SUPPLY AND SUPPLEMENTARY SUPPLY (FY 2003) BILLS (Business Motion)

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SUPPLY AND SUPPLEMENTARY SUPPLY (FY 2003) BILLS:

(Business Motion): Resolved,

That, notwithstanding the Standing Orders, the second and third readings of the Supply Bill for FY 2004/2005 and the Supplementary Supply (FY2003) Bill for FY2003/2004 may be proceeded with immediately after the conclusion of the proceedings on the Main and Development Estimates for FY2004/2005. - [Mr Lim Hng Kiang].

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ANNUAL BUDGET STATEMENT: Order read for Resumption of Debate on Question [27th February 2004].

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"That Parliament approves the financial policy of the Government for the financial year 1st April, 2004 to 31st March, 2005." - [Deputy Prime Minister and Minister for Finance].

Question again proposed.

Mdm Cynthia Phua (Aljunied): (In Mandarin) : Mr Speaker, Sir, for DPM and Finance Minister to present this year's Budget, especially against the backdrop of the current economic and social climate, it is a very difficult task. On the one hand, there was the need to generate economic activities to get our economy out of the woods. Yet, on the other hand, there is a need to temper these efforts such that they do not create a hole in our reserves.

Underlying this is the pressing issue of how to motivate young Singaporeans to have babies to replace the ageing population and the challenges faced by the ageing population. These issues have to be addressed against the backdrop of the uncertainties, not only from the economic perspective, but also the danger of an outbreak of diseases and omnipresent threat of terrorism and religious fanaticism. I would thus say that the 2004 Budget is as best as we can expect in the circumstances. It will require every Ministry to stretch the dollar to the limit, as they roll out the various policies.

Issue of Ageing

One of the policies that I wish to address is that of our rapidly ageing population. Today, about 7% of our population are aged 65 and above. By year 2030, this figure will rise to 19%, and will have a vast impact on productivity, healthcare and family support needs. We need to address this issue now, failing which, it will not only impact on our economic growth, but also

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our defence needs and the very existence of our nationhood.

I know that the ageing problem is not a particularly interesting subject. Everyone will get old. All you have to do is to live long enough. But we need to do more to prepare our society to cope, as older people are living alone. Some may have no one to care for them, and others may have no means to care for themselves. And still others might require special care because of the state of their health, physically and mentally.

We have been talking about these issues. However, so far, a more holistic approach has not been taken. For example, a resident requested for a lift at the Kovan Station. I was surprised by the request, as I know that there was a long debate in this House on the provision of public facilities for our elderly and there was assurance that the North-East Line would have the necessary lifts. I went for an inspection to see for myself, and I realised that there is only one lift at one side of the station. I then made an appeal. The reply came back asking for my understanding, as there was insufficient fund to provide additional lifts.

So where is the priority? We know that LTA has spent a lot of money installing various art pieces in the station to create the renaissance ambience. But what about the basic needs of our elderly, to enable them to be independent and move around? Is this being sacrificed for the artistic development? Which has a higher order in the hierarchy of needs for the population?

Till to-date, our buses are still not fitted to give easy mobility to our elderly. When is this going to happen? Leave it to the transport companies? They will tell you that they have no money. We have put ourselves in a bind and they need to answer to their shareholders and not the stakeholders.

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Many of the efforts in providing elder homes are left to the voluntary welfare organisations. What is the role of the Government? Where are their estimation and projections of the requirement of these homes in the long-term and in the short-term? Has the Ministry of National Development done any survey to find out the needs of the people, for their alternative choices of homes for the families to have extended families and support each other? We understand that, in the case of studio apartments for the elderly, the residents are not finding them attractive.

What measures and motivations have we taken to encourage our middle-age population to stay healthy and alert and financially-able, as many couples of our generation have now one or two children to depend on in view of the population policies then? We should marshall the grassroots organisations, voluntary organisations and other interested bodies to train their volunteers, set up the infrastructure now to take on their role as caregivers or guardian angels to the lonely and elderly. They can visit them at home, attend to their basic needs, or even make regular phone calls to keep in touch with them. This way, the incidence of our old people dying at home and undiscovered until days later, can be minimised. We must reach out to these people before it is too late.

Singaporeans are people who can do their sums and do them well. If they can see the benefits of bigger families, they do not need the carrots to lure them. We should promote stronger family ties, filial piety and family togetherness which can then resolve at least partially, if not wholly, the cases of old people having to be home alone.

Mr Speaker, Sir, here I have a few suggestions. For example, National Day tickets, concert tickets or SAF open houses can be on an extended family

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basis, ie, tickets for 6-8 persons, to cover the parents, children and grandparents. This can also apply to sale of extended family tickets to the Zoological Garden, Bird Park, Chinese Garden and holiday chalets. In this way, we encourage three-generation family outings. Even round-the-island tours or any outings organised by the grassroots organisations can be done on this basis. This journey to finding a solution to promote bigger families begins now. This is the mindset that Madam Yu-Foo has said that it has to be a societal movement.

Children are our future. If we can succeed in selling the merits of having larger families, we can then move to the young people to persuade them to marry and marry early. The carrots that the Government will introduce will be an added incentive. Because these young people grow up in an environment of the extended family, they do not need much persuasion to have more children. We have to remember that today's child will some day become the father of a child. So we have to start this cycle going.

Now comes the question of bringing up children. The responsibility to bring up children must involve not only the married couple but also their parents, in-laws and other relatives like aunties, uncles, etc, as the case may be.

Sharing childcare responsibilities

If grandparents are able to lend a helping hand, even if it is just to fetch the child from the day-care centre to home, the parents of these children can then concentrate on building up their careers. The focus should be about sharing responsibilities, not transferring responsibilities, or worse, dumping responsibilities on grandparents.

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Then, the young Singaporeans, given the opportunity to pursue their careers, will also be able to enjoy parenthood, and the joys and benefits of an extended family. Nothing can be more heartwarming than to go home and be received by your children and parents at the dinner table. I have always valued my mother-in-law because, after work, there is always that steaming hot cup of coffee waiting for us, no matter what time it is.

All the incentives for childbirth may not work, if the people do not see the benefits they can enjoy from having bigger families. We may recall those early days in the 1960s/1970s when someone would remark to another, "Oh! You are so lucky to have so many children!" Today, the tone of that remark is one of dismay when they hear you have children, "Oh! My goodness! How are you going to cope with so many children? Must be very stressful and very tiring!"

Coping with bringing up children is what we have to address. In fact, the issue of six months' maternity leave debate was a hot topic among the grassroots leaders of Paya Lebar. Many, including women employers, stated that the women are getting themselves out of job, as small and medium enterprises would not be able to provide women with such long leave nor afford the additional cost.

Is this incentive appropriate, in view of the volatile terms of employment in Singapore's global economy? Many of us have to double our efforts, as most companies have cut back on recruitment, with intense competition, in view of our global economy. Recent employment challenges, no iron rice bowl, retrenchment, the call for flexible wages, skills upgrading and retraining, all these compete with the effort of family procreation. Many people say unless they

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shut their eyes and do it blindly, then maybe they will have one or more children. So, indeed, we definitely need more than just economics when looking at procreation.

On the basic costs, many parents are asking for assistance for the 3rd and 4th child. It is only this year that the 4th child has the Edusave account. Many parents also need financial assistance beyond the childcare years, and many require support for their children in the before-and-after school care in the primary schools. The Inter-Ministry Committee may wish to add this incentive.

We need to reduce the stress of bringing up children. Many of the young adults who have gone through our education system are fearful of subjecting their children through the same stressful education system that they have gone through. They are afraid of their children being labelled EM1, EM2, Express and Normal. Are our current policies able to provide them the time and space for our young to enjoy learning? Are we not grouping and labelling them at a young age? Is our system pressing them too hard to excel and acquire the skills we deem they should acquire?

Mr Speaker, Sir, I feel that our education system is still too elitist in approach. I am pleased that the Ministry of Education has stopped making public the ranking of schools and releasing the names of schools with the best 'O' or 'A' level passes. Competition is good, but not when the stress in the competition is passed on to those who have to carry the burden, that is, the students and their parents.

In conclusion, we need not just have an inter-Ministry approach, but a multi-disciplinary review of the issue before drawing up the highway, the avenues and arterial roads to map out the roadmap to

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Baby Boom. We have to look at the ageing population and its impact, promote extended family values, encourage shared responsibilities in bringing up children, encourage early marriage, promote quality family lifestyle, minimise the stress in bringing up children and their education, and throw in whatever incentives we can give, so as to take a pincer approach when addressing this issue.

I am pleased that the PMO is now tackling the issue, and I am confident that they will take a comprehensive approach to nip the problem in the bud.

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Mr Speaker, Sir, I support the motion. In this Budget, there are some goodies and practically no negative measures that would burden our taxpayers, except for some additional taxes on tobacco, which are implemented for a very special social purpose. I would like to congratulate the Finance Minister for putting up such a healthy budget despite all the revenue cuts.

In terms of job prospects, the Budget Statement has confirmed that the new high value-added manufacturing sector will not create many jobs. The area where more jobs would be created will be in the service sector. We know that although high-tech and high value-added industry creates few jobs, they are more rewarding jobs. This sends an alarm to the people that in future there will be less high-paid jobs available and that people should lower their expectation and accept the lower-paid jobs offered by the service sector.

Sir, on another aspect in the Budget Statement, to allow the repatriation of foreign income is a very sensible measure. Under the old regulation, people prefer to keep their foreign income outside Singapore, just to avoid taxation. Today, with the flow of funds and the easy movement of people, the location of the

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funds is not really an issue. The old rule which prevented the funds from being repatriated to Singapore, we tend to lose in all aspects, including the revenue tax that the Government may likely gain from the investment of these funds. With the new rule, funds will return to Singapore and will help to boost our financial industry. Perhaps with more money available in our market, the expenditure of those funds will also help the service sector. The Government too will benefit in terms of the taxation from the income derived from the investments. The question I would like to ask is: why is foreign derived income, which is distributed from the partnership company in Singapore, not qualified for exemption under this particular provision? In my view, the foreign income paid by the partnership is of very little difference as compared with the personal income derived from overseas.

Sir, the Statement mentioned that university education will benefit the individual and that only about a quarter of our cohort will benefit from university education. It then said that in future, undergraduates will pay for 25% of the university's operating cost. Sir, for the people who are familiar with university education, they will know that the cost for running the undergraduate courses is very different from the university's operating cost. The announcement that the long-term university subsidy will be pegged to 75% of the university's operating costs is, in my view, an ambiguous and over-charged statement to the undergraduates.

The university has many operations and many of them have nothing to do with undergraduate education which the students pay their school fees for. I will cite a few examples. The university may run a lot of research institutions. There are many research institutions that we

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can name, like IPS, East Asian Studies, Strategic and Defence Studies, the Environmental Science Centre, etc. All these institutions are run by the university and have nothing to do with undergraduate education. The university manages their intellectual property. They register and manage the patent, hire lawyers and take prosecution action. These have nothing to do with undergraduate education. They do industrial collaboration and consultation, making money as a result. They do entrepreneurial development activities, university-to-university collaborations. Many of the expensive equipment in the laboratory have nothing to do with undergraduate education. The university runs courses with small classes, sometimes, for the purpose of national service. For any course with less than 10 students per class, the amount of fees collected is not even enough to pay for the salary of the lecturer who is directly teaching the class. The post-graduate education, one-to-one supervision of the Masters and PhD degrees, is a pure money losing business. Teaching staff too have also been assigned to do all sorts of work that has nothing to do with undergraduate education. I can continue to name the endless activities done by the university which are pegged directly to the operating cost of the university that have nothing to do with undergraduate education.

The cost of undergraduate education is only part of the operating cost of the university. If the Government is going to pay 75% of the net cost in the running of undergraduate education, in my view, it is extremely generous and I support it. At present, each of the students in the university, depending on the course that he studies, is already paying about $5,000 per annum. This figure, compared with the unofficially announced figure of $17,000 per student per annum, is quite comparable to those in the Australian universities. If we look at the

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figure, in fact, the student is already paying for more than 25% of the operating cost of running the undergraduate course. If, eventually, the Government is able to quantify the cost of running undergraduate education, I believe that figure will work out to be less than $17,000 per annum per student. So my question to the Government is: if 75% is the subsidised policy, does it mean that we are going to adjust future education fees for the undergraduate course downwards?

If we try to compare the fee increase in the past versus the reward of the student, as an argument in the increase in the student's contribution to the fees, then we can try to look back to my time. In 1969, I paid $600 per annum and, at that time, the engineer's basic starting pay was $900 per month, which was 1.5 times the fees that I paid. Today, the student pays $5,000 in terms of fees. If they are lucky, they are paid $2,500, if not, only $2,000. So, therefore, what they can receive per month is only a fraction of the fees that they have paid. If we try to look at the fee structure, comparing the old days and today, presently, the students are paying a lot for it. If the 75% includes all activities and costs unrelated to undergraduate education, I think it would not be right and fair for the undergraduate students to pay for those fees, as a large proportion is for activities which are unrelated to the undergraduate course.

Sir, I come to birth rates. The day before the Budget was announced, many have already coined the name for this Budget - "Baby Boosting Budget" - slanting towards the adjustment of the declining birth rate. In the past few years, our economy has not been performing well. People take specific actions to reduce and conserve their expenditure. Giving birth is certainly one of the matters people try to delay due to the gloomy economic outlook. This could

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be the reason for this particular low birth rate of 1.27 per couple. I hope when the economy begins to go back to normal, higher birth rates could be restored. In many cases, giving birth is a very personal matter. Incentives could only work for someone who is hesitating whether or not to have more children in the family. All the measures talked about, like longer maternity leave, paternity leave, more subsidy for the child and baby, and so on, will have a certain effect in helping people in this particular category. I agree with many speakers who have said yesterday that changing the mindset of the people is the important aspect in addressing the population decline. Assoc. Prof. Koo Tsai Kee, Senior Parliamentary Secretary, informed the House on the first day of debate that the airmen detachment in the US, at the moment, is having a baby boom.

In the 80s, I remember when I was in UK, at that time, New York City had an electricity blackout for a few days. A social chaotic situation developed. But, it registered a baby boom as a result of the blackout.

In the past many years, a survey reported by a contraceptive manufacturer, Durex, repeatedly put Singapore in the limelight of the survey results. Singapore always scored the best in "the least sexual activity" in the world. Sir, this issue is a very sensitive one and I do not want to elaborate any further. I hope the committee tasked to deal with the birth rate would seriously look into the above in relation to the declining birth rate in Singapore. Looking back, and viewing the birth incentives, we will discover some of its very unique characteristics. The uniqueness of the incentives being packaged would explain why it does not work so well for us. First, incentives are more for the working mothers - more benefits for the high income earners, eg, graduate mothers. Incentives in the form of tax relief - incentives stop immediately

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when the working mother stops working. Men have no role in the claim of the incentives, except the normal child relief. This incentive was actually given to the lower-educated, people with lower than "O" levels, asking them to stop at two.

Raising the birth rate is everybody's concern, whether you are rich or poor. If we only wish the rich and the educated to have more children, the incentive is sure to fail. If we are able to give the same amount of incentives to the lower income people, I believe that the effect would be more significant. The incentive to increase the birth rate is not aimed towards the whole population. In other words, we did not mobilise the whole nation to deal with the declining birth rate, but only call upon the well-to-do to produce more. Anyway, the well-to-do are the minority in our society and that policy will certainly not lead to the overall increase in the birth rate in Singapore.

Therefore, the conclusion is that we must widen our approach and encourage more people - the lower-income, the middle-income - to take part in this national task in arresting the decline in the fertility rate of Singapore .

I could understand that poorer families have their own problems. They have difficulty in bringing up their children, as they are not able to provide or allocate sufficient resources and attention to their children. Perhaps the nation, in this case, can play a more important role in the upbringing of the children. Let the State take over some of the nurturing of the children, and turn every child into a child with good ability, social behaviour and education.

In China , there is a concept called er tung kung . Children - the better ones in

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terms of their ability - will be sent to a centralised place called er tung kung and the state takes over the upbringing, education and training of the children. Perhaps this is not quite suitable to our environment, but the concept of the state having a role in the nurturing of the children will be a good thing to learn from.

Tax relief in the form of incentives has its shortcomings. The perceived incentive will immediately vanish after the mother stops working due to heavy housework. The original claim for incentives would immediately turn into disincentives because there is no more call for the same person to give birth to a subsequent child.

Men, we all know, have half of the role to play in deciding whether or not the family should have more children. If the wife is not a working mother or a high-income earner, there is no incentive at all for him to persuade his wife to have more children. We must give the husband excuses, for example, some form of incentive to convince his non-working wife to have more children. Otherwise, the husband's hard work would be misunderstood by his wife.

In addressing the declining population issue, increasing the birth rate and increasing the immigration rate are not the only solutions. One of the important aspects in the declining population is the emigration rate. Every year, I guess thousands of Singaporeans, especially the well-educated and who have the ability to work abroad, do not return to Singapore . It is a serious matter. We must look into ways of how to reduce such outflow of our local talents, and lure them to return to Singapore and serve us.

Many things are reported in the media by returned scholars, how they love the food, how important are friends and families, and we expect them to come back to Singapore . Sir, on the negative

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aspect, there are many things people do not report when they return to Singapore , and it is because of the negative aspects of life in Singapore .

In Singapore , I think all of us agree with me that Singapore is a very restrictive society and we have a very high legal norm. I listened to FM95.8 last weekend. They interviewed three successful men, one of whom was a lawyer. They were discussing about the problems of men. One person said that men should take proper care in order not to get into legal trouble. He cited two examples. He said that when you walk under an overhead pedestrian crossing, it would be good for you not to look upwards. If you are not careful, you may end up being alleged a peeping Tom. This is a jailable offence.

He also said that in the olden days, when you see a stranger at night and when you walk into the lift, you should avoid him. Pretend that you are checking your mail in your mailbox. After the stranger has gone, then you take the lift to go home. He said that nowadays it is not just strangers. If you see a lady at night and you are alone, you should avoid joining her in the same lift. It is better for you to pretend that you are checking the mailbox and wait until she has gone, and then you take the lift.

This kind of situation has created a lot of pressure in terms of life. This is precisely because of the publicity and the high level of punishment, causing fear in people's minds.

In Singapore , there are many minor offences which carry jail sentences. I am sure professionals do not want to be jailed even for one day. For example, if you are not careful and you rent your flat to a person who looks educated but has a forged work permit or employment pass, and if you are caught, it is a jailable offence.

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One day, when the Toto prize is $3 million, you bet all your take-home pay on Toto for that particular draw, and you lose all your money. If you want to avoid questioning by your wife, you go to a police station and report that your money was stolen. This offence is jailable.

Sir, our scholars and citizens who work abroad have enjoyed the air of freedom in overseas countries. In this kind of very restrictive environment, do you think they would like to return to Singapore ?

Singapore is a very expensive place to live in. To enjoy the same material standard of owning a reasonably big car and house, many who are already living abroad will find that their standard of living would drop if they should return to Singapore .

The good days of my generation of having high pay and good career development is over. Now it is a time of pay cut and to lower one's expectation. We have painted a gloomy future outlook for our younger generation. If we cannot offer them with what they currently enjoy elsewhere, how could we persuade them to return and to serve Singapore ?

Many Singaporeans think that our Government is too calculative and very petty. For example, an employer in Jurong may offer his employees and visitors free car park. One day the Inland Revenue may come and tell the employee, "Please pay your tax because your free car park is one of your employment perks."

Another example which has been well discussed and is also included in the Budget Statement is the announcement on means testing for people who earn more and use 'C' class hospital beds. Sir, people go to hospital in accordance with their ability to foot the hospital bill. We know that the hospital bill is not cheap. If

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you have a medical problem and you know that you are not able to pay for 'A' class ward, it is better for you to downgrade and go to 'C' class. The use of 'C' class bed is considered as a misuse and you would be charged more. How about the poor people who use 'A' class beds? There are 3% of the poor people, under the lowest income category, who go to 'A' class ward. Do we also consider that as misuse? The person is misusing because he spends beyond his means. And he is misusing because he never used the Government subsidy. Does it mean that for such a person we have to give him a rebate?

Why should we be so petty and claim that the person is misusing the subsidy? He has paid taxes for the past many years which has well exceeded the small benefit that he enjoys from the 'C' class ward. We are too petty. This is what they say.

The Singapore economy and the social policy should be supportive of the free economic system. Everyone, regardless of poor or rich, must be treated equally. However, if we look at our policy on taxation and the national benefit, we are indeed very socialistic. We tax the rich and give to the poor. The people who pay more taxes enjoy the least national benefits. The policy runs contrary to the free economic concept. We ask everybody to contribute and work hard, earn the most, pay the most tax, and enjoy the least of the national benefits. When there is a national crisis, they would be asked to pay the same price when they go to war.

I think this kind of discriminatory policy against the well-to-do will work against the Government and make us less attractive for the people who are already living abroad. With all this, how could Singapore position herself in the arena of competing for the best talents, including

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our own citizens? Our leaders must think about this very carefully and take appropriate action to change certain aspects of Singapore , and to see how we could make Singapore a better place for Singaporeans who are living here, and also very attractive for the potential citizens returning from foreign lands.

Sir, I support the motion.

Mr Speaker: Could I suggest that Members be more focused in their speeches, please? Dr Ahmad Magad.

Dr Ahmad Mohd Magad (Pasir Ris-Punggol): << />Mr Speaker, Sir, thank you for permitting me to participate in this debate.

I join others before me in applauding the wisdom of this year’s pro-enterprise Budget which augurs well for the continued prosperity and growth of Singapore and the well-being of Singaporeans. The various new initiatives proposed will most certainly boost entrepreneurship in our country.

Sir, hearing what Prof. Low Seow Chay had to say a moment ago, perhaps we should consider engineering some blackouts at random in certain parts of the island to see if we could get a bumper harvest of babies! But this is not the topic that I am addressing today. I would like to focus on what I feel that we could do better to instill the entrepreneurial spirit across the economy, which is expected to be one of the propellants of growth in the not-too-distant future.

While good initiatives, such as tax incentives and better accessibility to financing, have been introduced in recent years, these changes have brought about, at best, only incremental improvements. We really need to look into policies that tackle the root causes of structural weaknesses in our economy, and that will bring about transforming changes. Sir, for

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this to come about, some degree of mindset shift is called for.

First, Sir, to turn Singapore into a land of opportunity, one with boundless opportunities, we need to create a national sense of urgency about solving old problems in new ways. We need to explore new frontiers in how we create a nation of self-inspired people, focused and committed to be the best that they can be, and having a high sense of urgency to continually improve the way things are done. To operationalise this, I suggest that we forge a powerful and competitive sense of mission with key performance indicators (KPIs) that are effectively cascaded down, which every member of society can identify with and where people are inspired and motivated to achieve them.

Sir, research shows that there is a strong link between personal freedom and innovation and entrepreneurship. Our citizens therefore should be given the freedom to unleash their creativity through approaches that they are comfortable with - not just confined only to those which are top-down driven. We need to find new ways to make a quantum leap in our ways of doing business. This is especially so for the larger MNCs and SMEs which will be overtaken by competitors in our neighbouring countries and region that have the benefit of more affordable labour and less governmental controls. We must be able to adapt to meet the challenges of a constantly changing environment in the region. In such an environment, it is imperative that successful companies, especially the MNCs and larger SMEs, share with other companies the creative and innovative ideas they have implemented which have contributed to their success. This culture of sharing is very much alive in the developed countries such as the US , and many countries in Europe and Australia . I

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therefore urge business federations, such as the Singapore Confederation of Industries and the Association of Small and Medium Enterprises, to organise seminars and other forums to facilitate the dissemination of innovative ideas for doing business.

Relative to personal freedom is the issue of media censorship, specifically with respect to satellite-based TV. Perhaps this is for fear of bad influences that our locals may be exposed to. What we may not have considered is the fact that satellite TV opens our nation to a wealth of views and ideas in the outside world, beyond what is currently made available in the current set of channels

through cable TV. It took us many years before opening the 'bandwidth' of broadcast media to our citizens which we are all benefiting from today. We are one of the few developed nations in the world that does not provide satellite based pay-TV as a choice to our citizens. The technology is advanced, able to be regulated and relatively cost effective. What wireless is to land-based phone lines, satellite technology provides another dimension to cable-based technology. On a lesser note, we might have an entire generation that will grow up without benefiting from this technology when it matures and becomes redundant. As a technology, it competes and provides a solution to the issue of 'who owns leased cable lines' between the incumbent players. And, in this House, it provides a small advantage to us parliamentarians in that it frees us from having to tackle such issues unnecessarily. But the bigger picture is that exposure to a variety of sources of information enhances our entrepreneurial drive, creates a more robust society and discourages monopolies.

Let me now turn to innovation, which is an important component of entrepreneurship. It is the pursuit of

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innovation that raises an organisation or a nation to a level beyond its competition and effectively carries them into the future, despite changing times.

It is laudable that the Yellow Pages rule, as recommended by the Economic Review Committee, has been embraced by the Government. This should see the boundary between the state and market gradually shifting in favour of the market. This is exemplified by the Government's willingness, for example, to accept many ideas, including some entrepreneurial ones, emanating from the Feedback Unit as well as from citizens communicated through the Cut Waste Panel.

However, Sir, innovation could be hampered at many stages of the entrepreneurial chain. Allow me to cite some of these along with suggested ideas on how they could be improved upon or overcome:

(a) Continue to review policies and regulations that inhibit and stifle innovation. For enterprise development to take off, we need to aggressively reduce red tape. Minister of State Raymond Lim has stated some time back that rules and regulations should be date-stamped. I would like to take this step further to suggest that we should even consider stating expiry dates on some time and environmental sensitive policies to force their regular reviews and ensure that they remain relevant with changing times. Mandating a thorough house-cleaning of rules and regulations every five years by Ministries may be too long and, therefore, not good enough.

(b) Create the vehicles and platforms to harness ideas. This includes providing business support services to assist innovative start-ups and the commercialisation of their products or services.

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(c) Publicise studies of successful companies which employ innovation as a model for business positioning and success. Showcase success stories of Singapore companies and those from the region to spark new ideas and inspire our budding entrepreneurs on how others have done it successfully. The success stories of companies such as OSIM, Hyflux (whose CEO is an hon. Member of this House) and Mil-Com are worth highlighting.

(d) Assist in creating markets for innovative ideas. For example, this could be done by organising a street fair, along the lines of those found in big cities like New York, that showcases ideas and inventions of start-ups and SMEs to gauge the reaction of the public. Encourage our students to also participate in such activities early in their lives.

(e) Remove fear of failure. The stigma of bankruptcy, the fear of being impoverished and the lack of anonymity in Singapore send chills down the average citizen thinking about entrepreneurship as an option. This fear, coupled with an opportunity cost of switching from a comfortable 9 to 5 job, severely reduces the chances of one taking an idea and putting it to work by himself. Failure is indeed one of the prominent features of the new economy, but one must be willing to pick up the pieces and bounce back after falling. We need to find more effective ways to get Singaporeans to be more diverse, understand that second chances are becoming more and more of the norm and move away from a risk-averse mentality.

My last point, Sir, is on micro-enterprises. Older workers with less than secondary education and menial skills are finding it increasingly difficult to find suitable jobs. For this group, micro-enterprise development should be seen as an option to prevent poverty and enable economic self-sufficiency.

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Micro-enterprises are quite prevalent in many developed countries such as the United States , the United Kingdom and Australia . Micro-enterprise development organisations work closely with welfare recipients to get them out of the poverty cycle and reduce their reliance on public assistance programmes.

In addition to SPRING's SEEDS, which is extendable to smaller SMEs, it would be perhaps beneficial to explore the possibility of setting aside funds for "Micro Seeds" aimed specifically at providing funding support of, say, up to $5,000 to the micro-entrepreneur. In addition to funding, SPRING Singapore could also extend one of the schemes for on-going business counselling for a limited period to help the micro-entrepreneurs get off the ground.

Sir, for long-term sustainable competitiveness, we need to create the conditions that nurture both individuals and small firms as they will increasingly own intellectual capital and provide the flexibility and innovation that are essential for Singapore 's survival and growth.

To conclude, allow me to quote Noel Treacy, the Minister for Science, Technology and Commerce of Ireland, a country which ranks high in the World Competitiveness Yearbook ranking, who said:

"Our experience with local initiatives in Ireland lends support to the idea that an 'entrepreneurial culture' can exist in a much wider part of the population that was historically the case, and encompasses a much wider view of what an enterprise is. With this objective in mind we have adopted a pragmatic approach to enterprise development, working in close and continuing partnership with the other social actors, employers, unions and voluntary groups, to build up sustainable economic growth and prosperity through rigorous

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continuous assessment of our overall competitiveness." - (Noel Treacy in OECD Report 2002).

I believe it will augur well for Singapore if we could approach entrepreneurship along these lines. On that note, Sir, I support the motion.

Mr Ng Ser Miang (Nominated Member): Mr Speaker, Sir, thank you for allowing me to join in this debate. I have two issues that I would like to bring up.

In an article entitled, "Unhappy staff burden Singapore economy," in the Financial Times dated 17th October last year, it was reported that according to a gallop poll survey, 17% of our Singaporean workers are actively disengaged employees, a 5% increase compared with May 2002. The poll estimates that the general level of unhappiness among the workers is causing the Singapore economy a staggering $4.5 billion a year, based on factors such as absenteeism and lower productivity. If this finding is reliable, then this is a grave matter that warrants immediate attention. If we are able to recover even part of this $4.5 billion, then it is a great boost to our economy and our companies.

I think we have to take measures to remedy the situation where we have a high percentage of unhappy and disengaged workers. I am concerned whether in the preoccupation to deal with the economic crisis and new challenges, our companies have been too focused on numbers and bottomline at the neglect of the human element and, in the process, alienate or disengage our workers. Our corporate culture seems to have taken a very drastic change. It was like yesterday when we frowned on job-hoppers and valued loyalty, commitment and dedication, empowering our workers, and people first were the then buzzwords.

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Can we build strong companies without loyal, committed and highly motivated employees to deliver good services and make good products? Can we expect workers to be loyal and committed when their jobs are at risk whenever there is a crisis? Can we expect management and workers to work as a team and survive storms and share benefits when the company does well, if there is no job security?

With the rapidly changing economic environment, companies need to be nimble to survive. We accept that gone are the days of lifelong employment. But should we swing to the other extreme of hire and fire and of cold efficiency and nothing else? Sir, I believe that our companies should and could find a middle ground and a good balance between these two extremes and develop our own brand of corporate culture and philosophy that builds strong companies with happy employees with high morale in our land of opportunity.

Sir, next, I would like to bring up the subject of Chinese language. The recent changes in our education policy on mother tongue have generated a lot of discussions in Lianhe Zaobao . Many were concerned if the learning of Chinese would be neglected or marginalised. I am speaking of learning Chinese not as a mother tongue for Singaporean Chinese only but as a language for all Singaporeans - a language that we need to learn for our future prosperity and survival as we meet the many challenges and opportunities of a rapidly growing China.

In an article in the Lianhe Zaobao dated 29th February this year, Miss Pang Sin Hwa concluded that the Chinese economy is on the takeoff, whether to learn Chinese language or not, please weigh

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carefully. In the same article, Miss Pang also reported that media mogul, Chairman and CEO of News Corp, Mr Rupert Murdoch, has called on westerners to bring their children up to speed, in learning Chinese history, culture and language, in his keynote address at the Asia Society's Annual Dinner in New York . The Straits Times of 2nd March carried an article from Washington Post that says, "Advice to a baby born today anywhere in the world - learn English. Advice to a baby born of English-speaking parents - learn another language. Good choices could be Chinese, Hindi, Arabic or Spanish."

These are among the observations made by a British linguist David Graddol in an essay in a journal, Science . With 1.1 billion native speakers, Chinese, with its various dialects, have the largest number of native speakers today. So my advice to all Singaporean babies born today - learn Chinese.

In December last year, the College Board, which is best known for one of its programmes, the SAT test, announced the creation of an advanced placement programme course and examination in Chinese language and culture, citing China's growing economic significance.

Over the last few years, I have come across more and more reports on the promotion of and growing interest in the learning of Chinese language in countries around the world, in Europe , in Americas , from England to Russia . Countries and organisations around the world are aware of the huge potential of China , and people are realising the importance of learning Chinese. I would suggest that we should look at learning Chinese for all Singaporeans, not just our students but adults as well, so that we are better equipped to deal with the many opportunities that China has to offer, and so that we will maintain our advantage of knowing China better than the others.

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Here, I would like to echo what Assoc. Prof. Koo Tsai Kee has said about

the degree of learning Chinese has been grossly exaggerated by some. My advice to every parent would be, please, support the learning of Chinese no matter whether your child will do well in the examination. You will equip him with a language that he or she will need in the future. Perhaps, MOE Language Centre, commercial schools, can work with the experts to make the learning of Chinese more interesting and enjoyable.

I see the usefulness of learning Chinese, not just for Singaporeans going to China to do business, trade, or seek employment. Successful Chinese companies are now venturing overseas. For example, they set up offices in Singapore and some are even going for IPOs, and this is the policy of the current Chinese leadership where they encourage successful Chinese enterprise to zou chu qu, or venture abroad.

More and more affluent Chinese are also beginning to travel overseas as tourists. Singapore is one of the favourite destinations and we should keep it so, knowing the Chinese language will surely come in handy. Before the financial crisis of 1997, hardly any workers in shops and restaurants in Hong Kong spoke Mandarin. In fact, Mandarin speakers were usually ignored. Now, many of them speak fluent Mandarin. Mandarin speakers are welcomed with open arms because, now, they are replacing the Japanese as the biggest spenders in Hong Kong .

As we compete for more Chinese tourists to visit Singapore , our workers must be able to speak the language and make them feel welcome and want to come back and bring their friends with them.

Sir, after 49 speakers before me, I think there is very little for me to add on

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the baby problem. I would just like to say that I have three children and I have added positively to the TFR of Singapore. To bring a child to this world is a serious commitment and a lifelong responsibility. But it is also an indescribable joy to see them grow and to share their joy and pain of growing up.

I support the Government's effort and Members' recommendation to support Singaporeans to have more babies. Confucius had said, shi se xing ye, or eating and sex are human nature. This was 2,500 years ago. What has happened to Singaporeans who enjoy food and have less babies? Perhaps a campaign should be launched to reverse this.

Mr Speaker, Sir, I support the Budget.

Assoc. Prof. Ngiam Tee Liang (Nominated Member): Mr Speaker, Sir, I shall try to keep my speech short and simple, in other words, brief, as reminded by you.

Mr Speaker, Sir, the future of Singapore is actually about the long-term survival of Singaporeans more than the survival of the country -- Singapore. This is because we have two intertwined national survival issues. One is sustaining our economic growth and of this, I have more confidence that we can find the solutions more readily than our second issue of sustaining our population replacement rate, which is intractable. As our country is similar to other industrial countries having a large urban population, we share a number of similar problems, including fertility growth. For my speech, I shall focus on the second national issue.

Let me use a business analogy. Our social fundamentals are sound. But why are the share prices of our stocks down and not flying high? Can we reverse our fertility recession the way we can

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engineer a reverse of our GDP decline? We have a relatively safe environment and a globally recognised education system for our children to be brought up in. We have a relatively safe family-life environment, too. But it appears to many of our young married couples that these are not enough to encourage a baby boom. So we have a paradoxical situation. Those who can afford to have babies do not want to -- that is, those with no kids or have only one child. Those who want to cannot -- these are couples with infertility problems. And, lastly, we have those who should not have, but they have, and therefore they have abortions, and we have, unfortunately, abandoned babies, too.

This suggests that we have to look at certain trends and issues at work in society and they make up the fundamental concerns that we have. Let me just go through briefly some of the main ones. One, we have to be very mindful of the unbalanced structural shift of our demographic pyramid. No longer is it a normal one, and we have to worry about its implication. If we have very sudden changes in the population birth cohorts, it will give headaches later on when we have to do planning. For instance, with a decline in enrolment, we may shrink school enrolment sizes, and we may have surplus teachers. And if, suddenly, later on, we have a big swing, then we have to catch up and make all those contingency plans. This is not good for social planning if you like to have an orderly form of development.

Another trend that is emerging is that some Singaporeans, hopefully this is not the majority, are beginning to say that this is not their problem; this is the Government's problem. If it wants more babies, then it has to tackle the problems and leave us (the people) alone. We also have the bigger issue of changing values

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and perception. In the whole notion of marriage and the family as a social institution, we are now seeing a lacuna. In the past, there were values that kept us married, that gave us the incentives to have children, but we do not seem to have them now. So there is no longer a taboo. If you are divorced, no longer is there a stigma. If you are not married, even though my parliamentary colleagues had mentioned that, for female singles particularly, they still feel a bit of the heat, I think the pressure to get married is less now. Even the Chinese zodiac is no longer influential in persuading us to have babies - Dragon babies, or whatever auspicious animals are around the horizon.

As a result, we have what is perceived as a "no-win" situation for our country and our economy. The equation is something like this. There are high costs of child upbringing plus, because of the new economic order, there is no job security, therefore the equation is "zero" child. This is negative thinking and something that has to do with perhaps individual issues also. One of which is the increasingly self-oriented lifestyle preference at work, whereby we are thinking of our present situation mainly. We like to enjoy a comfortable lifestyle. We are not prepared to put up with sacrifices. We are not prepared to think long term. So there is a de-emphasis in a community-oriented lifestyle, relatively speaking.

There is also, of course, the question of having a "Singapore DNA" in our genes, whether there is such a thing as having an instinct to preserve the next generation, of thinking about the long-term survival of our country, with Singaporeans that are true-blue, rather than relying on a massive influx of immigrants and foreign talents to make up for the shortfall in population. And what implications will this have? This will change the face of Singapore society as we know it and we must be prepared for

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the consequences if we were to allow that to happen, whereby Singaporeans would not form the majority, or would barely be the majority, of the total population of our country.

Related to parenting concerns, of course, we realise that parenting is not inborn, something that we all can do naturally. But we all seem to lack effective interpersonal and communication skills. We all seem to be at a loss as to how to parent effectively. And all these probably act as a damper to having children.

There is also then the mindset of employers, as again mentioned by my colleagues, that we have outdated human resource policies and practices in many companies and employers tend to take the short-term perspective. There is debate over extended maternity leave and other fringe benefits that will actually promote family life but are not really favoured upon by employers, which therefore add to the magnitude of our concerns.

I would just touch briefly on the scope of the Working Committee on Population. With Minister Lim Hng Kiang involved, hopefully, the scope of this committee would be very broad and go beyond just what was released in the press statement by MITA, ie, for parenting concerns, there are only four issues highlighted: (1), maternity leave; (2), worklife balance; (3), childcare and infant care; and (4), financial support. I think we probably have to also go more into the values, attitudes and motivational aspects.

So my suggestions, Mr Speaker, Sir, will focus on what would be the general areas that we must deal with. I agree with the hon. Member Mr David Lim, that we should be dealing with the emotional aspects and not just the material incentives. We have to let the average Singapore couple understand that there is also the private net product of having

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children, the gains and the joy they will get. And I would like to share this with Members. For me, I think the best part of being married, apart from having someone you love and someone whom you like to have as a partner for life, are the struggles that we, as parents, have to go through, to bring the children up, sharing with them the ups and downs. And I think the rewards are priceless, as others have mentioned. Also, there is the social net product to society of bringing up the next generation of Singaporeans. When we pass away, they are going to inherit what we have, including our massive foreign reserves. To help Singaporeans cope with the vicissitudes of life in the new economic order, we have actually put in place very sound fundamentals here. So let us not underestimate or undermine the "treasures" that we have.

I would actually look at the need for a "family impact analysis" of policies and measures that the Government, statutory boards, GLCs and even the private sector would be making. Do not underestimate or overlook what impact various policies would have on family well-being, and therefore we must struggle with negative-impact policies to make them more balanced.

We also need to have a kampong spirit, even as we live in high-rise HDB blocks and neighbourhoods. I think we have not sufficiently utilised the golden opportunity of living in close proximity to each other to build community, social bonding, social networking and social support. I think these are the little things that matter. The "butterfly effect" mentioned by hon. Member Mr Leong Horn Kee is not so much all those big policies. For example, if we are friendlier, we can lend a helping hand to child-mind for our neighbours; when our neighbours or we ourselves are in difficulty, we go and support each other. These are the little things. I am reminded of the days when I was doing my PhD in Berkeley,

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and we were living in graduate housing. As students, we were more or less of the same social-economic status -- we were either on scholarships, or we had to work to pay for our expenses. So we had to pool our resources together. My wife and I decided not to own a car because we had neighbours who had cars. Every time they wanted to go shopping or do other errands, they would ask us, "Do you want to come along? Do you want us to buy things for you?" We baby-minded, child-minded each other's children. From this example you can see that it does not really take too much to bring up a family when you have social support.

Lastly, I would say that we are beginning to have a new work order in which the traditional notion of a lifelong career followed by retirement, and having another 20-odd years to survive on a meagre retirement income for financial support will no longer be the general case. Probably we have to change our thinking and accept that we will actually be moving in and out of the labour force over our life span. We will be taking what I call "mini-retirements" along the way, allowing people to plan to have children and spending time with them, to take time out to go for skills training and upgrading, or even to just explore other parts of the world for a while. Therefore, the labour market can be more flexible. Employers do not really have to be worried over undue costs of labour concerning, for example, extended maternity leave or other kinds of leave, such as paternity leave or even parental leave for that matter.

Of course, this requires financial planning. We need to have ways and means to find support whilst we are not working, but I think that in some companies in some sectors, employees are already doing that. In the electronics sector, they get employed for a while;

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when there is a downturn, they are retrenched; when business booms again, they get re-employed.

Sir, I would end by saying, let us have, maybe, a new set of five Cs, in addition to the so-called material five Cs:

(1) We should really value children . So, children are important;

(2) We should have caring family and kin ;

(3) We should have CPF and financial planning ;

(4) We should have community-based support ; and

(5) Employers should have corporate social responsibility towards family well-being.

I think these are the new Cs that will actually sustain us and help us overcome our problems. I therefore look forward to the deliberations of the Working Committee on Population and I hope that they will "procreate" their recommendations with comprehensive solutions that will actually augur well for us in the long term for our future national interest.

With that, Mr Speaker, Sir, I support the Budget.

Mr Andy Gan Lai Chiang (Marine Parade): Mr Speaker, Sir, my colleague before me has eloquently stated the beauty of having a family and elaborated a lot on the social side of the Budget. I would like to concentrate on a few tax issues.

After recovering from a difficult year in which Singaporeans saw the unemployment rate soar to an all-time high of 5.5% in September before easing off to 4.5% in December, and with the

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country experiencing the dreaded SARS outbreak, it is not surprising that this year's Budget is one that sets the mood for Singaporeans to look forward and remake Singapore into a land of opportunities.

The recommendations of the Economic Review Committee in 2002 are largely in place, and all that is left to do is a little tinkering here and there to make sure the country is kept on its course. On this note, I would like to congratulate the Minister for Finance for crafting a forward-looking Budget. I would like to direct my comments on specific issues relating to the competitive tax regime stated in this year's Budget.

To begin, I am happy to note that the Government has done much for businesses, with the corporate tax rate moving 2% downwards to 20%, and entrepreneurs receiving help, such as the new tax initiatives that allow exemptions for three years for $100,000 of chargeable income of a new company. This effort will see more new businesses of all sorts starting up and which will, hopefully, generate more job opportunities for Singaporeans.

For individuals, however, little was seen of any fiscal handouts by the Government and, to add to the surprise, the top tax rate for individual taxpayers remains, until further notice, at 22% instead of the widely expected rate of 20%. However, disappointed Singaporeans have been reassured by the Minister that the Government's target of top marginal personal tax rate of 20% remains.

During last year's Budget debate, I had urged the Government to promote Singapore as a place for wealthy individuals to park their savings and assets. Not only will it help to increase the supply of money and to keep interest

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rates low, these individuals can also be role models for budding entrepreneurs to emulate and overtake in wealth creation. Thus, I welcome the Minister's decision to boost Singapore's private wealth management industry by deciding that all foreign-sourced income received in Singapore by resident individuals to be exempt from tax with effect from the year of assessment 2005. This initiative will entice high net worth individuals, who would otherwise park their money offshore for tax reasons, to bring it back. It has also a potential spin-off, as it is likely to attract these individuals from around the region to take up residence in Singapore. If they do so in significant numbers, other sectors of the economy will also benefit. Beyond the benefits, however, a few doubts on the Budget Statement on competitive tax regime need to be clarified. Let me elaborate.

Firstly, in 2003, the Minister has already introduced the foreign-sourced exemption regimes which took effect from 1st June 2003. Dividends received by individuals will qualify for tax exemptions if certain conditions are met, such as whether the dividend has been subject to tax in the foreign country and is not less than 15%. What is not clear at this stage is whether individuals will have to satisfy those conditions before receiving tax exemption on their foreign-sourced dividends, or whether those requirements are now superseded.

Secondly, some years ago, when I was an accountant with a bank, it was told to me many times that the Monetary Authority of Singapore has a strong dislike for banks and its customers to indulge in round-tripping, and that was to be highly discouraged. Round-tripping simply means putting what might have been regarded as Singapore-sourced income offshore and recycling it as exempt. With the new competitive tax regime just introduced to exempt foreign-sourced income, has this fear now been forgotten

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in the interest of the Singapore wealth management industry?

Thirdly, why is it that exemption of foreign-sourced income for individuals not applicable if it is received through a partnership in Singapore? Any partnership simply pools its resources together for investment purposes so as to have a better bargaining power and, thus, a better margin on their returns. It seems that partnerships are now better confined to non-investment income businesses, and that the partners will be forced to invest personally overseas than through a partnership in the tax planning exercise.

Turning to the exemption of Singapore-sourced investment incomes for individuals, it is not clear whether non-resident individuals are included in the exemption. If they are excluded, then it would appear that this tax incentive seems to run counter to the desire to stimulate the wealth management industry.

Next, will this new exemption for Singapore-sourced income for individuals see the end of the Supplementary Retirement Scheme (SRS)? At the moment, tax deductions are available for contributions to the SRS. When one retires, half of what is withdrawn on retirement is taxable. This means that even if the withdrawal may be largely made up of investment income, it would not be exempt from tax. However, if this investment income is now earned directly by the taxpayer, it would be tax exempt.

Another issue that needs further clarification is the method used to determine how much indirect taxes are due to the taxman when Government grants are involved. With more emphasis being placed on getting companies on the right footing through Government grants,

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some anomalies need to be addressed in respect of the Goods and Services Tax (GST). The current view is that where grants are given for no specific supplies of goods and services, these grants do not attract GST. As the grants are not subject to GST, it must mean that the recipient is involved in non-business activities. Thus, the recipient's input tax claims cannot be claimed in full and must be limited. This has caused much anguish and difficulties to companies, especially new ones that have benefited from Government grants as part of the Government's efforts to promote certain economic activities or to enable them to provide low-cost services. These companies are normally run on shoe-string budgets and do not have the luxury of time and money to explain to the tax authority about their business arrangements and to appeal for greater apportionment of input tax claims on GST returns. If such a situation arises, it would mean that the cost for these entrepreneurs will go up. Hence, the advantages of the grant have to be weighed against the hidden costs incurred in getting a fair amount on input tax claims against the output tax.

In conclusion, I understand the Minister's real concern is in the future size of the population. With no specific measures as yet to be tabled, I suggest that Singaporeans concentrate their time in seeking out all opportunities created by this year's Budget. As some might have noticed, more are offered in the appendices to the Budget Statement than in the Statement itself. The Minister has, in addition, said that this Budget will deliver $1 billion of tax savings and Medisave and Medifund benefits for business and individuals. Hopefully, together with the Minister's forthcoming policy on procreation, we can all see a fiery dragon in the next dragon year instead of a lizard.

Mr Speaker, Sir, I support the motion.

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Mr Wee Siew Kim (Ang Mo Kio): Mr Speaker, Sir, we have much to look forward to. We can see the light at the end of the tunnel, and it is not because there is only one speaker after me. I am referring to the economy. All signs point to the domestic economy gaining traction in its recovery, the strengthening economies in the West and Japan augur well for our exports, and the economic restructuring initiatives we had put in place are relentlessly pursued.

However, we have to be continuously on guard for the next challenge. Hence, when I heard the remarks made by the and Minister for Finance in the section of his speech entitled "Effective Government and Living Within Our Means", I am thrilled. There is now a determined effort to keep Government costs in check. Clear positions were taken by the Minister for Finance on two issues:

(a) The expenditure cut, which is the year-on-year 2% permanent expenditure cut; and

(b) Productivity, not so much from the baby production angle, but the extraction of "productivity dividends" from the operating budgets of Ministries.

I applaud the boldness. The action almost exquisitely timed to send a great signal. We are cutting just when the economy is gaining strength, not when the chips are down. Cost is paramount. No matter who you speak to, be it the MNC which is seeking to locate its next centre in Asia or the SME deciding to do more locally or diversify aggressively overseas, or even the family breadwinner struggling to provide a decent standard of living for his dependants, cost is top-most in all their minds.

For companies, cost consciousness is a religion. Continuous attention is paid to taking out costs through productivity measures, such as Sigma and Kaizen, or

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through process re-engineering, or just hard-nosed attention to details. Cost reduction, cost avoidance and seeking lower cost of doing businesses are foremost in everyday's consideration. Companies have learned to live with less.

For our workers, many had their wages cut or frozen. They look forward, not as much to temporary rebates and one-time aid packages, but to a long-term sustained assault on the cost structure, eg, if they could look forward to a schedule of reducing cost of parking and SC&C charges, lowering of Government fees and levies, lowering rentals and cost of transportation, or even an earlier arrival at the 20% top marginal personal tax rate. For our workers, they welcome no less than a total and sustained assault on what they would loosely term the "cost of living". Our citizens have also learned to live with less. Now, the Government has also jumped in. It is also learning to live with less.

The year-on-year 2% permanent expenditure cut is indeed a move in the right direction, considering the competitive environment that we live in. Mr Chew Heng Ching referred to this as a wake-up call. However, my question is whether 2% is enough. I would like to highlight today my perception of a disparity in the Ministries' cost reduction efforts in comparison with what the private sector has been doing in the face of competition over the last years, and what individual breadwinners are facing: lowered income and seemingly increasing cost of living. I am heartened by the fact that $1.8 million was saved

from $17 million of contracts outsourced by the Government in FY03. This 10% savings must be a good indicator of the stretched targets that Ministries can step up to. We can do much better than 2%. Do not stop at two.

We can take a leaf from our own history. Civil servants of old must be

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abound with stories of working in much trying conditions. In the recent past, we did a lot with much less. I remember in National Service, when I got my first desk, it was one that had definitely seen much better days. It is one of those desks that if we pull a little harder, all the contents will be on the floor. It is a desk whose appearance definitely exudes history as generations of officers must have toiled on it. But we made do then; we can make do again today. We must learn to be hungry again.

Next, I want to turn to productivity. The extraction of "productivity dividends" from the operating budgets of all Ministries except MINDEF is a move that ought to signal that the Government is serious in matching the private sector in productivity performance. There must be already many examples of what can be achieved if we continue to push and slay old sacred cows. I ask the Government to consider providing a comparison of the agencies that had been privatised by the Government into private entities, or divested to other owners and see how these entities perform before and after the change of ownership. Factors that are regularly reported in the business world, such as revenue per employee, profits per employee or even the job-shop basis of work done per employee ought to be good indicators. Anecdotes of divested entities doing so much more with so many less people tend to raise one's hopes of great productivity jumps. But I know life is never so simple. Let the data from factual experience speak for themselves. Based on this experience, good benchmarks for productivity improvements across the Government sector could be derived. Continuous improvements can be made a way of life.

When one talks about productivity and paring costs, one quickly associates with

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suffering. Civil servants are no different. If they undertake such programmes, the downside for them must not be disproportionately greater than the upside. The Government must set the right incentive structure in order that there is a sustained drive for productivity improvements. Only then can the mindset change. In its effort to encourage civil servants to find productivity gains by breaking free of the shackles of the IM, Mr Yeo Guat Kwang has cheekily warned that at the time of reckoning when civil servants meet their creators and judged to have failed if they have been totally straight-jacketed by the IM.

Ultimately, I firmly believe that from both the cost and productivity perspectives, the Government not only can lead by example, but can actually set the pace for the private sector to emulate. An ever leaner Government that continues to deliver would win many kudos from both within and without.

Coupled with the expectation of a stronger economic performance, much more can be put aside for new priority and strategic areas. More money would be available. So contrary to what Mr Low Thia Khiang had said, the citizens of Singapore would stand to gain more. The way I see it, a virtuous cycle would be unleashed. Leaner Government, lower fees, increasing the potential for private consumption and investment and more money for other initiatives and programmes that would fuel other growths and ultimately, the creation of more jobs. All of us gain when more money is freed up to realise a stronger society and enhance the land of opportunity. We are all going to be so much more richer as a people and as a country. Hence, I am less disturbed by the many cautions sounded out by some of my parliamentary colleagues on the potential adverse impacts on current social programmes.

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Governments all over the world face the challenge of balancing taxation and expenditure. But in Singapore, we have the political will to make the necessary adjustments. Let us now take the scalpel and make even deeper cuts. Take out the whip and drive productivity to higher levels. We all want to get to 36,000 feet. Let us start by jettisoning some fat.

Mr Speaker, Sir, with that, I support the Budget.

Dr Warren Lee (Sembawang): Mr Speaker, Sir, thank you for allowing me to join in the debate as the last speaker before the Hon. Minister for Finance makes his reply. I would like to welcome this Budget for its stance of reminding all of us that, as a country, we must live within our means, while continuing to invest in our future, especially in defence and education.

This year's Budget is clearly pro-business with the 2% corporate tax reduction and the removal of tax from personal income remitted from overseas is very well-received. What I hope would also come soon is the removal of tax from corporate income earned overseas and remitted to Singapore. I believe that this measure would encourage offshore funds to move back to Singapore to benefit our banking industry and our role as a capital-exporting country. Perhaps, the potential revenue forgone in removing this tax would be balanced by the downstream gains from these funds flowing in and through Singapore.

I am heartened to note this Budget continues to pay attention to education and training and retraining of workers, rather than taking the populist way out of giving more rebates and subsidies for low-income families. I would like to draw hon. Members' attention to a heartening article in today's Straits Times entitled, "It's back to Japan for high-precision goods". In this article, on page 6, it reports that

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Canon, Kenwood, Seiko Epson and others are planning to move production of high-end consumer electronic products back to Japan from some of the factories in the surrounding countries because of the lower cost of procuring components in Japan, flexibility of workforce and proximity of R&D facilities plus the higher skills and productivity of Japanese workers. All these help to make it cheaper to produce these high-end articles back in Japan, in some cases, with a total savings of 10%. This article further noted that labour cost may only constitute 5% of the cost of these high-end products and further notes that one of the rationale, for one of these companies, is that workers in Japan could do the job of 22 workers in a neighbouring country. I think we should continue to encourage our manufacturing sector to upgrade and to continue to help companies find reasons to stay in Singapore, such as upgrading our workforce and also making a sustained effort to lower cost for companies and individuals through greater Government efficiencies and realistic pricing of Government services.

I turn now to babies. Like many of my colleagues, this time, I would like to say that when we got married, my wife and I wanted three or four children. But after my daughter was born, my wife changed her mind. She was not convinced that I would have been able to share more of the responsibility of looking after the next baby since I had seemed very hands-off with the first. In her eyes, a disproportionate share of the responsibility for child-rearing had been laid on her lap. Sadly, I must confess the truth of this. On my part, I had always felt a struggle to balance the demands of career and family. If I look back, I would regret what I had done. As the years have caught up with us, perhaps the time has passed for myself. But I wonder how many other husbands in Singapore have been faced with this dilemma. I would call on other husbands not to make the same mistake

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but to find a way to convince their wives that they will do more, and after that, better keep their promise.

Mr Speaker, Sir, having four to six months of extended maternity leave has been suggested. It is an attractive sounding option for some potential mothers but the employers may not be happy and female employees may not dare to take up this offer for fear of losing their jobs or promotion prospects. As one of my grassroots leaders very succinctly said, "You want to take six months, do not bother to come to work!" These are real attitudes that we must face. Another option might be to make it a statutory entitlement for companies to give parents, both male and female, maybe an extra 5 days a year for the first few years of each child's life and maybe three days a year extra for the next few years to age 10, with a maximum number of days of family leave, which would, in this case, have to be subsidised by the Government. The cost for this child leave could be shared by the employer and the Government and will not be deferrable or accumulated. We will need to send a signal that it has to be taken by both parents for the purpose of sharing out the responsibilities of sending the child to the doctor, attending a kindergarten performance or seeing the teacher about the child's work or just spending a day at the beach together as a family.

Sir, bringing up a child is an expensive business in Singapore. Not all will be able to use the tax incentives that have been offered. And at a time where many people with so-called "good jobs" are now worrying about job security, it will be better to assure them that the child will be looked after should something happen to the parents, rather than to give tax incentives which may not be for everybody.

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On the issue of maids, I agree with my colleagues in this House that for many families, if having a maid is not a necessity then the deciding factor is in terms of their timing for starting a family. We need to ask ourselves about the options available to families who need care arrangements for young children. For many, having a domestic helper makes more sense than childcare because childcare often costs more and childcare cannot do the laundry or help with the house chores. One simple relief could be that for families with two children, the maid levy could be reduced and reduced further for those with three or more children but with a cap. Some of my colleagues have also mentioned that we should rationalise the policy of where exactly a maid can be located. I recognise the Government's intention to prevent the abuse of domestic helpers' work conditions in having to look after two households on one salary. Nevertheless, it may be a practical arrangement for the granny to oversee the maid who is physically looking after the grandchildren. In this way, the child's parents would have the security of knowing that the family member is overseeing the children while the grandparents will not have to feel overwhelmed with the task of looking after the grandchildren by themselves. If what we are after is a fair arrangement for family and maid, will it not be possible to have a form of differential pricing of both the levy and the maid salary to take this into account rather than saying it cannot be done at all?

At this time, we are still saying to people - have three children if you can afford it. However, I would like to ask the Government to consider the situation of twin pregnancies. Whether the first or second pregnancy of a twin or multiple pregnancies, it would be good if parents could use Medisave for the third child or for the fourth if the mother actually has two sets of twin pregnancies. People who want to have another baby after

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having twins obviously like children and should be encouraged rather than punished.

Mr Speaker, Sir, I laud the Deputy Prime Minister's plan to contribute $50-$100 to the Medisave accounts of elderly Singaporeans. But I think that the money will go a longer way if it could be directed towards a medical insurance policy for the first cut of all medical costs, even as MediShield is targeted towards mitigating the second tier of costs of major illnesses. People should become accustomed to having to set a portion of their family budget for healthcare. However, we know that Medisave is often insufficient when illness strikes one or more members of the family and especially when the Medisave account holder is a self-employed person, for example, a taxi-driver struggling to pay his annual Medisave contribution, or when the complications of child birth and the neonatal period strikes a young couple having a baby early in their working lives. This proposed type of policy could still be based on co-payment and have a limited pay-out but could be compulsory and have universal coverage of all Singaporeans so that while avoiding the buffet syndrome, it will help alleviate the hardship caused when illness strikes.

I would also like to appeal to the Minister in his capacity as Minister for Finance to further refine the regulations of medical insurance in Singapore to ensure that no Singaporean is without medical insurance coverage in the long-term.

Children born with congenital conditions or illnesses that start in childhood, and those who have lost jobs and have lost their medical benefits after having developed a medical condition during their working lives, are particularly vulnerable to being denied insurance coverage just when they needed most. In Australia, there is a scheme in place

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which ensures that anyone can get medical insurance coverage even if you had a previously diagnosed condition like, eg, cancer, on the condition that no claims can be made for that pre-existing condition for a period of, say, a year after the inception of the policy.

As my hon. colleagues have exhaustively covered points on the Budget for Singapore, I would like to say a few words on the Singaporeans' budget. With flexi-wages here to stay, has the Government focused on educating our people on how to budget for themselves and spend prudently within their means? With the flexible component of wages set to become 30%-50%, perhaps the rule of thumb of, say, setting aside 35% of household income for debt servicing should become lower, maybe even 25% of the income. For the financially savvy, this is not an issue. But I feel that for many of the people, financial information should be simple, straightforward and perhaps even prescriptive, such as if you have a basic income of $1,400, a flexi-wage component of $600, it is best not to spend more than $350 on loan repayments.

Some of the people whom I get to see at the meet-the-people sessions, have gotten into trouble over relatively simple renovation loans and hire-purchase items. A prudent budget would have allowed many of them to keep their heads above water, even with job changes and wage reductions. Once over-extended, and forced into a lower paying job, many fall into a spiral of juggling debts, such as the power bill, conservancy fees, HDB instalments and telephone bills. School fees and examination fees also go unpaid. Little luxury like the air-conditioner for a hot night becomes unaffordable and the spectre of bankruptcy looms, further threatening existing jobs where companies may not want an employee who is an undischarged bankrupt in certain posts. Young people, who see their peers and

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neighbours in this situation, could draw the wrong conclusion that in the midst of such financial uncertainties they too would rather put off starting a family. In this regard, I would echo the concerns put forward by many of my colleagues in this House regarding the affordability of university education. For young couples planning to have kids, an important question is: can I give my kids the same opportunities that I had, including a shot at tertiary education and perhaps a leg-up on owning their first home?

Some of my colleagues have spoken of the need to build the spirit of the nation. Starting a family is about exercising an option on your own hopes for the future. Hope, enthusiasm, a belief that there is a future for Singapore and, more importantly, a belief that there is a future for themselves and for their children in Singapore, is a plus point for the national budget that cannot be easily quantified but perhaps is more important than any budget surplus or cut waste campaigns. We should continue to seek to build that spirit for Singapore.

Finally, I would like to put in a word for those retired teachers who taught in Government-aided schools at the time when their counterparts teaching in Government schools received both pensions and medical benefits on retirement. While Government school teachers have the Singapore Allowance to their pensions adjusted to meet the cost of living, aided-school teachers, on the other hand, received only prevailing CPF terms. While the Government is not contractually obligated to help these people, perhaps some assistance could be given to these same teachers who had given of their best years to produce many of the top students in Singapore, students who include many of the Members of this House.

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On this note, Mr Speaker, Sir, I support the Budget.

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 2.30 pm.

Sitting accordingly suspended

at 12.49 pm until 2.30 pm.

Sitting resumed at 2.30 pm

[Mr Speaker in the Chair]