ANNUAL BUDGET STATEMENT

ANNUAL BUDGET STATEMENT: Debate resumed.

Dr Tan Cheng Bock (Ayer Rajah): Mr Speaker, Sir, I rise to support the motion standing in the name of the Prime Minister and Minister for Finance.

Over the last two to three years, Members of this House have consistently brought to the attention of the Government three groups of Singaporeans hardest hit by the economy: (i) the low-skilled/income workers; (ii) the older workers; and (iii) the professionals, managers, executives and technicians (PMET). They belong to the 40 to 49 age group. So, has the Budget helped ease the pain of these Singaporeans? The answer is a definite yes. Now, at my meet-the-people sessions (MPS), I can confidently tell a low-wage worker that since he works regularly for the past six months and he earns $1,500 or less per month, he will be receiving Workfare Bonuses ranging from $150 to $1,200 in two portions. If he comes from the lower-income household, he will be helped with Utilities Save rebates, ranging from $60 to $200, and also continues to get rebates of up to four months of service and conservancy charges and up to three months of rent. On top of that, he, like all other Singaporeans, will get Growth Dividends, ranging from $200 to $800. And with the work support programme, his family will be helped with childcare and student care assistance, so that he and his wife can go out and work. Then there is the education assistance scheme to further ease his anxiety and financial woes over his children's education. All this and the ComCare Fund are very generous assistance programmes. Even this low-income group also has special CPF housing grant. So, it is very, very generous.

Column: 214

At my MPS now, for an older worker, when he comes to see me, I can tell him that he can get help through a scheme to help companies hire and re-employ him and his older worker friends. He will also benefit from the recreation of 10,000 jobs a year under the Enhanced Job Recreation Programme. This is the $40 million programme over three years. And if he is an elderly person, he will get CPF top-ups to meet his retirement and healthcare needs.

Therefore, it is a good Budget. It spells out clearly the Government's intention of sharing wealth with each and every Singaporean and more for those who really need it. It also shows that the Government knows and understands the urgency and need to allay their anxiety and ease their financial hardship. In fact, the Prime Minister and Finance Minister said, and I quote, "this Budget aims to build a vibrant economy where opportunities abound, and an inclusive society where no one is left behind."

I see that if we do not do something for those who are likely to be left behind, it will lead to the formation of an underclass group. They are usually 40 years and older and their income shrank 3.2% a year from 1998 to 2003. This data is gathered from the Household Expenditure Survey 2002-2003. This group spreads across all races but the Malay community is hardest hit, as can be seen at our meet-the-people session. It is a vicious cycle - no job, no money, no hope to come out of the poverty trap. So this Budget and the Prime Minister's assurance that no one will be left behind are timely, and we at the ground will support the various programmes to uplift their lives and hope that their children will be better educated and have more opportunities to have better jobs and income.

I support the upgrading and restructuring of the economy. We must

Column: 215

become a knowledge hub. So the setting up of an R&D Trust Fund under the National Research Foundation is most welcome. This fund will fill a huge funding gap for R&D in Singapore. We have no research culture. Our strengths have been in trading, finance and services. This fund will come in handy to help and encourage research. Our education system is now moving towards a more innovative, creative and research base. So when these students graduate, the working environment to meet their drive and passion for research must be there. It is very important - the working environment must be there for them - or they will move elsewhere. This fund will provide the seed money for local companies to think of R&D and we hope they develop many innovation-centred products of world recognition and acceptance.

My hope is less red tape for drawing on this fund. And I also see a possible issue arising from this research fund, ie, who has ownership of intellectual property should the product become commercialised? For example, if the research fund funds a research company to develop a test kit for avian flu and is successfully commercialised, who owns this intellectual property? Does it belong to the provider, or is it shared between the provider and also the researcher? I think this has to be worked out. It should be a win-win arrangement or else not many will want to draw on this funding.

We must try to capture a slice of the Islamic financial business which is booming. So, it is a good move to promote Islamic financing activities by harmonising the tax treatment of Shariah compliant financial products with that of conventional financial products. It is up to the banks and insurance companies here to now take the cue from the Government - create, market and

Column: 216

distribute such products. And I know they can. This morning, NTUC Income has already responded, and it is good. This will help us move into the Middle East which is now a fast-growing area.

The challenge that Singapore has to face is an affluent and rapidly ageing society. An affluent modern society has many high expectations and needs. Better educated, better informed, more knowledgeable, and coupled with the rapidly changing fast telecommunication have brought about mindset changes with regard to work, culture and behaviour. In the past, if you changed jobs too many times, you were a job-hopper. And I remember in the old House, and Mr Chiam and I were in that House, there was a big debate condemning job-hoppers. But, today, this moving from job to job is called "upgrading", "improving", and is very welcomed. Also, it looks good on your CV if you list your past job experiences in your next job application. There is also a big shift in thinking of how to do business. So, even in the Government, we have privatised or corporatised our waste and garbage disposal, our power and water, and many others.

Again, in the past, when I brought up the issue of privatising refuse disposal, ENV came up with reasons why it could not be done, including it was the Government's responsibility. But, today, things have changed. Today, involving public-private partnership is becoming a norm. It is called best sourcing, and I think Mdm Halimah has spoken at great length about best sourcing. Now, I will borrow what the Budget has defined "best sourcing", which is, "best sourcing is about choosing the provider who can best do a job, namely, to do it efficiently and economically." So you see HDB and URA outsourced their car parks and enforcement functions to private providers in August 2005. Then they have also many non-strategic areas like facilities

Column: 217

management, IT, security, audit, document management, call centres and library services - all have also been sourced out. Even the water desalination plant, a new water plant, will enjoy this PPP status. But change ownership has its new problems. I think Mdm Halimah has put it very clearly about the problems that were encountered with best sourcing. So there is no point for me to go through it again.

But these business changes are not bad. It shows that there is different thinking, different view on a particular business model and, therefore, I accept it. However, some Singaporeans think differently on some fundamental issues, like race and religion, especially among young Singaporeans, and the Internet is the battlefield. They have no history of the past and no emotional attachment to such issues. This is a change I am concerned about. And I am glad that the Police took quick action. Singaporeans must be free to live with one another, irrespective of their race and religion. It has been a cornerstone of success and pride. We legislated in the House on the right of each race to practise their religion. We had a big debate in the old House on this subject.

We legislated the Group Representation Constituency to ensure minority representation in the House, so that Malays, Indians and other minorities will be represented. We had a long debate. I think Mr Chiam can testify to that. Therefore, it would be wrong and unwise to challenge the GRC concept. I met many other MPs abroad and they were impressed with this idea of getting the minorities into Parliament. But they had no political will to entrench it in their Parliament. But we did it because we believe in it. If young Singaporeans challenge the number of MPs that makes up a GRC, then it is legitimate, and we can challenge that. But to totally remove the GRC is not wise and will open up communal politics.

Column: 218

The other challenge facing Singapore is our aging population. Many issues on the old have been discussed and debated in this House. Calls and recommendations have been made to improve the environment and a barrier-free one. Jobs have been redesigned and recreated to suit the old and the not-so-old, and the CPF top-ups have been given. However, I would still like to cover three grounds. One is the upgrading in old estates. It is obvious that old estates need upgrading, especially the lifts, because these people living there are old. We should relook the present package for lift upgrading in such old estates. Their children have moved out, their income depends on their children and they have not much savings because they belong to the old generation. They need help to move about and they need the lifts to get out of their homes or they will become house-bound. Yet, they have been asked to contribute to this lift upgrading. So I am actually asking the Government to now relook at this. Do not have one formula fits all. Surely, for all these old housing estates where lift upgrading is needed, we should give them. It is no longer a luxury, it is a need. So I hope that the Government will look into this and maybe give free to all these old estates.

While I was trying to source some funding for the lift upgrading, I came across an article in the New Paper which was very interesting reading, but I am not so sure how truthful it is. It concerns capital receipts that were not in our Budget statement. According to what the paper wrote, these capital receipts, which refer to the sale of land and goods, have a total amount of about $13-over billion. To me, I am concerned how come this sum is not in our Budget statement, and I am sure there must be some error here. So I hope the Minister for Finance will correct this. If not, I will be the first to queue up for this fund for the upgrading of the lifts in my old estates.

Column: 219

The other thing is we must treat old Singaporeans not as isolated groups. We must get them into the society. So what I did was I tried to rebuild an old daycare centre into what I thought would be a modern daycare centre so that it would allow old folks to go there and have some daycare service,

at the same time meet older well Singaporeans and even young people. This needs a total mindset change. I got my young to do it, and they did a marvellous job. So that, to me, should be what we call a modern daycare centre or social care centre for everybody - an inter-generation daycare centre.

But when you make all these changes, you realise you lose your funding. You cannot get the funding because MOH says, "I am sorry. This doesn't comply with the requirements of a daycare centre." So there goes one of my funds. Then MCYS says, "Sorry, you also don't qualify because you don't fit into our funding." So at the end, I am poorer. So I am asking the Minister for Finance, "Please help me!"

Third, I think we have to consider the setting up - and this is concerning old age again - a gerontology faculty in either the polytechnic or university. There was a report being circulated, I think, among MPs and also to the Prime Minister and Minister for Finance. I think it is a very good report because it will give you an insight of how old people should be managed. We cannot assume that we all know. You will be surprised that we do not know much about the old. With the setting up of a centre like this, we can train the caregivers. Many of us do not understand that the caregivers are very important in managing the old. I am hoping that, with the setting up of this centre, awareness will be created and, more importantly, having a core knowledge of the subject.

Column: 220

Finally, I think it is important for Singaporeans to know that, over the years 2001 to 2006, there were always some assistance measures to help the lower income and Singaporeans at large to cope with the economic restructuring and poor economic conditions, and also to meet the retirement and healthcare needs. So if you look back to FY 2001, Singaporeans received New Singapore Shares. In 2002 to 2004, there were the Economic Restructuring Shares, and this amount was very high, much higher than what we got for this Progress Package. This year, 2006, the Growth Dividends will be given to all adult Singaporeans; even CPF top-ups, tiered in favour of the elderly, were given from 2004 to 2006. There will also be the 40th Anniversary NS bonus; the Workfare Bonus to help low-wage workers; Utilities Save, S&CC and rental rebates, tiered again in favour of lower-income households from 2001 to 2006. Including other reductions like personal income tax, increases in tax relief and exemptions, the Government has over this period 2001 to 2006 distributed a total of $10.5 billion. It is not a small sum. We have always given back to the people whenever we have created wealth, and we will continue to do.

It is a generous, appreciative and fair way of rewarding Singaporeans who have supported us through thick and thin. Barring Avian flu, crazy oil prices and unforeseen circumstances, I am sure we can still continue to deliver all these, what we call, special transfers over the coming years.

3.50 pm

The Senior Parliamentary Secretary to the Minister for Defence and Minister for the Environment and Water Resources (Assoc. Prof. Koo Tsai Kee): Mr Speaker, Sir, Mr Low Thia Khiang is not here. I was listening to him very intensely and I found

Column: 221

his speech puzzling because, as the Secretary-General of the Workers' Party, he does not seem to be in favour of the Government helping out the workers at this time of the year. Basically, his question to the Government was this. Last year, 2005, was a good year for the Government. How is it that in a good year, we did not register a surplus but registered a deficit, a substantial amount? He implied that we are doing it because we are looking at the election that is coming ahead and that we are actually deliberately engendering a deficit which goes against the Government's policy of creating surpluses during good times and managing a deficit during very bad times. Mr Low Thia Khiang is looking at it in a very short horizon. I cannot speak for the Government. But the way I look at it from where I sit and from where I read the papers and do my analysis is that, when you look at the Government's performance, you do not look at it from year to year. You look at it over a period of time. How long is the term of Government - four or five years - depending on when the Government decides to ask for a new mandate? In other words, do not judge me quarter by quarter, as the company CEO always says, "Judge me on a longer term." In fact, when you give a contract to a CEO, it is never quarter to quarter, nor even year by year, very rarely year by year, maybe three or five years. So at the end of three years, you ask for a mandate, "In the three years, have you grown the company? If you have, then I give you another three or five years."

So over the last 4 1/2 years, I think this Government has done reasonably well. It has enough surplus, grown organically over the last 4 1/2 years, and the time has come to share that amount with the people. I am not a Teochew. Years ago, Mr Low Thia Khiang said, chen hu woo reed, lan men boh reed . I think you will find it difficult to repeat this line now because now, chen hu woo reed, lan men

Column: 222

ah see woo reed liao . I think this is the right philosophy because if you operate on a year to year basis, bad times you squeeze the budget - no Growth Dividends, no Progress Package, no Workfare - and during good times, you suddenly splash even over a period before the fine good time, and the people will judge us over that period of time.

But for today's Budget debate, Sir, I would like to focus on the main thing which has been occupying my mind for some time, that is, the low-income aged, particularly the aged. I like to tell this story which is a little story. Many years ago, when I was turning 40s, my hair began to turn grey which is not uncommon. So I went to my regular barber and she sensed an economic opportunity. She said, "Why don't you dye your hair?" I said, "No. I am past 40." I was 42. I said, "No. I don't want to dye my hair because turning grey is quite normal." She said, "No. You are wrong. In my business, all the men who come here when they turn grey, they dye their hair." I said, "Why?" She said in Mandarin, " Ni bu zhi dao, dang ni you bai fa, she hui dang ni shi lao ren, shi lao ren ne, ni jiu mian lin cai tui le ." In other words, she is saying that the moment you turn grey, society thinks you have aged. As you age, you become less useful, you will be in the hit list for retrenchment. Of course, when she said this, I knew her agenda because cutting my hair is about $8-$10, and dyeing the hair is $30. She makes more money dyeing man's hair than cutting man's hair. What she told me had a profound impact on me in later years because when I look around, it is true there are very few grey hair people in Singapore. Perhaps, she has an inside information. She is in the profession.

There is this perception that when you grow old, when you grey, you are less useful to the society. In fact, the year 2006 is a landmark year because, officially, the baby boomers turn 60.

Column: 223

Who are the baby boomers? These are the babies born in the years 1946, post-war, up to 1964. On 1st January this year, they clocked 60 years old. Around the world, the governments in USA, Europe and Japan especially are scratching their heads how to harness the grey power. The reason is very simple because there are a lot of grey hairs who are very productive and suddenly they are switched off. When they turn 60 or 65, depending on which country, they turn from being very useful to become totally useless. This is something that we should avoid. I think we are slightly behind the curve in that sense, but we are also onstream to becoming an older society.

In fact, I was just reading the Time magazine about one week ago. It says, "How to sharpen your mind?". I was also reading in Parliament this article on "How to manage an ageing workforce?" Studies after studies have shown that as we grow older, our physical dexterity deteriorates. If you are a typist, you will type slower. If you are a speed reader, you will read slower. In other words, we cannot run faster, jump higher or throw further. We cannot take part in the Olympics. But what we can do is to become Olympic coaches or Olympic ushers. We can enter the service industry. For those who have been, let us say, in manufacturing where they depend a lot on their physical dexterity, their motoric skills, they can go into the service industry, for example, hotel industry, tourism industry, hospitality industry and healthcare industry. When you are at a certain age, you tend to, in a sense, give better service. You are less impatient, you tend to be more humane, if I may say. Whereas a young person is more impatient, wants to get things done, and in the process may trample on the customer's feet. That is I think one reason why, for example, in the service industry in Singapore, you have very young people

Column: 224

in the shopping centres. But they do not provide the best of service. They are not rude, but they stand around not providing service. They are there, but when help is asked for, usually they are not around. If you contrast that to departmental store assistants in the USA, Canada and Europe, they are usually grey hairs, but they give you excellent service. Sometimes, they kill you with kindness. I think we need to strike a balance between getting very young people in the service industry who do not offer very good service, but they are there. We have very old people who offer very good service but they may be slow in, let us say, counting money, carrying barang barang , or things like that.

Many companies around the world are actually polishing up their alumni list. Toyota, in fact, the world's most advanced motorcar company in the world, soon to overtake General Motors, in terms of volume production, has specifically redesigned their manufacturing processes for older people, people whom they take above 60 years old. BMW, for example, has just opened a plant in Germany where the policy is to employ people over 45 years old. For them, it is a policy borne on necessity. But they also recognise that if you give encouragement to the older people and harness their other skills, so to speak, not purely their motoring skills, they can be as productive, if not more productive, than the younger people. This is something that we need to move forward. How do we move forward? That is the thing. I read in the papers that the Government is thinking of legislation. That is one way. But experience from the United States and Europe do not seem to point that way. In America, there is no Act to legislate retirement. But they have an Act called the America's Age Discrimination in Employment Act which is basically you cannot discriminate against older persons. So if an old person comes to see you, first of all, you are not allowed to put the age there, or whether

Column: 225

you are an Indian, Malay, Chinese, Caucasian, Black, or Hispanic. You cannot put your religion there. That is only on paper. They can go around it in many ways. The economists have found that such an Act again and again discouraged employment of older people. Because once you employ an older person, you cannot remove him or her.

In contrast to that, you find that a small country like Denmark, for example, has the most flexible employment policy. It hires and fires people almost at will. But it has the highest employment rate in the whole of EU, which is quite profound, and the wages in Denmark are very high, one of the highest in Europe. So you have these two countries to compare, the United States which tries to encourage employing older people through various legislative directives and Denmark where it is almost a free for all. You will find that the employment rate in Denmark is higher than in the United States. In Singapore, as we move forward in trying to encourage the society to employ more grey-hair people, I think we must calibrate this very carefully. Yes, as it stands today, where there is no legislation, companies are truly reluctant to employ older people, that is, because the people in charge - the CEOs and the human resource manager - do not seem to be convinced

that older people can be as productive as younger people. I think we have to slowly encourage them to think positively and look at the world's most advanced companies, such as BMW and Toyota, which are setting the way.

I want to also talk about the Budget today. The details have been splashed all over the papers and discussed at length in this House today. This year's Budget is a profound and seascape change, as I know it. For the first time, we are giving cash handouts. It is not a lot but it is symbolic, on top of other handouts which are kept in the CPF, in the schools through the Opportunity Funds, etc. This is

Column: 226

something that people did not expect. They did not expect cash. They expected the CPF top-up. When my grassroots leaders asked me, "How is it that we are getting cash this year?", I told them that this is a different year and a different Prime Minister and Minister for Finance. It happens to be two-in-one, so it makes things easier. But I support this, because for the low-income people, and I have quite a lot of low-income people who are old in the rental flats. If we put money in the CPF and ask them to get the money from the CPF, it is quite an effort. What happens is that they go to their MPs and the MPs do a lot of the paperwork for them in order to get the money. This approach of directing some cash to those who need them most is very useful.

I also want to commend the NTUC for working with the Government to put this package together. I believe that without the NTUC's representation in putting forward the workers' case, the workers would not be able to benefit so substantially this year from this package. A businessman lamented to me that it is a pro-workers package and less of a pro-business package.

Overall, I think it is a package that is much welcome on the ground, not because it is just an election year, as Mr Low Thia Khiang has put it - Mr Low is not here - but I would like to remind him that every Budget is really an election budget. Every day, for an MP, is really an election day, and as the work is not done today because next month or the month after or the month after that might be an election month, but because yesterday was supposed to be an election day.

4.05 pm

Mr Teo Yock Ngee (Nominated Member): Mr Speaker, Sir, thank you for allowing me to take part in this debate on the Budget Statement for the Financial Year 1st April 2006 to 31st March 2007.

Column: 227

First of all, I must say this is a Budget Statement that is too good to believe and yet it is very true that all Singaporeans will in some way or another benefit from the Progress Package announced on 17th February 2006 by the Prime Minister and Minister for Finance. We are indeed speaking under happier circumstances. Why? We are talking about how much to share and how to share. But more importantly, in my view, the Budget Statement 2006 is really about "Building on our Strengths, Creating our Best Home". The Statement has further detailed the strategies and approaches to upgrade and restructure the economy in Singapore, as well as helping Singaporeans move forward together.

I am glad that while the Government is mindful of the economic performance and progress of our country, it is also paying special attention to the needs of the less fortunate people and lower-income workers.

Sir, I choose to be more focused, brief and straightforward in my presentation. Therefore, I do not think there is a need for me to go into the various key initiatives and elements as they are already contained in the Budget Statement. However, my colleagues and I in the trade unions and NTUC are fully aware that all such actions and measures are ultimately aimed at enhancing job opportunities, job creation and, better still, job recreation for us. The unemployment rate has gradually eased to 2.5% now, which reflects that the employment and re-employment schemes have been successful.

The creation of some 110,800 new jobs in 2005 is testimony of the concerted efforts of the Government and our people. For the record, to be fair, Sir, we have to acknowledge this in this

Column: 228

House. We thank the Government for injecting more funds into these areas in this Budget. These schemes include the Job Recreation Programme for low-wage workers, the new ADVANTAGE! scheme for older workers, Workforce Skills Qualification System on training and retraining, ComCare Fund for the needy households and so on and so forth. There are, in addition, other measures to support the low-income families in the education of their children, CPF housing grants and Workfare Bonus ranging from $150 to $1,200 under the Progress Package. The list goes on.

All in all, we understand the Government's good intentions to share the fruits of growth in the form of Growth Dividends. We understand its intention to reward low-wage workers for work through Workfare Bonus, and that the Government will help lower-income households with their living expenses through rebates. They will help the elderly meet retirement and healthcare needs through CPF top-ups and more.

In conclusion, the Budget Statement is not just about comprehensive but also compassionate measures to help low-wage workers adapt to the global economy and a $2.6 billion Progress Package to share budget surpluses with all Singaporeans. I believe this will no doubt instill confidence in the minds of the people and at the same time warm the hearts of everyone as well in Singapore.

Mr Speaker, Sir, I support the Budget.

4.08 pm.

Miss Penny Low (Pasir Ris-Punggol): Mr Speaker, Sir, thank you for allowing me to join in this debate.

This Budget is one that tidies up past Budget considerations and keeps its focus on the group that is most needy, as well as developing the necessary infrastructure

Column: 229

for our long-term social and economic progress. But it is also a Budget that signals a change of policy from giving to Singaporeans in general to one that targets its biggest surplus to those who need it most. It is a move that nobody can fault and one that sets its tone on reinforcing the value of care and share with the less able or less fortunate in the society. This is a "Progress in Unity" Budget.

But no Budget speech is without its laments. One big part of our Budget is aimed at the Workfare Programme calling for workfare, not welfare. It is highly laudable, but I think it could have gone further to address the changing employment landscape in the new ICT era. Rewards based on the current workforce infrastructure may be short-lived. What is needed is a new paradigm, a framework that fits in the ICT revolution. Of course, we cannot reformulate our institutional systems overnight, nor will it be without pain. However, unless efforts to update the current infrastructure to address the changing demography and the knowledge environment are quickly put in place, I think we may risk redundancy.

Let me elaborate. Much of the current work reward and life infrastructures were developed based on the industrial revolution model which rewards work according to the clock-in-clock-out time cards and is quite location-dependent. During the period when machinery and automation were all the rage, there was even a shift in the economic value from labour to machines. The ICT revolution reversed this equation. The tools introduced by ICT are making work increasingly time and location-independent. The knowledge worker increasingly works in an environment in which work, play and life become a continuum and not compartments. Fostering talent is not only a question of material rewards but, to a great deal, a

Column: 230

question of understanding how to motivate and inspire creativity, innovation, initiative and striking a right work-and-life balance. The problem is that not all aspects of the world of work have kept up with the times in the knowledge economy. I, therefore, find that we have a number of discords between the economic realities and the labour market structures and practices.

Please allow me to elaborate on a few of my observations.

A larger share of the workforce will not define their future in terms of a single employer. Organisations will emerge to give them the extra labour market security, and that could include manpower, trade unions and employer organisations, which could be in fashion as 21st century guilds. Itinerant workers will sell their reputation and what they know or can learn to the labour market. The guilds, hopefully, will provide quality assurance and learning needs to itinerant workers. Job quality will bifurcate. A high quality of life, higher locational choices, greater potential to balance market hours of work with non-market hours will also occur. These changes will in fact favour the inclusion of the vulnerable, which includes the mobility-disabled, women with family responsibilities, the aging population, etc. The digital transactions will bypass inappropriate policy at the speed of light. Entire regulatory environments, if inappropriate, will be marooned. Government labour market institutions like trade unions will have to redefine their services and functions and how they deliver them or risk being irrelevant. Therefore, a passive policy is a ticket to marginalisation.

At the level of the enterprise, the operational tools that ICT has made in principle, made it possible to do things differently. Management practices in the way we organise work, however, are, to a

Column: 231

great extent, still a heritage from the Industrial Age. It seems to me that the question of work reward-life and shift of value from machines to human capital must be considered together. Systemic change to the economy, where decentralisation and outsourcing are now the norm, would have a profound effect on the way that jobs are organised and how workers receive their benefits. Over the years in Singapore, economic policy doctrines have shifted towards market liberalisation. Labour markets are expected to adjust to changes on their own, as the old levers are no longer available or not relevant to help in the adjustment process. With increasing reliance on the markets and the move to the knowledge economy, regulations also need to shift from protection of the individual to empowering and enabling them to protect themselves. Public policies reflecting this changing employment landscape and a fitting infrastructure for this brave new world should be promptly addressed in fiscal and policy measures.

Against the changes in the ICT revolution are the changing demography and workforce. Given our aging population, a particular concern is how we can engage and productively optimise this growing human resource. Do we recognise that at no time in history have we had such an educated and invested aging workforce that is rich in knowledge, experience and network? In business terms, are they not one of our greatest financial assets? If a machine reaches a notional lifetime useability but is well-oiled and still working fine, would we retire it unwittingly? If not, why do we put a notional lifetime use-by date on our aging workforce and an entire labour infrastructure and regulation to support it? We need to relook at our employment landscape and infrastructure and find ways to unlock the value of our aging

Column: 232

workforce. The skill obsolescence challenge needs to be effectively addressed, and labour markets need to be accessible while accommodating different forms of participation. A very recent survey of about 12,000 employees in Europe by the Manpower Inc is shedding some light on the shifting expectations of the workforce. Senior citizens are likely to be driven by different priorities and motivations and will have their own expectations of how to balance work-life, compared with young people. With increasing age, life priorities change.

It is also noteworthy that the measures will cover another rising group of workers commonly known

as the independent workers. Broadly classified, they include the contract workers, freelancers, self-employed, sole proprietors, consultants, part-time or contingent workers, temps, etc. The knowledge economy work environment certainly encourages the growth of such a sector and, of course, the economic downturn of the past years has encouraged businesses to adopt a range of flexible employment practices, from outsourcing to downsizing, to greater reliance on temps - contract workers, freelancers, and so on. Firms employ them to cushion volatile market conditions. And from a business perspective, they have worked well. Companies were able to adjust quickly during boon and bane business cycles. Unfortunately, this independent workforce also has the least institutional protection. Like the aged workforce and indeed, many of the retirees would join this work arrangement, individuals with flexible job arrangements pay a steep price for the way they work. They lack access to the same rights and protection enjoyed by the traditional workforce, making it increasingly more difficult to survive in a competitive environment.

While these laws and policies were not designed to discriminate independent workers, they were drafted with no

Column: 233

consideration of them. As a result, many are faced with tax penalties. For example, if they attend some educational seminars or conferences, they will not be able to claim against it, or up to a very low ceiling, compared to if they are employed and the company fully pays for those conferences. They also pay for high insurance cost because it is done on their own and not collectively, and, of course, inadequate retirement savings.

While the number of independent workers is growing, public policies and our system of delivering benefits to working people, particularly retirement benefits, and even health benefits, have not kept pace with these dramatic changes in the structure of work. Therefore, they must be updated to reflect the new era of flexible, mobile and contingent work. On this note, I would like to commend the Prime Minister for his far-sightedness in including this group of workers in his Workfare Bonus package where the bonus does not discriminate between employed and self-employed, full-time or part-time workers, so long as they have consecutively worked for six months and qualify for this income criterion. This is indeed tweaking our fiscal policy towards an inclusive society.

Having said that, there has been no comprehensive study or data on this growing group. Are they predominantly low or high-income? Are they male, female, old or young? Perhaps, it is time to commission such a study and adopt a new paradigm on building our workforce infrastructure. Existing and new organisations could also be incentivised to provide independent workers with the things that traditional job-holders receive from employers. This could give them some economic security, career opportunities as well as a sense of community.

An analogy is the craft associations or guilds during the middle-ages which

Column: 234

actively tackled the needs and concerns of independent workers. These groups could include the professional societies, unions, community organisations, staffing companies, college, corporate alumni groups, Government NGOs or non-profit organisations. Over the longer term, there is indeed a great potential to link up independent workers, the staffing companies and providers of training and learning services. Perhaps, we can also pioneer a sort of a network guild model, bringing together a group of focused professional organisations and linking them with providers of services of independent workers. This model is particularly interesting since it actually parallels the network structure characteristic of today's most innovative business organisations.

An example is a research done at the MIT's Centre for e-business that examines innovative new approaches to projects, staffing and management. These include B2B talent exchanges that link up large companies with networks of temporary staffing firms, new collaborative technologies that help virtual teams work more effectively and tools to enable e-procurement of services, including freelance talent. Given the growth of independent workers, it is all the more important to build an infrastructure that can provide independent or aging workers with the support that they need.

Mr Speaker, Sir, let me now turn my attention to an issue that is particularly close to my heart and that is the area of retirement savings. I was indeed disappointed with the lack of mention of this topic in this Budget. I think I will not do justice to the possible solutions if I am to try to concise them within this short time. So instead, I hope to bring home the magnitude of this issue and ensure a process where it is put high on the agenda. Why should we be concerned with retirement savings as an issue? The CPF, you may say, is there for all and will

Column: 235

stand the population in good stead when the time comes. It is there for all, I agree, but that is all. Studies by PricewaterhouseCoopers, the major accounting firm, have shown that the income replacement ratio for the lower-paid would be in the low 20% range and for the middle and higher-income earners, even lower, and that is if the CPF is their sole pension source. This is against an accepted international target of 66%. What level of subsistence income or annuity can one obtain from that savings? Certainly, they may have withdrawn sums to purchase a property which they live in, but if the answer is that they now have to sell this or do a reverse mortgage to unlock the cash, they will need to survive. Does that not undermine the whole concept of home ownership that the Government espouses?

There are, of course, other concerns with the CPF that I could spend long hours debating them. However, that is not my purpose here today. Let us leave the CPF where it is, as a useful but reduced component of the retirement landscape in Singapore and move on to analyse how the pension shortfall arises and how it is only going to get worse as time goes by. Let us look at the demographics. In the last 15 years, the life expectancy of Singaporean females has increased from 76 years to 81 years and the males from 71 years to 77 years. In the next 15 years, it is expected that another six years or so will be added to these numbers respectively. At this rate, it will not be long before the average retirement span is as typical as a working life. Relying on the CPF and the way it is headed will mean that there will be significantly less to go increasingly further, and the numbers simply do not add up. In the good old days, a typical family would comprise two or more grown-up children supporting one retired aging parent. The average child per family

Column: 236

now is 1.23 or so, and parents are living longer. The problem is, so are grandparents living longer. The pyramid is rapidly inverting. What we now have is 1.23 children supporting mum and dad, granny and grandpa. And if 1.23 of that son gets married to the other 1.2 of the girl, you can add another six to the list. We need to face these demographic challenges and face them now before it is too late.

So what is the solution? I think there are a number of alternatives. The first is an extension of retirement age and this may be inevitable anyway, but will require a change in both the employer and employee's attitude, as well as the workforce infrastructure that is conducive to the working aged, employed or independent. Another solution, quite simply, is that we need to help to create an environment that encourages not only employer-sponsored pension plans, but also industry support group schemes that cater for the self-employed and the entrepreneurs who are so important to our future. This latter group is the most difficult to cater for, but we must find a way.

But creating a pension environment is not something that the Government can easily legislate. It has to come as a result of the various parties, seeing the benefits and actively wanting to be part of the environment. To do this, we have to help answer the question: what is in it for me? Of course, the Government can throw in sweeteners and, through the tax framework, direct the general thrust and format of the schemes on offer. I will come to that in a moment, but the drive has to come from the interested parties themselves.

The most interested party, of course, is the worker, as it is his future that is at stake. What is in it for him is the comfort of knowing retirement will not be a struggle, something to be feared, but that

Column: 237

he will have a basic level of self-sufficiency to look forward to throughout the twilight years. If you can save on top of that, then it is good and the pressure is solved. What about the employers? The employers, before getting into the benefits, will probably have two concerns. The first is the cost contribution to the scheme and the second, the cost of administering it. These are valid, but ones which I think can be handled by repackaging employees' benefits as well as reaping efficiency from economies of scale. For the smaller businesses, woo schemes and multi-trust accounts could be used to bring down and share those costs. This may be met with some resistance by employers when schemes are first set up. But the key elements of a successful scheme are that there must be some sacrifice and there must be discipline despite transitional issues.

On the benefits side, the biggest draw has got to be employee loyalty. Singapore suffers from an overly fluid workforce where loyalty ceases the day after bonus. This is obviously an intangible, but it is nonetheless real and any scheme will have to be tailored so as to carry with them some stickiness. It would clearly be unfair for a moving employee to lose accrued benefits entirely. However, a delayed vesting schedule, say, by one or two years, would be sufficient to make the decision to leave more mementos, leave them as it is currently. What is clear is that the scheme should not contemplate the payout at any time before retirement. Otherwise, the desire to leave may be enhanced even further. One suggestion is that the value is paid into the CPF Special Account where it must stay until retirement. That helps to deal with the portability concept while the vesting adds the loyalty component.

In addition - and this is where the Government comes in - tax breaks should be available, not only for the on-going

Column: 238

contributions, but also for initial contributions that seed the scheme. These breaks could come in the form of double tax deductions and help add to the appeal of the scheme. This may appear to be an initial cost to the Government but there is no doubt that if a self-sufficient and effective pension environment is created, significant pressure will be taken off the need for Government intervention and potentially losing bailouts further down the line. These, of course, are longer-term benefits.

But in the shorter term, we, as an economy, also benefit. First, with the larger pension fund, we will be able to develop Singapore into the dominant regional force for the wealth management industry. The second is to continue to attract, but more importantly, to retain the so-called, foreign talent. The creation of a healthy thriving pension industry will generate significant interest for fund managers as a large pool of funds becomes increasingly available for management. And as far as foreign talent is concerned, it cannot be expected that a stable long-term environment can be created if this important resource is excluded as it is currently, from being able to save in an efficient manner.

If it is to be set up, should the individual decide on how this pension fund is invested as in the SRS or CPF? My view is that few laymen are investment experts. The funds should be professionally managed for simple safety reasons although some degree of high level preference could be worked into the overall investment mandate. In addition, full resources on large schemes can reduce the drag on value significantly through reduced management charges. The worker is thus getting access to low-cost expertise which is something normally beyond his reach. You may ask: how do we move this forward? Many people are not aware that the tax efficient pension framework currently does exist.

Column: 239

This is in the guise of the scheme that is approved under section 5 of the Income Tax Act. Largely, this scheme became redundant under the dominance of CPF. However, in the weakening grip of the CPF, we should revive interest in the section 5 plan concept. The scheme, as it currently stands, has some deficiencies. And the first step would be to address some of those and create a scheme that caters for the needs of a 21st century workforce. A number of companies, multi-nationals included, are starting to look at the section 5 schemes again. But we need to quicken the pace of this progress. Where the Government can help is in three areas. First, by instigating a process that will take a look at how the scheme can be improved and thus be given added appeal for employers. Two, by setting guidelines for the general shape, terms and conditions of the plan to ensure they meet their longer-term objectives. This can be controlled through the tax approval process as in many countries.

Three, by assisting in the marketing of the scheme, perhaps working with the accounting firms, business associations and so on.

I would, therefore, like to suggest a committee to be set up which comprises a cross-section of the stakeholders, including the labour unions, Government officials, accountants and tax consultants, to perform a thorough examination of this whole area with the view to recommend a way forward that ensures the future of Singaporeans.

We are no longer talking about helping them to realise their retirement dreams. What I think we are talking about is avoiding the retirement nightmare urgently.

Last, but not least, I would like to briefly highlight a rising sector in the global stage which not only complements

Column: 240

our ethos of a self-reliant society which is fitting for a knowledge economy where people are its focus, but could potentially be a new engine of growth in Singapore. I am referring to the NGOs or VWOs for-profit and not-for-profit social enterprise sector. Let me term this generally as the "people sector".

The scope is very wide. It includes not just NGOs, VWOs, but also clan associations, craft associations, professional organisations, trade associations, UN bodies, regional bodies, social enterprises and local franchise models like the Kao Shen Restaurants, High Point House Removals, Cabbages & Condoms, Restaurants, WCs, Cafes and so on.

In the more developed countries like the US or Europe, this is one of the fastest growing digits in the GDP. It has been found that the people sector often fills the gap where macro-economic policies and government agencies could not adequately address. Some of the benefits are as follows. This non-profit industry could be fashioned as one of the new economic engines of growth and the spin-off could be enormous in MICE, which is meetings, incentives, conferences and exhibitions, in fund management, in tourism, R&D, standard controls, as well as socio-political and economic leverages. It can also help to expand the job opportunities to suit the changing employment landscape and expand lifestyle choices. It can also inculcate good value systems in the society. As it progresses, we can mature into a more caring and less individualistic society. Last, but not least, it can also cultivate a good people-to-people tie with the region and international communities as we witnessed during the year of tsunami rescue, relief and reconstruction efforts.

Singapore, with its connectivity and efficiency, is well-placed to exploit this

Column: 241

economic sector. With our excellent logistics network, transparency and premium branding and a complementary growing wealth-management sector, we can engineer ourselves into a regional hub like Geneva, Belgium and Washington and even give them a run for their money since we enjoy clock-work efficiency at a relatively lower cost. In Singapore, this sector was given a boost with the recent regional disaster relief efforts. More people have come forward to set up organisations to cultivate self-help and mutual-help. Of particular interest to me is the social enterprise sector and micro-finance.

[Mr Deputy Speaker (Mr S Iswaran) in the Chair]

4.38 pm

Here, I would like to declare my interest as the founder of the Social Innovation Park, which is a non-profit organisation and social enterprise. Recently, the Social Innovation Park, in conjunction with the Straits Times and the Schwab Foundation for Social Entrepreneurs, declared Singapore as the 24th country that they are giving the Social Entrepreneurs Award of the year. The Schwab Foundation is expected to add a dozen more countries to the list this year, signalling a huge interest in social enterprise as problem solvers and change makers in the 21st century. To give a technical definition, social entrepreneurs find gaps in societies, seize the opportunities to innovate and create systematic, sustainable social transformation based on a sustainable market or business framework. Social entrepreneurs undertake both public and private sector functions simultaneously. On one hand, they work with those populations the governments have not been able to reach effectively or have ignored. On the other, they address market failures by providing access to private goods and services where business does not operate because

Column: 242

the risk is deemed to be too high or the financial rewards perceived to be too little. This distinguishes them from social organisations built on the paradigm of charity and using the approach of charitable acts.

Today, many large companies are seeking ways to access new markets and build their brand as responsible companies. Many support social entrepreneurs to maintain their competitive edge and re-invent themselves along the way. Governments also have much to gain from supporting social entrepreneurs but they should not make the same mistake of seeing them as simple service delivery subcontractors. Social entrepreneurs are system change agents. Like business entrepreneurs who are innovators in the corporate sector, social entrepreneurs are innovators of the public sector. Government should create the needed support system to allow them to innovate and scale, without wanting to take over the innovation process and kill it as a result. To go even further, Government could incentivise social entrepreneurs in both the for-profit and not-for-profit sector via MTI and MCYS respectively to kick-start and grow this sector. It is precisely in helping those successful social entrepreneurs to achieve scale that our solutions lie. We need new alliances, new thinking. Government and aid agencies can no longer be the sole actors in addressing these social gaps, neither should these always remain cost centres. The private sector can no longer see itself as simply in the business of making business, and the philanthropic sector cannot be expected to come in to fill the gaps all the time. We need hybrid organisations that creatively bridge across these sectors and address the social gaps. I would elaborate more in the COS.

In summary, Singapore would not have been what it is today without a hardworking population. A hardworking population thrives in an environment that

Column: 243

rewards hard work, not just economically but socially and psychologically. Building a conducive workforce infrastructure that fits into the 21st century knowledge environment and the possibility of enjoying one's fruits of labour as well as self-reliant groups in both the for-profit and not-for-profit sectors are thus critical pillars to Singapore's continued shine on the global stage. New eras, new challenges. We need new tools to propel the economy and society forward and address the changing landscape. The focus of the knowledge economy is on the knowledge worker. Let us focus on our people. May we progress in unity.

Mr Deputy Speaker, Sir, I support the Budget.

4.40 pm

Mr Zainudin Nordin (Bishan-Toa Payoh): Mr Deputy Speaker, Sir, thank you for the opportunity to join in the Budget debate. I will focus my speech on four key points and on feedback that I have received from my residents.

First, I wish to congratulate the Prime Minister and the Government for proposing a budget that will put cash into the pockets of many needy families. This is only correct because it is an endearing promise of the Government that when there are budget surpluses these would be shared with the people. I also support the principles by which these surpluses have been shared. The more needy will receive the most amount of money. Again, this is only correct because it is a testament to the principle that as Singapore progresses no one must be left behind.

I have noted, however, that we seem to be torn between setting up a welfare system and other ideas that we have creatively called ComCare or Workfare or Progress Package. I fully appreciate the

Column: 244

difficulty. A country like Singapore simply cannot afford to have a class of citizens who become dependent on welfare and who become economically inactive. It is simply not sustainable. It will do our economy no good if there is a percentage of our population who become dependent on handouts. Worse, if this group becomes endemic, it will do our social cohesion no good either and then where will Singapore be?

At the same time, we cannot ignore that there is a group of people in Singapore who bears the brunt of our economic cycle. Singapore's income divide increased drastically between 1997 and 2004, that is, during the economic downturn. While the average income of Singaporeans fell by only 2.7% during that time, that of the poorest families fell by a staggering 49%. Put differently, in real terms, the bottom 20% of our population earn less today than they did 10 years ago.

While Singapore, nimble as ever, can quickly adjust its economic policies to face the challenges of economic change, poorer, less educated Singaporeans are not able to adjust nimbly. Whenever Singapore decides to change tack and pursue new opportunities in the knowledge economy, there are dire consequences for a group of Singaporeans who are made redundant because they do not have the skills to be gainfully employed in this new economy. The Government has done well at promoting skills redevelopment and the need for life-long learning. It has made starkly clear that those at the bottom of the skills chain must find ways to upgrade or face the reality of being left unemployed. It is easy for us to say that the Government will help those who take steps to help themselves, but what do I tell the 50-year-old cleaner, odd-job worker in a factory who came to see me during my meet-the-people session? He became unemployed because his factory shut

Column: 245

down. He tried getting another job, but after many years in the factory, he had a certain salary on which he bought an HDB flat, supported his school-going children and managed to make ends meet. He cannot find another job which will give him a similar salary. In any case, cleaning contractors prefer to hire younger and even foreign workers who expect a lower salary and who can put in long hours because they do not have families in Singapore. When I told him to lower his expectations, he told me that if he takes a pay cut he would not be able to afford his housing instalments and other bills. He would not be able to afford his children's school-going expenses. I told him to be patient and upgrade his skills. He told me that if he had been good at learning he would not be an odd-job worker and menial cleaner. He does not think that at his age he would be able to pick up new skills. All he wanted was to continue with his simple job so that he could put his children to school and that, hopefully, they would have better lives than his. What do I tell this man?

I have no doubt that he will be grateful for the money he will receive if the Budget is approved, but, it only gives him temporary relief. What we need, Sir, is a comprehensive solution. We need a commitment from the Government that people like my 50-year-old cleaner have an assurance that they too are part of Singapore, whether the Government generates a budget surplus or not. We also need a promise from the Government that we aim to build a Singapore where we will be hard-nosed about our economic realities but we will not be heartless about the consequences of our economic policies. We need to let our people know that even as Government policy makers advocate economic change and urge the population to retrain, reskill and readjust their expectations, they will do so with care and realise that we are not dealing with mere numbers. These are lives of Singaporeans and they, especially the

Column: 246

poor and needy, deserve twice the attention and care from the Government because it is they who are least able to fend for themselves.

According to Merrill Lynch and Cap Gemini World Wealth Report released last year, the number of millionaires in Singapore is increasing faster than any other country. Those with assets of more than US$1 million now number more than 48,000 - an astounding 20% more than the previous years. However, the bottom 60% of the city state's four million inhabitants who are not as well educated or skilled face an increased possibility of unemployment as well as daily hardship to make ends meet.

My second point, Sir, is strengthening our social cohesion. This topic is close to my heart. I am a strong believer that Singapore's success is rooted in our ability to remain socially cohesive as a nation. I cannot say it better than the late Mr S Rajaratnam when he penned our national pledge. If we are not one united people regardless of race, language or religion, we are doomed as a nation. Beyond potential flashpoints of race and religion, we cannot ignore the growing income divide which could potentially drive a wedge between the haves and the have-nots. This is something we have to manage carefully but more proactively. While I agree with the Education Minister, Mr Tharman Shanmugaratnam, that we should allow inter-racial friendship to develop naturally in our schools, I believe there is room for a nudge in the right direction. And what better way than to start with how the pledge is taken each morning. As I have said elsewhere, 40 years ago, given the backdrop of communal violence, the pledge resonated well with a whole generation of school children. Today, I am not sure. My fear is that by reciting the pledge mechanically every morning, we are not giving it life. I am not sure that our children understand the lofty ideals represented by the words

Column: 247

we use in the pledge. I urge the Education Ministry to find ways to make our pledge come to life and to draw on the many talents of our school teachers to explain to our children why our pledge is so important a symbol of our nation's hopes. Even as I commend the many grassroots' effort to help forge our social cohesion,

I hope that the People's Association will redouble its efforts to give support to the work of the grassroots organisations, particularly by explaining to the public why their work is so important and how the public can get involved. In this respect, Sir, I wonder if we attach enough importance and allocate enough resources to tackle the concerns that I have expressed. Significant steps need to be taken to strengthen our national identity and guard our fundamental values that form the cornerstone of our nationhood during the early days of our independence.

(3) Wholesome education

Very often, Sir, through anecdotes and films, such as "I Not Stupid" and "I Not Stupid Too", we see and hear how parents want the best for their children - the fight to get them into good, branded schools. Sometimes, in trying to secure what is best for our children, parents employ methods that are far from exemplary and take the competitive spirit too far until it turns ugly. When the journey through school becomes a stressful affair, wrong values are imparted by parents and, at the end of the day, our children will suffer. Our young ones are increasingly buried with extra classes outside school, more specifically, tuition classes, as the typical caring parents strive for academic excellence. There is a danger of the child being academically strong but exhibiting other signs of inadequacy. They may be emotionally inept and far from being wholesome. The over emphasis on class performance

Column: 248

inherently teaches the child that his worth is only measured in such terms and he, most likely, will judge others in a similar way. Sadly, parents may not realise that success is not hinged on examination results alone. Straight 'A' students will not be guaranteed of success in life and career. Experts do agree that academic achievements do not guarantee the attainment of future career and the fulfilment of life.

(4) Non-academic educational path

Children who are not academically inclined and more technically oriented are entitled to an educational path that is pertinent to them. They must be given the opportunity to acquire skills and the know-how that are relevant and current so as to make them employable. Effort is needed to change how technical training is perceived. It is certainly not a dumping ground for academic under-achievers or problem students. Do we discourage our youth from seeking careers in so-called blue collar vocations?

In the US, Sir, studies show that technical education graduates require 20% less formal on-the-job training than those without technical education background. Nearly 50% of such graduates continue their education, and these are students who love what they do and who embrace life-long learning. It is indeed timely for us to give technical education and vocational training the necessary boost that is deserved. As the labour markets become more specialised and economies are demanding more skills, the future of vocational education must be secured. It must be given equal attention as other educational paths. We need to find answers to the following questions. How do we keep technical training current and relevant to industries' needs? Do we need to upgrade the public perception of technical education in Singapore? How can business and industry show support for the best vocational programmes that exist?

Column: 249

In conclusion, Sir, I would like to emphasise that children and youths are the future of the nation. And I am very happy that the Minister for Finance has ensured that they have better prospects and opportunities. In addition to that, I must reiterate that the needy must not be forgotten. A lot more must be done to ensure that they are protected, especially if they are unable to help themselves because of the current pace of development. While we are forced to act decisively to safeguard the nation's interest in the globalised world, we have a responsibility to the citizens of this country who are unable to catch up and join the race. This is their home and they have contributed to the nation in one way or another, and deserve more. I am sure Singapore is not only for the rich and strong. This was never the vision of our founding fathers nor our past leaders.

With that, Sir, I support the Budget.

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

I rise in support of the debate on the Budget. Like last year, this Budget is a budget for the people - near term and long term. While there is a strong focus on our low-wage workers and the elderly, there is something for everyone, including our indispensable NSmen. There is certainly a positive buzz in the air, accentuated by the positive outlook for both our local as well as the global economies. I have no doubt that this will have a beneficial effect on our retail sector. At the launch of a commercial centre yesterday, the operator/developer had commented that whilst there is no direct initiative like a Progress Package for the SMEs, he believed that with cash in the pockets of Singaporeans come 1st May, the retail sector would no doubt be beneficiaries.

Column: 250

I wish to speak on the elements of the Budget that focus on two key segments of our population base, namely, the young and the lower-wage workers as well as on increasing competitiveness of the economy.

On the young, the Opportunity Fund is aptly named. The funding opens up new vistas for the young, helping students from lower-income families gain access to enhanced learning opportunities. I must say that our young are already very fortunate and it certainly looks like things are getting even better. In my days, a trip to the Botanic Gardens was already quite a treat. But, today, a botany trip takes our students to Tioman, Langkawi, and our students go to France and the US for historical trips, and humanitarian trips to China and Cambodia. The Opportunity Fund would put the wider horizons within the reach of an even bigger pool of students.

A recent MOE press release has stated that "exposure to the region has tremendous educational value and strengthens personal resilience among our students". The objective of the Opportunity Funds is excellent, but the implementation has to be exercised with care. I support the encouragement for school-based innovation and flexibility, but I want to add a word of caution. My comments are based on certain incidents involving the Community Involvement Programme (CIP) in our schools that have come to my attention.

The CIP builds an awareness of service to the community, an awareness that a little effort on one's part actually goes a long way for some of the less well-off in our midst, an awareness that, if we try, we can always find the time. And among the students that I have had the opportunity to interact with in the schools, in my constituency, among the friends of my daughters and the children

Column: 251

of my friends, I am rather pleased that we are nurturing a young generation that place others ahead of themselves. For them, sharing is a way of life and they find some level of enrichment through community service. However, parents place a lot of faith in the schools as they entrust their children for a good part of the day in their care. As a result, there must be guidelines, oversight and accountability for the CIP programme. Not all schools are at the same level of vigilance as they possibly ought to be when it comes to overseas CIP projects. Very often, the schools outsource the administrative and operative aspects of these trips. I would like to ask whether there is a set of guidelines and checklists for the schools for the verification of the background of the operators and the people, as well as the facilities at the destination to ensure the safety and well-being of our students. Very often, parents trust the schools but, in reality, how reliable are the parties to which the schools outsource? With students travelling farther, we should take more precautions to ensure their safe journey, return and treatment. It would be foolhardy to do less. When students engage in any particular initiative or activity, parents have often relied on the comfort that these initiatives and activities have already cleared certain criteria. This is especially more pressing as we move beyond just selling flags for the CIP. This desire is not to stifle initiative on the part of schools or students, but we just want them not to be exploited, and having had a bad experience, these students get turned off from ever lending their strengths to the community.

Now that Opportunity Funds open up broader avenues for even more ambitious projects, I hope that the relevant agencies, and if there are multiple agencies that want to take a lead in

Column: 252

coordinating for these agencies that have the responsibility for students and their programmes that they exercise vigilant oversight, develop a system of checks and balance and ensure that there is a high degree of accountability. In the event an unfortunate incident happens, most parents would certainly look to the schools for some form of accountability, and this extends beyond just school organisations. There are also external organisations, however well meaning, that mobilise and organise students. I hope that as long as it involves students of school-going age that there is a similar degree of oversight. In the days of Internet, these organisations can reach far and wide, and many readers trustingly accept what they read off their websites. Hence, we must have our agencies, whether it is MOE, NCSS or others, not only to endorse such organisations but also to take on the responsibility for oversight of these activities. Yes, responsibility can be and is a burden, but do we have a choice? As we even subject maid agencies to accreditation, is it not more pertinent that we ensure that any organisation that raises funds, uses sources of funds from the Government and involves our young be likewise accredited as well? This means exercising oversight, vetting the volunteers and full-time employees that run such organisations, thereby ensuring that they are governed by the right people.

From the young, I wish to move up the age ladder - the Progress Package is certainly a big bonus to all. With Workfare, when one works, one gets an additional reward. In this way, in a growing economy, the fruits are shared by almost everyone - a recognition that not everyone benefits directly from economic growth and needs help. Workfare is one way.

Allow me to cite the example of two fishmonger brothers in Bukit Timah market. They get up early, they sell fish,

Column: 253

pack up late morning, and adjourn regularly to a round of golf before turning in early, as they always have an early start the next day at the stall. Would this have been imaginable just a generation ago? What is my point? The point is that Workfare is just one way. Now that we have Workfare, we must look beyond it. We must create opportunities for our people to be entrepreneurs, to be small businessmen, to be hawkers, to eke out a living by their hands, their wit and their sweat.

Last year, at the Budget debate, I brought up the issue of freeing up constraints so that hawking is easier. I know that some experiments at the Town Councils are happening, but we must do more, be bolder and faster. Take, for example, the office attendant in my workplace. The wife makes good kueh lapis from the house, and it is all by word of mouth. We must make it easier for women like this to strike out and create a business, and there is no better place for them to go but the shops and stalls in our HDB heartlands. In each and every town centre, in every hawker centre, we have the potential that some stalls and shops may rise to be the next Corona Chicken, which has grown from one stall to a regional franchise, or the next Food Republic that is bringing Singapore-style foodcourt dining to millions of people in China. It is the very fact that they had a small start, tried, calibrated, changed, adapted and grew that we have the next wave of local big names. So, where can they start? The heartlands, of course.

Just as McDonald's proof-tested its formula on American audience before it conquered the world, our local talents must have the opportunity to sustain and refine their formulae among our own people before they can even think they have a chance to move outwards. Here, I am pleased to discover that Spring Singapore is now taking up the challenge to be the champion of SMEs. And now it is my fervent hope that some attention be

Column: 254

given to the HDB shops. We must find a solution to the on-going survival of the shops and stalls in the heartlands. They are a necessity. As many MPs will agree, without these amenities, our residents will be poorer for choice and suffer much from inconvenience. Hence, even as rents go up, let us move away from being just a rent-extracting landlord.

I encourage the Government to look at sharing the risks. In success, all wins. In failure, the entrepreneur is poorer in the pocket but richer in experience. But they must bounce back, else why even bother with the experience? When these entrepreneurs fail, yes, they fold. When I come across these people, my heart bleeds for them. I hope we can devise a more structured way to solve this problem. It is not just a matter of another one bites the dust. It is not as clinical as calling another tender, another person steps up, and then we go through the cycle again, hoping that he succeeds and he fails another tender. If he succeeds and grows, I believe Singapore gains. So, why not experiment with ways to share the risk of upsides and downsides with the stallholders and shopkeepers? Yes, there will be issues and concerns on authenticating business levels, the proverbial three books - one for the boss, one for the wife and one for the taxman. We must not be deterred. Only when such small scale opportunities abound that the entrepreneurial spirit would thrive. And we must make the HDB heartlands fertile ground for our entrepreneurs. This way, we increase the probability that we have a continuous flow of companies and franchises that would put Singapore's name on the global map. They would be our BreadTalks and Osims of the future.

My remaining comments would be on the competitiveness of the economy. The Prime Minister has outlined our strategies to upgrade and restructure our economy so as to differentiate ourselves from our

Column: 255

competitors. The initiatives include a $500 million R&D Trust Fund which will be increased to $5 billion in five years. This is certainly quite a boost. But beyond additional funding, I believe that if we become even more cohesive and coordinated, we can extract even more gains with what we already have. Take the example of the recently concluded airshow. Here, I want to declare my interest as an employee of ST Engineering which is an exhibitor of the show. Looking at all the advertisements, it is clear that the coming Singapore Airshow 2008 is pitched in competition with the Hong Kong bound Asian Aerospace and Expo. I see this as a real-life example of competition among countries. Local agencies and companies must pull together for Singapore's benefit. There is an external threat.

Another example is the recent win by the Singapore consortium in Qatar for the new airport design. This is a prime example of how Singapore companies pulling together can make waves, and we must continue to do more. So, firstly, we must form consortia, go out together with either a Government agency or, even better, a local company leading the smaller ones. Additionally, companies in Singapore must combine to form bigger entities, increasing mutual competitiveness and becoming even more capable.

Take this anecdote told to me by a Singaporean friend who had lived eight years overseas. He has a partner who is consulting for EDS, which is a large US-based computer services company. And he mentioned that EDS was competing for a Singapore Government project and that EDS was partnering a Singapore company. My Singaporean friend rattled off a couple of names that he knew so as to guess the identity of the partnering firm. And it dawned on him that all the

Column: 256

names that he came up with are all Singapore companies which to a large extent have a common parentage. What this revealed to my Singaporean friend is that there are still too many Singaporean companies which are sub-skill on a global basis, still requiring foreign expertise in sizeable projects but, nonetheless, still content on competing aggressively with each other in this same Singapore pond. In business, there would be rivalries and pride. It is not easy to say that we put aside emotions. But if local business leaders focus on the fact that together we can stake out a larger slice of the global pie, then cooperation, collaboration and mutual help would result. Other countries have a large domestic market, we do not. Earlier, I mentioned McDonald's. They have the whole US market. Hence, why further handicap ourselves by not joining forces?

I do not profess to be an expert on the specific measures to nurture entrepreneurship and increase competitiveness. But I do believe that, together, we can take on the world. Our objective today is to appeal to the Government to be as innovative, ground-breaking, proactive and aggressive in its efforts to boost our local enterprise sector. All entrepreneurs have to start somewhere and often fail at the beginning before they can succeed. Hyflux, Creative and many other local enterprises started as SMEs. We need many more Singapore companies like them. Their eventual success translates into more jobs and greater tax revenue for Singapore. Only then will our economic growth be truly sustainable.

In closing, in support of the Budget, I say, let us protect the young, fly cover for the poor stallholders and shopkeepers in our heartlands and do our utmost to pull together local companies in the face of intensifying global competition.

Mr Deputy Speaker, Sir, I support the Budget.

Column: 257

5.08 pm

Mr Andy Gan Lai Chiang (Marine Parade): Mr Deputy Speaker, Sir, there was an air of expectation when the Prime Minister revealed the country's 2006 Budget. This year, people are waiting to hear what the rebates and top-ups are that they will be receiving and the amounts, as many perceived that prior to the General Election, the Government will be generous. As expected, the mood was a feeling of relief and excitement after hearing the Budget announcement. And one of my grassroots leaders who sells chickens in the market told me in the evening of the Budget day that many faces are now smiling.

The distribution of $2.6 billion back to Singaporeans in the form of a Progress Package is a very generous package and a compassionate one. The Growth Dividends of FY 2006 are a follow-up to the recent years of giving under the Singapore Shares of FY 2001 and the Economic Restructuring Shares for FY 2002 and FY 2004, and other rebates and top-ups that have cost the Government altogether $10.45 billion. These benefits to households show that the Government cares about the people and is willing to make hard decisions by using its previous year's surpluses to assist the citizens in difficult years. At the same time, it is not forgotten that those who fell along the way are helped to catch up with the rest in life's long journey. Some households have found the going difficult since SARS hit our economy hard and many men and women have lost their jobs. Those in their 40s found it difficult to lift their head high after finding that they no longer are able to find jobs that they are familiar with, nor can they command a salary equal to their last drawn pay.

Corrective actions by the Government, such as retraining and job-matching programmes, have helped those affected by the economic downturn of the past to

Column: 258

adjust to the reality of the present economic environment. Citizens have made self sacrifices and bit the bullet they did, as they move from one job to another until they find a footing again. It is interesting to hear that Dr Tan Cheng Bock earlier said that it is now a fashion for job seekers to jump from one job to another job, gaining experience before they land up with the next job.

This year's Budget went further than just job recreation. It allows the Government to extend a compassionate hand to many households by returning to them in cash whatever the country can give. Though it may not be enough for some to bring them back to their former level of economic comfort, the act of such giving is an example of compassion that the society should be proud of in our Government.

In our effort to further restore our competitiveness and find future sources of income, a restructuring of our economy has to take place. Globalisation has meant that our workers now face challenges beyond our shores. This has caused many to lose their jobs and while moving to another job, a lower salary is a common occurrence. Inequality of income has taken place. And those who are trained to work in the new industries, such as electronics and biotechnology, are seeing better paying jobs than those in the traditional, less high-tech industries. These inequalities have determined the level of consumption and wealth creation. I feel that the Progress Package, among other initiatives that the Government has ongoing, should in some way narrow the gap between the rich and poor. The overall picture constructed is one of inequality and we have to attempt to plug the nation's economic gap between the haves and have-nots.

The stage has been set in FY 2005 for CPF contributions by both employers and employees to be reduced. This would

Column: 259

mean that savings in the CPF account for all contributors would be reduced, thus affecting the amount allocated for the Ordinary Account, Special Account and Medisave Account. With most money going into the purchase of properties, which is still a high sum, less money will be available for savings for old age. With the workers' level of income coming under intense pressure, as companies find their margins of profits being eroded, owing to competition, savings apart from CPF contributions are no doubt going to be less. It is perhaps timely for the Government to explore various approaches to help the lower level of wage earners save for their old age.

One area of concern would be the cost of home ownership, which is relatively high. And in spite of the Government's assistance in cheap financing, many are still sacrificing other expenditures just to meet their mortgage payments. If the prices of new homes are set to rise, with the renewed confidence in the economy pushing it higher, then less amount of money will be set aside for savings for old age. Owning a home may be too expensive for some. Then having a rented property to live in may be the alternative. As such, I hope the Government can set aside a greater amount in its yearly budget to provide cheaper homes for those in the lower income group.

In remaking Singapore's economy, the Budget seeks to press on with upgrading and restructuring the economy in order to differentiate itself from other economies. The setting up of the R&D Trust Fund under the National Research Foundation with an initial fund of $500 million leading to $5 billion over five years is a step in the right direction. This will spur the growth of the knowledge hub that is needed for a global network of ideas where people and businesses can congregate here to share and learn from

Column: 260

each other. The setting up of a new national broadband network that is faster than what is available will plug Singapore into a wider pool of knowledge and increase our ability to use technology in more areas. However, how much this will cost the country has not been demonstrated in the Budget. The Government seeks to build on its strength in manufacturing and services. So it is promoting activities that place a premium on trust, quality and service, not just efficiency and low cost. The focus will then be to raise productivity and skills level.

Perhaps the Prime Minister could elaborate on how this year's Budget aims to do that, ie, either through a fund set aside or with non-monetary efforts from various Government agencies. Schemes such as the enhanced Designated Unit Trust (DUT) as well as tax exemptions from qualifying domestic trust and the underlying holding companies and foreign trusts are useful in attracting more asset and wealth management industries into Singapore. However, a combination of financial system stability, such as having a good risk-based regulatory and supervisory framework, with an array of competitive tax regime, is needed to strengthen Singapore's effort to market the republic as a sophisticated regional financial centre. These efforts seem to be paying off

when comparing Singapore with, say, centres such as that in Switzerland, which is the world's top haven for wealth management and private banking, and which seems to be disadvantaged through unfavourable tax changes imposed on them as part of the Economic Union (EU). Thus, a good portion of the trillions of US dollars of private money could slowly move over here in the next few years, if Singapore keeps its tax as competitive within a stable financial and political environment.

For the Budget to support in the upgrading and restructuring of the

Column: 261

economy and to help Singaporeans progress, our workers, employers and the Government have to forge a strong tripartite partnership. This is ongoing, and it is still a strong partnership. And we have to constantly remain open and nimble so that our enterprises will be able to adapt to the changing conditions under heavy global challenge.

Growing our economy this year which is projected to be between 4%-6% is necessary so that new jobs can continue to be created. Inflation, on the other hand, needs to be carefully controlled so that the percentage increases in the cost of living do not exceed our growth.

Opportunities are abundant. They are out there. Singapore needs more enterprising employers who are ready to explore different ways of creating wealth than just compete in price, as I have heard my colleague just now mentioning that Creative and Hyflux were one of those examples.

Consumers are more educated and the products they demand must be more than just price to attract them. We have to be constantly moving ahead in ideas and in good services to create demand. It is noted that this year's Budget may have used up most of the surpluses accumulated during the Government's term. However, redistribution of future budget surpluses, hopefully, will still be sustained, as this year's Budget programme should help Singapore prepare for the challenges ahead and to achieve good growth results.

5.20 pm

Dr Tan Boon Wan (Ang Mo Kio): Mr Deputy Speaker, I support the Budget. Many of my parliamentary colleagues have spoken on the business aspects of the Budget. I will confine my remarks to the people's component.

Column: 262

The Budget signifies the keeping of promises made by the Government to the people. The financial crisis in 1997 revealed that our economy had grown out of sync with the global economy. To remain relevant to the world, Singapore had to restructure. It was going to be painful. We called on the people to keep faith with the changes, to participate with the restructuring and to bear the accompanying pains. We promised to share the fruits of success. We have had three continuous years of economic growth, and before the end of the term of the current Government, it is timely and right that we share the surplus, to keep the promises that we made. This is also to reassure the people that the restructuring process is on track and has so far been successful. This is also important for another reason - the restructuring journey is not ended. It continues and our people have to do the same. This Budget will add to the trust between the Government and the people. It will provide us with the courage, reason and conviction to continue to strive for more and greater achievements.

I support the targeted approach adopted in this Budget to share the surplus. The effect of the economic downturn was not even across the population. The elderly, poor and low-wage earners were more badly affected. They have also gained less from the recovery. The distributed surplus will be more helpful and meaningful to them. I welcome the use of both the income and housing type in the distribution. I think this can be refined even more to further sharpen the targeting process.

I also support the distribution for its stimulative effect. Some people questioned the wisdom of this because of the possible inflationary pressure when the economy is already trending up and the productive capacity is tightening. However, it is helpful to note that the

Column: 263

shops in the neighbourhood and precinct centres have been complaining of poor business, when the national economic data were indicating growth. Somehow, the benefits of growth were not filtering down. Companies were making money. Income of the high earner was rising, but that of the low-wage earner was not keeping pace. This distribution of the surplus will get directly into the hands of the people, and I hope that it would stimulate business in the neighbourhood shops and centres.

I strongly support the additional housing grant for the low-income earners. Buying a flat is probably the biggest investment decision they will make in their lives. This additional grant is also timely since the wages at the lower end are likely to increase much slower than it used to. Some of my low-income residents have difficulties servicing their mortgage. They ran into problems the moment they have a pay-cut or lose their jobs. In the new economic landscape where the prospects of having to change jobs during their lifetime increase, and the chance of defaulting on the repayment of debts is greatly increased, this additional housing grant will reduce the probability of default.

Many of the people who had problems with the mortgage had also bought and sold flats. They bought a flat direct from the Government at a low price. They then sold the flat on the open market at a higher market price to realise the value gained, and then buy a bigger flat with the returned CPF savings, but now taking a bigger loan at an older age. This is clearly a recipe for disaster, should their economic situation deteriorate. To discourage owners from cashing out on the gain in the value with their first flat, I would like to propose that if a buyer seeks a second HDB loan to buy his

Column: 264

second flat, HDB require that the sale proceeds of the first flat be applied to the cost of the new flat. For his and his family's own good, he should be discouraged from cashing out.

Sir, I do have some concerns with the Budget, not of itself, but the possibility of creating the wrong expectation among the people. Firstly, the sharing of budget surplus is not a panacea for the income divide or low wage. It will not restore the income disparity between the high and the low-income earners. It is only a momentary boost. The answer to the income divide and low wage is to create more better-paying jobs and the ability of our people to improve their knowledge and skills to take on these jobs. There are no short cuts to this difficult problem. By reducing the proportion of people who need financial help for their livelihood, the more able we are, as a society and nation, to help those among us who are in need of help.

In recent years, we have shared some of our surpluses with our people through the New Singapore Shares, the Economic Restructuring Shares and now the Growth Dividends as part of the Progress Package. Some residents have asked if the Progress Package is like the NSS and the ERS. Those who think they are getting less want more. Those who are not working are unhappy that they will not get the Workfare Bonus. They said that since they do not have an income, they need and deserve more of the surplus as they have more financial problems. Yet, others feel that they deserve more Workfare Bonus. The point is that they do not understand the reasons for the distribution and some simply do not care to know. They are just happy for the cash. We must make the effort to explain to the people the rationale for the distribution. If we do not, the worry is that this will lead to unhealthy expectations and create a handout mentality. Another example is the service and conservancy and rental rebates which

Column: 265

have been given for years. This is very helpful for the people, especially those with low income. But I think it will now be difficult to withdraw it. We must constantly review such benefits and incentives so that they do not become entrenched. We must do more to prevent this from taking root.

During the recent difficult economic times, the Government has been greatly admired for its ability and willingness to help the people and business. We could do this because we had squirrelled away our surplus when times were good. This wisdom remains relevant today. In recent times like now, we have good reasons to share the surplus generated, but we must not create the impression that we no longer see the retention of surplus as important. We cannot de-emphasise the importance of building up our reserves and of keeping our surpluses for times when things are not rosy.

Sir, let me come to some general issues that I would like the Government to do more. I am very concerned with our young who drop out of schools. Like Dr Amy Khor said, most of the young have difficulties coping with their studies. They dislike schools and are likely to be disruptive which make matters worse. We must do more to help these youths. We have made the effort to keep them in school and help them to make the best use of their school time. Every citizen who is not prepared for life in Singapore becomes a lifelong problem for society. It is less expensive to solve the problem when it is still solvable, but, more important, it is the hope that every citizen becomes a wholesome person who can enjoy the quality of life that Singapore has to offer.

Sir, I applaud the efforts by the Government to improve the physical infrastructure for the elderly and the handicapped. The Lift Upgrading Programme, which is to make every flat

Column: 266

accessible to the outside world for residents, has been speeded up. Soon, more ramps and other facilities would be built in our estates to provide our people with barrier-free access. But there is more that we should do for the elderly, especially those from the low-income families. Some are locked up in their flats while their children are working, or they are handicapped and not so mobile. Others sit aimlessly at home or at void decks. Yet, others do not have enough to eat. They lead lonely and meaningless lives. Let us do more to help them make the final years of their lives meaningful and pleasant.

Finally, Sir, our race relations are good. But we must continue to work on them to make them even better. The race problems that surfaced recently in London and Paris showed that time alone does not even out differences. The recent cartoon issue reminds us of cultural sensitivities that need to be carefully managed. Since the birth of our nation, we had striven to build a united nation regardless of race, language and religion. The passing of Mr S Rajaratnam reminds us of this conscious effort. As a nation, we must continue with this task, with the same vigour as when we started. It is a journey without an end. We must never take for granted the unity of our nation, the good relationships among our different races.

5.28 pm

Dr Ong Seh Hong (Aljunied): ( In Mandarin ): Mr Deputy Speaker, Sir, the Prime Minister announced the Budget to share the fruits of our economic success with the people. I think the people are most concerned with, and welcome, the various schemes that the Government is using to look after the low-income families, the workers and the senior citizens. Encouraging the people to work in order to qualify for the Workfare Bonus and the additional housing grant is

Column: 267

something which Singaporeans would generally endorse. Most Singaporeans will recognise the defects of a social welfare system. Most people in Singapore are still maintaining the good work attitude and spirit of diligence. They want to work, not just depend on the Government for direct financial needs.

Yesteday morning, I participated in a breakfast meeting with our residents in the coffeeshop. A 70-year-old resident had some financial problems, but he did not ask me for financial assistance. Rather, he asked me to help him get a job. Of course, people will all welcome the Growth Dividend and Workfare Bonus announced by the Government. Especially for the lower-income families, the amount is quite substantial. This will help them settle their immediate needs, or they could save it up for a rainy day.

However, I have some suggestions to make with regard to the qualifying age for the Workfare Bonus. Among my residents, there are some who come from low-income families. Because they are not yet 40 years of age - maybe about 20 to 30 years old - they cannot qualify for this help. Most of them are lowly-educated and doing some manual work, with low income, in the region of $800 to $1,200 per month. Among them, many are married with two or three children and their wives are like them, lowly-educated and not working. Some of the wives are even foreigners and do not qualify for PR status. Many of them are just here on long-term social visit passes. They can hardly make ends meet and are constantly in arrears of utility charges, service and conservancy charges, housing instalments. Their children, if they are attending PCF kindergarten classes, would have to depend on the Kindergarten Financial Assistance Scheme (KiFAS), and even with KiFAS, some of them are unable to pay the other half of the fees.

Column: 268

Many of them are trying very hard to look for jobs. I hope that the Government could relax the restrictions on the qualifying age for Workfare Bonus. Many of them may be below the age of 40, they have families and children, and their wives are not working. I think we should look after them. Of course, the Government wants to look after the older workers, and maybe we should also consider giving these people, who are below the age of 40, a lower bonus, maybe about 80% or 3/4 of the normal Workfare Bonus.

Another point I would like to raise concerns the Government's Housing Grant for the low-income families. The Government is very generous in giving CPF Housing Grant of between $5,000 and $20,000 so that the lower-income families can own their own flats. But I would like to ask the Prime Minister and Minister for Finance, for those qualifying low-income families, if they have already purchased their flats, would they also be entitled to this concession? I wish that the Government would announce that these people also qualify for this allowance. For the low-income families, the very fact that they have worked so hard to buy their own flats shows that they are self-reliant, and this is in line with the spirit that we want to encourage for our Workfare Bonus.

Thirdly, helping the older Singaporeans. This is a very clear principle and spirit in this year's Budget. However, just by giving them the financial assistance is not enough. We should step up our investments in all elderly and disabled-friendly facilities. More importantly, we should extend this concept to the various Government departments and statutory boards so that it could be implemented in all the infrastructures and facilities, eg, in the markets, parks, hospitals, schools, MRT stations, bus interchanges and all public transport vehicles. Why am I saying this? Perhaps in the past few decades, we did not have this problem of

Column: 269

an aging society and many of these Government agencies did not have this concept and it was not their practice when they were building these facilities. A few years ago, we had an upgrading project of our markets and hawker centres and I actively participated in the design. However, I subsequently discovered that we could not have both lift and escalator in the same centre. If you have a lift, you cannot have an escalator. This is something very puzzling to me. Eventually, we were fortunate to be able to come to a compromise. We gave up one of the lifts in exchange for an escalator. But in an aging society, we should provide barrier-free facilities for the convenience of our residents. This is a case in point. We should let hawker centres and markets have both the lift and escalator as a norm, and not as an exception.

The other point I would like to raise is that the Government, in a plan to have a lean civil service, has set some targets for reducing the number of civil servants. The Prime Minister has also said that he will continue to freeze the number of civil servants for three years from 2006. I hope that while trying to attain the target of a lean and clean civil service, the Government will take the route of improving efficiency and doing away with bureaucratic and cumbersome workflow practices. I would like to ask the Prime Minister how is the Ministry of Finance going to assure us that it will continue to provide good service to the public. Otherwise, reduction in the number of civil servants may compromise the service standard. How does it ensure that the Government will not try to outsource its work and transfer the civil servants to the outside organisations, and thereby transferring the cost to the public, eg, increasing the charges, etc?

The next point I wish to raise concerns the Goods and Services Tax (GST). Mr Deputy Speaker, Sir, the Prime Minister

Column: 270

seems to have anticipated that some Members will raise this issue of exempting certain essential goods from GST. In the past, I used to agree with his view that by exempting these goods from GST, the higher-income people would be the ones who enjoy the greatest benefit, rather than the lower-income families. But I think the Prime Minister is looking at it from the tax loss perspective and not from the perspective of the lower-income families because, for the lower-income families, their main expenses are on daily essential needs, transportation fees, medical fees and children's education. GST may well be the only tax that they are paying. If such essential goods and charges could be exempted from GST, then they will benefit directly. They can save 5%. To them, for an expenditure of $1,000 a month, a saving of $50 is a big bonus. The Prime Minister said that we could use other means to help the lower-income families, eg, the service and conservancy charges and utility rebates. But these rebates are not permanent and they are indirect. So, once we revoke such rebates, they will not enjoy any benefit. I think it will be more direct if we could exempt them from paying GST on the basic essential goods and services.

Finally, I would like to reflect the disappointment of some of the small businessmen on this Budget, particularly the neighbourhood shops. Many of them say that they have not felt the benefits of our economic growth. I think one of the problems may be that the Government has lumped them together with the small and medium enterprises for the administration of the various assistance schemes. These schemes are not specifically tailored to their needs. I think this may be the crux of the problem. At the moment, I think our definition of SMEs is too extensive and too wide. Some SMEs may have just two or three workers like, for example, in the neighbourhood shops, and there are also some which are factories with more than

Column: 271

200 workers and a turnover as much as $10-$20 million. To these neighbourhood shops, they face a different set of problems from that of the factories. I think the Government should have individual committees or departments to look into the problems of the neighbourhood shops and help them to revitalise this trade for the benefit and inconvenience of the heartlanders.

Sir, I personally give strong suppport to the 2006 Budget as announced by the Prime Minister.

5.40 pm

Ms Indranee Rajah (Tanjong Pagar): Mr Deputy Speaker, Sir, thank you for giving me the opportunity to participate in this debate.

I wish to say at the outset that I support the Budget, and shall focus on two particular aspects of the Prime Minister and Minister for Finance's speech.

The first aspect is growing our human capital and investing in the next generation. The Prime Minister had said that besides attracting talent, we are also investing in our own people, we are providing students with more opportunities from primary to tertiary level, we should develop critical thinking, reshape the education landscape, provide more curriculum options, etc. I agree with all of that. I think that that is a praiseworthy objective and that it should be firmly supported. There is, however, something I wish to say in that regard, namely, that it is not sufficient just to equip our students with skills. It is not sufficient to give them knowledge.

Education is more than just mere technocracy. In educating our young, we must not forget to teach them the things

Column: 272

that make up the heart and the soul of a nation. And I say this because I read the newspapers in the past few days and noticed that there were quite a number of young Singaporeans who had written in to say that they did not know the role that Mr S Rajaratnam had played in our history. They did not know that he was the man who wrote our Pledge. Neither did they know about the historical circumstances which led him to pen the Pledge and to craft those words which have become the articles of faith that bind all Singaporeans, irrespective of our racial, religious or linguistic backgrounds.

There are many Singaporeans who do not know the fires in the crucible from which Singapore was forged, which means that they do not know our position in time and space in history and they do not have a sense of the uniqueness of who we are. We do not have 5,000 years of the history of China and we do not have the other 5,000 years of the history of India. We do not even have the relatively shorter history of Europe or the Americas. But what we do have is a nation that is forged from will, intellect and a set of principles, and this is something that they must know because, if we do not know from where we came, how do we know in which direction they are to go? We must know our origins in order to understand our destination. And why do I say this?

Let me just take two examples. The lack of awareness of our past history and of the racial and religious conflicts sometimes leads to calls for unfettered freedom of expression. It is good for us to be able to say what we like, we should be able to express ourselves. That is true to some extent. But when it is freedom of expression untempered by a sensitivity for race and religion, that is dangerous and is illustrated by the recent incidence of the prosecutions under the Sedition Act. It is also made all the more relevant by the progress of technology because,

Column: 273

nowadays, you have young people who enjoy blogging. There is nothing wrong with blogging in itself. But, of course, in the process of blogging, people may unwittingly traverse upon the sensitivities of others and hurt others. This is a hard lesson which the Danes are learning today. It is a lesson that we learnt many years ago and because we learnt it, it is something that we enshrine in our laws to make sure that going forward, we will have a set of principles by which we abide where we can live together.

There are many people who would cite the " kampung" spirit. They would tell you, "Oh, in the old days, we have the kampung spirit." But I can tell you that that is actually more illusory than real. If you go back to the Straits Times' archives and read the newspapers about history in the 50s and 60s, you will see the degree of racial and religious conflict that there was then. So, the sensitivity to racial religious conflict is hardwired into the collective memory of older Singaporeans, but it is not there in the sense of the younger Singaporeans.

A second example is the lack of awareness of the problems of segregation, which also leads to a lack of awareness of the critical importance of ethnic integration. There have been calls to do away with the ethnic integration programme, but the people who call for this do not fully appreciate the dangers of segregation. When Singapore was a colony and under the British, there were Indian areas, Chinese areas and Malay areas. That is a great policy for a colony. It is not a good policy for a nation. It is not a good policy for a people that are trying to create a national identity. So that is why I say it is necessary for us to understand our origins in order to understand where we must go. We need to understand the origins of the racial conflict in Singapore to know why we have to be sensitive to race and religion and why we have to have racial integration.

Column: 274

Those were just two examples. But the point I wanted to make was, it is very important for young Singaporeans to have a sense of our history. It is very important for young Singaporeans to know our political history as well as our economic history. And, therefore, when we put money into education to develop our human capital and invest in our people, it is important that the Ministry of Education should take a look at this aspect and ensure that our young people get to learn this.

The Prime Minister spoke of the Opportunity Fund and the fact that $50 million for education would be set aside as part of the Progress Package. This would be left to the schools to dictate what they would spend the funds on and the hope is that they will provide opportunities for the students to learn beyond the classroom and to build a firm foundation for learning. I would urge the schools to provide programmes that will encourage our students to have a better sense of our political and economic history. It is also noteworthy that Mr Rajaratnam, even in his passing, has reminded us of this fact. It is important because without this sense of our political and economic history, this Budget and every other budget just become an exercise in "what goodies can we get". And it is true. Whenever we listen to the Budget speech, everybody wants to know when we can get to the "goodies" section and see what handouts there are and what we will get. There is nothing wrong with that so long as we, as Singaporeans, understand that you can only hand out "goodies" when there is surplus from which to hand out "goodies". And not everybody understands that. I think it is important that we teach our school children from a very young age, basic economic principles. I know that economics is not a compulsory subject, but I think it is important to teach them these principles.

Column: 275

Let me just cite an example. I did a walkabout once. This was in the early part after the last elections when there was a lot of discussion on whether to raise GST. One of my residents said, "No, we should not raise GST." I explained that the Government needed to get money, had to have income, and one of the main sources of income was taxes and a better way of doing it would be indirect taxes for smaller amounts. Her response was, "It does not matter. Get the money from somewhere else. Whatever it is, just don't raise GST." There was a sense that she did not understand that the money has to come from somewhere.

For those of you who are of my generation and reasonably old would remember the movie, "The Sound of Music". There is a scene in "The Sound of Music" where Maria and the Captain were in the glasshouse, and she sang a song that is called "Something Good". But there is a line in that song which struck me as particularly appropriate for this Budget. And the line is, "Nothing comes from nothing. Nothing ever could." For those of you who remember that song, the Budget is just like that. The money does not come from nowhere. It is going to come from somewhere. It is going to come from money that we have earned, money that we have saved and money that we have put aside. So it is important for Singaporeans to understand that. We share surpluses, but we must also be very wary of pure welfare because if we keep doling out the money, very soon, there will be nothing left. There is a Chinese which says that wealth does not last beyond three generations. And I see this in the line of my work because I do litigation. Very often, in litigation, the conflict and the fighting take place at the third generation level. Because the first generation spends the time building up the

Column: 276

business and getting the money; the second generation works to preserve it; and the third generation who do not have to work terribly hard but have the money, then just decide to quarrel about how the money should be spent and, very rapidly, the money goes. As a nation, we are still in the first generation and we should be careful to carry on to the second generation, and to continue for many more generations.

So that is why I agree with and applaud the workfare approach, which is to help people to help themselves. By and large, all the initiatives in the Budget - to help people to help themselves - are very good. I just want to comment on one, which is the topic that the Prime Minister spoke on, about creating hope for the future. The Prime Minister mentioned that the fourth strategy is to create hope to ensure that children do better than their parents and can help lift their parents out of poverty instead of inheriting their problems. So we should invest more in the education of children from low-income families to help them become school-ready and work-ready.

I agree with the sentiment and the approach, but I am not convinced that the existing schemes fully achieve this purpose. Existing schemes, such as the Financial Assistance Scheme and the KiFAS, tend to be generic in nature. They help a general percentage of people and that is fine for a general group, but they are not targeted enough to help some of the truly needy. One example is what I see on the ground. When residents come to see me and I find that there are children well beyond school-going age of 9, 11 and, in one case, 14 years old, who have not been to school, I have to try and get them into school at this stage. But putting them into national schools, maybe still possible at the age of 9, is very difficult if the child is 14 years old. He has to go to a private school. He needs a

Column: 277

lot of extra tuition and a lot of catching up. The existing schemes do not really deal with this.

The other problem is when you have families where the mothers are not working because they have several children and they do not work because they have young kids to look after. I often ask the mothers what is their educational qualification because I try to encourage them to work. Frequently, I find that they are either of Primary Six or Lower Secondary education level. The HOPE scheme, which is intended to help low-income families, is aimed at helping those who limit themselves to, at most, two children. So it is open to couples if both have no more than two 'O' level passes, although I understand that this is going to be relaxed to include parents without post-Secondary qualification and slightly older couples who still have low income after working for some years. But the HOPE scheme still maintains the rule that couples must have no more than two children in order to be eligible for HOPE. That is not a very hopeful scenario.

The people who are left out would be divorced parent with a child or children, single parent with a child or children, and couples with more than two children. And these are precisely the ones who need help the most. For families where there are more children, I would say this, the child, once born, cannot be unborn. The child is there. If the family has three, four or five children, that family needs help and telling them that they cannot have help because they have more than two children would not help them and would not lift them out of the poverty trap and it would not help the parents either. So we have to think of more targeted programmes to help the people who fall into this kind of group, the people who need the most help. And you need a holistic kind of help because it is not just money. It is about counselling them, helping to change their mindset, to understand

Column: 278

family and financial planning and also to encourage the mothers to go back to work, whilst, at the same time, giving them the support in terms of childcare. The other thing also would be transport subsidies if that were possible because, frequently, I find the school fees and school textbooks are taken care of, but sometimes they have difficulties in meeting the transport fees in getting the children to school. Whilst the Budget on the whole is a very good Budget and, by and large, helps a broad number of Singaporeans, there is still a small group that can be helped better under more targeted and more focused programmes.

With this, Mr Deputy Speaker, Sir, I support the Budget.

5.55 pm

Dr Warren Lee (Sembawang): Mr Deputy Speaker, Sir, thank you for allowing me to speak today.

Sir, I want to say that I support the Budget. It seems befitting as a tribute to the late Mr Rajaratnam and others of our founding generations of leaders that the focus of this year's Budget is to achieve progress for and share prosperity with the nation as a collective whole.

This Budget speaks volumes. As a result of previous belt-tightening measures, a willingness of workers and industry to undergo painful restructuring exercises, the economy has grown, unemployment has decreased and now, there is a surplus. Now the fruits of our collective efforts are being shared. The tax base has been broadened through GST, so all, rich or poor, contribute to our taxes. But instead of taxing the poor to give tax breaks to the rich as in other countries, we have, in effect, used the money to more than offset the amounts paid in GST by the poor and much more through utilities rebates, town council rebates and assistance schemes for school fees to benefit the poor.

Column: 279

I applaud the approach of the Government to investing in our intellectual capital and in our workers, in particular, the manner of redistribution of wealth generated to the lower-income group, while continuing to encourage them to be self-sufficient by advocating and rewarding work through the workfare programme. This business of making sure that only those who have worked continuously for more than six months get workfare is, I think, a key feature of the programme. Because there are far too many people who would rather not work than to receive lower wages than what they would have expected.

No doubt, the rich had paid taxes many times more than the amount that they receive in this Progress Package. However, I support the ideal that since we have sacrificed together as a nation, we share the fruits together and those who are in greater need would receive more. The rich may have spearheaded or invested in projects leading to the economic growth, but this would not have been possible without the support of our low-wage workers who have their role in propelling our nation forward.

Rather than to leave everything to market forces alone, in the Progress Package we have chosen to respect market forces in setting wages. But, at the same time, we have found ways to level out the playing field for the poor.

That is what families and friends do - to share and share alike - only this time we are not sharing poverty but prosperity.

In this Budget, we see the Government's attempt and commitment to narrowing the wealth divide without disrupting the market for wages. Unlike countries which I have recently visited, where the rich are fabulously rich but the poor suffer at the doorsteps of the rich,

Column: 280

our method to redistribute wealth, as it were, tends to lower the Gini coefficient and minimise discontent and envy among the poor. While other countries wax lyrical about human rights and helping the poor, Singapore, in its own quiet way, is walking the talk with affirmation, meritocracy and policies meant to reward talents and effort while not discounting the contribution of each of its nationals. Singapore's poor are, by contrast, very well provided for and may, in fact, be considered quite rich by international standards.

Sir, the total amount in the transfers is worth about five Lift Upgrading Programmes annually for the whole island. This Government could have used the money for grandeur signature projects or could have just parked the entire sum into subsidies, if the idea was simply to get votes in an election year. But, I think the Government is serious about remaking Singapore and to put our money where our mouths are in order to achieve policy and behaviour changes. Tax policies and Government handouts are instruments to shape the behaviour of individuals and corporations and to encourage so-called better societal choices such as more energy efficient cars, air-conditioners and more investments in key sectors of the economy. The Singapore Growth Dividends signal that help is given, but so is free choice, and that the PAP Government is respecting individual choice and responsibility. The total Progress Package payout for the lower income elderly Singaporeans amounts to a not insubstantial sum, maybe about $2,000-$3,000, if one considers the worth of the rebates included. The individual given the money could blow it all on cigarettes and lotteries, or he or she could actually do the right thing and pay off arrears or set the money aside for their children's education. I think, in that sense, the Government is respecting free choice.

Column: 281

But I do have some criticism of the Package as it currently stands. Sir, I understand the difficult line between promulgating a simple but workable policy versus having policies that become unworkable because they seek to address every conceivable loophole. But, nevertheless, I would like to ask the Prime Minister to please consider fine-tuning the criteria for this and, hopefully, future programmes to distribute surpluses back to people.

Yesterday, Sir, I held a dialogue session in my constituency to seek feedback about this Progress Package and I would like to share with you the sad story of one of my grassroots leaders. When Madam Aini first booked her Executive flat, the price was just over $100,000. At that time, both she and her husband had well-paying jobs with the husband's income alone worth over $3,000 a month. When their family's turn came to choose the flat, the price of an Executive flat in Sembawang had risen to about $300,000, but they gladly accepted the new flat because of their six children. Recently, however, they suffered one setback after another, with both sequentially losing their jobs. For the greater part of last year, only Madam Aini has had a regular job in a call centre earning about $1,500 every month. She thought she was doing well and, in fact, had recruited two other neighbours to join her in employment, when to her shock and dismay, just after Chinese New Year, all 20 of her colleagues were terminated because the company decided to close down the call centre.

Another little niche professional living in an Executive flat recounted how he was retrenched a few years ago but found a job in a neighbouring country and now pays foreign provident fund and income tax. He said he just scraps by with a son in an independent school but feels embarrassed each time he is asked to

Column: 282

donate to the school but can only afford a small sum. He, too, expressed the hope for more sympathetic treatment with respect to those who have heeded the Government's call to accept jobs overseas and yet still face problems at home.

I realise that there are also other Singaporeans with similar stories, including those who have bought larger flats in better times, to heed the Government's call to let three generations live together. Some of these families are in employment but just getting by and because their elderly parents live with them in larger flats, their elderly parents would get less. In contrast, we all know of well-to-do Singaporeans who drive big flashy new cars like Mercedes Benzes but choose to live in 3-room flats. Now I think there is nothing wrong with that and, perhaps, it is their expression of prudence and humility despite their wealth. But when my residents know that these people will get a lot of SC&C rebates and so on while they will get far less, despite being in more difficult straits, I can sympathise with their feelings of frustrations and being hard done-by.

I would also like to highlight, like Ms Indranee, the plight of single parents and the difficulties they face with getting affordable public housing whenever the sale or disposal of the matrimonial home is dragged out or is in limbo, and where they do not have the means to afford open market housing options. Many who were previously considered well-to-do may now face severe hardship. Families in need also include those where ageing grandparents have to provide for dependent children and grandchildren in the case of single mothers, and where one parent is absent, due to abandonment or imprisonment. I wonder if future budgets could also include some provision for this group of the elderly because, perhaps, their needs are even greater than those of the elderly living alone.

Column: 283

Sir, as Singapore progresses and enjoys economic success, the living standards of our poor have been correspondingly elevated. We have to acknowledge that the face of the poor in Singapore has changed. It is not uncommon for the new poor, as it were, to possess refrigerators and televisions at home and almost 3.8 million people in Singapore have mobile phone subscriptions. While some have obviously been imprudent in their expenditure, others have merely been caught by the wave of globalisation and outsourcing. Families with middle class incomes also feel the pinch as their salaries stay static or get reduced while transportation, education and utilities go up. The Government's move to help pay for the education of children in this category is to be specially lauded as it signals that it recognises that even though some families are now earning $3,000-$4,000 a month, it can be difficult to provide all the best for our children. In fact, the Opportunity Fund which could be used for computers or school trips abroad is a fantastic idea. It shows how far we have come from the time when the first priority of the PAP Government was the provision of adequate primary and secondary school places for every child in Singapore. When my mother was a teacher in Paya Lebar in the 1970s, she told me she had students who had never been to downtown Singapore. By the time she became a relief teacher in her retirement, she recounted to me that her students in the same school were talking about their overseas holidays whenever school started. In contrast, I had met legislators from developed countries who had never been out of their country. When we talk about being a global city, we need to give our young people the chance to experience first-hand the world around them and also the wide world. I really think that these initiatives are the best things that has happened this year.

Column: 284

Sir, allow me to raise just two points. One may be an unintended consequence of the Progress Package in that some businessmen in small and medium enterprises, with workers and subcontractors in the informal sector, have expressed concerns that they may be held liable for inadvertent non-compliance with CPF, Medisave, income tax and workmen's compensation issues if the casual labour and small contractors were to claim an employer and employee relationship in order to claim eligibility for Workfare Bonuses. I hear that, in fact, a few have actively discouraged their workers from signing up for the Progress Package. Perhaps the Government could clarify this line.

Lastly, Sir, I think that our Government and our nation have made great progress and I note that many multi-nationals nowadays report their progress in their annual reports in terms of a triple bottomline. Besides reporting on their financial issues, they will also report on the progress, environmental and social issues. I believe, as a nation, we have done well in all these areas but, perhaps, not everyone is aware of the improvements made. Perhaps one day, when we report on the progress of Singapore in Parliament, we would consider this approach as well.

With that, Sir, I would like to express my deep support and appreciation for the 2006 Budget and financial policies.

Dr Geh Min (Nominated Member): Thank you, Mr Deputy Speaker, for allowing me to join in the debate.

I rise in support of the motion. The Budget this year tries and, I think, generally succeeds to be humane and progressive, to be both focused and holistic, far-seeing and far-reaching in both its concepts and its consequences. I would, therefore, just limit myself to one

Column: 285

area, the knowledge based economy and, in particular, the National Research Foundation.

Minister Mentor had a vision soon after Singapore's independence on a clean and green Singapore. This has turned out to be a blue-chip legacy for all of us. Every Singaporean has benefited from this vision and we still continue to benefit from it. But, as beneficiaries, should we just sit back and reap the dividends or should we value add? Obviously, the latter. I believe that in order for his vision of clean and green to stay relevant in today's and tomorrow's changing environment, R&D is an important aspect.

Sir, first of all, I should like to talk about the R&D in relation to climate change. Climate change was not an issue 40, 30 or even 10 years ago, otherwise, I am sure our past leaders would have addressed the issue. Now, today, no country can ignore this, not only because of the potentially devastating long-term effects but because of the rise in oil prices which is likely to continue. So climate change is something that has to be in every political agenda and in every energy policy of any country, whether it has or has not ratified the Kyoto Protocol.

One of the three key areas identified in the National Research Foundation is that of the environment and water. As a water-challenged country, we have done very well indeed in facing up to the problem and converting it to a growth industry that will benefit not just our economy or our environment but our national sustainability. I believe that we should do the same for energy. Singapore has no oil, gas; we do not even have coal, and, as I mentioned, oil prices are escalating. So energy efficiency, alternative fuels and clean development mechanisms must be one of our key target areas for R&D and the global market for this is enormous and will continue to grow. While we must do our

Column: 286

best to mitigate climate change, we also have to look into mitigating the possible effects of climate change such as greater and more frequent swings in climatic streams, rising sea levels, more potential outbreaks of disease as a result of these climatic disruptions. There has already been a theory that the rising dengue has been because of the increased rainfall we had last year. So will these areas be targeted in our R&D under the areas of environment and water?

Perhaps we should look to nature for more ideas and inspiration. I had already mentioned, but I will bring it up again, that mangroves have been shown to be some of the best ways of preventing land erosion and silt. Perhaps we should get some inspiration from that as to how to protect our coastlines in the event of a rise in sea level and more rough seas even though we have been told we will be resistant to tsunamis. Of course, mangroves also act as a natural sequester for carbon dioxide.

The other area of R&D that I should like to address is that of our biomedical sciences. Our venture into this area five years ago, practically from scratch, has now grown into a S$10 billion industry and contributes 6% of our GDP. I think we have to congratulate the Government for this. But, at present, most, if not all, of this biomedical research is done in the laboratory.

And yet, if you ask any scientist or doctor, they will agree that mother nature is a better scientist and healer than man. As one would expect, she had a headstart of a few million years. So, I think that nature cannot only be studied in the laboratory. Biomedical sciences cannot only be studied in the laboratory. You have to go to the field. You have to look at ecosystems. You have to study direct from nature rather than remove her in isolated in vitro specimens.

The Minister for Trade and Industry has emphasised the importance of

Column: 287

translational research in order to tighten the link between basic research and clinical applications in the biomedical sciences. I think this is an excellent initiative. May I suggest that this translational research be extended to the area of translation between different disciplines and between different areas of one discipline? We are getting so sub-specialised that everything is being divided instead of being integrated, and this is something that should be reversed.

We should also look at translational research between the laboratory-based and field-based research, and between man and nature. Singapore, Sir, as you have heard from me many times, has a very rich biodiversity. Although we regard it as a rich heritage, we have still yet to develop it in the way that it deserves, as a scientific research area. Most countries which have biodiversity are less developed and they have less infrastructure or knowledge to convert it into commercially-viable products or technologies. On the other hand, most developed countries do not have a rich biodiversity. They have lost it.

Singapore, I believe, is almost unique in having both. We have both our natural resources and we have the capability to develop it. Not only that, because of our small size, it takes about half-an-hour to get from field to laboratory. How many countries have this? Those countries which are biodiverse-rich, like Brazil and the Philippines, even if they do have the laboratories, they have to travel long distances. In some countries, eg, Malaysia, there are strict laws between states so that those states which are biodiverse rich, like Sarawak, have trouble bringing materials into areas where they have the capability, say, in Kuala Lumpur, to research into it. Singapore, therefore, is unique in having all these concentrated

Column: 288

in our small island - a small powerhouse - of biodiversity technology.

Dr Tony Tan, former Deputy Prime Minister, had said about our biomedical sciences initiative and the lessons that we have learnt from it, ie, "to make a significant impact on the world as well as the economic benefits for Singapore, we have no choice but to specialise." In a sense, to try and identify areas in which Singapore has got some competitive advantage and, I believe, this is one of the areas. Singapore should leverage on this competitive advantage to link our biomedical sciences to our rich biodiversity.

Unfortunately, many of our present researchers in the life sciences are imported. This means that they have not grown up in Singapore and they do not have a concept of how rich our biodiversity is. They see Singapore largely as a city. But, concurrently, we also have many naturalists, both locals and foreigners, who are still studying and discovering new species in Singapore. I think Members must have read of the Belgian scientist who discovered 150 new species of long-legged flies in Singapore. These are not just flies that can be found anywhere in our neighbouring countries. Apparently, some of them, I am told, which are found in the mangroves are only found in extreme climatic conditions like mountain tops somewhere way up in the north. These provide some very rich sources of genetic material and research potential.

A local example is pyrogene which is found in horseshoe crabs' blood and has now created a market of hundreds of millions of dollars, and I gather it is one of the biggest earners for NUS at present.

It has been shown that products from genetic resources and their derivatives often command far higher a price than standard indicators of value such as gold, for example. Taxol, which is an anti-

Column: 289

cancer drug developed from the yew bark, has a retail price that is 1,200 times that of gold by weight. What is more, products which are developed from genetic resources also have a far higher price than the basic raw material. For example, take Taxol again, if you take yew clippings from which Taxol is developed, it is priced at US 75 cents per kilogramme, but Taxol itself is US$12 million per kilogramme. This works out to 16 million times higher in value. And the ballpark estimate of annual market for products developed derived from genetic resources, not just pharmaceuticals and healthcare products but other areas of biotechnology as well, ranges from a conservative US$500 billion to a high of US$800 billion. So I believe that this is one area of R&D under our biomedical sciences that we should definitely be looking at.

In summary, therefore, I would like to say that I hope that the National Research Foundation will focus on these two areas as part of our environmental and water research, and our biomedical technology research; developing clean development mechanisms as part of our environmental research and looking at translational research between our biomedical industry and our rich biodiversity. This, I believe, will add a new dimension and greater value to our clean and green image and therefore our future sustainability.

With that, I support the motion.

6.22 pm

Mr Chew Heng Ching (East Coast): Sir, I rise to support the motion and applaud the Prime Minister for delivering a very good Budget.

In many respects, this Budget has deserved all the positive comments from the public, in the media, and from Members of this House, in its consideration for the common man and

Column: 290

the generosity of gifts to our citizens amounting to a sizable $2.6 billion.

To me, Sir, it is a Budget that shares the fruits of economic recovery, progress and prudence on the part of the Government. Cynics call this an election Budget. I disagree. I believe it is a Budget to reward Singaporeans who have sacrificed for the nation ever since the Asian financial crisis in 1998, the dotcom bust in 2001, SARS in 2003 and, accompanying all these unforeseen developments, the economic slowdown in the last few years.

Sir, I would like to put on record and to express my gratitude to the Government for all my constituents who are beneficiaries of the various initiatives and "goodies" proposed in the Budget.

Sir, I am pleased that we are able to afford these measures and am particularly supportive of the following two underlying philosophies. Firstly, the Workfare initiative is indeed an elegant way to ensure that we do not fall into the welfare pitfalls that other countries have faced, and ensure that job creation and sustainability can continue without too onerous a burden on businesses.

Secondly, the targeting of lower-income groups is particularly relevant in that as a Progress Package, and as we grow as a nation, we do not lose sight of the importance of social cohesion and consideration for the less well-off in our society.

Sir, we have to bear in mind that we are able to enjoy the fruits of economic success and prosperity because we continue to have an able, honest Government with prudent management of the public sector and fiscal coffers. Indeed, based on the track record of this Government, this constant sharing of success and surpluses seems to have now become a norm. It happens so frequently nowadays!

Column: 291

Because of this, I am concerned that the sharing of budget surpluses in times of plenty like now, which is well intended, could give rise to an expectation that Singaporeans will receive handouts from time to time, especially with General Elections around the corner.

Sir, there is nothing wrong with giving handouts. Singaporeans should be rewarded from time to time for the sacrifices they made to the nation. I have only concerns on two counts. Firstly, it breeds a potential unhealthy dependency and expectation, which may place undue pressure on future governments to deliver similar handouts. Secondly, it may create pressure even in times when budgetary constraints may be tighter, say, in an Asian financial crisis type situation, where there will be a need to dig deeper into our fiscal coffers to help meet the rising expectations of Singaporeans.

Sir, it is already evident from some of the coffeeshop talk and even letters to the press from various groups who feel that they have not got enough or have missed out, each with its own voice and demands clamouring for attention. In this regard, Sir, I have a suggestion. To achieve the objective of encouraging workers to stay employed and for businesses to pay manageable wages at the lower end of the spectrum, as well as to support and share the wealth of the nation with the less economically well off, I would suggest that future "gifts" from the Government be more targeted.

Presumably, in so doing, we will be delivering less handouts to the well-off and the middle class, and that in itself will reduce the future expectation-driven burden on budgets whilst achieving the aim of progressing as one people.

I have heard many discussions, even on the radio and in the newspapers, on

Column: 292

what Singaporeans plan to do with the handouts. A number of them have talked abut donating them to their favourite charity, or mentioned other frivolous pursuits like investing in 4D or Toto. This suggests to me that there is indeed a segment of the population who are beneficiaries of these measures who do not absolutely need it. Yes, they do welcome it. But if our message is to have a more targeted scheme for those who really need it, I believe we can achieve this goal at less expense, and perhaps with less expectations for future gifts. In this way, we could continue to grow as a nation and use our budgetary surpluses to achieve the social objective of helping the less well-off in society, and hence maintaining social harmony and cohesion.

With more effective targeting and less potential expenditure, we could cater more for the drivers of

economic growth, including fiscal measures that would benefit SMEs and also help to continue to attract and retain talent. For this reason, Sir, I am a bit disappointed with the Budget in that we could have done more for our SMEs, many of which have also made sacrifices in the past and are still struggling and not able to reap the benefits of economic recovery. We should equally be rewarding them for the sacrifices as we are doing for the lower-income group in our society.

In summary, Sir, I welcome the gifts to our people and in particular the financial help rendered to the less well-off in our society. This is the Government's promise of sharing the success and the wealth with the people, many of whom have made sacrifices during the last few years of sluggish economic growth. I hope the Government in future budgets will have the gifts more targeted at those who really need help and also address the needs of our SMEs. This is in order to make Singapore continue to have the vibrancy of its economy whilst

Column: 293

maintaining social cohesion as we power and move ahead as a nation.

6.31 pm

Mr Ong Kian Min (Tampines): Mr Deputy Speaker, Sir, on the second Sunday of the new year, 8th January 2006, I read with awe and some anxiety the realities of just how fast and successfully other cities and countries are moving ahead and transforming themselves. The Sunday Times that day carried two articles that arrested my attention. One entitled "Euro business turns London into boom town" talked about how just seven years ago, it was predicted that business would move from London to rival financial centres in Europe when Britain decided to keep the pound out of the European single currency. However, the people in the City of London had no intention to relinquish its position as the leading financial centre in Europe. They fought hard against the odds, maintained their premier status and proved the nay-sayers wrong.

The second article, on the next page, entitled "The Big Korean Wave", was about how South Korea, one of the countries most severely affected by the Asian financial crisis also about seven years ago, and long influenced by other cultures, especially China, now finds itself playing a new role as an exporter of soft power, and how its influence on the rest of Asia has grown.

Sir, while reading those articles in the Sunday Times that day, I also wondered about what other national newspapers in other countries write about Singapore as we transform ourselves and build a vibrant global city.

Our fiscal policies continually strive to shape Singapore into a bustling vibrant cosmopolitan hub that is safe, clean and green with a stellar reputation for

Column: 294

efficiency, transparency and distinction. In the past few years, we have had to reinvent ourselves in the face of crisis after crisis. Our plans are bold and ambitious. We have decided to proceed with the Integrated Resorts. For the next five years, we will be injecting $5 billion into the R&D Trust Fund. Each time we embark on a new idea, we take a calculated risk. We do not know when we will begin to see a decent return on our investment. We do not know if our strategies will reap us gains although we would have considered all angles before taking the plunge. But we do know that we must be at the forefront of progress. We do know that we must forge ahead with our deepest conviction towards a better and brighter tomorrow for all our people.

Underlying this year's Budget is a long-term vision that seeks to steer our growth along a strategically-mapped path. The focus on restructuring our economy without forgetting our socially-disadvantaged fellow citizens is uplifting and promising for our nation's future. The surplus-sharing package carries the message that in bad times, we have to face hard decisions together but in good times, we are able to share in the fruits of growth. I am comforted that although the Special Transfers have pushed the budget into a rare deficit of $2.93 billion, we do not have to knock on the door of the President to ask him to turn the second key to unlock our past reserves as the Government is able to finance the deficit with funds accumulated in its current term.

Sir, many have called this an Election Budget. But this year is almost certainly the last year of this term of Government and we have surpluses accumulated in the last few years. Should we have held back more of our surpluses and locked them away into our reserves for a wet and rainy day? We are experiencing respectable growth with positive prospects. Our

Column: 295

economy grew by 6.4% in 2005 and the overall outlook for 2006 is encouraging. Should we have been a little more tight-fisted and withheld the generous cash give-aways?

Many will agree with me that our economy is not entirely out of the woods yet. Structural unemployment still hovers like grey clouds over our heads. There are also the poor and needy who will appreciate assistance to shelter them from the economic changes that have affected them. We need to continue to upgrade and restructure our economy to facilitate the creation and exchange of knowledge. Since there are compelling reasons to fund these needs, I fully support the decision not to stash these surpluses away but to use them for long-term growth and distribute them through the Progress Package this year. I therefore applaud the Prime Minister and Minister for Finance for a prudent and caring Budget.

This year's Budget is a good one. But in itself, a good budget is not enough to bring us to greater heights to become a vibrant global city.

An English banker once recounted to me how he gauges the drive and energy level of the people in the financial sector of any particular city. He told me that he would stand in a subway station in the financial district of the city during the morning rush to work and observe how people go up the escalators on their way to work. In London and New York, office workers walk or run up both sides of the escalator. In Hong Kong and Tokyo, some people stand on one side while others walk up the other side. In Singapore, many people would rather stand and be carried up the escalator. Sir, I want to urge more people to walk or run up the escalator if they are eager to get to

Column: 296

work and start their day. Can a simple act like walking up a moving escalator reveal so much about the ethos of a community? People in many other vibrant global cities are very driven; they are on the move all the time; they are not dragging their feet. We too should not stand idly on the escalator of a good Budget waiting for it to transport us to higher levels. Let us get to our destination even faster by moving our legs and feet up the escalator steps. With each foot raised and placed on each successive step, we can demonstrate the drive and energy of our people in a global flourishing city. We must shake off all manifestation of lethargy and perk up with a more positive attitude. Let us rev up our spirits and propel ourselves forward.

Sir, as a small country with a limited land area and no significant natural resources to speak of, we have no alternative but to rely on our one resource - human talent - to stay competitive. We must continue to grow our human capital by attracting global talent and investing in our own people. As Singapore's economy depends more and more on the provision of specialised services and becomes more technology-driven, we will be less hindered by our land size and lack of natural resources and cheap labour. In boosting our human capital by welcoming and nurturing talent, Singapore will have a keen advantage in the new knowledge economy. But where will our unskilled and low-wage workers stand in the midst of this development?

This year's Budget statement recognises that their livelihoods will be adversely affected by our efforts to restructure our economy. There is a real danger that they will be left behind in our integration with world growth. For our nation to move forward as one, we must make sure that all Singaporeans move forward together, whether they are rich or poor, young or old, skilled or unskilled.

Column: 297

In addition to the monetary "goodies" contained in this year's Budget, I would like to offer some words of encouragement to all those who are struggling in life, and I think that pretty much includes everyone of us. Three evenings a week now, we watch the American hit TV programme "American Idol" on television. It is now down to the last 24 in the pre-finals. I think we can draw at least three life lessons while watching this programme: first, do not be disheartened when some people are negative towards you; second, have the resolve to bounce back to show that your critics are wrong; and third, do not be disheartened and give up even when you have been branded as a failure.

Sir, let me elaborate. First, who are our judges in real life? In school, our children sit for paper examinations conducted and marked in private within closed doors. In our workplace, our performance is judged by our superiors. In applying for a bank loan, we are judged by the bank's credit officer. In a traditional talentime, the judges are an appointed panel of experts and their decision is final. But that is not the situation in real life. As in "American Idol", our examiners in life are the people whom we come into contact with. In real life, just like in "American Idol", the contestants have to impress and win the approval of the people they come in contact with. The so-called experts, like Paula Abdul and Simon Cowell, can give their two cents worth but ultimately the public decides by their SMS votes who the winners are.

In real life as well, it is not the one who is technically the best who wins. Just like there are technically better MP3 players, but the Apple iPod is the market leader because of better business strategy, branding, packaging and marketing. In life, the academically weak still can and do succeed.

Column: 298

Second, how do we take criticism in life? We can see the different responses very clearly when the participants stand before the panel of supposed experts, especially Simon Cowell. Simon can be downright blunt, nasty and provocative in his criticism. Some take it graciously, and say "thank you very much" and hope to do better next time. Others get angry and throw insults back at him. And there are those who accept the remarks, but you can tell from their faces that they go away with the determination and resolve to come back to show him that he is wrong.

Third, how do you take it if you are at the bottom? Later, when it comes to the final 12 participants, three participants who receive the lowest votes will be singled out, placed before the entire audience and publicly branded as being in the bottom. Imagine the stigma, the prejudices. They are put under the spotlight and even have to make a final performance. If you are the one booted out, what would your response be? Do you give up, break down and cry? Or do you put up the best performance in your life for everyone to remember you by?

And, as a society, how do we treat those who have not made it? Do we scorn and avoid them? In "American Idol", the audience cheered, rallied behind and comforted the dropouts. Now, if you are one of the two who has been publicly branded as a lousy performer in the bottom here but is given another chance to come back to compete next week, do you give up because of the stigma, the prejudices? If you get posted to Normal (Academic), Normal (Technical), or ITE, do you say, "It's the end; there is no hope. I give up."? Or, do you go back with resolve of steel and determination to want to come back to show everyone you can do better and prove that they have been wrong?

Column: 299

There are some Singaporeans who are of the opinion that our heydays are over and are convinced that in spite of all our efforts, Singapore has already seen her last peak. They see greener pastures on the other side of the fence and move to where money is easier to be made. I urge my Singaporean friends not to give up on our country. Together, we can join our hands and work together to build this nation.

Look at the City of London today. Faced with competition from other cities in Europe, the people in the City of London refused to succumb to the Euro-mania and resisted relocation to the euro zone. They fought hard against the odds and won. Today, many European banks have shifted major parts of their operations to London.

The lesson we can learn from London's triumphant boom is that we must not give up on our cherished homeland. If we stand firmly by our beliefs and create solutions to overcome obstacles with agility, we will continue to enjoy the sweet taste of success.