ANNUAL BUDGET STATEMENT

Order read for Resumption of Debate on Question (28th February, 2003),

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2003 to 31st March, 2004.". - [Deputy Prime Minister and Minister for Finance].

Question again proposed.

11.26 am

Mr Othman Haron Eusofe (Marine Parade): Mr Speaker, Sir, we face formidable challenges in a world which is changing rapidly and radically. To me, the thrust and the message of the Budget Statement and the ERC Report is clear. To succeed in this new increasingly competitive environment, Singaporeans must be ready for a mindset change. The Economic Review Committee has come out with various recommendations, including some radical ones, to ensure that we are able to keep pace with the changes and meet the challenges effectively. As many Members have emphasised, it is crucial that the recommendations are implemented quickly so that we keep ahead of our competitors. It will not be easy or painless, but we cannot afford to be soft. There will be problem areas that will have to be dealt with sensitively and carefully. We will have to manage changes in a way that more confidence will be generated along the way. Our track record in managing changes in the past has been recognised by many all over the world as exemplary and the resources that we have pooled over the years, especially our financial and human resources, should provide the confidence to succeed even though the challenges are more serious than what we have faced before. Social cohesion is critical and in the process of meeting the challenges, we will have to provide special provisions for those who find it hard to cope, mainly because of their education and age. And as we make progress, we will have to ensure that everyone, regardless of race, language or religion, will be able to seize the opportunities that emerge, especially when they have made the efforts to adapt and be relevant to the changes.

Sir, over the past two days, many valuable comments and proposals were made by Members, particularly my PAP colleagues, including the need to provide more help to the local businesses and SMEs, cutting red tape, better information sharing of retraining and upgrading courses available for our workers, so that they are better able to consider available employment opportunities. I support these proposals.

Sir, I would like to turn to some specific issues. First, employment opportunities for older or mature workers who have voiced their concerns about their employment difficulties. They pointed out that employers prefer younger workers, even though they have work experience and the required skills and qualifications. It is frustrating for them after they have conscientiously attended retraining or skills upgrading courses to face barriers to employment, even though they have realistic expectations of the job and compensation terms. With the changes in the CPF contribution rates for older workers, especially those in the 50 to 55 years age group, their wages would have been moderated. We will have to urgently change employers' mindsets to get them to give the older workers a fair opportunity to be employed. In the new work environment where companies have to constantly restructure to boost their competitiveness, workers will face more frequent employment changes. It will be very stressful for older workers in this new employment regime if the employers only prefer the younger workers. It is therefore necessary for the Government to address this issue urgently and to consider incentives to jolt employers' mindsets to be fair in providing employment opportunities to older workers who have gone for skills and knowledge upgrading to be relevant to the current demands of the workplace.

Sir, next, complaints or allegations of discriminatory hiring practices. Sir, some job applicants have provided feedback at my meet-the-people sessions and some have also written to the press that they are discriminated when they apply for a job. They can understand that there are jobs which may require special requirements and, if they do not meet the job requirements, for example, a language ability or, more specifically, the ability to speak Mandarin, or any other special skills, they will not be considered for the job. However, they feel very aggrieved when they consider themselves qualified based on the job specifications, but not considered for jobs for reasons which are not disclosed. They simply cannot understand their rejections.

Sir, such grievances should be urgently addressed. Otherwise, there will be a loss of trust and confidence and our social cohesion will be severely tested. At this time of great uncertainty and increasing competition, we must strengthen our unity and pull together to become a formidable competitor.

Sir, let me now touch on the sensitive issues of foreign talents. Some Singaporeans have also voiced their concerns of being displaced by foreign workers or talents. The ERC Report has recognised that bringing in foreign talent is a sensitive issue, especially so now in a slow economy with retrenchments and rising unemployment. However, we must be able to attract enough global talents in order to be a dynamic and competitive economy. There is, in fact, a great competition for global talents and it would be better for us to get them in our workforce than in our competitors' workforce. They can certainly help create more job opportunities for Singaporeans. Having said this, I think more needs to be done to explain to Singaporeans why it is vital for us to attract foreign or global talent to complement our workforce so that we are a world-class workforce able to sustain the attraction of good quality investments to Singapore.

Sir, on the development of an entrepreneurial culture so that Singaporeans at all levels can be more enterprising and more self-reliant, I support the ERC's proposal to extend programmes to promote entrepreneurship to the young people through the Community Development Councils. Sir, allow me to share the experience at the South East CDC. We are promoting a Young Entrepreneurs Programme. Last year, we organised a Breakthrough Camp for students to encourage them to break out of the mould and to acquire an entrepreneurial spirit. During the camp, the students were taught business skills emphasising creative as well as practical aspects. The students were challenged in a very short time to work a business proposal with limited resources, that is, simulating the real world. They presented their business ideas to a panel of "investors" and the successful projects went on to organise a Christmas Bazaar at the Marine Parade Promenade. Even the teams that were not selected were so fired up that they organised themselves as a marketing team to promote the Bazaar. They made a profit of over $6,000 which they unhesitantly donated to the Straits Times' School Pocket Fund showing that they were entrepreneurs with a heart.

Sir, in the process, we also created a community in support of entrepreneurs as parents, teachers and members of the Marine Parade Merchants Association came out, despite a heavy downpour, to encourage the budding entrepreneurs. There is great interest among the young and we will certainly continue with programmes with the aim of developing a strong, young entrepreneur network in the South East District.

Finally, Sir, I would like to ask the Deputy Prime Minister and Minister for Finance what will be the impact of an increase in oil prices and a long, protracted war in Iraq on our economy. Are we ready with a contingency plan in case of such an eventuality?

Sir, I am confident that Singaporeans, our leaders, employers, businessmen and workers have what it takes to ride over our current problems and build a more robust and competitive economy. However, we have to watch the external environment closely and understand the developments and trends. We cannot afford to be soft and must proceed quickly to implement the ERC recommendations. We have to cast aside the old mindsets and firmly resolve to pull together to find new and better ways to earn a good living.

Sir, on this note, I support the motion.

Mdm Ho Geok Choo (West Coast): Mr Speaker, Sir, just like my colleagues and fellow Singaporeans, I am encouraged by the Deputy Prime Minister and Finance Minister, Mr Lee Hsien Loong's bold vision in steering Singaporeans in this dull time into a safer environment.

Sir, the title of my speech is `Striking a Balance - Going Forward'. The Budget has many practical aspects to strengthen our Singaporeans' resolve. I shall be focusing on four aspects. They are strengthening the social compact, embracing a flexible future, restoring CPF for the senior workforce and university graduates in the School of Straight Talk.

First, on strengthening the social compact. The crux of Budget 2003 is about remaking the individual spirit and soul of Singaporeans as we embark on a future of uncertainties. Ever true to its political philosophy of "a government of the people, for the people, by the people," Budget 2003 promises a place for every Singaporean who makes the effort in the new Singapore economy through the focused assistance of the Government and the support of the unions and employers.

Focused assistance and support do not equate with freebies and Singaporeans must begin to take the incremental steps to self-reliance. Logic dictates that priorities must first go into strengthening the fundamentals and infrastructure for the New Economy. The big challenge ahead is how fast is the Government able to implement the many recommendations of the ERC which are supposed to revitalise the economy.

Questions ahead of us include: are Singaporeans ready for the wheel of change? In doing so, how can the Government strike a balance to ensure that we do not leave behind those older ones who are unable to catch up? On the other hand, if we were to move too slowly, then how can we ensure that the needs of the younger cohort will be fulfilled?

Sir, we must not forget that there will always be in our midst those who are not capable of managing transition and also those who need to be given the booster to get themselves going. The spiritual surgery that Singaporeans are going through must be supported by rich social capital where we will have to invest the time and efforts to explain and educate the population on policy and directions taken by the Government.

People must feel that there is trust, respect and compassion in the society that they live in. This is where the Government must be at the helm. I have had the opportunity of co-chairing one feedback session on the expectations for Budget 2003 and also speaking to various stakeowners of Singapore.

Contrary to the newspaper reporting, I am happy to note that there was concern expressed for the needy poor who include the middle income group whose breadwinners have lost their jobs. Brought up in a culture of loans ranging from loans for homes to cars, to household goods, to credit cards, many have a string of financial commitments. Yes, they can downgrade and sell off even at a loss. The fact remains that they are out of a job and may be so for a long time to come especially for those aged 40 and above.

Although there were calls for Government subsidies and grants, these were dignified calls. They were calls for targeted subsidies, grants and loans for a limited period to help the unemployed tide over their difficult time. I call these reasonable calls because we have, in our midst, social capital that has self-regard and empathy. They were not asking for freebies. Here, I join my fellow MPs before me to urge the Government to consider a portion of the CPF account for the purpose of granting loans to those retrenched and who need to tide over their difficulties.

Sir, I was saddened by what I saw when I went for my house visit in the evening in Boon Lay. The electricity of two households was cut off. In one household, the children were seen straining their eyes doing their homework in the dim candlelight. In another household, a little girl was reading under the dim light of the corridor.

Sir, the retrenched middle-income group has never been included in any form of Government financial assistance. With an increasing cohort of Singaporeans falling into this group, it is timely that we give them more attention. Out of the 18,000 or so retrenched, 7,000 comes from this cohort, and this is no small number. In the words of DPM Lee "we now live in a fundamentally changed world", it is therefore appropriate that Singaporeans should wear a new mindset. Of course, with this come adjustments to realities around us which include lowering our expectations.

Singaporeans are a pragmatic lot and I trust that we have the social capital and qualities to will ourselves to do what we need to do to survive. Nonetheless, the Government must realise that there is a social compact with its people. This social compact is to deliver jobs and stability to the people of Singapore who, in return, give the votes to the Government.

It is unlike the employment relationship that a corporation has with its employees. That employment relationship is a commercial contract and therefore, an enterprise can within reasonable limits of the contract terminate this commercial contract.

Sir, social capital is not just focused on how we might increase the wealth of an individual and a country. Social capital is itself a form of wealth. Sure, our social connections can help us in business but feelings of connection and commensurate feelings of safety, comfort and support constitute important qualities of life. As we look for competitive ways to be competitive, the Government must develop this social compact with Singaporeans in the midst of severe cost cutting and job losses due to retrenchment. It is through building up this social capital that we can strengthen every Singaporean's resolve, and collectively forge a better and flexible future. Hence, the social compact of the Singapore Government with its people must strengthen during these times.

This brings me to my second point on embracing a flexible future. To embrace a flexible future, Singaporeans have to discard old practices and habits, even practices that might be considered sacred cows. Hence, both employers and employees need to adopt a new mindset and better ways of doing things. This includes flexi work arrangements, overtime payments, flexi compensation and other overtime arrangements.

Two main domains of the flexi future that we can consider are the collective agreements and flexi work mindset. On collective agreements, employers and unions may even need to review the terms and conditions in the collective agreements so as to help employers better manage the manpower cost structure, including benefits. For instance, why should some collective agreements have fixed increments and benefits, especially in a volatile situation, where we have to lower costs to safeguard jobs? We may even need to shed `grandfather baggages' in the collective agreements. Why should such collective agreements be signed for a duration of three years? In such volatile times, there may be a need for us to put in place flexi arrangements to review high cost items and irrelevant conditions which are deemed inappropriate in a changed situation.

As the Prime Minister has put it, there is no iron rice bowl. Today, it is about disposable styrofoam bowls. In driving productivity and cost competitiveness, early retirement and layoffs are just some of the options open to companies. Very often, the hidden costs come from `grandfather rights' in the form of shift and roster patterns and entrenched compensation and benefits in collective agreements. One may argue, "Well, collective agreements are negotiable documents. Go and bargain for the best deal." But we know that negotiations tidying up wastages arising from fixated items in collective agreements can be protracted. Therefore, a more convenient and expeditious way taken by most companies is to retrench or offer early retirement. It enables companies to turn around bottomline results quickly.

In new economy thinking, clean wage ensures cost competitiveness for business and saves jobs. Renewal of collective agreements traditionally cost companies anything from 3-5% increase to the payroll. Moreover, they can tie companies down for a good three years. Perhaps it is time to rethink the structure and purpose of a collective agreement in the new economy, just as the unions themselves have been evolving their role to be more relevant. So, instead of just massive layoffs or early retirement, perhaps we can substitute with smaller-scale layoffs and trim the grandfather baggage' in the collective agreements. They can achieve similar outcomes. In fact, they can be neater. Newcomers to the company simply inherit the grandfather rights.' So what happens is that whilst we weed off employees at one end, the other end continues to grow into the rigidity of the system. Cost, therefore, continues.

Singaporeans are facing a very uncertain future, with a number of factors converging at the same time: the worst economic downturn since independence, structural unemployment, highest unemployment rate, poor fertility rates, threats of terrorists acts, and the looming Iraq war. Against this background, Singaporeans need to strengthen their resilience to overcome these challenges. We can do this by adopting a flexi and pro-active mindset.

It used to be challenges that we had to contend with. Today, and in the future, we have to face uncertainties. While challenges spur us on with hope, uncertainties underscore an unpredictable future, which can turn hope into despondency. Here, the Government and grassroots leaders must step in to raise the confidence of Singaporeans and encourage them to plough on.

The second domain is on flexi mindset. We will begin to see a workforce made up of economic gypsies simply because they have turned itinerant, so as to adjust to an increasingly complex and inconsistent business environment. Singaporeans must recognise that a flexi arrangement is an important source of competitive advantage for companies. Two noteworthy benefits observed by companies with flexi arrangements are enhanced productivity and being nimble in different business environments.

In the area of employment relations, we see new trends emerging. Companies are beginning to hire temporary part-time or contract workers. Today, some 37,000 people in Singapore are classified as `temporary or part-time employees'. This may be a small number compared to many other countries, but it is a 50% jump from the number recorded in 1998. In today's difficult times, a temporary job is always better than no job but, clearly, there are many issues to be considered. For example, companies may have to specially invest in training for their short-term or part-time employees so as to raise their productivity. Furthermore, while employees may be denied a coherent career structure, they are flexible, as they can move on to other companies requiring their services. Companies will be able to stay competitive with a flexible workforce.

I urge Singaporeans to adopt a flexible mindset with regard to employment. Many of the jobs that have gone may never come back. Flexibility is a way of widening the potential labour market. In addition to short-term or part-time working, flexible work arrangements come in other forms. They can include job sharing, tele-working or working from home, besides contract work.

The Sub-Committee of the ERC on Enhancing Human Capital has, in its recommendations, highlighted the need to grant companies the discretion to implement work schedules that are based on their actual strategic needs. In other words, organisations should be given greater freedom to implement flexible working practices, so as to better optimise their manpower resources.

Sir, the success of a flexible future hinges on implementing a framework or guidelines to prevent malpractices, as well as engaging the HR fraternity. There was also a recommendation to review the present employment legislation, which often limits the implementation of flexi work arrangements. As the Sub-Committee on Enhancing Human Capital has rightly noted, a flexi-work arrangement can only succeed if employers and employees are prepared to adapt to new practices. To ensure that malpractices do not take place, the Ministry of Manpower, together with the unions, employers and professional HR bodies, should put in place broad guidelines for implementation.

The Ministry also highlighted the challenges posed as a consequence of `contingency workers'. Non-permanent workers, for example, are not automatically entitled to employee benefits, such as medical and insurance entitlements. One option currently under review is the introduction of medical benefits that are pegged to the number of hours worked in a month.

Sir, at this point, I would like to declare that I am a HR practitioner as well as the President of SHRI, and what I am about to speak reflects the views of my profession and Institute.

Sir, there are three areas that the HR fraternity would like to offer its services to promote a flexible culture in our industry. They are joint participation with the Tripartite Body, SBF as well as the newly set up CET statutory board and the CAL.

The issues arising from implementing flexi collective agreements and work mindset will need to be addressed by the HR experts and practitioners from the HR fraternity. These credible professionals have years of practical experience and insights into issues of organisation and employment. No substitute can just spring out of the blue to resolve these issues. I say this because - although I am the Co-Chairperson of the Sub-Committee on Enhancing Human Capital - I only came to know that SBF and SPRING Singapore are poised to forge HR excellence and competencies when I saw the print in chapters 12 and 13 of the ERC report. On national programmes such as these, it is important that the HR fraternity play a key role as well.

Sir, it is heartening to note and hear from many quarters, including our highest political leadership, on the importance of human capital. As co-players, the HR fraternity sees itself as a plus component in the tripartite formula.

Singapore has been re-making itself in every sphere in the last two years. Why not re-make the Tripartite Body into a Tripartite-Plus that will then see a more visible impact of the professionals in the decision making of the Tripartite Body? I am glad that the HR fraternity in the private sector, represented by the Ministry of Manpower as well and by SHRI, has been actively promoting and showcasing HR excellence and practices through a community of learning and sharing, both locally and overseas. As mentioned, the SBF will be setting up a HR Centre of Excellence to drive HR practices and excellence in the private sector. The HR fraternity sees itself synergising its practical experience and practices with the Centre. I see a twinning of the 38-year-old SHRI with the newborn HR Centre of Excellence of the SBF.

Embracing a flexible future is to remain relevant with the skills and knowledge that will empower Singaporeans to stay employable, as well as to assume any form of self-employment activities. This entails every Singaporean to acquire multi-skills and lifelong learning capabilities. This is their only form of safety net to endure uncertainties in the environment. The establishment of a national Continuing Education and Training (CET) body and a Centre for Adult Learning (CAL), together with the setting up of portable training accounts for our workforce, will ensure that Singapore has the future workforce that is relevant to the needs of the industry. The ERC recommendations to equip Singaporeans for the future and to help Singaporeans to face up to the challenges are concrete steps to this flexible future.

Sir, on restoring CPF for the senior workforce, the Minister for Finance, in his Budget speech, announced that the restoration of the CPF rate to 20% will not take place over the next two years. Instead, the current 16% rate of employer's contribution will be retained over the next two years. The purport of this measure is to ensure that wage costs do not get out of line with the urgent priority of helping Singapore recover from this recession. Since wage costs represent a significant part of total costs in Singapore today, this move is indeed a signal to investors that this Government is serious about tackling the issue of cost competitiveness.

However, Sir, there are a number of concerns that I would like to raise with respect to the issue of not restoring the 20% employer contribution rate for those who are 50 and above, even when this recession is well behind us. The main concern behind this policy is that older Singaporeans are able to find jobs in the future. Most of the concerns centre around the observation that employers perceive older workers to be more costly than their younger counterparts, and less productive as well.

As a number of my colleagues have said so before, I think the Government would have a better time selling its case if it can back up the assumptions with solid data to show that older workers do not represent value for money, when compared to their younger counterparts. Is there data evidence to show that older workers are less productive and would cost more in terms of the value-add they bring to the job, as compared to younger workers? Are there real, concrete bits of information to conclusively demonstrate that the policy of maintaining the employer's CPF contribution rate at 16% would significantly reduce the overall costs of doing business in Singapore and, therefore, increasing the employability of older workers?

The recent experience that this group of people could not gain re-employment after losing their jobs suggests that the problem of employability may have its cause elsewhere. If such is the case, then the policy of not restoring the employer's contribution to 20% for this group of workers would be a double whammy blow for them. I think that it would be much more prudent to educate employers to change their perceptions concerning older workers rather than adopt a measure that may not be very effective to begin with.

This is especially so when we think about the difficulties many among this group of workers would face in ensuring that they have sufficient funds for their retirement and not have to depend on the state for their upkeep. While it is laudable to attempt to maintain the employability of this group of workers, it is also important that we keep other objectives in mind before implementing the policy. This is especially so if we wish to ensure that many older workers do not suffer undue hardship in the years to come. Sir, I also join my colleagues in advocating for a mindset programme or campaign for employers with regard to employing the senior workforce.

The fourth aspect is providing the university graduates a transit in the School of Straight Talk. I would like to urge those graduates who are still unemployed to take an active lifestyle during this time by tapping the services available at self-help groups, CDCs and SPEC.

SPEC is termed the `School of Straight Talk' because it runs practical programmes that equip the retrenched participants with realities of a downturn, values and skills and assist them with job placements. Such pre-employment orientation talk in an unemployment situation can be useful. Bottom-line driven organisations are shunning university graduates for diploma holders and ITE graduands because these are supposed to be less demanding.

In actual fact, many bottom-line driven organisations are taking this opportunity to recast jobs traditionally held by the O' and A' levels holders. Many of these jobs are now redesigned and enlarged for the diploma holders.

In my opinion, the potential of the university graduates lies in their ability to contribute at a higher strategic level. There will always be a need in this area.

Nonetheless, if university graduates are prepared to start from the lowest end and win over the potential employer with a willing attitude, they can have an advantage in terms of their strategic contribution to the company in the long run. It can be very discouraging to be faced with a bleak job prospect and, at the same time, being told that their failure to find a job is because of their unrealistic expectations.

Over FM 93.8 radio, graduates were interviewed on their feelings about the job market and many have expressed despondency over the bleak job prospect.

Sir, I am concerned that if this matter is not given the attention, the morale of our university graduates and their resolve to find a job would be affected.

The School of Straight Talk runs programmes on Entrepreneurship, Self-Employment and Minding the Mind in difficult times. Such programmes will help boost the confidence of our graduates, inculcate a flexible mindset and equip them with practical skills.

I urge the Government to extend some financial assistance under the WSTP funding for retrenched workers to this group of graduates as well. In this way, they can prepare themselves better for the job that they are looking for. And so, university graduates need not despair whilst waiting for that job.

Sir, in conclusion, I would like to raise that in our pursuit for unprecedented structural change, we must be mindful that our transactions and relationship with people do not evolve into an adversarial stance, where each hardens its resolve.

What we do not need more are the quick fixes to problems within the rules in the box. Instead, we need strong social capital support for the stark choices arising from thinking out of the box.

As people grapple in the dark to find new ways, they want and need help. Such help must be based on respect, trust and advocacy of interests within the context of evolving new lives for Singaporeans.

Sir, Budget 2003 will spur the implementation of the ERC recommendations and the success lies in the acceptance of a flexi future by the public, private and people sectors of Singapore. Only then can the economy remain competitive for years to come. 12.07 pm

Ms Irene Ng Phek Hoong (Tampines): Mr Speaker, Sir, I would like to focus on two groups, the older Singaporeans and young Singaporeans: what do they have to look forward to?

First, older Singaporeans. In this debate, much has been said about the problems posed by our aging workforce, such as increased social spending in the future. The answer to this problem, as stated in the Budget Statement, is: we must find new sources of growth or else stagnate and decline. Put this way, the aging population is cast as a burden on society and the cause of possible stagnation. Why not view them instead as a potential engine for economic growth? The greying population can be a big opportunity for business and can spur the Silver Sector, the industry for senior citizens. This would involve not only medical and nursing care, but also creating, producing and marketing products and services to meet their changing needs and interests. This would include anti-aging healthcare and beauty products, health supplements like Viagra, cheaper and better alternatives to that, as well as leisure activities. The Silver Sector may also boost the pension and insurance industries.

Just look at the phenomenon of line dancing which took our older Singaporeans by storm. Imagine how much money some entrepreneurs made by selling cowboy boots, cowboy hats and chequered shirts. Mind you, these are not cheap stuff. As I understand it, the cowboy boots are brought in from Australia and they cost from $100 to $1,000 a pair and they are being snapped up by our not-so-young residents and during an economic downturn. Sir, we should not keep painting all older Singaporeans as people without spending power and who would only drain our resources.

Sir, in 10 years, we will have more empty nesters than young people. Empty nesters are those aged 40 to 59, with their youngest nearing financial independence. We will also have more aging singles with considerable purchasing power. The number of empty nesters is forecast to grow by 50% to 10.9 million during the next decade in economies like Hong Kong, Singapore, South Korea and Taiwan. At the same time, the youth market will shrink by 10% during the same decade. In Japan, some companies are already reorienting their marketing to appeal to the senior citizens. As the Asian Wall Street Journal reported on February 28th, Yamaha Corp had two years ago created an easy to play electronic guitar for older people who grew up on the Beatles and Japanese folk rock and who had always wanted to play the guitar. So they produced an easier version of the electronic guitar. The guitar was a hit with those above 50 and they were all snapped up.

There is another reason why the Government should nurture the Silver Sector as one of our new growth industries. It would also help with the employment situation of our older workers. Studies in other countries show that companies with customers aged over 45 are more likely to employ a mature worker. These companies know that if they are to appeal to mature customers, they need to improve the level of service they offer this group. Older workers will become increasingly important in developing relationships with customers.

Our growing population would also influence employment trends. In Australia, the second biggest employer group was hospitals and nursing homes with about 330,000 workers. As its population gets older and begins to require even more medical attention, employment categories such as medical and dental services are expected to continue to grow. This means more jobs would be created in these sectors. Are we projecting for this?

Sir, many of our older workers today feel that their future in Singapore looks like a bleak one because what they hear and see is this: their pay needs to be cut year after year by the CPF to make them more employable and then jobs are still hard to come by even with the CPF cuts. Cost will keep rising as public services become more market-oriented. Medical and social services will be means-tested. They are a burden to society. The emphasis is on nurturing the young, and not the old.

Sir, we need to get through to them a better vision of their future - or else why should they buy into it? That is why one of the brightest spots in this year's Budget to me is the setting up of a new statutory board for Continuing Education and Training. It should tailor programmes specifically for our mature workers which can then place them into decent jobs. If the pay is too low with reduced CPF and the job is too onerous, older workers may not see it as worth their while to carry on working. One way to encourage them to continue working is to provide financial incentives.

Sir, under one proposal in Australia, people who work for five years beyond their pension age could become eligible for a tax-free payment of A$25,000 when they retire. We need not be so generous. But the option to me seems stark - unemployed and pessimistic older workers clamouring for more handouts and subsidies or older workers with decent jobs which make them feel useful and wanted, and a decent quality of life to make them glad that they are Singaporeans.

Turning to young Singaporeans, Sir, their mood today is one of frustration and despondency. Many of our fresh graduates have found it hard to get the jobs they want. But it is useful to remember that this is not the first time that we have been through such a difficult time. Indeed, when I graduated in 1986, it was a recession year and I too found it hard to find a job. After my final examinations, jobs were so scarce that I had to take a part-time job, telling children stories at the Robinson's toy department. I was hired by a young entrepreneur who was bringing in teddy bears from Australia, and for each bear, there was a character in the story. So I gained from the efforts of a young entrepreneur. My pay was $100 a week as my job was only over the weekends in the afternoons in the toy department. That was about $400 a month. But the money managed to tide me over for about two months until I got a full-time job at $800 a month. So that was double - what joy! And that was as an editor-cum-writer-cum-sales-cum-marketing person-cum-ad-copywriter-cum many other small jobs for a small time publication company. It was an insecure job because the company's finances were shaky.

But despite the poor prospects, I thought having a job was much better than having none. And frankly, I had a great time because I felt stretched and I also learnt to stretch the dollar. And one of the greatest pleasures for me in those days was to save up enough to have breakfast at McDonald's. But about five months later in August 1986, I got a job in the Straits Times which was the start of a more stable career until I joined politics in 2001. I tell this story to remind ourselves that this gloomy situation for our young graduates is only temporary. The crucial thing I learn is to keep our chins up and to seize every opportunity that comes.

I see this tough time as an opportunity for our young Singaporeans to show their mettle. The more entrepreneurial among us should strike out and follow their passion. What is the worst that could happen? We fail, so what? Try again, better than staring at the wall and griping. And with the Minister of State in charge of entrepreneurship, the outlook should be more promising now.

The more creative among us should write plays, poems, songs, make movies that can give us a different view of things and, in the process, help lift us from this gloom. In this respect, I am pleased that the Government is not stinging on its investment in the arts scene.

I am not sure how many of you remember but there is this song titled "Happy Days are Here Again". It was written in 1929 in the US for a movie called "Chasing Rainbows" and the chorus goes:

Happy days are here again.

The skies above are clear again.

So let us sing a song of cheer again.

Happy days are here again.

Sir, this song was written and sung in the midst of the Great Depression in the US. Yet the lyrics are one of hope and cheer. You have to hear the Barbara Streisand version to hear how exhilarating the song can be. What we are going through is by no means a great depression, but where we are heading towards is indeed a great destination.

The Budget is a step towards realising the vision of a leading global city, a hub of talent, enterprise and innovation and one of the best places to work and live in Asia. It is a place where, young or old, all of us can enjoy an interesting and fulfilling life. This is something that we should look forward to and work towards.

Sir, in conclusion, we have many strengths, not least a team of good leaders who have brought us this far. It must be recalled that, though some of the changes in recent years have been swift and drastic, such shifts are not new in Singapore. The 1960s, in fact, had been the most revolutionary for Singapore. Few other countries have undergone so many significant changes in so short a period. The 1960s saw the transition of Singapore from a colony to an internally self-governing state from 1959 to 1963, to becoming a part of the Federation of Malaysia from 1963 to 1965, and then to an independent republic. Furthermore, the challenges that threaten Singapore's economic viability as a state was sprung on it in quick succession. This includes Sukarno's Confrontation and Britain's decision to withdraw its military bases in 1975 which left Singapore with the task of absorbing 40,000 employees, making up for the loss of 20% of the GNP and creating a credible defence force within four years. It was Singapore's leadership, together with the support of the people, that effectively overcame all these severe problems.

Sir, in 1986, when I was wondering what the future held, there was a team looking at how to pull Singapore out of the recession. It was called the Economic Committee and was led by Mr Lee Hsien Loong, then Minister of State for Trade and Industry. Today we have another committee, the Economic Review Committee, led also by Mr Lee. Sir, I would say that our leaders have had a good track record so far. This should give our people confidence. I, for one, am confident that, with the people united behind the Government, determined to achieve a better Singapore, happy days would indeed be here again.

On that note, I support the motion.

Mr Chay Wai Chuen (Tanjong Pagar): Mr Speaker, Sir, I just want to speak in support of this motion in the name of the Minister for Finance. Members of the House have been speaking and have spoken at length on the various issues in the Economic Review Committee Report on entrepreneurship and the present economic difficulties we are facing. I want to focus specifically on the investment issues and business related issues to growth.

First, on the foreign direct investment issue. Our economic strategy over the past three decades or more has been on attracting foreign investments that will lead to growth and employment. We had been very fortunate. We embarked on this path in the sixties, just about the time when the MNCs were going transnational. We betted on the MNCs and the export growth strategy and that would help us clear our unemployment problem then and our growth into the future. We were right.

Today, however, the other giants have awakened, chiefly India and China. And, today we all know China is absorbing the major share of the FDIs from the world.

This foreign direct investment (FDI) growth strategy here is characterised by a lumpy or plant size investment in manufacturing products, which can be a final or an intermediate produce, which is usually exported overseas. The gain we expect from the manufacturing process is derived from the employment generated and the value-added for the investors. Is this FDI growth strategy still the way to go for Singapore?

I am not saying the foreign investment is no more useful. It is a source of technology and jobs. My question is: can FDI growth be an effective strategy for us, whether it is in the current electronics industry or some other manufacturing sector?

We should remember that when we went into the FDI growth strategy many years back, many of our competing countries were not awakened yet. Later, as more of them were awakened to the challenges, the EDB had to attract so-called higher technology content and higher value-added industries to base them here. The employment creation in many of these investments is low, and our competitiveness in terms of business cost or wage cost is only temporary as the technology of these processes is often embodied in the machines. As the costs get higher, these factories move in search for lower wages.

What we should be aiming at in growth at this stage of our economic development is to move to businesses where the technology or knowledge resides in the heads of our people, not just in the machines. With technology in machines, labour ends up working for the machines. We always think that the machine is working for us. Capital gets higher rate of return and labour gets paid in low wage. With technology or knowledge invested in the head, the table is turned, and the knowledge and technology workers get more decision-making and get the first cut of the value-added. So we have to reposition ourselves and the investment we attract. I believe this knowledge based in the head investment approach for growth rather than machines or plants is more sustainable for us.

These investments in knowledge and technology in our heads can also be lost if our able men go away or migrate. I assume it is harder to move the men than the machines. But that is another issue. The investments in the heads have to have quality and content. It has to have complementary resources to get the correct soup - good brains and environment and research facilities in universities or private research units. There also has to be quality. For example, some years ago we started this idea of "incubators" for research and design in Singapore. The best example of incubators is, of course, Silicon Valley. But recently we hear of incubators by the hundreds all over China. Is this the real thing? I am not sure. Some young talented research students may be there, but the facilities for research, the resources, the marketing and business network connection, the international trust and respect for Intellectual Property Rights, the efficient legal infrastructure system, are not there in China, or even in India, by a long mile. So these are actually competitive advantages for Singapore, which we should exploit.

If input investment under FDI for growth is not sustainable, what then should the new Singapore economy be aiming for? We should be aiming for growth from Research and Development, Design, Innovation, Knowledge and Quality Control. These are growth factors but, by themselves, spending on them may not yield returns. The productivity of these factors will also be determined by how well our businesses in the economy can synergise and how well we can blend these elements and market them for business. Here is where the assistance to SMEs and outsourced businesses can be developed to service technical processes. This type of growth in the economy is different from the input growth we have been so familiar with. Economists call this endogenous growth and such growth derives from total factor productivity gain. I am glad SPRING has last year finally embarked on measuring total factor productivity in our economy. It will take time to systematically monitor this, but it is an important step in the right direction.

We ask our workers to brace for the challenges - tighten up for the competition by lowering wage expectations, CPF and so on. What can our GLCs and bigger Singaporean companies do? Can the Government get GLCs to spearhead this overseas business drive by setting the management to work and achieve X% of their revenue from overseas by year Y by developing viable overseas businesses? By setting targets and time-lines for them? Any management team that achieves the target by year Y should be given both bonuses and/or tax breaks. Introducing the right incentives for them is the only true way of getting things done. Otherwise, we will be talking with insufficient sense of urgency as what our colleague, Mr Inderjit Singh, mentioned yesterday.

A lot has been said about helping SMEs and taking them overseas. To me, the national economic strategy, if there is one, is to get the bigger ones, with the potential to go transnational, such as the GLCs, because they have bigger resources, or the bigger local companies, and then to get the SMEs to latch along.

Although I agree that it is difficult, it is important for us to do and important for our Government agencies to assist the SMEs. In all these, it is important to understand that speed and simplicity are important criteria for SME businesses. One-stop service centre and meaningful value adding assistance will be of great help to them. We should cut down the red tape for them.

Our plant/factory focus approach to attracting investment should give way to more process focus and value chain focus approach to base MNCs here. I believe steps are already being taken in attracting MNCs to base their OHQs here. But the linkages in the economy to exploit this presence may not be sufficiently developed. I think we should go a step further in identifying the value chain and the production/research or design processes in these segments of the chain to make business successes out of them for our local businesses and start-ups. A mapping of this should be done. The Government has the resources to do it. The Government should invest in such a service agency and get private sector people who understand business to do it. I believe there are a lot of local talents in the employment market and many of them used to work for the MNCs.

We have a lot of advantages, especially in the educated young graduates from our universities and polytechnics, who are very good. I have met many of them and I am really proud of them. We should do the right thing by opening the avenues. They will do it right, once the trail is blazed.

The problems facing the economy are indeed challenging, to say the least. I believe the Minister has got the issues well covered. Frankly, many of the issues mentioned by the Minister in the Budget Review - high business costs, the need for an entrepreneurial economy, GLCs crowding out private sector in businesses, which properly should be left to the local SMEs, high statutory costs - all sound very familiar, and have been said by many of us who have been long enough here on this side of the House. Let us hope that the remedial actions will be implemented with speed and efficiency.

With this, I support the motion. 12.26 pm

Mr Tan Soo Khoon (East Coast): Mr Speaker, Sir, the story is often told in Malaysia nowadays of a young man from Kedah, who not many years ago was a rice trader wandering around Kuala Lumpur in a pair of slippers. Today, this man has varied business interests. He has a net worth of RM1.7 billion and has been ranked the 7th wealthiest man in Malaysia. He is Mokhtar Al-Bukhary, now better known as the man who developed Johor's Tanjong Pelapas port and lured away the business of two big shipping lines, Maersk and Evergreen from Singapore's PSA Corporation.

Sir, the story does not end here. This savvy businessman has now been given the green light to take over Senai Airport in Johor and turn it into a major hub to complement the transhipment business of Tanjong Pelapas and compete with our Changi Airport. Dare we say that he will not succeed? Certainly not, after the unthinkable happened to PSA. Are we running scared? Certainly not too, I hope. But what has happened should serve as a wake-up call of what harsh reality in a competitive world is, in that we cannot take customers for granted.

In business, they say that you are friends, and the relationship stays for as long as you can make money of one another. If your customer finds that he has a better deal elsewhere, he will run to your competitor, no matter how long he has been with you. One important lesson we have learned in this is that if you are No. 1, there is always someone waiting to knock you off your perch, and that someone need not be an obvious competitor like Hong Kong or Kaoshiung, but it could be a sleepy backwater like Tanjong Pelapas. This is because your competitors, no matter how small they are, play a game called "catching up" - that is what you can do, given time and determination, they can do too, and at a better price. And, it is not just in port services that things are shaping up.

Another Malaysian company launched a no-frills airline not long ago called Air Asia. No champagne or free gifts on board. Bring your own food too, if you like. It just gets you to where you want to go without fuss and at a low price. Amongst this week's offer, fly from Kuala Lumpur to Penang for only RM19.99, cheaper than taking a bus ride. No doubt it will soon be flying passengers from nearby Senai Airport to other destinations at very low price and it gets you to where you want with minimal delays. Delays are costly in the airline business and they cannot afford to have them, not at the prices they sell their tickets. So, they are very efficient at getting you to your destination on schedule. And it is a profitable company. In the first eight months since taking over the company and operating it as a no-frills airline, the new owners turned around previous losses and made RM19 million, and they are debt-free. Last year, Air Asia flew 1.3 million passengers. This year, it is aiming for 2 million passengers.

While airlines like SIA cater to their own niche luxury markets, here is one airline that has carved a new market for itself by reaching out to those who could not afford to fly before, or those who are simply looking for a better deal in air travel, especially during these difficult times. I am glad that SilkAir is sitting up and has taken notice of the competition it faces from airlines like Air Asia.

Our healthcare industry is another example of how an industry is feeling the heat from regional competitors. At one time, we had Indonesians and Malaysians queuing up at our private hospitals for treatment. Today, they, and even others from as far as Europe, are going to Malacca or to Bangkok for surgery, because the costs, including travelling and expenses, work out to be only a fraction of what it would cost here, and the standards match ours.

Sir, today, to stay alive in a lacklustre economy, companies have learned very quickly that they need to offer better value for less money. A New Paper report two days ago highlighted how companies in the luxury goods business now offer lower-end versions of their high-end products to appeal to middle income consumers. It cites the example of Jaguar which now markets its X type cars at half the price of its top-end XJ series. Similarly too, as in the case of Mercedes Benz, pushing its C Class and A Class cars at less than half the price of its top of the range models.

As a consumer, I too am looking out for better deals whenever I need something. Two years ago, I bought my first DVD player, a Philips. It cost me $750. Three months ago, I bought another one, this time a Samsung, a Korean brand and it cost me only $180 - slimmer, sleeker, great features and generally easier to operate. People may say that there is a great difference between the two brands, but I have not discovered any loss in the quality of the movies I watched.

A Singapore company has learned to carve its own niche during these bad times too. This is a company that makes electronic products in China under its own brand name Akira. Recently, Akira was selling 21-inch colour TV sets at $190, and friends who have bought them tell me that they are of good quality. I tried to buy one but they were all sold out.

Sir, I give these examples to make some points. Firstly, never underestimate the competition. We have to be flexible in doing things to meet threats and challenges because, out there, there will always be someone who will try to do things better than you can. Secondly, even in a flagging economy, one can find a niche and seize opportunities.

The other point I want to make is that today, people have wised up to the fact that good quality need not mean high prices. In other words, whether you are a shipping line or you are just shopping for electronic goods, people are looking for better deals. If PSA had recognised this fundamental point, it might not have lost two of its biggest customers. How did the world's number one port, long vaunted by the Government as a model of efficient management, end up an enigma of bloated capacity? How did 500 of its employees end up swallowing the bitter pill of retrenchment and find out that they, and not the sacred cows of the Singapore economy, were the ones being slaughtered? Who can blame those, not just the PSA employees but many others in the public and the private sectors, who have lost their jobs for the way they feel now? It was not too long ago that the Singapore worker was held up as the number one worker in the world. Now, the number one worker finds that being number one is like winning a race with no prizes at the end.

The problem is not just with land cost, as some Members have pointed out. It has to do with the way you handle your customers, so that you retain their patronage through good and bad times. It is all about business philosophy and attitude. Give the guy a good deal, he stays with you. But sometimes I know it is hard to change mindsets. We are quite used to the Government mantra, that if you want better services, you must be prepared to pay more - be it hospital charges or transport fares. We have gone through this last year, but I think the mindset still remains.

Now, we are told that to ensure that taxis provide better services, there is a need to monitor them. LTA says, pay $50 per taxi per month.

An hon. Member: $25.

Mr Tan Soo Khoon: $25, sorry. $25 per taxi per month. With 19,000 taxis, that is a cool $6 million collected a year. Will this result in solving problems such that taxis disappear mysteriously just before midnight and appearing suddenly when the midnight hour strikes? I think not. Will we now be able to get taxis when it rains? I think not. Will taxi companies absorb this additional charge in the long run? I think not. Will passengers end up paying for this? I think so.

Or try the URA for its own brand of service - pay $1,200 upfront when you apply for a change of use for your premises. Sir, I do not wish to repeat what Mr Lee Han Shih wrote in his article. It is all in the Streats newspaper of 5th February. He wondered how the URA does its costing and lamented that it is a very costly service. Still, it is $1,200 per application, whether you are successful or not. And with 2,600 applications being processed a year, you can do your own calculations how much that works out to. This is very lucrative work for the URA but it just adds one more item to the heavy cost of doing business here.

So, it is high cost that is making us less competitive. Mr Koo Tsai Kee can argue that we are not much more expensive than Guangzhou in terms of office space, but I want to tell him that every dollar saved counts today.

Mr Inderjit Singh said that it is hard to shake off the impression that we are an expensive place to do business to his foreign friends. I agree with him. How can we do that when this is the reality? And it does not help us to shake off this image when some of the measures that the Government implements are labelled merely 'reliefs'.

Sir, reliefs are helpful. I do concede. But they are what they are - reliefs - a balm to relieve you temporarily, make you feel good for a while. But when the effects wear off, the pain returns because the root causes have not been dealt with. Many businessmen tell me, "why can't the one-off measures or reliefs be permanent ones?" We need a permanency to these measures so that we know the savings are here to stay. We cannot plan on the basis that you tweak with these measures now and then. I too would say that the Government should have, once and for all, taken the opportunity to take the bull by the horns and not let business and industry play the guessing game as to when the next round of rebates will come. And this is what I feel is amiss, Sir, in Budget 2003 - that it may not have provided sufficient stimulus to kick-start the economy.

A Morgan Stanley report that I read says that this year's Budget gives little support to a fragile Singapore economy. Sir, the report points out that the estimated deficit at $900 million works out to less than 0.8% of GDP, and that this might turn out to be even smaller, given the tendency to conservatively estimate revenues. Indeed, if you look at last year's revised figures, Net Investment Income (NII) was $3.8 billion - happily, $1.4 billion more than was originally forecast.

Sir, some MPs have already pointed out that the Government did not incur a deficit last year and, in fact, actually crossed the finishing line with a budgetary surplus of $1/2 billion. The transfers to the Lifelong Education Fund and the Medical Endowment Fund are exactly what they are - transfers from one account to another. They are monies that remain with the Government and are not spent. What is spent from these two accounts are the interests they earned, just like the way interests and dividends from NII are spent, but not the principal amounts. So averse as I am to red ink, I must say that the Minister for Finance tried very hard to show a deficit last year, but I think he just could not.

Sir, I would argue this point further. The Lifelong Education Fund has a capital of $1 billion. In its last reported financial year, it earned $27 million and it gave away grants of $141/2 million. After deducting expenses, it still ended up with a surplus of $10 million. It has another accumulated surplus of $10 million from previous years. I know the long-term target is to raise the fund to $5 billion. But if the fund is, in fact, able to more than meet its current needs, why do we need to increase its capital now?

Likewise, for Medifund. It has a capital sum of $800 million. In its last financial year, it earned an income of $30 million. Even with its close to 100% approval rate, it gave grants of $27 million and it has an accumulated surplus of more than $35 million. Would it not be right to say that these funds are presently self-sufficient and we need not transfer money at this time? After all, the Government did say previously that transfers to these funds would take place only when we enjoy healthy surpluses. And this may not be the time to do so simply because, firstly, we are not having healthy surpluses; and, secondly, the funds themselves are generating enough to serve their present needs.

Speaking of funds with surpluses brings me to another point of how I think the Government should also examine its revenue sources by taking a look at the financial position of some of our statutory boards. Sir, under the Statutory Corporations (Contributions to Consolidated Fund) Act, the Finance Minister is empowered to require statutory boards to contribute part of their incomes to the Consolidated Fund. Statutory boards today provide services that were once the function of the Government and their revenues and surpluses would have accrued directly to the Consolidated Fund if they had remained so. This throws up two questions. Firstly, can the Finance Minister ask for more from the statutory boards that are making money to boost the revenue position? Secondly, what about the large accumulated surpluses that some of them have in their books?

Let us just take a look at the last reported financial year of some of them. Jurong Town Corporation, accumulated surplus, $8.6 billion; net profit, $112 million after contributing $50 million to the Consolidated Fund.

Civil Aviation Authority of Singapore, net profit, $333 million; after returning $1 billion to Government, it is still left with $2.3 billion accumulated surplus.

Public Utilities Board, accumulated surplus, $4.3 billion at group level; net profit, $412 million.

URA, accumulated surplus, $1.3 billion; net profit, $29 million after contributing $91/2 million to the Consolidated Fund.

Sir, statutory boards usually take the position that such surpluses are necessary for future capital expenditure. But can we not require them to justify their retention of large surpluses with concrete plans and if they cannot do so within a fixed period of time, to return the money to the Government so that it can be put to better use? In fact, under the Act, the Minister has the power to require the statutory boards to return to Government any amount that is not required for that board's duties and functions. If the money is sitting there for a long time, I think we have to take a look at that. Even if the boards require capital outlays, should we not ask them now to fund these by going to the money market through such instruments as bond issues? After all, they operate successful businesses and should be able to raise their own funds as and when they need them. Ultimately, Sir, this will leave the Minister for Finance some extra room to manoeuvre the Budget.

Mr Yeo Guat Kwang (Aljunied): (In Mandarin): Mr Speaker, Sir, having listened to Mdm Ho Geok Choo, let me share some of my thoughts on an effective way to meet the challenge, before I speak on the Budget.

In an open economic environment, we should throw away all our historical baggage. Both the employers and employees should change their way of thinking, their mindset. It should not be confined to the employees alone. I think a collective agreement is still a very effective tool in managing the relationship between employers and employees in the open economy. The problem is not in its form, but rather in whether the employers have also raised the transparency of their operations and share all the information with the workers in an honest manner. In this way, the workers would understand the terms and conditions of their employment, and would not harbour the impression that the employer is exploiting them.

A collective agreement is made after negotiations where the terms therein are mutually agreed upon. It is an assurance extended by the employers and employees to one another. I want to emphasise that the labour movement in Singapore is an enlightened one. I also hope that our employers would understand that, although the iron rice bowl concept in some countries is outdated, this concept has not been in existence in Singapore at all. No one can say in Singapore that his rice bowl is cast in steel and would not be broken. Everybody's ricebowl can be broken. However, in reality, we would not like to see any employee being looked upon as a disposable utensil - one that is used and discarded when his usefulness is no more.

Be it employee or employer, their rice bowls are interconnected and cannot be separated. Both the employers and employees should share the fruit of success and the prosperity of their enterprises. Whether employers or employees, they are all human beings, they are not machines or merchandise. We do not want to see the employees being left to the mercy of their employers, just like a hunter going hunting with his dog, captures his prey, then kills his dog and eats it. People in personnel departments should be open-minded. More importantly, all the people in the company should feel that their contributions and efforts put in are rewarded accordingly. Therefore, I hope the management should be foresighted enough to warn their workers to prepare for the challenges they will meet ahead of them. They should be committed in looking after the welfare of their employees and give them due protection and a sense of belonging.

Mr Speaker, Sir, the theme of DPM's Budget Speech was "Seizing Opportunity in Uncertainty". I want to take the message one step further. Not only should we seize opportunities in uncertainty, we must "turn adversity into strength". Let me elaborate.

The economic downturn has hit Singaporeans hard. We must help Singaporeans to restore their confidence, so that they could be at ease when faced with adversity. As a union leader, I have experienced, first hand, the impact of the downturn on our workers. Many workers and people have lost their jobs. Those who are still holding on to their jobs face salary freeze or wage cut.

I am happy that the Deputy Prime Minister has announced measures to help workers and Singaporeans. I applaud these measures, especially for the assistance in manpower training. $37 million has been set aside to enhance MOM's employment assistance and training programmes aimed at generating 20,000 additional training places under the Skills Redevelopment Programme.

I do not agree with Mr Tan Soo Khoon that our expenditure should not be based on past experience. We should look at our past and present situations and make the necessary adjustment. We should give our workers confidence by job creation and employment assistance.

Mr Speaker, Sir, the Government has accepted the ERC's recommendations. These measures will enhance our competitiveness, nurture entrepreneurship, grow local enterprises and strengthen our human capital. But whatever benefits they may bring about, the workers are still primarily concerned with job security and a steady income.

Deputy Prime Minister Lee disclosed that the investments that Singapore has attracted are expected to create 21,000 jobs. However, if the economic situation does not improve, our unemployment rate will go up from 4.4% to 5.5% this year. I understand that there are certain external factors which are outside our control. For example, will there be a war in Iraq? How will the threat of terrorism unfold? Will the major economies of US, Japan and the European countries remain sluggish? All these factors add to our uncertainty. They are beyond our control. But our people are hoping that our Government would do more in the areas where we have control over. In fact, many of my parliamentary colleagues have elaborated on how to cut down the cost of doing business in Singapore.

I know that Deputy Prime Minister Lee has announced the extension of various rebates and reductions in cost for businesses to the end of this year. Many people have asked: "Why not give a firm commitment to extend them further?" After all, the deferment of CPF restoration for two years has been accepted by the workers and it has sent a clear signal to investors. Why not send another signal to investors by cutting down business costs for two years? We hope that they can expand their businesses here, and many jobs can then be preserved.

Another concern of the workers is in the area of healthcare. If we want the workers to upgrade their skills, to enhance their competitiveness, they must be assured that when they are sick, they can have some form of protection against illnesses. DPM Lee said that our national healthcare expenditure is now 3.5% of GDP, which is lower than most of the developed countries. He also said that the low expenditure was not entirely because of our efficient healthcare system, but rather due to our younger population. What worries me is that if our population has the same age profile as, for example, the UK and Japan, then our national expenditure on healthcare, based on our present spending patterns, would be near to UK and Japan.

Therefore, there is another set of statistics that we should also be aware of. Our healthcare expenditure in dollar terms has increased fourfold from $1.3 billion in 1990 to $5.6 billion in 2001. Are we heading towards the problem we currently see in healthcare systems in some developed countries? In the US, many workers are not covered by medical insurance. When they are in need of medical treatment, they are in a dilemma. We are all too familiar with the three fundamental pillars of healthcare financing in Singapore - the 3Ms (Medisave, MediShield and Medifund).

In his Budget Speech, DPM Lee announced a $100 million special transfer to Medifund to help more Singaporeans. He also announced the phasing-in of higher contribution rates to Medisave. My question is: what about MediShield? Is the Government looking at how MediShield can also be enhanced and modified?

To facilitate the implementation of policy, the Government should also consider reviewing the criteria for use of Medisave to be more responsive and appropriate to today's needs. For example, to allow the use of Medisave based on medical conditions instead of the number of days of hospitalisation. Right now, many of them still have to fork out cash to pay for their treatment at the clinics. Today, 90% of the working population are covered under MediShield or one of the Medisave-approved insurance schemes.

Over the past few years, MOH has improved the benefits and features of MediShield. I believe that the Government can continue to enhance MediShield to make it more relevant and responsive. However, we know that MediShield is quite near to portable medical benefits. It can provide portable medical benefits as long as the premium is paid, whether the insured is still working or out of job. However, this system has been in existence for quite some time. It does not cover specialist treatment in outpatient clinics or hospitalisation. I wonder if the Government will review or revamp MediShield in this direction. I am also concerned that more than a quarter of a million of Singaporeans have opted out of MediShield, although 90% of the people are still being covered by MediShield. There are 270,000 people who are not covered by this scheme.

As one of the fundamental healthcare financing programmes, it should be made a compulsory national medical insurance for all Singaporeans so that they can have a basic medical insurance coverage for their medical needs. I feel that every Singaporean should have at least a basic medical insurance coverage, and we should make it compulsory. As union leaders, we are in contact with workers every day. There are many problems. When they are jobless or retrenched, they will not be able to enjoy any medical benefits, especially with all the turnover in jobs and instability in their jobs. Therefore, the Government should widen the coverage and improve the scheme.

Secondly, all CPF members should be allowed to use their savings in the Medisave accounts to pay for the premiums for all portable medical insurance. According to the ERC's recommendations, employers should contribute at least 1% of their CPF for this purpose. But members cannot make use of this amount to pay the premium for this kind of medical insurance.

Thirdly, the Government should step up its education and publicity efforts both for the employees and the employers on the merits of portable medical benefits. As union leaders, we want to see a seamless and affordable medical benefits system that is relevant to their needs, and one that will provide coverage for the workers not only during their working life but even after their retirement.

Healthcare financing has a long-term implication on our national budget. Besides phasing in higher contribution rates for Medisave, the Government has to consider measures that will facilitate greater pooling of risks, such as making MediShield a compulsory basic national medical insurance scheme.

Mr Speaker, Sir, a greying population means an ageing workforce. We do not want to see Singaporeans finding themselves unable to cope with their healthcare needs in the future. We do not want our older workers to be disadvantaged if employers are reluctant to hire them because of higher healthcare cost. We feel that portability in medical benefits is a good system. But Government should supplement this with other schemes.

Mr Speaker, Sir, history is the best judge of successes and failures. When we look back at this year's budget, several years down the road, what would we see? We would see this Budget as a turning point in the re-engineering of Singapore. It will not be just another dull Budget, as described by some cynics in the newspapers. In such a difficult and uncertain environment, it is important for the Government to clearly reassure Singaporeans.

We can expect a budget deficit of $90 million for financial year 2002 and our projected budget deficit is $900 million for the next financial year. Yet, the Singapore Government is contributing $100 million to top up the Medifund. This is a change from the previous instance where the Medifund was topped up only when we had budget surpluses. This is a clear way of reassuring Singaporeans who are worried about their healthcare costs. Whether in sickness or in health, in boom or in recession, and whether we have budget surpluses or deficit, the Government will help them. This is like a marriage vow!

We should constantly reaffirm that the Government has the best interest of Singaporeans at heart. We should assure the workers and those who are disadvantaged that we have a strong social safety net, including appropriate healthcare subsidies and measures that will help Singaporeans cope with their healthcare needs. Only with such firm reassurances and practical economic measures proposed by the ERC, then as a nation, we can brace ourselves for the changes and challenges ahead of us.

I support the motion.

Mdm Ho Geok Choo: I would like to seek your permission to clarify Mr Yeo Guat Kwang's response to the part of my speech where I had referred to the collective agreements.

Mr Speaker: Carry on.

Mdm Ho Geok Choo: Thank you, Sir. In advocating for a flexi future, I have identified, as one of the domains, collective agreements to promote a flexi culture in Singapore. Unfortunately, Mr Yeo has, in one sweeping statement, inferred my suggestion as doing away with the collective agreements and has cast my speech out of context.

I would like to reiterate once again and please bear with me as I go through the significant portion on the CA.

Mr Speaker: Make it concise, please.

Mdm Ho Geok Choo: On collective agreements, I have said that employers and unions may even need to review the terms and conditions in CA so as to help employers better manage the manpower cost. I gave the example and asked why should we not be looking at some of the fixed items in CAs which have actually entrenched the good practices of management, especially in this volatile time, and I have called them "grandfather baggages". For example, in this volatile time, why should we have CAs signed for three years? Can we not have a shorter period? Very often, in the three-year duration, annual increments be made fixed for three years. If a company were to lose money, say, in the second year, the company is entrenched into having to pay the same amount of annual increment.

I have also said that, in anticipation of the reaction of our labour MP, we can argue that CA is, of course, a negotiable item between the employer and the union. But I have mentioned that because negotiations can sometimes be so protracted, running into three or four years, before you can sign a CA, it can sometimes end up as one of the causes for companies not looking at trimming the entrenched practices and taking the easy way out by trimming away the workforce, instead of by removing some of these fixed items. So I have suggested that it is time to rethink the structure and purpose of CAs in the New Economy, just as the unions have been evolving over these years to make their role more relevant. Nowhere have I suggested that we cast aside CAs.

I have also made a point about why we have to look at some of the rigidities in CAs ---

Mr Speaker: Mdm Ho, could you please cut it short? You are making another speech.

Mdm Ho Geok Choo: Just one last point. Because the fixed items actually would be inherited by newcomers. When newcomers inherit the fixed items, you can go on weeding off employees by retrenching them. But, on the other hand, you have new employees growing into the rigidities of the system.

The Senior Parliamentary Secretary to the Minister for Home Affairs (Encik Mohamad Maidin B P M): (In Malay): Mr Speaker, I wish to thank you for allowing me to participate in this debate. As a Singaporean and based on the feedback that I have received from many Singaporeans, I have no qualms in saying that we are proud to be citizens of a country that has achieved a lot of progress. There are many factors that have made us a successful country. Among others, I would like to state only two. First, is the existence of a strong and dynamic leadership. This is found in the political leadership, civil service and the private sector. All who are at the leadership level are working hard in giving the best services for the well-being of the country, companies, and so on.

There is also a second factor that I feel is important. We have a capable and hardworking community, from the private as well as the public sectors, to work together in order to make Singapore a prosperous and progressive country. Mr Speaker, the combination of these two factors and other factors which have been debated by our colleagues in this House have strengthened Singapore's economy. We are also recognised as the best workforce in the world and we have also been successful in making Changi Airport the best airport in the world in conjunction with Singapore Airlines which is also the best. Year by year, it has been ranked as the best in the airline service worldwide.

Although there were retrenchments in PSA recently, we also know that our port is still one of the best and most efficient in the world. Likewise, as a result of the combination that I have mentioned earlier, the standard of living of Singaporeans and the quality of life is the best not only in Asia but the world too. As a Singaporean, I realise that, in many areas, for more than two decades, we have been enjoying a good life, we have been enjoying the wealth that allows us to speak not only in terms of improving our standard of living but also a better quality of life. In the constituencies, our Members frequently hear appeals for us to provide more linkways and additional facilities in order to improve and make it easier for the residents.

Mr Speaker, I would like to urge Singaporeans to think again on how, as we face the situation at present, after having successfully built our nation, today we are facing a crisis which has been on-going since 1999. Are we able to overcome this crisis effectively? Secondly, are we prepared to face this crisis with the right attitude? What I mean is: do we only want to face it lightly and do not want to face the difficulties posed by the new challenges that we face? Are we hoping that a group of people, be it in the Government or elsewhere, can spring out a new formula to resolve our problems immediately? Or are we prepared to work hard and struggle together to once again rebuild our own strengths and niches that we have built since independence?

Here, we have a question to ponder. Although I am confident that our Singaporeans are practical, hardworking and dare to struggle to continue making Singapore a successful country, there are also signs which at times are worrying. Today, we often hear the effect and consequence of the wealth that we have enjoyed for so long has caused Singaporeans to complain and criticise the situation. This is not a reaction that will generate more ideas on how to face the problems of the country that affect its people, which could bring about problems to our future. Can we face it in a way that could build up new advantages and strengths in which we are able to provide goods and services to the global marketplace? I am worried because, among some of the factors which made us strong and successful, in the end, these successes and strengths could be factors that would weaken our country and community.

Mr Speaker, what I meant here is whether the effect of our wealthy lifestyle has brought about an impact on Singaporeans to think that we should always live comfortably and find an easy way out when facing a crisis. I ponder on these questions when I was on my way to the office this morning when I saw a young Singaporean man in his mid-30s or early 40s. I saw him using a motorised bicycle. I thought to myself: is it necessary for a strong and healthy man to use a motorised bicycle to travel from his house to a shop which is not too far away? The question is: is it wise for this young man, who is not the only one using the motorised bicycle which is getting popular nowadays, to use a motorised bicycle to travel from his house to the shop? Is it because he wants to save time so as to reach his destination fast, or is it because of other reasons? I was unable to ask him as I was driving.

But I am worried whether this is an indication that, in many issues which include travelling to a place which is not too far away, Singaporeans would like to find the easiest way out, just press a button and you get what you want, you reach your destination. We press the button to use the lift or escalator and we ask for more linkways. Many hon. Members of Parliament have heard complaints by the residents about providing a bus stop near their homes. If given a job they prefer it to be air-conditioned, because if it is too hot, they would get headaches, and if their working places are too far away, they find it a waste of time. These are the reasons which are frequently heard nowadays. I see this young man as another sign. Is it true that we are weakened by our own progress and wealth?

This question arises as I am comparing how some senior citizens whom I have met in my constituency frequently cycle from one place to another. I have asked them why they like to cycle. There are two reasons for this. Firstly, they said that it is a good form of exercise whenever they have to travel from home to the shops, mosque or anywhere else. It not only improves their health but also helps them to save money. Last week, I met a 70-year-old man. He is a trishaw rider. When he was young, he worked very hard to raise the family, and most of his children have grown up now. Although they live on their own and have their own house, this Singaporean, who is more than 70 years old, is still a trishaw rider. I asked him whether it is tiring for him. He said no.

In fact, he felt that riding the trishaw has helped him to maintain a healthy life. And because of his good health, last year - after his wife passed away more than 10 years ago - he remarried. He could afford to remarry as he is still working and has an income. Now he is married to a lady who is half his age. I asked him whether he did fall sick from time to time or worry about remarrying again. His reply to me was very encouraging. He said that he has been riding the trishaw for many years and has never taken any medical leave. He did not have to take leave as he is always healthy, seldom coughs or falls sick. He belongs to the early generation of people. He is so used to working hard since young to raise his family.

And I suppose the young Singaporean man who prefers to use the motorised bicycle is seen as a sign of young Singaporeans, whom we think are wiser, but I worry if this is an indication that they would find an easy way out when faced with a problem or crisis.

Mr Speaker, Sir, I still hope, and dare say that, in general, Singaporeans have not become weak, but these are signs which we must pay attention to. I raise this issue with the hope that Singaporeans realise that at times we should not be trapped by the norms of our wealthy lifestyle during this difficult period. We still find people with financial difficulties who are seeking help from CDCs and CCCs but who do not want to do away with their handphones. There are also people who have rejected many job offers with lower salary. There are some who realise that their jobs will be relocated to other countries, but are still reluctant to go through new courses to acquire new skills to enable them to get better jobs and have careers that are long lasting in the years to come.

Mr Speaker, Sir, I raise this matter to urge Singaporeans to think that, since the 1960s, we have progressed not based on our ability to take the easy way out. I am confident that the earlier generations, and some who have passed away, had toiled day and night to build a future for their children and now the prosperity is enjoyed by the younger generation. It is important for us, when facing the situation at present, not to easily give up. Instead, we should be daring to explore new ideas, find new ways and work hard to bring Singapore to greater heights in the years to come.

I hope that the illustration that I have given just now is not necessarily true despite my concerns. What I hope is that, when facing this crisis, the solution for Singaporeans is not by taking the easy way out. On the other hand, what we have to do is not just by asking what the Government or the CDCs can do for us. All these will continue to be provided. In fact, we should ask what we, as a Singaporean, can do or take action in order to contribute towards the recovery of the economy, and not be too dependent on the goodies that are given out by the Government.

Mr Speaker, Sir, that is my hope. I hope our fellow citizens can think about this matter together.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, this is going to be a tough year for the planners and for the people. Tough for the planners because of the uncertainty created by the impending war, rising oil prices and China's competition; and tough for the people because of job losses, the fear and worry of retrenchment. My parliamentary colleagues have already covered a wide range of topics, including CPF changes, business costs, entrepreneurship and the bureaucracy. I do not propose to go over them.

However, I would like to draw the attention of the Deputy Prime Minister to potential social problems at our HDB heartlands. The last two days' debate produced some very strong arguments, calling for the Government to do more to alleviate the plight of Singaporeans affected by this downturn. Amongst many suggestions is one calling for the setting up of a central fund for retrenched workers, into which our Singaporeans can donate monies and shares given to them by the Government by contributing their ERS shares. I remember the hon. Member, Mdm Halimah Yacob, also suggested even using the CPF, of course, with some conditions attached, for a contribution to this fund. This call, repeated by my fellow MPs, brings into focus the issue of poverty at the HDB heartlands.

Many of us can feel the difference at our MPS, compared two years ago and now. The number of people approaching us for financial assistance and jobs has all gone up and, in my opinion, by at least 30%. Who are these people? They cannot fit into the ERC profile. They are casualties of this economic restructuring. They are not very well educated, and the majority of them are Malays, with Chinese and Indians increasing in number. The Malays are the hardest hit in this economic downturn. Many hold jobs that are affected by the restructuring of our economy. When a firm upgrades and starts to computerise and send messages by emails and faxes, despatch riders and drivers would be out of work. This is true also when the firms cut cost. The Chinese and Indians, though smaller in numbers, are the recently retrenched, and they are usually from the smaller firms. I spoke to a Malay who just got retrenched from PSA. He felt that he and some of his friends were retrenched because they cost more to hire than foreigners. And I have heard of such stories at our feedback sessions.

In the past, some of the jobs were traditionally taken up by the less educated Singaporeans, be they Chinese, Malays or Indians. These jobs are usually manual and construction jobs. But they are now lost to foreigners. The reasons given are that foreigners are cheaper - which is true - and they are prepared to work longer hours. So, today, we have lost that cushion. These Singaporeans, together with the sizable number of our mature unemployed workforce, belong to what we describe as "structural unemployed". They lack the technology and the language of the computer age. Our Lifelong Learning Fund may not be within their reach, because they are usually not unionised. So, I find it very difficult for them to make use of this Fund for their retraining.

Let us see some of the problems that these people face. First, most of them are not able to pay their electricity and water bills. Some live in darkness and depend on neighbours or relatives for water. It is a sad situation. This is where I ask Singapore Power to be more considerate. When these people come to pay a little bit of their bills, do not cut off their water and electricity supply.

Second, some are not able to pay their S&C bills, and sometimes pasting notices on their doors requiring them to make payments is very embarrassing for them. I think they have gone through a lot of trauma and we should be more careful when we implement some of the ways of recovering these bills.

Third, some are not able to pay their HDB loans and mortgages. Most of us have faced this at our meet-the-people sessions. This is where we have to relook at how to advise them on the restructuring of their loans for a longer period and also how to advise them to downgrade to a smaller flat, and sometimes this smacks into bureaucracy. And this is where I urge HDB to pay some attention to this area. Maybe we should allow them to rent a flat, because there is no need to insist that everybody must own a home. I think rental is a better option for some of them. So, we should not try to force them to buy a flat.

For those who are not able to pay kindergarten fees, this is where we can help. All branches and CDCs have pitched in to help some of these students who cannot afford these fees. Education is very important. I make it a point, at my constituency, to make sure that every child who cannot afford should come to see me. Because if the children are deprived of an education, it would be a great burden to their family later on because they are not productive. And, of course, some are not able to pay medical bills. This is something which many of us encounter at our meet-the-people sessions, and we have to look into how we can help these people to manage their admission to hospitals.

Our CDCs, NTUC Fairpirce, our own Party and, of course, our education and welfare funds have all chipped in to help this group of people. I remember a couple of Malay families cried when my branch members gave them food vouchers to spend for their Hari Raya. Their children were living on bread and water for some time. I bring up these examples to highlight a point that while we embark on this high road of economic changes, do not forget that many may not be able to follow us. We must, at times, look back and help the slow ones along. This will bind us as a nation. This group of people will find the going very tough. As the economy changes, they will find jobs more and more difficult to come by. Jobs that we are attracting are beyond them. Their educational level, as I said, is low and the technology is not there to meet the changing needs.

We have a potential social problem and we must make sure we address this problem. We must make sure that they do not fall into this poverty trap or else it will be a big social problem for us in the years to come.

Has the Budget addressed this? I think the Budget may not have focused a lot on this area. They have given S&C and rental rebates. But these rebates are for all. Everyone living in an HDB flat gets these rebates. It is not targeted. I know CDCs have helped through financial assistance and job matching. But what I would like to see is a more structured organisation at the national level doing this function, rather than ad-hoc measures. Perhaps we can start by finding out the profiles of these people through our Government agencies and maintain a register to assist the CDCs at the ground level. With such a structure in place, we may have a better feel and understanding of the situation and take whatever measures necessary. And many a time, the voluntary welfare organisations can play an important role as counsellors, and their involvement will be very useful.

On that note, Mr Speaker, Sir, I support the motion. 1.35 pm

The Senior Minister of State, Prime Minister's Office (Mr Matthias Yao Chih): Mr Speaker, Sir, entrepreneurship is the choice flavour on the menu in this Budget debate, and rightly so. For so many years, we have relied on GLCs and MNCs to grow our economy. We need more entrepreneurs among Singaporeans, so that they too can be key drivers in the next phase of our economic growth. I join the many speakers before me to support the Government's intention and measures to promote, support and nurture entrepreneurship in Singapore. I support the calls to price industrial land competitively, and cut red tape.

So much talk about entrepreneurship has, unfortunately, caused workers to feel rather left out. They think that this debate is for businessmen and investors only. Workers are mentioned only when it came to non-restoration of CPF contributions and having to work beyond their retirement age. That, to me, is a great pity. It would be a limited view of the ERC Report and this year's Budget debate. So, I was happy that MPs who spoke today have brought some attention back to the needs and worries of our workers. Our workers should not feel left out.

If this was merely a pro-business Budget and workers are not of concern, the Minister for Finance could have simply focused on helping Singapore companies move abroad and take advantage of the lower costs and larger markets in the region. That would raise profits for the companies and make many businessmen very happy. It would also be a cheaper and probably less complicated exercise for the Government. But that is not what this Budget is all about.

On the contrary, the Budget proposes a broad range of calibrated machines aimed at drawing high value investments, assets, talent and know-how into Singapore, and keeping them here. They encourage Singaporeans to start and grow more businesses using Singapore as their base. The emphasis this year is on our domestic economy, less on the external wing.

The benefit goes directly to our workers. Entrepreneurs and investors cannot do business all by themselves. As long as they operate in Singapore, they must employ at least a few staff to do the work. The more successful we can help them become, the more they will need to employ. And other businesses will emerge to provide upstream, downstream and support activities to these successful companies. Meanwhile, a new statutory board and substantial funding will help the workers bring such opportunities that lie ahead within their reach. It is not a zero sum game between entrepreneurs and workers. What we have is indeed a pro-business, pro-entrepreneur Budget. But because it aims to attract, nurture and anchor companies to Singapore, it is also a pro-job creation Budget.

We have already heard some good news that banks and manufacturers have decided to move more of their foreign-based operations to Singapore because of our increasingly attractive conditions. As the Budget measures take full effect, more companies will come, more start-ups will be formed. The small ones will provide only a few jobs but the larger companies will bring in jobs numbering in the hundreds. The result will be jobs, and more jobs, for the workforce. Workers are not left out of this debate. Their livelihood is the key concern.

But as jobs get created, they will not be the kind that we have been used to doing. There will be fewer permanent jobs, and certainly no iron rice bowls. The skills that are needed will keep changing, more and more quickly. We will have to work out different ways of doing this. We will have to work for different employers, and even change industries several times within our working life. Even our collective agreements may have to be looked at, but collective agreements will still need to be the mainstay of a relationship between employers and the unions. The terms can be discussed. If we can make the transition effectively, our workforce will continue to thrive in the face of global competition.

Entrepreneurship will not be just for entrepreneurs. In the future, workers too need to be entrepreneurial. I do not mean that all the workers should go into business. If some do want to, I would say, make a try, and I sincerely wish them every success. What I mean is that workers must start to think like entrepreneurs with regard to their employment and employability.

Entrepreneurs work hard to build up a successful business model that will be profitable for a long time. Workers too need to work hard to build up their knowledge and skill sets that will keep them employable for life.

When an entrepreneur finds that customers no longer buy his product, he will improve it, or switch to something else. When a worker finds that his skill is outdated, he must do the same.

When an entrepreneur meets a strong competitor who sells at a lower price, he may have to lower his price for a while to protect his market share while he figures out a new strategy. Workers too face cost competition in the global labour market, and need to adjust their wage expectations from time to time to avoid losing out altogether.

There is one difference. Entrepreneurs must dare to take risks, but workers are less able to take risks. In fact, in the new era of rapid changes in our global and domestic economies, workers need stronger social safety nets that will cushion them more effectively from adverse outcomes. This is a subject my NTUC colleagues have dealt with in the Budget debate and will continue to take up in the Committee of Supply.

Our entrepreneurs, investors, managers, workers and public officials are integral and interlinked communities in the same national economy. The changes that come our way affect us one and all. Our response must be cohesive and concerted. The title of the ERC report is "New Challenges, Fresh Goals - Towards a Dynamic Global City". We have many long-term and immediate problems to solve. Let us together embrace the challenges, take aim at the fresh goals, and boldly implement the recommendations that will take us towards the dynamic global city that is our vision.

Sir, I support the motion.

Dr Tan Boon Wan (Ang Mo Kio): Mr Speaker, Sir, I am grateful for this opportunity to join in the debate. This is a watershed debate on our economic future. We can tell our grandchildren, I am sure with pride, that we were here when the House changed their future for the better. Now at the tail-end of the debate, most of what needs to be said, my many hon. colleagues have eloquently said them many times over. I would thus keep my comments brief.

It is pertinent to remember that while we are in pain, we are in the midst of a global economic downturn which many in the region and elsewhere are suffering even more. In comparison, we are certainly not doing badly. Many people elsewhere would gladly exchange place with us. In a global network world, we would be daydreaming to believe that we can shut ourselves completely from global changes and events. Let us recognise that we are entering an era of constant change. Let us accept this and adapt ourselves to this new world. Major changes are needed. However, in making the changes, we must not mistake our short-term needs for our long-term requirements.

The Economic Review Committee had done a good job. They had proposed good recommendations, many of which the Government has accepted. But, on a more basic issue, do we need the ERC to achieve this in the first place? Why did we wait until the current economic crisis to constitute the ERC to do a comprehensive review of the economy and for the Government to accept its recommendations? Did we not have a planning culture in the first place? Did the world suddenly change that we could not see it coming until it was upon us?

Yesterday, Dr Wang Kai Yuen had also asked this question in another form. According to Senior Minister of State, Mr Khaw Boon Wan, the recommendations were not all new. Many were proposed before, but for whatever reason, we did not adopt them until now. So what was the main contribution of the ERC? It must be the ability to get the Government to accept its recommendations. Thus, was the Government lulled into complacency like the proverbial frog in the pot over the fire? Did the current crisis shock us out of our stupor and complacency? If it did, the economic crisis was certainly a blessing in disguise. We were lucky that we had time to get out before the pot boils. This is a very important question for our world has changed. Can we continue to depend on this same planning approach that had worked well for us? If we believe that constant change would govern the new world, then our planning paradigm must change. We must constantly review our planning parameters for the relevant and be bold enough to make continual changes pro-actively, to remain competitive and relevant. Again, Dr Wang had alluded to this in his speech yesterday.

Let us not wait for something cataclysmic to happen again before we see the need or build up the resolve to change. The next crisis may happen so quickly that we may not have the luxury of time to constitute a committee to make the necessary recommendations for change.

The same can be said of our people. If we were to go by the anecdotes of how some people responded to the difficult economic situation, it would appear that we were also like the proverbial frog. Some of the reasons they gave for not taking up jobs offered to them include: the workplace was too far; the job was too tough; never did this type of jobs before; too old; too bothersome; cannot learn new things; wait for the old jobs to come back, or do not like to serve others.

I am glad to say that our people learn fast. Several residents who came to see me during the MPS with these reasons have moved on to learn new skills and take on new jobs when they realised that the old jobs were not coming back. I agree with Mr Khaw Boon Wan again when he said on Monday that proposals and recommendations were easier to promulgate than to implement. However, I am hopeful that our people will face up to the challenges that confront us. We must adopt an open and dynamic mindset with the world as our market - the willingness to learn and relearn by recognising that our knowledge is time-dated, the willingness to take risk and to try new things, to take on new jobs and to accept failures and try again - among other qualities. I hope that this open, flexible, daring mindset will take hold to become part of our national psyche. If this is achieved, then the price paid for the pain that we had to endure to meet this change would have been worthwhile as it would have prepared our people for the new world.

I have one final point, Sir. In our earnestness to change, we appear to have downgraded loyalty. No organisation could survive for long without loyal members. Loyalty is a virtue. Loyal, hardworking workers are a competitive advantage. Loyalty is a culture that takes years to ingrain, but if it is carelessly handled and abused, it can easily and quickly die. Loyalty should thus not be given short shrift as we overcome our short-term problems. If we do so, this shortsightedness will come back to haunt us in the days ahead.

In conclusion, Sir, it is less difficult to plan and budget than to carry it out. The success of this transition depends on us, the Singaporeans. Let us take the painful lessons learned and move forward together into a challenging future. We can overcome; we can succeed. We will overcome; we will succeed. Let us quickly adapt and adjust to the new future by making the necessary changes to meet the new conditions. We must succeed.

With these comments, Sir, I express my support for the motion.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.00 pm.

Sitting accordingly suspended at 1.54 pm until 3.00 pm. Sitting resumed at 3.00 pm