CENTRAL PROVIDENT FUND AND RELATED CHANGES

[Mr Speaker in the Chair]

Debate resumed.

Mr Seng Han Thong (Ang Mo Kio): (In Mandarin): Mr Speaker, Sir, as we debate on the changes to the CPF system, we should ask: are we looking at the immediate effects or the long-term benefits? During the last two days, the bulk of the debate was on the immediate effects of the proposed changes. Many Members spoke about the 4% reduction of CPF contributions for those between 50-55. To me, this cut is necessary. However, if the companies feel that this is unnecessary, then please pass on the savings to the workers as a variable component of their salaries, or as bonuses.

Just now, Mr Chiam See Tong remarked that it appeared very strange to him because in the past it was always the Opposition that was asking for the CPF contribution rates to be cut, and now it is the Government asking for the cut. This is indeed a "turn of the tides". Everything seems to have changed, but he has not changed. In fact, just some two months ago, he was debating with me as to whether the CPF reduction should be exercised. I told him that the most important thing was to keep the job. If you have no job, why talk about CPF. I think we have to look at the long-term benefits of the proposed changes to the CPF system rather than their immediate effects.

Sir, to me, this recommendation by the Economic Review Committee can be described as wei min licai, fang yan jianglai (minding the people's wealth, and looking at the future). What are our concerns? We are looking at an aging population. Do we have enough to provide for our retirement? Do we have enough funds for our medical expenses? If the Minimum Sum is not enough, then how much is enough?

As it is, many of our people are buying properties beyond their means. Mr Low Thia Khiang mentioned yesterday that he agreed with the Government's policy of gradually adjusting the CPF scheme. In Parliament, most of the time, I could not agree with the arguments put forward by Mr Low. But on this occasion, I agree with him. I feel that he is speaking more and more like a PAP Member, and I begin to wonder who the Opposition is now.

On the Special Account, the proposal is to change from the 4-6-8% formula to a 5-7-9% formula. Mr Low wants to propose a further change to 7-9-9-6, making it a 4-digit formula. Inspiration for the 4-D punters!

Prior to the financial crisis in 1997, many people thought they could strike it rich by speculating on property. Now they get their fingers burnt, and their property becomes a negative asset. It is said that if you speculate on property, you become a landlord because you cannot dispose of it and have to hold it. Likewise, if you speculate on shares and get caught by a downturn in the share market, you hold the shares and become a "share-holder".

Members may remember the "Hello Kitty" incident in Singapore some years ago. Many people thought that they could make a lot of money by buying up all these Hello Kitty toys offered by a fast-food chain. They ended up spending a lot of money buying stacks of hamburgers which they could not consume, and even landed up in court for disorderly behaviour while queueing up to purchase these valueless toys.

Yes, indeed, there are a lot of people in Singapore who have a lot of money but do not know how to mind their wealth. When the CPF Board relaxed the rules for withdrawal, they just spent their savings as though they were not their own money. They say it is gong ji jin, therefore it is money accumulated by the Government. Let us spend them all while they are available to us. They do not realise that they are actually spending away their own money. Some may say, "I have so much money in Medisave, why not stay in a luxury ward and enjoy myself?" They do not realise that money in the Medisave account is meant for medical care in their old age, and as you grow older, you would need more money for medical expenses.

Mr Speaker, Sir, I remember the multi-billionaire, Mr Li Ka Shing of Hong Kong once said, "I may have donated millions to charity, but if I see a five-cent coin on the ground, I would bend down to pick it up." Although he may have billions, the 5 cents still count to him. I think Singaporeans are losing their virtue of thrift. Many people want to make maximum use of their funds in the Ordinary Account. The Government now wants to increase the contribution to the Special Account. The reason is to make sure that people have enough funds in their savings for old age. You may not realise it. If you cook a little handful less of rice every meal, in three years' time, you would have saved a whole tank of rice. I think Singaporeans have forgotten how to be thrifty.

Just now, fellow Member, Ms Penny Low, said Singaporeans did not know how to mind their wealth and complained of "Money not enough!". I must say that they should know that the CPF money is not enough. In the United States there is a best-seller entitled, "Rich Dad, Poor Dad". Perhaps our Government should publish a book entitled, "Rich Government, Poor Government" to explain why we must have a rich reserve. This is a way to educate our people, and we may be looking at yet another best-seller!

Many people feel that these changes proposed by the ERC are some sort of interference in their lives. No matter how they look at it, it is a good thing that the Government has done, and we must commend the Government for that.

Sir, if we look at the long-term effects, we can see that, to a large extent, there is some problem with our existing seniority-based salary system, because many of these older workers will be the first to be retrenched whenever there is a retrenchment exercise. We must do something to help them. Mr Low Thia Khiang said that we should look after them. I can assure him that the Government is looking after them.

Many colleagues have also asked whether this 4% reduction in CPF contribution rate would guarantee job security. Of course, it is not as simple as that. There are many other things to do. We have to look into the training of the workers. Last year alone, among the 500,000 training places, 20% were run by NTUC and the trade unions. We must train our workers so that they have the right attitude, the right skills, so that they have good employability.

Mr Speaker, Sir, if we create a balance sheet for our workers, on the assets side, you would have tangible fixed assets such as the HDB flat or private property which hopefully is not a negative asset. And, these are current assets, CPF Minimum Sum, Medisave, etc. The NTUC has also created for the workers some intangible assets, such as the skills, the knowledge and their work attitude. These intangible assets will help them find a job. There are many workers who are choosy and they are not prepared to take on the jobs that are offered to them. I think we have to change their mindset. We must train them in such a way that they would not only have skills and good attitude, but also goodwill. So, in this respect, we must work very hard to build up the goodwill of our people.

I hope this Committee headed by Dr Vivian Balakrishnan will look into not only remaking Singapore but also remaking the people, to change their mindset. Many people are saying, "Well, I have been working the whole life and now you want me to start all over again." It is just like I have been drinking PUB-supplied water all my life and now we have to drink a new type of water. We have to learn to drink this NEWater. So, everybody has to learn. We must adapt to changes and start drinking NEWater and prepare ourselves for many changes to come.

I support the statement.