apply only to younger workers who could then plan the use of their CPF for housing, having regard to the new contribution rates.

Finally, on social cohesion and national unity, the Finance Minister has pointed out that we have been able to weather difficult times because of our strong unity. We will have greater challenges to our social cohesion in the years ahead, because of September 11 and also because of the increasingly competitive global environment. Sir, I would like to encourage our companies and businesses to provide a budget for activities to enhance social cohesion in their organisations and for the bigger companies, they can also perhaps appoint special staff for this function. It would benefit them as it would help enhance teamwork, better understanding and therefore increase productivity. Perhaps such expenditure could receive tax credits or can be tax exempt and they can use the funds to organise projects with the local community where the company is located, or with the CDCs. Sir, in this way, we will create a more united people and this will certainly enhance our total competitiveness.

Sir, on this note, I support the motion. 4.30 pm

[Mr Deputy Speaker (Mr Chew Heng Ching) in the Chair]

Ms Irene Ng Phek Hoong (Tampines): Sir, the Budget this year is hard-headed, yet compassionate. It is hard-headed in its determination to restructure Singapore and at a time when unemployment is hurting some 100,000 Singaporeans. Put them together, and that is more than three-quarters the population size of Tampines GRC, my constituency. Indeed, the restructuring process is likely to cause more blood to be spilled in the job market. But as the Finance Minister pointed out, this decisive move to restructure the economy is this country's best hope of staying ahead of the race and creating jobs for our people.

This hard-headedness is balanced by compassion, with the close attention paid to those who will be affected by the restructuring process. The Government should be commended for working out a generous Economic Restructuring Package, including the ERS, and for promising that all lower-income households will not be worse off with the hike in GST rates.

However, I have several concerns. They revolve around the kind of society that we are building.

First, the measures are said to be aimed ultimately at creating jobs. But jobs for whom? Most likely, for the skilled and nimble workers who are able to compete in the new economy. But if there are not enough of them, we say, "bring in the foreigners". Let me make clear that I am not against this policy. It is good for Singapore that higher value-added jobs will come in, such as in biotechnology and in the life sciences. It generates growth for this country and helps to secure our economic future. But where does that leave our lower-income, lower-skilled and our older workers?

Figures show that they are often the first casualties of the restructuring process. This is often because the jobs that are created are way beyond their skills level or in entirely new high-tech fields. Their problem is one of structural unemployment. This is a problem confronting many developed countries and many countries in transition.

In Singapore, the problem is being felt on the ground. I see a steady stream of older workers and lower-skilled workers coming to my meet-the-people sessions begging for jobs. The success rate of job matching at the North-east CDC does not give much cause for cheer. Despite its best efforts to find jobs for 1,220 job applicants from January to March this year, only 41 of them were successfully matched with a job. This is about a 3% success rate. The main reasons cited for the low rate: shrinking vacancies in the job market, more retrenchments, the mindsets of employers and job seekers.

Sir, it is not helpful for us to keep lamenting that they are choosy about work or have unreasonable pay expectations. Some, especially the older workers, tell me that they are prepared to take lower pay but employers just refuse to give them a foot in the door. Companies are also reluctant to send their older workers for retraining and upgrading programmes, preferring to invest in their younger workers.

All these biases and practices against the older workers, including the skilled ones, must be overturned, especially given the fact that Singapore has an aging population. Will the lower-skilled and older workers have a place in this new Singapore? If the Government can go out of its way to save and conserve marine life in Chek Jawa, surely, it should expend even more effort in saving and preserving the economic shelf life of our lower-skilled and older workers.

To this end, I would like to make four suggestions.

First, redistribute the overall gains from free trade through subsidies to employers who hire and train such workers. The first step in this direction could be a tax credit. If tax credits prove insufficient, the Government should consider cash subsidies to firms that hire and train lower-skilled and older workers. Our People for Jobs Traineeship scheme should be expanded further. This is a better option than giving direct handouts to those hit by restructuring. It fosters self-reliance and self-respect.

Second, review the effectiveness of the training programmes. There are many training programmes. There is no doubt that the Government has put a lot of thought and effort into rolling them out. The issue is how effective are they in securing better jobs for displaced workers in a fast-changing environment. It is a cause for worry that many of the places on the various training schemes still go unfilled. But we cannot expect hard-pressed workers to go for training just for the sake of it. They must be confident that it can reap some tangible benefits for them and their families. What is the point of going for retraining if at the end of it, jobs are still elusive.

While I welcome the Finance Minister's assurance that the Government will not stint in its support for workers to upgrade themselves, we must ask, given our scarce budget resources, how high are the returns on this slew of programmes. We must identify the effective programmes that can lead to better jobs for workers, rather than roll out many programmes with minimal returns.

Third, we should address the issue of quality of work for older workers. This means modifying the organisation of work, working hours and working life in general to the needs and abilities of the older workers. Most older workers seeking employment today want part-time work. However, new types of jobs suited to the older workers are still too scarce. Presently, only about 3% of workers work part-time in Singapore.

Sir, I must declare my interest. I am working on a programme to give part-time work for older residents at my ward in a non-profit elderly centre in my constituency, Tampines-Changkat. I hope that such grassroots effort will receive the support of Government in terms of funding.

The Government should consider providing funding to new businesses or projects that promote legitimate employment and training opportunities for these workers. They may not yield high-growth rates for the economy but it will give residents some useful pocket money and a greater sense of belonging. We should also provide incentives for VWOs and CDCs to expend employment opportunities for this group.

In Africa, to help its older workers cope, the Government in Zimbabwe has given rural headmen in some areas to set aside one plot of land to be farmed jointly by the community. Private charities, such as HelpAge Zimbabwe, are also trying to set the elderly up with small businesses and collective farms. We do not have land to set up farms, but we can take the lead by running useful businesses and projects which involve older workers.

These issues facing us today are not just technical economic issues. They are also moral and ethical ones.

Those urging ever more tough market measures use the language of economic efficiency and individual enterprise. They tacitly assume that people stay the same regardless of the kind of social structures that surround them. This is not true. If a society becomes too thoroughly marketised, where everyone is an economic entity or else irrelevant, if the principle of private pursuit of personal gain becomes too dominant, then people become greedy and selfish. I fear that we might run that risk.

Already, I hear that Singaporeans are not talking just about the 5Cs. They are now talking about promoting the need for the 5Ks - Kaki Ko Kaki. That is Hokkien for "to each, his own." If we go down that road, it undermines social relations that make life worth living. It treats people as things with an expiry date. It breeds alienation and rootlessness.

It is crucial that we reinvigorate families, community groups and VWOs which stress responsibilities, duty and sharing, to counterbalance the ethic of private self-interest. The Government is trying to give a balance by raising public spending significantly on social development and by providing the ERS package. It is well aware of the need to promote a sense of community and to spread the benefits of growth across the board.

I applaud particularly the tax measures to promote the spirit of philanthropy in individuals and corporations.

Sir, no one disputes that faster growth is necessary to reduce poverty and the income gap between people. The more challenging question is whether economic growth itself is enough to achieve our social goals of creating a better home and a better future for all Singaporeans. The Government has long subscribed to the world view in which the rising tide lifts all boats, including many at the bottom. But increasingly, this world view is being challenged. The poor do get richer, but at a far slower pace than the higher-income group. This leads to a widening income gap. The latest measures to cut tax rates will widen this income gap further.

It was with an eye on this widening gulf that Prime Minister Goh Chok Tong had last year stressed the need to forge a new social compact. One prong of it is to pay particular attention to the needs of the lower-income Singaporeans. But going by the handout given by the Finance Minister, the table which says "Impact of Economic Restructuring Package on representative households", it would appear that those who gain most would be those in 4-room and 5-room flats, mainly because of the ERS. Unlike previous redistribution of budget surpluses, this time the allocation is not skewed in favour of the lower-income.

Under the NSS scheme last year, the lower-income receives seven times more shares than the top earners. The Economic Restructuring Shares will be redistributed more evenly, with more than 90% of households receiving the maximum, 1,200 shares each and the rest, half of that.

This does not help very much to narrow the income gap. In a sense, this focus on the middle-income is fair. The middle-class is also hit by restructuring, and in some cases, even harder, as they have to bear higher financial burdens than the lower-income. Middle-income families, as we know, now form the bulk of Singaporeans. About 60% of HDB owners live in 4- or 5-room flats.

So perhaps it is right that they get attention this time round. On the other hand, unlike those without the skills to cope in the new economy, the middle-class Singaporeans have more resources and abilities to fall back on. It is this resilience that we need to encourage.

There is a danger that all the welfare and wealth-sharing mechanisms and schemes will be taken for granted and that everybody would begin to expect them as a matter of course. I am not saying that we should not help the middle-income families but I am saying that we should help them, but to help the lower-income more. They are the ones who are finding it hard to cope and they are the ones who should deserve our special attention.

Sir, the fundamental task of every legitimate government is to secure the good society for its citizens. A good government has to discern the true interests of this country to invent and pursue policies that transcend the self-interest often revealed in public opinion.

Another thing which worries me is how quickly despondency descends on the public mood when faced with bad times. The danger is that it can paralyse required efforts to turn retreat into advance. And this mood does not only affect the vulnerable groups, such as the lower-income and older workers, it seems that they are also spreading to the younger generation.

In an Asian survey conducted last year for Coca-Cola, young Singaporeans are found to be the least optimistic among young people surveyed in eight countries. Asked if they agree that the future always offers more and new possibilities, only about 65% of Singaporeans say yes. This is compared to 84% in Malaysia and 91% in Thailand.

One possible reason for this could be the trend towards more unemployed graduates. The latest labour force survey showed that the number of graduates unemployed rose from 6,600 in 1997 to more than 20,000 last year. The Government must give hope that the restructuring will yield jobs for the mass of Singaporeans and that it will indeed translate into a better Singapore with opportunities for all.

Sir, employment is not just about numbers or a line on a chart. The conditions under which work is performed, the livelihood it provides, and the solidarity shown by those doing well in this new economy towards those who are displaced by it - these are all measures of a decent society.

Sir, I want to take this opportunity to also lend my voice and support to Halimah who asked for a review of the medical benefits scheme for women. I had intended to raise this as a Budget cut which I put under the Prime Minister's Office but I just want to say that it is an outmoded policy and it definitely needs to be reviewed.

Sir, in his Address, the President called on us to remake Singapore together so that we will continue to thrive and prosper in an uncertain world. The world may be uncertain but we have to be certain about why we are embarking on this difficult journey as a people. It cannot be only for economic growth. In this globalised economy, growth rates can zig zag up and down very rapidly, as we have all found out, and if that is what we hitch our destiny and happiness to, we will be quite a sick people. Nausea cannot be a driving force. In facing these difficult times, we must equip and engage our people as citizens in shaping their future.

This economic downturn will be worth all the troubles and problems they give us if they show up the areas which we need to work on, and teach us that the true worth of citizenship lies not in waiting selfishly to be helped, but in helping ourselves and our fellow citizens. We will need, in larger measure than before, the help and encouragement that the strong can give the weak. Thus helped, we all should rise to the path that leads to the objective we have all pledged ourselves to: "Happiness, prosperity and progress for our nation."

Mdm Ho Geok Choo (West Coast): Mr Speaker Sir, I rise to congratulate the Deputy Prime Minister and Finance Minister for his courage and vision in outlining for us a pragmatic and competitive strategy in this Budget that will see through the remaking and survival of Singapore in these highly volatile times.

This year's Budget has been labelled "pro-individual". It has also been called "pro-business". Many agree that it is indeed a "balanced" Budget. The need to enhance business competitiveness in the country by reducing the cost of doing business in Singapore is balanced off by mitigating the impact of the associated measures on the economically disadvantaged consumers and businesses, as well as by the need to meet the concerns and aspirations of its citizens.

It is noteworthy that the Finance Minister has actually, after taking into account relief packages, budgetted for a small deficit of $190 million. For a country used to enjoying surpluses in excess of $10 billion, this is symbolic and could be viewed as an indication of the resolve of the Government to increase Singapore's competitiveness.

Although not an entirely painless budget for some, the keywords used by the press to describe the Budget Statement were "bold and competitive." There has been applause from businesses, and even Mr Chiam See Tong from Potong Pasir has been positive in his response to the press after the budget announcement.

Nonetheless, the reactions of the men-in-the-street - the workers, the wage earners and the displaced professionals, executives and managers - have yet to be digested.

Sir, some Singaporeans, especially the middle-income groups, have expressed their displeasure at the allotment formula used in the first distribution of the Singapore Shares. This time, the Government has heard their voices, and has made the necessary adjustments to make the distribution of the Economic Restructuring Shares more widely acceptable.

Overall, as the Finance Minister has put it, Singapore has to make painful but necessary adjustments now so that we can sharpen our competitive edge in an increasingly unpredictable world. This year's Budget must be understood in this context.

While the Government has made these unavoidable adjustments less painful, Singaporeans must fully accept the surgical act when it comes, as otherwise the patient cannot recover. Let us therefore take comfort in the assurance given by Government that we are in their good and competent hands, that Singaporeans will be widely consulted and that ramifications of any measures are clear. As with any major operation, life-supporting and life-saving equipment as well as contingency plans must be in good working order before the surgical knife is delicately applied.

The pronouncements in this year's Budget have all the makings of a successful operation. But until Singapore fully recovers from the operation, ie, the remaking of our economy, external global viruses and infections can still attack us with impunity, often without warning. I urge all Singaporeans to accept some of the painful adjustments such as the GST increase as a necessary vitamin pill to strengthen our competitive immunity.

Sir, we all know that a key fundamental that has helped Singapore make economic progress in these last 37 years has been the vigilant and robust promotion of wise economic, social and political policies. These policies have brought about political stability, racial harmony, industrial advancement and a secure livelihood for our people.

Under the farsighted and dynamic leadership of the present Government and with the unanimous support of the people of Singapore, this little island with no resources has made quantum progress in various fields, much to the discomfort of our Malaysian neighbour. I am sure Singaporeans are proud to belong to a nation whose future is promising and a Government that has always come good on its promises to the people.

As we all know, today, Singapore is operating in a very competitive business environment, but some Singaporeans do not seem to grasp the momentous and dramatic changes going on around us. Singapore faces increasingly fierce competition from China, which today offers a haven for investors. But are we prepared to take the Chinese on in terms of creativity, entrepreneurship, and sheer diligence?

Even our much vaunted advantage over the Chinese in the area of services may now be under threat. Prof. Michael Porter has recently pointed out that our nation needs to work on some of our competitive strengths, one of which is in the area of services. However, if we are not careful, we may even lose this edge to China.

As a point of illustration, Sir, I had an opportunity last month to attend the Assembly of the Asian Parliaments in China. Prior to this visit, my last visit to China was two and a half years ago. I must say, the first thing that struck me this time round was the tremendous change in the attitude of the Chinese people. What I could literally feel was their hunger for knowledge, friendship and the desire to want to please and serve their foreign guests from both young and old, men and women alike.

Many of the Chinese people, attending to the Assembly, spoke grammatically flawless English. It seemed as though they had learnt "by heart every phrase and choice of word," to demonstrate that I can do just as well, if not better. They even delivered their services beyond what was normally expected of them.

For example, when you ask for the directions to the washroom, the service provider will walk you all the way. Such is the kind of service excellence that will make a delightful service experience and provide the cutting edge in the competition. The whole attitude displayed was one of eagerness to show their feats and their readiness to embrace foreign investors. Customer savvyness seems to become more and more an ingrained part of the Chinese psyche.

Sir, in remaking Singapore, our ultimate aim is to thrive and prosper in this global competition. Our long-standing principle "to make as few enemies but as many friends as possible" is worth revisiting. By this principle, we will make more friends amongst men and nations, and our personal and national prestige can be expected to grow. No doubt the pedagogy of engaging Singaporeans from all sectors of our society in this remaking is a resounding move. Nonetheless, our policy makers and leadership must be able to convince and win the hearts and minds of our people.

China's economic involvement will increase in this part of the world. It is to our advantage that we start preparing our young for more involvement with China, as the majority of our students still betray very scanty knowledge of the Chinese.

Some of our students have even expressed disbelief at reports of the rapidity with which the Chinese people have made economic progress. What is even more disturbing is that some of our students have shown a marked reluctance to monitor and keep up with developments in China. To many of them, the world of excitement and progress is still America and Europe. I would like to propose that the Ministry of Education sets aside a budget to organise more subsidised educational-cum-trade missions for our students from secondary and tertiary institutions.

Sir, such educational-cum-trade missions will provide a melting pot into which distances, differences, prejudices and even self-interest are integrated, mixed and brewed into mutual beneficial arrangements. What I saw during this trip, in the world's largest dam construction of the Three Gorges, will amaze Singaporeans of the engineering prowess and feat of the Chinese civil engineers.

The dam site takes 17 years to construct. 28,000 people involved in this project have been living in this isolated site since 10 years ago and will continue to live there till 2009, the expected date of completion. All these will be a reminder to Singaporeans that, at the end of the day, it is a flexible, adaptable and enduring attitude that will make us a winner, granted that all other qualities are a given.

It is also timely that a national customer service programme be mounted to start inculcating service attitude and service skills in our students who are the future service leaders of tomorrow. Sir, it is not enough to have the knowledge of the product. That is going to be a given. But the service attitude and skills will make that difference in whether customers choose to patronise the business again and again. In inculcating such values and attributes, we need to start early.

Sir, my proposition for such a programme is premised on practicality and what is much needed in the real business world. The IT world has taken away too much of the human touch and face to face encounter, and we need to bring back these old but results-winning formula. Again, the Ministry of Education should seriously consider incorporating such a programme into its syllabus.

This programme is about "Hui Zhuo Ren, Hui Yong Ren", a phrase used by shipping tycoon, Li Ka Shing when asked what was the secret of his success. This phrase means, if we do it right from here on the way to deal with people, we would have equipped ourselves with a powerful tool for survival.

It is no point remaking Singapore in all the 5Cs if we cannot recognise that the fundamental C is your customer, both internal and external, whom you must win over. When that happens, then all the Cs of cash, condominium, car, credit card, club will be yours with the wink of an eye and the smile of the lips. Sir, we need to learn the finesse of winning people in this competition, and we must start with our students.

Sir, I have mentioned in the beginning that some have felt the pain of this Budget. I agree with the Finance Minister's sentiments that this is not a give-away but an encouragement to help Singaporeans remake themselves. The pro-business strategy of our Government all these years has been necessitated by our geographical size and fate and this year's Budget continues to aim at attracting investments plus global talents.

The shift to an indirect mode of taxation is in the right direction. The increase in the GST, which is meant to make up for the loss in revenue as a result of the reduction in corporate and income taxes, is well cushioned by the offset package which ranges to about 10 years for some categories. As can be expected, there are Singaporeans in our midst who will be left out totally.

Sir, the hardest hit in this downturn is the cohort of displaced professionals, executives and managers I label PEM. Unlike the unskilled lower income and older workers who touch at the heartstrings of the Government, PEMs do not do that well. Many retrenched PEMs have heavy commitments incurred during better times, eg, mortgages, loans, children's educational expenses. Yet, when they are out of work, they are not considered "poor enough" to qualify for the offset measures spelt out for the lower-income groups.

Along the same vein as Mr Iswaran who has treaded on the subject of the ERS, I offer another perspective. Some of these displaced PEMs reside in residential dwellings and, as such, will not be eligible for the higher tranche of the Economic Restructuring Shares (ERS). Therefore using the criterion of housing type or value may penalise those in need of real help. To extend the argument, one may say, then downgrade. But, Sir, this may be painful as residential property prices were much higher in the past and it just makes no economic sense to sell at a loss.

Now, let me turn to some other areas where further strengthening of our social fabric can take place. The bulk of the displaced PEMs, if they remain unemployed, will not gain from any income tax deduction in 2003, whereas in 2002, when they lost their jobs, they had to fork out their savings to pay tax for income earned in the year 2001. The increase in GST will be an additional burden compared to those who are gainfully employed. They need some financial assistance.

Can I therefore humbly request that this group of affected Singaporeans be helped in the transition, as they do not benefit from the tax-saving and road tax saving, and yet they have to meet additional expenses due to the higher GST, transport and parking charges? Will the Finance Minister consider making an exception for displaced PEMs to enjoy the higher tranche of the ERS, if at the point of issue they still have not found employment, and not subject them to the criterion of housing type?

Next, taking care of the elderly and needy requires sacrifices and resources. With GST and other increases associated with ferrying them around, people who do not qualify for the offset measures need to be helped, especially when they are affected by difficult economic situations, such as unemployment and its accompanying effect.

The Budget is silent on the assistance measures. I would like to urge the Government to consider the plight of people who have to take care of the less fortunate, especially when they are handicapped or are suffering from illnesses requiring regular treatments, and thereby having to incur non-healthcare related expenses.

Sir, the highly anticipated changes to the role of Government-linked Companies (GLCs) were not mentioned in the Budget. Generally, the feeling of the small-time business players is that they relish being courted or invited to participate in the business of the GLCs. I recognise that this should not be too great an issue if the SMEs can prove that they have value added contribution to make. No one begrudges the GLCs of their right to compete for business, especially in those areas that are their forte.

I continue to encourage and support Government private joint ventures in order to further consolidate social construction and welfare services. I trust hon. Members would agree that the hard work of our people and the wise leadership have enabled resource scarce Singapore to grow into an economically strong and prosperous nation within a short period of its independence.

We must therefore continue to nurture our national capitalists through business opportunities and, at the same time, grow the State coffers from the profits derived from the GLCs. These profits can be used to initiate programmes to help the aged and the handicapped.

Sir, coming to the increase in parking charges, I fear that the cost will go up for those who use their vehicles for carrying out their work activities, eg, taxi drivers, bus operators, heavy vehicle operators, salesmen and technicians. Unlike those who use their vehicles for convenience and comfort, these vehicles are essential to the livelihood of these Singaporeans. Is the increase on vehicle usage aimed at those in the second category or the first category? Should we have a differential in the rate of charges for the two categories in order to achieve a more equitable imposition of such increases?

Another concern arising from the increase in parking charges is the issue of illegal parking in private estates near to HDB estates. Our successful integration of HDB dwellings with private residential estates has made it convenient for vehicle owners, including goods vehicles from HDB estates, to park their vehicles in these residential estates, often causing inconvenience. Will the Finance Minister kindly look into some of these implementation issues so as to minimise negative consequences?

Sir, I would like to end here by saying that in this time of great change and in the midst of the terrorist threat and political instability in the Middle East, it is important that Singapore continues to surge forward with both political and economic strength. The Finance Minister deserves appreciation from all in this House for presenting a Budget which pulls no punches in laying out a strong and sound launching pad by which the economy will find the ballast to thrust us upwards into higher global reaches.

Like Mdm Halimah and Ms Irene Ng, I look forward to the Finance Minister's pro-women policies in order that more Singapore women will be convinced to come forward to serve in this august Chamber.

Sir, I join my colleagues in supporting this Budget.

Dr Amy Khor Lean Suan (Hong Kah): Mr Deputy Speaker, Sir, the new economic landscape created by a sea change over the last few years warrants a new budgeting paradigm. Budget 2002 manifests this as it represents more than a carefully thought revenue and expenditure plan with its broad policy and strategic thrusts. Beyond the cyclical measures and the short-term budgetary goodies, more importantly, the 2002 Budget embodies two key tenets which I would like to highlight.

The first tenet refers to an "under siege" Budget. There have been criticisms aplenty about this Government's overly cautious approach to budgeting. The debates in this House accompanying last year's second set of off-Budget measures amply illustrate this point.

Interestingly, a journalist commented in a recent story in Streats that he knows of no other government that is planning to give hand-outs just after general elections, and in the midst of a recession. This remarkable ability to do so stems from our previous healthy budget surpluses and prudent fiscal management.

Sir, underlying this conservative budgetary approach is what critics have described as a siege mentality, bordering on paranoia, a general reluctance to loosen up, to being a tad more generous. This is borne of fear that baser human instincts may take over and lead to the squander of precious resources, like the prodigal son in the Bible. Such a mindset, however unpopular, is nonetheless not completely at odds with the New Singapore we are trying to create.

While we push ahead with giving our citizens more economic, social and political space, the forces of globalisation will create winners and losers. This Government needs to build up the resources to help the weaker members of our society - the aged, the underclass, the physically and mentally challenged - who feel increasingly bewildered by the profound changes affecting us.

Our economic base is being challenged by the rise of China and India. Around us too, there are also voices of suppressed anger and envy. We are a little red dot, and a cat waiting to be skinned. Sir, we are indeed under siege.

Hence, the very small budget deficit of $190 million after implementing the proposed tax changes and GST offset package is understandable. A budget should not be viewed, like in some quarters, as a well-conceived plan to spend beyond one's means. Our years of prudent budgeting have given us fiscal surpluses that have enabled us to implement off-Budget measures, including immediate significant tax cuts, without undermining our fiscal position.

Mr Deputy Speaker, Sir, I am very pleased that the tenor of this Budget shows a sensible approach to balancing the competing claims that confront us and yet, retains the prudence of past budgets, belying our siege mentality. Future budgets of this Government will undoubtedly follow the spirit of this Budget.

The second key tenet I would like to highlight is one of letting winners emerge. Sir, this Budget can be rightly called a New Singapore Budget, a watershed Budget, one in which due recognition is given to the markedly changed circumstances, precipitated by the onslaught of global competition and heightened nationalism.

In particular, I am delighted to note that the Budget represents the beginnings of a sea change in the way industrial policy is being pursued, from trying to pick and groom winners, including GLCs, to creating an environment, an ecosystem, in which winners can emerge.

Borrowing an analogy from the stock market, the efficient market hypothesis postulates that one cannot perpetually outperform the market by intelligent stock picks. Neither can we do so for industrial sectors, no matter how "sexy" they may be. Hence, as Harvard academic Rosabeth Moss Kanter recently remarked, it will be better not to place your bets only on a few key industries, but to cast the net wider and bet on more sectors, including the social services or people sector.

In fact, this is exactly the comment of a volunteer social worker for autistic children whom I recently met. She observed that every time they organise a seminar or course on autism, it is over-subscribed with many participants from the region. She feels that there is scope for Singapore to become a regional hub for special education, and the Government should also take a bet in this sector, and not just in mainstream education.

Budget 2002, as my other parliamentary colleagues have noted, is clearly only one part of a very large jigsaw that is still being put together to remake Singapore for the new uncertain and volatile world. It initiates the process of restructuring Singapore, but a lot more work needs to be done. There are some areas of concern that need to be addressed to ensure that Singapore can play confidently in the major league - share in the pie and not just pick up the crumbs. And I wish to highlight three.

First, the plight of the SMEs. Although the generous income and corporate tax rate cuts and group tax relief are welcomed by manufacturers, a frequent complaint has been that this Budget does little to help SMEs faced with shrinking markets, high costs and domestic competition from multi-nationals and GLCs.

This is the oft-repeated refrain of what use is the reduction in corporate taxes if there is no profit to tax. Worse still, the shift from direct taxes to indirect consumption and usage-based taxes will exacerbate their difficulties. While consumers can turn to the GST offset package and the economic restructuring shares, SMEs continue to face daunting cost structures.

Sir, I appreciate that Singapore's limitations will always mean that we cannot compete with the low cost base of China or India and, hence, are at risk of more hollowing out. While the policy of moving up the value chain and promoting entrepreneurial start-ups that could become the next Creative Technology is, I believe, correct. SMEs are also our constituents. They do have a role to play in the economy and should not be left to struggle on their own.

I would thus like to echo the calls of the SMEs and urge the Government to undertake a comprehensive review of all Government administered charges and levies and reduce them where possible, so that operating costs could be kept as low as possible.

Whilst I have no quarrel with the view held by the Senior Minister of State for Trade and Industry, Mr Tharman Shanmugaratnam, that the lasting solution for economic competitiveness is not lower costs, but stronger capabilities, streamlining and reducing costs, where possible, would clearly allow the ship to be run more tightly, and thus making it more profitable without losing its seaworthiness.

There should also be a thorough review of all Government rules and regulations which affect SMEs with a view to rationalising these rules and regulations to remove any barriers to doing business. Many businessmen have expressed frustration over the labyrinth of rules and regulations they must negotiate. More recently, for instance, Mr Simon Lim, a Director at Wong San's pub in Mohamed Sultan Road was quoted in the press as saying that setting up a pub could involve "onerous" applications to at least seven separate Government agencies!

Also, I support some of the ERC's recommendations on taxes and incentives that would help SMEs. These include the broadening of the Technopreneur Investment Incentive to an Entrepreneur Investment Incentive to be made available to a wider group of entrepreneurs, and not just the high-tech sector.

My third concern relates to rationalising the role of GLCs. Again, there has been considerable debate about the role of GLCs in Singapore's economic development, and their "crowding out" effects. Sir, it is recognised that GLCs, such as SIA and PSA, have played critical roles in the economic development of Singapore. Indeed, I have no doubt that GLCs will continue to play important roles in the economy, specifically in areas where the private sector does not have the resources or the will to enter.

Sir, I submit that, important as GLCs have been in the past, the time has come for them to re-look at their own backyards. Recapping a now familiar criticism, an unidentified businessman was quoted in the Straits Times, 4th May 2002, that there is a perception among many, even till now, that GLCs have intruded into every profitable business there is, often at the expense of the private sector. Sometimes, the companies at risk are the SMEs who are, at times, aggrieved by the zeal of GLCs in their quest for higher EVAs.

The working out of a charter for Temasek Holdings to spell out its mission and responsibilities, and make it clear how the Government sees the role of the Temasek stable of companies in the Singapore economy is therefore timely and welcomed. It is also heartening to note that the Minister for Finance has categorically stated that the Government will divest or dilute its shareholdings in a controlled manner in GLCs that are no longer relevant to the Government or Temasek's objectives.

In this respect, I am pleased to note that the ERC sub-committee headed by the Minister of State for Trade and Industry and Foreign Affairs, Mr Raymond Lim, is working out a set of guiding principles for Government's involvement in business. This is to ensure that private sector initiative will not be stifled by the pervasive role of GLCs with deep pockets and abundance of scholarly talent, or even statutory boards offering services to the public that are already being offered by private entities. Instead, GLCs could facilitate the internationalisation of SMEs by working jointly with them on overseas projects.

Sir, I hope that clarifying the role of GLCs would help define business areas where GLCs could contribute strategically to the development of the economy without treading into areas where the private sector is fully capable of handling.

Sir, my third concern relates to helping stragglers cope. Even as the Government embarks in earnest to put in place changes that will help Singapore survive in an increasingly competitive and hostile environment, there are many in the marathon race that are straggling behind. These Singaporeans are bewildered and fearful, even feeling a sense of hopelessness with the sea change that is taking place. Some, particularly the above 40s, who have found themselves unemployed due to restructuring exercises are frustrated. What use is a reduction in income tax as they are now unable to earn any income?

On the other hand, those who remain employed are now worried about how any change in the CPF system would affect them. Many are also feeling indignant that the proposal to cut employer's CPF contribution for those above 40 - supposedly the prime years of a person's working life - is an indictment of their economic worth. Some are also concerned that they may become redundant soon and lose their jobs. I therefore would like to urge the Government to continue to be sensitive to the many Singaporeans, including professionals and other white-collar workers, who may feel left behind and hopeless as a result of the many changes that are being implemented or considered.

I am relieved, for instance, that the Minister for Finance has taken pains to mention in his Budget Statement that the issues related to the CPF contribution for older workers and allocation amongst the different uses are recognised to be complex and sensitive. He has assured Singaporeans that any change will be done very carefully, after full consultations and without causing disruptions either to CPF members or the property market.

Sir, I would therefore like to urge the Government to commit sufficient resources to consult and educate the public and carefully consider the possible impact on individuals and the economy before slaughtering any scared cow. The Government must avoid the temptation of finding "quick fixes" for problems which touch on the very fabric of society, as just like surgery, a botched operation could, instead of curing the sickness, cause even more harm.

Before I conclude, I would also like to join the choruses of my female parliamentarians here regarding the medical benefit for female civil servants. Sir, I must profess and say that I have a vested interest because if you are a male MP, you are entitled to medical benefits for your dependants.

Some hon. Members: No more!

Dr Amy Khor Lean Suan: No more. I am sorry. Then I do not have a vested interest. I am pleading for the female civil servants whom I think deserve our plea. In addition to the fact that they work full time and work as hard as their male counterparts, they also have to take on many other roles as a wife and as a mother in many instances. So I would also like to join the plea of my female parliamentarians that the reasons for not giving medical benefit to female civil servants are getting murkier.

Budget 2002 spells a brave new vision for the future Singapore economy and takes the first few steps forward. The marathon, or more accurately the "ironman race", has also just begun. There is still a long distance to cover and many obstacles to overcome. The Government has clearly shown its resolve and set the tone for change, including the willingness to slaughter what were previously thought as scared cows in the tax system, such as the Group Tax Relief. No doubt, more scared cows may have to be slaughtered, whilst some others may have to be given a strong dose of medicine when the ERC and the Remaking Singapore Committee submit their recommendations.

Indeed, to restructure Singapore, so that it is able to compete effectively in the major league, truly requires a mindset change and cooperation of all players including businesses, Government and society. Many other issues have to be grappled with and carefully considered. These include CPF issues, portable medical and retrenchment benefits, dual citizenship and changing attitudes about success and education. The task to remake Singapore thus has only just begun.

On this note, Sir, I support the Budget.

Dr Chong Weng Chiew (Tanjong Pagar): Mr Deputy Speaker, Sir, thank you for allowing me to speak in this debate on the Budget Statement. After a series of speeches by my three female colleagues, I hope the House will welcome a male voice. My speech would not be long. I will take about 10 minutes.

The gist of my good friend and fellow parliamentary colleague, Mr Arthur Fong's speech is that, in a new world, we are living with new and sometimes tougher challenges. Hence, we need a newer and stronger plane to fly us through the turbulence we are experiencing now and, more importantly, to last the longer journey ahead. Mr Fong's speech is a direct reference to the title of Finance Minister's Budget Speech "A Budget for a Different World". This Budget is an aberration in more ways than one. It is indeed a different world we are living in. For starters, we are experiencing a hitherto high unemployment. The experts in this field called this structural unemployment. But, Sir, call it by any other name, to the tens of thousands of unemployed, for months on end now, it is just as painful.

I have two points I would like to highlight with regard to this Budget. Firstly, the changes to our tax structure introduced in this Budget. When I was in university, I read with great interest that Singapore's brand of politics can be best described as "democratic socialism". Hence, whenever I discuss Singapore's success with foreign counterparts, I feel very proud to be a Singaporean. I am very proud to say that the PAP Government had benefited the whole population. Our people's lives had gotten richer over the years.

Sir, our Government's policies had always been crafted to benefit the people on a bottom up the social strata approach. For instance, we allocated a huge amount of resources to the building of public housing and the success of HDB had ensured 90% of Singaporeans having a roof over their heads. We build schools with universal access to allow all our citizens, regardless of race, language, religion and social class, the benefits of education.

Our system of rewards is based on meritocracy and it does not matter who your father or mother is. It matters equally less what race and social class you belong to. For that, Sir, I am very proud to be a Singaporean. And because I am proud to be a Singaporean and being also a Member of Parliament, I feel that I would not be doing my duty if I do not echo the concerns of my fellow citizens.

Sir, some wise alecks have labelled this Budget as a "Reverse Robin Hood". This view, unfortunately, is reverberating in many quarters of Singapore. They refer to the changes in the tax structure. In particular, many are of the opinion that lowering personal income tax and corporate tax will benefit only a small pool of the population. Since about 70% of Singaporeans do not pay personal income tax, the reduction in personal income tax does not benefit them. The increase in GST, notwithstanding the offset package, they argue, will hit them directly. The GST is indirect in nature and is consumption based; it is the 70% who would be taxed most. Hence, the wise alecks argue that the shortfall in tax revenue collected as a result of the reduction of personal income tax amounting to $1.3 billion is net off with the amount of $1.32 billion collected from GST. Is this really reverse Robin Hood? Is this really the Government taking from the poor and, in the process, benefiting the rich only and, in the midst of it, widening the income gap, as mentioned earlier on by my parliamentary colleague, Ms Irene Ng? If this is so, we have shifted our focus in our policy. If not, I rather believe that we have not. How did this perception creep up, and is germinating?

Sir, let me state here that I do not fully agree with the views represented by the general public. The perception however is very real on the ground. Do we put our heads above the cloud level ignoring the rumblings on the ground, stubbornly believing in the superiority of our views? I feel the changes introduced are significantly profound. The shift from direct to indirect taxation calls for greater individual responsibility. I feel that this is a fundamental change and the citizenry should be given more time to prepare themselves. As a doctor, I have come across enough cases to come to the conclusion that individual responsibility is not very reliable. Many times, I have made the correct diagnosis and prescribed the right medicine for the full recovery of my patients. Yet, I see many repeat cases simply because they do not take their medicine. The increase reliance on consumption-based tax system might be a step in the right direction. Many feel that this is a major change, yet there is not enough consultation and deliberation. Herein, Sir, I feel lies the problem. Our population is getting more educated and informed. They would like to be informed of big changes, preferably well beforehand.

My second point is the objective to allow me to quote Finance Minister Lee Hsien Loong, "bring to Singapore the economic activities that will provide Singaporeans with jobs". Sir, I have no quarrels with that stated objective, except the point of using lower corporate and personal income tax to attract foreign direct investment to Singapore. I feel that the concomitant reduction of corporate tax and the increase in GST have, in total, a negative bias. The attractiveness to foreign companies of the reduction in corporate tax is very much negated by the increase in GST. I am not a businessman, but I do not think you need to be a savvy businessman to work this out. When a company invests in Singapore, the reduction in corporate tax is good to them only if they are profitable. But when a foreign company sets up shop in Singapore, they pay the GST upfront, even when they are still starting to set up the shop. Moreover, they might not have benefited from the reduction in corporate tax if their business is not profitable, while they still have to pay indirect tax.

Sir, I am highlighting these feedback so that we may have, to quote Mr Arthur Fong again, a better plane with a stronger jet engine to take us higher and faster.

With that, I support the Budget.

The Senior Minister of State, Prime Minister's Office (Mr Matthias Yao Chih): Mr Deputy Speaker, Sir, I support the motion.

During the 1960s, a Dutch bus company wanted to find a more scientific way of recruiting bus drivers. It commissioned a study on what makes a bus driver a good driver. At first, most people thought that the key trait should be quick reaction and sharp reflexes. Well, that was not so. As it turned out, the study showed that the best bus drivers were the ones who could anticipate the road conditions early and adjust their driving well before they entered the curves or the bumpy stretches on the road. That makes a lot of sense. A bus driver is not a racing car driver. If he drives the bus like a Formula One car, the passengers will have a scary and sometimes disastrous ride. A good bus driver is one who brings his passengers speedily but safely on their journey, while giving them as smooth a ride as possible.

In managing the economy, the Government must drive it like a bus, not like a racing car. That means anticipating the problems that may come well in advance, and making small adjustments before the problems hit us so that they do not become a crisis. This Budget is one such move. It anticipates the tough economic competition that lies ahead.

In the past, investors would set up companies where the markets were. This was because transport was expensive and communication was slow. The businessmen and the factories had to be close to where the buyers were, to lower the cost of delivery and shorten the reaction time to changing market conditions. Investments had to be spread over many countries to be close to the customers in every region. Singapore benefited by being the gateway into South East Asia.

Today, transport is cheap and communication is fast. It does not cost much more to ship an item 5,000 km than 500 km. Businessmen can be in touch with the developments in any major market by cable television and Internet even as the events unfold. They can give instructions by e-mail and telephone direct to the recipients almost anywhere in the world in an instant. Investors no longer need to spread out their plants and offices to be close to their markets. They are more concerned over where they can get the best value for their dollar. And they can concentrate their investments in a few locations around the world to derive the highest benefit.

Furthermore, there are many more new places that are attractive for them to invest in. The end of the Cold War opened up the whole of Eastern Europe and the ex-Soviet Union republics to Western investment. Ireland adopted pro-investment policies and made its economy attractive. Mexico joined NAFTA and became an important supplier to the US market. China entered the WTO and will be the focus of investor attention for many years to come.

The competition for investments is no longer regional, but global. It is so much keener than just 15 years ago. The world does not, and will not, stay still for us. To attract investments, we must watch what others are doing and take the necessary steps to stay ahead.

The tax changes are an important step in the right direction. But in our discussions with union leaders in NTUC, one question stands out and this is the same as the one raised by Dr Chong Weng Chiew a moment ago. This Government has always been a Robin Hood government, ie, it takes from the rich and gives to the poor. So, why is it that this time the Government is taking from the poor by raising GST and giving to the rich by lowering their income tax?

Sir, the Government is taking nothing from the poor. The GST is fully offset for lower income Singaporeans for 5 years or longer, by which time the economy should have recovered sufficiently for wages to rise again. But, more importantly, if Robin Hood wants to rob the rich, the rich must be there for him to rob. I regret to report, Sir, Robin Hood cannot rob the Sheriff of Nottingham anymore. The Sheriff has relocated to Hong Kong because of the more conducive environment there. And I heard that he is thinking seriously about moving on to China next year!

I am sure that this Government will always be a Robin Hood at heart. But to be always able to take something from the high-income individuals and companies to give to the lower-income, they must want to remain here to work and to do business in the first place. We must do what we can to encourage them to come here and stay here, so that we can collect a little bit of income tax from them and, more importantly, so that they can create good jobs for us. The tax changes will be effective in achieving this.

Recently, the Economist Intelligence Unit rated Singapore to have the best business environment in Asia, overtaking Hong Kong for the first time, and the tax changes were cited as a key factor. Singaporeans should view the new tax structure positively. It will help our economy to grow in the long run.

Another change that is being discussed is the CPF system. Sir, the public discussions are getting Singaporeans worried. They wonder how much of the contributions will be cut, and what new restrictions will be put in place.

I urge Singaporeans to take a calm approach to this discussion. The time has come for us to take a re-look at the CPF system. As the population ages and as we live longer, our retirement income will become an important issue. The projections suggest that at current rates, many Singaporeans will not have enough savings to retire on. This needs to be corrected before it is too late. The question is: what should we do? In making the review, I suggest that we observe four working rules.

First, focus firmly on the fundamental objectives of CPF savings, which are to provide for retirement income, healthcare and housing. We need to make adequate provisions for each of these needs and find the right balance of allocation among them. Everything else should be secondary. We should not eye CPF funds for other uses. We should not use CPF as a macro-economic instrument to influence the money supply or disposable income. We should make a firm commitment never to dilute its basic aims.

Second, workers should have enough CPF savings but they must not be priced out of a job because of CPF. Because of our seniority-based wage system, employers prefer to hire younger workers compared to older ones. Since the Asian financial crisis in 1998, we have seen many instances of older workers not being able to secure another job after retrenchment. If the CPF system needs to be adjusted to help older workers find and keep jobs, we should study it seriously. Remember that without a job, there is no CPF to talk about.

Third, while we may suggest ideal new systems to replace the current one, many Singaporeans are already locked in by the present system and practices. Knowing what the ideal system should be and changing the present system to fit the proposals are two different things. Workers use CPF to pay for their housing and medical care. A complete overhaul of the system, or any drastic changes to the rules, will cause hardship to ordinary workers and their families. While we should range freely to capture all good ideas, we must be extremely careful in choosing what to implement and how to do it. Like a good bus driver, we must not turn a corner too sharply as the passengers will surely be flung off their seats if we do so.

Fourth, give as much time as possible for Singaporeans to make the adjustments. CPF is a huge subject. Every worker, every family in Singapore is affected. We must help everyone understand and prepare for the changes. The Government gave almost 10 years between the original proposal for GST and its implementation. The Medisave system was also given much time for digestion before implementation. I ask the Government to make haste slowly on the CPF.

Sir, this Budget kicks off many more changes to our economic strategies and structures. The Government is open in finding new ideas and proposals. I hope Singaporeans will take part in these discussions with a positive spirit. The outcome will be a set of changes that will put our economy on a firmer footing to face our challenges ahead.

I support the motion.

The Minister of State for National Development (Dr Vivian Balakrishnan): Mr Deputy Speaker, Sir, I rise on a point of clarification. Too many people have talked about skinning cats in this House and I want to remind everyone here that we are a civilized people. We do not indulge in barbaric acts like that. In fact, the Bill to amend the Animals and Birds Act, which had its First Reading a month ago, provides for increasing the fine and imprisonment for people who indulge in cruelty to animals. So I would advise people who persist in such barbaric acts to keep away from Singapore.

Mr Yeo Guat Kwang (Aljunied): (In Mandarin): Mr Deputy Speaker, Sir, since the delivery of the Budget Speech by the Deputy Prime Minister and Finance Minister Lee Hsien Loong, many discussion sessions have been conducted, and I have participated in a number of them. From these discussions, a few issues kept popping up. Let me reflect five of these issues concerned.

In the Budget Statement, DPM Lee said our highest priority is to create good jobs for Singaporeans. To do this we must continue to attract companies and talent to come to Singapore and help our economy to grow. This statement is very reassuring to the workers. Many workers and union leaders have asked how the ordinary workers will benefit from the tax changes. The link between tax cuts and job creation cannot be seen immediately, but we all know that the link is there. Tax cuts attract investments and investments create jobs. This is the message that union leaders shall continue to convey to our workers. Some people are sceptical about how the tax cuts work. Let us look at a concrete example. Within two weeks of the announcement by the Economic Review Committee recommending cuts in corporate tax and personal income tax, the Economist Intelligence Unit (EIU) published a survey that Singapore had overtaken Hong Kong as the economy offering the best business environment in Asia. The EIU said that the proposal to cut taxes was the key reason why Singapore had topped the survey. We are on the right track.

The newspaper reported last week that our biomedical hub will generate at least 4,000 jobs. That is certainly encouraging news but there are some questions asked by our workers. Apart from this, with the new tax regime, how many jobs can we create down the road? What jobs are these and in what sectors? How soon can we expect these jobs to come? We hope the Government can give us more good news. Can the Government give us some projections? We know that projections are projections. They are tentative. But, with more accurate projections we will able to guide and encourage people to upgrade their skills in the relevant fields, and have better chances of getting better jobs in the new economy.

Reducing corporate tax does not mean reducing corporate responsibility. Mr Deputy Speaker, Sir, the reduction in corporate tax will certainly be welcomed by the business community. It will alleviate the tax burden on the companies and improve their bottom-line. As a labour MP I urge the companies to take advantage of the tax changes by taking more risks and seeking new markets so that their business can grow and more jobs can be created for workers.

They should also realise that reduction in corporate tax does not mean reduction in corporate responsibility. What are these responsibilities? Let me broadly highlight three messages to the business. First, treat workers as stakeholders. From time to time we hear of horror stories - employers retrenching workers without compensation, retrenchments disguised as dismissals or terminations to save on retrenchment benefits. Such cases, if proven to be true, must be deplored. Companies have an obligation to their shareholders to improve on their returns. But they must acknowledge that there are other stakeholders too, and these include the workers too. With improved earnings resulting from lower corporate tax, I urge companies to invest more on workers' training and spend more to enhance their welfare. Do not forget that all members of the staff are entitled to a share in the fruit of the company's success.

Secondly, responsibility towards customers. I have been involved with CASE for two years and I have personally come across many cases of business malpractice. A common complaint is a lack of transparency. Consumers are often not well-informed of price change or they are caught by the fine print. I believe that the business approach can be a win-win situation. There can be improvements to their earnings without compromising the interest of their customers. In today's newspapers, it is reported that the DBS Bank is making their credit card terms reader-friendly. That is a good example. Other companies should do likewise.

Thirdly, responsibility towards the community. A company cannot be completely isolated from the public and the community at large. Perhaps, companies that are performing well can channel part of their improved earnings to community and charitable projects. Such an act of charity will send a strong signal that it is sharing its successes with the community and that it is a good corporate citizen.

Mr Deputy Speaker, Sir, the Government has introduced a comprehensive package to offset the impact of the proposed GST increase. In particular, I am glad that DPM Lee has given a strong reassurance that low-income households will not be worse off. I want to highlight three GST-related issues.

First, I urge the Government to monitor the impact of the GST when it is implemented next year to make sure that it will not lead to inflation. Secondly, I commend the Government for making much efforts to explain the reasons of the tax changes. I am impressed by three things: the brochures in different languages to reach out to all Singaporeans, the use of cartoons to convey the key messages and the on-line calculator which Singaporeans can use to compute how much benefit they can get from the offset package.

I hope that the Government can do more to dispel common misconceptions such as:

(a) GST is compounded and the end-customer pays more than 5%.

(b) Increased GST will discourage consumers from spending and the retail sector will be hurt. More Singaporeans will shop in neighbouring countries and our neighbours will benefit.

On our part, as a labour movement, the NTUC News published an article last week using the example of a shirt to illustrate that GST is not compounded and would not lead to price increase. The Government can consider doing likewise.

Thirdly, are there any particular group of people who are not adequately covered by the GST offset package? All along, the Government has been using examples of typical families to illustrate the extent of GST package. How about those single-parent families or retirees who are living alone? Could we do more to help them?

Mr Deputy Speaker, Sir, in the Budget speech, DPM Lee said that Government expenditure in the economic development sector would continue to emphasise on workers' training and upgrading. He stressed that the Government would not stint in its support for workers to upgrade themselves. This is very important. Our efforts to train workers must keep pace with economic restructuring. It is time for our training drive to go into turbo charge. We have all along relied on incentives and subsidies. But if these incentives cannot achieve the desired result, should we not push workers and employers harder? Workers are increasingly seeing the importance of training but can we do more to get employers to come on board? Can Government identify certain specific industries and areas to channel our training efforts? We know generally where the growth areas are, such as biomedical and ship building. If more specific industries and numbers can be provided, we will have clearer objectives to move towards.

Mr Deputy Speaker, Sir, the world has changed and changed rapidly. International competition is getting more intense. The future challenges are getting more severe and the current times are unsettling. What are the main causes of uncertainty? I can identify three sources of discomfort. The first source is employment-related issues. There are discussions on employability of older workers and changes in the CPF can be disenchanting.

The second source of worry is the uncertain external environment, particularly the competition we face from our neighbours and the unresolved issues we have with them.

The third source is the likelihood of lifestyle changes that we may have to make. Can we continue to maintain our high standard of living as we used to enjoy? In such an uncertain environment, it is important for the Government to give our people a clear reassurance, just like what DPM Lee has done when he gave the assurances that the Government's top priority is to create jobs and the low-income families will not be worse off after the GST increase. We have to continue to reassure them.

Mr Deputy Speaker, Sir, after MediaCorp actor, Pierre Png gave part of his liver to Andrea De Cruz, I was told that many wives and girlfriends had been asking their partners whether they would do the same thing if the same tragedy happens to them. The New Paper reported yesterday that it asked 50 single Singaporeans whether they would donate their organs to their partners and 33 said, "Yes!". Unmarried partners may be able to say no, but for husbands, there is only one correct answer to your wives - "Yes!". This answer alone is a reassurance of love for your better half, and I am sure that it is something that many wives would want to hear.

Although our Government does not have any liver to donate, I am sure it has a big caring heart. The Government should reaffirm and say to its citizens that "we have the interest of all Singaporeans at heart and we will continue to enhance the social safety net". Such a statement and commitment would be a reassurance that Government cares and no matter how many times it has been said, no matter how difficult our circumstances, we will make sure that our heart is always warm, and the people will not be tired of hearing it. I hope that the Government will make such assurance of love, especially when we have to face the challenges ahead, we must have a government with the people's benefits at heart.

Assoc. Prof. Chin Tet Yung (Sembawang): Mr Deputy Speaker, Sir, to restructure the economy, Singapore obviously needs to have a more equitable direct and indirect taxation system.

This Budget goes someway to address this issue and the DPM and Minister for Finance has been, and should be applauded for providing a comprehensive analysis of how the tax structure should be revised. I generally agree with the Budget. I only have a few points to make, mainly from feedback received, I realise that Members before me have raised some of the points already, so I shall attempt to be brief.

Firstly, the comment is that: is this the right time to introduce the restructuring? Some see the restructuring of course as leading to a more equitable system. However, for the majority of Singaporeans who do not pay income tax, they only see the increase in indirect taxes as making them even poorer and the reduction in direct taxes as benefiting only the better off. Must the changes therefore come at a time when almost everyone is facing economic problems such as unemployment, retrenchment, pay reduction or pay freezes?

Secondly, following from that, has the Budget adequately addressed the high cost for individuals and businesses? For the individual, the tax burden will increase with the increase of GST next year. The increase in GST will definitely bring higher bills for essentials, such as food, utilities and transport. We can only hope that the increase in GST will not result also in a reduction in consumption, which will always affect our economic recovery.

I am particularly worried for those who are still unemployed. As it is, I believe all in this House have seen the hardship faced by many jobless. Even at today's prices - mountains of bills to pay - many have had their power supply cut off at one time or another, many could not afford to pay for even the basic necessities, and there seems to be no end in sight.

Many families have been affected. So the question is: will the offset package be enough? All in all, is the Minister confident that the offset for GST has taken into account, for example, the potential increases that are likely to be brought about by increases in fuel cost? Can we expect more off-Budget measures to tackle the problems that the increase in consumption taxes would bring? The Minister has mentioned that where the offsets are not enough to cover the increase in GST, such families could appeal to the CCCs. Sir, I am afraid that if the current trend in unemployment continues, the CCCs will be snowed under with this burden and I hope that sufficient resources for this purpose will come from the Government.

I am also disappointed that while we recognise that in Singapore, we have an increasing number of older workers, we seem not to have provided sufficient incentives to encourage companies to retain or re-employ them. Even small industries, such as the garment industry, are outsourcing their work to neighbouring countries where labour is much cheaper. There is no incentive for them to employ workers here even when such workers are available, ready and willing. Many of them have come to tell us, "give us some work and we will prove ourselves". Should we not consider some fiscal incentives to encourage companies to employ Singaporean workers even in those non high-tech industries so as to absorb this growing group of workers who are in their mid-40s or 50s? We need fiscal measures to encourage companies to employ these older workers, preferably without adverse consequences to their CPF. I believe that the over-40s still need their CPF, even though they may not have as much to pay off as the younger ones, but they would still need to provide for their retirement.

Next, is the Budget helpful to small businesses? Another growing perception is that this Budget did not provide much good news for the small businessmen who have been facing the twin mishaps of poor business and increasing cost. There is every probability that with fuel prices going up, business cost will increase. The small businesses in the sectors, such as manufacturing, retailing or non-financial services, see no great tangible benefits from this Budget. Many of the companies are striving to stay afloat, so a cut in corporate taxation, as many of my colleagues had earlier mentioned, is irrelevant because they have no profits to pay tax on.

Further, they face increasing competition with neighbouring countries and if costs in Singapore rise all the time, the degree of competitiveness must correspondingly reduce. One example I have been told about is that freight costs, for instance, have already risen by 10% recently, and GST has not been increased yet.

As for those in the retail business, we have also been telling Singaporeans to shop in Singapore and support them. But, in reality, can we blame Singaporeans from going across the Causeway if the Singapore dollar stretches much further than it does here? So, all in all, small businesses, particularly those in the retail trade, see that the Budget does not really help them that much.

Finally, from the consumers' point of view and from the HDB residents' point of view, many have made the comment that this Budget is a give-and-take budget. What is given by one hand is taken away by the other. And the illustration that we have of this is the way in which we have been adjusting taxes on cars. True, of course, there are reductions in the ARF, road taxes and other direct taxes, but these reductions are unlikely to be felt, with the increase in petrol prices, COE, ERP and HDB car park fees.

As we know, car owners are already paying substantial taxes to buy a car and maintain them. And the taxes that are collected amount to billions of dollars. Also, if we just look at the additional 5,000 COEs to be issued, and if each COE is worth about $30,000, it would generate about $150 million. One suggestion is that Government should use this revenue to offset some of these increases in the building and maintenance of car parks until such time as the economy picks up. So, will the Government consider postponing the rise in car park charges till a later date when the economy is in a more robust condition?

In conclusion, Sir, I have to confess that I withdrew my wish list after listening to the one proposed by the hon. Member for Ang Mo Kio, Mr Inderjit Singh. My wishes pale by comparison, and I do not think that I can come up with the bold ones that he had proposed. But in listening to the female colleagues of this House, I cannot but find myself compelled to support the call to review medical benefits for female civil servants. And I hope they will not think it presumptuous of me to do so and would welcome support, I am sure, from their male counterparts as well.

With that in mind, Sir, may I say that although this Budget presented so well by the DPM and Minister for Finance should also perhaps pay attention to those individuals and businessmen that remain mired in the throes of the recession. Let us hope that these concerns will be addressed at the earliest opportunity should the need arise.

I support the Budget, Sir.

Ms Indranee Rajah (Tanjong Pagar): Thank you, Mr Deputy Speaker, for allowing me to participate in this debate.

I would like to say, at the outset, that I thought that the presentation of the Budget by the Finance Minister was an extremely good presentation, and that it is a Budget which is deserving of praise. I do not think it is necessary for me to highlight all the good points about it, because so many of my colleagues in this Chamber have done so before me. So, what I intend to do is just to raise three areas in which I have specific comments.

The first is, of course, my concern that it does not sufficiently address the needs of the SMEs. For that, I had prepared a segment, but here I want to thank Mr Inderjit Singh for saying some of the things which I had considered and many more things which I had not, and I would like to endorse what he has said and fully support that.

The second point is on the GST offset. I understand the need for the offset. Government financial policy is not like Newton's law of gravity. It is not a situation where what goes up must come down. When you are trying to balance a budget, clearly if something comes down, something else must go up, and I think we fully understand the need for it. The only thing though about the GST offset is that it is, in its very nature, a short-term solution. It does not address the problem which is really the employability of older workers, especially those who have a lower level of education. I have heard it said in this House that, ultimately, we hope that with the restructuring and with the financial and fiscal incentives, in due course, the economy will recover and there will be jobs. This is true, but the way we are trying to restructure our economy is to attract the high value-added industries. And for the older workers with lower levels of education, it will still be extremely difficult for them to find employment. So, as far as this segment of people is concerned, the GST offset is a short-term solution but, ultimately, we have to find a way to make them employable and keep them employable. In that respect, I was encouraged somewhat by hearing the Minister for Manpower talk about the skills upgrading programme and the amount of money that we spend on that. This is something which I think needs to be taken further.

The second thing, of course, is to change the employers' mindsets. I am not sure that subsidies alone will do that, but it is a mindset change that employers have to go through.

Thirdly, to identify certain types of industries where these older workers would be more suitable to participate in. But, clearly, we have to do something in that regard. That was my second point on GST offset.

My third point is on the falling birth rates. Financial policy is wonderful if we are planning to build the economy, we are planning for the future. Of course, if we have falling birth rates, there may not be many Singaporeans left by that time to enjoy the fruits of what we are planning now.

I had noticed that in the Budget Statement, no specific things were put in the Budget to address this concern. The Prime Minister, at the opening of Parliament, had very kindly responded to my plea for housing for singles and, in the course of addressing that, he said that the greater problem was the falling birth rates.

Our birth rate in 1988 was 1.96. It has been on the downward trend since then. In 1999, it was 1.48; in 2000, it was 1.59; and in 2001, it was an all-time low of 1.42. And we have to ask ourselves why this is the case. Partly, it is a personal decision. But, partly, I think it is also a result of the somewhat incoherent policy that we have had in trying to encourage the birth rates to go up, and I will explain exactly why I say our policy has been incoherent.

There are two groups of people we have to look at when we are looking at falling birth rates. One is the group of people who choose not to get married at all. The second group is those who are married but choose not to have children. And we must never confuse the two groups, because their reasons are quite different.

I will take the second group first, which is married couples. When dealing with married couples and encouraging them to have children, the problem with our policy is that the measures so far have been essentially financial or fiscal. We have treated what is, by its nature, a social problem as if it is an economic one, and that is why we have not been successful. Because Singapore, as a country, is excellent at economic policy. We are very good at fiscal measures. And over the years, we have restructured, managed, boosted, designed, tweaked, pruned our economy using financial and tax incentives. We have pioneer tax status, we have ERP, we have car ownership, and somewhere along the line, we have come to believe that Singaporeans have an almost pavlovian response to cash stimuli. We put a monetary incentive and Singaporeans will react. That is fine when, ultimately, the end objective is profit. They will react in that way. But when the end objective is a social thing like having children, then money has very little to do with it. And if we want to address the problem, we have to ask ourselves what are the things that people actually think about when they decide whether or not to have children.

There are various reasons. One, they look to see whether or not they are ready, because having babies is a heavy responsibility. And, increasingly, we find amongst young couples that they actually want to spend some time with each other first before they actually have children, and that is why they put off the decision to have children. Of course, if they wait too long, they could run into medical problems, but that is another area altogether which I do not intend to touch on.

Secondly, it is whether they can manage their work commitments if they have a child. This is perhaps less so for men who are expected to be the breadwinner. But I think we constantly underestimate the desire of women to actually continue working even if they have children. So we have to take this into account if we want women to have children.

The other thing that they take into account also is time and stress. The pressures and demands of work in Singapore are enormous. This pressure has been exacerbated by the use of information technology. Generally speaking, Singaporeans have very little rest. We cannot escape, because there is SMS, there is e-mail and there are all sorts of things. We just cannot switch off, and work follows us everywhere - back home, to the office, in our car, when we are on holiday, work comes with us. And with all this kind of pressure, people are so busy just trying to live their own lives, let alone think about having children and worry about that additional responsibility. These are the three main factors.

The other thing about our policy regarding financial incentives to have children is that it has a very off-putting effect to Singaporeans. It is off-putting because many of them feel that when we do this, it is as though I give you money, I pop it in and out comes a baby. They are not baby-making machines. It does not work that way. It is not correct to think that financial or fiscal measures will address the problem. So then, what will?

I applied some thought to this. I certainly do not have all the solutions, but there are a couple of ideas which I think may help. One is a more coherent approach towards the issue of maternity leave. There are currently two pieces of legislation on maternity leave. First, there is the Employment Act which provides for two months of maternity leave for employees who are covered by the Act. I have no issue with two months of leave. But when you look at the Employment Act, the provision was enacted at a time when it was a stop-at-two policy. So that allows for paid maternity leave for the first and second child, and it provides for protection against termination of employment during a woman's maternity leave for first and second child only.

Then somewhere along the line, we decided that having a third child will be good. So we have the Children Development Co-Savings Act. What that Act does is that it allows for paid maternity leave for a third child and it imports the provision of the Employment Act. So it provides for protection against termination of employment for the third child. The thing is that the Employment Act does not cover professionals, executives, managerial or confidential staff. That means women professionals, executives and secretaries are excluded. They do not have the protection of paid maternity leave. I know in the market many employers do follow the Employment Act, but it is not compulsory for them to do so for the non-Employment Act group of women workers.

This leads to a very inconsistent situation because for Employment Act women, first and second child, it is protected in the sense that a woman cannot get terminated when she is on paid maternity leave. And for all women under the Children Development Co-Savings Act, they get paid maternity leave. But for women executives, for their first and second child, they are not protected, because legislation does not provide that they have maternity leave there, and certainly not for the fourth, fifth, sixth child. So we have got this very incoherent policy.

The thing about maternity leave is that it is not supposed to be regulating the number of babies one churns out. The thing about maternity leave is that at the end of nine months of carrying a child - mind you, I have no personal experience, but I have it on good authority that it is very tiring - the woman needs some rest, and she needs some time with the child to bond, and that is the purpose of maternity leave. The trouble is that we use paid maternity leave as a means to regulate the number of babies that a woman has, but that misses the purpose altogether. And I think if our target is to encourage more women professionals to have babies, this is an area that needs to be looked at.

The other thing I should mention is that maternity leave should be across the board, not just for first, second, third child, but for any child, and it should also be for unmarried mothers. I know that, as a matter of policy, we do not wish to encourage people to have children outside of marriage. That is true, but mistakes do happen. These things do happen and we cannot ignore it. And if the purpose ultimately at the end of the day is to allow a mother some time to rest, allow her some time with her child, then I think we should have maternity leave for this group of people too. I do not think if we had paid maternity leave for unmarried mothers, that it would suddenly result in a rash of children born outside of wedlock. Because I think the societal pressures are still strong enough that people would prefer to have children within marriage and not outside. So that is the first thing that would help.

The second thing is greater childcare facilities. What is the one thing that will make a woman want to have more children? If she has a child and she wants to work, the thing that would really help is her feeling that the child is looked after while she is at work. There are many mothers who choose to give up their jobs. That is not a problem. If they are happy to do that, that is okay. They stay at home and look after their children. But like I said, we have under-estimated the desire of many Singapore women to want to work. If we force them to choose between having a child and maintaining a career, they may very well choose the latter, and that results in a falling birth rate. So something that would help them is better childcare facilities. And knowing Singapore parents, it is not just childcare facilities where they can just drop their children, and that is it. It would have to be childcare facilities that are good in terms of the people who look after the children, the kind of not only teaching but care that they can give their children, and also the age at which they look after the children. Because now, most childcare centres would be happy to take them in at two years old, some may be at 18 months, but certainly not many that I know of that would take them in at perhaps six months. In the Scandinavian countries, I think they do take them on from six months onwards. So if we want to increase the birth rate, that is something that has to be looked at.

That is the first category of people - the married couples.

Then there is the group of singles who do not want to get married. And we have to ask ourselves why this is the case. At the Opening of Parliament, in his speech, the Prime Minister identified the two groups where there seem to be the largest problem. For single men, it was those that have secondary school level education and below. And for single women, the largest proportion of the unmarried women was the graduates. What this suggests is that non-graduate women are marrying either graduate men or non-graduate men. So they have a larger pool to select from. And for the graduate men, it also suggests that they are marrying either graduate women or non-graduate women. So they also have a larger pool to select from. And that is why we have the two ends, which is the non-graduate men with secondary education and below and, of course, at the other end of the spectrum, graduate women.

Again, the reasons why these two groups tend to remain single are different. For the men in the lower education group, I think it is more difficult for them to marry someone with a much higher education qualification. And if the women with the same or similar education qualification with them are marrying upwards, so to speak, that leaves them with little choice but to look outwards and perhaps to non-Singapore women. But if they do that, they run smack into the SIR. Because during my meet-the-people sessions, I have many men who come to me to ask for PRs or citizenships for their wives, or they have difficulty getting permission to marry in some cases. I fully understand that we need to be very cautious in terms of immigration policy because we have to be quite careful about where our society is going. But if we do want to look after the needs of this group, then I think we do have to examine the criterion for immigration policy afresh and see whether there is a way in which we can strike some balance so that at least for this group, they will have a certain measure of access, shall we say, to spouses.

For the single women, it is quite different. Although it has been put as the largest group being graduate women, I think the "true" group is actually career women, not so much graduate women, because we can have non-graduate women who are also career women. What has happened, I think, is over the years, there has been a change in gender expectations of one another which has led to this current situation. For the men, they have not really had to change their own roles. Forty years ago, a man was seen as a breadwinner, a protector and a provider, and today he still sees himself in that light. There is absolutely nothing wrong with that. For women, 40 years ago, they may not necessarily have seen themselves as career women. What has happened in the 40 years is that they have actually come a long way. We have education, and because we have a meritocratic system, we have been able to advance in terms of careers.

So a lot of changes have happened in women's life over the last 40 years and their perception of themselves has changed, and the perception of the role that men play has changed as well. For women, they see the men today less as a protector and a provider, although I think many still do. But many see them as a person whom they can look to for their emotional or intellectual needs. By this, what I mean is that in the past, many women would have married for financial security.

Today, because they can actually earn for themselves, this is not the reason to marry anymore. They have the option of not marrying, which means that they do not look for a man for financial security. They look to him and would consider marrying him only if he meets their emotional and intellectual needs. And I am not sure that this problem has been sufficiently identified or realised because the way we treat the problem is one of, "Oh, well, you know, maybe they are not meeting one another enough. Maybe they don't have opportunities for interaction." So I asked a friend of mine, who is single, after the Prime Minister's speech, and I said, "Well, you know, you think it would help if you get to meet more men?" And she looked at me with a slightly incredulous expression and said, "What will I talk to him about?" She obviously had this difficulty. So that is actually the real area of the problem. And if it is something that we want to address, then this is what we should be looking at, not so much of fiscal measures.

The role that SDU and SDS play in helping people to meet, I am sure, is helpful, but it does not actually address the crux of the problem. Just a brief word on the role of SDU and SDS. I am not sure that the public actually appreciates the distinction of one organisation for graduates and another for non-graduates. Because what we are actually doing is sending out a message that there are two classes of society. Singaporeans have been born and bred to believe that we are a meritocratic system and, in many respects, we are equal and there are equal opportunities for all. Certainly, there are many graduate women I know of who do not appreciate the distinction, and they automatically switch off when they receive something from SDU. This is not to denigrate the efforts of SDU whose officers work extremely hard and are very diligent. I know because when I became an MP, I received a packet on dating tips which I have not yet made use of. But they do work very hard. But they are fighting against something which is not within their control. So if we do wish to address the problem, I think maybe this distinction between graduates and non-graduates should be done away with. And we should see Singaporeans as a whole, as equal people.

With that, Sir, I support the motion.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): (In Mandarin): Mr Deputy Speaker, Sir, this is a tax reform Budget. The Government intends to offset the reduction in direct tax revenue by increasing the Goods and Services Tax (GST). The reason for reducing the corporate tax is to attract more investments, retain the present investments and create more job opportunities for our people. At the same time, we are reducing the personal income tax to attract more foreign talents to come to Singapore and to encourage Singaporeans to be more enterprising. If this policy can attain the above objectives, then there is no reason why we should not support it.

However, having heard the Budget Statement by the Deputy Prime Minister and Finance Minister, I do have a number of doubts. We reduce the corporate tax by 2.5% and then raise the GST by 2%. This would only benefit those companies which are making substantial amount of profits. If you have a product for sale, take away the production cost, the overheads and other costs, your profit margin is 45% and above, you will benefit from this scheme. If the profit margin is less than 45%, the company would be worse off. Three years later, when the corporate tax is further reduced to 20%, you will benefit if your profit margin is 35% and above.

Unlike the MNCs, most, if not all, small and medium enterprises (SMEs) in Singapore do not have a profit margin as high as 35%, not to mention 45%. So with this new tax regime, the business cost would increase rather than decrease for the SMEs. These measures would not benefit them and it would, in fact, be detrimental to their operation. I do not know what measures we have to help these companies which would end up worse off because of these tax adjustments.

At present, most Singaporeans are not paying any income tax since the major adjustment when the 3% GST was implemented in 1994. That being the case, this present round of tax reduction does not benefit them at all. On the other hand, they have to pay 2% more in GST, the tax burden would be heavier for them. Although we do have an offset package, it is going to last only five years or, at most, 10 years. What is going to happen after that? Like it or not, the poor people would still have to pay 5% GST. As a result, the lower income people will have a heavier tax burden, and this burden is added to them because they have to make up for the reduction in tax revenue resulting from the tax cut for the high income earners and the corporate tax. In the long run, this is not being fair to the lower income people. As far as this issue is concerned, in five or 10 years' time, it will be a real problem for our people. I think the Government should take note of this.

On the other hand, we know that many people living in the HDB executive flats have a lot of unhappiness over the distribution of the New Singapore Shares. Those who are living in the Executive Condominiums (EC) were conveniently classified as "rich" people. As such, they were deprived of the benefits enjoyed by those living in HDB flats. Under such circumstances, many people living in the Executive Condominiums were very unhappy with this distribution. This time round, when the Economic Restructuring Shares (ERS) are being distributed, the Executive Condominium residents should be very happy because they will be entitled to the same number of shares as the HDB residents. In this aspect, I think we should recognise that the residents in the Executive Condominiums are not really "rich" people as such.

However, on conservancy charges rebate, the E-flat residents again will be excluded from this benefit. I hope that the Finance Minister would listen to the complaints of EC owners. They are not high-income people. In fact, many E-flat residents are earning just as low as other HDB residents. I hope that the Finance Minister would consider this aspect of it and consider giving some of these benefits to the owners of Executive flats to offset the impact of higher GST.

In my speech during the debate on the President's Address, I mentioned that subsidiary companies should be allowed to offset their losses against the profits of the other companies in the group or the main company. This is also one of the means to reduce business cost. I also mentioned about the high business cost due to high transportation cost. I am pleased that both are being provided for in Budget 2002. This will benefit the businesses, and the businesses would be more willing to undertake more high risk ventures and this would help in building up their entrepreneurship.

As for the reduction in the vehicle taxes, I have some views. Every time, when the Government reduces the vehicle taxes like the Additional Registration Fee (ARF) or the import duty, the second-hand car dealers would be hard-hit as the stock of second-hand cars would almost immediately lose its value substantially. The losses can be very severe. For example, a second-hand car dealer has about 20 to 30 cars in hand. If the price of a second-car drops by, say, $2,000, he would have suffered a loss of some $40,000 to $60,000 overnight.

How do we help these people when we implement these measures? How do we help the second-hand car dealers? It would depend on how we are going to decide on the PARF value. If reduction in the PARF values equals to the total reduction in the ARF and import tax, the effect on price of the second-hand cars would be minimised. In this instance, the ARF and import tax are reduced by a total of 20 percentage points of the OMV, when the car is to be scrapped in five years' time, the PARF value will be reduced by 33% of OMV from the original PARF value. In other words, by these new measures, on the surface, it would appear that they would reduce the cost of owning a car. But, in fact, by implementing these new measures, the scrap-value for vehicles will be reduced, and the amount recoverable by the owners will be less. Hence, the net cost in owning a car is higher under the proposed new scheme.

Therefore, the end result of these new measures actually runs contrary to the original intention of making cars more affordable to the people. The effective cost of owning a car is actually higher than the original one. I think the Government should reconsider this PARF adjustment, as it runs contrary to its original intention.

In this Budget, it is mentioned that the civil service and statutory boards should be "lean" and efficient. But when you look at the procedure in some of the Government departments, you will find that some of the procedures are unnecessarily cumbersome. For example, if you want to register a car, you have to go through so many payments before a car can be registered. Let me tell you what are the things you have to do. First of all, you have to pay the import duty, the GST on the import duty, the ARF, the registration fee, and then the road tax, and then another GST. When the car is on the road, you pay petrol tax GST and ERP. There are so many types of charges that you have to pay. Is it really necessary? If the Government wants the Government departments to be lean and efficient, then you should consolidate all these levies into one payment. If the Government wants to be effective, to be lean, it has to simplify all these procedures.

Another point is that we are talking about giving double tax rebates for R&D expenses and for those who are employing foreign companies to conduct R&D for local companies. It is a very good practice. It is something that warrants our support. But we know that in R&D, the scope is very wide. More often than not, it is not just one company doing everything in a R&D project. In the R&D market, there are things like copyright, patent and other intellectual property rights on sale. Companies could speed up their technology by purchasing all these intellectual property rights. It will benefit many companies. So I hope that when a company has to pay for the use of intellectual property or right/licence for manufacture, these expenses would also be entitled to double tax rebates.

Despite all my doubts and reservations, I nevertheless support the motion standing in the name of the Deputy Prime Minister and Finance Minister.

Mr Loh Meng See (Jalan Besar): Mr Deputy Speaker, Sir, this first Budget 2002 presented by DPM and Finance Minister Lee Hsien Loong is significant in responding to the different world we now live in. The proposed strategic changes, in my opinion, are bold, honest and unwavering. The impact will be far-reaching as it would contribute to the well-being of Singaporeans in the next phase of our growth and development. The picture he has painted is now clearer in defining the kind of economy we want to create for Singapore. Sir, this is the kind of leadership that Singapore needs during turbulent times and when we move from one generation to another.

This year's Budget is presented later than the usual end-March Budget in each year. The Budget has the advantage of knowing the results of the year's first quarter economic performance. In fact, the global economic environment is so volatile and uncertain that it makes financial and economic forecasting perilous. There is the dire need for the Government, even after the Budget has been approved by Parliament, to constantly review the progress throughout the year so that timely measures are taken and adjustment made, taking into account any critical and momentous developments that might scuttle the Budget plans for the year. I am thinking about the developments in the Middle East which certainly could be a development that can change the scene in the world. We experienced this last year, Sir, when the Budget was presented as usual in March, yet the Government saw it fit to implement the $2.2 billion package of measures in July to forestall and cushion the effects of the severe deterioration in our economy.

The Government has given the highest priority in creating good jobs for Singapore. Sir, good jobs mean higher value jobs that command good salaries for Singaporeans who have the skills and qualifications to take them. The Singaporean businessmen commonly ask the Government to help bring their cost of operations down so that they can compete against the countries in the region. Unfortunately, there is a limit as to how low we can go in bringing the cost of operations down. Sometimes, I wonder whether our liberal policy to allow the importation of cheap foreign labour has led to our lack of competitiveness in some of our industries today. It is not possible for Singaporean businessmen to want to earn good profits and Singaporean workers to desire and expect higher salaries and yet are unprepared to pay commensurate prices for the goods and services produced and provided for by fellow Singaporeans.

Conversely, we should not unwisely pay generous remuneration to foreign talent just because they are foreign without scrutinising their capacity to contribute and their ability to fit into the local culture and environment. We should not overlook the equally deserving Singaporeans by giving them similar opportunities to make the grade. The cynicism Singaporeans have for foreign talent has been that quite a few have been deemed to be largely unsuccessful in making their mark. Singaporeans have been unconvinced that foreigners have made the vast difference to the performance of Singaporean organisations that employ them. Singaporean corporations can do a better job in succession planning and the development of Singaporean talent as corporate leaders for their organisations. It is sometimes amusing to note of the contrary approach taken by Singaporean corporations that want to employ more foreign talent and the foreign MNCs are satisfied with Singaporeans because they find them to be capable and competent.

Sir, the Singapore market is highly competitive and demanding. In order to succeed, a strong management team supported by a cohesive group of subordinate staff is required. The issue is not talent alone. It has also to do with business knowledge, systems, culture and team effort. The question is not foreign or local talent. It is that in Singapore, we just simply do not have a large enough pool of leadership and executive talent in Singapore with the breadth and depth of experience operating as multinational corporations at the corporate level in the regional and global markets.

Singaporeans now realise that it is no longer a stigma to move from job to job and to change from one business to another. Singaporeans have learnt to seize whatever opportunities available and the need to climb up the value chain both in their careers and businesses. However, we have to be realistic that no matter how hard we try and whatever encouragement we may give, there would only be a small segment of our population who would want to be entrepreneurs. The vast majority would be content to remain as salaried employees. There is no doubt that the nature and tenure of employment will also change. The present unfavourable employment market conditions have affected the attitude and psyche of the average Singaporean who feels insecure and vulnerable. In recent times, we have witnessed graduate executives and professionals losing their jobs arising from mergers and acquisitions, and the organisations needing to adjust to the new business operating environment with the use of information and communications technology and this had added to the gloom and doom. We have to brace ourselves that for a long while yet, a sizable number of Singaporeans will suffer joblessness and have difficulty securing alternative employment with salaries comparable to what they used to earn. For Singaporeans who are currently employed, the way to protect themselves and secure their employability would be to be flexible in accepting work assignments and even accepting downgrading in job roles and be diligent to learn new skills and apply their knowledge as best as they can.

Sir, this Budget did not cover any changes to the current rate of CPF contribution at 20% for employees and 16% for employers for those below 55 years. Singaporeans used to have the total CPF saving rate of 50% and then reduced to 40%, and now adjusted to 36% because of the economic downturn. The Government has all along expounded the long-term policy of 40% in CPF contributions to be adequate in providing for the retirement needs of Singaporeans. Therefore, Singaporeans are especially concerned when there was a suggestion to introduce new age bands for the 40 to 55 years old to lower the employers' wage cost. This has rattled middle age Singaporeans who fear that they would be adversely affected if this came about.

Sir, we all know that CPF savings have been used to cater to the housing, medical and retirement needs of Singaporeans. Singaporeans in the 40 to 55 age groups are people with the highest financial needs. We should not reduce the employers' CPF contribution for the older workers without giving them ample notice. I would hazard to say that they should be given at least five years' notice before any change could be made to allow them to make their long-term adjustment. I estimate that there must have been a few hundred thousand properties that have changed hands at high property prices in the last few years. Many Singaporeans have borrowed and mortgaged their homes to the hilt with a substantial instalment repayment coming from the withdrawal from their CPF savings. Any reduction in employers' CPF contribution would certainly cause severe financial hardships to many families who have bought new homes in recent years. I hope the Government will think very carefully before attempting to change the rate of employers' CPF contribution overnight. And I think any change just to solve the problem of a small group at the expense of a much larger group is not the way to go.

Sir, I am glad that the Government has recognised that with the reduction of corporate and income taxes, the income gap will widen. The tax deductions provided will help promote the spirit of philanthropy in individuals and corporations, which I believe is a step in the right direction. In fact, I am pleasantly surprised that such a heavy document as the Budge Statement saw it fit to have this element of philanthropy written into it. I hope many Singaporeans and local and foreign corporations operating in Singapore would contribute generously to support the less able in our community. Their act as socially responsible citizens will contribute to social bonding and help build a strong and cohesive Singapore society.

Sir, I support the motion.

Mr Zainul Abidin Rasheed (Aljunied): Mr Deputy Speaker, Sir, thank you for the opportunity to speak on Budget 2002. However, it is getting late now and many have spoken, and on overlapping areas too, and so I will try to be short.

The Singapore Government is well-known for being decisive. Now is the time indeed to be decisive and bold. As DPM and Finance Minister Lee Hsien Loong said in his Budget speech, to thrive in a different world we are in, we must confront and accept the new realities, we must quickly adapt ourselves to the changed environment, and to many more changes to come.

The proposed changes to restructure our economy are indeed very sweeping. I agree, as we must start early. I have asked around and the reactions I obtained are varied, understandably. From the private sector, they like the bold moves, especially the corporate and personal tax cuts. We must spur our economy to grow, they urged. There are those who however feel that not enough was being done for the SMEs, a point also stressed by Mr Inderjit Singh and many others today. For the more radical, they even feel that the corporate tax cuts should not be done in stages. For greater impact, it should be done at one go, they said. That is how serious and how urgent, they feel, is the situation if Singapore were to remain competitive and to save jobs. That is how fundamental it is. The bottom line is saving and creating jobs.

For the average citizen, especially the lower income earners, their main preoccupation is why increase the GST, especially now. They feel that while the corporate sectors and higher income earners have a lot to gain, they are the ones having to pay more. The GST offsets notwithstanding, they feel that there is no point in the Government taking pride in the position that 75% of the population does not pay taxes when there is the GST to fend for.

To the lower income, including and especially those who have been retrenched or unemployed, there is no big picture. It is their micro position that looms high on their agenda. That is the bottom line too: jobs.

But we know, of course, that this is precisely the reason for the sweeping changes in Budget 2002: saving jobs and creating jobs. That is also the critical test for this Budget. If I may cite the experience at the North-East CDC, and here I declare my interest as Mayor of the North-East CDC, jobs, jobs and jobs are also the focus.

Mr Deputy Speaker, Sir, when I was appointed Mayor of the Ang Mo Kio-Cheng San CDC, part-time before and now full-time at North-East, my main preoccupation was then racial harmony and social cohesion. But now, it seems "Jobs, Jobs, Jobs" matter most. But do not be mistaken, for jobs too play an important part in forging a more cohesive society. For not many will care about harmony and cohesion, when on an empty stomach, and with so many bills unpaid, with electricity and water on hold, awaiting to be cut.

At the North-East CDC, we have set up what we call JELL (Jobs, Employability and Lifelong Learning) Committee as part of our priorities. Yes, jobs, not just for the short-term, filling the vacuum left by retrenchment and unemployment, but long-term employability achieved through lifelong learning. We believe that way we will be able to ensure a better jelling of the community.

In a nutshell, Sir, the people trust the Government. The 75% votes cast last November said so. Not that there were no outstanding issues and problems then, but the people knew that the Government can and will deliver, especially in trying times. In other words, the people are saying, do what you think is necessary, but just save the jobs and create enough new ones to make us Singaporeans sleep better.

Allow me, Mr Deputy Speaker, Sir, to close by focusing on three recommendations:

1 To call upon the Government to do more for the SMEs and help them to grow further and help save and create more jobs;

2 To monitor closely the effects of the new GST rate to ensure that the offset package to help alleviate the short-term problem is effective, especially for the lower income earners; and

3 To provide more resources for the CDCs to help Singaporeans prepare for the new realities, be it in educational and bonding programmes, improved job matching and placements and/or training and retraining. I have just mentioned them briefly but I think I will be dwelling on them at the COS later this week.

On a final note, Sir, if the Government has been bold in its Budget measures, the people too should respond with grit and determination. The challenges brought about by this new and different world require nothing less.

Sir, I support the motion.

Dr Lily Neo (Jalan Besar): Mr Deputy Speaker, Sir, my parliamentary colleagues in this Budget debate have spoken on the different financial aspects and the difficulties faced by our people, SMEs and corporate companies. I would like now to dwell on another financial consideration of many, that is, healthcare affordability which has been touched on by my parliamentary colleague Madam Halimah Yacob earlier. After listening to 23 speakers before me and a long day, may I seek the patience of my colleagues here for a while more to hear me out.

Sir, healthcare affordability has been a major concern for many Singaporeans. This concern will only get worse with the expected escalating healthcare costs in view of our ageing population and rapid advances in medical technology. In fact, Singapore's national health expenditure, at the current level of healthcare servicing, will rise to 7% of GDP by 2030. The widespread worry, especially among the elderly, on hospitalisation affordability is understandable. I am reminded of a familiar saying "Can die but cannot afford to fall ill" and I hope we do not succumb to such a predicament in the days ahead.

Our National Health Expenditure (NHE) increased from $4.4 billion in 1999 to $4.7 billion in 2000. As a percentage of GDP, NHE formed about 3%. Per-capita health expenditure rose about 6% in one year from $1,360 in 1999 to $1,439 in 2000. The NHE proportion is borne two-thirds by the people, or the private share and only one third by the Government. This contrasts significantly with that in England where the private share is only one sixth, in Australia where the private share is only half, and in Hong Kong and Malaysia where the ratio is roughly one to one. If the ratio of Government and private proportion is going to remain, the impact on the people can be great indeed. It is worse still as in this year, when in absolute terms, the allocation to MOH is less because the Government allocation is based on GDP. As the NHE cannot be lessened, the extra burden will be on the people.

Today, I would like to beseech the Government to address this concern of many Singaporeans and find ways to ameliorate their worry with some expedient actions and with further and better planning to soften the future burden.

Sir, as a people, our main prime resource, the provision of good healthcare to all Singaporeans must be prioritised. This is to ensure a healthy workforce as the main contributors to our survival as a nation. The MOH should have the same importance and bestowed the same weightage as other Ministries, the MOE, for example. The Ministry of Education is cultivating our future resource, but the Ministry of Health is sustaining and nursing the present as well as our future resource. Sir, I would like to suggest the following eight ways relevant to Singapore to address this issue of affordability.

(1) There is a need to allay the concerns of many, especially the elderly on the affordability of hospitalisation bills should they fall sick. It is a fact that hospitalisations can cost thousands of dollars and can even be tens of thousands if surgery is involved. This is so even in our public hospitals. We need immediate action towards assuring people that affordability of hospitalisation is ensured with our 3M-scheme (Medisave, Medishield and Medifund). Remarkably, many people still do not understand their usage fully. For a start, MOH can provide more briefing materials for MPs to familiarise their grassroots workers with what is provided for. With the new Eldershield and Elderfund, MOH must provide even more in public education regarding the various schemes available.

(2) To ensure special long-term affordability, "health risk pooling" through insurance, a risk transfer mechanism, may be better than plain dependence on savings alone. Therefore, a bigger proportion of Medisave should be allowed for purchase of medical insurance, such as the Portable Medical Benefit Hospitalisation and Surgical cover. The fear of encouraging the buffet syndrome or of driving up healthcare costs can be contained as long as Medisave accredited insurance companies contain the co-payment and deductible elements in their policies. This will emphasise the principle of individual responsibility or one's own healthcare needs. This will encourage Singaporeans to better plan and save when they are younger, and not to depend just on Medisave alone or, worse still, to depend on Medifund when they fall sick. It is necessary for the people to know that we cannot assume there will always be budget surpluses to build up our Medifund and provide an unlimited safety net in the years ahead.

(3) Sir, our homecare services are almost non-existent at present. We need to make this service available quickly in order to lessen the need for high cost stay in the tertiary institutions, especially the acute hospitals. With our ageing population, homecare, where many discharged patients can be looked after in their own homes, will be an increasing demand and an important part of our healthcare structure. In tandem with the establishment of homecare, there must be effective support from primary healthcare, community healthcare and social services, as well as modified housing. I feel that for homecare to be really effective, there must be the involvement of the community. There should be more community volunteers and home help for families to care for the dependent elderly in their homes. There should also be more adjunct community supporting services like domiciliary, daycare, rehabilitation and occupational therapy services to complement the homecare. Such facilitation will translate into lower costs and convenience for a happier people.

(4) We need more innovative concepts to better plan the present and future manpower needs of our healthcare system because manpower costs demand a rather large portion of our healthcare costs. We must have fresh ideas and a "dare-to-do" attitude in trying out new grounds. For example, in order to cater to the manpower needs in starting homecare services, MOH should re-look at the usage of healthcare workers and consider using not only full-time paid personnel, but also family members, community volunteers, and so on. Such healthcare workers can be trained in a matter of weeks. In England, it takes only three weeks of intensive training to equip them with the necessary skills. They are certified at the end of courses which teach them in assisted feeding, catheter care, prosthesis use, simple dressings and simple grooming as in toenail cutting for non-diabetics using sterile techniques.

Sir, another example is the recognition that nurses who are well-trained can do a lot and can contribute not only to better care of patients but also to lower costs in healthcare delivery. It is very much cheaper to maintain a nurse as compared to, let us say, a doctor. Moreover, well-trained nurses can carry out many functions otherwise performed by doctors and this frees the latter for other duties. The present shortage of nurses has to be addressed urgently.

We do not have an undergraduate nursing programme for nurses. There is only the diploma course from Nanyang Polytechnic and Certificate in Nursing course from ITE. Sir, it is about time that this option be made available. We need to train more professional nurses, not just as caregivers but also as care managers, coordinators and innovators to keep up with the changing needs. The provision of an undergraduate programme for nursing will also address the shortage of nurses and this will provide another channel for the better qualified students that will otherwise not go to ITE or Nanyang Polytechnic to do nursing. This group may feel that they are wasting their talent by not pursuing a university degree. The undergraduate course will provide the discipline to grow as many nurses can also upgrade themselves after graduation from ITE and Nanyang Polytechnic.

Sir, the scope of nursing work must be expanded. Qualified nurses become even more relevant as we pursue the life sciences and excellence in medical healthcare. We can have nurses as trained personnel to assist in scientific and clinical projects as part of a team with doctors and scientists.

(5) Preventive healthcare must be the hallmark of all issues concerning healthcare affordability. The adequate allocation of funds today and the success of preventive measures will save us millions in the future. The Ministry of Health must ensure continuity and lasting follow-through of all efforts on preventive healthcare. The Ministry's priority must be to continuously identify prevalent diseases that need greater attention and to continuously monitor and study the trends for prevention and common diseases, as well as the many different aspects of preventive healthcare. Consider these examples. Since colorectal cancer is the second leading cause of cancer in men, there should be a national screening programme started. Since pneumonia is the third leading cause of death, it will be useful to find the causal factors and establish the preventive measures. As the prevalence rate of depression in Singapore is 8.6%, a new emphasis on mental health, which has not received its due attention, is necessary.

Mr Deputy Speaker, Sir, since morbidity and mortality from any disease can be dramatically reduced when the diseases are treated in their early stages, preventive healthcare should be especially targeted at the younger age group. I am concerned that the young may assume that they are less vulnerable because of age, and therefore have no need for regular check-ups. We have to make sure that they are not left out in our preventive care efforts, especially in prevention of early and treatable conditions like diabetes, hypertension and high-blood cholesterol. In tackling this problem, there is a need for much creativity, funding and enthusiasm.

(6) Appropriate investment in medical research and life sciences directed at our prevalent needs, like finding the cures for the common diseases and cancers that affect most Singaporeans, can address the long-term healthcare affordability. If gene therapy can be found to treat and prevent heart diseases, diabetes and hypertension, the amount of savings will be enormous. If cures or better still the preventive factors can be found for the common cancers affecting Asians, such as nasopharyngeal cancer, many will be saved from dying from them.

It is better to place more emphasis on prevalent diseases and possible future plans in Singapore in the development of these diseases. For example, Hepatitis C has emerged from obscurity to being recognised as the major public health problems world-wide.

Sir, because western researchers may lack priority and subject material to work on Asian conditions, priority in use of funds and manpower should therefore be directed at our specific needs and especially at those diseases that affect mostly Asians. We should have more detailed epidemiological studies of disease patterns and based on medical research and life sciences study on them, to better plan and cushion our own long-term healthcare cost.

(7) The rise in healthcare expenditure has prompted many nations to develop and implement on armoury of cost-control mechanisms. A study on the experience of six countries, Australia, Canada, Germany, United States, United Kingdom and Singapore, showed that healthcare inflation can be managed and not through the strategy of competition but through centralised control over healthcare resources. Two countries, the United States of America and Singapore, opted for competition in healthcare financing. In the case of Singapore, our Government decided to use market competition by carefully designing competition between the public and private hospitals. The expectation of countries subscribing to this approach is that competition will drive down prices, while providing incentives to improve efficiency and quality. However, evidence suggests the contrary. The United States and Singapore have experienced the highest growth rate in healthcare expenditures. Sir, the right approach should be an integration of the private and public sectors in Singapore to maximise our small resource pool.

(8) Sir, new medical technology can contribute to efficiency gain in the hospitals, for example, in making it possible for more day surgeries done which otherwise require hospitalisation stay. Technology acquisition is closely linked with manpower considerations. Physicians are a major factor in the demand for and use of technology. More specific training of physicians to use high-tech devices should be encouraged. Limits on medical technology have been envisioned for the private sector in Singapore. Sir, these limits will jeopardise Singapore's role as a healthcare magnet for patients from foreign countries. Technology limitation might alter the inflow of such patients.

Sir, I would like to end by reiterating that the development of Singapore into a medical hub of the region and turning Singapore into the "Mayo Clinic of Southeast Asia" is a worthwhile industry to pursue. Having more full-paying foreign patients, apart from giving a spin-off effect for our other services by having more visitors to Singapore, may be a source of subsidy rather than a cause of rising healthcare cost for local patients. There is a need for a mindset change here.

Mr Deputy Speaker, Sir, I hope that the above suggestions to address the affordability of healthcare in Singapore can be considered favourably by our Government. 7.15 pm

Dr Tan Cheng Bock (Ayer Rajah): Mr Deputy Speaker, Sir, I shall be as brief as possible.

After an overwhelming victory of 75%, the people's expectation of the Government is very high, and the task of meeting this expectation is challenging and daunting. Challenging because many changes to our economy and institutions are being made, and daunting because these changes bring a lot of uncertainty and pain to our people. Yet, not to do so would be like an ostrich hiding its head in the sand. We change because the world has changed since September 11. Business methods are changing, so our financial institutions and banking instruments will have to change. Manufacturing is no longer assembly work, but innovation, design, research-based. Biotech is slowly going to replace even our wafer fab, because the latter has reached an over supply stage. And we cannot compete with China as it has more of the wafer fab plants.

In the past, Indonesia and Malaysia served as our hinterland, but geopolitics and competition have changed all that. Our ports face competition from Malaysia and Indonesia, and so also our airport will soon face very strong competition. We must accept this as part of our neighbouring countries' upgrading and domestic needs, and push ourselves into new frontiers of service and business.

I do not foresee the position we enjoyed in the past with our neighbouring countries as ever coming back. So we must change and change fast. Geopolitics and terrorist activities will serve as a backdrop, as we continue with our determination to progress and survive. With these opening remarks, I look at our Budget trying to meet the new circumstances of doing business and helping our people to come along with the Government to meet this new challenge.

The concern of the man-in-the-street is GST, CPF changes, car park charges, utility bills, medical and education. Above all these, he wants job security and jobs. The changing economy has made many Singaporeans very insecure and worrying. This insecurity affects many, but more so the less educated. Some want to change with retraining, some simply cannot change, and watch with frustration to see foreign workers doing the jobs that they do not want. Calling Singaporeans to have mindset change is right, as we cannot continue to provide, for example, economic downturn relief, as this will create a crutch mentality.

Yet, there are some who have lost jobs, because of business change and relocation up north and elsewhere, especially manufacturing plants. They cannot upgrade, because of technological changes and cost of operation is high compared to China, Indonesia, etc. However, perhaps to save jobs, we should not be too eager to replace such factories too quickly with new biotech ones. Some are beyond rescue, but surely there must be some that can be helped to upgrade to meet the new business and manufacturing requirements of high-end products.

I hope our special Committee on Remaking of Singapore will look into this. Perhaps they can involve the Enterprise Promotion Centre to help. Do not write off manufacturing too fast, because employment in this sector is high, and if we can lend a helping hand, we should and this will be able to protect job losses in this sector. We must capitalise the expertise of EDB, our universities and industry experts to help such companies to upgrade, and thus preserve jobs.

Sir, I am advocating a balanced approach to transform our economy because many of our people are not able to cope with the speed of change we expect of them. So many policy changes are happening each day that the average Singaporean is probably lost or cannot follow, resulting in many to be indifferent to the changes. However, we cannot turn the clock back. We have to be more circumspect in the execution of our policy changes and not be too quick to throw the rule book at them.

Mr Deputy Speaker, creating jobs through the tax restructuring is one way of attracting investors and talent. Therefore, the cut in corporate and personal income tax will be most welcome. But do tax cuts draw investments? In a report of Barclays Capital, which I read in the Business Times on 9th May 2000, it is unlikely to spur inflows of foreign direct investments (FDI) and in its view, the main impediment to FDI is not necessarily the cost base but limited business opportunities. And it goes to explain:

'South-east Asia's manufacturing base is also "far shallower" and its economic outlook "far more modest" than North Asia, while Singapore's regional entrepot role is undermined by competing port and transport hubs in Malaysia. Until South-east Asia can deliver the economic growth prospects seen in North Asia, we find it unlikely that Singapore will experience an upsurge in foreign direct investments.'

It further says:

'At best, the new tax measures may prevent a net decline in FDI - which itself is not an achievement that should be sniffed at.'

So you see, Mr Deputy Speaker, Sir, Singapore watchers are guarded in their assessment of our economy restructuring. But having said that, I think they should, on the contrary, spur us to explore more investment opportunities through more aggressive selling of Singapore through our EDB. This becomes a challenge to push us to achieve more.

While I agree that tax changes do help to bring more investments to our country, I am sure those who want to set up businesses here have to take into account the political and social security of our land. In this respect, we should be ahead of many countries. In fact, I have no problems with the Minister allocating one-third of this Budget to Defence and Security. We have to ensure that this place is safe not only for the investor but also for his family and friends.

The impact of the GST on the economy as a whole has been discussed and I shall not go into it. What seems to be taking a low profile is the offsetting package for the GST. So, to sell the GST better, I would suggest that more emphasis be done after this Budget to bring the message home. There are already listed at least nine ways of cushioning the GST and this includes the ERS shares, no GST on subsidised medical care, increased subvention to Town Councils, PTC would not raise fares in 2003, SC&C and rental rebates for low income HDB households, households with less than $3,000 can apply for assistance from the CCC, raise public assistance and the Singapore Allowance for pensioners and, finally, a Committee to Combat Profiteering.

Sir, we need to emphasise this and in order to sell our GST better, because we did well in 1994. Here, I must commend NTUC Fairprice, Unity, NTUC Healthcare and NTUC Food Fare for volunteering to absorb the 2% GST hike for at least one year on essential items. They deserve a pat on their backs and I do hope others will follow suit.

Sometimes, Sir, when I talk to Singaporeans, I get a very gloomy picture of Singapore, somewhat depressing. They worry about the economy, Malaysia's recent harsh stand against us, Indonesia's response to terrorist operations and China's emergence as an economic force. While I share their concerns, I also tell them to look on the more positive side. All is not lost. Relations with Malaysia, like the economy, will have its ups and downs. Nothing is static. Good fortunes will return, not by chance, but through careful planning. We must not take things lying down, react fast to make the necessary change, to be more pro-active in our approach to issues, and to stand our ground when challenged. I believe this Budget tries to meet some of the more challenging issues facing us. Externally, a different world and uncertain outlook globally and regionally; internally, restructuring taxes and creating jobs. We may not have the complete answers, but at least we are attempting to move ahead. I wait to see the various reports of the many sub-committees involved in the Remaking of Singapore.

Sir, I support the Budget. It is a good Budget.