ANNUAL BUDGET STATEMENT

Debate resumed. 3.35 pm

The Senior Minister of State for Transport and Information, Communications and the Arts (Mr Khaw Boon Wan): Mr Speaker, I speak in support of the motion.

This year's Budget is ERC-inspired. It is an important first step to re-position our economy for the future.

The ERC is a reincarnation of the 1985 Economic Committee, but its karma is different. Almost a generation has passed between the two. The 1985 Economic Committee Report and the changes it launched led to more than a decade of very strong growth for Singapore. So, the question is whether the ERC Report will be just as successful. Will it too lead to another decade of robust growth for Singapore and well-paying jobs for Singaporeans?

The ideas are out there in the ERC Report. But, as a friend remarked recently, ideas are a dime a dozen. The ability to execute is what is worth millions. Whether the ERC Report will lead to success depends crucially on our collective attitude and joint efforts towards restructuring.

Many of the ideas in the ERC Report are not new. You can find them in the 1985 EC Report. For example, my Services Sub-Committee's idea of making education and healthcare services engines of our growth was not new. It was a major recommendation in 1985. So, why are they being recycled in 2003? Obviously, it means that the old recommendations were not fully exploited. I was in the Ministry of Trade and Industry during this intervening period. I can testify that it was not for lack of trying. But the economic agencies did bump against many obstacles. For example, in the case of health services, there is genuine worry that if a large number of foreign patients are here, competing with local patients for the attention of our doctors, they may drive up healthcare cost. In other words, there is a trade-off between economic objective and social priorities. So, unless we have a forum to debate such concerns, we will remain in ambivalence and under-perform. Hence, our recommendation to set up a Ministerial Committee on Services where such issues can be connected and trade-offs made. I am cheered by Deputy Prime Minister Lee's decision to chair this Ministerial Committee. Many hard choices will have to be made, going forward.

But there is one major difference between 1985 and now. Then we were truly way ahead of the region. But over the years, the others have caught up. We are still ahead in most areas, but the gap in capabilities has narrowed. We have good hospitals and good schools, good universities, but it is no longer sufficient to be good, as the others have also built up good institutions.

Somebody pushed me this book, Good to Great by Jim Collins. Collins spent five years looking into why some companies become great but many others do not. His key insight is: "Good is the enemy of great. And that is one of the key reasons why we have so little that becomes great." This is his observation:

"We don't have great schools, principally because we have good schools.The vast majority of companies never become great, precisely because the vast majority become quite good - and that is their main problem."

Applying Jim Collins' insight to the ERC Report, my take is that being good is not enough in our next phase of development. We need great institutions, and many more of them, going forward. We need to do four things.

First, we must aim high. Good is no longer good enough. Without the resources, critical mass and low cost structures, we will not be able to compete if we are merely good.

To illustrate this point, look at our Changi Airport. For four million people, we do not need and do not deserve a world-class airport. But because we plan it and we run it to serve 400 million, we have Changi. It is a perfect example of the abundance mindset, focusing on opportunities. Had we adopted the scarcity mindset of focusing on constraints, Changi would not be there and we will all be poorer for it.

Last week, Matsushita Refrigeration Industries, the world's No. 2 maker of compressors for household refrigerators, celebrated its 30th anniversary here in Singapore. At a time when many companies are crying their lungs out about the challenge of manufacturing in Singapore, Matsushita is expanding its activities here. It aims high. It aims to make Singapore the world's No. 1 R&D Centre and Manufacturing Solution Hub. Its Singapore factory is the largest facility in the world, making more than half of Matsushita's global output. Last week, it launched the world's most efficient compressor, designed by the R&D team in Singapore.

The Esplanade is not of the same scale as the Sydney Opera House, although it is not less charming. Like Changi Airport, we built it to serve a larger hinterland. To attract the clientele, our facilities, especially acoustics, have to be world-class. Last December, tenor Jose Carreras performed in our Concert Hall and he was all praise. He said, "It's probably the world's best modern hall and one of the world's top concert halls of all times."

Second, let us move, and move faster than the fastest in China and elsewhere. Those of us who visit China regularly know how fast some of the cities there are moving. Just look at broadband connections in hotels. They are now fairly common in China, but our own hotels here are still slow to implement it. At the end of the day, we win a race only if we can run faster than our competitors. The ERC Report contains many sensible recommendations, but actual implementation and the speed of implementation is the key.

Third, learn from our successes and our failures. We need to apply our knowledge more widely in Singapore and build up new knowledge faster. We have pockets of excellence. I may be biased, being from MITA, but I think our libraries have done a remarkable job. We should apply what they did to other areas. Likewise, NETS, Tradenet are all remarkable successes. We should apply our knowledge in cluster information integration in other areas, for example, in healthcare.

But we should especially learn from our failures. This follows from the need to move fast. When you move fast, you must be prepared to make some mistakes. We must then be willing to readily admit mistakes, change quickly and correct them. For if we do not learn from our mistakes, we would have wasted our tuition fees and, worse, repeat the mistakes.

Fourth, be frugal. We should try to do more with less. Even as we aim high, our feet must be firmly on the ground, focusing on the bottom line. If our feet are not on the ground, we will merely be creating bubbles like the dot.commers. And, if we are not delivering value at realistic prices, someone else would.

A CEO friend of mine had this to say about management:

"In my 26 years of working life, I have seen us jumping from one management fad to another. Each launched with great fanfare and consultants made tons of money from fees. All the while, I stuck with simple ideas of:

(a) productivity = maximise output, minimise input;

(b) quality is defined by the customers;

(c) value = maximum perceived quality at lowest

possible cost;

(d) the role of management is to help the frontline staff deliver maximum value to the customers. Everything else is unnecessary bureaucracy."

He may have over-dramatised, but I agree with his key message that we should focus only on things that matter to customers and cut out unnecessary bureaucracy as an effective way to reduce cost. Save every single cent and invest on the great stuff. Acquire the culture of being frugal. Look at our first generation entrepreneurs. They are famously frugal. And this is not a uniquely Asian value. The most successful American companies in modern history are ferociously competitive on cost - Intel, Microsoft, Dell, Walmart, Cisco, South West Airline, just to name a few.

Up until at least 1998, Bill Gates flew economy, not first class. Walmart employees, including their executives, share rooms when on business trips. These companies have built a strong corporate culture that recognises and rewards employees for being frugal. They know that over the long haul, being cost-competitive is a key competitive advantage.

In the absence of some natural advantages, we will always need to be cost-competitive, not necessarily to be the cheapest, but must provide the best value for our customers. My sense is that during the boom years of the last decade, we seem to have forgotten the wisdom of the ancient sage: Ju an si wei, ju sheng si gan ( ). In victory, remember defeat. In time of plenty, we should be especially mindful of deprivation. We should work to make frugality a national culture and regain quickly our cost competitiveness.

In conclusion, let me return to the question: will the ERC Report bring in another decade of strong growth? And the answer is really in our hands. Good is the enemy of great. If we are complacent, thinking that we are good and have arrived, then success will escape us. On the other hand, if we succumb to the current economic slowdown and wring our hands in despair, success will also escape us. So, Straits Times' Chua Lee Hoong is right. In her 5th March "Budget 2003" article, she hoped that this Budget debate would generate the right buzz, by focusing on the big picture shift in direction that we are making. Instead, if we wallow in self-pity and talk ourselves into a depression, we deserve to lose.

Last week, I had the pleasant duty to give away the Woman of the Year Awards to Olivia Lum and Elim Chew. Several parliamentary colleagues were also there. Wonderful choices by the judging panel, especially at a time like this. These two ladies did not wallow in self-pity when they were down. They had gone through very tough times, but they picked themselves up and succeeded against great odds. And that was also how modern Singapore was built by our parents, despite poorer endowment and more hostile neighbourhood. Surely our generation can do better, given better education and stronger resources.

In last year's Sing Singapore song, Dick Lee had this to say:

"Look where we are, we've come so far

And there's still a long, long way to go

With all of my heart, I will care

I'll play my part, I will share

With family and friends, together we'll stand

And in the end, hand in hand

We will get there"

I share his optimism and his spirit of confidence. Rain will not last forever. While we may not like getting wet, rain also clears the air and nourishes new growth. Singapore has all the conditions to grow and flourish again when the sun comes up.

Sir, I support the motion.

Dr Teo Ho Pin (Holland-Bukit Panjang): Mr Speaker, Sir, I rise in support of the motion as proposed by the Finance Minister.

The Budget Statement sends a clear signal to all Singaporeans. We must work together as one united people to face the new challenges in the global economy. We need to develop a resilient and diversified domestic economy, and position Singapore in the global market.

In today's uncertain world, we must equip our people to be more flexible and hardworking. It is a mindset change, which we must encourage all Singaporeans to adopt in order to have a better future. I agree with the Finance Minister that "success ultimately depends on the resourcefulness and resilience of Singaporeans."

Sir, while the Government moves its stride to globalise Singapore, we must not make Singaporeans lose heart that they are unable to cope with these rapid changes. Incentives and encouragement must be strategically administered to develop passion among Singaporeans. For those who have difficulty coping with the economy's transition, we must lend a helping hand. This includes the small and medium enterprises which employ many Singaporeans.

There are three key aspects which the Government should focus to make Singapore a globalised economy:

First, the Government must encourage and help all Singaporeans to learn new skills.

Second, the Government must help to strengthen our firms to better cope with global competition.

Third, the Government must help both Singapore firms and Singaporeans to globalise.

Helping Singaporeans

There are three groups of Singaporeans who require more help from the Government to be self-reliant. They are, first, needy Singaporeans who are chronically sick, mentally sick or elderly; second, Singaporeans with low skills or unemployed; and, third, dual income families which have become single income families.

Sir, over the last 12 months, about 9,000 residents in the North West CDC district have approached the CDC for job assistance. Although 3,000 have managed to secure jobs through the CDC's job assistance, job counselling and training programmes, 6,000 residents are still jobless. Despite many job-matching attempts, many job seekers are still unable to find suitable jobs.

Two key reasons are cited for this situation. Firstly, the salary of jobs offered is unable to help the job seekers to meet their living expenses; and, secondly, the accessibility of jobs and homes is poor, resulting in high transportation cost for the job seekers. In addition, many job seekers have either low skills or irrelevant skills.

Job seekers who are above 50 years old face greater difficulty to return back to the job market. The limited number of job vacancies in the market further compounds this problem. As for those who have medical history, firms are not willing to employ them for fear of low productivity and high medical expenses.

Sir, some dual income families also face difficulty due to over financial commitments or poor financial planning. Many had miscalculated their sources of income and were caught off guard by the prolonged economic crisis. In fact, quite a number of these Singaporeans stay in 4- or 5-room HDB flats, and receive lesser utilities and S&C rebates from the Government. Very often, their children's needs and education are affected.

Sir, I wish to propose the following measures for the Finance Minister to consider:

(1) Creation of jobs. More incentives should be offered for firms to provide more jobs for Singaporeans. These include part-time jobs, flexible jobs or contract work. The People-for-Jobs Traineeship Programme (PJTP) should be further enhanced to include part-time or contract work. We must also render more support to those voluntary welfare organisations which provide elderly, family and medical care services in the community. More PJTP programmes should be introduced in these VWOs. In this way, we can build a larger pool of healthcare and social service workers to meet the future needs of an ageing population.

(2) Skills upgrading. The key ingredient to self-reliance is to have a positive and flexible mindset. Singaporeans must have the "never say die" attitude. We must continually strive to improve our employable skills. With the correct attitude and multiple skills, Singaporeans will always be employable in a diversified economy. The Government should also let Singaporeans take ownership of their own skills upgrading. We should introduce a "portable training benefits" scheme, whereby workers can take their own initiative to attend approved training courses which are recognised by the National Skills Recognition System. Sir, I fully support the special transfer of $500 million into the Lifelong Learning Fund. What is needed is a more effective outreach to encourage Singaporeans to continually upgrade their skills. The Skills Development Fund has achieved some success in upgrading workers through firms. We should allow more flexibility and incentives for Singaporeans to take initiative to learn more skills. With a portable training benefit scheme, workers will have more options to upgrade their skills.

(3) "Means test" and subsidy. We should review our "means test" and allow more flexibility to help needy Singaporeans who are chronically sick, mentally sick and elderly. While we encourage families to help one another, some working class families do not have the financial ability to help their parents and siblings. This is especially so when there are family members suffering from chronic illnesses. The long-term medical expenses will put severe strain on the families. Thus, the Government should provide more social assistance to these needy Singaporeans and reduce the burden of their family members.

To date, no fee subsidy is provided for pre-school education. Families with a per capita income of less than $700 usually face difficulty to pay for their children's pre-school education. With the growing importance of pre-school education, I hope the Finance Minister can consider subsidising the fee for pre-school education in Singapore. To further encourage Singaporeans to have more children, we should also review the subsidy for childcare and student care centres. The first three children should be given equal and higher subsidy so as to help working parents.

(4) Medifund. Sir, I support the transfer of $100 million to the Medical Endowment Fund. The Medifund scheme has provided much help to many needy Singaporeans. Those who have received help are appreciative of the financial assistance, which could sometimes amount to thousands of dollars per case. Based on feedback from the CDC's social assistance services, some residents would like to urge the Government to consider extending the scope of subsidy for Medifund to include some necessary consumables for patients, such as stoma bags, adult diapers and special liquid diet. These consumables can amount to hundreds of dollars per month, which is usually beyond the reach of needy families.

Helping Businesses

Sir, I support the measures introduced by the Finance Minister to reduce business costs and increase the competitiveness of our companies. We must explore more innovative ways to encourage Singapore companies to be globally competitive. We need to relook into the factors of production and re-engineer our work processes to reduce cost, improve quality and productivity.

Sir, I would like to suggest three areas which the Government can assist businesses:

(1) Reducing business costs. More flexibility should be given to allow integrated and maximum use of land. Factories and businesses must be located near our logistics and transport infrastructure to minimise travelling time and reduce transportation costs. We should facilitate complementary mix of tenants to achieve better supply chain operations. For example, anchor tenants of industrial land should be given more flexibility to house their subsidiaries or sub-contractors/suppliers. In addition, we should also consider abolishing property tax in Singapore, especially for vacant land so as to reduce holding cost for businesses and encourage property ownership.

The Government should provide more support to help Singapore firms brand their products and services overseas. I would suggest that we develop a one-stop website to showcase all Singapore's products and services in the global market. The portal can be the gateway for Singapore firms to brand their products and services. At the same time, more business tie-ups could be initiated through the web.

(2) Upgrade skills of staff. The Government should facilitate the development of capabilities of Singapore companies to be globally competitive. Except for the Government agencies, private firms are usually less keen to send their staff for skills upgrading. Sir, employers are the "best teachers" to train workers with employable skills. We must provide incentives to encourage employers to train their employees regularly.

Like the recent revision of foreign worker levy, the Government should also consider providing incentives for employers who train their staff in multiple skills. In this aspect, I would urge SPRING Singapore to be more proactive in encouraging employers, especially the SMEs, to send their staff for skills upgrading regularly.

(3) Increase business opportunities. Sir, the reduction of business cost cannot help firms to survive if there is no business. The market in Singapore is small and saturated. Therefore, Singapore firms must search for new markets overseas. Business delegations led by the Government have indeed opened up many doors for our firms. The Government should continue to organise more such delegations and facilitate business tie-ups in specific industries such as financial services, design consultancy, trading, transport, or logistics services.

Today, Singapore is a hub for almost everything (seaport, airport, logistics, trading, info-comm, finance and tourism). Although the visitor arrivals to Singapore increased marginally by 0.6% to 7.5 million in 2002, hotel occupancy rate fell by 1.9% to 74%. I understand from the business community that many visitors merely used Singapore as a transit or tourist stop where visitors will only spend a few hours here. Thereafter, they will stay at cheaper hotels in our neighbouring countries.

Sir, we need to address this visitor's transit problem and encourage more visitors to stay longer in Singapore. The Singapore Tourism Board should provide more incentives for organisations or firms to hold longer duration international conventions or exhibitions in Singapore. We should also commission event promoters to bring in world-class shows, exhibitions or meetings to Singapore.

As a safe haven, Singapore should capitalise on its secure environment to attract family visitors, especially children, to have fun in Singapore. But to achieve this, we need to have better tourist attractions for children and families. The Government should seriously consider building a world-class theme park, maybe a "Wonderland" or "Dreamland for Children". We must invest and build a world-class tourism infrastructure to attract new tourists to Singapore.

The proposed theme park should be supported by the Government and be competitively priced to attract visitors. The Singapore Tourism Board should be tasked to operate the park so as to achieve better accountability.

Sir, the outsourcing of theme parks to the private sector has failed many times in Singapore. We should not repeat these mistakes but should instead have only one world-class theme park in Singapore. Spearheading tourism will provide more business opportunities for our companies in Singapore.

Globalising Singapore

Sir, I wish to propose three strategies to globalise Singapore:

(1) We have to focus on the quality and reliability of our products and services;

(2) We must build a resilient and multi-skilled

workforce; and

(1) We must nurture a few world-class companies to serve the global market.

(i) Quality and Reliability

As competition gets more intense, we must differentiate our products and services from our competitors. Singapore is in a good position to capitalise on our trustworthiness to produce good quality and reliable products and services. We need to establish key benchmarks or performance indicators to measure the acceptance of our services and products in the global market. More resources should be allocated to brand Singapore's products and services.

I fully support the setting up of a Ministerial Committee on Services. To be a global player and tourism hub, we must adopt a total approach to provide world-class customer service. In business, customer service is the key to retaining loyal customers and attracting new customers. We must make every effort to ensure that all customers have good experience with Singapore's products and services. One role model whom we can all follow is Singapore Airlines.

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

4.10 pm

Dr Teo Ho Pin (Holland-Bukit Panjang): (ii) Resilient and Multi-skilled Workforce

To cope with the fast changing global market conditions, we must have a resilient and multi-skilled workforce. As businessmen are always very versatile to react to market forces, workers are often caught off-guard to adapt to these changes. Therefore, we must instil an "entrepreneurial mindset" among our workers. Our workers must be capable to move in tandem with the market forces and be prepared to take challenges constantly. As such, we should encourage firms to adopt job rotation practices and provide opportunities for their employees to start businesses such as forming subsidiaries or business start-ups.

(iii) World-class companies

It is not practical to groom all Singapore companies to be world-class. We have to be selective and channel our limited resources to nurture a few companies, which are promising. The key support needed is funding for business ventures into the global market. For a start, the Government can provide incentives for local banks to reduce their stringent requirements for credit facilities. Many banks require personal guarantees or collaterals for business loans. As such, limited funding is available for local firms to expand their businesses overseas.

In addition, the Government can also facilitate public listed companies to raise funds through share issues for business expansion programmes. With adequate capital, Singapore firms will be able to better position and compete in the global market.

Sir, this year's Budget is a fair and balanced budget. It has the ingredients to prepare Singapore for the future. What is needed is a mindset change among Singaporeans to be more flexible, more hardworking and more resourceful. With the strong support from our Government, Singapore will continue to prosper in the future.

Mr A Nithiah Nandan (Nominated Member): Mr Deputy Speaker, thank you for allowing me to join in this debate. My main focus would be on enhancing competitiveness, thereby helping Singaporeans.

This year's Budget is presented during a time when Singapore's economy is at a crossroad. We are undergoing a structural transformation and facing greater competition due to rapid globalisation. Ahead of us are the uncertainties prevailing in major economies and the possibility of war in Iraq. This is a tough time.

In the last couple of years, many Singaporeans are severely affected by the economic downturn. Many workers have lost their jobs and finding it harder to be re-employed. Those in employment are very worried about job security. I will further elaborate on this during the debate in the Committee of Supply.

Sir, the message of seizing opportunity in uncertainty in Deputy Prime Minister's Budget speech is timely, given the current situation. The measures proposed by the Deputy Prime Minister and Finance Minister in his Budget speech to restructure our economy are crucial for our economic survival. Some of them are painful, such as the deferment of CPF restoration, but I understand why they are absolutely necessary for retaining and attracting businesses to Singapore. These will create good jobs and ensure continued prosperity for all Singaporeans.

Allow me to elaborate on strengthening competitiveness for the creation of jobs and wealth.

When we talk about competitiveness and flexibility, we should not come to the immediate conclusion that the only factors are wages and labour costs. Yes, wages and labour costs are significant, but there are other factors such as land and related costs, regulatory and statutory costs, transportation, taxes and other business costs. Let me elaborate further.

First, wages and labour costs. We should continue to maintain labour cost competitiveness and raise productivity. We cannot just focus on cutting wages and retrenching workers. We have to build up the flexible wage component in our wage system, such as through monthly variable components and variable bonuses. To sustain employability of workers, wages must be directly linked to productivity improvement. I strongly urge employers to involve their employees in efforts to improve productivity for mutual benefit.

Second, land and related costs. Are high land costs and other factors making Singapore uncompetitive? We have to further explore whether the land pricing and other related costs are artificially high in Singapore and not adhering to current market factors.

Third, regulatory and statutory costs. As a union leader, I have come across concerns from businesses that regulatory and compliance costs on companies are high in Singapore. These have affected businesses and our competitiveness. Will more steps be taken to address these concerns?

Sir, the Deputy Prime Minister and Finance Minister has announced a number of measures to make it attractive for businesses to invest in Singapore. At the same time, he has announced various rebates and reductions for businesses until year's end. Would it not be better if such rebates and reductions are extended for another three years? Further, why not freeze all other cost increases at the same time for another three years? I believe all these suggestions will greatly help businesses in Singapore and attract new ones, which will result in the preservation and creation of jobs for Singaporeans. Retrenchments can be minimised and not make the unemployment situation worse. This will boost the confidence level of Singaporeans.

Enhancing human capital. I applaud Government's move to set up a new statutory board under MOM to promote adult continuing education and training. The new statutory board will oversee our continuing education and training efforts. The details of the statutory board have not been announced, but I would like to see the new statutory board addressing the following:

(1) Enhance the employability of older workers who have mainly knowledge in job-specific or technology-specific skills.

(2) Help workers make career switches.

(3) Continual learning and skills upgrading for professionals, executives and self-employed.

(4) Help the structurally unemployed gain new skills and

find new jobs.

(5) Manage a database of important information emerging from the rapid structural changes. This will ensure optimum investment in training and retraining, so as to enhance workers' employability and help them adapt quickly to changes.

(6) Strengthen synergies with other important partners such as EDB, NTUC, SNEF, and others. These strong synergies will help identify the type of skills needed for the jobs that new investments will bring and help prepare workers through training and skills upgrading.

With the concerted efforts of all partners working in tandem with the new statutory board, we can collectively and confidently address the issues of skills gap, wage gap and structural unemployment.

Mr Deputy Speaker, Sir, during this period of uncertainty and tight budget position, the initiatives by the Government to help Singaporeans, especially the poorer ones, must be lauded. The measures would lighten the load of Singaporeans. Assistance such as Utilities Save and additional S&C rebates will help workers and Singaporeans. The additional allocation of funds for Skills Redevelopment Programme, Lifelong Learning Fund and Medifund are steps in the right direction. Taken together with the earlier announcements of ERS and the phased-in introduction of GST, there is no doubt that there is help available.

These various assistance schemes clearly show that the Government is committed to its social contract with the people of Singapore. For the future, I urge the Government to continue to target more help to the most needy, the unemployed, the poorer or unfortunate Singaporeans and their families. I suggest an opt-out donation mechanism to a central hardship fund be explored, so that better-off Singaporeans can donate the shares or benefits granted by the Government to those in greater need.

Sir, in conclusion, the challenges ahead of us are formidable, one of the most difficult facing our nation since independence. In the past, we have worked together and remained focused on our objectives. This has led to continuous growth and prosperity for all of us. This is the approach we must continue to take. We must never allow minor problems or even setbacks to distract or discourage us. The greatest welfare to people is jobs. And I strongly urge the Government to do all that is necessary for the preservation and creation of jobs. Policies to bring about this should be implemented fairly and humanely, especially to those who are affected most. Together, let us seize the opportunity in uncertainty and strive for a better Singapore.

I support the motion.

Mr Zainudin Nordin (Bishan-Toa Payoh): Mr Deputy Speaker, Sir, like many of the hon. Members in this Chamber, I would like to join in the debate on the Budget Statement delivered by the Deputy Prime Minister and Minister for Finance. I hope to give my perspective and views on the matter and, at the same time, give feedback on views that I got from the ground.

As I stand here before you today, I can safely say that I do not recall a period where the nation has faced greater uncertainty. The seemingly inevitable war in Iraq and the performance of the regional and US economies will pose serious challenges for us. In fact, they are already affecting us. Indeed, we are facing difficult times. The waves that we have to ride may grow in size. We do not know. Therefore, we can only do what is humanly possible to stay prepared and survive this period in our nation's life.

I believe that fellow Singaporeans are very familiar with the way the Government works. Our approach in times like this is almost predictable. It is simple. We study the problem at hand and we seek solutions. Often, the way out is not a breeze. It is usually painful. But we go to our people and work with them. Retrospectively speaking, we have been fortunate that they understand when it is necessary to grit our teeth as a nation, persevere and patiently wait for the storm to blow over. More often than not, the fruits of our policy changes emerge after several years. History has shown that they are not immediate. It is this lag period which many find excruciating, and no amount of explanation will appease the man-in-the-street who bears the brunt of the economic slowdown and, on top of that, the additional blow from policy changes.

The recent increase in job losses, the highest unemployment rate since 1986, and the daily war rhetoric are all very disheartening. As a nation, we have also recently been plagued by a series of freak accidents, beginning with the Pedra Branca tragedy and a few others. We are terribly saddened by the loss of innocent lives amidst the economic and geo-political uncertainties.

While Budget 2003 is really a continuation of Budget 2002, the global situation has since last year deteriorated, and our people need more hope than ever. Hope, hope and more hope are my mantra these days. The belief that this too, like most things in life, will pass, holds true.

Sir, I hope it is obvious to many that Singapore needs to embark on a different path where individual entrepreneurship will propel the economy while the country is on the path of consolidation. Private enterprise must be encouraged, engineered even for the sake of growth. If this is indeed the direction that we have charted for Singapore, are we willing to seriously assist our start-ups in every sense of the word, and sincerely provide infrastructure and financial aid? Supporting them is inevitably part of a conducive environment that we need to create. How do we create risk takers when the predominant culture is to always ensure certainty, back-up plans after back-up plans?

I support the call by Dr John Chen and other Members that our civil service officers should be more pro-business and act as advocates for companies and start-ups, rather than just apply rules and uphold regulations. It will certainly help to smoothen the flow of requests and applications and reduce wastage of time and money. Perhaps, Sir, the changing of mindsets is the greatest challenge at hand. I am glad that more support is being allocated, and the Minister of State for Trade and Industry, Mr Raymond Lim, has eloquently spelt out his vision and mission towards this effort. My hope is for him to listen to the industry players and stakeholders. Very often, I hear people lamenting that the policy makers are oblivious of happenings on the ground when they are churning out policies, schemes and programmes that are supposedly intended to help the companies.

Mr Deputy Speaker, Sir, in the present economic climate and challenges that face the country, the Malay/Muslim community must continue to strive along. It is definitely not easy for all Singaporeans, but it is also commonly known that the majority of the Malay/Muslim workers are in the lower-income and the lower-skills category. If the economic slowdown persists, the community will naturally be hit by retrenchments and loss of jobs. But this does not mean that we should just lie down and consider ourselves defeated. Instead, we should take this opportunity to improve and upgrade. The community must take these challenges and face them, just like all the other difficulties that they have faced and overcome in the past. We should continue to focus on education and the vision of a community of excellence.

The young and the youths of the community are doing better. Similarly, the Malay/Muslim organisations and NGOs have done quite a commendable job in terms of providing accessibility to resource and assistance. However, the journey surely cannot end here. They should continue to work closely with the Government agencies and other self-help groups to continue to uplift the community.

Sir, in the long run, we all agree that handouts need to be reduced. We do not intend to be a welfare state. However, having said that, addressing real needs is part of our commitment to care for our people, and this deserves our full attention. Health cost is a real problem to three categories worth mentioning here: the senior citizens and retirees with chronic illnesses, the handicapped and the unemployed. Not all companies can afford to provide healthcare, post retrenchment. Some may, but are not motivated or required to do so. This is a problem and needs to be looked into seriously.

Mr Deputy Speaker, Sir, the arts carry very little weight to the average Singaporean. This area of interest is not perceived as a serious subject. At best, it is limited to a favourite pastime. I know many parents who send their children for piano or violin lessons with the contention that the stimulation helps their children to perform well in mathematics and science instead. Perhaps, there is a neurological link. Credible or not is not to be discussed here, but my point is that the mentality at large does not regard the arts very highly. I am often worried and concerned that in these difficult times the support and resources for arts and culture will be reduced. However, thankfully, our hearts are at the right places, and the cultural achievements in 2002 are very encouraging. It presents concrete steps to change perceptions and mould different opinions.

It is thus heartening to note that we will continue on our pursuit of creating a cultural capital and boosting our arts scene and industry, as recommended by the ERC. The economic and social potential of our cultural capital cannot be denied, and the ERC recognises this fact. I certainly believe that, as we develop and grow as a young country, these aspects of our development should not be neglected. Let us not choose the convenient and so-called obvious choice of cutting expenditures in this area and, thus, bringing us back in time.

The importance of continuous learning and upgrading in all areas cannot be emphasised enough. Our schools and institutes of higher learning are intricately linked with our chief engines of growth. The formation of a statutory board to focus on this area is laudable.

Mr Deputy Speaker, Sir, I would propose to this new organisation to try and leverage on the existing institutions and bodies, and streamline the schemes and programmes that could further encourage and incentivise lifelong learning. Our workers are worried that, even after picking up new skills and knowledge, they still cannot improve their chances of getting new jobs. We need to address this concern clearly. Beyond that, our tertiary institutions must continue to remain relevant and serve not only the student cohorts but also the working adults who yearn to upgrade themselves. Our universities need to be relevant, and the recent university review was timely. They need to work closely with industries and look at feedback seriously.

This brings me to the kind of graduates that we are producing at our universities. Can our graduates think for themselves? During the recent student dialogue with our Senior Minister, the criticism was that the questions were mainly from foreign students, whereas the Singaporeans were often silent. Are they simply shy to ask or are they complacent, contented to simply sit comfortably and absorb without doing more serious thinking? Are they independent? Can they cope with not being able to find a job immediately after they graduate?

Sir, going back to the current situation that faces the nation, my last word on this is that we need to work together and help our people to get out of the doldrums. The retrenched may actually find themselves employed in a shorter period, if some things are put into perspective. Often enough, we hear of jobs and opportunities in the service industry, but they are not well regarded and thus the take-up rate is slow. It is time we started to change mindsets and prejudices towards jobs and careers in the service industry.

To those who are considering to go into this industry, let me give this small piece of advice which I picked up from a movie that I watched over the weekend. There was this very professional and dignified butler who said, wisely:

"To serve people takes dignity and intelligence, but remember, they are just people with money. Although we serve them, we are not their servants. What we do does not define who we are. What defines us is how we rise after falling."

I wish that every Singaporean would remember this. 4.28 pm

Mr Wee Siew Kim (Ang Mo Kio): Mr Deputy Speaker, Sir, thank you for allowing me to join in this debate.

It is to be applauded that in spite of a difficult environment and much pressure to implement populist measures, the Government has come out with a clear roadmap that will take us to the next lap to be a global, entrepreneurial and diversified economy, one that will be well-positioned to take on the competition and challenges posed by mega-cities around the world. Rather than manage just for the short term, the Government has decided to take measures to ensure the long-term survival of Singapore. In my mind, that we would succeed to remake Singapore to be an attractive place to work and play for both Singaporeans and foreigners, is without doubt. Three and a half decades ago, Singapore was in a worse position - a poorer background and devoid of the many advantages that we have today. While today's competition is stiffer, we have also progressed much in terms of being a better organised country with world-class infrastructure. Just as the Senior Minister of State, Mr Khaw Boon Wan, has said, we are a fertile ground that would be nourished by today's rain. But we are also pragmatic and hard-nosed enough to take the bitter medicine required at each stage of our growth. Nowhere else is a country's leadership so forthright and bold enough to be upfront on the need for retrenchments, that they are a necessary part of the solution needed to meet stiffer competition.

Retrenchments alone are not sufficient. We need measures to take care of the lower strata of society, and to prepare them to contribute positively in the new Singapore. I am pleased that we would have a new statutory board set up to look at retraining and employment opportunities and placements. Job creation is key. Singapore would need to find new value-added activities that are either generated in the country or attracted from abroad. The many FTAs that have been put in place since the last budget debate will certainly help, and they will give much comfort to Singaporeans that this Government plans and executes well.

With the many measures being put in place, there is no doubt that Singapore would be well-placed with a significant role in the world and the region. With first-class infrastructure and value-added manpower, it is not difficult to imagine several years from now when Singapore will have a vibrant movie industry, a hotbed of R&D activities, that it will be an indispensable node in the world of network finance and a key hub through which tangible and intangible services flow efficiently and seamlessly through.

But, as we all know, everything eventually hinges on confidence. While we hope to be a linchpin in a thriving Southeast Asia, it would be too hopeful to think that the threat of terrorism would subside anytime soon. While we yearn for a peaceful world, we must not let our guard down. The very ingredients of our success make us a choice target. The fact that we succeed as a key cog in the world machinery will make us a natural target. So, while we keep a sharp eye on the fiscal position of the country, it is imperative that we invest enough in our homeland security in order to deter anyone with intentions to inflict harm on our citizens and to dent economic confidence.

I hear with much comfort the measures we have undertaken in being the first to participate in the container security initiative, a key node in the so-called Green Lane. There is also further confidence that we read of the gamma ray machines and the focus that are being brought to bear at the new Immigration and Checkpoints Authority. However, I believe that it would do us well to be doing even more. We need to further reinforce the confidence of our people and external investors. We must stand out from our neighbours as being ahead in the area of security and vigilance. We must be the bedrock of stability in this part of the world.

Looking just beyond our shores, we are beginning to develop Bintan and Batam as part of our economic hinterland. They feature in our FTAs. We should now extend our security measures and procedures to this extended hinterland as well, so that they become part of our security eco-system. With greater confidence in these two islands, investors would no doubt be more convinced and motivated to plant the more labour-intensive factories there, while using Singapore as their logistics and management centre.

For expatriates, the security of their families is often paramount. More so for those who make Singapore as their launch pad and spend most of their time travelling in the region. Peace of mind would definitely drive their choice of location. For the investors who decide on the location of their multi-million-dollar plants and are reliant on these to be sole suppliers of key components and processed materials, Singapore's commitment to homeland security to reduce even the remote possibility of a catastrophic event would definitely be a swing factor in their investment decision.

For our people, especially those who have experienced the lack of civic safety in other major concentrations of population, we understand too well that our safe environment cannot be taken for granted. We must draw upon all our resources to tackle the new terrorist threats. The issue of social cohesion had been well debated during the debate on the White Paper on the threat of terrorism. But I wish to add that strengthened social cohesion must be supported by reinforced security infrastructure. Terrorists, like water, seek the path of least resistance. But we are already ahead in this respect. We are probably one of the most IT-savvy and wired-up islands where pockets of good information technologies are under the jurisdiction of different agencies and Ministries. The next step is to have all these agencies connected up, sharing information and sharing learning. The fact that we are a small island makes this task even easier.

A similar analogy is the rationale for the setting up of the credit bureau in the financial industry. Prior to this, each bank has its own information, but this is not shared. The sharing of critical information on a common platform now results in a better outcome for all. Today, technology allows us such sharing of data, information and experience on a broad-based basis on end, even instantaneously.

Just as we have strong ministerial overview on entrepreneurship and services, I hope we will likewise strongly consider having an overview on homeland security on a ministerial level. There must be a strong concerted and focused effort by drawing upon all the agencies that straddle different jurisdictions and a determined effort at wiring up and strengthening our island and its infrastructure. The mission requires resource coordination, tracking, quick identification and precise response, often in very compressed timeframes.

The security agencies must be given the tools to get this job done and done well. The economic agencies and the security agencies would debate on how much is affordable and whether it would increase the cost of doing business. But I would contend that security and efforts to enhance personal security and business continuity make good business sense for the people, for the Government and for the business community. I believe that the people would not want us to be stingy on issues of security.

Dr Warren Lee (Sembawang): Mr Deputy Speaker, Sir, thank you for allowing me to join in the debate on the Budget.

Over the next few years, as we encounter the same issues as other developed economies, we will face the problem of the lowly-educated workers who have limited skill sets. They may become our long-term unemployed. We need to think of ways to help them, without encouraging them to just sit back and collect welfare payouts.

Can we think of ways to encourage them to earn at least whatever they can earn? For example, additional help with school fees for an extended period that our grassroots and Government agencies might offer could be contingent on the unemployed head of the household accepting at least a job, even if after accepting this job the family would still need some additional financial help, eg, with education of the children. Those who consistently turn down job matches that the CDC provides could then be given the least priority for extended help.

The second point I want to touch on is about encouraging an entrepreneurial culture. Some of these unemployed would also be white-collar workers. While individuals may feel unsure of becoming entrepreneurs, community centres or other agencies could also help them to meet, after the manner of the Social Development Unit (SDU), so that they can network and form syndicates of people with complementary skill sets and who could either then strike out on their own as a group or seek venture capital to get jobs overseas. Recently, in the papers, there was a group of people who had done just that.

While the SDU has arguably been successful in getting people to meet partners of the opposite sex, an organisation, eg, an Entrepreneurial Development Unit - to coin a phrase - could provide opportunities for like-minded people who happen to be professionals, or people who have marketing skills, or even people who have had technical training from various statutory boards, such as PSA, etc, to get started together to talk to each other and, perhaps, to listen to motivational speakers who themselves have started a business, about opportunities elsewhere, eg, in neighbouring countries, and those who share a common vision might start a company in someone's flat and, who knows, one day, this could be another Apple or Microsoft.

Members might ask on what basis I make these suggestions. I have never started a commercial company, but I have helped to start up one professional association, two NGO organisations and two service centres, both in Singapore and in the region. In all these cases, these projects took off because, firstly, there was an opportunity for people to discuss these ideas socially. The people who discussed these ideas believed in them, believed that they would benefit people, and decided to run with the idea over a period of time, overcoming obstacles along the way.

In Kandang Kerbau Hospital in 1998, a small group of staff from different professional disciplines also brainstormed, developed and patented a small device which we still use now for all children in KK Hospital. I am sure that Members of the House here, who have successfully started businesses, would have similar examples in mind.

I am sure that Singaporeans are as capable and innovative as anyone else in the world. We just need to dare to dream, to share our dreams, and believe that we can achieve these dreams, if we also dare to fail.

Let me turn to another point - about whether we would be penny wise and pound foolish in some of the things that we do.

Mr Deputy Speaker, Sir, can the HDB miracle of affordable modern homes for most Singaporeans be sustained? Will our clean and tidy neighbourhoods be also clean and tidy in five years' time, if we see increasing numbers of citizens with power and water supplies cut off? While there may be good reasons why this has to be done, it could be that these people would eventually live in squalor and lack modern sanitation, even within our modern HDB townships. How can we help them? How can we ensure that we will not get many ghettoes within our sparkling city? Could we not be innovative and have maybe a small timer switch that would allow just enough electricity to run lights between the evening hours when children need to do their homework and, perhaps, in order to ensure sanitation, that a thimble or some other mechanism might be found to let water supplies be given at low-flow rates, again in the interest of public safety?

I understand that Singapore Power is now a commercial entity, but we should also consider public health and decency. It would not be helpful for our school children to go to school spreading lice and infectious diseases that used to be seen only in the kampungs of old. A dishevelled worker, unable to bathe for several days, would also find great difficulty convincing a would-be employer to employ him.

On the other hand, Mr Deputy Speaker, Sir, I strongly support the increase in tobacco duties. As a doctor, I am convinced that smoking is clearly linked to cancer, heart disease, blockage of blood vessels and other medical ills. The downside of smoking is tremendous. The only upside is fiduciary. And, even so, Mr Deputy Speaker, Sir, I doubt that the increased tax revenue could exceed the cost of increased medical care needs and social costs of smoking. While the loopholes in the cigarette size and length have been plugged by the Deputy Prime Minister and Minister for Finance, I still hear of young people banding together to share a pack of cigarettes. It is a difficult loophole. But I am confident that the Minister will find a way to plug this one as well. Perhaps, there ought to be a COE for cigarettes! The arguments for smokers to bear a greater burden of the true social cost for smoking are no less strong than the arguments for road users!

Next, Sir, support for tax incentives to relocate foreign talent. I strongly support these moves to make it more financially attractive to locate talent and skill in Singapore, be they foreign or previously resident Singaporeans. Our property market, retail sector, entertainment sector, and even the little neighbourhood shops and eateries, are suffering from a lack of clientele. Singapore needs a certain critical mass to achieve this cosmopolitan buzz, and talented people, with their generally greater spending power, will make a great difference to the local economy. Can we also make it easier for these people to live in and perhaps own the bigger and less affordable - at least to current Singaporeans - HDB flats? I would also say that allowing these people perhaps lower tax rates may still benefit us, provided that the money is kept in Singapore and not repatriated back home.

I support the statements by my fellow MPs to ask the Government to consider to continue with rental rebates for JTC and HDB commercial tenants for a longer period. However, like Dr John Chen, I would argue that with a situation of soft demand, where investors are weighing carefully the pros and cons of locating new investments, we should take an approach where we would adopt fixed rates or lower rentals for a longer period of two or even three years. Our emphasis should really be on making the sale and making a prospective investor sign on the dotted line. The effect of having predictable fixed costs for rentals cannot be under-estimated, given our generally high cost structure. Again, the knock-on effects of a hollowing out of our local industrial base are tremendous. Even if factories will come for the next three years, they may be persuaded to stay. If they do not come at all, we will not get the chance to renovate their premises, sell them new computers and create jobs for our workers even as we retool and remake our economy.

In that regard, I am strongly in support of the incentives for uptake of industrial land with long leaseholds, as has been announced. I also hope that the Government will also make some lands available at short leaseholds to make it more affordable for businesses to set up shop and have a lower entry hurdle, especially where they think they can make their money back in a shorter period of time. For example, big electronic factories have been known to locate and even relocate in very, very short time-frames. Nevertheless, we benefit when investors do come to set up shop. At least we get the chance to persuade them to stay.

Sir, I support the Budget.

Mr Ng Ser Miang (Nominated Member): Mr Deputy Speaker, Sir, thank you for allowing me to join in this debate.

DPM and Finance Minister announced in his Budget Statement the five long-term strategies to make Singapore a leading global city and immediate measures to help our economy to recover from the recession. He cautioned that there is no safe harbour where our ship can shelter to rebuild and refit before heading out to sea. All work must be done on board ship while we are sailing and battling the elements. As more disheartening economic data from major economies like the US, Germany and Japan were released and the acrimonious debate at the UN Security Council on Iraq revealed a great political divide, the elements that our ship is battling are fast becoming a perfect storm. It does not make our immediate future prospect look optimistic.

Set against this background, the 2003 Budget is a practical and a reasonable one. It does not meet everyone's wish but it gives where it is needed and matters most. The $900 million deficit is significant after running a deficit for the last two years. To address the concern that not enough has been done to help the people who are in need as well as to help the economy to recover should the economy worsen, I hope that the Government will come forward with subsequent off-Budget measures quickly if it becomes necessary.

It is heartening to note that the Government will continue to extend help to those of our fellow citizens who are most affected by the recession. They deserve our support.

Many in the business community, while disappointed that the much anticipated corporate tax cut will not materialise this year are, however, reassured that the Government would likely reduce the current corporate tax from 22% to 20% for the Year of Assessment 2005. However, I think we should avoid the Hongkong example where the substantial budget deficit of HK$70 billion this year necessitates an increase in corporate and personal income tax. Hongkong has announced an increase of 1.5% increase in corporate tax to 17.5%, and an increase of 1% in personal income tax to 16% to support its budget deficit.

The Government's commitment to continue to help reduce business cost, simplify its rules and procedures and cut red tape and for the Ministries and statutory boards to avoid crowding out the private sector are all necessary measures in the remaking of our economy. An entrepreneurial and innovative bureaucracy will also help to support our businesses and entrepreneurs. I would like to suggest that there could also be greater inter-agency cooperation so that policies and measures of different Ministries would be harmonised and conflicts minimised. The business community has long viewed tax on foreign income remitted into Singapore a sacred cow as repeated recommendations and suggestions for exemption were rejected. The move to exempt tax on foreign income remittance is, in fact, very well-received. It is significant not just in monetary terms but also symbolically it represents a change of mindset and a paradigm shift. It is a pro-business decision and one that the ERC has also recommended.

The move to exempt domestic interest income to individuals derived from savings, current and fixed deposit accounts is also most welcomed. Companies who up to now keep foreign income offshore and individuals who keep deposits out of Singapore for tax reasons will now find no barriers in bringing them back to Singapore. All Singaporeans should indeed take heed of the call to pull together to tide over this difficult period and move ahead.

South Korea, one of the worst hit economies during the 1997 Asian economic crisis, made an amazing recovery and remains as one of the world's most resilient economy, with some of the world's most admired companies such as Samsung and LG. During the 1997 crisis, South Korea had to be built up by IMF with a loan of US$50 billion. In an amazing recovery story, South Korean economy grew by 9.3% in the year 2000, 3% in 2001 and 6.2% in 2002. The South Korean people are hardworking. They can endure a lot of hardships. They have a 'never say die' attitude. They tighten their belts to support the Government during their crisis. I can still remember vividly reports and images in newspapers and television on news of South Korean women queuing up to contribute their gold and jewellery to help the economy. I think such is the spirit of the South Korean people and such is the spirit that we must cultivate for our Singaporeans. This is an area we must build on - the resilience of our economy and the resilience of our people. I think Singaporeans can also make it. We can be like another South Korea. And I look forward to the difficult voyage ahead with optimism and hope. I know as a country and as a people, we will survive this perfect storm and survive well.

Sir, I support this Budget.

Mr Ong Ah Heng (Nee Soon Central): (In Mandarin): Mr Deputy Speaker, Sir, I support the motion in the name of the Minister for Finance. This is an apt and timely Budget. For the 1-room to 5-room flat owners, they will continue to enjoy the utilities and S&C rebates. At the same time, everyone will benefit from the additional $100 million paid into the Medifund account by the Government.

To the business community, the Government is granting some tax rebates and extending the rental rebates to help companies reduce their business cost and enhance their competitiveness.

The Government is also accepting the Economic Review Committee's recommendations of the five strong strategies to enable Singapore to remain competitive and establish itself as a leading global city.

Mr Deputy Speaker, Sir, although the Government has done so much, there are still some people who feel that the Budget is not generous enough. I can understand their feelings. It is never easy for any Government to please everybody. If there is no complaint, it means that the Government has done perfectly well, and there will be no improvement and progress. That is not necessarily a good thing!

When reading the Lianhe Zaobao on 1st March 2003, I paid particular attention to the remarks given by the NCMP and the Opposition MPs. I feel that in this difficult time, whether you are a Government MP or an Opposition MP, we should all try not to please the people with claptraps, but rather contribute feasible and constructive suggestions on the real issues. Do not harp on the same old tune and adopt a sentimental pose. Do not be carried away just because someone sings some praises to you.

In Singapore today, the young people are pressurised in their studies. They also face the gloomy prospect of securing a rewarding job after graduation. The middle-aged people worry about their job security, and whether they can continue to draw a regular income to maintain their families. The older people worry about their ability to afford the healthcare services provided by the Government, and try not to burden their children with their medical cost. Today, the people's concern is not on the salaries of the Ministers and the senior civil servants, but whether the Ministers and senior civil servants can help them to solve their unemployment and healthcare problems.

As a labour MP, I am glad that the Government has set aside $500 million to establish a Lifelong Learning Fund to assist the workers in their upgrading and training programmes. I am also encouraged about the initiation of $3.7 million for a MOM training scheme to provide assistance to the unemployed and retrenched Singaporeans, so as to equip them with the necessary skills for re-employment.

I would also like to commend the Government for the setting up of a Continuing Education and Training Centre for adults. However, I hope that the Ministry would scout around for the right people with the necessary know-how and experience to manage the centre so that relevant training programmes would be rolled out to suit the needs of individuals, and to equip them with the relevant skills for better employability. Any irrelevant training programme would only result in more disappointment and frustration of the workers.

If possible, the Government should consider my fellow labour MP, Mr Seng Han Thong's suggestion of getting the workers employed before undergoing training. This would boost their confidence and they would be better prepared to participate in the training programmes to improve themselves.

According to a survey conducted by the National University of Singapore, our graduates no longer expect high starting salaries upon graduation. Some 85% of NUS graduates are prepared to participate in training programmes to upgrade their skills so as to improve their chances of being employed. This is a very encouraging sign!

I hope that the mature workers would also seize the opportunity to upgrade their skills in whatever line they are in so as to enhance their employability. They should persevere and be courageous in taking up training programmes and learn new skills so that they can be self-reliant. To make a good living they must depend on themselves rather than on others.

Some people have asked me why the NTUC has not opposed the Government's delay in the restoration of CPF and the gradual reduction in the CPF salary ceiling. They asked why the NTUC dare not hold a demonstration in the streets. I told them that even if a demonstration succeeds in getting the Government to restore the CPF contribution to 40%, and no lowering of the CPF salary ceiling, it would only succeed in making the headlines of the foreign newspapers and our Secretary-General, Minister Lim Boon Heng would be hoisted as a hero. This would be very thrilling and awe-inspring, but what will be the end result? The end result would be that the companies, owing to higher business cost and a heavier burden to carry, will retrench more workers, and there will be more unemployment.

Since we do not want to have more workers retrenched, we support the Government's action because that will ensure that our workers get to keep their jobs, and the employers would be able to survive, to continue looking for openings to expand their business, and hence create more jobs for Singaporeans.

Mr Deputy Speaker, since 1965, the Malaysia media have been regarding Singapore as an "abnormal baby" abandoned by Tunku Abdul Rahman. We can read this in their newspapers all the time. They believed that Singapore could not survive after its separation from Malaysia, and they never expected Singapore to grow and prosper. Apart from being a politician, Senior Minister Lee is also a first-class doctor. Under his careful nurturing, this "abnormal baby" grew up strong and healthy, it did not die an early death.

We all know that Prime Minister Mahathir is an astute statesman. As a doctor, he knows that one can survive without food for three days but no one can live for three days without water. As such, he has been using the water issue as a lever against Singapore. But he forgets that our Prime Minister Goh is also a very brilliant person. He adopted the NEWater as a substitution for natural water, to ensure that we do not die young.

We are still surviving and we will continue to do so. Singaporeans should be proud that our leaders are all very skilful kung fu experts. They can deal with all the blows that have been rained on them. However, we should not be complacent, neither shall we be self-abased just because we are a "little red dot". We want to live with dignity and self-respect, but not forgetting to be prepared for danger in times of peace, and be vigilant even in peace time.

A Taiwanese friend of mine commented to me that the Singapore Government was like a "twenty-four filial father" (a Taiwanese dialect expression to the effect that the father takes extreme care and looks after every detail of his children's well-being). Perhaps this is why our people are so heavily dependent on the Government. I think this is food for thought! We should all ponder over this.

I agree with the Senior Minister of State for Trade and Industry that it is not the policy that drives Singapore ahead. It is everybody, every company and every individual that drives the country forward. We are all assets of Singapore. We can make contribution. Everyone of us must work hard. We must learn how to be self-reliant. Singapore is small in land, with a small population. We must look after one another, stay united so that together we will be able to help Singapore maintain its competitive edge. As the Finance Minister has said, we will then become a leading metropolis in the world.

Mrs Lim Hwee Hua (Marine Parade): Mr Deputy Speaker, it is interesting to note that when the Deputy Prime Minister delivered his Budget Statement, we were expecting both a response to the ERC report which contains recommendations for the longer term and Government's package of measures for the immediate or short-term challenges. Some of these ideas may appear to contradict one another. But the themes common to both are those of Singapore's competitiveness and economic positioning. Let me dwell on three aspects, with the first in greater detail.

CPF and the Concept of Retirement

The ERC has made many recommendations on restructuring the Central Provident Fund in order to refocus its role back to old age financing. The Government has decided to defer the restoration of the CPF contribution rates for two years, lowered salary ceilings for contributions and reduced contribution rates for older workers, whilst phasing in higher contribution rates to the Special and Medisave Accounts.

Sir, these can be confusing signals, as they serve different purposes - from ensuring Singapore's competitiveness to providing for old age to checking any imprudent allocations to property investment. I believe the discussion on what appropriate structure our CPF scheme should take is incomplete without addressing the fundamental concept of retirement itself, and not enough attention is paid to this.

Sir, generations ahead of us never stopped working and had no concept of retirement. They literally worked till they dropped or were prevented from doing so by illness. The present generation of Singaporeans, however, feel they have worked doubly hard, no thanks to the competitive pressure from globalisation and technological advances. Retirement is therefore a given - regarded by some as a necessity, by others as an entitlement and, to many, the earlier the better.

But, Sir, the reality is, as a nation, we cannot afford the pensions and the CPF savings are insufficient for most people. With the CPF withdrawal age at 55 and a life span of almost 80, we could be facing some serious challenges if Singaporeans, who are expecting to retire at around 60-62, fail to ensure they have sufficient finances for themselves for a good 20-25 years. This takes on greater urgency when one were to look at the sweeping changes to the concept of employment itself and, specifically, to the relationship between the employer and the employee. Let me explain why I think this relationship will increasingly be mercenary.

Firstly, the idea of a one-career-in-one's-lifetime is no longer the reality. Business and product cycles are shorter. Just look at the speed at which new mobile phone designs flood the market. A manufacturer employing a few thousand workers today may be history in a matter of 2-3 years. Thus, a person will increasingly have to bring his skills across different industries in order to remain employed.

Even more unlikely is the possibility of one-employer-in-one's-lifetime. This is not peculiar to Singapore. It is incumbent on corporations world-wide to restructure and re-position themselves to meet the changing demands of a global market place. Look at the sweeping changes in the telecommunications arena. Even hitherto old-fashioned businesses, like postal services, have extended themselves into a larger supply chain of courier and other distribution services.

Sir, even Government Ministries have to remake themselves on a continual basis to serve the economy better. For example, the creation of Media Development Authority to deal with the convergence of channels and the corporatisation of certain services like HDB Corp.

With employment trends changing in tandem with those in the underlying economy, gone are the days of a predictable job pattern and fixed compensation schemes. Jobs are no longer 9-5, Mondays to Fridays, or confined to working within Singapore. Salaries will increasingly be linked to performance rather than to seniority or pre-determined salary structure. The short business cycles mean that companies can no longer carry fixed labour overheads and that they need to be nimble-footed when it comes to right-sizing. Therefore, unlike in the past where contract work is associated with temporary or even cheap labour, contract work will increasingly be the norm for many professions. By extension, Singaporeans can no longer expect the income levels to be one predictable and regular wave, but a series of steps, both up and down, with the occasional gaps. Towards this end, the promotion of portable medical benefits is a step in the right direction of dealing with multiple employers and the occasional breathers in-between employment.

Sir, in this context, the concept of retirement at a certain legislated age is no longer tenable. Neither will it be helpful to our ageing nation. Some may argue that the solution may be found in raising the retirement age, difficult as it is politically, to inch the bar upwards. Sir, I believe we should abandon the concept of retirement altogether, and the earlier the better. Singaporeans should decide when they want to make transitions between jobs or to slow down at a certain age or when they would like more leisure. We should work longer, but moderate the pace as we go along and not artificially stop at some pre-determined age. Moreover, there is anecdotal evidence that an abrupt end to active employment can cause the retiree to lose self-esteem and suffer poor health prematurely.

I would therefore like to urge the Government to consider abandoning the whole concept of retirement even as we proceed with the various CPF changes. In addition, can incentives be provided for Singaporeans to maintain sufficient finances as they age, eg, such that CPF balances are kept even past the withdrawal age of 55 years? At the same time, can the Government inject more resources into facilitating the employment of older people on a contract or part-time basis?

Role of Government in Services

Sir, the Deputy Prime Minister has elaborated on the need for us to nurture the services sector as a twin engine of growth to manufacturing. But, many have unwittingly limited this to the role of the private sector as the driver, with the Government playing the role of a facilitator or, better still, as a customer through continual outsourcing of non-strategic services. Sir, I agree that the Government should outsource as much as possible. However, we should not pre-judge the roles or limit our own potential as a collective whole. We need to think out of the box, blur the demarcation between the public and private sectors and do an inventory of our services expertise. Let me illustrate with some examples.

Much of our expertise resides within the Government Ministries. In education, we have over the years honed our abilities to develop sound curricula and testing resources for schools, established commendable practices for managing educational institutions and systematically nurturing teaching resources. Some schools in the US have paid the compliment by using our mathematics textbooks. Foreign delegations visit our schools for ideas and to learn more from our experience, and the list goes on.

Other examples can be found in our healthcare services, town-planning and business infrastructure building skills. But these are all deemed strategic services and thus far the respective Ministries are unlikely to have considered their commercial applications beyond Singapore. Earlier on, my colleague Mr Khaw Boon Wan had explained the concerns over the influx of foreign patients which may drive up healthcare cost in Singapore. But I also note that he gave many other examples of the pockets of expertise that we have, for example, in running libraries. Sir, I am optimistic that we can add substantial economic vibrancy through broadening the services sector. The challenge is therefore one of commercialising such skills and exporting them to markets where the stage of development warrants the use of such expertise. I would like to urge the Deputy Prime Minister, in his capacity as Chairman of the new Ministerial Committee on Services, to place emphasis on and explore the commercialisation of the expertise residing within the Ministries. I am hopeful that these can be nurtured into new services to be exported and can in turn spawn new business for the private sector to participate in. Unlike Mr Chiam See Tong, I do think we need to operate on a caveat emptor principle as opposed to tight regulation.

Role of the Public Sector in Economy

Sir, it is heartening to note that the Government will devote serious efforts to reviewing rules. This is to be applauded but perhaps the Government should go one step further and impose the sunset clause requirement to rules relating to business operations. A sunset clause puts the onus on the Ministry or statutory board to justify why a particular rule should be kept, whereas a review is likely to lead to the retention of existing rules than otherwise.

Sir, as some of my colleagues have urged, we need to shift towards being more pro-business rather than pro-risk aversion. Generally, our policies are sound but our execution is frequently fraught with an overkill of measures to stem out the violation of rules. This, I am sure, is best described by the now famous "no u-turn" story about policy execution in Singapore. Like Mr Raymond Lim, my plea to the public sector is: when in doubt on business issues, please say yes.

With regard to Singapore's competitiveness, I would like to propose that the relevant Ministries and statutory boards be assessed according to how well they contain business and other operating costs under their watch. This goes beyond reviewing fees and charges. For example, in compliance checking with the financial institution, if more hours are spent fulfilling this requirement from one year to another, the spotlight should be shone. Frequently, it is time costs which are the real hidden costs. In this context, Ministries should be encouraged to pledge a certain standard of service which must be credible, not the usual 3-6 months or 4-6 weeks, but one that is reflective of a real intent to provide top notch service.

Sir, we have an excellent public sector which has served us well. In meeting the challenges ahead, we need to have the same amount of nimble footedness in both the private and public sectors.

On that note, Sir, I support the financial policy for the new fiscal year.

Mr Deputy Speaker: Order. I intend to stop here. Mr Mah.