DEBATE ON ANNUAL BUDGET STATEMENT

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ANNUAL BUDGET STATEMENT: Order read for Resumption of Debate on Question [17th February, 2006],

"That Parliament approves the financial policy of the Government for the financial year 1st April, 2006 to 31st March, 2007." - [Prime Minister and Minister for Finance].

Question again proposed.

12.18 pm

Mr Ang Mong Seng (Hong Kah): (In Mandarin) : Mr Speaker, Sir, Singapore enjoyed a good economic growth of 6.4% last year, and the prospects for 2006 are also quite optimistic. This year, the Prime Minister and Minister for Finance Mr Lee Hsien Loong is giving us a $2.6 billion Progress Package which could be said to be pro-senior citizens, pro-low-income workers and pro-National Servicemen. I could say that this is the most generous Budget since our economic crisis in 1988. We are all very happy that we could have a share in the fruits of our economic success.

I am sure most people would concur with the principle of giving more grants to the lower-income workers and the lower-income families, and to the elderly. This incentive bonus is to reward them for their contributions in the past. However,

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on the distribution of this bonus I have three suggestions to make:

First of all, on the topping-up of CPF ElderShield and Medifund, I think we should be reminded of the Chinese maxim: "Whenever we drink water, think of its source." Topping up of Medisave accounts for the senior citizens is something that we should do. In the early days of our nation building, this group of Singaporeans, who were then in the prime of their youth, perhaps 20 to 30 years of age, put in a lot of hard work and effort to lift Singapore from a remote Third World country to the developed country it is today, in a rather short span of time. Our nation building and economic progress is a result of their hard work. Their contributions to our nation building, development and prosperity are evident for all to see, and we must give credit where it is due.

More than 40 years ago, Singapore and the Southeast Asian countries, such as Malaysia and Indonesia, were all Third World countries which were economically backward. Many people from the neighbouring countries decided to leave their hometown to migrate to this small island of Singapore. They were farsighted people. They realised that with the able leadership of the Government, Singapore would develop very quickly.

In 1957, when I was only seven years old, my father decided to move from Muar in the State of Johor to Singapore. At that time, our family lived in Jurong, 18 milestone, in a small kampong two kilometres from the main road, with no electricity supply. On the first night, even with the kerosene lamp on, the whole place was pitch dark. We heard a lot of insects and had swarms of mosquitoes around us. Our whole family could not adapt to such a living environment because we were living in urban Muar before we came here to live in such a rural area. We were very

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unaccustomed to the environment. We, brothers and sisters, just hugged our mother and cried the whole night, unable to sleep. But when my father saw this, he told us, "The environment here may not be good, but it is still better than losing your lives." This was because my father had personally witnessed the type of bloody communal conflicts in Malaya during the 1950s and he knew that although coming to Singapore life would be difficult initially, it was still better than losing our lives. He said, since we were already in Singapore, we had to work hard in order to earn a better living and to have some achievements. We accepted our lot, hung on and managed to get used to kampong life. We did farming, planted a lot of durian trees and rambutan trees. I know quite a lot about durians. So, if you want to learn how to choose a durian, you can consult me.

We worked very hard for more than 20 years and in the 1970s when the Government was developing Jurong Town, we were asked to resettle and we accepted the Government's arrangement to move into HDB flats. With urbanisation, nation-building and economic prosperity, we moved from the kampong to the HDB flats and we began to have water and electricity supply, and our standard of living improved.

Our pioneers have become older and older with the years. The economic restructuring over the years had a great impact on many of our senior citizens. It gave rise to a lot of stress and they were unable to adapt to the new situation. For those who are older, they are unable to get suitable jobs, and when they attend training courses, they find that they are unable to cope with the lessons. Yet, now we cannot go back to planting vegetables or fruits for food or digging wells for water like in the kampong days.

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For the lower-income workers, particularly the older folks, they are facing all sorts of difficulties. We can understand. Moreover, nowadays, most families are small. They do not have the type of mutual support and help provided by larger families in the days gone by. Nowadays, Singaporeans living in flats may have neighbours on every side, but they are very lonely and have difficulties that they could confide in no one.

All these years, when we receive members of the public who come to apply for ComCare grants, we feel very sorry for the predicament they face. I think the package comes at the right time. Although my parents have passed away years ago and are unable to enjoy this package, I treat all the old folks in my constituency as my parents. I hope that the Government would treat them equally so that all the old folks will benefit from this package. They have contributed in the past to our nation building and economic development. Even if they do not have credit, they have merit. I think we should distribute more of this bonus to the old folks. We should not use the annual value of the house they live in as the criterion, because sometimes the houses they live in do not belong to them. To the older folks, we should treat them equally. We should not classify them into a lower category. I hope that the Government would give all the old folks above the age of 60 a bonus of $800, and those between 50 and 59 a bonus of $600 each, so that all these senior citizens would be able to enjoy equally the fruits of our economic success.

Secondly, something that is close to my heart, ie, the neighbourhood shops in the HDB estates. Our neighbourhood shops face a lot of challenges and problems due to the recent economic restructuring. We must thoroughly study the problems that they face. Apart from reviewing the existing policy, we should have multi-pronged measures to help

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solve their problems. Due to high rentals, our economy not yet fully recovered, and the termination of their rental rebates since December last year, many of the shops are facing problems surviving, and may even have to close down eventually.

Generally, our economy has recovered somewhat, but the recovery is not even across the board and some of these neighbourhood shops have not really enjoyed the benefits brought about by the economic recovery. So, if we do not give them a helping hand, I think they will face the risk of having to close down which would cause our residents to suffer a lot of inconvenience. I hope that we could better empathise with their problems and give them a helping hand to tide them over the difficult times.

The neighbourhood shops are serving residents in the housing estates. And because the scale of operation cannot be compared to the large shopping centres, naturally, their rentals should not be compared to that of large shopping centres too, we should consider lowering their rentals. In this time of difficulties, I suggest that the Finance Minister consider extending the 20% rental rebate for another one year. So long as they have the shops in operation, they would be able to have a better future. I think this would be a good policy so that they can continue to serve our residents.

Thirdly, for those people who are better paid and are paying more income tax and some older residents in private properties, their feedback to me is that they hope the Government would also give them some benefits under this package. These people had paid quite a lot of income tax, much higher than others in the past, and they have contributed to Singapore's economy. But in this year's Budget, they did not have any benefit in terms of utilities rebate and they have only about $200 in the Growth Dividend. For those senior citizens who

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used to have higher incomes, this is not quite equitable.

Although they are not asking for some rebates and because the $200 plus $100 have no great impact on them, they are worried that after their retirement, who will be looking after their medical needs. For example, now they are having a high income but when they retire after the age of 62, and with the high cost of medicine and should they live a long life, they would have a lot of problems paying their medical expenses, because as they get older, they would have to pay more medical fees and look after their own medical expenses. So I suggest that the Government consider allowing these Singaporeans, who had paid more taxes in the past, a 5% rebate. Those who have paid more than $0.5 million throughout their working life, they should be given a 5% rebate. This rebate is not in the form of cash. 5% of $0.5 million would be $25,000. We could credit this into their Medisave account. If they are sick and they go to hospital and if the bill is $10,000, with the Government's normal subsidy, they would have to pay about $9,000. Maybe the Government could consider giving them a further 10% discount on the $9,000 bill, or another discount of $900. In other words, from the $25,000 in the Special Medisave account, they can deduct this amount until it is exhausted. All these people, although they do not have direct cash benefits, will benefit from some help under their Medisave scheme. It is very important to save for a rainy day.

I believe these three suggestions will benefit our older citizens. I hope that the Prime Minister and Finance Minister would consider them.

12.32 pm

Mr Lawrence Leow Chin Hin (Nominated Member): Mr Speaker, Sir, thank you for allowing me to participate in this debate.

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This year's Budget has been described by many as a people-centric Budget, one that focuses on providing fiscal relief to the general population, in particular, the lower-income earners and older workers. With the measures rolled out by the Government in the last few years, having brought the economy back on track, recording a better than expected growth rate of 6.4% for 2005, the Budget's inclination towards providing for the lower-income families and older workers is just and right.

This group of people, the lower-income earners and the older workers, had contributed towards restoring the economy. Wage freeze, wage and CPF cuts, job losses were some of the sacrifices that this group in our population had to put up with during the difficult times over the last few years. Now that the business environment has improved, and with the economy growing at a healthy rate, it is timely for the Government to distribute the goodies to the general workforce who had played an important part in the economy's recovery.

Whilst the general population would benefit from this generous and inclusive Budget, from the business angle, there is a segment of the business community that felt that the Budget has nothing much for them. To a certain extent, this feeling is understandable as this year's Budget does not contain specific measures that have created the excitement and buzz in the business community like those in the preceding years' Budgets.

We have to acknowledge that even though the economy has recorded a healthy rate of growth, the recovery is not across all sectors of the economy. The structural changes that underpin our economic development had, over the years, somewhat created a dichotomy in

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our economy where we have the ironic situation of an advanced and high-tech sector recording a healthy growth rate while, at the same time, the more conventional sector continues to experience difficulties.

The crux of the problem for the conventional sector is typically the intense competition within a small domestic economy. This leads to downward pressure on the top-line as businesses struggle to generate enough revenue to keep them viable. In this House, I have previously spoken on the need to implement measures to address the problem of helping SMEs increase their top-line and I wish to reiterate this point given its significance.

Yes, the Government had done a lot in providing local businesses with measures to lessen their burden, particularly in the previous two Budgets. While needed, these measures are generally focused on reducing business cost, the act to improve the bottom-line of a business, but are not specifically directed at addressing the primary concerns of these SMEs, which is a problem of not having enough business.

The growing competition in the region, arising from the awakened giants, India and China, and our neighbouring countries in Southeast Asia, has hastened the need to help our SMEs, particularly those operating more conventional businesses, to find new markets, with the small domestic size of our economy compounding the problem. With the general feeling amongst SMEs that there is not enough business for everyone, improving the top-line for SMEs has emerged a more pressing problem. Along this line, the Government has implemented some measures to help alleviate the plight of these SMEs in the past. Let me briefly recap some of these.

In the 2003 Budget, the Government's announcement to progressively stop

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providing services that the private sector could supply and the introduction of a three-yearly review on businesses conducted by all Government-related companies brought cheer to the SME sector. In last year's Budget speech, PM Lee also gave an update on what the Government had achieved through the Best Sourcing Initiative where it was announced that the Government had outsourced $57 million worth of contracts to the private sector. Indeed, this initiative by the Government to free up businesses for the SMEs is to be lauded.

Today, we are seeing more of our GLCs and statutory boards moving towards divestment of some aspects of their businesses. One recent case is JTC Corporation's impending divestment of some of its business that would help to generate business opportunities for the private sector property players. However, there is a genuine concern that the divested business may actually end up in the hands of one or two big players, including foreign companies.

The Government should therefore study the divestment process. Of particular concern would be the criteria set upon the bidders and the size of the divestment. If it does not hinder the overall divestment plan, the Government should consider breaking down the business for divestment into smaller chunks or units so that smaller companies can participate in and bid for it. If it is not yet in place, the Government should introduce a set of guidelines or principles, governing Government's divestment, which would include measures that would help to level the playing field so that smaller companies can get an equal chance to participate in, and hence, benefit from the Government's divestment plans. Otherwise, we could have a situation where only the big boys stand to gain from such divestments which outcomes could run counter to the objective of such divestment exercise.

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Take the case of JTC's impending divestment. Rental could end up higher after the divestment if the divested business ends up in the hands of one or two big players for whom, unlike in the case of JTC, there is no real cost for them to keep rental down other than if imposed upon by market forces. So we need competition to keep rates down. In essence, to achieve the objective of freeing up businesses for local SMEs to participate, there must be measures that will help to facilitate SME participation in the divestment exercise.

Besides measures to free up businesses in the domestic market that are incongruous with but are yet dominated by the GLCs, a more comprehensive approach towards assisting SMEs venture overseas to set up new markets has to be brought into action. I acknowledge that the Government had reckoned the importance of helping local businesses venture overseas and then taking them international. PM Lee had also touched on the Government's plan to assist our local enterprise become global players during his recent Budget speech.

While the focus of IE Singapore has been aligned towards helping local companies grow and internationalise by offering a wide range of services to help local companies embark on their overseas ventures, many SMEs still face difficulties in their bid to go international. From feedback that I have gotten, one of the primary problems is that there are gaps within and between these various schemes that are available. SMEs that fall into these gaps will end up not being able to leverage on or not being able to enjoy the full benefit of these available schemes. Given the importance of assisting our local SMEs venture abroad, I would suggest that a high-level committee be set up to look into designing and implementing a more comprehensive set

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of measures that will eliminate or at least minimise these gaps that exist in our current system so that SMEs would be able to venture overseas to explore and set up new markets.

This high-level committee should send study teams to learn and understand the successful models of overseas ventures by others, be it models that advocate venturing together or co-locating in a pack. There are already great examples of such successful models in Kunshan and Donguan in China where the Taiwanese and the Hongkongers have done extremely well with their investment there. These models should be studied and, where appropriate, applied to help our local SMEs enhance their chances of success in overseas ventures.

The significance and contribution of SMEs to our local economy have been reiterated many times before and I will not take further time to indulge in these areas. But suffice to say, since SMEs make up the indigenous part of our economy, they are rooted in and committed to Singapore. This, in itself, is a strong enough factor to warrant greater resources to be committed to promoting the growth and development of SMEs, an integral part of which is to help them venture overseas to set up new markets successfully.

Some in the business community have expected more pro-business measures in this year's Budget which they felt are lacking. Strictly looking at this year's Budget alone, such feelings are not unfounded. However, the Budget should not be viewed in isolation or in a snapshot manner. The Budget must be looked upon as part of a total plan comprising a series of budgets.

Due regard has to be given to measures implemented in preceding Budgets to better appreciate the overall plan and intent of the Budget. In this context, having focused on the immediate and shorter term measures to restore our

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economy in the preceding year's Budget and now with the economy generally in a good state of health, this year's Budget is focused on implementing the mid- to long-term measures, of which the benefits may not be immediately tangible but are, nevertheless, important for the long term benefit of our economy.

The emphasis on training, funds committed for research and developments and plans to help local businesses globalise are important aspects of a long-term plan to strengthen, restructure and upgrade the economy. Let me refer to a term commonly used by economists to measure the long term growth prospect of an economy - Multi-Factor Productivity (MFP). MFP is influenced by the degree of innovation and learning in an economy. While there have been much contention and differences in opinion with respect to the way MFP is measured, there is little argument on the proposition that the higher the MFP, the better the long term growth prospect of an economy. So the focus on training and research and development in this year's Budget reflects the Government's commitment towards elevating the level of innovation and learning in our economy, which will in turn enhance our MFP and help to strengthen and upgrade our economy.

Finally, Sir, I hail this year's Budget for its focus on helping the lower income families progress in tandem with the economy. It is heartening to see that surpluses generated from the positive growth of Singapore being shared among Singaporeans and not just the lower income earners and older workers but all Singaporeans at large through the new Progress Package.

With that, Sir, I support the Motion.

12.48 pm

Ms Eunice Elizabeth Olsen (Nominated Member): Mr Speaker, Sir, thank you for allowing me to participate in this debate.

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When I spoke last year, my first Budget debate, I had a niggling sore throat but otherwise was quite happy to catch the buzz from the Budget fever. After all, the initiatives did try to target as many people as possible. This year, the Budget has made me feel like it is still the festive season. After all, there are lots of little red packets for those of us living in this little red dot. "Generous" seems to be the word that crops up regularly whenever the Budget and its goodies are mentioned. I agree that the Government has been creative in finding ways to disburse money to the population or electorate, depending on how you look at it. At the same time, many would say it is only fair and right that the good performance of the economy is finally felt by all and sundry and especially by the lower income and the elderly. Only a collective effort, including that of all workers in Singapore, would have complemented the generally sound economic policies in place to produce the results we have seen. It is commendable, therefore, that the Budget will share the fruits of growth with all Singaporeans as the Prime Minister has said. Indeed, there are many fruits to hand out - apples, pears and oranges, lychees, longans and rambutans. The harvest is plentiful. But to me, the durian, the king of Singapore fruits, in this Budget, was clearly apparent. To me, nothing cheered me more than the news of the Opportunity Funds. Let me explain why this is the most delicious morsel in the Budget.

Mr Speaker, Sir, the Opportunity Funds are meant for schools to provide more curricula and enrichment activities specifically for needy students. In particular, the Funds are worth more for neighbourhood schools than for independent and autonomous schools. This worth takes on an important meaning at two levels. First, literally, at double the grant per capita for neighbourhood schools than for their independent and autonomous counterparts. Second, I

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believe the Funds mean much more to pupils at neighbourhood schools. The reality on the ground is that most children from lower income families, especially the bottom 20th percentile, are studying in neighbourhood schools. Many years ago, maybe when Singapore society was more flat in terms of social stratification, you might find a more even or less unequal distribution among all the schools of children from various backgrounds. As we move from third world to first, an untrammelled capitalism took root. The gap grew between the have and the have-not. With globalisation, this gap has widened further. There is also a new educational context. Life's lessons can no longer be confined to classroom sessions. We read often in the media about the need for global perspectives. Overseas trips are becoming de rigor for schools that hope to open doors for their students. Even on terra firma the range of activities on offer has increased. The upshot is that those with resources have the means to get ahead even if nobody is denied an education because he or she cannot afford it. The question is: what kind of education?

In this challenging world, meritocracy, as has been practiced in Singapore for so long, needs a new framework. Advancement based on individual ability and achievement is no longer comparable when the starting line has so irrevocably been redrawn. Equal opportunities can only be considered almost equal and real opportunities when we, as the Prime Minister said, level up. This is what the Opportunity Funds hope to do and that is why the Funds are striking. I see it as a recognition of the new realities and the way to put meritocracy into true practice. I believe the Funds can exemplify the types of values we want to have as a nation. Our long term goal has to adequately equip the children from the bottom rung of income earners to climb out of the poverty trap. The Funds can help to establish what we want to build

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as the foundation of our society. We can look to it to set the tone of how we choose to progress as a nation. The Prime Minister has said consistently that no one should be left behind. The Funds are one way to live up to this. The subtext is that perhaps we no longer need to be afraid of the label "affirmative action".

I know that questions have been raised as to whether needy pupils from independent and autonomous schools should not receive the same level of assistance under the Funds. I believe these schools are better placed to help their needy pupils than it is for neighbourhood schools to do likewise. In fact, many of these schools have made a success out of helping pupils from modest backgrounds to soar high. They can tap on an alumni base that neighbourhood schools can only dream of having for now. Furthermore, IP schools have already been given an extra grant by the Ministry of Education to kick-off their programmes successfully. Perhaps it is time for neighbourhood schools to say, now is their time. However, I do have some questions of my own. For example, although MOE will not dictate how the money will be disbursed by each school, will it provide any clarity to the schools about how to achieve the objectives of the Funds? Will there be a limit to how much each student can tap from the Funds? As these are Funds whose uses are open-ended but target group specific, how do we ensure that they do not become an Edusave-type fund?

Mr Speaker, Sir, there are many laudable initiatives in the Budget that many of the hon. Members in this House have touched on, so I shall focus on the message that whilst subtle seems to stick to this Budget, in the lead up to the Budget announcement I could not help but note, with concern, the cautionary overtones shrouding the extent to which

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the Government could help vulnerable groups in Singapore. Not so much for this year, but for the future. Without a budget surplus, we were told, it becomes difficult, if not impossible to look after the less well off. That is a chilling message for the less fortunate in Singapore. Chilling, because the world has become more volatile economically and in other ways, and it is this volatile world to which Singapore is linked and on which it depends on greatly.

In the event that Singapore's budget surplus is weakened, maybe even considerably as a result of a slower or even a negative economic growth, are we going to cut the lower income loose? Remarks that it is impossible to look after this group seem to suggest that this will be the case. Yet, there will always be Singaporeans who cannot even look after themselves and I am not talking about the ones who will be losing their money in the casinos. More seriously, I am referring to those whose conditions do not enable them to work, those with no children on whom to depend. What will happen to them and to lower income Singaporeans who seem to suffer the most each time the economy dips?

While this year's Budget maybe impressive, we should not forget that a number of the schemes are one-off payments under the Progress Package. It is highly likely that many under-privileged Singaporeans will be using the money to pay their arrears in conservancy charges, utility bills and/or mortgage payments. But how sustainable will such one-off payments be in the years ahead? More important, it is the implication that we can only help the lower income groups when there is a healthy budget surplus. If this is really the case, then I would think this group would feel as if they belong on the peripherals of this country. Although some might say that assuring this group of continued assistance from the Government might create an entitlement

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mentality, some say the signs are already creeping up. I feel that some of this might be due to resentment about how they are always struggling even as they see others race streets ahead, come rain or shine, budget surplus or otherwise. We must strike a balance between guarding against entitlement and providing targeted support for those who need it.

Mr Speaker, Sir, this Budget has the potential to be a significant turning point in our nation's progress. Since we have taken the necessary steps and have focused on strengthening our bonds, as the Prime Minister has said, we should not let up on what we have set out to do.

Sir, with that, I support the Budget.

The Minister of State for Foreign Affairs (Mr Zainul Abidin Rasheed): Mr Speaker, Sir, please excuse me for my bad throat. Iran air, where I was last week, was very, very dry, but I am sure this Budget will surely whet many appetites.

Mr Speaker, Sir, first, allow me to join you to record my respects and to honour the late Mr S Rajaratnam. While he was better known for his ideas, ideals and as a Singapore ideologue, as was very well captured by Prof Chan Heng Chee in yesterday's Straits Times , to many Kampong Glam residents he was a man with a great heart. He cared. I know, as I was among the fortunate few who served in his tuition schemes in the late 60s for needy residents. His concern for all Singaporeans to progress and to live in harmony was also embodied in our Singapore pledge.

Sir, to me, the spirit behind the PM's Budget Statement is this pledge of a place for everyone in Singapore. In short, it is about sharing our progress and prosperity, educating our people regarding the

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opportunities ahead, just as Ms Eunice Olsen has spoken about Opportunity Funds, and it is also about hope. Not least, a sharing of responsibilities.

Mr Speaker, Sir, I think you will agree with me that it will not be an easy task to convince Singaporeans that it is not an Election Budget. In fact, some even say that they do not mind having elections every year if it means goodies every Budget. But the point would have been lost if we Singaporeans only elect to measure the Budget in short term benefits. Let us look beyond. Singaporeans need to understand the real thrust behind the Budget.

Allow me, Mr Speaker, Sir to focus on three areas from the Prime Minister's Budget Statement to illustrate my point. The Progress Package says a lot about Singapore's philosophy in terms of relationship between the Government and its people, an important partnership that has withstood the test of time and the challenges in between. General elections, notwithstanding, this partnership has taken Singapore through the last 40 years, each step taking the country and its people forward, true to the spirit of Majulah Singapura . It is about hard work, facing challenges squarely, unity of purpose, sharing prosperity and moving ahead together.

Budget 2006 is also about Workfare, not welfare or any programme that could bring about a false sense of short term comfort, but long term interest. When the Government wants to share the fruits of growth with all Singaporeans it is based on Growth Dividends. Again, based on hard work first. When the Government wants to reward low wage workers, it is also based on employment and employability first, not just handouts. I share Mayor Amy Khor's concern about the crutch mentality. I had the same fear too. The last thing we would want to do

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is to make our people soft. Yes, we will want to handle the needy with a warm heart but not to spoil them cold. My experience working at the grounds with the Northeast CDC shows that it is all the more meaningful when we can help provide employment for the retrenched and those out of jobs. Dignity and self-help growingly is a norm with Singaporeans. There are quite a number of my Eunos residents who would come to my meet-the-people sessions and ask not for doles but for jobs. This was reassuring. There are, of course, those who tried to resort to the short term and easy way out by demanding financial assistance as though it was their entitlement. But growingly, we do see now that people are becoming more realistic, whether in terms of employment or expecting financial assistance only as an interim measure.

Mr Speaker, Sir, to save time, allow me to ask the Clerk of Parliament to circulate some examples of residents who are realistic in their expectations and have become more self-reliant.

With some interim financial assistance, counselling and help from the VWOs, many of my residents realise the importance of the Workfare approach and self-reliance. Like what Mr Ang Mong Seng said just now, I like the spirit of ai pia, jia a nya. In the song, you will remember that it says about e sai kee, e sai lok, meaning you can go up and you can go down. But my residents are always very excited when I sing the song and instead of e sai kee, e sai lok, I say, e sai kee, boi sai lok, meaning you can go up but do not go down.

Sir, we emphasise Workfare and not welfare as the way out for the long-term. To ensure a better understanding of Workfare, the CDCs are now taking a more comprehensive approach, including counselling, even case work and working

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with the VWOs. CDCs will be most glad though to receive more resources from MCYS to enhance their capacity building.

The Government's approach towards Workfare is right and should continue to be the basis for social and financial assistance. Workfare Bonus should be work-based and this would encourage people to stay employed.

This is all fine, especially for those who are employable and do find employment. We must, however, remember that there are still many who, following retrenchment, find real difficulties getting re-employed. Even for those who are re-employed, their salaries could be far lower than their previous salaries and might either need a second job or their spouses have to work. There are also those who cannot work full time because of family considerations. They might be able to work a few hours of the day or have to stay home to do some work. They need to resort to the informal sector to source for additional income.

At the North East CDC, we have started various projects in the informal sector, including Push Carts and HomeWorks. The Push Carts scheme was a success, and it was later adopted by the WDA for implementation at the national level, working together with the Retail Promotion Centre. Through HomeWorks, the North East CDC teaches residents skills like jewellery making, flower arrangement, baking and hair dressing. We also facilitate a community kitchen where residents could cook and sell food. There is a limit, of course, as to how many CCs which could be used for such purposes. Void decks in some HDB estates, bus interchanges and business hubs where the community gathers, would have to be put to better use.

This, however, would require a seamless approach among related Government agencies, including the NEA,

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HDB and Town Councils, to facilitate more of such ventures. The one-size-fits-all approach will not work. We cannot look for just administratively-efficient arrangements but also those that are user-friendly. We need a one-stop or what in Mandarin is called e tiau long approach to accommodate such needs. Gone were the days when those looking for jobs could turn to school tuckshops, hawking or peddling on their own. We therefore need to help facilitate new opportunities for such people to remain self-reliant. We need to inculcate and facilitate a culture of self-reliance, including through the informal sector.

Finally, Sir, one other example of Government's effort to really help the needy, but which had not really taken off, is Project Hope. The Government has even made it simpler and more attractive through this Budget, but more should be done to allow a better reach-out. There are still many of those who could benefit from this scheme but are ignorant about it. For those who might have misgivings, they could still be counselled and made to see the benefits. Grassroots leaders should be deployed to scout for such families who could benefit from the scheme which could easily reap about $100,000 in HDB housing, education, training and other financial benefits. Fellow Members of Parliament should also help. They could refer young families who are struggling to cope with life and qualify for Hope to apply or send them for counselling, if and when necessary, particularly to the CDCs. More could be done to bring Hope to success.

Mr Speaker, Sir, I support the Budget.

1.07 pm

Mr Steve Chia Kiah Hong (Non-Constituency Member): Thank you, Mr Speaker, Sir, for allowing me to participate in this debate. I will comment on the electioneering behind this Budget

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first, before making a thorough analysis of this Budget, and will close with a few important ideas for the MOF and other Ministry officials to take note and look into.

As several MPs before me had rightly pointed out yesterday and today, this is indeed an Election Budget. It is a Budget used to sweeten the ground support for the PAP Government in the run up to the election. The Budget is used to reduce the anger and frustration of the lower income, the poor and the aged workers against the rising income/wealth divide between the rich and the poor, at least temporarily. And I can place my bet very firmly that the GE will be called within 30 days from 1st May 2006, after the people had collected the money.

Sir, I believe the Government had succeeded in this political objective. The poor, the aged, and the lower income are definitely thankful and appreciative of such a helping hand. This appreciation, by the lowest 30% of income earners and small-size HDB flat owners, will translate into appreciative votes for the PAP Government come polling day. We, especially the new faces and non-incumbent Members of the Opposition contesting this coming General Election, will be wiped out.

How then can we still get people to be interested in contesting in the elections, especially when they cannot create much impact individually in a single-member constituency? As I told some Ministers and MPs in the Members' Room yesterday, we, in NSP under the SDA, may not be able to even field a team to contest the five-person Jalan Besar GRC, for short of candidates.

Unless there is a big change in the electoral boundaries, Singaporeans should expect to see less constituencies being contested than in 2001. Their right to vote is being eroded by a monopolistic

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anti-competitive PAP Government. As the Straits Times headlines on Sunday put it, "Lack of political choice is harmful to our Singapore society." I hope the PAP Government will not continue to play this political advantage, at the expense of causing greater harm to our Singapore society.

Therefore, if the Prime Minister takes the coming GE as seriously as this Budget, I hope he will also play it more fairly. Play fair to spur more interest for concerned citizens to participate in this GE - whether as independents or Opposition Party members. The Prime Minister can easily do it by reducing the size of the GRCs back to the 1998 proposal of three-men team each, and that will immediately quadruple the number of SMCs to around 42. Singaporeans will immediately see more contest, and 50% of our citizens will immediately be able to exercise their right to vote in this GE. Society will be better off and richer for this experience. Sir, please do not hide behind a big GRC any longer.

Now, let me come back to the analysis of the Budget in detail, Sir. The headline figures project operating revenue of $28.96 billion, and a total expenditure of $30.62 billion. Factoring in special transfers and NII contributions, we are told that the Government will make an operating deficit of $2.86 billion. Can this be true?

A look at Appendix 7.1 (page 35) of the Budget Highlights tells us that this is not an accurate picture painted by the Government. According to this Appendix given out by the Government, the Government's actual total receipts for FY2004 and FY2005 are $37.7 billion and $38.8 billion respectively. For FY2006, it is estimated at $40.69 billion. This means that all expected money to be collected by

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the Government going into the Consolidated Fund is actually $40.7 billion.

Sir, this is $11.7 billion more than what the Government said it will collect as operating revenue. The Government is collecting more money than it dares to declare. So, after deducting all the special transfers and deficits, the Government is, in actual fact, still holding on to $8.8 billion of surplus revenue receipts.

Given that only 50% of Net Investment Income, as required by the Constitution, amounting to $3.7 billion cannot be touched and must go into the national reserves, the Government will still expect to have an operating surplus of $5.1 billion for FY2006. This $5.1 billion comprises $4.1 billion of capital receipts - mainly from land sales and other capital receipts - and an additional $1 billion of investment income, allowed but also not reflected in this Budget. Apparently, the Government decides to use only 33% of projected NII returns for this term of government. Why it did not use up all the 50% allowed, to show a smaller budget deficit of only $1.86 billion, is something beyond my understanding. I hope the Prime Minister can explain.

Sir, the figures presented by the Prime Minister and Finance Minister do not reflect the overall fiscal position of the Government. After deducting the total expenditure of the Government for FY2004 ($28.96 billion) and FY2005 ($28.85 billion), the Government is actually still holding on to surplus cash receipts of $8.74 billion and $9.95 billion respectively. Not inclusive of the 2001 transfers, FY2002 and FY2003 surplus receipts not previously reported - because I cannot find any figures of that from the highlights - a simple calculation tells me that there is actually an obscene total of at least more than $19 billion still sitting in our Consolidated Fund waiting to be transferred to the national reserves

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when this current term of government ends in the next four months.

That, Sir, is a lot of money. More importantly, that money has not been reflected in the Budget. And it gives a misleading picture of our Government's fiscal position.

Although MOF had defended its 'more stringent definition' of avoiding these 'lumpy uncertain capital receipts', the figures from Appendix 7.1 clearly show that these lumpy amounts of $3-$5 billion have been appearing in quite certain regularity every year, and these should be clearly reflected in our Budget. I believe everyone here and all accounting experts will agree that all revenues going into the Government's Consolidated Fund must be clearly reflected. There should be no exception unless mandated by the Constitution.

Not reflecting such big Government capital receipts in the Budget is certainly more misleading to the public than reflecting it, more misleading than what the MOF spokesperson said on a query by the Today paper last Saturday, and I quote:

"... otherwise Singaporeans could be misled about how much revenue is available for expenditure."

Sir, I had been misled. The public had been misled. Everyone had been misled to think that the Government budget had been very tight these last four years, and we will enter FY2006 with a huge deficit. But, Sir, that is not true at all.

Not reflecting capital receipts is indeed even more misleading than the whole truth. As stated earlier, this Government has more than $19 billion in the Consolidated Fund waiting to be transferred to the reserves. Can the Prime Minister and Finance Minister deny this fact? We want the truth, nothing but the whole truth.

As Mark Twain ever wrote in his most famous quote, "There are lies, damned

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lies, and statistics." No wonder the IMF, and their report last year, said that Singapore's budget balance underestimates the strength of Singapore's fiscal position. Now we know why. Clever statistics have been used. We can only hope the Government can be more transparent in its disclosures henceforth.

Sir, in view of our better understanding now of total Government receipts, I believe the Government can be a lot more generous. Generous not only in the element of giving handouts, but also in the aspect of takings. Mr Low Thia Khiang was right when he said that "only the Government is rich, not the people". With 60% of households earning below $3,400 per month and the next best 20% of households making only an average of $5,400 per month, how rich can our Singaporean citizens be? Sir, it is high time to reduce the indirect taxation and fees collected from our people, and allow them to truly grow richer by their efforts - not just from Government dividend handouts.

Table 6.2 of the Budget Highlights shows that "other taxes, other fees and charges, and others" account for $4.36 billion in FY 2004, $3.87 billion in FY 2005, and an estimated $3.97 billion for FY 2006. These revenue receipts are higher than total GST collections of $3.6 billion and $3.75 billion respectively for each of the following years. Yet, they are all lumped together as "others" - together with stamp duties, foreign worker levy, etc.

Can Government be more specific about these etc. and etc? These are not small peanut amount of money that the Government collects. The total revenue from these "others" is bigger than the revenue collected from the 5% GST, and I think it is important for these others to be more clearly and transparently reflected.

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From Appendix 7.1 again, we understand that the Government expects to collect $870 million from stamp duties, $160 million in water conservation tax and $1 billion from "other taxes", although it is not reflected what this "other taxes" is about - that it can amount to actually $1 billion. I wonder also whether the $111 million collected from the radio and TV licences, as reported last week, is reflected in this $1 billion too.

The point I am driving is this, Sir: that the Government should scrap (or at least drastically reduce) some of these taxes like water conservation tax, radio and TV licences, and domestic foreign worker levy. They can afford to, and they should.

Water is an essential constituent for life. Without it, we all die. Thus the message to conserve is important. We do not deny that. But to impose a "water conservation tax" from the first drop of water coming out from the tap is wrong. The moment you turn on the tap, the first drop, you are taxed. That is not good. People should not be taxed for at least the first 15 cubic metres of water needed for daily necessities and living. Any taxes imposed on the excess water used above that amount will be reasonable, not below it.

This is especially so since the technology to produce desalinated water is here, and water is no longer a limited resource, constantly threatened to be cut off by our Malaysian neighbours. With this new secured source of unlimited water supply from the sea, residents should be charged fair market rate from the provision of such water, and not be imposed such outdated unfair taxes. I hope the Ministry of the Environment and Water Resources will expedite their reviews and remove it soon.

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As for TV and radio licence fees, it is not fair for residents to do national service, and subsidise our national objective of promoting local content developers and providers. That economic objective should be funded by the Government. The Government can afford to subsidise more than the current $5 million given for this fledging industry. Licence fee holders should not be asked to fund this Government objective. This is an outdated tax and should be reviewed and abolished soon. Only England, Ireland and some other Commonwealth states continue to impose this licence fee. Other developed countries, like America, no longer impose such fees to subsidise their national broadcasters. I hope MICA will act on this soon too.

The Government should also reduce the foreign domestic worker levy, so that the minimum pay of these migrant workers can be raised. It is incredible that the Government earns more from its levies than the domestic worker herself. This is cruel, and it profits excessively from the undue hardship of migrant workers. With better pay, Singaporeans can expect to recruit more experienced maids to look after their families - and not those fresh young maids coming here with psychological problems, adjustment problems, family problems, and with no experience at all working in high-rise flats, contributing to all the murders, suicides and all the careless things that are happening. The experienced ones are going to Hong Kong and other countries, because of the low pay here, leaving Singapore with all these inexperienced but cheap workers. Looking at total Government receipts, the Government can well afford to be kinder.

Lastly, Sir, I now want to touch on the Progress Package announced by the Government. It is good of the Government to return the money back to the people. I

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do not see it as a problem like some other MPs do. When the Government collects more, then more must be returned to the people. Period.

On behalf of the people, I thank the Government for heeding my calls (from past budget debates in 2002 through 2005) to return any budget surplus back to the people, to take greater care of our elderly pioneer generation of workers, and to care for the low income and poor - suffering from the high cost of living in our Singapore society. Thank you, Sir, for heeding our calls.

To all our citizens out there, you can see this is what some of the things Opposition MPs can do in Parliament - to press the Government to take greater care of you, the citizen, and not take you for granted.

That said, is that all? Can the Government do better? I think so. And I think it should, if it wants greater support from the people.

Firstly, a big group of non-salaried workers are being left out of the Workfare package. They are the housewives and homemakers. They work hard 24/7, 365 days to take care of the family (which is the building blocks of our society) and nurture worthy Singaporean citizens with the right values for our society. Their contribution to Singapore is crucial but it is often neglected, because there are no economic indicators to capture their contribution.

I feel strongly that the Government should include them in this Progress Package and give them the same recognition as we give our NSmen. They do their national duties by producing babies for our country, sacrifice their career to look after them, and guide them up as proper citizens. We must appreciate them. Therefore, I suggest a one-time bonus of $100 per housewife per child, ie, $200 for housewives with

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two children, up to a maximum of $400 per housewife with four children or more. This is to give them some ang-pow spending money for doing a different form of non-financial national service. It will cost the Government some money, but, again, not something that the Government cannot afford.

Secondly, the whole Workfare package - announced with great fanfare - to help the lowest 20% income earners in our society. Sir, this is a good scheme. I support it, and I praise the Government for it. It only costs the Government $400 million, but it goes a long way to help the estimated 200,000 of low income earners. A small amount to help a big group of people - that is a brilliant policy! This is what I would truly call "peanut expenses" compared to the overall total Government expenditure.

Sir, if the Government does not first lead to show care for the poor of our society, nobody can take that initiative to make such a big impact. As one Australian visitor, Richard Tan, expressed in the Straits Times Forum last week: "Has Singapore become so selfish in its quest for economic prosperity that the poor and the aged get discarded along the way?" I hope not. And I believe not. With this new Workfare package, it is a big shift in the Government's policy on welfare. And I want to credit our Prime Minister Lee for his bold step in that direction. The rich and well-off in our society must help the poor and low income in our society, through the redistribution of wealth by the Government. Everyone who wants to work must get a decent comfortable income from it. Therefore, I beseech the Government to finetune this Workfare programme into a yearly programme, possibly through the use of negative income tax (NIT).

In today's term, the cost of living and the wages of the low income workers

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have not risen proportionately. The cost of utilities, public transport and housing have all risen tremendously by profit-centred businesses whereas the wages of the low-income unskilled workers are artificially depressed by increasing supply of low and semi-skilled migrant workers coming here to compete for jobs.

We need to raise the earnings of the non- and semi-skilled Singaporean workers. We need a more sustained effort at improving their lot. As some MPs had also agreed earlier, help must be given on a more consistent and sustainable basis, not just in the run-up to a general election where the one-off cash handouts will be spent in no time.

The Government can well afford to spend up to a maximum $500 million every year to generate tax credits for every aged working citizen above 45 years, earning below the minimum income of $1,200 per month. On a tiered basis, it will go a long way to help the really poor in our midst. If the Government is genuinely more caring now, I, like Mdm Halimah, challenge the Government to install this Workfare programme every year, not just at an election year.

Thirdly, and most importantly, the Government needs to incentivise help for the young family. Our modern society and family are being attacked by the onslaught of decaying moral values through the mass and digital medium. Parents no long know what their teenage children are doing, and even if they do know, they no longer have the power to control nor influence them. What we read in the papers of late, and even today, of some parents who do not even know that their children sneak out of the house in the middle of the night, are but the surface cream of more trouble brewing underneath with our teens in our society.

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Our values are being badly eroded, and our youths grow up lost, disoriented and led by peers with less than proper character. Young parents really need help bringing up their children. And this guidance cannot be coming from childcare centres, maids or schools. It must come from the family - in the person of the parents and the grandparents.

The Government urgently needs to provide greater fiscal incentives for grandparents, and even mothers, to consider quitting their outside jobs to spend quality and quantity time with their children and grandchildren, especially in the first seven years of development. If we seriously care for our families and society, 10 to 20 years down the road, we need to act now - immediately.

Mothers need to consider giving up their job for their children and family, if necessary. Husbands and fathers need to spend more love and attention on their family, other than chasing the economic dole. Grandmothers must be encouraged, through limited Government subsidies, to provide home-based infant and childcare - something that I had mentioned at the last budget too.

To subsidise the cost of childcare through grandparents is a big paradigm shift. It is a shift that we can no longer afford not to take The right and proper family authority and guidance must be established to guide the growing youths from being led astray in our society. The Government can help in a big way. I hope that MCYS will review this proposal fast and give a satisfactory reply in the COS debate.

In conclusion, Sir, this is a good Budget. Returning money to the people is always good, albeit for the wrong motives. I support this Budget even though it comes with personal political expense. This could be my last Budget debate here in the House if I am not

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elected at the next coming General Election. I, therefore, hereby wish all colleagues and citizens the best of wishes for the coming year.

1.30 pm

Mr Tan Soo Khoon (East Coast): Mr Speaker, I am afraid I will be disappointing the House as I would not be able to match Mr Steve Chia's fire and fury.

Sir, about two weeks ago, a Malaysian Minister caused a little flap in business circles here when he accused Singapore traders of rebranding his country's products and relabelling them as Singapore ones. As an example, he referred to Malaysian rambutans being exported to Hongkong as Singapore lychees . In other words, we were exploiting an agricultural produce of his country in a way to benefit Singapore. I think the people of Hongkong, well known for their discerning tastes when it comes to food, and being able to get abundant supplies of fresh and good quality lychees from China and Thailand, would be the last people on earth to fall for rambutans passing off as lychees . Fortunately, the Agri-Food and Veterinary Authority of Singapore has investigated the matter and concluded that there is no truth in the accusation, be it of fruits, ornamental fish, or flowers, being passed off as Singapore's own.

But this incident made me think that there is more to it than a simple case of unfounded accusation. Trade issues are always a sensitive matter in economic relations between countries. I think that even if our traders do not indulge in any such malpractices - there are strict WTO rules that prohibit this - this incident must say a lot about the unease that the Singapore name can cause when it comes to trade matters. Unease because the Singapore brand is strong, and it strikes fear in those who compete with us, or

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perhaps there is a case of pure envy of how far we have come.

Take the failure of Singapore Airlines to get the right to fly from Sydney to Los Angeles from the Australian Government. Is it really, as the Australians say, that opening up the Pacific route offers no benefit to Australia, or is it simply a protectionist measure to shelter Qantas from competition? The Australians have mastered the art of telling the world with a straight face that giving Singapore Airlines the right to fly once a day on the lucrative Pacific route, where there is a shortage of seats and where prices have been kept artificially high for the consumers, would cause Qantas to axe jobs, affect its status as one of the most profitable airlines in the world and, even as they claimed, cause Qantas to go bankrupt.

Yet, as has been reported, the Australians are quite happy to allow their own budget carrier, Virgin Blue, to fly this route instead. One must therefore presume that the Australians have, in the same breath, concluded suddenly that Qantas can now survive competition, as long as that competition comes from one of their own.

Is this not an admission by the Australians of their inability to compete with SIA's much lauded inflight service, and does it not boil down to a case of looking after their own parochial interests? Anyone who has flown SIA and Qantas can tell the difference between the quality of service provided by the two. Qantas can be not too bad at times - if they want to - but most people would tell you without hesitation which airline consistently comes up tops.

So it is the same old story again. When you feel the heat from the competition, you put up the barriers. Our competitors know that the Singapore

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name has done well. The Singapore brand has gained a strong reputation in the world. Whatever we do, we strive to do it well, in fact, some might say, too well, that our competitors envy or fear us, but they cannot bring it on themselves to compete with us on a level playing field.

In Europe, an Indian gentleman by the name of Mr Lakshmi Mittal is causing an uproar in political circles. His company, Mittal Steel, is the world's largest steel producer and he wants to make it even bigger by merging it with Arcelor, Europe's largest steel maker in a deal that would cost him about US$23 billion. Mr Mittal is facing obstacles. He has infuriated governments in Europe. Never mind that he has built his company to become number one in the world as long as it remains outside of Europe. The refrain running through much of Europe seems to be: how can this man, what more an Indian, take on the Europeans? The Finance Minister of France, Mr Thierry Breton, is quoted as having said that Mr Mittal has a grammar problem, implying that his linguistic imperfections must be a serious barrier to his ability to run an European operation. Such a statement displays the European's xenophobia and betrays their cultural or, even worse, racial prejudices. All rationale and economic arguments for a merger that would benefit consumers in over half the world - Mr Mittal's steel interests extend from China through the Asian continent to the United States - and all hitherto pontifications on the part of the Europeans of their commitment to a free trade and to a free flow of investments have been thrown to the wind. So much for free trade agreements.

Across the Atlantic another group of investors is also causing a stir elsewhere, this time in the United States. Having now successfully bid for P&O, Dubai Ports World, the investment arm of the United

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Arab Emirates, will end up managing some of the most important ports in the world, including half a dozen ports in the United States. American legislators are up in arms over this, citing security concerns over their ports being managed by a company controlled by a foreign country, never mind if it is a country that has been America's close ally in its fight again terrorism. Nor did it matter to them to reason why it was all right for them when P&O, which was until now a British company, managed the same US ports. One can well imagine that we could have encountered similar hostility if we had won our bid for P&O.

The failed bid by China National Offshore Oil Corporation (CNOOC) to acquire American oil giant Unocal in August last year is another case in point. American lawmakers argued that it was just too sensitive a matter for a State backed Chinese company to acquire a hold on valuable and strategic American energy assets. The Chinese assured the Americans that this was a purely commercial transaction, an acquisition of a company that in fact has most of its assets outside the US, and that in any case it was prepared to dispose of the US-based assets if the deal came through. Another assurance by CNOOC that the takeover, unlike that of the rival bid from Chevron, would not result in any job losses, did not cut any ice with US legislators who wanted to block the deal. Even though its bid of US$18.5 billion was way above the US$17.6 billion bid from Chevron, CNOOC's attempt was frustrated by the US lawmakers and, in the end, the Chinese decided to walk away from the whole thing. To the Americans, the maths just did not matter.

I recount all this to point out that we live in a sensitive world where trade and political tensions still and will continue to simmer. In an era of globalisation and trade liberalisation and free trade agreements notwithstanding, there are

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still those who, while subscribing to the principles of trade liberalisation, succumb to their own narrow interests when the crunch comes, and domestic political considerations come first at the expense of sound economic sense. To some Americans and Europeans, it is a case of "you play the game by our rules". It is easy, Sir, for the Australians to tell us that the SIA issue will not affect broader ties but Singaporeans are angry with the outcome. For a long time, the Australian's position dangled between one of reticence to giving us an occasional dash of hope, but in the end having got all the fifth freedom rights they wanted from us, and knowing that we have no more bargaining chips left on the table, they led us on a 10-year run around. The Singapore lion was simply outforced by the wily Australian kangaroo. Maybe we were not canny enough. A successful Singapore company has not been allowed to engage in a fair fight for the consumer dollar. A man from India, Arabs from the Middle East, and entrepreneurs from China are not supposed to disrupt the Western order of things, no matter what the economic rationale is.

A writer to the Straits Times' Forum page yesterday summed it best when he wrote, and I quote: "The West, used to cultural and economic pre-eminence on the international stage, suddenly finds its position under threat by the unstoppable growth of a dynamic Asia. The West is unable to accept that it will soon be overtaken by the emergence of Asian powerhouses and fears that it will become irrelevant in an increasingly globalised world it refused to wake up to. Thus, in a desperate bid to avoid the inevitable, the West seeks to use whatever means available, sometimes even in contravention of internationally agreed norms, to suppress the growth of Asian economies wherever possible."

Sir, our businessmen will continue to straddle the globe to look for

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opportunities. Most of the time, they will come across a conducive environment abroad because our Government has negotiated and paved the way for close economic and political ties, but once in a while they can expect the unexpected and encounter hostility. Our economic success will be shaped by our own determination and our ability to be innovative and daring, but we must continue to ensure that we can play by fair rules and that our efforts are not stymied by those who continue to use unfair practices when it suits them.

1.44 pm

Mr Chiam See Tong (Potong Pasir): Thank you, Sir, for allowing me to join in the debate. Sir, I am not a cynic. I know the realities of politics, especially politics in Singapore, and I say that this Budget is an Election Budget. All the signs are there.

The PAP's aim is to win the election this time with convincing results equal to or not better than the record of 75.1% achieved in the 2001 election so as to give the standing of the new leadership a big boost. It shall then have more authority with a strong mandate from the people to deal with matters locally and those abroad with greater confidence.

However, it is difficult for the PAP to repeat the 2001 election results. I sense that the ground is different this time round. Currently, more people are talking earnestly that they want more Opposition in Parliament, especially the young and more educated Singaporeans. Their desire for more Opposition representation in Parliament is hard to change.

For this reason, the PAP's tactic is to target the poor and the elderly. Financially, they are the worse off group in Singapore and are vulnerable to monetary handouts by the Government. The Government's timing is right. Despite

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the Government's claim that the economy is recovering and a drop of unemployment rate from 4.2% a few years back to the current 2.4%, the effects of the recession are still felt now by the workers. Any monetary help from the Government at this point of time to the poor and the aged shall be readily welcomed. The Government knows of this fact and the use of the Budget at this time round for election purposes is fully exploited. The tactic is awesome. The tactic used is like a military assault - massive and precisely targeted.

The amount to be distributed is a whopping sum of $2.6 billion. The sum is massive. In fact, to me, it is mind-boggling as giveaways. The sum is more than that budgeted for FY 2006 for the following sectors: Health, National Development, Environment and Water Resources, Transport, Trade and Industry, just to name a few. This huge sum distributed to the poor at a time when the election is around the corner must "render the ground sweeter for the ruling party in the coming general elections", as mentioned by a PAP Member in this House.

Some PAP Members have boasted recently that their Party has won every general election. But they forgot to mention how the elections were won. Were they won at level playing fields or were they won with tactics they rather not mention, like the tactic for this coming election, where even the Budget is used to the PAP's advantage? The sum involved this year is a huge $2.6 billion. Recently, Government Ministers have tried to brush off comments that "this Budget is an election Budget". I believe that they know at the bottom of their hearts that the fact that such a large sum is disbursed to every adult Singaporean, those comments must have a ring of truth. Otherwise, such a large sum would

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not have been disbursed even at the expense of incurring a deficit.

What is interesting also is that the much-publicised practice of the Government is done away with in the way money is paid out under this Budget. The practice of the Government has been almost never to give subsidies, financial assistance or monetary handouts without a co-payment being made by the recipient of the Government's monetary gifts. So, in 2001, when the Government allotted the New Economic Restructuring Shares and the New Singapore Shares to Singaporeans, they had first to co-pay $50 before those shares could be handed to them. It was reported that as many as 100,000 Singaporeans did not pay the required $50 into their CPF accounts and they were not allotted the New Singapore Shares. This time around, because the exercise is to win votes, the payments out of monies under the Growth Dividends and the Workfare Bonus need not be accompanied by any co-payment. This, I believe, the Government wants is to make sure all Singaporeans receive payments under the Growth Dividends and Workfare Bonus schemes so that they may be influenced to vote the PAP.

I would like to report a feedback on the Workfare Bonus. This scheme, according to some people, seems to discourage hard work. I was told of a worker who earns $1,200 a month basic and since he has a wife and three infant children to take care of, he worked very hard and did plenty of overtime to increase his earnings. His gross salary jumped to $2,500 and, because the upper limit of his income exceeds the upper limits of $1,200 and $1,500, he is not allowed to claim the Workfare Bonus. That worker is very angry at the way the Workfare Bonus is framed. The Government, on the one hand, tells Singaporeans to work hard, yet, when this worker puts in more hours and earns more money, he is disqualified from

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receiving his Workfare Bonus. I do not think the Workfare Bonus scheme is fair to this category of hardworking Singaporeans.

Sir, I have one last comment to make. It concerns the distribution of the CIPC funds from the Ministry of National Development. Can the Minister for Finance do something to bring fairness and equity in regard to the distribution of the CIPC funds? The current practice is to allocate CIPC funds only to PAP MPs, while other MPs who are in the Opposition are kept completely out of those funds. I ask: why the glaring unfairness?

1.53 pm

Assoc. Prof. Ong Soh Khim: ( In Mandarin ): Mr Speaker, Sir, thank you for allowing me to join in this debate on the Budget Statement.

First of all, I support the financial policy and the Budget announced in Parliament by the Prime Minister in his capacity as the Minister for Finance for the new fiscal year, to build a vibrant economy where opportunities are everywhere and an inclusive society where no one is left behind. Allow me to raise a few suggestions and observations.

In this year's Budget, the Government has introduced a Progress Package amounting to $2.6 billion. This package includes the Growth Dividend, Workfare Bonus and the National Service Bonus. With regard to the $1.4 billion worth of Growth Dividend to all adult Singaporeans, I would like to make a few suggestions. This Growth Dividend is computed according to each citizen's annual income and the annual value of the house that he lives in. Each person will receive an amount of between $200 and $800, with the middle and lower-income families getting the biggest benefits. Singaporeans only need to fill in a form or make an application through the ATM or

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website by 1st April 2006 and they will receive the Growth Dividend by 1st May 2006.

In past years, we saw many generous and well-off Singaporeans who cashed their New Singapore Shares and Economic Restructuring Shares, and donated the proceeds to poor and needy Singaporeans. This year, these well-off Singaporeans may not claim their Growth Dividends, so we will have some amounts of unclaimed dividends which have been budgeted for. Although the amount may not be very great, it would also go a long way to help the poor and needy people in our society.

My first suggestion is that we could allocate some of these unclaimed Growth Dividends which have been budgeted for, to the neighbourhood schools for them to set up a Pocket Money Fund for each school. Although there is the Opportunity Fund for each school to help the children from the lower-income families, the Ministry of Education has raised the income ceiling of families to qualify for the various financial assistance schemes and the Edusave scholarship, and the Ministry of Education has also announced on Sunday, the Breakfast Plan. But many students from the lower-income families are often worried about having not enough pocket money. After using it to pay their bus fares, they may have no money to buy food during the recess. Moreover, when they have to stay behind for core-curricula activities or remedial classes, some of them may not have the money to buy their lunches. Although the Straits Times has already set up a Pocket Money Fund, it would be good for an individual pocket money fund to be set up for each of the neighbourhood schools. These schools know their students well and are in a better position to extend their help to those who are genuinely in need.

My second suggestion is that we should distribute some of the unclaimed

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Growth Dividends to the old folks' homes and day-care centres. In Singapore, most of the old folks' homes and day-care centres operated by voluntary welfare organisations are running at a loss. Among the inmates of these old folks' homes, some of them are lonely, single old people and some of them are displaced parents. No matter what job they did during their younger days, they have contributed in one way or another to our nation-building. Singapore does not advocate a welfare system, so we cannot provide welfare to these lonely old people. But if we can make use of some of these unclaimed Growth Dividends to help them, why not?

This year's Budget is very generous and it takes care of the immediate problems of the older and lower-income workers. But there is one group of people who have been perpetually neglected. They are the middle or lower-income singles, particularly those who are middle-aged.

The middle or lower-income singles, particularly those who are middle-aged, face all sorts of problems. Singapore society now is aging. By 2030, almost 19% of our population will be 65 years and above. With an aging population, smaller families and lower fertility rate, there will be fewer family members with the means to maintain their older folks. The probability of the single persons having to bear a heavy burden to look after their old folks without helps from siblings is higher. This Budget does not help them in this respect. I hope that we could provide the followings to help the people to maintain their old folks:

(1) A higher tax relief for maintenance of parents, particularly those who need long-term medical treatment;

(2) Paid eldercare leave to take their parents to hospital or clinic, since they

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cannot afford to have maids to look after their parents; and

(3) More subsidies to help with the charges of the old folks' homes or day-care centres so that these lower-income people could send their parents to the old folks' homes or day-care centres, and they can then go to work with a peace of mind.

The single people also have a lot of problems when it comes to housing. In this year's Budget, the Government will spend $75 million to provide additional CPF Housing Grant to the lower-income families to help them own their flats. But this would have no effect on the lower-income singles. According to Census 2000, 15.8% of the people between the age of 15 and 44 are single. With some 650,000 people in this age group, there are in fact as many as 100,000 single men and women. For those who are below 35 years of age, they will have to form a family unit jointly with their parents before they can apply to buy a new HDB flat. HDB will occasionally sell some of their new flats to the singles, but they are sold to them at market rates. Moreover, the singles do not qualify for concessionary interest rates for their housing loan. Those whose income is $3,000 and above will not qualify for the $11,000 housing grant and they cannot apply to the HDB for the concessionary loan. I think this is unfair to the singles, particularly the middle or lower-income singles.

First, these middle and lower-income singles remain single not by choice but due to circumstances beyond their control. No matter what job they are doing, they have been contributing to Singapore. But when it comes to buying a flat from HDB, they are treated unequally. There is a middle-aged single lady in my place of work. She is 40 years old and working as a general clerk. When she wanted to purchase an HDB flat, she

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had to buy from the resale market and it is much more expensive than buying direct from HDB. Her salary is not too low, yet not too high either. Hence, she cannot apply for a HDB loan and has to take a bank loan. Because she is buying a second-hand flat, she has also to spend a lot of money to renovate it before she could move in.

In Singapore, there are many middle-aged single people, men and women, who are facing these problems. Generally, in Singapore, if both the husband and wife are working, they need about 20-30 years before they can clear their housing loan. For a single person, he or she will have to spend a longer time before the housing loan could be fully discharged. The unfair treatment when purchasing HDB flats causes many problems to the middle and lower-income single people, and they feel that they have been discriminated against. This middle-aged lady in my place of work asked me, "Why must I be penalised just because I am not married and have not produced children for the nation?" This feeling is not limited to middle-aged women, many other middle-aged men have the same feeling too!

Secondly, I think it is not practical to insist that a single person must apply together with their parents, as some single persons' parents could have already passed away. Those parents who are still alive would, more often than not, choose to stay with the married children so that they can look after the grandchildren. These single persons are unable to form a family unit and they cannot apply for new flats from HDB.

Thirdly, there may be suggestions that these singles can stay with their brothers or sisters, and there is no need for them to buy their own flats. But we all know that the HDB flats are getting smaller and smaller, and married brothers or sisters who have their own families will not have

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a spare room for these uncles and aunties to stay in. Even if there is a spare room, when the nephews and nieces have grown up, they will need a room for themselves, and these uncles and aunties will have to move out after all.

Fourthly, the HDB's rule is that for a single person to rent a one-room flat from HDB, he would have to apply jointly with another single person as he cannot apply for one unit for himself. Why is the HDB insisting that two total strangers should "cohabit" with each other just to apply for the flat? This would create a lot of problems. I think there are frequent reports in the papers of problems arising from these circumstances.

Fifthly, there are rumours that some lower-income single men, in order to buy their own flats, would just go overseas and conveniently take a bride in order to form a family unit to apply for the flats. These foreign brides are causing some new social problems in Singapore. Has our so-called pro-family home ownership policy added on unnecessary stress on our lower-income singles resulting in the creation of new social problems?

Sixthly, the pro-family policy is to encourage people to get married and have children. But we can see that it is not making much headway. The trend that many Singaporeans (not only the women, the men too) did not marry is not because they are too highly-educated, but is due to a strings of problems, such as an unbalance in the gender roles in the families, no financial means to support and bring up their children.

Singapore has progressed and modernised. The education level of Singaporeans has also risen. It is no longer the Singapore of the 70s and 80s. Nowadays, many people have gone overseas to work or study. When they come back, many of them are beyond the

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age of 35 years old, still remaining single. Many have missed the boat for courtship and marriage due to work or study. Hence I have to declare that I am not advocating singlehood. All I am saying is that the housing problems that come about with their remaining single are part of the new modernisation process - something that is inevitable. We should adjust our existing policies to look after them. We cannot remain like an ostrich which buries its head in the sand and ignores the existence of the singles. Has our pro-family housing policy, which aims to encourage young Singaporeans to marry in order to purchase new HDB flats, fallen behind times? The Ministry has said that Singaporeans can apply to the HDB for waiver based on their special circumstances. However, if there are so many Singaporeans applying for waiver, does it mean that our pro-family is our-dated, and it is time to amend this policy? Our pro-family policy, encouraging marriages and procreation, should be adjusted in accordance with the changes, to enable the singles to buy new flats at the normal HDB prices. I would like to make two suggestions:

One is to allow lower and middle-income singles to buy new flats at the HDB prices. Many of these middle-aged people have reached a certain age and whatever pressure you put on them, they would not get married. This is a fact. Like in my workplace, there is a middle-aged lady. She told me that she is no longer pretty and could not possibly give birth to children. She would not contemplate getting married. She told me that she was used to the life of a single and would not get married just for the sake of getting a flat. Our procreation policy is irrelevant to her. Hence, I hope the HDB can consider allowing middle and lower-income middle-aged singles to buy HDB flats at HDB prices.

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The HDB is considering the building of retirement village. In this regard, I would like to raise my second suggestion, which is that perhaps HDB can reserve some units in this retirement village for purchase by singles. I passed by a retiree village during my visit to New Zealand last year. I was in a special bus that took the passengers from the airport to their destination. When the bus passed through the retiree village, my impression was that this was a very quiet place with no life or vibrancy in it. If we allow younger singles to buy some of the units in the village, then they will bring life and vigour into the village, and also help to look after these old people. By allowing these singles and the older people to stay in the same retirement villages, the retirement village can become a better place with the structure of a family although there is no direct family relationships between these singles and older people.

Lastly, I would like to talk about the status of women in Singapore. There is a group of people in Singapore who seems to be neglected, they are the Singaporean women, especially the unmarried single women. In this year's Budget, we have a Progress Package, comprising the Growth Dividend, Workfare Bonus, NS Bonus and so on. If we combine this year's package to packages in the previous years, including baby bonus, marriage, procreation package, foreign maid levy, rebate for married women and so on, then everybody in Singapore seems to get some kind of benefit from the Budget in recognition of their contribution to the country. Only the female citizens, especially the single female citizens, despite whatever contributions that they had made to Singapore, do not seem to be duly recognised.

Since 1965, the conservative and traditional nature of our society has become a marked contrast to our modernisation and economic develop

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ment. Singapore has become an Asian city with a modern outlook, but a relatively conservative and patriarchal society. The social status of women in Singapore remains not too high. In Singapore, the materialistic lives of our women have apparently improved. However, compared to their male counterparts, the women do not seem to be affirmed and elevated as far as social, economic and political status is concerned. Singapore has consistently taken strict control of the social ideology, flying the flag of upholding values of Oriental traditional culture to counter the onslaught of westernisation and modernisation, and this includes resistance to the elevation of social, economic and political status of the women vis-Ã-vis the men.

Why do I say so? Take, for example, the political status of the women vis-Ã-vis the men. There was a recent newspaper report that a certain Minister said that the PAP would field more than 10 female MPs in the next election, and that there was "progress". Why should it be called "progress", rather than "as it should be"? Does this not show that we are still having a deeply patriarchal society here in Singapore? Is this not an indication that the Singapore women would have to stand by the margin and try to integrate into the patriarchal social system by working silently by themselves?

The Singapore Government seems to feel that the Singapore women should consider themselves lucky for not being among the women folks of Japan, Korea or India. The Government seems to be sending out a message though its policy that female citizens of Singapore ought to be contented with their present situation whereby they can walk out of the kitchen and get into the main hall, and that they could have a happy family and an income that could make them self-reliant. This may not be the actual message that the Government and the Cabinet wish to send

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out, but it is the kind of message that many Singapore women have "heard".

While appealing for the female citizens to walk out of the comfort zone of their homes, to take upon the citizens' obligations and to join the workforce, the GovenrmentGovernment is also insisting that the women folks should not abandon their traditional roles as wives and mothers. For example, the female employees are provided with the flexi-work hour system and thereby enabling them to get married and bear children - for posterity of the nation. Only then, would they be deemed to have contributed to the nation, and be affirmed and endorsed by the Government to enjoy benefits like tax relief, baby bonus, etc, under the Budget packages. But, for those female citizens who are single and have not produced any children, apart from the basic Growth Dividend, they do not get any other form of recognition. The Government does not seem to recognise that the female citizens, although not having done National Service, have also made contributions to the nation.

After the 90s, the awareness of independence and freedom from domestic responsibilities has gradually been formed amongst the women of Singapore. They refused to get married, refused to have children, while actively pursuing their careers. The Government introduced various measures to encourage female undergraduates to get married and have children after their graduation. The Social Development Unit was formed. Childcare centres were set up extensively, flexi-work hours were provided for female employees, procreation incentives were given, more time-off for husbands to visit their wives in confinement, and even paid leave for fathers to look after their sick children. But these measures are fundamentally built on the basic viewpoint that family obligations are the bounden duties of women. So the women have not been given true equality. This does not go to the root of the problem. It will

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not effectively resolve the problem of low fertility rate in Singapore.

Singapore women's social obligations are generally becoming heavier and heavier, with no likelihood of relieving themselves of their families' obligations. They have to contend with three layers of pressure from their personal, family and social obligations. We should find some ways to help them get out of this predicament. Many working women have told me that having worked hard for an entire day, they would still have to tend to the household chores when they reached home. Even helping their children with the school homework is also considered to be part of their duty. If we cannot address these problems faced by women with regard to family, work and society responsibilities and obligations, and implement concrete measures, then it will be very difficult for Singaporean women to maintain a between family and work and yet remain true to themselves.

I hope that the Government will look at the basic social structure and value, and create a new society where there is a balance in the gender roles. I have to declare that I am not a feminist. I am only proposing that the Government uses a more gender balance approach when proposing and implementing new policies. What I am asking for is to have a better balance between the male and the female citizens in our society.

The women of Singapore are grateful to Minister Mentor Mr Lee Kuan Yew for giving the female citizens of Singapore equal opportunities to be educated and to find better employment during the 1960s. Since they have been given equal opportunities to be educated and to secure good employment, then why can we go one step forward to give all female citizens equal status as their male

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counterparts in society, the economy and in politics?

As a newly emerging city-state, the important issue is how do we let the womenfolks who hold up half the sky give full play to their capabilities. This is one issue that relates to our social harmony and national development and prosperity. The realisation of social harmony and national development depends not only on political stability, strong economic growth, formidable defence and religious harmony, equality and tolerance, but also on the equality and harmony between the sexes.

In a speech entitled "Oriental and Western Culture and Modernisation" delivered at the "China Science and Humanities Forum" organised by the China Science Academy in 2004, Minister Mentor Lee said, "In the past, I felt that I have to bear the responsibility of allowing all female citizens of Singapore equal opportunities to be educated and the best job opportunities in the 1960s, resulting in the phenomenon of many female university graduates not getting married subsequently. Now, I believe I was merely bringing the phenomenon forward by some two decades or so." Yes, Minister Mentor Mr Lee Kuan Yew does not need to take responsibility for this because this is an inevitable phenomenon in the process of modernisation of the nation and the society. I personally feel that, at the present moment, there are many policies and measures that are inclined towards the male perspective. The lack of a feminine angle in the system and the imbalanced family structure are the critical factors that cause the economically-independent females to avoid getting married and reject the duty of procreation.

I hope the Government will consider the points I have raised concerning the status of women in Singapore. I hope that the Government will immediately

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start to focus on this trend, and adjust some of its policies so that they could take off from the angle of equality between the sexes thereby affirming and elevating the status of the women vis-a-vis the men.

Finally, I would like to thank the Prime Minister for his fiscal policy and this Budget to build up an inclusive society where no one is left behind, so that Singapore will become the best home for all its citizens.

2.15 pm

Mr Yeo Guat Kwang (Aljunied): ( In Mandarin ): Mr Speaker, Sir, on this Budget, all the three Opposition Members, Mr Low Thia Khiang, Mr Chiam See Tong and Mr Steve Chia, are behaving like what the Teochew would say: "When you did not have any, you would complain that you had not; but now that you have some, you will still find fault with what has been given to you."

They claimed they were looking at it from the workers' point of view. However, it was reported in yesterday's Straits Times that views from various quarters, ranging from the President of the Contractors' Association to the ordinary workers, were that this was a pro-business and pro-worker Budget. Having provided for the business community and the workers, we are able to satisfy the needs of our people. This Budget provides for various packages, schemes and grants which not only benefit the workers directly, but also fall in line with the workers' expectation of more job opportunities to be created. The Workfare Bonus, together with the NTUC's Job Recreation Scheme will directly alleviate the workers' burden. It will also upgrade their low-paying jobs, improve the standard of living of the low-income workers in a practical way.

I am sure the three Opposition Members know this, but they just refuse

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to accept it. But members of the public generally look only at the ang pow s and overlook the other packages, and some members of the public are even asking if this Budget is deviating from the general principle of the past Budgets.

I have a friend who told me the Coca Cola story and suggested that we draw a lesson from it. Mr Speaker, Sir, in the early 80s, the Coca Cola Company conducted a series blindfold tasting test. In other words, the people participating in the survey were blindfolded and were asked to randomly taste two drinks. The company discovered that many of those who took part in the tests preferred the sweeter Pepsi Cola. As a result, the company made a very absolute decision and introduced the new Coca Cola. In the new Coca Cola, they reduced the traditional ingredients and made it sweeter. But this so-called "thorough" change was a "thorough" failure because people like Coca Cola not because it is sweeter than Pepsi Cola, but because of its traditional taste. So, in the end, Coca Cola Company has to recall all the new Coca Cola and reintroduced the classic Coke. So in this Budget, are we, to a certain extent, deviating from our past prudent and pragmatic principle of budgeting? I believe not, and I am sure the Prime Minister will clarify this doubt.

The purpose of this Budget obviously is to increase our economic competitiveness and to push our infocommuncations technology, intellectual property, research and development, maritime and logistics industries to a higher peak and to recreate our economy in such a way that we will be able to give more emphasis to our manufacturing and service industries, and provide more support and help to our lower-income workers. This is very important. I am sure, with all these schemes, more workers would benefit.

In the past, when I heard this song, I could not understand the meaning of its

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lyrics which said, "Loving you may lead to hurting you." Yesterday, having heard what Mr Low Thia Khiang had said, I began to appreciate the message. If we just resort to sweet talks to please the workers, we are not loving them, but rather we are harming them. They keep saying that our workers are suffering and they cannot find jobs. Yet, all they do is mere talking but nothing is done to address the problem. This is lip service, and rubbing salt into the wounds. It may be good in winning over the support of the people, but it is meaningless.

In the end, we have to do like what the labour movement is doing. We examine the needs of the people and prescribe the right medicine for their needs. The NTUC has worked very hard in fostering our labour, employer and Government tripartite cooperation to tackle the unemployment problem. This is the correct medicine.

There is a Chinese saying, "a mantis trying to stop a chariot using its arms", that is, to over-rate itself by attempting something impossible. How can we stop the global trend of development? To a very large extent, we need to help our older workers. We cannot expect the industry to lower their standard or restrain its development to suit the lower-skilled workers who could not cope with the changes. What we can do is to find practical ways to help our older workers upgrade their skills so that they can retain their income. Most importantly, in this year's Budget, we have provided more assistance to the children of the lower income families so that they can receive better education in order to eventually get out of poverty.

We all understand what are the problems facing us today. The older workers have difficulty getting jobs. According to the Ministry of Manpower's

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statistics, the unemployment rate for the older workers is about 6% and it takes a longer time for them to fit into a new job. I think we must first of all understand their problems and help them to stand up on their own. Through the various schemes, we want to help them to continue being employed. We must also understand what are the problems faced by each and every one of the unemployed workers and guide them so that they know where they could look for solutions to solve their problem.

We cannot say, "Oh, let us have more protectionist policies and ban companies from moving overseas. We want the companies to stay in Singapore forever to provide job opportunities for our workers." We all know that this is impossible.

During the transitional period, we must let the workers understand that they must accept the challenges and accept lower paid jobs as it is better than to be unemployed. This is the principle behind the Workfare Bonus. We want to cheer up our workers. Let them know that although their income at the current moment may be lower, so long as they have a job, there is a hope of eventually earning a better income and a better standard of living.

We cannot do like what Mr Steve Chia has recommended just now by asking the Government to draw out all the money from the reserves to help the workers. This is a sure way to bankrupt our Government. We all know that this is not feasible. What are we going to do if we run out of money? So, more importantly, we have to help our Singaporeans to stand up. I am sure all the people in Singapore do not want to just sit there and stretch out their hands to wait for handouts from the Government. I know that all the workers in Singapore prefer to be taught how to fish rather than being given the fish.

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Mr Speaker, Sir, the Finance Minister should also help to clear the doubts of some Singaporeans as some of them are worried that this package of $2.6 billion would in some way reduce the Government's capability to carry out all its projects and services to our people. Many people have this doubt. I am sure this will not be. I am sure that the Government must have thought out all the implications before arriving at such a decision to share the fruits of economic success with the people. The Government knows, as a fact, that education, defence, medical service, etc., are very important to our people.

The only thing that I am disappointed with is that the Government has not provided more money for Medifund. Of course many people are happy with the plan to build more 2-room flats and the extra housing grants for the lower-income workers. This is a shot in the arm as they would otherwise not be in a position to own their own homes. In fact, Singapore is the only country in the world that could attain the idealistic realm, as painted in the famous poetry of the great Tang Dynasty poet, Du Fu, "Having millions of homes and bringing shelter and happiness to people all over." We have actually achieved "home-ownership for everyone".

But with this trend of globalisation, we may need to make some adjustments to our existing "Home for Everyone" scheme. I notice that for the younger generation nowdays, the moment they get married they would want to purchase an HDB flat straightaway, and start bearing the burden of a housing loan. If the Government can provide some rental flats as an alternative, they may consider buying a flat later on, perhaps only after they have children. It is still not too late. Then, they would not have to immediately bear this heavy housing loan the moment they get married. I hope the Government will consider this.

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As far as healthcare is concerned, we know that once a worker has lost his job he would have lost his medical benefit. The NTUC has all along been advocating the concept of portable medical benefits. This will enable the workers to retain their medical benefits even after they have left their job. If the workers do not have portable medical benefits, they would have to make use of their Medisave accounts. Many workers may not have used their medical benefits in their younger days. One simple way is to allow the unused medical benefits to be saved up. The Government should consider setting up a new account so that employers could make additional contributions to this account and the employees would be able to make use of it in times of need, or even to pay the premium for their medical insurance. If it is not used, the amount in the account will remain, and when they get old they could make use of this money to pay for their medical expenses.

Generally speaking, in this trend of globalisation we have to be more flexible. We cannot just turn a deaf ear to the problems. There is a Chinese proverb which says, "Close you ears and steal the bell". This is not the right way to do things. We should not ask the Government to prohibit our companies from relocating overseas. This is not practical. What we need to do is to create a conducive pro-business environment so as to attract more investors to come here to invest and thereby creating more jobs for our people.

There has been a suggestion that we should have a minimum wage provision to prevent the employers from exploiting our workers. This so-called minimum wage policy is practised in some countries. But we can say for sure that, eventually, it is the workers who will suffer.

Let me give you a very simple example and you will understand. When the

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Philippine government ruled that all Filipino maids should be given a minimum wage, the immediate reaction from the Singapore families was to turn to other sources for cheaper maids, eg, from Indonesia and Sri Lanka, instead of employing Filipino maids. In the end, it was their citizens who will suffer.

Another example is that in the United States, the US government recently introduced the Age Discrimination Act. The employers' reason is that, "If that is the case, then the best way is not to employ the older employees, so that they would not be accused of discrimination against them." This is not going to the root of the problem.

When there is a problem, we have to look squarely at the crux of problem. We have to try and resolve it in a practical way, for example, the Job Recreation Scheme introduced by NTUC. We have created 4,600 jobs in 2005. This year, we plan to create another 10,000 jobs. We want to tell our employers how to improve the welfare of our employees. Now, we have more than 50 companies who have committed to participate in this scheme and to amend their human resource solution so that they can continue to employ the older workers beyond the statutory retirement age. Through this pioneer project, we will be able to work out some solutions to motivate all the employers to do the same thing by employing the older workers.

But, in the end, it is a question of mentality. For example, in Japan, they have a new law which says that all employers should provide jobs for retired workers. I think this is something that we could consider so that our employers will have no excuse not to employ the older workers. Because they know that by employing the older workers, they would have some benefits derived therefrom.

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However, in the process of extending the retirement age, I think, most importantly, the Singapore Government, as the biggest employer in Singapore, should lead by example and see how we could let the older workers remain in their jobs, and work beyond their statutory retirement age.

Generally speaking, this package should not be looked at purely as an ang pow . In all the packages, we must let our people know of their existence and also the reason for their existence. This package is not a welfare subsidy, as described by Mr Chiam See Tong. It is not just an incentive. It serves to cheer up our workers too. In the end, we hope that all workers, particularly the low-income workers, would take up the challenges and be self-reliant.

However, on the details of the implementation, the Ministry of Finance needs to let the public know clearly the various bonus schemes. To my surprise, even Prof. Ong Soh Khim and Mr Steve Chia did not really understand the working of this Growth Dividend. So long as you are an adult Singaporean, you will have a share, even though you are a housewife. Even hon. Members of this House do not know this, so I am sure many Singaporeans would not know too. There is a need for us to do some work, so that Singaporeans would understand the details of these schemes and the reason for this Progress Package.

During my walkabout, some odd-job workers asked me whether declaring their income would cause adverse effects on their employers. I think the Minister for Finance should clarify this doubt of our people.

2.38 pm

Dr Ong Chit Chung (Jurong): Mr Speaker, Sir, thank you for allowing me to join in the debate. First of all, I want to

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declare my interest as a person from the private sector.

Sir, I wish to commend the Government for a most generous Budget. There is something for every Singaporean. It is a people's Budget. Above all, it demonstrates the sincerity and commitment of the Government in helping senior citizens and low-income families.

It is indeed the best Budget in years, and the Government deserves the praise and support of all Singaporeans, including Opposition Members. Therefore, I heard with amazement the hon. Member, Mr Steve Chia's call to abolish or lower taxes like licence fees and levies and, at the same time, advocating more and more give-aways and freebies. Now, who will pay for all these? Without sufficient taxes or revenue, such things cannot be sustained. It is, in my mind, a recipe for disaster. Does Mr Steve Chia know that Singapore will end up a bankrupt country? This is not what we want. It will be a sad day indeed if our Treasury becomes empty.

Sir, the ground is abuzz with anticipation and excitement, unlike what the Opposition says. The Ah Peks and the Ah Ems are particularly happy that the Government is sincerely looking after their interests. Singaporeans are convinced that we have a very good Government. Even if you go round the world and search, I am sure you cannot find a better government! It is a Government that has given Singapore security, racial harmony and prosperity. And the Government could only achieve this because it has the support of the people.

Sir, I welcome the Government's allocation of $5 billion for the R&D Trust Fund. This is a right move that will generate economic growth and create new jobs for Singaporeans. R&D is the cradle for new technology and innovative

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products that will give our economy the cutting edge. It will be an engine for growth, and will bring Singapore to a higher level of economic development.

My question is whether the Government has set up an apparatus to evaluate stringently the R&D proposals from companies, monitor their progress and performance and assess their results systematically. Further, I wish to ask whether these companies, which benefit from the R&D grants, will be prepared to anchor themselves long term in Singapore.

Sir, I also welcome the setting up of the Enterprise Development Centres and the EnterpriseOne Portal. These are good measures which will help the SMEs. I know the Government is trying its level best to help SMEs, and there are many initiatives and programmes spread out in many agencies. But there is no central coordinating agency which devotes its energies and resources to the SMEs. We need, therefore, an agency with the drive, the commitment and the passion for SMEs.

The MNCs have a big brother in the EDB, which does an excellent job of attracting foreign investments for Singapore year after year. EDB cuts through the red tape and assists these MNCs to establish themselves.

Why not an EDB-like agency for SMEs? SMEs are the backbone of the local economy, and strong and flourishing SMEs will generate growth and create jobs for Singaporeans. The SMEs of today can, with the right support and programmes, be the MNCs of tomorrow. SMEs, therefore, deserve an agency, and it would be good for Singapore. SMEs are like Cinderellas. I hope the Government would soon send a prince charming and transform Cinderella into a princess for the betterment of Singapore.

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Unlike Mr Steve Chia who wants to cut most of the taxes, I will confine here to the discussion of one tax, and this is a tax not when we are alive but a tax when we are dead, ie, estate duty. There is a common saying that, in life, we cannot escape taxes or death. But now, even after death, we cannot escape from the taxman. The hope of many was dashed, at least for the time being, when estate duty was not abolished on Budget day.

The Government says that it should reach a decision by the next Budget. But the people are saying that we are waiting too long - tan jin ku. May I ask why is the Government dragging its feet when Australia, New Zealand, Hong Kong, and even Malaysia, our next door neighbour, have abolished estate duty? Singapore prides itself as being visionary and farsighted. But now it seems we are lagging behind.

I would like to ask the Government whether the abolition of estate duty in Hong Kong, for example, will make Hong Kong even more competitive than Singapore in attracting foreign talent, foreign investments and funds. Further, why are we perpetuating a skewed limit of $9 million for residential properties and $600,000 limit for all other assets? Would it not encourage disproportionate purchase of residential property? If it is so skewed, why not simply do away with estate duty once and for all?

Sir, the process of getting estate duty clearance upon the death of a relative is cumbersome, time consuming and tedious. It takes months, and sometimes even years, to get clearance. It is quite a hassle for the surviving relatives to search for records, bank statements and share transactions. It is indeed difficult to seek clarification, as the deceased is no longer there to help clear enquiries. It is very difficult for the families. I, therefore, urge

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the Government not to hesitate any more but take the bold step forward and sound the death knell for estate duty.

Sir, I support the Budget.

Mr Ong Ah Heng (Nee Soon Central): ( In Mandarin ): Mr Speaker, Sir, during my routine coffeeshop walkabout, I can sense the positive response from Singaporeans from all walks of life on this year's Budget. Regardless of the interpretation or speculations on the objectives and purposes of the Budget we have seen in the media, it reconfirms my belief that Budget 2006 will benefit many Singaporeans, especially the lower-income group.

There is a Chinese saying, "Spread the money and unite the people". It means that if the Government knows how to use the money wisely, it will be able to unite the people and progress together. Wealth is only meaningful if we know how to gain and spend it. This is what Mr Low Thia Khiang has failed to understand. Why do we incur so much deficit and give away $2.6 billion to the people? He did not know how to use the money. He did not know how we can use the money to level up the people.

Mr Speaker, Sir, I fully support the principle of sharing the wealth of economic growth in a targeted manner. Such a consistent policy is particularly important to the lower-income groups and the less fortunate people in our society. We know that some people have difficulties and hardships, and the Government is particularly targeting at helping these people.

But we need to manage the people's expectations properly. One 60-year old resident of mine complained that the few hundred dollars from the Government is not enough for a year. I asked him what his son was doing. He told me that his son was an odd-job worker with a family

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of three children, and that he could still give $100 a month to his father. He feels that the amount is too little. I told him that looking at his son's earning capacity and family commitments, he should be thankful that his son would still be able to cough out $100 per month for him. I told him that he had to be realistic and contented with what he has received from his son and the Government. Most importantly, he must also do his part, get a job and work to sustain his expected standard of living. He reluctantly agreed to my suggestion.

Just now, when I heard Mr Steve Chia, Non-Constituency MP, said that the Government should give everybody $100 per family, two children, $200, three children, $300, and so on, I just do not understand. Where will the money come from? Where can we get so much money to give away to so many people? You can give the money to the people, make the old people happy, make the housewives happy, but they may not necessarily cast the vote for you.

Mr Speaker, Sir, there are ups and downs in life. The fact is that we are unhappy about many things in life but if we look back and think about it, we are not short of the essential needs for our daily lives. It is rare to see Singaporeans who are so poor that they cannot even afford a roof over their heads or money to buy food and clothing. Even in the event of some rare exceptions, at grassroots level, we would be able to help them. We leave no stone unturned to do our best to help such people. I do not deny that there are some poor people in our society. These people may be poor, but they have strong character. Our poor people are poor simply because they have less than others. But compared to poor countries, the poor people in Singapore are still better off. Singaporeans should not make unreasonable demands on the Government. You may not give the

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Government full marks, but at least you should not discard the Government that we have now.

On the other hand, there are many people who appreciate the Opportunity Funds set up by the Ministry of Education. Why? This is because many poor children in the neighbourhood are going to benefit from this fund. They will be able to access the Internet, attend immersion courses overseas, and take part in many activities, thus making full use of the excellent opportunity in education. Even if a child comes from a low-income family, the Government will help him to upgrade and become better off in future. More and more children have better opportunities to be better educated and enjoy better opportunities to enjoy a better standard of living.

We must know how to use money wisely and how to earn a living. The Non-Constituency MP suggested giving $100, $200 or $300 to each of the poor families. I think that is not the correct way. When you give the money to a child and do not teach him how to spend his money wisely, he will soon use up all the money, and his pocket will be empty again. We must strive to upgrade. We provide training to the workers to upgrade themselves. We have helped all the lower wage workers and older workers to improve their skills and thereby earn more money to enjoy a better quality of life. To these people, the real help is to get them jobs, and better jobs for that matter. Then they can have a decent life. But if they are still having difficulty, we have so many assistance schemes to help them. I feel that, in Singapore , nobody can say that he would not be able to live. History has taught us that the national power is limited, but the people power is unlimited. So we know what the Government can do is limited, but Singaporeans must do their own part - be a self-starter, upgrade the skills regardless of age and adapt positively to the new job.

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Another important point to note is that we live in an uncertain world. So we cannot depend on the Government for everything and hope that the Government will give you money every day to live on. Mr Speaker, Sir, this world is very uncertain. We are not sure when the bird flu will hit us or whether the terrorists will eventually strike at us. This is something which nobody can be certain about. Even a powerful country like the United States was in a state of shock when the 9/11 terrorist attack happened at the heart of its biggest city. The Government must ensure that, in case of such an eventuality, the people here are alert and vigilant all the time. We want to ensure that the Government has annual surpluses to help the needy, and this is something that can be expected of a good Government. Our people expect a government like the present one to share the budget surpluses among the people. If you are not a good government, then nobody can have such expectation. As a people, we must also understand that the Government will not always have money to help. Very often, we have to help ourselves and be self-reliant. We have been trying our best to help our people to upgrade and raise the standard of living and quality of life.

People have come to a realisation that mere propaganda talks over the media are meaningless. You can criticise and make a lot of comments and promises. But they are all empty promises - cheques that cannot be honoured. In Singapore , people are used to having a good and honest Government. Politicians cannot just give all sorts of empty promises in order to win votes. It would not work! The people of Singapore can see for themselves that this Budget has the interest of the people at heart, particularly the lower-income people and the older workers. Help is given to those who need it most. This is clear for everybody to see.

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Mr Speaker, Sir, I must stress that the greatest achievement of the Government is its ability to implement the policies that bring prosperity to the nation and happiness to the people. From the media reports, we can see that there are political problems in a lot of countries - Philippines , Thailand , and so on. Why is it that Singapore can stand out of all these chaos and unrest? The reason is simple: Because we have a good, clean and capable Government. Many countries have much more natural resources but they are not able to have a Budget like the one we have today, because politically, they face different kinds of corruption and incompetence. Our people are fortunate that we have already gotten out of this kind of situation. A clean government will realise the promises it makes. If we do not have good people in charge and put in place the right policy, we will not have budget surpluses, let alone debating on how to share the wealth. To make matters worse, if we have the wrong people in charge - those who have lost touch with the reality at the ground, especially on issues like multi-racial harmony, meritocracy, work ethics and economic development - then we are done for.

From the 1985 economic recession, the 1998 Asian financial crisis, the urgent need to restructure the economy in the face of globalisation, the terrorist threat since 2002 to the 2003 SARS crisis, the current team of Government under the leadership of Prime Minister Lee Hsien Loong has proven once and again to Singaporeans that they are reliable and dependable.

Since last year, our job situation and economy have improved. Accordingly, we must distribute some benefits to the people. They deserve them! The fact tells us that only a capable Government and hardworking people, together with social cohesion, will be able to ensure that Singapore continues to live on. We will

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be able to ensure that our families and our children will have a better life in the future.

Mr Speaker, Sir, whether or not this is a good Budget, we can see for ourselves. As for those people who promise more, we cannot see how they are going to do so, because political parties who propose more giveaways are not in the Government. I say that Singaporeans should consider themselves fortunate that we continue to have a capable and clean Government to lead Singapore ahead to a better and brighter future.

2.48 pm

Dr Lily Neo (Jalan Besar): Mr Speaker, Sir, I am very happy with this year's Budget and support it wholeheartedly. I consider this Budget as one of the best and I would like to thank the Prime Minister for this. I consider the Budget with a "heart" because this Budget especially caters to the many in our midst that are less well-off and will therefore touch the lives and make a difference on those most in need of assistance. It is most commendable that having steered the economy to generate budget surpluses, our Government would channel these surpluses to the people with emphasis on those in the lower-income group.

Sir, I especially applaud the various assistance schemes announced by the Prime Minister that will help Singaporeans move forward together. The various assistance schemes are indeed laudable and are given out with very good intentions to share our nation's progress with all Singaporeans. I would like to stress that at the end of the day, it will be the implementation part that will decide the success of these schemes. May I urge the Prime Minister to ensure that the various schemes reach all the targeted groups? The lower-income group may be the group that are less informed and may

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not be even aware of the assistance available to them. In view of the varied assistance with many variables, raising public awareness is essential to better inform all the public. Community and grassroots assistance may have to be called for to ensure the good reach to all residents. It will be better for the various schemes to be made less onerous on application lest it deprives the very people that they are targeted for and those most in need. For example, the claim for Workfare Bonus for those odd job labourers who do not contribute CPF or declare their income with IRAS.

Sir, I would like to raise two main points today: firstly, to enable upward mobility among the lower economic and social strata and, secondly, to reduce the size of the future lower social and economic group. On upward mobility among the lower economic and social strata, the Prime Minister has provided various assistance programmes to help Singaporeans move forward together.

May I request the Prime Minister to go one step further, ie, to enable upward mobility of the lower economic and social strata? This is especially vital for those young lower-income families with children to get out of their bleak situation to better themselves and their children. I feel that, for this group, a more extended approach should be taken. Without intervention that will change their course, they may not be able to get out of their poverty trap. Their children may father and mother children ill-equipped to do better, thus perpetuating a downward cycle of economic or social failure.

I suggest that we offer a holistic assistance package, once such families are identified, by providing integrated two-generation strategies assistance to address both the needs of adults and children simultaneously and address the co-occurrence of these issues among vulnerable families. Although it may incur more labour and cost, we may hopefully

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address not only their present needs but also help solve their own and their children's future needs. We already have many assistance schemes available, both private and Government, in the community to assist them, but we lack the facilitator who can evaluate, coordinate, direct and follow-up for them. Full-time social workers are best suited for this role to better tap and maximise and take advantage of all the available schemes.

Sir, half of my constituents live in HDB rental flats. When I made my house-to-house visits, I encountered many low-income young families, many of them with varied difficulties. Many a time, I was moved to see how poorly they live. I was filled with this yearning to want to help them improve their lives for the better. I felt compelled that I needed to do something immediately, especially for those with vulnerable young children. May I now request our Government to facilitate ready assistance for such families with the right social policy?

For the parents of this group, more assistance should be rendered to enable them to establish a stable family and raise children who can make it in our society and economy They may need guidance in job training, life-skills training and better job placements and some additional family planning and budgeting skills. I would like to urge our Government to make it more attractive, especially in terms of financial assistance, for them to take up retraining opportunities. Often, the lesser take-up rates were due to lack of suitable matching job placements and inappropriate expectancy of both employers and employees. We need to evolve a better synchronised system to ensure higher success. It is best to deploy a social worker with each family in order to actively promote and recommend and take advantage of the training schemes available for this group. They

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may also need parenting guidance and parental counselling in order to get better educational support and attitudes towards school for their children at home through supportive nurturing family and home environment.

For the lower-income group, the well-being of their children should be taken care of as well. This is to give their children a better start in life by paying special attention to their well-being, especially to their education.

Sir, the social worker assigned can assess the family's needs, which may include social, psychological and health, apart from economic services. They can then initiate and direct intervention programmes. These may be guidance and counselling, directing for individualised tutoring, moral and social support, study choice, and enrolling for vocational educational classes and so on. Continued follow-up and monitoring on these families, especially their children over time, will ensure the success of our assistance to them.

The young children of this group will need early interventions with more opportunities for success in school work, such as early intensive reading, subsidised childcare and student care, tutoring, mentoring, and education and career guidance.

Sir, here I would like to differ with my esteemed colleague, Dr Wang Kai Yuen, and fully support the School Breakfast Programme reported yesterday. This programme is only for primary school students under the Financial Assistance Scheme. I feel that it will be money well-spent because breakfast is actually important and has positive impact on the well-being and performance of all students in school. Yes, children under-perform, relative to their potential, for a variety of reasons, but this is one reason we can do something about effectively. There are good international studies on

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this. Teachers and schools know the problem. I am especially glad that MOE is funding this project because we can then be reassured that the programme is comprehensive and sustainable. The situation will not improve if we wait for parents to improve, and we will be less than committed if we wait for community and private entities to come in with donations piecemeal and sometimes not sustained. Sir, I think we have here a good example of effective and timely intervention to help our children from low-income families perform better.

More and more studies are recognising the complex interplay between student, family, school and community variables in shaping students' paths toward early school withdrawal or successful school completion. Sir, there is a need for well-integrated services involving the home, school and the community. There are many assistance schemes available, including VWOs that offer various educational and mentoring assistance. What we need now is to have a system in place for a social worker to be assigned to and to hand-hold each family. These social workers can then assess, support, plan out and match the family with suitable partners and closely monitor the effectiveness of the recommended assistance, and adjust accordingly, if necessary.

On reducing future lower-income group, Mr Speaker, Sir, in a globalised economy, there is an increasing appetite for educated workers. Those who lack education will be more likely to raise a new generation with dim prospects of doing better and perhaps of doing worse. As GPC Chairman for Education, I would like the Government to consider tweaking the weakness I feel in our otherwise excellent education system, ie, to improve the drop-out rate of our students from post-secondary education.

According to the MOE's Education Achievement indicators, the percentage of

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Primary One cohort in post-secondary education institutions is at 82% in 2003 and remained at 83% for 2004 and 2005. MOE expects it to remain at 83% for 2006 as well. In the old days, eg, 1965, only one out of 10 students got post-secondary education. Today, eight out of 10 of our students get post-secondary education. Compared to most developed countries, this percentage is high. But in view of our unique situation, we need to develop our only resource to the fullest, and that is maximising all our human resource. I feel that we should not sit on our laurels and accept the fact that the remaining two out of 10 of our students do not get post-secondary education. In a cohort of about 50,000 students, even if we take a conservative figure of 10% instead of the 17%, it means that about 5,000 students every year do not get post-secondary education. The cumulative effect will be substantial, and this group may be in the next generation of lower social and economic strata which will pose future burdens.

Sir, preventing school drop-out must be our priority social policy issue. Drop-outs are more likely to experience negative outcomes like under-employment and unemployment as well as negative consequences to society. The personal, economic and social costs of academic under-achievement are high and growing. It was reported recently that the number of youths arrested for crime has peaked since 1998 and that more youths have been caught for rioting and involved in gangs, and school drop-outs dominate in numbers among them.

Reasons for leaving school that have been identified in literature include problems getting on with school work, problems with teachers, suspensions, expulsions, low grades, financial responsibilities, disliking school, care-taking responsibilities and employment. Sir, we need to have our own studies to find out the reasons of our school drop-

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outs. This will facilitate us in designing better policies to solve this problem.

May I suggest that our Ministry of Education implement an improvement plan to meet the needs of a diversity of students and focus especially on at-risk students? Schools may adopt programmes and practices that focus on efforts on at-risk students, such as providing extra help, to achieve success. We should re-examine our present approach in order to better target the last 17% or so of our students that do not get post-secondary education. Sir, for this group, I feel that we need to take a more integrated approach for us to make the next quantum leap.

Preventive efforts must be both comprehensive and preventive. Comprehensive drop-out prevention programmes must target those factors in schools, families and communities that contribute to or exacerbate the drop-out process. The role of prevention must be emphasised in drop-out prevention policies and programmes. A preventive approach allows early identification of potential risks and protective factors within individuals, schools, families and communities. Risk factors within the individual include poor self-esteem and external locus of control; risk factors within the family or environment include limited financial or material resources and a poor social support network.

Teachers can instruct and inspire, and they can spot troubled youths. However, they do not have sufficient time and ability to follow through with individual students. We need school social workers who can have the time and ability to intervene, assist and follow up on each case. A more comprehensive and sustainable approach that calls for school social workers and mentors is needed. Such programmes may include connecting

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students to an attainable future, providing academic assistance to help them perform well in their school work, such as tuition, recognising the importance of families in the school success, enhancing vocational education that has an occupational concentration, formal counselling in personal issues along with career counselling, as well as creating a caring and supportive environment, such as use of adult mentors.

Sir, to alleviate the issue of at-risk students, schools and communities must refer to school social workers and mentors for potential drop-outs. Helping students plan their careers and make occupational choices may well help them decide to stay in school and graduate, particularly as they learn what kind of education is required to land decent jobs. Social workers, in recognising the increasing demands on educators, can meet the social and emotional needs of students and should provide support and consultation. Guidance counselling can keep more students in school. The success is on early identification and intervention of potential cases before they become school drop-outs.

We need to take the approach of believing that there is no reason for any student to drop out of school due to academic weakness, as there is now the broadening of choices to students of varying abilities. For example, there is the O-levels menu that accommodates students with more practical abilities as well as ITE and vocational training facilities. Sir, the crux of the matter is for MOE to provide more places and choices in vocational training to cater to those students who are less academically inclined.

In closing, I would like the Prime Minister to consider longer-term assistance for a group of Singaporeans who are not eligible for public assistance for one reason or another but in

no less

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dire state. They are the elderly, the handicapped and the families whose breadwinners are unable to work. May I request for ComCare to be channelled to such people on a longer term basis and for more ComCare funds to be allocated to these constituencies with more of such household?

Mr Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.40 pm.

Sitting accordingly suspended

at 3.16 pm until 3.40 pm.

Sitting resumed at 3.40 pm

[Mr Speaker in the Chair]

ANNUAL BUDGET STATEMENT: Debate resumed.

Mr Loh Meng See (Jalan Besar): Mr Speaker, Sir, I rise to support the motion.

This year's Budget presented by the Prime Minister and the Minister for Finance is quite unique and extraordinary. I do not think that any other government in the world would have done the same. It can only come from a PAP Government that is close to the ground and understands the people's needs - a Government that is investing in the long-term.

We understand fully the maxim, we reap what we sow. If we cast our minds back five years ago in 2001, the situation was very bleak indeed. There was hopelessness and despair and the feeling of despondency was widespread. Many Singaporeans wondered whether we were seeing the end of high growth and the beginning of decline of the Singapore economy. Singapore was thought to have lost its comparative advantage against the

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emerging low-cost economies. The loss of jobs and lack of employment opportunities were mostly keenly felt by Singaporeans, even amongst the middle-level professionals. Many businesses were barely above water because of the high cost of operations.

Sir, the dramatic turnaround of our economy in the last two years has been amazing. It showed that we are on the right path. The drastic and painful measures that we had to take in restructuring our economy have worked marvellously. There is now renewed confidence and our people optimistic of opportunities abound if we were to remain steadfast and stay the course.

I am pleased, therefore, that the Prime Minister and Finance Minister did not try to stimulate the economy even further for this would have led to the over-heating of the economy, resulting in manpower shortages and an artificial inflation in cost of operations. It would have been an imprudent course of action taken against the backdrop of volatility in economic cycles.

We must learn from the lessons of the last economic downturn and try not to over-stimulate the economy and lead to problems down the road. I believe that another year of 4%-6% of economic growth is going to cause serious talent shortages, leading to artificial increases in remuneration packages. We have a sizeable group of professionals who were trained in the skill sets of the old economy. They are not catching up fast enough in developing the competencies required for the new economy. These people are likely to fall behind even as those who are well-equipped now would have it good.

I find it a real pity that many professionals in their 50s with the education and experience behind them are

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not being tapped as widely as they should in contributing to the different sectors

of our economy. I, therefore, welcome the strenuous effort put in by the Government to increase the effective retirement age of the average Singaporean worker. The Government ministries and statutory boards can take the lead in appointing older staff to appropriate jobs in the public and people sectors. The society can benefit from the years of accumulated experience in building up their domain of knowledge.

Sir, my fear is the tendency to focus on technical skills and not enough on the knowledge, expertise, relationships and networks built over the years for the middle-level professionals and executives. That is why our valuable human resources are wasted and not deployed for fruitful work. Even as we want to keep our Government lean and to the areas that the Government does best, I sense from the ground that decisions are made purely from the financial cost perspective instead of from the economic value propositions, especially as it affects the livelihood and well-being of individual citizens. Moreover, the Government, ministries and agencies seem very much driven by revenue and the avoidance of expenditure. Some essential amenities are not provided for, in some cases for years.

Sir, the case in point is the need for covered shelter for the short narrow bridge over Sungei Rochor, linking the Lavender MRT station to Crawford Estate in North Bridge Road, which is my constituency. Some hundreds of people use this facility every day, yet no shelter is built. There are a number of overhead bridges which are not as well-used but are provided with shelters. Sometimes one wonders about the consistency in Government decisions in public infrastructure. It gives the impression that we

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are run by different governments instead of one government with different ministries and agencies.

Next, our labour market was given an added boost with more than 110,000 jobs created in 2005. The unemployment rate has fallen to 2.3%, the lowest in the last five years. What concerns me is the low productive rate of 1.9% against the rate of 4% to almost 7% in the preceding years from 2002 to 2004. The labour productivity rate was usually closer to the GDP growth. The question I would like to ask is: are we absorbing our manpower in the employment of lower productive work or are our businesses not generating enough economic value-added for every employment dollar cost or are some predominant unproductive sectors pulling the overall labour productivity rate down? With the real GDP growth of 6.4% and, at the same time, having a labour productivity rate of 1.9% for 2005, this is certainly not a bright picture. Hopefully, this is a passing phase and when our young entrants to the employment market gain more experience and are better deployed to the right sectors of the economic, we can bring output and productivity up, instead of slackening labour productivity, as is currently the case.

Sir, it is to our interest to see wage levels go up because of higher productivity. I note that GST revenue has gone up significantly from a stable $2.1 billion in the three years from Financial Year 2000 to 2002 and jumped up to $3.5 billion in Financial Year 2004. With the ease of air travel, we run the risk of leakages from our people making more purchases from overseas where travellers are given tax refunds. I am, therefore, pleased that the Government is holding the current GST at 5% as any further increase could cause changes in buying habits which may not be helpful to our local businesses, especially those selling premium quality items of high value.

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I am very happy with the Progress Package that the Prime Minister and Finance Minister announced in the Budget Statement. They have been thoughtfully considered and the refinements over the past years' practices in sharing the fruits of our economic growth with Singaporeans. It is only right that help be extended to those in need - the elderly who have retired and no longer employable, the low income groups who are able and should be encouraged to work and be diligent in what they do. We should not also forget the NSmen who have served our nation with distinction and the young who are our hopes for the future.

Sir, a sizeable sum of $2.6 billion have been committed for the Progress Package and this has resulted in a Budget deficit of $2.9 billion, made up of 1.4% of GDP in the immediate year's Budget. We are told that this amount is being funded by the special transfers from budget surpluses of the earlier years of this Government. There is public concern as to whether this will set the precedent and create an expectation in the minds of our people when such handouts are clearly not sustainable. The question is: is this the beginning of the practice that before the end of its term, the Government will square off its account and declare their share in dividends to Singaporeans? This concern for raising unnecessary expectation among Singaporeans for regular cash handouts could be spelt out clearly as a matter of principle that it only applies to those in need and not to feed the wants of our people or those who can fend for themselves. The Government has clearly stated that we want Singapore to be an inclusive society. There is a place for everyone, including the poor, orphaned, widowed, disabled and the needy. The stronger and able among us should help the weaker members of our society. We want to preserve the dignity, esteem and self-worth of every Singaporean. Therefore, the Government's

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help should only be confined to the small proportion of the less able and weaker members of our society who are in need of help.

Finally, Sir, the PAP Government has constantly demonstrated their ability to think of novel ways to encourage and spur our people on. I hope whatever the Government does, the outcome is the uplifting of the spirits of our people and not just to meet their material needs. It is the human spirit that has helped Singapore be what she is today. Let us keep this Singapore spirit alive and burning and be the light of the world.

3.53 pm

Dr Chong Weng Chiew (Tanjong Pagar): Mr Speaker, Sir, this Budget is very much a social Budget, by its emphasis on the people's welfare, particularly the lower income group. In the past, MPs had constantly exhorted the Government to pay more attention to them, as they struggle to adjust to globalisation and catching up. Every year, the Government has given assistance through various help schemes, on top of the usual " ang pow " in various guises for all Singaporeans. Over the years, we have become so used to the annual goodies, big or small, that we would have been very surprised if there were none.

My Parliamentary colleagues who spoke earlier have expressed their concern of a crutch mentality developing among the very people we aim to help. Going forward, I hope the Government will continue to help needy Singaporeans but refrain from too many unconditioned giveaways. These should be reserved for those who are truly destitute and helpless, especially children and the elderly. As much as possible, future grants should be tied to efforts, along the lines of Workfare, to encourage our people to be more dynamic and independent.

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There is a fascinating article in the Straits Times on Saturday about the determination of new China immigrants to succeed, titled "Enter the Hungry Dragons". New immigrants are often viewed with some apprehension but they do provide the established community with a much needed jolt. They have not received any Government assistance and depend entirely on their own efforts to succeed.

On the same day, I read my January copy of "Armynews" which featured an article, "What's your shark for '06?". Now this story is much too good to keep for our NSmen alone, so please indulge me while I share a thinking soldier's "sashimi" story.

The Japanese have always loved fresh fish, but the waters close to Japan have not held fish for decades and the fishing boats went further than ever. The return trip took more than a few days and the fish became not so fresh, so fishing companies installed freezers on their boats. The Japanese did not like the taste of frozen fish. So, fishing companies installed fish tanks instead and stuffed the fish into the tanks. The fish were alive but tired and dull and the Japanese could still taste the difference. To solve the problem, the Japanese companies added a small shark to the tank! The shark would eat a few fish, but the remaining fish would arrive in a very lively state. The fishes survived because they are challenged! The feature concluded that people need right-sized challenges to keep them active and to help them work better.

Our Government's task is to figure out the right "shark" - the appropriate combination of fiscal incentives to motivate a diverse group of workers. Low taxes, minimum bureaucracy, efficient and reliable infrastructure are some of the pillars of a successful and competitive

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economy. Controlling inflation and maintaining a reasonable cost of living is also essential. In recent years, many Singaporeans have complained about the rising costs of living, but if we examine our Consumer Price Index trend over the last decade, we can see that, if cars and housing were not included, our CPI has actually been quite stable.

The high cost of our cars jacks up our overall cost of living. In a recent international ranking of the most expensive cities to live in the world, Singapore was near the top, because of this. A 2003 Household Expenditure Survey found that about 35% of all households own cars. The overall average monthly household income is $4,800. The cheapest car in the market is around $50-$60,000. This is equivalent to about a year's wages. Car ownership is a constant gripe of the middle class. The elites have no problems paying for cars. The lower 20% do not even think about affording cars. The middle class aspires to own cars, works hard to pay for them and winces under the heavy burden of car ownership. Their main complaint, based on feedback I have heard over the last few years from my residents, is that they are dissatisfied with our current transportation system. Most are executives and professionals, and they are pressed hard for time and desire much better connectivity.

The Transport Ministry may wish to be more responsive to feedback on the inconvenience of the now widespread "bus-MRT-bus" mode of travelling. Wherever MRT stations pop up, some bus routes will be withdrawn to get commuters to use the MRT. But the travelling patterns of people are diverse and varied and having some overlap is actually desirable as it provides alternatives, adding to the robustness of our transport system. For example, I understand that this morning, there were some problems along one of our MRT

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lines. It caused many commuters to be delayed. Imagine if there were a crisis affecting one of our MRT stations, the whole line could be jammed up for hours, even days. Buses offer a much needed alternative and they are flexible. Their routes can be changed easily and I hope the Government will take a deeper look

into this issue to see how we can improve our current transport system.

The middle class also feels squeezed and has not been given that much in terms of Budget "goodies". Unlike the bottom 20%, they pay taxes but live in apprehension of the impending means testing measures being imposed on more and more public subsidised services, from healthcare to education and others. If our means testing system is well-conceived, erring on the side of generosity, I think they would not mind so much. But if they perceive that their problems have not received due attention because they are supposed to be able to take care of themselves, I think they might protest with their feet.

They are well-educated, skilled, hardworking and driven. They are the ideal immigrants. They are mobile. Based on anecdotal evidence, a significant number of Singaporeans seem to be migrating. This may or may not be true. Official statistics, unfortunately, are not available although I think it would be useful. Perhaps the relevant departments could make an effort to collect information on this because we need to know why and whether there are issues we need to deal with. Even as we open up to welcome foreign talents, we must also play defensive to keep our own local-born-and-bred talents.

Next, I would like to speak on nurturing our local enterprises. Singapore's economy has benefited much from aggressive courtship of mega investments from MNCs. I agree with many of my parliamentary colleagues who

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have been urging for more support for our SMEs. We need to develop more SMEs. They can play a much bigger role in our economy than what it is today. Based on feedback from many local business people, setting up an agency focusing on their needs under MTI would help tremendously. Many entrepreneurs speak and write mainly in Chinese and communicating with Government staff is a problem. Moreover, proposals and applications for Government grants are all in English and they have to incur additional costs to engage consultants to just help them to write the proposals in English.

SMEs, by definition, have assets below $15 million and employ less than 200 people. However, within this group, there is a diverse range, from one-man shows to those employing over 100 people. Their needs are very different and setting up different departments within the proposed agency will help focus on the specific measures to boost their viability and survival.

In addition, Government help schemes for SMEs have daunting criteria. New companies with short track records have the greatest problems getting financing. Without help, many a fledgling enterprise will never see the light of day. They also need help with research and data to plan their businesses better, expand overseas markets, and greater subsidies for staff training. Thus, I strongly urge the Government to consider rendering our SMEs more support. Their development and growth will add greatly to the dynamic fabric of the Singapore economy.

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

4.05 pm

Mr Chay Wai Chuen (Tanjong Pagar): Mr Speaker, Sir, I speak in support of this

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Budget proposal by the Minister for Finance.

Ever since I was a student of Economics at the university, I have been reading the annual Budget Statements in some depth every year. There were some landmark Budget Statements from some of our previous Finance Ministers, such as Dr Goh Keng Swee, Mr Hon Sui Sen, Mr Lim Kim San and Dr Richard Hu. They reflected the deep concerns of the times, the economy facing challenges from unemployment, the oil crisis, economic restructuring, globalisation, the Asian financial crisis, economic growth and income inequality, and an ageing society.

In my view, this is one such landmark Budget by the issues the Minister has addressed, and the detailed measures he has put forth. I will begin where he ended, "that this Budget aims to build a vibrant economy where opportunities abound and to build an inclusive society where no one is left behind. The prospects for Singapore are excellent. Asia is on the rise, powered by the booming economies of China and India."

There is no better summing up. To say that prospects for Singapore are excellent today after all the economic uncertainties in Singapore over the last few years since the Asian financial crisis of 1997 is not to be taken lightly, and not to be taken for granted. A sum of close to $3.6 billion is being transferred to the people, so that all, especially the ones in the lower-income bracket, will benefit. This deficit that is estimated for 2006, however, is balanced over the business cycle, from the surplus accumulated over the previous years. Although the Government has undertaken another such sizable deficit in 2001, this time, it is one with optimism, with light at the end of the economic growth tunnel.

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Generally speaking, talking with people in business, I find confidence in the economy all round, and the economic prospects optimistic. And despite some Avian flu threats or some events that may threaten the peaceful development, the trend for growth in Asia, with China, India and Japan leading the way, is unstoppable.

It shows that our Government's economic policies have successfully adapted to globalisation in the manufacturing, R&D and design sectors. Also, that Singapore is making its mark as an international hub for finance, services, air and shipping services are showing results. Many of the policies have been adopted, coming from the consultative committees that have been set up for such studies, with feedback from the business sectors and the community. Many of these policies have come from Members of the House. Some have been implemented a little late. But all in all, I must say that the Government has been receptive to ideas and suggestions from the private sector.

The Minister has proposed many specific measures to attract new investments to our economy in manufacturing and services, in our knowledge economy and to maintain our competitive tax environment. These tax incentives are targeted specifically to encourage business and investment. I have no quibble over these measures. My plea is only not to bend backwards, at times, to favour the foreign investors and therefore discriminate against the local ones. Here, I am unlike Dr Chong who spoke just now for assistance for the SMEs. I am asking for equal treatment. I would like the Minister to know that one such scheme, which has discriminated against local businesses, is the Warehouse Retail Scheme administered by EDB, under which foreign-owned retailers were given industrial/warehousing land

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next to the HDB heartlands to be used as retail space.

Sir, the difference in cost between retail space and warehouse space is 10 times. Big local retailers were not even considered. Apart from being unfair, this is also an issue of putting unnecessary burden on local businesses, because of favour being placed on the foreign retailers, and these are not even new foreign retailers. These are retailers who have been here for decades. And these so-called flagship stores, as mentioned in the Annual Economic Survey, are not even new retail formats which we do not already have, and we have seen them all over the world. We are not asking for special favours. We are only asking for the chance to compete for the land equally. These foreign retailers are not even investing in the land and in the warehouse.

As reported in the newspaper, a GLC company is building it and leasing it to them. I speak with some considerable knowledge of this, because I run the logistics operations for fast-moving consumer goods in both HACCP certified Fresh Food and Ambient Products for the biggest local retailer in Singapore, with a shorter cycle time by far than the nearest foreign retailer competitor here. This is not a boast. It is a fact. I feel that this must be addressed by the Minister so that foreign and local businesses can be treated on a level playing field because the world is flat.

The Minister mentioned that he is looking into the review of the estate duty so that the present system of exemption set at $9 million for residential properties and $600,000 for other assets may present biases for investment choices and inter-generational equity. I support this approach.

The tax system should not cause people to put so much savings into the

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next bigger house because it is a better return. And resources should be allowed to channel into creating more businesses in competition and more jobs for the economy.

As I look through the Budget figures for Total Expenditure over the last 10 years, this Budget's Total Expenditure at $30.6 billion is the highest. The Subvention and Transfer at $4.5 billion is also the highest. If we add the Special Transfer of $3.6 billion, we are having Total Transfer at almost $8 billion, which is 27% of Total Expenditure. In FY2005, the figure was 12%. This is quite a sizable jump and one which we have to be very careful about.

The headcount on the Government Ministries has gone up substantially over the past 10 years. In the Headcount Table of the Ministry, the figure in FY2005 is the highest, at 112,156. These numbers do not seem to corroborate with the Minister's statement about a 2.9% reduction in headcount in FY2004 by the Manpower Management Framework, as mentioned. A footnote in the Budget Table tries to explain this. With the implementation of the Manpower Management Framework, the headcount is supposed to be lower. Why is the forecast for FY2006 even higher at 114,004, an increase of 1.6%?

I appreciate the Minister's concern about controlling headcount and can even understand why headcount in the public service in the last few years may have gone up because of the need to create jobs. But it is proper to free up as much labour as possible for the private sector, so that the economy can grow and support private sector economic growth.

The Minister has pointed out the strain in the public finance because of the decline in collection and the new areas of spending. Also, currently, the Investment Income component in balancing the

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Budget over the business cycle is playing a crucial role. It is good that the Government has, on its own, only allowed 50% maximum of its Net Investment Income to be spent in the year, even if there are strains on the Budget.

The Budget measures are targeted to those directly in need of assistance, and are supportive of the worth ethic. I applaud these measures which are specifically targeted to those in need. Workfare is always preferred to welfare, especially when dealing with those who can work, and want to work.

Some observers have mentioned that the Workfare Bonus can be likened to a negative income tax. I hope not. I am glad the Minister is only making a one-off decision in granting this Workfare Bonus - to share the Government surplus over its term with the people.

I urge caution in likening this Workfare Bonus to a negative income tax. It can be quite unwieldy to implement, and experience in the US has not shown this to be effective - certainly, not as effective and impactful as targeted assistance for the needy that our Government has embarked on in recent years and has built up a database for.

The question we

must ask in all these Workfare Bonuses and transfers from Government surplus is: Who is paying for all these? They are all paid from the Government revenue, which are taxes from the businesses and the taxpayers. The longer-term solution is for job redesign and for better paying jobs through training. Job redesign is not sufficient, and will not solve the problem. Machines and equipment have to be worker friendly or redesigned. Contracts of engagement also have to be redesigned. I have a question in the Committee of Supply and will elaborate more on this later.

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In the package to share the surplus of the Government with the people, all Singaporeans get to share. Those in need receive more and they are also measures targeted in an effective way of helping them in their finances. It is most important that measures assist them effectively - by helping and training and retraining, by helping in matching jobs, by helping them own homes, so that otherwise rental expenditures by the family can be converted into savings and home equity.

Everyone is getting something from this package. I have one clarification to make about the Growth Dividends. The amount a person will receive depends on two factors - his income and his wealth. What about those with no income and no wealth, as defined in the boxes? These are people who stay in the HDB rental flats who are retired, aged or unemployed. I hope all the smart computer programmers will capture this set of people. I can see that the Government has devised effective ways to target assistance to those with various needs. I believe this is a good use of information technology and databases with which we should build up progressively so that various policy formulation can even be anticipated over the life cycle of the general population. My hope is that the Government should assist people in the right way. It is the age-old story of teaching a man to fish and giving him a fish. Giving money is okay for a day - enabling the worker to work for a living wage is a challenge.

Sir, I support the Ministry's Budget for FY 2006.

4.17 pm

Prof. Ivan Png Paak Liang (Nominated Member): Mr Speaker, Sir, thank you for letting me join in the debate. I strongly support the Prime Minister's and the Government's vision to build Singapore

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into the best possible home for our people.

Allow me, Sir, to offer four suggestions, three responses and one observation. My first suggestion is that the Committee of Supply include a test for every Head. This test is, what activities would the responsible entity cut if its budget were cut by 1%? What activities would they add if its budget were increased by 1%? Only with such a test, would Parliament and the people understand the Government's priorities and trade-offs. Only then, would this Committee of Supply be a true budgetary exercise. Absent such a test, every Ministry, every MP has incentive to ask for more. And the Ministry of Finance is alone in defending against more expenditure. Instead, we should engage all MPs and all people in judging the priorities and making the trade-offs.

On a related matter, Sir, we should broaden the scope of the Auditor-General's work. The Auditor-General should not be confined to checking for accounting errors and non-compliance with procedures. He should be empowered to conduct value-for-money audits. I will give details in the Committee of Supply.

My second suggestion concerns international relations. Prime Minister Lee mentioned the WIPO office in Singapore. I consider this to be good for us. I suggest that we build on this to make a bold, strategic move. Let us become the Asian base for the United Nations. Many hon. Members have visited Geneva which is the UN base in Europe. The UN provides many well-paid jobs and many positive economic spin-offs to Geneva. In this, the Asia-Pacific century, we should aim to bring the UN to Asia. Hosting the UN could pay for itself through economic as well as security spin-offs. The presence of the UN in Singapore might be even

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better contribution to our security than the US naval base.

Sir, my third suggestion concerns research and development. As a researcher, I support investments in R&D. However, as an economist, I worry about two aspects of the R&D plan. One, the target to invest 3% of GDP in R&D is an input. As an economist, I would rather aim at output targets. For instance, we should be aiming at the target increase in productivity growth. After all, we are more interested in productivity than we should be in spending. Two, with regard to the R&D plan, I worry about the ability of our research organisations to make a good use of such a sharp increase in funds. Let me give an analogy. Suppose that we are running at 7 kms per hour and we want to speed up to 10 kms per hour. Yes, if we want to run faster, we must increase our caloric intake. But the increase must be calibrated and measured carefully, or else we will just make ourselves sick. I will make detailed suggestions on R&D funding in the Committee of Supply.

My fourth suggestion concerns taxation. The Prime Minister's Budget proposes new tax incentives to the financial, maritime and logistics industries. These add to a wide range of incentives - tax incentives, grants and loans - that we give to particular industries and activities. Sir, as I said last year, and I reiterate now, I urge the Government to resist creating more tax incentives. Our key tax incentive ought to be a simple tax system with low headline rates.

Sir, my three responses. My first response is to thank the Government for hearing hon. Members, Ms Irene Ng, Mr Sin Boon Ann and me. In last year's Budget debate, we called on the Government to focus the national dividend on those who needed it most. The Government has done so. I am sure that

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our whole society - rich and poor - appreciates and supports such targeting.

My second response is to thank the Government for accepting my suggestion to rationalise our record-keeping requirements. I do appreciate there was some element of having to cut the Gordian knot here. On the evening of the Prime Minister's Budget Statement, I mentioned this change to a manager with a multi-national company. She was delighted. She said that she would soon clear out part of her CISCO storage! Bad for CISCO, but good for enterprise.

My third response is to thank the Government for committing to review the estate duty system. Let me state clearly that I do support the estate duty. We do not tax capital gains, unlike many countries, and it is right and efficient not to do so. So, some level of estate duty is reasonable. It is the structure that needs fine-tuning. One, as I have suggested in this House before, and I echo hon. Members, Dr Ong Chit Chung and Mr Chay Wai Chuen, we need to balance the exemptions between real estate and non-real estate properties. Two, as I echo my hon. colleagues, we need to refine the procedures to reduce compliance costs.

Sir, my one observation concerns the budget deficit. The budget projects a deficit of $2.39 billion, or about 1.15% of next year's GDP, assuming 5% growth. Let me point out one reason why the actual deficit might be lower. The budget includes $900 million of transfers to various funds as expenses. The largest transfer is $500 million to the National Research Foundation. But these funds only spend the income from their endowments. Accordingly, the actual expenditure depends on the fund income and is not related to the current transfer. It is worth noting therefore that the actual budget deficit might be lower than

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projected. Indeed, the Government should consider calculating the budget surplus, or deficit, on the basis of the expenditure, rather than the transfers.

Sir, allow me, in closing, to thank the Prime Minister and the Government for such a people-friendly and growth-oriented Budget.

Sir, I strongly support the motion.

4.26 pm

Ms Irene Ng Phek Hoong (Tampines): Sir, I thank the Prime Minister for a very generous budget, especially with its direct Workfare Bonus targeted at our older workers and our low-wage workers.

All in, the Progress Package can come up to a big amount, especially for low-wage households. I just spoke to Mr G Muthukumarasamy, who is the General Secretary of the Amalgamated Union of Daily-Rated Workers, which represents some of the lowest-paid workers in Singapore. I am its Advisor.

Muthu himself works as an electrician. He earns about $900 a month and his wife also earns about that amount as a clerk. They have four children, two of whom are NS men. I was trying to add up for him all the Budget goodies that he will get, including the Workfare Bonuses, the Growth Dividends, the NS bonuses and all. He was quite amazed to find that he would get in total about $4,000, around there, from this Budget. And for him, this is mind-boggling. He is very grateful. He told me that this is a Government that obviously cares for the workers and understands the plight and problems of low-wage workers and of older workers, and they are grateful.

They have been through a very hard time, especially in the last few years. As you know, as lower-skilled jobs move out of Singapore, they have been struggling to

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keep their jobs and, year after year, their wages hardly move, while the rest of the workforce have been doing quite well, earning better wages. They are thus very encouraged by this Progress Package and they hope that these targeted measures, when we do have a budget surplus, will continue whenever possible.

This is not a sign of a handout mentality taking hold. I think we should not confuse this with the crutch mentality because this is tied to work. This is why I support this Workfare Bonus. It is not crutch, but a ladder. It is not something for them to lean on, but something for them to climb on. And it fulfills our promise to the people that no one will be left behind in this country's progress even as we restructure rapidly. I think some of our concerns that this will lead to a handout mentality might be misplaced when it comes to the Workfare Bonus, when it is clear that it is tied to work.

Moving on to the overall Budget itself, I would like to just make three points: First, I would like to put in a word for homemakers. I know they do not qualify for the Workfare Bonus, as it is tied to work. I support fully the principle of tying the condition of work to this bonus. At issue is whether we define the work of a homemaker as work. One can argue that every mother is a working mother. Homemakers are just unpaid working mothers. A good guide of what can count as work for homemakers is this: If a third person could be paid to do the unpaid activity of the homemaker, then it is work. Thus, cooking, childcare, house cleaning, these are jobs that you pay people to do and these are jobs that homemakers do without being paid. Therefore, it is work.

It might seem like, pardon the pun, a motherhood statement, but mothers play a valuable role in this country's progress. We have been encouraging our mothers to have more babies, to arrest our country's

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falling fertility rate. We know that women still shoulder most of the household duties. But they do pay an economic price for being mothers. Figures show that women generally earn less than men as motherhood tends to narrow career options. Hence, we have this gender wage gap.

Mothers have to take time off to care for their young and some do not return to work until their children are older for several reasons. One is that sometimes their pay at work is barely enough to cover sending their children to childcare, paying for domestic help to make sure that the household runs smoothly. So they might as well stay at home, given the pay that they get at work. Some do not return to work because they cannot find flexible work arrangements. There is no flexible work arrangements that offer part-time work or flexible hours that would allow them to marry their job and their household duties. And, third, there is still a lack of affordable childcare arrangements that can support shift work and long and irregular working hours. Increasingly, as you know, our workers have to work long hours, graveyard shift and late nights, they have to find childcare for those hours. Hence, women tend to be the ones that pay the financial price for being mothers.

Usually, by the time, they do return to the workforce, they lag far behind on the wage ladder. It is also harder for them to improve their job prospects as they tend to miss out on skills upgrading programmes. They cannot go for skills upgrading after work because, as I said,

there is hardly affordable childcare options for them during after-work hours. So we need to recognise this. For a large proportion of women with families, their incomes will lag behind their male counterparts.

Sir, if I may contrast this with how we recognise and reward our NSmen for their

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sacrifices. I would like to say that I fully support all the rewards that we are giving to the NSmen. I sat on the RECORD IV Committee and I am grateful that the Government is giving them especially the 40th Anniversary bonus. No one argues with the fact that they have made sacrifices. They have sacrificed their career, their time; they have undergone great hardship to defend the country. So we give them make-up pay, bonuses, various rewards. And this sends a strong signal that defence is a national priority. But we should also not forget that we also need to send a signal that procreation and nurturing families are also valued, and that homemakers too will not be left behind as this country progresses.

It is true that last year we gave baby bonus, but it was designed for the care and development of the child, not a tangible recognition of the mother's role. I would urge the Government to consider giving, when it can when there is a surplus, to give a bonus directly to the homemakers as well. I make this request not to be demanding, not just another group asking for more, but out of a sense of equity. Before women can have equality with men, we must first have equality among ourselves. We should not be rewarding only mothers who go to work but also mothers who choose to stay home to take care of their family.

Second, Sir, this Budget is not only about goodies but also on the long-term picture about what kind of jobs will be created and whether these job opportunities are open to our Singaporeans, especially our older workers. Our latest MTI figures show that total employment rose by 32,800 in the fourth quarter of last year, retrenchment has also gone up from 2,810 in the third quarter to 3,100 in the fourth quarter. This trend is expected to continue with restructuring,

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ie, more jobs created and still more retrenchments.

In my meet-the-people sessions, it is always a heart-rending sight to see retrenched middle-aged workers coming to me saying that they cannot find jobs, they do not want financial assistance but, please, just help them find jobs with decent pay. And they are willing to make the adjustments. That is why we get two different signals. On the one hand, we have the Ministry of Manpower saying, "Look, there are jobs out there, they are just not going for them." On the other hand, we have all these older workers coming to us saying, "No, we have gone for several interviews, we are not getting the jobs that we need, jobs with decent pay." Not only security guard jobs or cleaner jobs, but jobs with decent pay that would suit their skills and talents. And I do not think it is an unreasonable request for them to hope for promising jobs. I know the NTUC and the tripartite partners are working very hard in the Job Recreation Programme to recreate existing jobs. With the $40 million from the Government through this Budget, this programme is on a strong footing. But I think that people need to be reassured that not only JRP for existing jobs but also new jobs with prospects and better pay are also in the pipeline, are being created for older workers.

Sir, it has not been an easy time for older workers and I just want to give one example. I have a resident who came and see me. He is 57. He used to be the leading steward of a very good airline. He was paid up to $3,500 plus allowances, but he was retrenched during SARS. He could not find another job in the service industry. He tried hotels and restaurants but could not get a job. Too old, he was told. He is 57. So he took a training course to become a security guard, and I took my hat off to him. From a leading steward, he was willing to be a security guard. So he took the programme and

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was paid $750 to $1,000 to be a security guard. He found the pay very irregular. The employer was not paying him on time, and sometimes not at all. So, he quit. Now he is unemployed. So he is willing to make that change. Can you imagine - from a leading steward of a first-class airline to a security guard? Sometimes, on the one hand, I feel, wow, that kind of spirit, resilient worker, that kind of attitude we should encourage, model worker. But, on the other hand, there is this sense that, surely, he deserves better. He has skills and talents. The only thing that is working against him is his age. He could have a job, working, using his skills well, getting prospects that he can look forward to, and I hope that the Government can encourage employers to create opportunities for them and to create new sectors where they can play a role.

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

4.35 pm

Finally, it is on recognising the contributions of our founding fathers. There is only one founding generation. Our modern founding fathers, they are a special breed. Without them, we would not be here, we would not survive, much less progress. In the last week, we have been reminded that we have extraordinary people among us, leaders who made a difference. Mr S Rajaratnam passed away and I think many Singaporeans mourned his passing. But I was thinking: why is it that we only praise and recognise leaders after they have passed on? There must be something in our psyche that must want to recognise them while they are still alive, to show that we are a humane society that knows how to be grateful and to recognise the sacrifices of those before us.

I see we recognise NSmen and various groups of people. We set up committees for low-wage workers, committees for

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older workers, but I do not remember us having a committee to see how we can recognise our founding fathers. And this should not be something that is top-down. It should not be decided by the Cabinet. It should be something decided together with the people, that involves the citizens. If we read today's Straits Times , there is a sense that people want to be a part of that process of deciding how to recognise our founding fathers and we should give them that opportunity.

Sir, while I am hesitant to ask for a Progress Package for our founding fathers, because it might demean their sacrifices and their memory, I think we should think about how we should do it and do it well, in a way that is significant. And I think the families of those of our founding fathers who have passed away would also be quite appreciative because, sometimes, when I talk to those relatives of some of our founding fathers who have passed away or even some of those who are still alive, they feel that there is no appreciation, there is no sense of gratitude, there is not even a remembrance. I think that says something about our society and I do not think that is fair. I think we do recognise, we do remember, but it is just a matter of showing it. I hope that we will set up a committee, and I would urge the Prime Minister to set up a committee, involving both representatives of the Government as well as ordinary citizens, to look into how best we should honour our founding fathers. I do not think a nation can ever be too young to show its grateful heart to a leader who had sacrificed for the country. So, let us do that. I fear that if we let this moment pass, we will become desensitised to the notions of sacrifice and service, and take the tears and sweat of those who had gone before us for granted.

In conclusion, Sir, this Budget should not be just about what we want to build, and the shiny buildings, the great

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landscape full of hope. Not only that, but it should be also about what sort of society we want to build, what sort of people we are and who we want to become. This Budget lays a strong foundation for a brighter future for all of us.

With that, I fully support the Budget.

4.41pm

Assoc. Prof. Low Seow Chay (Chua Chu Kang): Mr Deputy Speaker, Sir, I am going to talk about three topics.

The first topic is sharing the nation's wealth with the people. When I was an undergraduate in the late 1960s, I was very impressed by the annual timber bonus issued to all Sabahans by the then-Chief Minister of Sabah, Tun Mustapha. This was one of the very early models I know of in sharing the state's wealth with the people. Because of this, up to today, I can still remember this gentleman, even though he has already been out of the political scene for a long time. In short, I would like to say that good things done will always be remembered by the people.

In the past few years, the bonuses given by the Government to our people were far greater than the timber bonus that I mentioned, which was only US$50 then. Sharing the nation's wealth with our people was first mooted by our ex-Prime Minister, Mr Goh Chok Tong, beginning with the offer of SingTel shares at a discounted price. Later, it was developed into Edusave top-ups, utility and GST rebates, New Singapore Shares, etc. When Prime Minister Lee Hsien Loong took over as the Prime Minister, the way in sharing the nation's wealth entered into an era of innovation. We introduced the new Growth Dividends, Workfare Bonus for the low-income people, and huge housing subsidies to

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first-time low-income home buyers, as presented in this Budget. The schemes are designed to help and reward people in accordance with their age, income level, home size and even National Service. It is also purposely slanted to share the wealth with the people in such a way that the poorest who live in the smallest flats and the oldest are the ones who get the most. The high income earners, though getting the least from this particular package, are actually benefiting from the income tax reductions. In short, the poor and the rich are both winners in this particular Budget, except that they are gaining their advantages through different means.

Zaobao , on 19th February 2006, featured a 57-year-old man who had done his NS living in a HDB four-room flat and earning below $1,500. He stands to benefit $2,280. Together with his unemployed wife who is a homemaker, the family will stand to gain $3,600 from this particular package. For low-income families like this particular one just cited, this sum would help them to set off at least two months of monthly household expenditure. These people will remember and be appreciative of the Government for its generosity and good-hearted effort in trying to help the people who are particularly in the low-income group. This is particularly helpful to the people who are not able to enjoy the fruits of the prosperity of our nation. The residents in my constituency are of no exception. They will all benefit from this wealth-sharing package offered by this Budget. On behalf of my constituents, I would like to thank the Prime Minister.

The many initiatives have been placed in such a way that everybody will have an opportunity to have a share in this particular package. But it is by no means perfect. I believe there are still some minor adjustments to be made in such a way that no deserving individuals will lose out in this particular package.

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First, the NSmen Bonus. We know that some of our young persons have lost their lives serving their NS. In my constituency, I know of at least two such cases. We should not forget this group of people. Their immediate family members should be given the full NSmen Bonus to recognise their loved ones who had once contributed and lost their lives in building our National Service force. In Singapore, the lowest income people are more often than not those who drop out of the radar screen of our CPF database. They earn a few hundred dollars a month through a full-time job as a cleaner, odd-job labourer and, sometimes, helper in a coffeeshop or market. This is the genuine group of people who are actually exploited in our system due to their low education, lack of means to upgrade themselves and who are also unable to seek better jobs. They may find difficulty justifying their income in order to qualify for the Workfare Bonus and the low-income housing subsidy. Our task force now being deployed on the ground should think of ways to facilitate the application of this category of people and make sure that no genuine individuals will miss his entitlement in this wealth-sharing package.

Sir, years ago, people like to say "Government has money but the people do not." It will sound more touching when it is said in Teochew . With this kind of wealth-sharing package with the people, and if it can be done in a cyclical manner, the version would then be changed to: "The Government has money, but everyone has a share."

Sir, our national reserves are more than $100 billion. In a national crisis, if there is, if each family requires $1,500 per month, it will last us five-and-a-half years. Is this a comfortable figure for our reserves? I am sure, if we throw this problem to the floor here,

we would have a diverged opinion on this issue. Yes, we do not have a very large reserve, compared with Japan or China, but we

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are well above all the Asian countries, other than those mentioned. By reserve per capita, we are the highest in Asia.

Judging from the patterns of accumulation of the national reserve in US dollars, our reserve built up very rapidly in the early years up to 1996. After that, it hovers at the present level, with - only very moderate growth. What does this graph show in this particular trend? What it is trying to say in this graph is that we are comfortable with the reserve level and, I believe, that it is adequate.

If we have a big Budget surplus like in the past few years, we can have the luxury in sharing a portion of wealth with the people. To reward those who are unable to benefit from the fruits of the economic success of our nation for their contributions to the economy is a matter worth doing. The share of wealth helps the less able so that all the people in the nation could move ahead together with no one being left behind. It is an important social lubricant to our society, characterised by gradual widened gaps in the socio-economic disparity. In my view, if the Budget surplus permitted, we should continue to share the wealth of the nation with the people in every year's Budget, but the quantums have to be adjusted to suit its affordability.

Sir, the next topic I would like to deal with is the $5 billion on R&D. We have moved away from the labour-intensive industry to that of the skilled and capital-intensive industry. To continue and sustain the success in our economy, we must move up the value chain to that of the innovative and knowledge-based economy. We shall then compete on knowledge and talent. We need original product design, research and development and creation of intellectual capital.

In the past five years, the Government funded a total of $12 billion in research and development. It brought our research

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spending, as a percentage of GDP, ahead of Holland, but it still falls behind countries like Korea, Japan, USA and Sweden. The number of research scientists and engineers has grown to 87 per 10,000 in 2004. This Budget happens to fall in the beginning year of the fourth Science and Technology Plan 2010.

The funding in R&D for the next five years is significant in two aspects. First, is the formation of the Research, Innovation and Enterprise Council, chaired by the Prime Minister. It brings the R&D matter to the attention of the Cabinet level, a level higher than the previous Plan. The fund committed for the next five years is not $5 billion, but $13.55 billion, which is more than the total allocation in the past 15 years. During the past 15 years, it was only $12 billion. The economic indicators we plan to achieve, through the R&D initiative, are impressive and significant to our economy in the future: one, achieve research expenditure closer to that of the leaders in the field, like Sweden and Japan; triple the GDP contribution by three new areas - bio-science, environment and digital media - to $27 billion and double our research manpower in these three areas to $80,000 by 2015. And more importantly, it doubles our manufacturing sector, in terms of output and growth and value-added. Doubled by 2018, would mean a sustainable growth of 5.5% annually.

On the various aspects, in the investment of R&D, there are some issues that I would like to bring up over here. First, in the area of human capital development, I notice that the third Science and Technology Plan created 6,500 research scientist and engineer positions and out of which, about half are postgraduate researchers. Sir, the postgraduate research post in the third Science and Technology Plan was a large

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number compared with what the local universities could produce, bearing in mind also the postgraduate research post in our local universities is an area overwhelmingly dominated by the foreign students. I could imagine the postgraduate research scientist and engineer posts created in the last five years, ie, in the third Science and Technology Plan, will be an area dominated by non-Singaporeans. Initially, we have to start from scratch. We have no choice, but have to find the people whoever available worldwide.

We all knew that the universities in Singapore existed well before the Science and Technology Plan started 15 years ago. No specific interest was placed on the training of local postgraduate research students. What people are interested in is the number, but not who constitute the number. Fifteen years after the Science and Technology Plan, theoretically, we should have a local postgraduate research manpower training programme in place in the various local universities in order to meet the challenge of R&D for the future knowledge-based economy.

To the surprise of many people, the landscape of research postgraduate in local and foreign compositions did not change very much. It is still an area dominated by the foreign students with some Singaporeans around. If the situation does not improve in the near future, at the end of the fourth Science and Technology Plan ending in 2010, there will still be an area where not many Singaporeans will benefit from this creation of R&D opportunities. Although A*STAR has a projection of creating 220 PhDs through their various schemes in the next five years, this number is exceptionally small compared to the projected 4,500 postgraduate research posts in the 2010 Science and Technology Plan. We really need to pay attention to this matter of having a critical number of local postgraduate researchers

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if we would like our population benefit from the developments of the knowledge and innovative-based economy and let our population share the success of the economic growth.

Concerning the development of intellectual capital, it reminds me of the old issue in the late 70s about the British university's professors. They were all very interested in research work and not keen in commercialising their inventions. As a result, the Americans took advantage of them and made money from the inventions of the British professors. Sir, the British professor syndrome also happens in today's Singapore. If one looks at the low number of IP registrations by the local universities, the low number has different implications. It could infer that either certain local universities are lacking in innovation or the IP eco-system in the universities does not make it worth a while to patent one's ideas. While we are going to spend $1.05 billion for the academic research fund in the university research, this matter should be addressed and make sure that the research fund would give us a better intellectual capital in return.

In development of the industrial capital, I am of the opinion that R&D work should be dominated by objective research, or what I would like to call it, product development. This research should be an industrial-motivated work so that the outcome from the research will immediately interest the industry, either in the improvement of their existing products or leading to the emergence of new products. In the committed research expenditure for the private and public sectors, I notice that the ratio was less than two. The ratio does not change much in the long-term projection given, whereas the leaders in the same field like Sweden, Japan and others, the ratio was in the order of three. It means that our private sector research was lower in this ratio compared with other countries.

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Though by the end of the fourth Science and Technology Plan, our research expenditure, as a percentage of GDP, would get closer to that of the world research leader, our actual private sector expenditure, as a percentage of GDP, would still be far behind those of the advanced knowledge-based economy. We shall not just, through the public sector research spending, keep up with the research spending percentage of GDP and catch up with the advanced knowledge-based countries. We should also actively promote private sector research in order not to lag behind the advanced knowledge-based economy.

Sir, the next topic I would like to talk about is university fees which I initially have no intention to speak. But, lately, SMU has announced another 5% rise in the school fees after the 15% increase - last year. NUS and NTU also came up with the announcement of 3% increase. The Minister for Education said in the media that the increase was moderate, and that it was better to have a small increase every year instead of a large one after a few years.

On the matter of university fees, I would like to remind the Government of the commitment to the cost of running the undergraduate courses. The Government would fund 75% of the courses and the students pay 25%. If the universities increase their fees by 3%-5% per annum, and if it is agreeable and supported by the Ministry, I am inclined to believe that the Government must have agreed and committed to increase the Government funding per student by the same proportion. This is a good mechanism. If it does happen, it locks together the students' fees, the Government's commitment and the university fee hike. Every time, before the Government agrees with a fee increase by the universities, they must also, in the first place, give additional funding per student to the

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universities. Otherwise, if funding by the Government per student remains unchanged, an increase in the tuition fees implies the reduction of Government's commitment.

I would like to seek clarification on whether the Government funding in the other graduate courses per student has increased accordingly in line with such announcement of the university fee hike. Otherwise, does the Government change its view in the funding of undergraduate courses, as has been committed earlier?

Sir, with all these comments, I support the Budget Statement.

5.00 pm

Dr John Chen Seow Phun (Hong Kah): Mr Deputy Speaker, Sir, Mr Steve Chia earlier accused the Government for concealing the truth by not including in the Budget proceeds from Government land sales, thereby showing a deficit budget. I think either Mr Chia does not understand what constitutes reserves and the protection of it, or he is, indeed, deceiving the people himself. Proceeds from Government land sales obviously is part of reserves, otherwise a rogue government, with the election promise to give away money, can come in easily and start to sell land and give the money to the people. That is why we have the Presidential Election Act to protect the reserves, and land sales is part of the reserves.

Sir, I have only two comments to make on the Budget. The first is on R&D. In his National Day Rally Speech last year, the Prime Minister spoke about the predicament our economy was in. He likened it to being in between the two closing blades of a pair of scissors. We are caught in between the lower cost of production in the liberalising economies of

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China and India and the technological progress of developed nations. If we cannot keep up with these technology advances, Singapore will become increasingly irrelevant, leading to a gradual fall in the standard of living, increasing unemployment and under-employment and eventually social discontent. We certainly cannot afford for this to happen because it will lead to the end of Singapore as we know it.

Even our traditional forte of trade and commerce is not safe. The Internet brings about increasing this intermediation whereby producers now find it more and more convenient and profitable to sell directly to consumers. The music and movie industry is beginning to see this happen. Many software sales are also now being sold by software authors directly to users, bypassing the distributors and publishers. Super long-range commercial airliners may make Changi an airport of little consequence as they now can fly directly from European cities to Australia. We live in times of change and, if we do not keep up, if we keep doing the same things in the same way, year after year, just because it had worked previously, and if we believe that if it ain't broken don't fix it, Singapore will be in big trouble.

Creative destruction is the way to go in this age. We must break down the old paradigms, systems and methods that worked before in order to progress and move forward. If we do not do this, we will soon be competing with two billion other people from China and India because these people are hungry to be in the world league and are determined to catch up. What then can Singapore do?

We took the first right steps in starting to focus on R&D in the 1980s. This helped to change the mindset of our science and technology communities and that of our administrators and managers. Singapore started to attract the high-tech

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companies and gradually they began to start their research laboratories here and this, in turn, made our R&D more vibrant. However, I hope we do not repeat the formula that was adopted in the past. This is the formula of our past success in the last 30-plus years, but it is this very same formula that leads to our current weakness. Singapore is overly dependent on the MNCs from the western countries. We hardly have any home-grown companies that are globally significant and almost no large world-wide technology companies. SIA and Creative Technology are notable exceptions, but how many more can we name? Such giant corporations can become the driving force of successful economies. If you look at the USA, many of these companies outsource their production to low wage countries like China and Latin-American nations, but the US economy remains strong due to the fact that the ownership and control of these companies remain in America. The R&D and productive design activities remain in the US and these are the high value added jobs which keep the value added to workers high. Only then can there be increase in wages.

However, Sir, R&D alone is not enough. In a Straits Times' article yesterday, featuring the start-up biotechnology company Veritas, the founder, Dr Rosemary Tan, was reported to lament that good R&D results were being wasted due to the lack of commercialisation efforts. This is the reason why she started Veritas, which today has successfully produced and has started to sell an H5N1 bird flu test kit. The company has also produced a malaria test kit, the technology obtained from an NUS laboratory where she worked as a PhD student. If successful, Veritas would not only bring economic benefits to Singapore but it will benefit many throughout the world who may be saved from possible deaths. Such companies have the capacity to make a positive difference in the world. We must,

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therefore, see to it that R&D leads to and spawns technology companies which may be capable of growing into significant world-class companies. Singapore certainly needs such home-grown companies to keep her economy progressing with sustainable growth into the future.

Mr Deputy Speaker, Sir, I, therefore, strongly feel that special attention ought to be paid to the commercialisation of our research results. It is from this commercialisation that we sow the seeds to grow giant technology companies. R&D alone cannot achieve this. While the Government has generously allocated over $13 billion for R&D, specific amounts for commercial exploitation of research results must be put aside. Commercialisation is a process of transforming new technologies into commercially successful products. The commercialisation process includes such efforts as market assessment, product design, manufacturing engineering, management of intellectual property rights, marketing strategy development, raising capital and workers' training. This process is risky and can cost more than the R&D effort itself. It is well known that our traditional businessmen and even the venture capital funds avoid taking such risks until more certainty is seen. We also lack sufficient technology managers who have the expertise to exploit and defend our intellectual property rights. This explains why many of our patents from our funded research institutes and research centres sit in dark steel cupboards waiting for the light of day.

Sir, after spending billions, how much are such patents in dark cupboards worth? They are worth nothing. Zero. Unexploited patents will simply decay with time and technology progress of others. When other competing technology hits the market first, it will be an uphill struggle to extract any value from the patents, even if you have a superior technology.

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Now, to be fair, the Singapore Government has tried to encourage technopreneurship with a variety of schemes. However, none is focused on bridging the funding gap face by small firms seeking to commercialise technologies from universities and research institutes. Although A Star has introduced the Commercialisation of Technologies scheme (COT), COT only funds development activities of the research institutes under A Star. It does not fund the SMEs or technopreneurs trying to make use of and commercialise the research results of these institutes. COT also does not cover universities and polytechnics. EDB also recently introduced the Innovation Commercialisation Scheme (ICS) for small firms. ICS reimburses up to 50% of the qualifying cost of supported project, up to a maximum of $75,000. This limited amount that is available and the restrictive terms of reimbursement may not help solve the financial needs of many small start-ups seeking to commercialise R&D, especially those from the biotechnology sector.

Sir, let me share a few facts from the most technologically advanced country, and that is the USA. In 1980, the US passed the Stevenson-Wydler Technology Innovation Act. It is mandated that federal funded laboratories spend at least 0.5% of their budgets on technology transfer. This was followed by the Small Business Innovation Act of 1982, also known as the Bayh-Dole Act. The Act established the Small Business Innovation and Research Scheme (SBIR). Subsequent amendments to date compel that at least 2.5% of extramural research budget from federal funded programmes be spent on commercialisation of research with the small businesses.

In his letter to the Straits Times published on 5th September 2005, a reader Lim Keng Hwee wrote, SBIR has

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served the US economy well by bringing the private and public sectors and academia together. This model may help to do the same for Singapore. Sir, I agree with him. In an advanced country such as the USA, where risk capital is supposed to be readily available, the Government continues to provide financial resources and grants to help small businesses exploit new technologies. A notable success from this SBIR programme is Qualcomm. I am sure Members would have heard of Qualcomm. The company is the key player behind the CDMA mobile phone technology and is today worth about US$80 billion. Should Singapore not emulate such success?

While on the topic of R&D, I would like to commend the Government on starting to focus on three key sectors, ie, biomedical sciences, interactive and digital media and the environment and water technologies. These are relevant to Singapore's economy and the products and services from these industries are exportable world-wide. However, I would like to suggest that we also look at research into energy, renewable and efficient energy resources, energy storage, efficient energy distribution as well as efficient energy use. The recent spike in oil prices reminds us that energy is a very valuable resource which can be scarce. Singapore imports all her energy needs and the savings, when such research bears fruits, will be significant. More important, the know-how can also be exported internationally, bringing significant revenues.

Sir, for the R&D, in summary, I would like to recommend that the Government study and incorporate a significant funding scheme to help with the exploitation and commercialisation of technology. Such a scheme, I hope, will in time help spawn many technology start-ups, a few of which will grow into significant global technology companies, generating billions of dollars for the future

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Singapore economy and bringing high value employment to our people. Further, I would like to suggest that energy research be added as a new field for the NRF pursuit.

Sir, I come to the second point, which is the Progress Package. Earlier, I have said that for Singapore to stay relevant and compete successfully in the global market we have no choice but to move up the technological ladder through R&D and its commercialisation. However, such progress would also mean that the rich-poor divide in our society will get wider. The rich-poor gap will be worse if we fail to solve our structural unemployment or under-employment problem and cannot help the lower 20% of our people find work or upgrade. In this regard, I must praise the Government for thinking long and hard on how to spend the surpluses it has accumulated during its term of Government with the people. It differentiates the PAP from the Opposition parties. It is easy to give away money, but it is hard to give it meaningfully so that it will reap long term benefits for the country and the people.

Sir, the Progress Package can be divided into three main categories, namely, the Growth Dividends, help for the needy, and the Workfare Bonus. I have spoken on the concept of negative income tax in FY 2003 budget debate and the need to use some form of negative income tax to encourage people to work. I am, therefore, pleased to see that the Government has accepted the Workfare principle and is giving out Workfare Bonus this year. However, the Government has not committed to giving Workfare Bonus every year for fear that it would be entrenched and loses its effectiveness. There is also a fear the employers may take advantage of it and depress wages. Sir, if Workfare Bonus is to be given once in four to five years, I am not sure whether it will work either. We need to come up with a regular mechanism where

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older and lower income workers can benefit without the pitfalls of a crutch mentality. I think, in this regard, the Government has not spent enough time or thought to look into what other mechanisms that we can have.

In the older days, when the Government was concerned about food prices, NTUC Fairprice was set up as a cooperative with the social objective to stabilise prices. Can we now consider the setting up of a labour cooperative, also with a social objective and supported by the Government, to train and place workers for jobs?

I believe Government funding for such a cooperative would be a more meaningful approach of Workfare. Sir, I hope the Government would look into my suggestion and see how we can have the Workfare principle implemented on a more regular basis, so that workers can be encouraged to work and, at the same time, benefit from some form of negative income tax.

With that, Sir, I support the Budget.

5.15 pm

Mdm Ho Geok Choo (West Coast): Mr Deputy Speaker, Sir, this year's Budget will be one that will be long remembered as a people's Budget that brings hope to the people. It is the outstretched arms extended to wrap around the shoulders of a group of people standing in a line. The one who stands closest, ie, the poor, gets the most warmth. The better-off, positioned further abreast, is touched by the tip of the fingers. They know that they have not been forgotten. As one senior executive delightfully told me that between him and his wife, they are getting $500 "ang pow". Everyone gets something. The only difference is that the amount varies. Even the Straits Times , I read, benefited and its circulation shot up because of the Budget news.

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Admittedly, we can please some people some of the time and not everyone all the time! The ones left out are the businesses, especially the small and medium enterprises.

**** While some of my parliamentary colleagues labelled this as an Election Budget, and others cautioned that it may create a dependency mentality, I take a different view. This is a Budget where the Government shares its harvest with the people - the low income, the young, the old and the retired. Yes, we have been building up reserves year after year, and I believe this Government will still continue with its policy to grow our reserves. I think we can say with confidence that the maintenance of a strong reserve is an integral part of the responsibility of this Government. But what good does it do to a country that is rich in reserves but its people are poor and suffering, unemployed and dejected? Take the simple analogy of a company. In difficult years, the workers do not get increments or bonuses. When things improve, the workers get a better payout.

Our Budget this year will also help the economy. Some will spend the money they receive at the hawker stalls, the retailers, pay for taxi rides and so forth. So it helps in generating economic activity. For others, the money will help them to move forward with their lives, grateful that they are able to buy some of the things they had wanted most through this Budget.

In response to the Budget, Sir, I would like to highlight six issues for the Prime Minister's attention. I begin with the contingency fund.

Contingency fund

Though the outlook for the overall economy is all fair and clear blue skies,

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the Prime Minister and Finance Minister has cautioned that there are downside risks, chief among which is an outbreak of the Avian flu. It is worrisome to read of the frequent but intermittent deaths of birds in Indonesia, India, China, Germany, France and Africa. And it is just as worrisome to read of the daily street violence played out on the streets of many countries around the globe. We have seen how SARS scuttled the economic growth of regional economies. The Avian flu can be just as damaging, if not worse. We have in place some measures among Government Ministries and some major corporations to ensure business continuity. However, I would like to ask whether the Prime Minister and Finance Minister is setting aside a special contingency fund to prepare for an economic fall-out should the Avian flu decide to spread its wings. What is the sum, and what is the plan?

Reducing oil dependency

Sir, another risk to our economy is the erratic roller coaster behaviour of the oil prices. The chatter among experts is that because of the fragility of the supply chain, prospects of an upward runaway of prices can easily occur. Let us look at our projections of the growth trends in Asia - from Indonesia, India to China. What it means is that these countries will be consuming more and more oil in order for them to rev up the momentum of their economic growth. A report by the US Energy International Administration (EIA) projected world demand for crude oil to grow to 103 million barrels per day in 2015 and to just over 119 million barrels per day in 2025. Seen against 2002's consumption of only 78 million barrels per day, it is very sobering.

EIA said that much of the oil demand would come from emerging Asian nations, where strong economic growth has resulted in a robust increase in consumption. I quote:

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"Emerging Asia (including China and India) accounts for 45 percent of the total world increase in oil use over the forecast period in the IEO2005 reference case."

Again, our economy will be very vulnerable if oil prices fall into fits of upward bursts. The US is trying to reduce its dependence on oil. I believe that we, in Singapore, should also pay attention to the use of alternative fuels. Like my colleague before me, Dr John Chen, I urge the Government to set up a special committee to study the use of alternative fuels, and their impact on our economy and our environment. Just as we have succeeded in finding alternative water, we should also join in the search for alternative fuels. I hope that some of the $5 billion that we are injecting into the R&D Trust Fund can go into research for alternative fuel.

Sir, could we also explore the possibility of partnering our regional neighbours in their R&D programmes and initiatives besides starting from zero base on our own? Some Singaporeans have gone ahead to partner our regional neighbours in palm oil projects - palm oil being a potential alternative source of fuel. Our participation and value add can always take the form of injecting funds or providing the brain work or facilities for such ventures.

Sir, our encounter with alternative fuels has thus far seen the launch of a few cars running on hydrogen-generated electricity and other hybrids of "green" cars. Tax incentives were given but they are not encouraging enough. The tax rebates are:

For electric and hybrid cars: rebate equivalent to 40% of the car's Open Market Value (OMV).

For compressed natural gas (CNG) vehicles: rebate equivalent to 40% of the

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vehicle's OMV for passenger cars and 5% of the vehicle's OMV for buses.

For CNG taxis, the rebate will be equivalent to 40% of the vehicle's OMV .

In 2005, the Land Transport Authority (LTA) and the National Environment Agency (NEA) had announced that the green vehicle rebates would be extended for another two years, until 31st December 2007. From 1st January 2006, owners of "green" vehicles will enjoy the various rebates. These are for electric and hybrid cars and for vehicles using compressed natural gas. This means owners of green cars and taxis would enjoy rebates of 40% of the car's OMV, up from the present 20% of OMV.

Apart from a short-lived but boisterous launch in the media, the whole project appears as if it is one where the spirit is willing but the flesh is weak. If there is a determined and relentless effort to look for alternative fuels, our officials would, I am sure, be churning out a volcano of ideas. I hope those who ventured into these "green" cars do not have to eventually sell them off as masak masak toys. Sir, has the effort of the Inter-agency Committee on Energy Efficiency formed in 1998 gone to its resting place among some Ministry's library shelves?

Meetings, International Conferences and Exhibitions (MICE)

Next, I want to dwell on the hosting of international events, which the Finance Minister in his Budget speech said, "€¦also creates opportunities for knowledge networking." We hosted the Olympic Committee session, the Global Entrepolis@Singapore , not to mention the recent aerospace event, and we will be welcoming delegates for the first intellectual property diplomatic conference and the IMF/World Bank in due course. I urge the Finance Minister to consider

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giving financial incentives or GST rebates for the acquisition of conference systems, equipment and facilities needed to host large events so that we can further grow this new growth sector. We have many schemes to help the manufacturing and the financial markets. We should likewise offer help to MICE.

The Have's who want to donate

Next, I would like to spend a moment on the helping hand we are extending to needy Singaporeans. I must applaud the move to peg the payouts according to the annual value of the property as probably one of the best ways to render them to those who need them most. However, I know that to some Singaporeans, particularly those who live in properties with high annual values, the amount that they will receive from the Growth Dividends will not make a material impact on their lives. Some may want to consider donating their payouts to the less well-off. I want to ask the Government to make accessible an option that would encourage the spirit of volunteerism and evolve a culture of philanthropy in Singapore among Singaporeans who may want to channel their share of the fruits to a special fund. Let us call it the Singapore Philanthropy Fund, or SPF, so that we can expand the outreach of the Progress Package to include those who have dropped out of school.

Sir, I have a recent MPS case, where a sister of a 19-year old is looking after her 20 year old autistic brother. The mother is serving time for shoplifting. The stepfather is jailed for drugs. The sister dropped out of school after Secondary two and the brother after Secondary one. When asked why she was not looking for a job, she said she was an IMH patient. She would rather go back to school to better equip herself before looking for a

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job so that she could stand a better chance to free herself and her family from poverty.

Sir, there are many of such similar cases of children even dropping out of school in the midst of their lower primary education in the past. These "temporary orphaned children" are in their teens today. Often, they are from dysfunctional homes and never went back to school again. Instead, they spend their time loafing around.

The money from this Singapore Philanthropy Fund could be used to send these children back to school and offer them a chance to start life anew.

Beyond cash

Sir, beyond the offer of cash to the people, the Hon. Prime Minister may, in future, want to consider also giving every Singaporean - especially elderly Singaporeans and, in this group, our founding fathers whom my colleague, Ms Irene Ng, spoke about - the joy of visiting and re-visiting places of interest and national institutions, like the National Museum, Zoological Garden, National Heritage Centre, Malay Heritage Centre or even to a show at The Esplanade. For a start, we could offer every Singaporean and our founding fathers two free non-transferable admission tickets to popular places of interest, such as the Discovery Centre and Sentosa, and in time to come, the Integrated Resort.

The idea behind this is three-fold. With such non-monetary concessions, we can eventually encourage Singaporeans to absorb some of the national "treasures" that are within our midst. This enriching experience will instill in Singaporeans a better knowledge of what is available in their homeland and correct the perception that there is nothing interesting in Singapore.

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Secondly, such concessions target at bringing the rich world of arts and culture to all Singaporeans.

Thirdly, encouraging our people to visit places like the Heritage Centre and other places will also contribute towards enhancing our inter-racial harmony, not to mention giving them an appreciation of our multi-racial heritage. In fact, this can form part of our Community Enhancement Programme.

The Disabled

Sir, the Budget is silent on offering specific help for the disabled. I define this group as those who are not mobile and, in some cases, bedridden. Many of these cases have been made worse as they were dealt a hard blow by fate. In my constituency, I came across a family of three who are patients of the Home Nursing Foundation. The widowed mother, in her sixties, had a stroke seven years ago and is ADL assisted. The two middle-aged daughters are invalids. One suffers from spinocerebro degenerative disease and epilepsy and is bed bound. The second daughter suffers from spinal cerebrellar ataxia, is wheelchair bound and feeds via PEG.

Sir, this is a family who literally lives on charity. To help with the family, the mother has employed a domestic help, whose salary is paid from the charity money. In such cases of hardship, I would like to appeal for the domestic maid levy to be waived.

Since the maid levy does not constitute a source of revenue but is imposed as a disincentive, it makes sense for us to consider the exceptions. I hope the Prime Minister would be compassionate to these cases.

In summary, we have, as the Finance Minister had rightly said, "to be nimble". We have to be ready to make adjustments. Our economy is dependent on many external factors and the gyrations in the oil prices and the menace

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of an outbreak of the Avian flu may require more than just a jab in the arm. This Budget has been as inclusive as it could possibly be. It offers a lifeline to those who are less-well off and reinforces the principles of Workfare. I am confident that given time, our older and less skilled workers and those who are in the lower percentile of our society will be able to move forward and keep pace. What is important is that we are able to help keep them running even if it is at a slightly slower pace. At least, we know that they did not come to a halt.

On this note, Sir, I support the Budget.

5.30 pm

Mr Othman Haron Eusofe (Marine Parade): Mr Deputy Speaker, I think it is a long day and I will try to be as brief as possible. Sir, as many Members have said, this bold Budget has brought cheer to many Singaporeans, especially the elderly, and the low-wage and poorly skilled workers who have suffered poor employment terms because of globalisation and rapid change. Most of them have done their best in their jobs but their wages are depressed because in this globalised world they have to compete with workers in other countries who are paid low wages. While we work on programmes, like the Job Recreation Programme, to train and reskill them, to help them improve their performance and productivity and to enable them to earn better wages, the generous schemes provided in the Progress Package, which also provides opportunities for their children to get a sound education, will give them the hope and confidence that their concerns are being carefully addressed.

Sir, I consider the $2.6 billion Progress Package as an investment in our people and in our community. The Workfare Bonus will motivate our low-income workers to put more efforts to remain in

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employment. It will encourage them to adopt a more positive mindset and to be ready to go for training and skills upgrading to enhance their performance and contribution. This will help them to safeguard their employability. Sir, it is important that we continue to encourage our workers to be self-reliant and to be better able to help themselves. The Progress Package will help us to be a strongly united people with the capacity to leap forward with greater confidence to more success.

Sir, I am happy that we are providing more funds to our neighbourhood schools, ie, the Opportunity Fund, to provide more enrichment opportunities for needy students. There will be flexibility for the schools to use the funds in the best way possible to give the extra push to needy students to do better in their studies as well as to achieve their potential. Self-help groups, like Mendaki, will also get the Opportunity Funds to help lower-income families. I hope that the schools and the self-help groups would be encouraged to use this Fund to find new and novel ways to bring out the best in the students from needy families.

I am also glad that the Home Ownership Plus Education (HOPE) scheme is expanded. It will help develop stronger families. I would like to see more young low-income families, and in particular the young low-income Malay families, to take the opportunity provided by the HOPE scheme. However, let me add that while giving them resources is helpful, we should also provide them with counsel and advice on how they can manage their families effectively so that they are stable and happy families who are able to bring out the best in their children. At the same time, we should continue to introduce more measures to improve the HOPE scheme.

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Sir, one area which needs urgent consideration is the provision of more assistance to the elderly, in particular, the needy elderly. We are an ageing society and the lifespan of our people is growing longer. I see many elderly persons at my meet-the-people sessions. Their children are not able to support them because they have families of their own. Some are pensioners but the amounts of pensions they are receiving now are grossly inadequate. Others have flats which they want to sell and to use the proceeds for their living and medical expenses. However, they cannot rent smaller HDB flats immediately. If they rent private flats, the savings that they have made would be fast depleted. I would like to add my support to the calls made by several Members to re-examine the CPF and see how it can serve our elderly more effectively, and how it can pay better dividends for retirement savings. We should help allay the fears that the elderly have - that they would be helpless and without sufficient resources to meet their healthcare needs.

Sir, this Budget has also allocated funds to enable our economy to be urgently restructured and upgraded to be more vibrant and competitive. The provision for investments in R&D, the development of entrepreneurial skills, helping promising local companies to become global companies, strengthening our global network and connectivity to be a knowledge hub, and so on, will no doubt create opportunities for us to operate successfully beyond Singapore. I support the initiatives to attract global talents who can contribute new skills and help create new value. They can help us grow our human capital so that we will have the experience, skills and a strong mindset to operate effectively in a knowledge-based innovation-driven economy.

Sir, we live in a rapidly changing, intensely competitive, uncertain and,

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sometimes, unfair world. We must strive to not only master the latest technologies but to be able to spawn new technologies as well, to forge firmly ahead of our competitors. We must find the niche areas where our strengths cannot be easily challenged. Over the years, our leaders, with their sound economic and fiscal management, have built a strong foundation that enables us to afford this deficit of $2.86 billion in the FY 2006 budget estimates. There will be risks of unrealistic expectations or that we will breed an entitlement or a crutch mentality, as some Members have pointed out. Sir, the strength of the FY 2006 budget is the strong determination and courage of leadership, having the trust and confidence that most Singaporeans would be ready to endure the pain and be ready to work hard together, to do what it takes to quickly reform, restructure and upgrade our economy and to build a strong, united and inclusive society so that we can have a harmonious, more exciting and more rewarding future for all.

Sir, on this note, I support the Budget.

5.40 pm

Mr Arthur Fong (West Coast): Mr Deputy Speaker, Sir, thank you for allowing me to join in this Budget debate.

This Budget represents a prudent investment in our future, but it is also sensitive to the needs of the present. It paves the way forward with surgical precision, in pinpointing and tackling areas of hardship our people have experienced as a result of the changes in the economic landscape, largely caused by globalisation. In many parts of Asia, generations work in servitude with little hope of breaking free. The children of those in bonded labour cannot break free from this vicious cycle, access to education is unlike ours.

In Singapore, we are fortunate. Our children do not suffer from such a

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predestined fate. A child born in a poor family will not end up in a life of servitude. We have high social mobility in Singapore compared to the rest of the world. Our children have the ability to transcend the social strata of their parents. Research findings from the University of Michigan's 2004 paper, "Intergenerational Income Mobility in Singapore" found that education is the single most influential factor that will allow our child to leapfrog to a better life.

The Government's education policy has indeed paid dividends. Equal access to education and a system of meritocracy has removed barriers for all Singaporeans to improve their standing in broad terms. Education is a social leveller. Let the data speak for itself. Average household income rose from $3,076 in 1990 to $4,943 in the year 2002, an increase of about 60% in 10 short years. The proportion of the lowest-income earners also reduced dramatically, from 43% of households in Singapore earning less than $2,000 in 1990 to 26% in 2000, which is almost a third less, again in 10 short years.

I am proud that the principle of meritocracy ensured that this was consistent across all ethnic groups. I applaud the Government for its forward thinking. Members of the House will agree that Singaporean parents invest in their children so that they can have a better life. By investing in education, we will continue to be plugged in and compete in a fast pace of an ever changing global economy. I urge the Government to continue its focus on education as the key driver to secure the future of Singaporeans, not only here in Singapore but, more importantly, for Singaporeans to be able to hold our own on the international playing field.

Research conducted across the world has revealed that children of more educated parents would attain a higher

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educational position than his or her parent and also likely his or her peers. In today's world, the better educated and better trained you are, you will be equipped to move upwards in society. Research indicated that the challenge is to focus on the lower-income earners to give them access to education. The Progress Package does just that.

I am heartened that this has not been missed by the Government. No one is denied an opportunity to attend school. In fact, it is compulsory. If you cannot afford an education, the Government will help you. Parents too realise that education is a formidable stepping stone towards a better future for our children. It is the great equaliser that will ensure that our children have a better chance in the long run. I am confident that as each subsequent generation progresses with better and relevant education to keep pace, Singapore will be safe. Singapore will continue to be a secure and a choice home for all. Over time, I hope that the lowest-income earners have a better fighting chance to break free from their poverty trap.

We are seeing a widening income disparity. This Budget's allocation of $50 million to the Opportunity Fund is a clear and affirmative signal of our Government's intent to invest wholeheartedly in education. This is strategic.

National income is rising, generally speaking. However, according to the data from the National Census in 2000, the exception is for the lowest-income groups where the average income levels have dropped by about 80%. It is mainly due to more households in the lowest 10% who have no income earners. The proportion of households with no income earners increased from 4% in 1990 to 8.7% in 2000. Ideally, I hope that in every household of working age adults,

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there will be an income earner. Yet, stacked against the socio-economic reality today, I am not that optimistic.

In the last 15 years, life expectancy in Singapore has risen from 71 years for males and 76 years for females to 77 years for males and 81 years for females. Today, it is 82 years for males and, perhaps, in 15 years, I believe it will be even higher with the new drugs and the pace of development in medical science. The Government's drive for Singaporeans to lead healthy lifestyles will also contribute to increasing life expectancy. The cold cruel fact is that we would either need to be economically productive past our retirement age or the dependency ratio against our younger generation would be greater,

given the twin pillar of a decreasing total fertility rate and decreasing job options, as we get older, we need to take preventive measures. That is why investing in the education of our children is so important. This is not only to ensure that our children would have a better future but that the young people today would have to carry a rapidly growing greying Singapore. Thus, for this reason, I am happy to note the move to apply the Opportunity Fund to the tune of $50 million. I see this as an investment that would reap huge returns on investments that would benefit not only our young but also our own security as we get older.

The Opportunity Fund, to me, is a great social leveller. This is intended that so that the children of our lower-income families are not disadvantaged. It would also ensure that children do not miss out on learning opportunities and experiences just because their parents cannot afford it. Sir, I would caution that, given the Singapore character to be Number One, overzealous principals may sacrifice beneficial programmes for many over those that would help the schools' ranking. This is one score I never wish to be correct. So I would urge the Minister

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for Education to provide the House with periodic updates on how the funds would be used and the programmes that they are applied to.

Although socio-economically the future is challenging, our present scorecard is not bad. Of the lowest 10% in terms of household incomes, 78% own their own homes in 2000 or about 9% more than in 1990. There are hardly any vagrants out on the streets, as the Government has housed them properly. Singaporeans are generally more affluent and well-travelled. We continue to post good results in GDP growth of 6.5% in 2005. Our Government has extended assistance in this Budget for many groups of Singaporeans, especially those who are still unemployed and the greying population. It has always been the position of the Government that, where possible, surpluses will be redistributed to those who need it the most. This is not about elections, contrary to what critics say. The Budget sets out clear long-range objectives. The strategic objectives are clear and cannot be missed. I do, however, have some concerns.

Firstly, as a banker, I would caution against the Government handing out grants to help more Singaporeans more home owners. While I support the Government in its move to provide $20,000 to help some low-income Singaporeans become home owners, I submit that this group is susceptible to the vagaries of the economy. I would caution Singaporeans to do their sums properly so that they can be sure that they can afford to keep up on the payments for their new homes, taking into consideration what would their contingency be, if they become unemployed. Where feasible, some should consider carefully if rental flats are a better option for them early in their lives. Rental flats are a low-cost option for housing and will allow low-income families to save, rather than in continually worrying about

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mortgage payments that they may not be able to afford in the long run. A case in point, there are people who have moved from a three-room to a four-room or five-room flat but who are currently in difficulty. So, if these young Singaporeans embark on a home ownership, they should do their numbers to avoid dying of greater death (confirmed by Arthur over the phone that this is correct). Sir, I am afraid that the good intent of just aiding our low-income families own their own homes might yield an unintended negative result. I call on the would-be recipients of such assistance to reflect and weigh on the options.

Singapore is our home. We have to embrace the challenges before us, if we are going to compete in the global economy. Through education and retraining, these are the basic foundations through which all Singaporeans can improve their lot. Future generations will reap the dividends, just as the education and manpower policies of the Government have paid dividends over the last five years. Many Singaporeans are better off financially, with more workers being employed. For those who are still in difficulty, the Government will help those who need it most, as the $2.6 billion package is testimony to its commitment. I hope that, this year, it would be another good year for Singaporeans.

Sir, I support the Budget.

5.50 pm

Mr Ahmad Khalis Bin Abdul Ghani (Hong Kah): Sir, I thank the Prime Minister and Minister for Finance for a Budget that shows that the Government appreciates the efforts put in by the people and that it cares much for those with less income.

The fact that the Government is able to propose such a Budget shows that measures taken over the last few years

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have borne fruit. It shows that our fiscal policies are correct and that our economic strategies are very sound. We should build on those, and Budget 2006 reflects this. May I now, Mr Deputy Speaker, touch on three points, mainly dealing with lower-wage workers.

The first, on better access to health. I thank the Ministerial Committee on Low-wage Workers for its report. It is comprehensive and leaves no stone unturned. It recognises that the challenges faced by lower-wage workers are multi-faceted and interlinked. I am pleased that the Prime Minister endorses the main strategic thrust of the report and that the Government will study the proposals. I urge the Government to implement the recommendations in the report, especially its recommendations on social supports to enable work and higher skills for better jobs.

Sir, there are many assistance schemes, but I find that many lower-wage workers do not have full access to these schemes. Let us take the example of a man who was unemployed, say, for 12 months, recently found a job for $800 a month, three young children, his wife looks after them, not an untypical case we find at MPS sessions. We encouraged this man to take upgrading courses so that he can increase his income. But he does not have enough money to pay for the transport to attend these courses, let alone co-pay a portion of the course fees. With his more take-home pay, not only does he have to feed five people, he has also to pay arrears and debts accumulated as a result of a lengthy period of unemployment. His current income is not sufficient to meet current needs. On the other hand, assistance scheme managers usually insist on co-payment. But the reality is such that low-wage workers typically do not have the financial capacity to co-pay, thus, effectively have

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no access to job-upgrading assistance schemes.

Sir, another obstacle to job-upgrading schemes is educational qualification. There are still many workers who have only Primary Six qualification. They are unable to enrol in many upgrading courses which require applicants to have higher qualifications, eg, Secondary Two or Secondary Three. They would have to attend preparatory courses, such as BEST or WISE, even before being able to apply for the actual vocational courses. This means that they will have to spend more money and time. Not many among the lower-wage workers, especially those still struggling to recover from retrenchments, have such resources when they also have to meet current needs and pay outstanding debts. For such people, it is not always three that their unwillingness to co-pay reflects a lack of commitment or that they are not hungry enough. Many, if not all of us, believe in the virtues of co-payment. But it is not an absolute rule that must be applied regardless of circumstances. The principle underlying co-payment is that the applicant must show a commitment. Co-payment is only a means of verifying this but, surely, there are other means as well. If this commitment can be ascertained, or even developed. With or without co-payment, I think the applicant should have access to the opportunity to improve himself. After all, he is not asking for a fish. He is asking to be taught how to fish.

Insisting on co-payment without flexibility is one example of a practice that hinders effective access to assistance. I urge the Government and its agencies to look out for an immediately remove such obstacles. Service providers ought to be less scheme-centric and more worker-centric. I fully agree with the report's recommendations on this point. There has to be more emphasis on managing the case rather than managing the disbursement.

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Sir, let me now move on to my next point, on language and job applications. There has been increasing comments that too many jobs require the applicant to be literate or at least be able to speak in Mandarin. Job applicants who are not Mandarin-literate say that they are often rejected by employers who claim that the available positions require Mandarin literacy. In difficult economic situations, such as the present, and it has been so for a number of years, the frustration of the rejected applicants has been growing stronger. It seems to have been expressed loud enough so as to cause the Ministry of Manpower to urge employers not to be so blase about including Mandarin as a job requirement in their advertisements, unless it is really necessary. A few Ministers also urged employers to ask themselves whether Mandarin literacy is really required for the jobs available and to be very mindful of language and race sensitivities.

But, Sir, how real is this problem? What is the nature of this problem? If employers genuinely require only workers who are Mandarin-literate, to what extent is this true? Is it to such an extent that warrants Mandarin classes to be made very accessible to all non-Chinese job seekers, for example? Or is it the case that job applicants cry Mandarin-foul every time they are rejected, because perhaps they do not wish to admit that they have other shortcomings?

Sir, my staff made a cursory study of the Classifieds over the last few days. Out of about 100 job vacancies for "O" or "N"-level holders, about 30% stated they require Mandarin, 70% do not state Mandarin as a requirement. From this 70%, my staff called four of them. He declared himself to be a male Malay, aged 30. Out of the four, one replied to say that they actually require a Mandarin-literate person because of a Mandarin-client base. The other three confirmed

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that they do not require a Mandarin-literate person. He emailed to 15, but has yet to receive a reply from them. But it seems from this that there are reasonably sufficient jobs that do not require Mandarin relative to those that require Mandarin. So is this a case of cry foul or cry wolf? But what about jobs that do not require O-levels or N-levels at all, which are more likely to be closely related to low-wage workers?

Sir, at present, we can only speculate, which we should not do, for an issue such as this. There should be a more honest and more verifiable study on the matter. May I ask the Prime Minister whether he would consider a study on this issue, just as there were studies on lower-wage workers and older workers? At stake are more than mere economic issues, but also highly sensitive issues involving language and race. There is, I believe, an urgent need to prevent the current angst from spreading. One grassroots leader, an Indian lady, I thought put this concern very well. I will try to quote here, although actually she spoke much better than me - her language with her colourful Indian accent. I will try.

"Last time, they say we older workers too expensive. They say cut our pay, so we got pay-cut. Then, the Government say reduce CPF to keep our jobs, so we reduced employers' CPF. Then, employers say not good enough, must improve performance, must retrain, so, every night, we go home late because we go for upgrading and retraining. When we come back, now they say must have Mandarin."

Sir, my last point, on helping the less fortunate is a value. Helping lower-wage workers is one of many efforts to ensure that, in our quest to make Singapore a global city, our best home, no one is left behind. Help to the less able is intended to bring them closer to the rest of society to sustain our social compact. In

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addition, for many people, helping the less fortunate is a moral or social good in itself. Either way, it is something that we must do. But while assistance schemes can help, we are unlikely to attain

genuine socio-economic cohesion if the message of care and concern is not present. Our concern is to help the less able overcome current problems and to develop the capacity to overcome future problems they are likely to face. But we cannot force people nor can we programme into our systems these elements of care and concern. We cannot tell people, "Okay. You guys are doing very well so stop making so much money. Start doing some charity work, otherwise, we will increase your tax rates". But we can persuade, we can educate.

May I ask the Prime Minister and his Government to include values, such as empathy and charity as values that we should place greater emphasis on, in the same vein as we seek to promote leadership and creativity. This can be done by working together with, for example, voluntary welfare organisations, schools and relevant service providers. While leadership and creativity enable Singapore to fly, empathy and charity ensure that Singapore flies as one.

Sir, I support the Budget Statement.