ANNUAL BUDGET STATEMENT

Order read for resumption of Debate on Question [3rd May, 2002],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2002 to 31st March, 2003." - [Minister for Finance].

Question again proposed. 1.30 pm

Mrs Yu-Foo Yee Shoon (Jurong): (In Mandarin): Mr Speaker, Sir, yesterday, many of my parliamentary colleagues had spoken in support of the motion standing in the name of the Finance Minister. I also support the motion, but I would like to raise two points here today.

First, since our independence more than 30 years ago we have continuously improved the standard of living of our people and improved our competitiveness in the world. Today, I would like to say that even with this economic downturn we should not lose our confidence. So, my emphasis here is that we must maintain our confidence and we must not lose it. Secondly, what brand has Singapore created? To me, the name "Singapore" itself is a well-renowned brand name.

First of all, I would like to commend the DPM and Finance Minister for this very forward-looking and balanced Budget. Mainly, this Budget aims to restructure our economy and to bring to our people better lives and better days to come. When the Finance Minister introduced the tax reform, he has also introduced various measures to help Singaporeans tide over the difficult time

When we review our CPF scheme, we have to be very careful. Many people feel that the Government's restructuring plan is not going to be confined to those changes which have been announced only. On May Day, DPM Lee called upon the people and the workers to change their work attitudes and to look at this economic downturn more positively. And most importantly, he said that the Government will review and introduce reforms to counter these challenges. So, these changes are not solely targeted at the people or the workers. I am very comforted by his statement.

I believe that when we are conducting this economic review, we have to look at the various industries and sectors, not just the financial sector or the sectors which are directly related to the economy. I think that we should also review the service industry, manufacturing industry and other industries relating to the quality of life of our people.

I hope that this Economic Review Committee would also conduct some sectoral and regional review. Why do I say we must have sectoral review? I remember that many years ago when I was still in the NTUC, we said that the maritime industry was a sunset industry. Many people in the maritime industry were very pessimistic and very negative. But two weeks ago when I visited the shipyards, I regained a lot of confidence and I am more optimistic about our economy now. When we visited Keppel, I learnt that the oil rigs designed by our local engineers had already attained international patent, and they command 60% of the world's market. We are now servicing some 20% of the world's ocean-going vessels.

As far as we know, our wafer fab industry is in the process of recovery. For example, SSMC (System on Silicon Manufacturing Company) has already started a new factory in Singapore and UMCI (United Microelectronics Corporation) will also start a new plant here next year. Our Creative Technology commands 60% of the world's sound card market.

I am citing all these examples because yesterday my parliamentary colleagues mentioned about the difficulty of getting a job nowadays. In my constituency, the reliefs we are handing out are among the highest in Singapore. Maybe it is because many of our workers are staying in the south-west part of Singapore. We registered the retrenched workers in our constituency and introduced many of them to jobs in the factories. I told the shipyards that the Government was providing training programmes for those who employ workers 40 years old and above, and we would pay half the salary. I told them that the workers I send them would be able to work, people who would have no language problem. As soon as the shipyard employs them, the Government will pay 50% of their wages straight away. The company said, "All right". We sent a few hundred workers there when the company had more than 1,000 vacancies. Yet, only 150 workers were recruited.

A few days ago, I sent applicants to a hotel for jobs. I telephoned the Manager and asked what was the result. He told me only one woman applicant accepted the job offered to her. What is the problem? Are the employers prejudiced or are there some problems with our workers? So here I would like to urge the workers to make adjustment to their own attitudes and expectations.

As a Mayor in the south-west part of Singapore, I will step up efforts to help our workers secure a job. But I hope that these applicants who are recommended for work would, as far as possible, accept the job offered to them because we have actually looked into their background, their qualifications and their skills level before matching them for the jobs. We do not just send anyone to them. In fact, all these people were interviewed, their backgrounds were looked into, and companies have also agreed that they would try their best to accept these applicants recommended by us because they know that we had actually screened them before we send them over. So I feel that these workers should just take the job for the time being and when the economy has recovered they could perhaps look for better jobs later.

Just now, I said that we had to review the various industries because we should not have bias or prejudice towards any particular industry. So long as this industry has some leading edge I think that we could still be very competitive in the world market. We should not just single out our talents in the financial sector, we should also give credit to our engineers who have created or invented new products and who have obtained international patents for the inventions. I think that we should give more credit to them and let them have a sense of satisfaction for their achievement.

Another point that I want to raise is the informal sector. Many people may not be very interested in this sector because we call them "informal", and hence they are not in the mainstream. Hence, they cannot fit into the financial sector or the service industry. When we talk about structural unemployment, normally the people involved are the elderly workers. It is not that they do not want to look for a job but they just have this difficulty in matching. For example, the telephone operators. Nowadays, many companies are looking for telephone operators. I have introduced some women, 40 years and above, to a company. The company told me that age did not matter, so long as their voices are decent and presentable to the ears. But eventually they were not accepted because their standard of English is not good enough. Perhaps the company could provide them with some training.

The Economic Review Committee should also look into the needs of this informal sector. We should be more tolerant and give more allowance to all these people who are not able to fit into the formal sector. In our South-West CDC, we have started a course for the caring of new-born babies. In Australia, all these new-born babies are being looked after by nannies at home. The Government would also subsidize for the employment of these nannies. With our ageing population, we should also train some workers in the 40s or 50s to look after all the senior citizens who need their care and concern. In some industries, for example, in the bakery or food catering industry, there is also space for development. I am sure that we have all heard of the Bengawan Solo Cake Shop. Bengawan Solo started off as a family business where the owner baked cakes at home and sold them to her friends and regular customers. When the cakes became popular and well-known, she commercialised her operation, and now Begawan Solo has become a household brand. Perhaps, HDB should consider relaxing its rules to allow housewives to bake cakes and pastries at home for sale, so long as they comply with the health and environmental regulations. I believe that during the festive seasons, quite a lot of housewives are already doing so, albeit illegally.

In the schools, there used be some people from the not so well-to-do families setting up stalls in the school canteens to sell local delicacies, such as mee siam, kuehs, tid-bits to the school children. Nowadays, because of the hygiene requirement, only the major suppliers are allowed to supply to the school canteen operators, and all these "small hawkers" would not be allowed to sell their goodies in the school canteens. So I feel that in this informal sector, for those people who are not in the mainstream industries, some form of help could be provided to help them improve the standard of living. I think we should look into their needs.

Another thing I want to mention is about our brand-name. Whenever I go overseas, I feel very proud when the people there express signs of admiration for our country. On one occasion I went to Harbin, a remote city in the north-east part of China. At the night market, there was an elderly gentleman who asked me where I came from. I told him that I came from Singapore, and he exclaimed, "Oh Singapore! Lee Kuan Yew." Even in a small night market in far-away Harbin, people know about Singapore. The name "Singapore" by itself is a brand. It is a brand name. I feel that as a small nation, the question is not who has a bigger piece of the pie. The most important thing is we want to create a bigger pie for more people to share.

I feel that the well-established Government-linked companies need not be restructured. If they have made their name internationally, let them retain the goodwill and the advantages that come with it. If the Government-linked companies are doing well, we should not downsize them or divest them completely. I think the Government should be more magnanimous and invite some successful companies to become partners of these Government-linked companies and these smaller Government companies. Of course, in the sensitive and strategic industries, such as telecommunications, aviation, and defence-related industries, where the small companies cannot take the lead, then let them be led by the GLCs. But, we can invite more SMEs, successful entrepreneurs or local entrepreneurs to take up shares in the big GLCs, or take over the smaller sized ones like, for example, companies in the food industry or electronics companies. I think most SMEs have these skills. We should be more magnanimous and invite some successful companies to merge or even to take over the management of these smaller Government companies.

No matter how we look at it, we have to stand united. We should make use of the strength of the GLCs and the local companies to fight for a bigger space in the international market. My visit to the maritime industry has boosted my confidence. In the past, for safety consideration, a lot of works in the maritime industry were carried out on land rather than on board on the vessels. When I asked the shipyards why people shied away from this industry, they told me that safety in this industry was a great concern to the potential workers. I think if we can enlighten our workers more on this aspect, we should be able to boost their confidence in this industry.

Another point I would like to raise here is that the Economic Review Committee should look not only at the economic matters, but also on our living environment and our quality of life. Yesterday, some MPs talked about the problem of having children and the desire for a better living environment. I feel that perhaps the south-western part of Singapore has been neglected in our national development We have Punggol 21. We have good old Katong, etc. Jurong seems to be neglected nowadays. In the past, Jurong was a show-case to the developing countries on how we developed our industries, and the bed of our industrialisation in the 1960s. It was an industrial estate which we were very proud of. But now, it has lost its glamour. I would be touching on Remaking Jurong initiative under MTI in the Committee of Supply.

We should also have a review on the various regions. Many regions have lost their glamorous characteristics. Jurong used to be a very famous place in Singapore. I feel that Jurong can be more beautiful than the Suzhou Industrial Park in China. I hope that this Economic Review Committee would also conduct some regional review, and this review would be able to help improve our quality of life.

Another point is on social and welfare services. The Deputy Prime Minister has provided for double tax rebates for donations to charity. I think it is a very good measure. But we should also look into how we could help the charitable organisations to look after the needy people, for example, the handicapped people. We should change the mindset of the people, because in this industry, it is not just welfare work. In fact, in this aspect, Singapore has done well. Dr Amy Khor mentioned about autistic children yesterday. We have done a lot. We have many experts in this field. We should look at it as a service industry. We could even export this expertise. It could tun out to be a lucrative industry.

In conclusion, I hope that the Economic Review Committee will look not only at the direct economic fields but also on the living environment of the people and the needs of the various sectors.

Mr Speaker, Sir, I support the motion.

Mr Ong Kian Min (Tampines): Mr Speaker, Sir, Singapore is a city state. Unlike other big cities, like New York, London and Shanghai, we do not have a natural hinterland that can act as a buttress or conduit for our city. The cost of living in a city can be very high compared to the more rural areas. But many still want to come into the city to live, work and seek their riches and fortune. And those who cannot make it in the city and find it too expensive to live in, will move out to other areas.

There is a natural process of rejuvenation. Take New York, for example. Garments used to be one of its key industries but when it became too expensive for textile companies to remain in Manhattan, they moved out and other industries, such as financial services, took their place. Those who cannot make it have moved out and new industries, new players, have moved in to continue to make the place buzzing. The city rejuvenates itself.

Throughout the years, Singapore has been able to restructure its economy. We have transformed from an entrepot trading centre to an international business hub and diversified from labour intensive manufacturing to wafer fab plants and other hi-tech industries.

However, this has resulted in some segments of our population finding it difficult to make the adjustments to upgrade. And, in our case, we are uniformly expensive. Over the years, we have relentlessly upgraded our environment, infrastructure and services to make life more comfortable for our people. Our bus companies have introduced air-conditioned buses; road-side stalls are done away with; hawker centres have been replaced by air-conditioned food courts; wet markets replaced by supermarkets, like NTUC Fairprice and Cold Storage.

This has not only led to an increase in the cost of living but also left behind few low-cost alternatives. And this has also led to the problems of high land prices and high cost of doing business in Singapore that Mr Inderjit Singh spoke about yesterday.

This strategy worked well in good times when people were earning decent incomes and enjoying increasingly affluent lifestyles. But when they lose their jobs or have to suffer a drastic pay cut, they find it very difficult to make ends meet on a household budget of a few hundred dollars a month. The basic costs are still there. They still need to feed themselves and their children, repay their housing loans, pay for their utilities and service and conservancy charges. There are no low-cost alternatives to many of the things that we need today. There are very limited ways to bring our costs down to a really low level. Even if one retreats to Sembawang, Lim Chu Kang or Pulau Ubin, one cannot lower one's costs substantially.

Take another example of Raffles Place. Cheap hawker stalls are now a thing of the past. Lau Pa Sat and Boat Quay have gone up-market. People who work there are left with little choice but to accept the higher cost alternatives, although they may still enjoy the improved ambience and surroundings. In other major cities, including big and infamously expensive ones like Tokyo, I find there are alternatives to meet varying levels of affordability. I remember visiting Tokyo some years back on a shoe-string budget and was able to find very local, relatively inexpensive food stalls in the alleys just off the main thoroughfares of expensive precincts.

But unlike Mr Inderjit Singh who called for a general reduction in prices and adjustment in asset values, I believe we have to create an environment that allows for a natural rejuvenation and offers alternatives for varying needs. We still have successful companies that require modern infrastructure, facilities and services and are willing to pay for them, and others who require a lower cost environment to operate in. To cater to these differing demands would require a relaxation of rules, less centralised control, more privatisation and devolution of ownership and responsibility to private hands.

Right now, we have a pretty rigid model for the progression of our young. According to the model, they are to study hard, get good grades, go to university, if not, then to polytechnic, and if not, then ITE, and it is not the end. After graduation, they are expected to get a good job, get married, buy a new HDB flat from the Government and have babies. After some years, property prices rise, they sell the flat and use the capital appreciation as down-payment for a larger flat, and so on and so on. But what if this beautiful order gets shaken and goes out of sync? Is there a fall-back position? Sir, we must create some flexibility in the system.

In times like these, when jobs are in shortage and acquiring the right skill set is a problem for some, we have to step in to help those who are caught in a bind by the sudden change in economic climate. They have suffered a massive cut in income and have no alternatives to turn to. They look forward to some help, some breathing space to regain their strides and start life anew. Many of those affected are in their middle age, too old to start from the bottom, too young to retire and too weighed down by financial commitments.

They are therefore disappointed with the Budget which they see as one that focuses on the problems of the rich - their tax bills and car prices. With the 2% increase in GST and income tax reduction, the common grouse is that this Budget is for the higher income group. While the change in fiscal policy is for the good of the economy structurally and in the longer run, how are we meeting the short and medium term problems the average wage earners face?

I would like to raise three specific issues about this Budget.

First, Electronic Road Pricing. The sudden change in car ownership cost places existing vehicle owners at a disadvantage. The change in scheme benefits those who are buying new cars. Existing owners with cars that are more than five years old suffer a drop in the resale value of their cars because the price of COE is expected to drop with the increase in the number of COEs and the drop in new car prices. The expansion of the ERP scheme will hit all vehicle drivers alike, but the existing owners would not have the benefit of the upfront savings. An expanded ERP will also place a heavy burden on the small time businessmen and the salesmen who have to be on the road a lot of the time.

Second, the GST increase. The 2% increase in GST is seen as helping to balance the Budget after giving the rich taxpayers their tax savings. While in absolute terms the higher income group will pay more in GST as they consume more, in relative terms, the indirect tax is regressive. This will widen the economic gap between the top and bottom tiers of our people.

High tax rates can be a disincentive for people to work hard. But low tax rates can also give the higher end of the labour supply curve more disposable income, and this may result in people not wanting to work so hard. After all, their needs are met and they might rather use their time for leisure pursuits.

Tax cuts are important. But I share Dr Tan Cheng Bock's concerns that we should also focus on creating the opportunities that encourage the rich to invest their tax savings in Singapore. In the early 1980s when Margaret Thatcher cut British personal tax drastically, instead of investing in local enterprises, high income British earners used their tax savings to buy their second home in Spain and south of France.

Third, dividends. Prudent companies generally only distribute 10% to 20% of their annual profits as dividends. But they pay tax at the corporate tax rate on 100% of their profits. I therefore wonder why we should want to tax those who receive dividends, which represent only a small percentage of total profit. Can we make some allowance by granting tax credits for certain categories of people, like retirees whose source of income is the dividends from their investments? The returns on the investment will encourage the retirees to hold on to their investments and not to speculate by trading in stocks. This will also encourage CPF account holders not to put all their money in housing but keep some for investment in equities. Taxing dividends at the corporate tax rate may also convince more companies to have their domicile outside Singapore.

Sir, favourable income tax alone is not sufficient to attract expatriates to relocate here. Similarly, tax cuts are only one of the measures to attract local and foreign investments.

We must, first of all, have the conducive business environment and opportunities for people to invest in. Security and stability are key considerations for foreign investors.

The front page headlines of The Sunday Times of 28th April 2002 stated: "Al-Qaeda `may set up base in South-east Asia'".

When I went to a constituency function that morning, some residents were concerned that such headlines would cause alarm to prospective foreign investors. They asked whether foreign investors would be deterred from investing in this region. One of my grassroots leaders told me that he knew of a number of American MNCs who had decided to divert their investment elsewhere and others who had decided not to proceed with subsequent phases of their planned expansion here because of perceived regional security issues.

I hope in the course of this debate and the Committee of Supply, we would have an update on how we are doing in attracting foreign direct investments and whether those foreign investors who had committed to invest here had deferred their investment plans.

Sir, many Singaporeans, both professional investment analysts and ordinary man-in-the-street, are disheartened that we are losing out while Malaysians generally feel upbeat about their economic performance and prospects because they had scored a number of successes against us recently. We need success stories. We need more of the likes of Creative Technology and Sim Wong Hoo. We need inspiring stories to boost the morale and spirit of Singaporeans that it is not all doom and gloom, and that there are gems among us and we can do it.

A couple of months ago, I was introduced to an unknown local company that can be a real gem. First of all, let me declare that I have no pecuniary interest whatsoever in this company. This company, Stikfas, creates and makes toys. And this is "Alpha Male" - created, designed and manufactured in Singapore. Within one month of launching their sales on the Internet, that was about four months ago, they caught the attention of a major US toy multinational. Even George Lucas of the Star Wars series got to know about this toy and its Singaporean creators because it is a system or platform of toys that would see no end in its potential line-ups. What makes it so special and creative is the ball and cavity joint that allows for many degrees of movement that would see endless possibilities in terms of poseability. The US experts think this toy system can become a legend comparable to Lego.

This toy was created in a typical garage-type start-up - in a shophouse in Katong off Mountbatten Road. The ground floor is used as an animal shelter. There were four dogs and nine cats when I last went there. Take a step into the shophouse and the smell of dog food and animal pooh was unmistakeable. But when I ventured up the stairs, the whole of the second floor was a different world. Stacked from wall to wall was a multitude of toys. Thousands of them of all varieties. This is a four-person Singapore start-up, set up with the vision to create toys.

Seeing the "Alpha Male" and its potential, the US toy multinational and toy fanatics all over the world were astonished to find a creative toy company in Singapore. To them, the toy universe comprised only of North America and Japan. The American top executives did not know where Singapore was. Singapore was not on their map. Yet, the creation was so good and so enticing that they were prepared to fly half way round the world to come here to meet and work with our local chaps.

The Americans even offered to buy the Singaporean start-up. But the founders are staunch Singaporeans. Despite the lure of millions of dollars to sell their company and a golden opportunity to move to the US to work with the big boys and their hi-tech equipment, these Singaporean toy makers firmly refused. Relocation out of Singapore was not negotiable. They are firmly rooted in Singapore for now. Mr Ban, the founder, told me he would miss his laksa, char kway teow and his friends too much.

Now, this US multinational has secured a licence from our local start-up to jointly develop and market the toy and its derivatives worldwide. This is something quite unheard of - that a Singapore company could license its toy technology to a US MNC. I guess we will be hearing and seeing more of this little guy. But more importantly, whether through remaking Singapore, whether through restructuring our economy, changes to our tax system or financial incentives, we must create a society that can produce, support and nurture winners like this.

There are still many who believe in Singapore. Adversity will drive us to seek out new frontiers. We still have many gems, and there will be success stories coming from among us. We must not lose heart.

Sir, on that note, I support the Budget Statement.

Mr Low Thia Khiang: (In Mandarin): Mr Speaker, Sir, the distinguishing feature of this Budget is to shift the tax burden from the corporate profits and the higher income people to the ordinary citizens in the medium and lower income groups. Originally, the principle of taxation is to tax according to the company's profit and the individual's income, and the Government's role is to redistribute the wealth through taxation. If reduction in corporate tax can serve to attract foreign investments, thereby creating more jobs for Singaporeans or bringing them higher income, it is well and good. But the question is when the investors decide whether or not to invest in a country, will the sole consideration be on the tax rate alone?

On the other hand, the Government says that because of a reduction in corporate and personal income tax rates, the Government will run into deficit and therefore we have to shift the burden to the ordinary citizens. This is indeed inconceivable.

The greatest beneficiary of this round of tax reduction is the small group of high income earners and the consequence is that all Singaporeans will have to bear a heavier tax burden. So is the Government looking after this small group of rich high earners, or the interest of the ordinary Singapore citizens?

In addition, before this announcement, the maximum rate in personal income tax has already been reduced to an effective rate of 22.1% after tax rebate. Why is the Government saying that the reduction in personal income tax will result in substantial loss to the Government and that it has to raise the GST?

From this Budget, it is apparent that there is no necessity for the Government to raise the GST in 2003. The Government says that by raising the GST to 5%, their estimated revenue loss will be $1.3 billion. But the Economic Restructuring Shares (ERS) alone will cost the Government $1.2 billion. The difference is only $100 million. Will the Government run into financial deficit just because it collects $100 million less in tax?

The Finance Minister also said that by reducing the personal income tax and corporate tax to 22%, the Government will lose $1.32 billion in revenue. In 2004, when it is further reduced by 2%, what would be the estimated loss? And if we reduce only the corporate tax by 2%, and not the personal income tax, what would the Government's financial situation be?

If the Government's Net Investment Income (NII) is pushed up to the ceiling provided for under the Constitution, and if our economy has improved, coupled with the increased revenue from other indirect taxes, would it still be necessary to raise the GST?

In the Budget Statement, the Finance Minister stated that by reducing the ceiling of personal and corporate income tax to 20%, the Government would lose some revenue, amounting to some 9% of its annual tax revenue. What is the basis on which the decision is made that the GST must be adjusted now for the 2004 Budget year? Please tell us, if the corporate tax is reduced to 20% in 2004, what would be the Government's revenue loss? If the personal income tax is reduced to 20% in 2004, what would be the Government's loss in revenue?

Moreover, this reduction of corporate tax and income tax to 20% is something that will happen only in the year 2004. Why are we starting to increase our GST in the year 2003? Has the Government considered other means to obtain a balance in our Budget or because the increase of GST is the most convenient and easiest method for the Government to fill up its coffers immediately?

The Government should review certain items of the Main and Development Estimates, and explain to the people that if GST is not increased, the Government would not be able to provide these services, so that the people will clearly understand why it is necessary for the GST rate to be increased. For example, this Budget decides to lower the vehicle tax and road tax. Is it really necessary to lower these taxes, causing revenue loss and thereby warranting an increase in GST?

In this Budget, the Government is giving double tax reliefs to donations to charity. Philanthropists who have a heart to donate to charity will not withdraw their donations just because the Government is not giving them tax reliefs. If by not giving them the reliefs, the Government can avoid raising the GST, then the philanthropists will surely feel that their donations are more meaningful, because such donations will benefit not only certain organisations, but all the people of Singapore. They will be very happy indeed.

On the upgrading of HDB flats, the Government has set aside some $300 million for this upgrading programme. Since the Government says that there will be a budget deficit and therefore it needs to raise the GST, does it mean that by carrying on with the upgrading programme, it will make the increase in GST inevitable? Hitherto, the impending upgrading projects would cost some $5.8 billion. Can the people have a choice as to whether they want upgrading or GST?

When the Finance Minister announced the GST increase, he also announced an offset package. The media immediately followed up and publicised vigorously how this package will benefit the people. But the feedback I received from the people is that the Government is giving you a piece of candy, and in return it is going to cut a piece of flesh from your body.

The Government has also announced the establishment of a Committee to Combat Profiteering. Let me tell the Government, at the moment, the small-time businessmen and hawkers are faced with the predicament of bad business, strong competition and high operating cost. They should consider themselves lucky if they can just survive. How would they dare to raise their prices and profiteer in the present circumstances? I think most of them would probably absorb the additional cost after the GST increase, and swallow all their miseries in silence.

It is most ridiculous to blame the small-time businessmen and hawkers for raising the prices! Is it not because the Government has raised the GST first? If you say the small-time businessmen and hawkers are profiteers, then the PAP Government, which raises the GST, must surely be the biggest profiteer - the main culprit!

From the revenue for the financial year 2001, we can see that even without reducing our corporate and personal income tax rates, the Government's tax revenue had already been reduced by $2 billion. As for the GST, even if the tax rate is not increased, the Government's tax revenue could only be $550 million less. Apparently, at the time of economic downturn, the corporate and personal income tax would greatly affect the Government's revenue. On the other hand, the Government's revenue from GST will not necessarily be slashed substantially because of the economic downturn. GST is the Government's magic wand to generate financial surplus. Whether the economy is good or bad, you have to pay GST for your food, clothing, transportation, accommodation and so forth. The Government could just sit idle and enjoy the fruit of other people's labour, with a guaranteed stable revenue. This is indeed the real reason for the Government's decision to increase the GST!

Dr Ong Seh Hong: (In Mandarin): Mr Speaker, Sir, thank you for allowing me to take part in the debate on the Budget.

In the very beginning, I had the same concern as Mr Low Thia Khiang in thinking that the Budget was diverting or shifting the burden of tax from a small group of companies to the general public. But after further analysis and study of the Budget, I am convinced that this is not the case. If we do not want the general public to bear the cost of GST and make the necessary changes to our economy, then we will not be able to attract foreign investors to Singapore. That means, no additional jobs will be created for our people. Many people will stay unemployed and have no income. They will have no money to spend, and hence no GST to pay. That being the case, 3%, 5% or 0% GST will make no difference to them.

Mr Low Thia Khiang's farfetched thinking that the higher cost of living is the result of GST is far too simplistic. Many people like to say, "Look, 30 years ago, I paid only 30 cents for a plate of char kuay teow." But now, the same plate of char kuay teow costs $3. You may say that the price has gone up ten-fold. But, is that the whole truth? The fact is, it is not so simple. Thirty years ago, when I was 10 years old, my father's monthly income was only $100. Now, the average family income, if you take the median income, is about $3,600. So the standard of living has gone up, so have prices of goods. This is a general phenomenon.

Mr Speaker, Sir, as we restructure to face the challenges of globalisation and a knowledge-based economy, we have to make a lot of adjustments and restructuring. Many times, we have to make bold changes in many areas, in taxation, in employment practice, CPF scheme, and so on.

Sir, changes always bring uncertainties. Uncertainties cause anxiety, and there will be resistance. As a small country with many limitations, we have to be resolute in making and accepting tough decisions and move on if we want to survive and be successful. We need to anticipate and prepare ourselves for any possible social and political consequences.

Digital divide would bring about the economic divide between those who make it in the new economy and those who do not. Consequently, the income gap would also be enhanced. If the Government is unable to effectively redistribute some of the wealth to cater for the needs of those who could not make it, there is this possibility that a social divide will appear. Eventually, we may face political divide when the socially disadvantaged begin to harbour the impression that they are not being taken care of. I am sure nobody would want to see this happening in Singapore. .

Mr Speaker, Sir, the threat of widening wealth inequality is real. I recently read this article in the Harvard Business Review which explained the Network Model of economies. I am no economist. But I understand that this is a mathematical model proposed by Jean-Philippe Bouchaud and Marc Mezard from the University of Paris. The model can track the degree of inequality of wealth distribution and shows how the distribution can be influenced. Specifically, the two researchers found that the greater the volume of money flowing through the economy and the more often it changes hands, the greater the equality of wealth distribution. Conversely, the more volatile investment returns are, the richer the rich tend to get. The example of the United States was quoted in the article. In the United States, the 1980s and 1990s were dominated by free market ideology and government deregulation, much of it defended by the idea that wealth would trickle down to the poor. Everything was done to encourage investment activity of all kinds, regardless of risks involved. Did the wealth trickle down? No, wealth distribution in the United States today is significantly less equitable than it was 30 years ago. Wealth is more concentrated than it is in the European nations. The article explains this phenomenon stating, "A dramatic increase in investment activity, unmatched by measures to boost the flow of funds between people, ought to lead to an increase in wealth inequality."

The article also mentions the effects of income tax, capital gains tax and sales tax. According to the article, both income tax and capital gains tax reduce differences in wealth by redistribution and discouraging speculation respectively. On the other hand, sales tax, even those targetted at luxury goods, might exaggerate differences in wealth by dampening purchasing power and encouraging people to invest more of their money.

So, in this Budget, the proposal to give double tax reliefs to donations to charitable organisations is commendable. I must declare my interest as I am working for a charitable organisation. I would suggest that the Government should take a bolder step to give double tax reliefs even to those who donated with- out naming opportunities. We should welcome individuals and organisations who want buildings/rooms/facilities to be named after them. We could publicise these donations and make good examples of all those buildings and facilities to showcase how many people benefit from such good deeds. This would promote the value system and culture that would hopefully produce more philanthropists like the late Mr Tan Kah Kee and the late Mr Lee Kong Chian.

For donations enjoying double tax relief, the Government actually bears about 40 cents of every dollar donated because of the tax incentives. However, voluntary welfare organisations (VWOs) also receive substantial amounts of donations from members of the public who are not paying taxes. The Government should consider providing matching grants to VWOs on every dollar they raise from these non-tax-payers, in the spirit of double tax relief.

Of course, we cannot create a more caring society just depending on tax relief alone. We should continue to cultivate the public-spiritedness and community bonding through education and involvement of people. Community involvement programmes (CIPs) in the schools are good starting points. However, CIPs should be made more interesting and motivating. Students should not be made to feel "compelled" into doing these good deeds. CIP initiatives should come from students and not pre-arranged by the schools.

In addition, we can also encourage the charitable organisations and grassroots organisations to jointly launch community services and voluntary work. For example, our hospitals and the Northwest CDC jointly run a domiciliary service that provides medical and nursing care to the home-bound patients. This programme has a special feature, that is, we are able to make use of the network of grassroots organisations to help those families which are genuinely in need. At the same time, we are able to recruit more volunteers, give them the training and allow them to go back to their own community to serve.

Mr Speaker, Sir, the Government has provided certain reliefs as a means of redistribution of wealth. Just now, Mr Low Thia Khiang said that while giving away the Economic Restructuring Shares, it gives away more than $1 billion with one hand and takes back the money through GST with the other. But, by this kind of relief to redistribute wealth to those who are in need, these families would have the money to spend on things they need, and the money would be re-channelled into the economic system to stimulate the economy.

Mr Speaker, Sir, in conclusion, in order to meet the challenges, we must take bold steps to propel our economy into new heights. However, we should always be mindful of our fellow citizens who may fall out along the way and extend a helping hand to them. Let us build up our social capital while we accumulate the economic wealth.

On this note, I support the Budget.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin): Mr Speaker, Sir, the Budget tabled by Deputy Prime Minister Lee is a Budget that has taken cognizance of the world situation and is in keeping with it. The world situation is different now, therefore we have to restructure our economy to create more jobs. This statement seems to be simple when one hears it. The trouble is that the Government is forward-looking, and the people look but cannot see. Many people do not understand. After hearing the whole Budget Statement, the immediate thing that strikes them is that the GST rate is going to be increased. They would also like to know whether the relief package would be adequate to cope with the rising cost of living. The review on CPF will affect their financial commitment. They are also afraid that the unscrupulous businessmen would jack up their prices.

However, undue worries coupled with suspicions will lead to divisiveness. As the Member for Hougang alleged, the Government is giving you a piece of candy and then cut out a piece of flesh from your body. People are shocked to hear that the GST will be increased. So the Government has to give them some kind of tranquiliser to calm them down. The extra 2% in GST may pain you. The Teochew people would say, ba tia (meaning pain in the flesh). But the Opposition Member has exaggerated by saying that the Government will cut a piece of flesh from you. You may feel some pain on your flesh, but no flesh will be cut out.

Mr Speaker, Sir, the world is indeed changing and changing very fast. But for people who are preoccupied with earning a living, they have heard a lot but they do not understand. If a Member of Parliament like Mr Low does not understand, how do we expect the ordinary people to understand? They may be confused by what they have heard and misunderstood it. The world is changing very fast and becoming very sophisticated. It is too complex for the people to understand. Therefore, we should avail this opportunity to explain to the Singapore people why we need to adapt to the changes.

Mr Speaker, Sir, for people who have lost their jobs or people who are likely to lose their jobs in the process of economic restructuring, they know that they are facing a new world. What worries them is that they will not be able to get an alternative job. For the older Singaporeans, they feel that they have become useless. In the past, people used to say, "having an old person at home is like having a piece of treasure". Now with an old person in a family seems to imply having more worries and trouble. Why? Because you cannot find a job. When you go home, nobody bothers to greet you.

An arduous statement made by the Government is that we must change our mindset. This statement is easy to understand but how are we going to do that? How can we change our mindset? Changing one's mindset takes time and it cannot be done in a hurry. And it has to involve a lot of people - individuals have to change, employers have to change, Members of Parliament have to change. The change will bring a lot of impact. Every MP has a responsibility to explain to the people. I am pleased to see DPM Lee at the TV forum last night, explaining the need for economic restructuring. What is noteworthy is that he even invited a taxi-driver to take part in the forum. DPM Lee saw it fit to invite ordinary people to a TV forum. This is an indication that the Government is pro-people and is reaching out to the people. Other Ministers should emulate this and try their best to explain the rationale of the Government's policies.

When times are good, we like to compare. We try to compare our houses, our cars, our children. But when the economy plummets, people become calculative. At this juncture, we are surfing troubled waters in the same boat. We should help each other. We should be united to face external threats. This is what we call the "big picture". We have become a nation where everyone is calculative, worry about petty issues and we suspect that all businessmen are trying to make profits. If a hawker reduces the number of fish-balls in a bowl of noodle from four to three, or from four big fish-balls to four small fish-balls, can that be said to be profiteering? If there are such hawkers, the best thing to do is not to patronise them. Boycott them. There are many other stalls where we can go to.

I think Singaporeans are too straightforward. They do not know how to negotiate a bend. They do not know how to adjust themselves.

Just now, our colleague talked about the high cost of living and escalating business cost. When NTUC set up the Fairprice supermarkets, one of the objectives is to bring down commodity prices. Give the people more choices. For example, you want to buy a bottle of soft drink, go to a provision shop, you pay 50 cents for it. If you go to an air-conditioned supermarket, you pay 60 cents. If you go to a convenience shop at the corner of your block, you pay 80 cents for it. If you go to a coffeeshop, you pay $1 (with a glass of ice). If you go to a coffeehouse, you pay $3 for the same bottle of drink. But, if you go to a hotel or a high-class cafe, you pay $5 or more. You put your neck on the chopping board! The point is that you have a choice, you have the freedom to choose. You can go to a provision shop or go to a cafe to have your drink. And, if you really want to save money, then go home and drink a glass of plain water - and it is probably more healthy too! The only thing is, can we continue to have a continuous water supply?

Talking about water supply, this is a crucial issue. We all know that we are faced with the difficulty of water supply and we have suffered all kinds of humiliations. So we should go all the way to set up desalination plants and work on this NEWater project. We should make sure that the nation has water. The Government has been trying very hard to get water supply for us.

Just now, a Member mentioned that when he went to a shop, he saw a few dogs and cats there. I keep a rooster and a hen in my house. In the morning, the rooster will faithfully cry, "koo-kair". When the hen lays egg, it would cry, "kok-kay, koo-kay". This egg will hatch into a chick. "Koo-kay, koo-kay" means nation in Teochew or Hokkien. My mother commented that this hen is very intelligent. She knows that there must first be a kok (nation) before you can have the kay (family). Sir, at this present time of difficulty, what worries us most is not catching those merchants who try to profiteer, but how to ensure that we have a nation and a family.

Dr Mohamed Maliki Bin Osman: Mr Speaker, Sir, thank you for allowing me to participate in this debate on the Budget Statement 2002.

Sir, one of the adjectives that has been used to describe the Budget is "bold". This reminds me of the title of a popular soap opera - "the bold and the beautiful". I am very sure that the Budget also aims to beautify the economic and social landscapes of Singapore - making it attractive for foreign investors to set up their operations here and to ensure that Singaporeans have and keep their jobs.

Sir, one of the main aspects of the Budget that has attracted the attention of Singaporeans is the increase in the GST. The Finance Minister, in his Budget Statement, has assured that no Singaporean will be worse off when the GST is increased. The package of goodies has been presented to ensure that the attempts at beautifying our economic landscape will not be marred.

Sir, while the Budget and its related cushions of goodies are aimed at preparing Singaporeans for a "different world", I am not sure if Singaporeans are aware that their world will be different, perhaps different from a different perspective. The harsh realities of the economic crisis have left many Singaporeans gasping for breath to stay alive, like fish out of water. I am sure many Members of the House have met Singaporeans coming to see them to appeal for one instalment plan after another.

It is not uncommon to see a family come to an MPS session with a stack of bills that have not been paid, often over a period of at least three months, if not more, some up to a year. They come to see us because they have either been threatened with legal action or that their electricity, water supplies or even telephone lines may be disconnected. To many average Singaporeans, going to court is indeed a frightful thought, although I am sure many of my colleagues in the legal profession will say that it is just in a day's work. Worse still, the thought of having their supplies disconnected is even more frightening to many of them.

Sir, while the Budget aims to beautify our economic complexion, I am afraid we have pockets of problems that will continue to mar our complexion if we do not pay attention to them. We need immediate attention. The problem is here and now. No amount of facelift in the future will help if their current problems are not addressed.

Sir, I am speaking of a growing number of Singaporeans who I have come across that are trapped in the current crisis and will continue to remain trapped unless something is done to assist them. These Singaporeans are facing severe financial hardships. They are in arrears with Power Supply, SingTel and other phone companies, HDB, Town Councils. I do not have the figures but I am sure that the relevant agencies will concur that the numbers are increasing. They also owe financial institutions for unpaid renovation loans. Some also have arrears with schools for their children's school fees. It is also not uncommon for them to have arrears with hire purchase companies. Who are they?

Sir, I have been a social worker for the past 12 years. The above used to be the typical low-income families who reside in rental flats. But we have put in place good programmes to assist such families in rental flats.

However, the families that I am describing above are not rental flat dwellers. Indeed, there are no rental flats in Admiralty division where I am responsible for. Sir, they are the purchase flat dwellers who are slowly developing a sense of helplessness as they attempt to overcome what they perceive perhaps as insurmountable challenges. Many of the heads of households are victims of structural unemployment. They have low education and limited skills. Their spouses also have limited education and skills. Some have several young children, often the reason given for their spouses' inability to seek employment.

Sir, the world may indeed be different for them. It is getting bleaker and darker as the days go by and as their arrears continue to accumulate and as they continue to feel drowned by the mountain of unpaid bills. The Budget addresses the problem that they will face if they are affected by the increase in GST and other taxes. Indeed, they will be affected. But I am not sure if the Budget addresses the problems that they are facing today. While it is promised that they will not be worse off, can we ensure that they can be better off at the same time?

Sir, the Budget promises jobs and more jobs for Singaporeans as we make our tax system attractive for foreign investors to set up their operations here and to stay here. But we have also been told by some that these jobs will not come until three to six months later, if not more. In the meantime, the arrears of these families described above will continue to increase along with the interests and the threats of legal action.

Sir, how have they been coping so far? Whatever they earn from their part-time jobs or from financial assistance are often used to pay one bill at a time. Often they pay the Town Council this month, the Power Supply the next month, and telephone bill the following month. In the meantime, the arrears accumulate when they do not settle that particular month's bill. They have to play this juggling act month after month. How else could they manage? Sir, the Budget may be bold but perhaps may not be as beautiful to the group of Singaporeans.

Sir, we can be quick to point our fingers back at these families. We may say, "They have themselves to blame." They should be held responsible for their own actions, for spending beyond their means. Now they have to accept the consequences of their actions. Yes, what they did may not be right. Perhaps they were merely succumbing to the aspirations of urban modern living. Whatever it is, their problem is real and will continue to be a problem in our economic and social complexion if we do not address them.

Sir, I am not advocating for more handouts for these families. Indeed they need to be held responsible. Indeed, I think they want to be responsible. But Sir, I think they are at their wits' end. They probably feel trapped to the corner, gasping for air, perhaps hyperventilating. We can try to create space for them to breathe and organise their thoughts. We can stop the creditors from harassing them and giving them space and peace of mind to manage their challenges in a more systematic manner.

Sir, I am recommending that the Government explore a system that can help these families negotiate with their creditors the settlement of their accumulated arrears. We do not have to give them handouts. We merely need to assist in making their problems more manageable for them.

Sir, what I am proposing is the setting up of a system that is akin to the "debt consolidation" service that is beginning to gain prominence in the US. This is a service provided by a non-profit consumer counselling agency which will consolidate the debts, contact the creditors and assist in negotiating for a reduced interest rate and monthly payments. The person pays the monthly instalment to this agency who will then settle the payments with the creditor on his behalf. The person is relieved of the hassle of creditors breathing down his neck and having to deal with potential legal actions. Creditors are keen on this programme as it ensures that they will at least get their principal sum back rather than losing it if the indebted person files for bankruptcy.

A similar agency of this nature can be set up here to assist this group of individuals and families. The agency can negotiate with the creditor to stop legal action against the indebted person. This is critical as often times the legal costs are borne by the indebted person, making them perceive the problem as even more insurmountable. In light of the current emphasis to encourage philanthropy, these creditors could also be encouraged to lower their interest rates to motivate and facilitate these individuals' ability to settle the debts. We can prevent more bankruptcies from being filed and we can help ensure mental health for these individuals.

Sir, this scheme will create a sense of competence on the part of the individuals as they try to settle their problems themselves. They are merely facilitated by the assistance of the debt consolidators. Indeed we are empowering them to manage and be responsible, albeit some level of supporting. It will eliminate their sense of helplessness,

Sir, financial problems have been found to create strains on marital and familial relationships. Many families have been broken due to financial hardships. We need to continue to strengthen our families through whatever means we can. Strong families produce strong and productive members of society.

Sir, as we continue to promote strong families, we need to acknowledge the significant roles that our women folk have and continue to play in and out of the families. Here I would like to lend my support to the call made by our women colleagues yesterday to extend medical benefits to the dependants of our female civil servants. Sir, the men, often known as the heads of households in our society, are never retrenchment-free or recession-proof. Many have lost their jobs and rely on their wives' income to survive. Their dependants should not be deprived of medical coverage. Indeed, extending the medical benefits to dependants of female civil servants reflects a recognition of the increasing shared roles and responsibilities between men and women in our families. On the same note, may I also recommend that the child sick leave enjoyed by female civil servants be then extended to male civil servants too. I am sure these are good ingredients for more babies to be born, apart from the natural order of things, but I shall elaborate more on it during the debate in the Committee of Supply.

Sir, the above proportion assumes that the person has an income to make the monthly payment to the debt consolidator. The challenge is for him to also ensure that he has the necessary skills and knowledge that will assist him in securing a job. I am pleased to note that emphasis has been placed on the development of human resources. Sir, part of this development is the need to shift the mindsets of Singaporeans, as mentioned by several parliamentary colleagues - to survive in a different world, we need to be nimble, adaptive, determined, and most of all, resilient.

Sir, the change in mindset needed is more critical for the Malay/Muslim community. It has been reported that the Malay workers were hardest hit during the recent spate of retrenchments as many have low level skills and are not quite enough to re-skill themselves. For the Muslim community to ensure that it succeeds in the new and different world, we must embrace the vision of a community of excellence charted by the new Minister-in-charge of Muslim Affairs.

Sir, there are two meanings to the verb "to excel". One, to excel is to be exceptionally good. Two, to excel oneself is to do better than ever before. The first definition is abstract and not easily measurable. The second definition suggest something that is more operationable. To do better than before allows us to use a more measurable indicator of what it means to excel. Using this definition then means that to strive towards excellence is an ongoing process and we excel each time we perform better than all the previous attempts we have undertaken. In this sense, excellence is an infinite point in that process. This definition is indeed useful.

Sir, to build a community of excellence, each member of the community must recognise that he or she plays a critical role. The most micro of the role is to do your best in whatever you do. I am reminded of the motto of my former secondary school - "From each his best" and for the Malay/Muslim community, I would want to add "and nothing less". A community of excellence is one that comprises not only of individuals but of families, organisations and businesses of excellence. Each of these levels of the community must espouse a similar set of values - importance of seeking and creating knowledge, hard work and determination, and commitment to do one's best.

Singapore has prided itself with being number one in many areas, the best airport, the best sea port, etc. I urge the Malay/Muslim community to work together with the Malay political leadership and the Government to make the Malay/Muslim community the best one in the region and in the world. We should focus our energies on the education of our young to ensure a new generation of educated individuals who will excel in the new world. We need to help those who are disadvantaged and give their children a headstart. Our young must have an excellent grasp of English, Mathematics and Science as early as possible, to ensure a strong foundation for them to excel. The Budget is set to invest heavily on such social and human capital. The community must capitalise on this opportunity.

We need to ensure that our workers can fit well into the jobs of the new economy. We need to send a message that it is never too late to learn. It is never too late to succeed. It is never too late to excel. Indeed access and acquisition of knowledge are key ingredients for success in the new economy.

Sir, the Malay/Muslim community as well as the other communities have their respective roles in contributing to the efforts of beautifying the economic and social complexion of Singapore. The ingredients for a lasting face-lift have been gathered. We need to blend these ingredients well to ensure that our complexion remains smooth and radiant, thereby attracting potential suitors from all over. Indeed we have been bold in the measures introduced in the Budget. Let us ensure that we are also beautiful.

Sir, I support the motion.

Mr Low Thia Khiang: Sir, do I have your permission to clarify the point on my speech referred to by Mr Seng Han Thong, Member for Ang Mo Kio?

Mr Speaker: Yes.

Mr Low Thia Khiang: (In Mandarin): Mr Speaker, Sir, in my speech I talked about the small-time businessmen and hawkers who are struggling for survival. Who dares to profiteer at this moment? I think all these small time businessmen will have to swallow their misery in silence. I do not know whether Mr Seng could not understand me or that he is distorting the meaning of my speech. If you want to catch the culprit for price hike, I think the biggest culprit is the Government.

Mr Ang Mong Seng (Hong Kah): (In Mandarin): Mr Speaker, Sir, I would like to thank you first for giving me the opportunity to take part in the debate.

The Deputy Prime Minister and Minister for Finance announced that the important change in Budget 2002 is to cut down on corporate tax and personal income tax so as to create more job opportunities for Singapore, and for Singapore to continue to prosper. To balance the Budget, he accepted the Economic Review Committee's recommendation to raise the Goods and Services Tax (GST) by 2%. At the same time, in order to cushion the impact of GST increase there is an offset package to help the low income families to lighten their burden.

Mr Speaker, Sir, at a time when the economic prospects of the world are not certain, the Government has accepted the recommendations of the ERC to make a comprehensive restructuring of our tax system to help the poor families or lower income families to offset the effect of the increase in GST. This shows that the Government and the people of Singapore are also cooperating in recreating Singapore. So it also lays emphasis to say that in time of economic difficulty the people and the Government will continue to cooperate and make the necessary preparations for our future take-off and prosperity.

I would say that this year' Budget is generally supported by the people. The people here appreciate that this is necessary. The Government has done its best to lay down the foundation and measures to rebuild our economy. In this year's Budget, there are only three types of tax increases. First, GST to be raised from 3% to 5%, secondly, the tobacco and liquor taxes will go up, and thirdly, the parking fees would be increased. In order to offset the impact of all these increases, there will be certain measures to help the people to ensure that most families will not suffer under the increase of the GST. These packages include (1) lowering personal income tax and corporate tax, (2) giving SC&CC rebate for HDB dwellers for five years, and (3) cutting down road tax and vehicle registration fees. In addition, parents' relief will be more generous. Rebates for foreign workers' levy will be extended and Economic Restructuring Shares (ERS) will be distributed to all adult citizens of Singapore.

Mr Speaker, Sir, when we look through the entire Budget, we all feel very relieved because the 2% increase in GST has also been offset by other measures and the Economic Restructuring Shares given to us could be used to offset the increase in GST, if necessary. But the people in general also fear that the increase in GST will cause a consequential increase in the prices of goods. This is possible. Soon after the proposed GST increase was announced, the television station interviewed some ordinary citizens. A hawker who was interviewed was asked whether he would sell his wares at higher prices. He promptly replied "Yes, of course!" "By how much would you increase?" "I used to sell a bowl of noodle for $2.50. Now it will be $3.00". So there is an increase of 50 cents. The increase is 20%, and not 2%.

The Government knows the problem. A Committee under the chairmanship of Mr Chan Soo Sen has been formed to combat profiteering to ensure that prices will not be increased without a good reason. So if anyone is to come across any instance of such profiteering, he should feedback to Mr Chan Soo Sen or to any Member of Parliament. Let Mr Chan be the Justice Bao of the new economy. All you need to do is to fill up a simple form and send it to Mr Chan Soo Sen. I am very glad to see that Mr Chiam See Tong has been invited, and he has accepted, to join the Committee. Perhaps, Mr Low Thia Khiang should also volunteer his services to the Committee.

All these measures are preventive in nature. We hope that the hawkers and merchants would not increase their prices without good reasons. But we must take preventive measures. Prevention is better than cure. So this prevention by appointing the Committee to act against profiteering is far-sightedness on the part of the Government.

Mr Speaker, Sir, another emphasis of the Budget is to be pro-business, to lower income tax for the companies and the individuals, to increase our competitiveness and to attract foreign talents so as to create more jobs for Singaporeans. I hope that this good news will turn into good opportunity. In the 21st century, competition is becoming increasingly intense. With the opening up of the China market better opportunities are provided for investors to go to China. So in attracting foreign investments to Singapore, we face a greater challenge.

In order to overcome this difficulty, the Government has made a lot of tax restructuring to provide impetus to stimulate the Singapore economy, to reshape Singapore as a place which is more attractive to foreign investors whose investment would help to generate more jobs for our people. The people are now very concerned as to whether they are able to keep their jobs. About 100,000 people are presently unemployed, and they are having difficulty getting another job. I wonder if the Economic Review Committee (ERC) is able to come up with some kind of indicator as to how many of these 100,000 people are being given job offers and what kind of jobs are being offered to them.

On 12th May 2002, a factory placed a job vacancy advertisement in a morning newspaper. Within 25 minutes of the opening of its gates, some 400 people turned up to apply for the 200 vacancies. This is the report in Lianhe Zaobao. From this newspaper report, we can see that many people are unemployed. There were only 200 jobs, and within 25 minutes they attracted more than 400 applicants. That is, two applicants to one job. Those who are eventually recruited are like having struck a lottery.

Over the past few months, the various CDCs and the Ministry of Manpower have conducted a number of job fairs to help the people look for jobs. But the success rate is not encouraging. Many who attended the fairs, particularly those who are above the age of 40, would find that the jobs offered at the fairs are not suitable for them. Because at the job fairs, most employers were looking at younger people or people who are computer savvy. These fairs do not seem to cater to the needs of the older job seekers.

In order to understand the situation of unemployment, the CDCs have conducted a random survey of about 1,200 interviewees to understand what kind of problems they are facing, what kind of attempts they have made, before they approach the CDC or MOM for assistance. The survey shows that 21.5% of the job seekers went by the recruitment advertisements in the newspapers, and some went to employment agencies, while some browsed the Internet. About 13.7% attended job fairs. Only 11% went to MOM, and 10% approached their friends for help, and a very small percentage of 7% went to the CDCs. According to the survey results, we feel that the CDCs and MOM can work harder to provide better services to the unemployed people to help them look for jobs.

Mr Speaker, Sir, in this Budget for a changing world, I would like to raise five points: One, the most important, is how can we help the 100,000 unemployed people look for jobs. I suggest that we have a one-stop employment agency service. We must first have a national registration of unemployed people. Through more than 100 community clubs and community centres of the People's Association, we could register the unemployed people together with information concerning the kind of job they want or desire to have. Through this data centre, we can re-channel the information to the CDCs for reclassification. For example, if a person wants to work as a cleaner, he can go to the CDC and be matched up with the cleaning contractors on the list, and arrange for the relevant training to be provided. Once the applicant is familiar with the job, I believe it will be easier for him to secure a job. Likewise, if a job seeker wants to become a driver, arrangement can be made for him to be trained at Comfort Taxi or SBS, or undergo some form of training through the relevant trade unions. In this way, he will acquire the necessary skills to prepare him for the job.

MOM can also seek the cooperation of all the factories, companies and enterprises to report to the Ministry any job vacancies available. With this kind of information from the CDCs and MOM, we will be able to provide better job-matching services.

My second suggestion is that the Government provides some form of incentives for employment. In helping the unemployed people financially, the Government gives $200 relief a month. For a period of three months, the total is about $600. This kind of financial assistance is only temporary in nature to help the unemployed people maintain their family. Over the long term, the Government can set up some kind of unemployment incentives for companies or businesses to employ the older workers, say, those who are 40-50 years old. For example, give $100 a month to every 40-year-old worker employed for a period of six months. With this kind of incentive, companies will be attracted to employ the older workers. This will help to reduce our unemployment rate. It will also help our workers to get jobs to look after their families. Then they will not face financial hardship.

The third suggestion I would like to make is for some kind of rental rebates to be given to the JTC and HDB shops. This was also the suggestion of Mr Inderjit Singh. At the moment, they can be given about 20% rental rebates, so as to lower their operating cost, and they will be in a better position to carry out their business and tide over the difficult period. They can even afford to lower the prices of their merchandises and our people will not have to go all the way across the Causeway to do their shopping.

The fourth point is that with effect from 1st September, the monthly parking fees in the HDB estates will be increased from $75 to $90, an increase of $15 per month. The open car park fees will be increased by $15. I am afraid that residents affected by the SERS projects, these residents who used to park their cars in the surface car park and paying $55 per month will now have to park their cars in the multi-storey covered car park and will now be asked to pay $90 per month, an increase of 35% per month, or $420 more per year. This is a very huge increase. I hope the Government will give them special consideration.

Personal income tax will be adjusted downwards over a period of three years. Similarly, the increase in parking fees should also be spread over three years. Then there will be a balanced way of treating two different groups of people. This will be one good way to help our people, so that they will not suddenly be faced with a huge increase in parking fees.

On the rebates for public utilities, there is no mention on this issue. I have been asked by many residents whether the Minister for Finance has forgotten about the rebates for utilities. Over the past few years, there is some kind of utilities rebates announced every year. It will be very helpful to the poor and low-income families. They hope that the Government will consider re-introducing the rebates for public utilities.

Sir, I support the Budget.

Mr Seng Han Thong: Mr Speaker, Sir, may I seek clarification on Mr Low Thia Khiang's speech?

(In Mandarin): Mr Speaker, Sir, I understand every word of Mr Low Thia Khiang in Mandarin. I know the meaning. What I was saying is that when the Government was restructuring the economy, the Government is forward-looking, but many people cannot see it. So, when he said the Government is cutting one big piece of flesh from the people and is therefore the biggest profiteer, I sought clarification and expressed concern that in the end, you would start suspecting also among the hawkers who among them are profiteering. So, I hope he also understands my Mandarin. What I said is that during these difficult times, we should not start pointing at people and say that he is profiteering. What we should do is to understand the long term objectives of the Budget and place nation (Koa) before family (Kia).

Mr Speaker: Order. I suspend the Sitting and will take the Chair again at 3.35 pm.

Sitting accordingly suspended at 3.15 pm until 3.35 pm. Sitting resumed at 3.35 pm