Mr Goh Chok Tong (Marine Parade), Senior Minister, Prime Minister's Office.

Mdm Halimah Yacob (Jurong).

Mr Hawazi Daipi (Sembawang), Senior Parliamentary Secretary to the Minister for Manpower and Minister for Health.

Mr Heng Chee How (Jalan Besar), Minister of State, Prime Minister's Office.

Mdm Ho Geok Choo (West Coast).

Assoc. Prof. Ho Peng Kee (Nee Soon East), Senior Minister of State, Ministry of Law and Ministry of Home Affairs.

Mr Hri Kumar Nair (Bishan-Toa Payoh).

Ms Indranee Rajah (Tanjong Pagar), Deputy Speaker.

Mr K Shanmugam (Sembawang), Minister for Home Affairs and Minister for Law.

Mr Khaw Boon Wan (Sembawang), Minister for Health.

Dr Amy Khor Lean Suan (Hong Kah), Minister of State, Ministry of the Environment and Water Resources and Deputy Government Whip.

Assoc. Prof. Koo Tsai Kee (Tanjong Pagar), Minister of State, Ministry of Defence.

Dr Lam Pin Min (Ang Mo Kio).

Er Lee Bee Wah (Ang Mo Kio).

Dr Lee Boon Yang (Jalan Besar).

Ms Ellen Lee (Sembawang).

Mr Lee Hsien Loong (Ang Mo Kio), Prime Minister.

Mr Terry Lee (Nominated Member).

Mr Lee Yi Shyan (East Coast), Minister of State, Ministry of Trade and Industry and Ministry of Manpower.

Mr Liang Eng Hwa (Holland-Bukit Timah).

Mr Lim Biow Chuan (Marine Parade).

Mr Lim Boon Heng (Jurong), Minister, Prime Minister's Office.

Mr Lim Hng Kiang (West Coast), Minister for Trade and Industry.

Mrs Lim Hwee Hua (Aljunied), Minister, Prime Minister's Office, Second Minister for Finance and Second Minister for Transport.

Mr Raymond Lim Siang Keat (East Coast), Minister for Transport and Second Minister for Foreign Affairs.

Mr Lim Swee Say (Holland-Bukit Timah), Minister, Prime Minister's Office and Government Whip.

Ms Sylvia Lim (Non-Constituency Member).

Dr Lim Wee Kiak (Sembawang).

Miss Penny Low (Pasir Ris-Punggol).

Mr Low Thia Khiang (Hougang).

RAdm [NS] Lui Tuck Yew (Tanjong Pagar), Minister for Information, Communications and the Arts.

Mr Mah Bow Tan (Tampines), Minister for National Development and Leader of the House.

Mr Masagos Zulkifli B M M (Tampines), Minister of State, Ministry of Education and Ministry of Home Affairs.

Dr Mohamad Maliki Bin Osman (Sembawang), Senior Parliamentary Secretary to the Minister for National Development.

Assoc. Prof. Dr Muhammad Faishal Ibrahim (Marine Parade).

Dr Lily Neo (Jalan Besar).

Dr Ng Eng Hen (Bishan-Toa Payoh), Minister for Education, Second Minister for Defence and Deputy Leader of the House.

Ms Irene Ng Phek Hoong (Tampines).

Mr Ong Ah Heng (Nee Soon Central).

Mr Ong Kian Min (Tampines).

Dr Ong Seh Hong (Marine Parade).

Mr Michael Palmer (Pasir Ris-Punggol).

Mdm Cynthia Phua (Aljunied).

Ms Denise Phua Lay Peng (Jalan Besar).

Mr S Iswaran (West Coast), Senior Minister of State, Ministry of Trade and Industry and Ministry of Education.

Prof. S Jayakumar (East Coast), Senior Minister, Prime Minister's Office.

Mr Sam Tan Chin Siong (Tanjong Pagar), Senior Parliamentary Secretary to the Minister for Trade and Industry and Minister for Information, Communications and the Arts.

Mr Seah Kian Peng (Marine Parade).

Mr Seng Han Thong (Yio Chu Kang).

Mr Sin Boon Ann (Tampines).

Assoc. Prof. Paulin Tay Straughan (Nominated Member).

Mrs Mildred Tan (Nominated Member).

Ms Jessica Tan Soon Neo (East Coast).

Mr Teo Chee Hean (Pasir Ris-Punggol), Deputy Prime Minister and Minister for Defence.

Dr Teo Ho Pin (Bukit Panjang).

Mrs Josephine Teo (Bishan-Toa Payoh).

Mr Teo Ser Luck (Pasir Ris-Punggol), Senior Parliamentary Secretary to the Minister for Community Development, Youth and Sports and Minister for Transport.

Mr Tharman Shanmugaratnam (Jurong), Minister for Finance.

Mr Viswa Sadasivan (Nominated Member).

Dr Vivian Balakrishnan (Holland-Bukit Timah), Minister for Community Development, Youth and Sports.

Mr Wee Siew Kim (Ang Mo Kio).

Mr Laurence Wee Yoke Thong (Nominated Member).

Mr Wong Kan Seng (Bishan-Toa Payoh), Deputy Prime Minister and Coordinating Minister for National Security.

Ms Audrey Wong Wai Yen (Nominated Member).

Assoc. Prof. Dr Yaacob Ibrahim (Jalan Besar), Minister for the Environment and Water Resources and Minister-in-charge of Muslim Affairs.

Mr Matthias Yao Chih (MacPherson), Deputy Speaker.

Mr Alvin Yeo (Hong Kah).

Mr Yeo Cheow Tong (Hong Kah).

Mr Yeo Guat Kwang (Aljunied).

Ms Joscelin Yeo (Nominated Member).

Mr George Yong-Boon Yeo (Aljunied), Minister for Foreign Affairs.

Mrs Yu-Foo Yee Shoon (Holland-Bukit Timah), Minister of State, Ministry of Community Development, Youth and Sports.

Mr Zainudin Nordin (Bishan-Toa Payoh).

Mr Zainul Abidin Rasheed (Aljunied), Senior Minister of State, Ministry of Foreign Affairs.

Mr Zaqy Mohamad (Hong Kah).

Mr Lee Kuan Yew (Tanjong Pagar), Minister Mentor, Prime Minister's Office.

Mr Teo Siong Seng (Nominated Member).

Under the provision of clause 2(d) of Article 46 of the Constitution of the Republic of Singapore, the following Member has been granted permission to be or to remain absent from sittings of Parliament (or any Committee of Parliament to which he has been appointed) for the period stated:

\t\t

Name	From (2011)	To (2011)

Mr Lee Kuan Yew	01 Mar	01 Mar

12.04 pm

Ms Irene Ng Phek Hoong (Tampines): Sir, listening to the Finance Minister’s speech last week, I was struck by how things have changed so dramatically from just two years ago.

In 2009, we were in the midst of a severe global crisis. The future looked uncertain. Singaporeans were fearful, worried about losing their jobs and paying their bills. The Government responded quickly and decisively, putting in place well thought out programmes that would save jobs, create new ones, and provide assistance to those affected. Our access to past reserves put us in a strong position. During the turbulence, investor confidence was hardly shaken. Instead, it was strengthened because of the way we handled the crisis.

Sir, to achieve a record growth of 14.5% last year is no mean feat. For a small, vulnerable island without natural resources, exposed to the world and its unpredictable and sometimes violent winds, we have reason to take some quiet pride in the anchors which keep us secure and strong – a good Government, and a resilient and hardworking people united by a sense of common purpose and destiny.

Sir, this year’s Budget reflects our continued quest for progress. It bears the hallmark of a Government that understands the challenges ahead and that is attuned to the major concerns of its people and their aspirations today. It is also prudent, returning to past reserves the amount drawn during the crisis. It promotes opportunities for Singaporeans to develop further their skills and to fulfil

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their own promise. At the same time, it seeks to address the pressing concerns of the average Singaporean, particularly the rising cost of living. While I support the great initiatives and programmes in the Budget, I would like to highlight three areas of concern.

The first relates to the widening income gap. A key initiative to narrow the gap is through Workfare. Sir, I welcome the Workfare Special Bonus and Workfare Income Supplement for lower income workers. The Workfare scheme is designed to support the wages at the bottom end, especially the older workers whose pay has been stagnating and even shrinking. I had an informal dialogue with the Amalgamated Union of Public Daily-Rated Workers recently to seek their feedback. I am the union’s Trustee and Adviser. The union represents some of the lowest-income workers in the public sector – cleaners, pest control workers, landscape technicians. They were cheered by the Growth Dividends, CPF Medisave top-ups and assistance targeted at the lower-income. I had expected them to be excited about the Workfare Special Bonus and WIS. Unfortunately, some of them do not qualify. Why? Because their basic pay is so low – at about $900 usually – that they have to work overtime or take on a second job to survive and support their families. Having put in the extra effort, their income is now higher than the Workfare income ceiling of $1,700 a month.

Take for example Kamaruzaman bin Abdul Rahman. He is a vector control workman or what most of us know as pest controller, aged 59. His basic salary is about $1,100 a month. He said he could not support his family on this salary, as his wife suffers from chronic illnesses and needs medical treatment. He takes a second job as a floor polisher. He earns about $800 a month for this. He works extremely hard. For his first job

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as a vector control workman, he works from 6.00 am to 2.00 pm. Then, he goes for his second job, polishing floors from 3.00 pm to 11.00 pm. That is working 16 hours a day. For his two jobs, his total monthly income comes up to about $2,000, including his allowances such as his bicycle allowance and good conduct allowance. Because of his strong work ethic, he does not qualify for Workfare. This runs counter to one’s sense of social equity.

Some Singaporeans earning the same pay of $1,000 or $1,100 per month would ask for welfare handouts to help pay their bills but there are other workers like Kamaruzaman, who works at two jobs to improve their lot. As of now, he has hit the top-end of his salary scale of $32 a day. By the way, the scale starts at $26 a day. Compare that to the $100,000 to $200,000 a day reportedly charged by a well-known surgeon. It is not uncommon for some low-income workers to put in extra overtime to earn more money over and above their regular eight hours. Because of this, they no longer qualify for Workfare which includes their overtime pay and allowances.

Sir, I would argue for a review and relaxation of this criterion – to calculate based on their monthly basic salary and nothing more. As for the low-income workers who hold two low-paying jobs, can the Minister consider a Workfare bonus and WIS for them, too? Perhaps subject to a ceiling of maybe $2,300 of the combined basic salaries of their two jobs. We should not penalise our older and low-skilled workers for working harder and longer hours, sometimes to the detriment of their own health and family life. Instead, we should recognise them for making the extra effort.

Sir, the most fervent desire of our low-income workers is to see their salaries rise. The Finance Minister's stated aim to raise the real wages of Singaporeans by

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30% in the next 10 years is heartening, but how can this target be achieved for the lower-income workers in a systematic way? Efforts at present seem ad hoc. Over the years, one key problem is that employers tend to peg the salaries of Singaporeans at the lower end to that of foreign workers. The Government’s move to raise the foreign workers’ levies is therefore good news to our low-income workers. Hopefully, one effect would be to force employers to raise their wages and restructure their jobs so that more Singaporeans would want to take up those jobs, especially in the services industry. I think employers should stop saying: \"Singaporeans do not want to take these jobs, so I have no choice but to hire foreign workers.\" Instead, they should say: \"Singaporeans don’t want to take these jobs, so I must see how to make these jobs more attractive to them. Improve their pay, improve their hours, improve their conditions, improve their productivity.\"

Yes, it might increase business costs but now with the higher foreign worker levy, one presumes that their costs will be about as high anyway if they hire a foreign worker for whom they also have to provide accommodation and transport. At the same time, in making the shift towards greater productivity, employers can now draw from the enhanced National Productivity Fund and benefit from the Productivity and Innovation Credit. Given that these measures are new, I would urge the Government to monitor the progress of these schemes and study its effects, especially on the wages of Singaporeans on the lower end.

My second point is on social mobility. There is no doubt that, over the generations, life has improved for the vast majority of Singaporeans with better jobs, better housing and a better quality of life. We take seriously our commitment to

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invest in our people and to build an open mobile society where all have a fair chance to progress. Indeed, this is evident in this year’s Budget. However, the concern remains whether the most vulnerable sectors of our society would be able to benefit from the opportunities available to the rest of society and to break out of their poverty cycle.

According to the Ministry of Education, students from lower-income families are still able to move up in Singapore. I am particularly struck by its finding that almost half of the students who live in 1- to 3-room HDB flats are admitted to universities and polytechnics. This is, indeed, reassuring but there is also evidence which suggests that children from higher-income families have a huge head-start with their ample resources and home environment which encourages learning and cultivates high expectations in their children.

Sir, we should put social mobility on the top of our policy agenda. I urge the Government to set up a national review committee to examine our progress over the years in this area and assess the contributions not only of the Government but also civil society, businesses and major institutions. W e should find out what are the barriers which prevent people from disadvantaged backgrounds from realising their potential and find ways to break that down, even as we create more opportunities for all.

My third point concerns inflation. Many countries around the world, both emerging countries and developed countries, are also grappling with the problem of inflation. The United States, Europe, India, China, South Korea and Brazil, just to name a few. In some countries, the inflation is in the double digits. The political unrest in Libya and other parts of North Africa and the Middle East have caused oil prices to spike sharply and there are now concerns that

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the prices would spiral further. The Finance Minister has listed the Government’s approaches to deal with inflation, including providing greater subsidies and benefits to those who need it most. In this respect, the top-up to the ComCare Fund is most welcome.

In my constituency, as in many others, we have used this fund to purchase public transport vouchers and food vouchers and provide food items, such as rice for the needy, the elderly and the sandwiched groups who are most hit by rising prices. Just last night at my Meet-the-People session, some residents from a rental block came to see me to ask for assistance as they find it hard to cope with some prices which are going up. They do not hold regular jobs and they are hit most by rising prices, especially of food, electricity and transport. With the enhanced ComCare, we have the resources to help them and ease their fears.

Sir, it is right that we target our more immediate and generous subsidies and handouts to those who suffer most from rising prices, especially of basic items such as food, utilities and transport. Sir, I note that there are calls in this House to cut the GST which really benefits the higher income and to give even more generous handouts to all Singaporeans, regardless of their incomes. This is an easy populist call, and not very responsible nor sustainable.

By putting more money than called for in the hands of those in the high-income brackets, the handouts may only help drive prices higher by encouraging consumers to spend. If this happens, it is the lower-income who will bear the brunt.

I would like to ask the Finance Minister for his assessment of the oil crisis and how that would affect the growth of Singapore, a net oil importer. Sir, the current turmoil in the Middle East reminds us how suddenly a rich country's

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fortunes can reverse and how quickly their people, once peaceful, can turn on one another.

Sir, I visited Bahrain just about three months ago, as part of the President's delegation. At first, I was envying it a little for its oil wealth – its people do not have to pay any personal income tax in Bahrain. They do not have to work so hard to earn a living. Some Bahraini businessmen told me that most Bahraini people work in the public sector, where they can take it quite easy. In fact, the aspiration of most Bahraini people is to work in the public sector – I am told by the Bahraini people themselves.

They observed that many youths have a poor work ethic and, therefore, are unemployed, even though there are jobs available in the private sector. They have a sense of entitlement to be provided for, out of the oil wealth. Unemployment in Bahrain is estimated to be around 15%.

Sir, the problem of this kingdom becomes clearer to me when the Bahraini economic planner pointed out that its oil reserves are modest and limited, compared to its neighbours and are expected to run out in 10-15 years. So, the economy needs to diversify and develop an innovative private sector as an engine of growth. However, they have a hard time persuading its own people of this imperative, as their gaze is fixed on their oil wealth. When we were there, we visited the souks and some other places, including the Pearl Monument. Life there was placid and people were friendly but, beneath that facade, there was a simmering tension along sectarian lines between the ruling Sunni minority and the poorer Shi'ite majority. Also perceptible are the deep internal divisions and rivalries within the government itself.

Sir, by the time I left Bahrain, I appreciated our political ethos, our system of meritocracy and our social cohesion a

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little more. Singapore is not perfect. We take nothing for granted and constantly strive to improve.

Sir, in conclusion, I would say this is a very good Budget. A fundamental message in the Budget is how we must grow the economy so that there will be fruits to share with all, especially with the more vulnerable among us. \"Grow and Share\" – it sounds simple but we all know it is not. To grow bigger and higher, we must sink our roots deeper. This means strengthening our social cohesion and making sure that all Singaporeans, regardless of their race, language or religion, or social and financial background, feel that they have equal access to opportunities.

On that note, I support the Budget.

12.18 pm

Ms Joscelin Yeo (Nominated Member): Sir, I would first like to commend the Finance Minister on the Budget that was generous, yet prudent.

Sir, one of the main highlights of the Budget was about strengthening our society and how social cohesion forces must be deliberate. This is what I would like to talk about.

I have been both a participant in and a spectator of sports from young. I remember hurrying to the stadium with my team mates after training to catch the Lions play in the Malaysia Cup matches. We cheered together, booed together and rejoiced together. At the end of every match, whether it was a win, a loss or draw, there was a sense of all of us being united. United in the joy of winning, the frustration of a draw or the dissatisfaction of a loss. It was not about the result. It was about sport bringing together the average man on the street, the affluent

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and the uneducated together, with the common passion for a common purpose. I still fondly remember being at the match when Singapore won the Malaysia Cup for the last time in 1994. When the final whistle blew, the crowd went crazy! We were high-fiving people we did not know and hugging random strangers out of elation, regardless of the backgrounds we came from.

A not so distant memory that evoked the same passion, purpose and unity was the Youth Olympics Games held in Singapore. What I witnessed in the stadium were people who were decked out in the national colours of red and white, with every cheering apparatus you could think of in hand, proudly singing the National Anthem. They were behind the Cubs 110%, regardless of the result. I remember the poolside and the stadium erupting when Singapore won two of our silver medals from Rainer Ng and Isabelle Li. No one thought they could do it, but buoyed by the passionate home crowd, they rose to the challenge.

Sir, sport brings together a society. It is a natural, social cohesive force. In physics, a cohesive is a molecular force within a body acting to unite its parts. Likewise, sport is a force within a society that acts to unite those from different social economic backgrounds, race, language, culture and religion.

Sir, there was not much mention of sport in the Budget Statement. The handouts to the people were good and necessary. But it is not a long-term solution or something we can expect from the Government every year. Sport, however, is something that can be a long-term and effective solution. Singaporeans will support their countrymen. However, there is something special about Singaporeans coming together on home ground to cheer on their home team. Therefore, I would like to suggest that the Singapore Government use the opportunity such as

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the SEA Games, Asian Games and Commonwealth Games to play host. This is to give all Singaporeans the opportunity to stand united for a cause. As our society develops, the socio-economic divide causes division within a nation, as with many nations. We should invest in sports for the purpose of building and strengthening the social fabric of Singapore.

With that, Sir, I support the Budget.

12.22 pm

Mr Ong Kian Min (Tampines): Sir, by definition, a balanced budget is one where revenue equals or exceeds expenses. But a good budget requires a lot more balancing than just revenue and expenditure. A good government budget has to balance the needs of the lower-, middle- and high-income earners' long-term developments and short-term demands, the young and the old and the various business sectors, to name a few.

For this Budget, I would say that the challenge is to balance, optimally, the present and future needs of the nation. The most pressing problem to be tackled is the rising cost of living. Our $3.2 billion \"Grow and Share\" package allows Singaporeans to directly benefit from our exceptional economic growth last year. It will certainly help to alleviate the pains of inflation and rising costs. As for our future growth, the Budget strategies to boost productivity and innovation will elevate the incomes of all Singaporeans.

Last year, our economy rebounded faster than expected. This is due, in no small part, to the resounding success of earlier initiatives like the Special Risk-Sharing Initiative (SPUR) and the Jobs Credit Scheme that were created in response to the economic crisis. The robust economic performance we experienced last year means that we are now able to enjoy the generous 2011

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Budget that is able to meet immediate concerns and also enable us to fulfil our longer term goals. In other words, better times beget bountiful budgets. However, even as good times return, we will do well to exercise prudence in the way we employ our surpluses. Rather than spending away our surpluses readily in euphoria, we should invest wisely in our people and our corporate systems to build capabilities.

The \"motherhood\" statement of our Budget this year is \"invest in our future\". I note that the Minister for Finance referred to the \"Growth and Share\" package as being complementary to the long-term measures to help lower- and middle-income Singaporeans. The key word is \"complementary\". Although measures such as the Growth Dividends, tax rebates and top-ups will make a positive and immediate impact on the lives of many Singaporeans and allow them to share in the growth of the economy, I would like to caution that spending on consumption is only a short-term measure. It is like taking a medicine for pain relief. Within a short time, the pain lessens and disappears, but that little pill has not removed the underlying problem.

I am heartened to note that the Finance Minister has made it clear that the main thrust of the Budget is to strengthen our economy by boosting skills, productivity and enterprise growth and building our society through ensuring opportunities for all, including the lower-income group. This approach recognises that long-term investment in the future matters more than one-off measures. However, the post-Budget reaction received by the Feedback Unit, REACH, shows that the rising costs of living remains the primary concern of many Singaporeans. At this point, there seems to be little absorption of the fiscal philosophies governing the Budget Statement. Understandably, many Singaporeans

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are worried that cash payouts will not cover all rising costs and they find it hard to see beyond their immediate difficulties. Nevertheless, surely more can be done to help Singaporeans understand that the Government cannot shield all residents completely from the impact of rising costs, and investing in the future with the aim to raise real incomes by 30% for this decade paves the way to better living standards in the long run for everyone. We should come up with a novel and simple way of communicating this \"motherhood\" statement of the Budget more effectively to the people.

Sir, I applaud the Finance Minister's responsible decision to return the $4 billion drawn for the Resilience Package into the past reserves, even though there is no legal obligation to do so. Returning the funds into reserves will strengthen our position to cope with future uncertainties and vulnerabilities. We must save and set aside money for rainy days, especially in view of the extreme weather patterns and volatile economic turns that we have almost come to expect as normal these days. The Singapore economy is sunny for now, but there are some dark clouds looming overhead.

Although we welcome the economic recovery in Asia, the global economy is not quite out of the woods yet. While Asia is charging ahead, the economies in the Euro Zone and the US are, on the whole, still anaemic, although there are some early signs of recovery. Hopefully, these economic imbalances will work out eventually without overly painful adjustments or discontent and social unrest, which can disrupt global recovery.

Meanwhile, the domino effect of unrest in the Middle East and North Africa has taken the world by surprise. First, it was Tunisia and Egypt. Now, there are protests in Bahrain, Yemen, Morocco, Iran

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and Sudan. The recent events in Libya threaten oil supplies and may send prices rocketing to unseen levels, unravelling any inroads into the still fragile recovery of the world economy and sending major economies down the spiral into a double dip recession.

Further, rising food prices are casting a shadow over the household budgets of many Singaporeans. In fact, it is a worldwide predicament. If we find it difficult to cope with high food prices, in spite of our strong economy and full employment rate, I wonder how other less well-off nations are managing – grappling with hunger while fending off social discontent.

Back in 2007, I recall that prices were rising amidst the booming global economy. Compared to 1.3% rise in 2005 and 1.6% rise in 2006, Singapore's food inflation in 2007 shot up to 2.9%. The price increases did not seem to be a hindrance to the rich western economies that were borrowing and consuming like there was no tomorrow. In contrast, the world is now faced with a double whammy. Major economies are not growing while commodity prices are getting more and more expensive. The stresses on these economies may also filter over to Asia.

Another change that may shake our economy is when our currently low interest rates go up. It can only be a question of when, not if. In January this year, MAS Managing Director Heng Swee Keat warned banks not to assume that the current low interest rates will last indefinitely and to take into account potentially higher interest rates in their credit assessments. The general consensus is that the US Federal Reserves will pump in more money if the need arises, with more quantitative easing (QEs) and that low interest rates will stay for some time to come.

However, there will be a day when interest rates will go north. Businesses and the man in the street

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should be prepared for it in their financial planning to avoid rude shocks.

Sir, recently, anti-speculative property cooling measures were introduced to stabilise the property market buoyed by our low interest rates, inflow of hot money, high liquidity and strong economic growth. The Minister for National Development has explained that low interest rates compounded by excessive liquidity can cause property prices to overshoot economic fundamentals and lead to unmanageable capital losses should the market weaken. When interest rates rise, property owners who are overstretched financially will be caught. May I ask how long will the latest cooling measures be sustained? How will the Government determine when the market is sufficiently \"cooled\"? Although we should be wary of excessive speculation, we would all agree that some degree of short-term speculation is desirable or even necessary in every market as it adds liquidity, resulting in the creation of a more efficient market. Therefore, I would like to ask, at which level of interest rate or liquidity would the Government consider withdrawing the draconian measures meant to stem speculation?

Sir, many are concerned about the impact on businesses arising from the 0.5% increase in the CPF contribution rate from employers and the increase in the foreign worker levy. I believe that most employers have accepted the restoration in the CPF contribution. However, the levy hike will require a more painful adjustment on the part of businesses. The fact is that there are jobs that Singaporeans refuse to take up. In January, it was reported that job vacancies were at a four-year high, with 50,200 unfilled jobs, most of which are low skilled. Businesses in the service sectors, which attract little interest from local workers, will find it a challenge to increase their productivity and still maintain their service standards.

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     Sir, there is never a good time to increase fees and charges. But now that the economy has improved and business is better, companies are in a healthier position and should seize this opportunity to raise their productivity and reduce their reliance on cheap foreign labour. At the same time, they may take advantage of the enhanced Productivity and Innovation Credit Scheme to raise the skills of their workers and boost productivity.

     Sir, onto a subject related to productivity, that is producing more babies. I was talking to a CFO of a listed company yesterday who has two children aged 4 and 2 years old. So, I asked him what would persuade him to have the third child and more. As he is an accountant by training, someone who deals with numbers and costs, I thought he would calculate the high costs of bringing up more children but, to my surprise, he said if children of families with more than two children can get priority admission into primary school, he and many in his cohort would definitely want to have more children. In fact, he would apply for six months leave, take his wife on a long vacation and work harder. Although there will be some implementation issues to be ironed out in such a policy, I think the suggestion is worth considering and it is not too dissimilar to allowing families who stopped at two children to have priority admission to school when we had the Stop at Two policy.

     Sir, in our drive to improve productivity, workers too must play their part. Increasing productivity can come in many ways. I would like to share the advice which Jim Rogers received from his father. Some may know Jim Rogers as the legendary investor who has now made Singapore his home. In his book, A Gift to My Children, he recounted that when he was 14, he spent his Saturday mornings working in his uncle's convenience store.

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Sometimes business was slow, but he never sat idle, in part because of the advice his father gave him that \"there is always something you can be doing\". A few years later, he brought the same energy to his job at a local home builder. When he was awaiting deliveries of building materials or had nothing to do, he would gather up the scrap lumber or sweep up the sawdust or whatever else he could find. His initiative, energy, right attitude and work ethic so impressed his bosses that he advanced quickly in his job. Increasing productivity does not mean that one has to work longer hours. But, during the hours of work and since we are stuck having to spend those hours in that work anyway, if every worker were to do the best that he can with the right attitude and work ethics, I think we can increase our productivity many times over.

Sir, no doubt, the increase in the CPF contribution from employers and the levy increase will lead to cost increases for companies which will, in turn, be passed on to the consumers. With the generous handouts this year and a healthy economy to boot, it will be no surprise that there will be many consumers who would be willing to fork out the resulting increase. This will be welcomed by businesses, but I would urge Singaporeans to be cautious in their spending on consumption and to remember to save and invest wisely in view of the uncertainties I mentioned earlier.

In his Budget Statement, the Finance Minister has given us his careful diagnosis of our economic situation and prescribed appropriate short-term relief and long-term measures accordingly. Although our economy is growing healthily, the economic environment is still fraught with uncertainties and we must stand prepared.

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Sir, I support the Budget Statement.

12.36 pm

Mr Liang Eng Hwa (Holland-Bukit Timah) (In Mandarin ): [For vernacular speech, please refer to Appendix A*. ] Mr Speaker, Sir, in the last six months, we have heard around the world one austerity budget after another. Just type the words \"austerity budget\" into any of the search engines, chances are that a list of countries would be thrown up – countries like Ireland, Greece, Portugal, UK, Spain and even the state of California in USA. For example, in Ireland where they have just announced their budget last December, there were spending cuts and tax increases amounting to six billion Euros. The austerity measures include cuts to child benefits, pensions, social welfare spending among others and also various tax increases as they tried to rein on the budget deficits that run as high as 14.4% of GDP. About 24,000 public sector jobs will go as well. In Portugal, their recently announced budget also aims to cut 5 billion Euros through a combination of painful cut in public spending and tax increases. In the United Kingdom, the Chancellor of Exchequer announced deep budget spending cuts and raising taxes to help the government slash its 1.3 trillion pounds of debt. These deep cuts in public spending coupled with tax and fee increase inflicted pain on their people and brought about unrest and street protests. The unemployment hit is as high as 20% in the case of Spain and others are not far behind. The people have to suffer and pay a very high price from the mismanagement of their past governments.

On the reverse, if you do a similar search on the words \"generous budget\"; yes, you guess it right, Singapore is the top on the list. Hence, it is actually with great pride that I listened to the Budget speech by the Finance Minister. The Budget not only dished out a generous

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sharing of the fruits of our economic performances at the time where our citizens are feeling the squeeze of rising costs, it also still retains the usual hallmark attributes of investing into the long term to enhance our economic viability, for example, our single-minded focus to enhance long-term productivity.

To top it all, we still have money to return to the reserves. The $4 billion that we dipped into two years ago to fund Jobs Credit and SRI – which we should not forget – was crucial in preventing job losses in 2009. Returning the $4 billion sets a very good precedent for future governments. I fully support the Government's move and it nicely puts a fairy tale close to the remarkable financial performances for this Government in its five-year term.

Many governments would be tempted to use this additional money to distribute, especially when it is an election year. However, in Singapore's case, you can rest assured we will not be spending as if there is no tomorrow. We have set our sights squarely on our long-term future. While we share some of the surpluses, we also invest some for the long term and save some for rainy days.

We only need to look at the unrest in the oil-rich Middle East region in the last few weeks to appreciate how uncertain is the world we live in. The unstable geopolitical risk has pushed oil prices to a two-year high of almost US$120 per barrel last week. Some analysts like those at Nomura even predicted that oil price could rise above US$200 per barrel if the unrest spreads and expands further in the region. Nobody could have predicted this one year ago.

What we save will strengthen our financial position and enhance our survivability. It increases the base of our strategic reserves and the benefits will come back in the form of increased NIRs

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in future budgets. To deliver such an inclusive Budget would need more than just economic growth. Crucial to all these is the consistent practice of fiscal prudence, financial discipline and competent economic management.

Besides focusing on long-term objectives, Budget 2011 did not ignore the short-term challenges we are facing, such as the fight against inflation. While the strong Singapore dollar continues to be our powerful macro economic weapon to reduce imported inflation, the direct cash assistance by way of Growth Dividends and the other reliefs offered would be of most practical help to our people faced with rising costs.

Mr Speaker, Sir, of course, no budget can please everyone. But we try to spend and benefit as many as possible in the short term and those surpluses not spent, hopefully, will benefit all in the long term.

(In English ): Sir, realistically, there is no Budget that can please everyone. But in our case, we try to spend and benefit as many as possible in the short term and those surpluses not spent now, hopefully, will benefit all in the long term.

The Finance Minister mentioned that one possible long-term benefit is to grow incomes by 30% in 10 years. This is one of the key thrusts of this year's Budget and it is always good to set targets and to rally our people towards achieving them. Higher real income is really the only way to solve the \"money-not-enough\" problem. Subsidies, price controls and welfare have their limits and may not sustain. Just look at Europe and we can see how the countries there landed themselves into a sovereign debt crisis.

In this effort of growing incomes, while we should rightly focus on the low-wage workers, we should also not neglect helping our lower- and middle-income groups to grow their incomes as well. I

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am referring to the sandwiched group who have children and parents to support and to take care. They also have lifestyle aspirations and want to live a reasonably good life.

I am glad to note from the Finance Minister's speech that the real income of the 20th percentile has risen by 8% over the decade, and that of the 50th percentile by 21%. I agree we can do better. However, the next 30% of income growth is always that much difficult to achieve than the previous 30%. As our economy enters into a more mature phase of growth of between 3%-5%, we cannot really count on high economic growth now to uplift wages.

Given our land constraints, increasingly we will have no choice but to depend on our service sector to grow our economy and moving more of our enterprises to high value service activities and helping workers to attain superior service skills.

The service sector is where we should get most of the income increases. The Asian Development Bank described Singapore as a service economy with a large manufacturing sector. We can build further niches in the service sector and develop more of our service branding. If we can be world-class in airline and financial services, I cannot see why we cannot be world-class in education services, hotel management, healthcare, and so on. Singapore can be a place where we are trendsetters of best practices in the service sector. We have the comparative advantage to develop an internationally competitive service sector and export our services to the region.

We may need to revisit the idea of having a super agency to champion the services sector, very much like how the Economic Development Board (EDB) champions the manufacturing sector and

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deals with the cross Ministry regulatory issues. This services agency would not only help to cut red tape but would also plan, coordinate and execute strategies to grow the services sector and develop better paying careers.

For the economy and businesses, this year's Budget is clearly a \"stay-on course\" Budget, focusing squarely on executing the strategies laid out by the Economic Strategies Committee (ESC) last year. At last year's Budget debate, I commented that the $1 billion pledged by the Government to the National Productivity Fund is not significant enough given the strategic importance of enhancing productivity and the size of our Gross Domestic Product (GDP). Hence, I am really glad the Government has topped up another $1 billion, bringing the National Productivity Fund to the size of $2 billion. In addition, there are significant improvements to the Productivity and Innovation Credit (PIC) scheme, costing the Government $520 million per year. That is a strong commitment.

I am also particularly pleased that there is more assistance to groom Singapore-based Globally Competitive Companies (GCCs). This was also a key suggestion put forth by the Finance, Trade and Industry GPC to the ESC last year. The Ministry of Finance (MOF) announced details of the Co-Investment Programme last December where the Government would catalyse the supply of growth capital of about $500 million to be matched by a similar amount from private-sector capital. What impressed me about the scheme, besides the quantum of the fund, is that the bureaucracy involved to tap the programme appears to be quite minimal, at least on paper. There are only four very straightforward qualifying criteria, one of which is that the global corporate headquarters and at least three strategic decision-making functions must be based in Singapore. I think this is fair and is a necessary requirement.

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With Temasek as one of the co-investors, the invested enterprise is more likely to be rooted in Singapore together with its economic value add. I have received very positive feedback from the businesses and they look forward to tapping the programme. Temasek's involvement is seen as a plus to the standing of the companies, in addition to the benefits of its financial and strategic mentorship. Putting money into the programme is probably the easier part. The more difficult next step is to find promising suitors for the programme and the question is whether we have a big enough pool of entrepreneurs and businesses. We need to do more to nurture entrepreneurship especially those businessmen with regional aspirations and those who have the ability in them to develop new niches.

I suggest that a small portion of this fund be carved out to specifically nurture and support young entrepreneurs, those with out-of-the-box innovative and creative ideas. These ideas and ventures often would not involve a large capital outlay but if an idea hits on the sweet spot, it could be turned into a big commercial jackpot. We need to believe in some of these young entrepreneurs and their propositions and give them a little lift. Who knows, there could be another Mark Zuckerberg in the making.

Also, another commitment worth mentioning is the $850 million grant set up under the Enterprise Development Fund (EDF) over the next five years. Given our small domestic market, our local enterprises may not have the initial scale to compete in the region. Yet, it is also because of our small domestic market that these companies need to internationalise so as to scale up for growth and efficiency. This initial help and support at the start could make the difference and help the companies secure foothold in regional markets. If we are serious about helping these promising

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companies to expand overseas, that leap of faith is important and this support, such as the EDF, is necessary.

Understandably, the enterprises or the SMEs that depended on foreign workers in their area of business are unhappy with the Budget. In our post-Budget dialogue with the Finance, Trade and Industry GPC resource panel last week, these new increases in the foreign workers levy dominated the discussions. Business people from the services and construction sectors felt that the increase of another $180 and $200 respectively by July 2013 are just too steep. While the PIC does have various schemes to help mitigate the increases in levies, my sense is that many of the businesses are not aware or have no idea how to tap the juices from these schemes. They feel the pain from the stick but many have not tasted the sweetness of the carrot or do not even know where the carrots are.

There is also this perception that they have to fulfil a long list of checklist and requirements to apply for these benefits. They felt that after going through all the effort, the benefits may not even move the needle too much in their bottomline. I suggest the respective sectoral agencies go on small-group road shows to show and sell the enhanced schemes to the businesses, hand-hold the businesses with the paper work. And perhaps for each company's first application, we should give them the benefit of doubt even if the paper work for the qualifying activities or expenses is not in perfect order.

The quick turnaround in the disbursements would certainly be helpful. I applaud the simpler and better cash conversion option where businesses can choose to receive cash payout of 30% for the first $100,000 of their qualifying expenditure. This would be a good encouragement to cheer them on and encourage them to venture deeper into improving productivity and innovation.

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Perhaps the most common disappointment in this year's Budget was the absence of procreation incentives. I guess after the release of the record low Total Fertility Rate (TFR) of 1.16 last year, expectations may have build up for more assistance and incentives. In my view, the Government should continue to look at new and enhanced incentives, both financial and non-financial to help lower the demands of parenthood. It has to be of significant size to bite and to make a difference. It needs to be also packaged with non-financial incentives as well; for example, as suggested by the Member Mr Ong Kian Min, priority for schools as well as additional HDB homeownership benefits.

I suppose parenthood and Baby Bonus packages are traditionally items addressed during the Prime Minister's National Day Rally and not at the Budget. So, we would look forward to the next National Day Rally and hopefully our economic financials can support an even better package. We just got to keep trying.

Before I end my speech, I would like to ask the Finance Minister for an update on the performance of our financial reserves, particularly the performance of GIC and Temasek. Two Budgets ago, like many other investments and funds, the values of our reserves were impacted by the global financial crisis. Has the market volatility in the last three years affected the level of the expected long-term rate of returns which in turn could also affect the Net Investment Return (NIR) in our future Budgets?

Sir, we are in a different phase of our economic development. In essence, the challenge faced by the Government now is to manage an almost fully employed economy. We will experience bottlenecks, constraints and crowding out, whichever way we grow our economy. In fact,

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Singapore can be a country with no domestic unemployment, buffered by the foreign labour. Socially, Singaporeans are feeling more squeezed than before. Our public transport modes and roads are more congested. But as the Prime Minister said last year, it is a happier situation in Singapore where we are managing problems of success rather than problems of failures like what is happening in Europe. The trade-offs between economic growth and social cohesion will just get more stark now and something may have to give.

The choice we are making is that we still want to continue to improve our lives and to manage the associated problems that come with it. The level of difficulty managing these trade-offs is just going to get higher and the balancing of different needs and demands is even more challenging. All the more, there is an even greater need now to have the best Government to run this tiny island, as Singaporeans simply deserve the best.

12.54 pm

Assoc. Prof. Dr Muhammad Faishal Ibrahim (Marine Parade) (In Malay): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, Sir, thank you for allowing me to participate in this year's Budget debate. Much has been said about the Budget. Kindly allow me to add my perspectives on this matter.

This year's Budget is progressive in nature which cements our Government's standing to be one that is forward looking, and embeds itself in good governance and practising disciplined fiscal policy. It reinforces Singapore's continued efforts in investing in human capital and its commitment to growing its economy through productivity as the impetus to growing incomes. With a productive economy and a quality skilled workforce that sees its incomes growing progressively, it puts Singapore in good

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stead to face the ever changing challenges of the new economy.

There are two elements that struck me in this Budget. One was the deliberate element to innovate to adopt manpower practices that promote productivity. The other was the act of prudence to put back what was taken, which reminded me of the days when Singaporeans from the past generations saved to build their wealth progressively over time. These elements differentiate us from many other nations. While other countries are putting forward budgets that propagate cuts on spending for some on education, we are increasing our spending on investing in our people and infrastructure, both physical and software, while propagating productivity as a key growth strategy as well as investing for our future. Thus, I strongly concur with our approach to remain centred on opportunities, not entitlements, and focus on helping the low-income group through education, employment and home ownership.

Looking through the past Budget Statements since I became a Member of Parliament in May 2006, I could see how the Government had been responsive to the challenges of the times and had rolled out many policies, schemes and programmes to enable Singaporeans to reap the opportunities and challenges during these different periods. I have met Singaporeans, including my constituents, who have greatly benefited from these schemes and programmes.

One of them is Mdm Zaiton Binte Jantan who has recently upgraded her skills by completing a Certified Service Professional Course in November last year. Through her perseverance and self-belief, she subsequently secured employment as Library Assistant at Bedok Library the following month. She hopes to continue her education and upgrade her skills in the future to earn more income and provide greater opportunities for her

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family. I sincerely hope that programmes such as the Skills Training for Excellence Programme (STEP) and possibly the Lifelong Learning Endowment Fund (LLEF), would be able to support her aspirations. Mdm Zaiton is glad that the Budget would be reducing her expenditure and making it affordable for her to upgrade her skills.

Another constituent is Ms Tan Lay Wah who had attended Workfare Training Scheme Motivational Workshop. She was able to use the learning experiences of the course to subsequently secure employment. She was initially apprehensive to go for the course but then decided to try. She found the training useful. When told of the additional schemes and programmes in the new Budget, she was heartened to note that she could grow her income through training and that this would open up more opportunities for her.

Mr Speaker, many Singaporeans welcome and are excited about our Government's plan to increase Singaporeans' income by 30% over 10 years. One resident mentioned that, \"This will certainly be good for me, as my children are growing, and I would need more money to support them, especially for their education.\"

Nevertheless, the increase in income will not come without the effort and support of Singaporeans. Singaporeans need to ensure that they continue to remain relevant and upgrade their skills and expertise. While I have met residents who have embraced their upgrading and training routes, there are those who are still apprehensive at making these efforts. There are also those who are unaware of the options available to them, while others are yet to be convinced of such a route.

Therefore, the task ahead of us is to continue our outreach efforts in enhancing

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the awareness of Singaporeans on the availability of schemes and programmes which will benefit them. We need to encourage them to participate in these programmes. I feel that we need to do more and take a multi-faceted approach in spreading the self-upgrading fever among Singaporeans. They should continue to build on their capabilities at the grassroots organisation front to engage our residents in promoting this national effort. We should showcase more role models from amongst Singaporeans who have gone on to the upgrading of skills route and have benefited from it, so that more Singaporeans can come on board this journey. In addition, informal channels, such as creating networks amongst residents and workers, can be further enhanced to excite Singaporeans about self-upgrading.

Allow me to continue my speech in English.

(In English): Mr Speaker, Sir, I am also very pleased about the Special CPF Housing Grant which aims to help low-income families make their first-time purchase of a Build-to-Order flat. This is on top of the existing additional CPF housing grant. I believe this will certainly assist them in their quest to own a home in Singapore and is certainly the right way to go.

Sir, last week, I was on an overseas trip with my post-graduate students, a few days after the Minister for Finance read the Budget Statement. We had foreign students among us who shared with me that they were pleasantly surprised and touched that the Government of Singapore is seriously assisting low-income Singaporeans to own a flat or a home. From where they came from, low-income residents may not have the opportunity to own a home in their life time. Many spend their time

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looking for homes, like in squatters, and have difficulty settling their families. To me, this represents the Government's continuous stance in promoting home ownership among Singaporeans which deepens our efforts in creating an inclusive society. While the home provides shelter for an individual, family and the society, it also plays a very important role in moulding our current and future generations. I have met residents whose families' well-being has been challenged due to the loss of their home.

Recently, I sought the views from Singaporeans about what a home or housing means to them. As expected, I received many responses. Among them, it includes this comment that, \"It is a place which would provide me with a sense of belonging and rootedness to Singapore. It is a place where I can always feel secure.\" Others mentioned that it is a place where they can feel safe, relaxed and be away from all the stress of work or school. It is a place where one creates and builds one's family. Some call it a comfort zone, others call it a place to work and play. To some, a home also represents opportunity, aspirations and investment. Some regard a home as the greatest asset in their life, next to their family. As one of the respondents mentioned, \"Housing is the most important and valuable asset to me as of now. I will use my home as a backup for my retirement plan. It provides me with financial security and is not just a place to stay.\"

Recently, I met a resident, whom I will call Mr X, who shared with me that he is going to sell his home as the prices of HDB flats have gone up, and he would stand to have some capital gain if he were to sell his flat now. However, upon further discussion and analysis with him, we found that he would have difficulties financing another home, which may affect the well-being of his family. Thus, he decided not to go ahead with the sale and

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to focus his attention on his newly found job and develop his family. While Mr X may have saved himself and his family from facing a future housing problem which may have implications on his family's well-being, I have met many other residents who had difficulty owning a flat upon selling their flat, thinking that they would have much capital gain from the sale of their former flat. A few of them shared with me about their regret for not analysing it carefully prior to the sale.

Sir, last month, I had the opportunity to visit residents of Block 20 in Chai Chee Estate. The block was built in 1972 and I met two residents who have been staying there since then. They bought their flats for less than $10,000. They shared with me their happy moments witnessing the development of Chai Chee Estate as well as their family members. Their flats have since undergone the Main Upgrading Programme. They shared that they are happy that their children are doing well in life. And their flats, although small, have provided them with a base to pursue their purpose in life. I sense a feeling of stability and satisfaction among them. I could also feel a sense of belonging to the community where they live – a pride in owning their flats although it is a small 3-room flat. And they could also link home ownership to the success and development of their family in Singapore.

I urge Singaporeans to take the message of home ownership seriously, as I believe this effort is part of nation building, and individual and family development, and not only about the opportunity to have capital gain arising from the low actual price paid due to the generous grant from the Government. We should continue to strengthen this base among Singaporeans so that as a society, we can see this as a platform to reap the many opportunities available in the development of Singapore.

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Sir, before I end my speech, allow me to briefly mention a few areas where the Government could do more in future. I have spoken earlier about promoting home ownership. The challenges faced by today's couples in this generation differ from those of my residents who bought their flats in the 1970s or even in the 1980s and the 1990s. With higher standards of living and additional costs, such as hiring a maid to look after their children, kindergarten cost, childcare cost and others, I still receive calls from young Singaporeans for additional effort from the Government in helping them to own a flat. Within our society, besides the low income, there is a growing number of Singaporeans who are handicapped, diagnosed with special needs and the destitute who would need greater support in meeting the challenges of the new economy. We also have children, young persons and orphans who may not have support from the mainstream. I sincerely hope that the Budget of the Ministry of Community Development, Youth and Sports could provide greater support for this segment of our society so that they too can benefit from Singapore's growth.

While the Budget means well, some of my residents, like Mdm Tan, have challenges in attending some of the training sessions due to time constraints in making ends meet for her family. I would like the Government to work out flexible structures for courses under Workfare to be able to meet the needs of people like Mdm Tan. I have received feedback from residents of the not-so-positive operational aspects on matters and procedures that affect some of the aspirations of our senior residents in attending training for Workfare. I sincerely hope that the agencies would go beyond the call to make the experience of our seniors a convenient one.

The direction to propel our economic growth through productivity and innovation is a sustainable strategy, as even

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low-cost centres like China and India are facing rising labour costs. However, the movement to upskill and train our workforce can only benefit those who are able to learn and work in an increasingly competitive labour market. I would like to know what measures the Government can put in place to ensure that while we set aside funds to help those who can still learn and upgrade themselves, we must ensure the illiterate or the uneducated workers are not left behind.

Sir, in conclusion, this Budget resembles the Singapore way of being a forward-looking Government that continues to demonstrate its ability to deliver good governance so that people can realise their aspirations and goals, that we take no short cuts, take longer term perspectives and, most importantly, have the pulse of our citizens at heart.

Sir, on that note, I support the Budget.

1.11 pm

The Minister of State, Prime Minister's Office (Mr Heng Chee How): Mr Speaker, Sir, thank you for allowing me to join in this debate and to support the Budget.

As a trade unionist and a Member of Parliament, one of my top priorities is to see how best to enable workers and residents to make a better living. My experience on the ground taught me that achieving it really boils down to doing a few key things really well. First, do not kill the goose that lays the golden eggs. Businesses must want to come to Singapore, invest, thrive, grow, reinvest here, so that they can create better jobs for Singaporeans.

Second, grow the pie, because unless and until the pie grows, there is very little that you can share.

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Third, as the pie grows, get a fair share for the workers.

Fourth, create the conditions for industrial peace, help achieve full employment, so that as many Singaporeans as possible can be in work and share the growth. Also, full employment makes clear to employers that they have to treat their workers well in order to get the workers that they need to fulfil the orders that they have, to grow their businesses and to make money.

Fifth, and finally, help workers climb the skills and capability ladder, so that the value of their jobs goes up, and their pay can also move up.

Sir, if we get these five things right, then the value-add per worker will grow with time. The productivity growth can then lead the growth of real wages, and produce a higher standard of living for Singaporeans.

I am, therefore, very glad that this year's Budget gives us even more resources to shoot for this goal. To begin with, I applaud the Government for returning the $4 billion drawn from the national reserves earlier, which was used to fund the Resilience Package, to the reserves. We must know that whatever we do, there will always be the next downturn to prepare for. Today, our economy is doing very well but it is just a matter of time in the course of business cycles that another downturn will come. Therefore, we must ready our defences and build up our store of ammunition ahead of time. This good habit of saving for a rainy day cannot be taken for granted. In Chinese, they say wei yu chou mou ( 未雨绸缪). For example, I read in the newspapers calls by some writers that in good years, the Government should take the surpluses in the Budget and share. But they were very silent on what the Government should do in the bad years

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when there are deficits. So, what it tells me is that we must not kid ourselves into believing that money will come out of nowhere. We can share in good years but in bad years, where is the money going to come from? Resources to do things must come from somewhere. If we do not have savings, whether individually or in our national reserves as a country, then we can only get resources by borrowing. Many countries have had to do that in order to prop up their economies during the sharp global recession in 2009. They are now laden with debts and their current and future generations will have to labour in order to repay their national debts. Their lives are not going to get better any time soon.

Sir, I spoke of the need to save in order to build up our defences. It is like a fortress. But having a fortress and having ammunition would not be sufficient to ward off attacks, because if our troops are incapable of outwitting and out-fighting the opponents, then even with the best of fortresses and city walls, we will still be over run.

Therefore, it is critical that we continue to invest and invest in a big way in the training and skills upgrading of our workforce, and to take into account the structural shifts in our workforce such as the rising proportion and needs of the Professionals, Managers, Executives and Technicians (PMETs), on top of the continuing importance of equipping our rank-and-file workers.

Third, aside from good defences, well-trained troops, strategy and logistics. I think the outcome of battles is also heavily influenced by technology, communications and coordination. If we look at history, in war, in the battle between Carthage and Rome when Hannibal introduced elephants into the battlefield, it wreaked havoc among the Roman ranks, at least initially. So these things are productivity multipliers. If you

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have a gun and the other side has a sword, you have an advantage. Technology is one thing, but if you organise your processes better, your coordination or work methods better, if you out-organise the competition, that makes a big difference. These are productivity multipliers. Economies that are able to increase the number and power of such productivity multipliers will win. For this reason, I have spoken in this House on the importance of spurring productivity, especially in the light that our productivity has been on the decline over a number of years.

Last year, our Government formed the National Productivity in Continuing Education Council (NPCEC) in order to drive sustained productivity improvement. As many of our parliamentary colleagues have mentioned, the idea is to sustain annual productivity growth at 2% to 3% a year, compound it over 10 years, and we can see a 30% or one-third improvement in real productivity levels that can then support and sustain real wage growth of around 30% over that 10-year period, and improve the standard of living for Singaporeans.

Sir, I am therefore very keen to find out what has been the progress so far, both in terms of overall productivity improvement as well as in the outcomes for the 12 sectors that the NPCEC has identified in its work. How have we been doing so far?

Sir, I also note that 2010 was a year of very strong economic rebound – 14.5% growth. But that came on the back of a recession year. So, in that recession year, we had excess capacity. And part of the Resilience Package was to save jobs and, therefore, there was also excess manpower within that economy. Part of that was being soaked up when the economy rebounded in 2010. If we were to take out the strong cyclical

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productivity improvement last year because of that economic rebound and the absorption of inherent excess capacity after the 2009 recession, then what would we see as the structural improvement that we may be pinned to enjoy since last year?

What lessons have we learnt in this past year that would help us finesse our promotion support and methods for productivity? For example, what are the barriers that the different lead Government agencies have encountered in helping or nudging companies to ramp up their productivity efforts? To what extent was there a lack of know-how, management interest, availability of funding or continued easy access to alternatives, such as foreign manpower, that had hampered the fast take-up of productivity improvement initiatives? Are we sensing any of these things especially in the 12 key sectors identified? Was there any indication that some sectors or industries do not even accept that they may have a productivity challenge by international comparisons? Given the experience, would there therefore be specific initiatives that will be developed to help overcome these barriers so as to accelerate execution?

As far as the labour movement is concerned, we have been playing our role in this national push for productivity through two key programmes. One is what we call the Cheaper, Better, Faster (CBF) programme. The key goal of the CBF programme is to encourage unions and companies to work together towards higher productivity through lower unit cost of production, better quality and faster responses, ie, a higher degree of responsiveness to environmental changes, so as to improve the overall competitiveness and outcome of the companies, and to share the gains with workers in a fair way. At the end of

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2010, more than 120 unionised companies have initiated CBF projects together with their unions and that has brought benefit to more than 10,000 unionised workers.

The second programme is the Inclusive Growth Programme (IGP), which targets improvement especially for the lower-skilled, lower-wage workers. The IGP draws upon a $40 million fund as part of the National Productivity Fund and is making very good progress. More than 200 companies have already signed up just in the latter half of last year and, again, benefiting many thousands of workers, ie, the lower-wage, lower-skilled workers. And our aim, in this year, 2011, is to double the outcomes and that would be our value-add to this national push.

For the CBF programme, at this moment, there is no separate funding of the programme. Instead, the companies will be urged to draw upon the funds set aside under the National Productivity Fund for each of the target sectors. In this regard, I feel that the value-add of the labour movement can be enhanced if the key unions or union clusters corresponding to the target sectors are roped in more, ie, given more information about the trends and programmes by the respective Government lead agencies. By doing so, a closer partnership can be forged with the unions or union clusters, the lead agencies and the industry bodies and they can then be in a better position to catalyse interest and attention, and help companies start or accelerate their productivity efforts.

Sir, the ultimate guarantor of a better life for workers in a small open economy like Singapore's is a heightened and an ever-improving level of competitiveness and quality that will allow us to lead the field. Only then can we hope to have jobs that attract premium wage rates that can be sustained. We should therefore leverage fully upon the budgets of the

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Government each year and upon the strength of Singapore's tripartism to achieve this soonest.

Sir, I support the Budget.

1.23 pm

Dr Lam Pin Min (Ang Mo Kio): Mr Speaker, Sir, I rise in support of the very generous and inclusive Budget announced by the Finance Minister. This $6.6 billion Budget is not just a big bonus to impress and please Singaporeans, but one that is well-thought through, with grand plans to grow the real incomes of Singaporeans by 30% by the next decade and to strengthen our society in the long run. Its generosity is made even more significant against a backdrop of a lacklustre economic outlook in Europe and the slow economic recovery in the United States.

Sir, Singaporeans have indeed demonstrated our resilience and unity in overcoming one of the worst economic crises that besieged the world in 2009. Our ability and our resolve to bite the bullet, coupled with the excellent tripartite relationship, are all contributing factors for the rapid bounce back to a strong positive growth last year. Our national reserves which we had painstakingly accumulated over the past four decades of nation building had proven to be one of the effective weapons in helping Singapore weather this storm. Without the strong leadership of this Government and the \"never say die\" attitude of Singaporeans, we would not be celebrating the fruits of our economic recovery today.

However, what struck me most about the Budget were not the multi-million dollar packages designed to help the individuals, families or businesses, but the very fact that the Government will put back the $4 billion into the reserves to replace what it had drawn down in 2009 during the global financial crisis to fund the Resilience Package. This reflects the prudence and the \"saving for a rainy day\"

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approach even in good times like these, when Singapore had achieved a sterling 14.5% GDP growth.

It also speaks very well of this Government – one that exercises prudence, responsibility and care for its people; likened to a loving parent who provides for the children. A good parent will not hesitate to do what is right and in the best interest of the child. The love of a parent is unconditional, one that is inclusive, forward-looking and generous. Parents also provide the necessary skill set for the children, with the ultimate objective of equipping the children with the right values, being independent and able to stand on their own two feet, and to eventually contribute back to society. I see these qualities reflected in the way the Government manages the country and cares for its citizens.

I am also delighted with the Government’s \"Grow and Share\" package, which includes cash dividends, bonuses and rebates to individuals and families totalling $3.2 billion. Rightly so, this package is tiered so that those with lower incomes will receive substantially more than the more well-off citizens. This is timely as it will help Singaporeans cope with the rising costs of living, a concern many of my parliamentary colleagues had spoken about and raised yesterday.

In addition, this package also encourages Singaporeans to adopt a positive mindset in self-reliance in the form of employment. To supplement the existing Workfare Income Supplement (WIS) scheme, there is the Workfare Special Bonus disbursed over the next three years. Lower-income workers will receive bonus payouts amounting to 50% of the full-year WIS in cash this year, and bonuses equivalent to 25% of their WIS in 2012 and 2013.

The sandwiched class is also not left out in this year's Budget. There is a one-off personal income tax rebate of 20% up

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to a maximum of $2,000. In addition, the adjustment to the personal income tax regime also benefits the middle-income earners, and these changes are permanent with significant savings in the tax amount paid in the long run.

While I applaud the Government for its effort for being as inclusive as possible in this year's Budget, there are two issues which I would like to highlight and wish that the Government will consider addressing in the near future.

This year's Budget did not address the very special needs of single parents. No one would want to be a single parent if given a choice, and many are forced by circumstances. While the Government does not want to give generous assistance that encourages the growth of \"undesired\" alternative households and the erosion of Asian values, ignoring the magnitude of this issue will lead to adverse social consequences, affecting the opportunities of children in such families.

Regretfully, the current public policies do not address the thorny issues and predicament faced by this group. Single parents are already facing tremendous pressures from society and the current discriminatory Government policies do not make things any better for single-parent families. Employment, housing, dealing with ex-spouse and helping their children cope emotionally are just some of the other issues that they need to grapple with. Many single parents also find it difficult to seek proper full-time employment because of the lack of support from their own families and they end up having to look after their young children themselves.

Single-parent families are not specifically targeted by social security policies in Singapore. Lower-income single-parent

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families have to compete with other vulnerable groups for means-tested social assistance. Even then, some assistance programmes have eligibility conditions that disqualify such families. In many aspects of public policy and discourse, single-parent families are looked upon as undesirable alternative household entities that are to be discouraged and are thus excluded from some social services that are available to \"normal\" two-parent families.

For example, single parents are not entitled to maternity leave and maternity benefits, including the pro-natal baby bonuses. Applicants for HDB housing must be a proper \"family nucleus\" – comprised a married couple – in order to enjoy the subsidies and grants. This excludes unmarried single-parent families by default and has significantly disadvantaged such families to live in subsidised public apartments.

Disadvantages are also found in tax policies. For instance, tax relief granted to married parents to employ domestic maids is unavailable to single-parent households. Thus, instead of being helped, single-parent families are often discriminated or disadvantaged by Government policies.

1.33 pm

Mr Sin Boon Ann (Tampines): Mr Speaker, Sir, I rise in support of the Budget proposed by the Minister for Finance.

Last month, this House had an extensive debate on the question of providing minimum wage for our low-wage workers to help them cope with the demands of a globalising economy. While this House is not prepared to push for minimum wage at this time, there remains a concern with the growing disparity between the top income earners and those at the bottom. In the longer term, we need to do something about this growing gap.

Sir, a wide disparity in income distribution flies in the face of equity and fairness in our democratic society. It breeds deep resentment in the minds of those who aspire to live the good life but for whom such aspirations are but only a pipe’s dream. A society that deeply divides the rich and the poor produces great tensions. Such tensions will spawn a politics of the underclass as Minster Mentor would put it. A politics that would be divisive and would distract the leaders away from the more constructive business of governance – this would not be good for Singapore.

Indeed, the Gini coefficient for Singapore suggests that at 0.425, it ranks 51 in the world compared to Japan with a Gini coefficient of just 0.249, making it one of the more unequal societies in the world at 110th position. Our relative income disparity is worse than the United Kingdom, Australia and, at one point of time, the United States, the epitome of the excesses of a free market economy.

Sir, a widening income gap in our society raises concerns about social mobility for those who make up the

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underclass. As societies mature, social mobility for those who aspire to a better education and achieve a higher level of salary becomes more restrictive. Opportunities and qualifications tend to fall on the side of those born into families that are better off than the wider society. Minister Mentor recently observed this after visiting various local schools. His comment that children in the top schools tend to have parents who are graduates compared to the children from the average neighbourhood schools struck a chord with many Singaporeans. These children have better resources and a better chance of getting into good schools. They have the benefit of an environment that is structured for learning and excellence. This is a great advantage over many children whose parents may not be similarly resourced.

Just look at the tuition support that these parents give to their children. These days, many children get private tuition. For many, it is a question of the quality of the tuition and the extent of it. Rich parents will not have any problem plying their children with tuition. They spend huge sums on tuition just so that their children will be well prepared for the examinations. Tuition is a big time industry in Singapore. Recently, I saw an advertisement in our Straits Times which boasts of the number of top-scoring students that it produced. Centres like these do not come cheap, and parents must be prepared to pay to ensure good results. Now, where does this put a child whose parents are just making enough to make ends meet?

Sir, we are talking about just one obvious advantage that children of better-off parents enjoy. What about the verbal engagements or the learning exposures that these children get to benefit from, particularly the regular travels to the various places and interesting places, and

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not to mention the good nutrition that they receive. I am not surprised that many of these children will end up in top schools, feeling extremely confident and articulate when compared to the other children. Quite obviously, with good schools, these children will have a better chance of getting a scholarship to go to a top university, getting high paying jobs and when they get married and have children, and perpetuate the system by putting their children through a similar process.

So they begin at a different starting point in life. How does one realistically ensure or expect a child from the heartlands to compete under such circumstances? As the social strata in our society becomes more settled, it gets harder for one to break out of his class and to work up the social hierarchy. Indeed, for many children in my constituency, the hope at school is to do well enough to get into a polytechnic. I would suspect that for a child studying in a top secondary school in Bukit Timah, going to a polytechnic instead of a good junior college may be seen more as a failure than a success.

Sir, although like many of us in this House, I am concerned about the growing income gap between the top and the bottom members of our society. I am even more concerned if we should become a nation with a rigid class strata where social mobility is limited and where your destiny is very much tied up with the family that you are born into. Such an outcome is an affront to our sense of equity and fair play. It goes against the spirit of our National Pledge which commits us as a people to build a society based on justice and equality. It also robs us of the opportunity to tap into a wider talent pool for our purpose had these children been given the right conditions and time to fully develop and exploit their ability.

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The way forward in addressing the problem of the widening and rigid social and income gap is not to suppress those at the top through heavy taxation or outright denial of their achievement through a quota system, but rather to work at ensuring that mobility to success is not hindered by forces beyond the control of the person concerned.

Sir, I would humbly suggest three broad areas that I believe can help to ensure that social mobility continues to exist for the less well-off members of the society. These are broadly: better management of our educational resources and approach to bringing out the best in our children; better career prospects and opportunities in the public sector; and, finally, providing suitable incentive schemes that encourage our private sector, particularly the successful companies, to support meaningful programmes to mitigate the differences between the rich and the poor.

First, education and social advancement. One of the hallmarks of Singapore’s economic success has been the provision of universal education to the masses. In one generation, Singaporeans lifted themselves out of poverty by seizing educational opportunities to advance themselves and their skill sets. This has enabled them to earn higher salaries than before.

Education has also enabled many Singaporeans to realise the aspiration of going to top universities overseas on scholarships sponsored by the Government; something which could only be a dream for Singaporeans but for this opportunity. My brother, Boon Wah, was one such recipient when he won the coveted Singapore Armed Forces Overseas Scholarship after it was launched in 1971. The scholarship enabled him to get an overseas education, without which my father would not have been able to afford.

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Scholarships like these are both prestigious and coveted. These scholarships save substantial amounts of money for the parents besides assuring a relatively high-flying career. Snaring a Government scholarship has become a sort of a trophy prize for parents and students, making it a highly coveted commodity. It has also redefined the meaning of success in the Singapore context. These scholarships have also raised the bar for competition in schools because the better schools get more than their fair share of scholarship recipients. Unfortunately, for these schools, competitive entry by examination scores does not always reflect an equitable distribution of places among the social classes.

It is not good for Singapore if places in the best schools in this country go to those whose parents are well educated or rich. Children whose parents are from the lower social economic strata of our society will not have the same resources to compete in the same national examinations. Even if they do invest additional resources in their studies, which mostly come in the form of additional tuition classes, it will come at great expense to the family.

The way forward essentially is not to ensure the equality of outcome, but to ensure equality of opportunity. Much as I wish our education system can be designed in a way as to do away with the need for tuition, which I know will not be possible, we should do more to increase the opportunities for children from the heartlands to go to top secondary schools. We should increase resources to the primary schools in the heartlands and encourage the principals to have more make-up classes after school to better prepare the students for examinations. We could invest in more IT resources to help these students understand and visualise concepts better. We should send

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some of our best teachers to these neighbourhood schools to raise the quality and, hopefully, lift the performance of the students in the examinations. Putting more resources to improve the opportunities for the children from the poorer social economic background will not only improve their chances of getting into good secondary schools through a more level playing field, but will also increase the number of talents that we can throw up with every cohort of students who enters our schools.

A laudable example, I would say, of such an approach may be seen in the recent initiative taken by Raffles Institution when the school took the opportunity to go to the primary schools in the heartlands and offered scholarships to promising students who are likely to make the cut to this pre-eminent school. The scholarship, I believe, is intended to give deserving students the opportunity to make a difference so that they are not deprived of the opportunity of getting their best shot at enrolling into Raffles Institution.

Secondly, greater mobility and career prospects in the public sector. The public sector is currently the biggest employer in Singapore today. It sets the standards and the benchmarks for our human resource policies in our country. The public sector also offers the most number of scholarships to students; scholarships which will ensure employment and good careers in the public service.

Unfortunately, those who are familiar with the public service will realise that academic prowess is a necessary requirement for advancement in service. Many believe that advancement into the Administrative Service, which is the premiere and most prestigious service in Government, is limited unless you are a returned Government scholar or you have

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achieved excellent results in your examinations. Government scholars are also often perceived to enjoy relatively fast promotions and wider opportunities for career advancements than those who are not. The converse is also true. It would be difficult to get significant advancements in service if you do not possess the right degree or pedigree which, in this case, is often synonymous with being a Government-sponsored scholar.

Sir, it seems that the route of advancement within the Civil Service is fairly rigid. Much will depend on the type and quality of the paper qualification you have. It does not matter if you are good on the job. There is very little hope of promotion unless you have the requisite paper qualification and background. If we accept the proposition that children of graduate parents and those from well-to-do families are going to the good schools and winning Government scholarships, it will mean that higher level appointments in the Civil Service will also be dominated by the same group of people. The poor neighbourhood kid from a lower-income family may not have a chance to begin with. I do not deny that there will be the occasional boy whose father is a casual worker and whose mother is a homemaker winning that coveted President's Scholarship and going on to a great career in the Civil Service. However, I suspect that such occurrences are becoming fewer and farther between. What we will most likely see happening is the son or daughter of some graduates or well-to-do middle-class parents going forward to receive the award from the President.

The Civil Service, being the biggest employer in our country, can and should set the example for social mobility. It should not close the doors to those who may take a longer time to get their qualifications. There must be hope for those who wish to take a longer time to

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rise up in the service. Sir, do we ever recall anyone from ITE making it or joining the Administrative Service at all? The Government should be seen as an inclusive employer, giving everyone who works for it at least the hope of making it to Permanent Secretary grade if they diligently apply themselves at work. Keeping the doors open ensures that the last bus is not missed if they did not do well at the PSLE to go to a top secondary school. We will also be sending the message that going to a polytechnic does not mean limited career options, and going to ITE does not mean \"it is the end\". Hopefully, this message will cascade down to the private sector and will serve to encourage and give hope to all Singaporeans that their fate in life need not be tied up with the family they are born into or necessarily by the grades obtained in the school examinations.

Extending the runway for their careers ensures an element of mobility and gives much hope to those from the lower-income group.

Thirdly, we can do more to support or encourage the private sector to take up initiatives to provide opportunities to those from the heartlands who would otherwise not have such opportunities. Our Government could consider providing some tax incentives to such organisations to help the less fortunate to level up. I can think of two initiatives that our Government can consider to provide tax support for companies that undertake such activities.

The first example is funding for mentoring programmes for kids from lower-income families. Mentoring allows children from such families to be exposed to adults who can guide them and counsel them about their studies and their future. Besides, these mentors can also serve as their tutors and supervise them in their school work. Through mentoring programmes, what the children lack because of their family background is more than

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made up for by the mentors. Hopefully, the wise counsel of the mentors will help to bridge the gap between these children and the children who are more fortunate.

The second initiative I can think of relates to providing more training and exposure to someone from such background through training and internship opportunities in the bigger companies or corporations. But for these internships, many of those from less fortunate families may not know what it is like working for such large organisations or have the opportunity to impress their bosses with their potential. Very often, they do not even get past the initial stage of screening in the mail. Hopefully, the first contact through the internship programme could lead to a longer term of employment with these companies or at the very least inspire these interns to strive harder so that they too can be part of these organisations. Companies or business organisations that spend money on such programmes should be allowed to claim additional tax deductions as a way of incentivising them. It should be encouraged as part of their corporate social responsibility.

Sir, all in, I would say that this is a good Budget. The Government has demonstrated yet again that it is consistent in the way in which it seeks to grow the economy and share the fruits of economy with the majority of Singaporeans. In fact, this is a Budget that many Singaporeans, especially those from the lower socio-economic group, have reasons to cheer and rejoice. And for this, I applaud the Minister for the great work that he has done.

In the final analysis, I accept that we can never build a society that ensures equality of outcome. However, what I cannot accept is a society that cannot ensure an equality of access to an outcome. Our children cannot choose which family to be a member of, but our

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children can choose to be a member of the family of success. No one should have his outcome determined by the colour of his skin or the family he is born into. Ours is a society that believes in openness of opportunities. We believe that hard work and dedication to the task will bring about success and failure arises only because of inability and not want of opportunity. This is our commitment as a nation. Let us pledge to keep it that way.

With that, Sir, I support the Budget Statement standing in the name of the Minister.

1.48 pm

Dr Ong Seh Hong (Marine Parade) (In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, Sir, when our economy was in recession, the Government did not forget to give its people and businesses relief packages in its Budget. Last year, we achieved a strong 14% growth, and this year's Budget handed people a very substantial hongbao so that everyone can share the fruits of economic development. However, while handing out hongbao, we must let people know that they should not take it for granted that the economy will always grow at this fast pace. The reason we can overcome one hurdle after another is because we have a capable Government, a united people and a large reserve as our backup.

I told a story during the Budget debate two years ago about a ship running into a storm. The sailor says: when a person encounters hardships, he tends to become hysterical. However, when the situation gets worse, he feels how lucky he was previously. On the other side, people tend to want more. When he has one egg, he wants two; when he has two, he wants four. Such mentality is dangerous. This year's honghao is unprecedented and is

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considered very rare even in other countries. However, there are still people feeling unsatisfied, asking the Government for more.

It is necessary that we instil the philosophy of self-reliance in the people, so that they do not rely on the Government too much. Handing out hongbao is a kind of sharing, not welfare. Dependency will create laziness in people and it is detrimental to our nation's fundamental values.

With an ageing population and stricter immigration control, our tax revenue may decrease over time. At the same time, an ageing society will have higher demand on healthcare and welfare. Therefore, we must save more when we have surplus and prepare for the future.

(In English ): Mr Speaker, Sir, thank you for allowing me to speak in this Budget Statement debate. I have mixed feelings regarding the Budget as announced by the Finance Minister. For my fellow Singaporeans, I am happy for them. Everyone would be receiving something from the Growth and Share package in one form or another and many of them really need the extra help.

However, I am worried that this is something that they have come to expect every year around Budget time. Perhaps because the Budget in Singapore is almost always presented close to the Chinese New Year period, Singaporeans, too, are expecting hongbao, ie, red packets, from the Finance Minister every year. During a bad year, one expects relief and assistance packages. This, I can understand. However, during a good year, if one also expects goodies and bonuses, this indeed is not a healthy national culture.

In the Forum page of the Straits Times and at some dialogue sessions, there are already Singaporeans demanding that

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whenever there is budget surplus, the Government must give dividends away. Sir, is this the beginning of the long slide down to a culture of demand?

I have spoken on many previous occasions in this House of my concerns with this unhealthy expectation of goodies every Budget and, Sir, please pardon me as I am going to repeat it this year.

First, let me applaud our Government for taking the most prudent step in returning the $4 billion back into our reserves. In spite of dishing out a generous package to our people, we are still able to return the $4 billion. This is something that very few countries around the world can do. Sir, while we are celebrating this astonishing fiscal achievement, may I urge everybody to look carefully and think about how we managed to achieve this enviable position?

Sir, if you look carefully, after taking into account Special Transfers excluding top ups to Endowment and Trust funds, our fiscal position FY2010 was actually in the deficit of $2.5 billion. It was only after the Net Investment Return Contribution (NIRC) from our reserves of $7.8 billion that we managed to have a nearly balanced FY2010 of a slight deficit of $0.3 billion after considering top ups to Endowment and Trust funds.

If not for our reserves and the use of its return, we would have been in a Budget deficit last year and many other previous years. We would not have been able to offer the Resilience Package that helped us through the global financial crisis and get out of it so rapidly and effectively.

But what about the future? Going forward, we have to prepare ourselves for the challenge of an ageing population. We face the twin problems of falling fertility rate and the need to control the

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number of immigrants into Singapore. On one hand, we are not replacing ourselves fast enough or adequately. On the other hand, we have to manage the inflow of new migrants and foreign workforce in order to maintain our social stability. As a result, our population is getting older at a faster pace while the manpower base to support our economy is indeed getting smaller.

With a greying population, there will be a decreasing tax base and collections eventually. On the other hand, our elderly dependency ratio will increase. And this elderly population would also demand more funding for healthcare, social safety net and other elderly friendly infrastructures on all fronts. For example, we would need to build more hospitals, nursing homes, day centres and other facilities. We need to hire more doctors and nurses as well as many other healthcare and social service workers. I think my point is clear. On this rising demand on our very limited resources, we need no sober reminder that we are a small island-state with no natural resources to fall back on.

While we really need to save more money and resources for the future, I note that we have actually started spending more money from our reserves in the last two years. Prior to 2009, the Government was allowed to spend only what was defined as Net Investment Income (NII) from the past reserves. Briefly, NII was computed only based on dividends and interest income. The amount the Government was allowed to draw on was around $2 billion with the exception of FY2008, which I noted was at about $4.3 billion. In 2008, this House approved the changes that allowed a new computation of NIRC that is based on the expected real rate of returns over the next 20 years and that includes the capital gain. With the changes to this NIRC, the amount rose to $7 billion in FY2009 and $7.8 billion in

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the last FY and is estimated to be about $7.7 billion in the coming FY2011.

In short, we are only able to have a generous Budget this year, as well as returning the $4 billion to our reserves because of the changes we made in 2008. It is, therefore, fair to say that if we have not changed the rules in 2008, the amount that we may be able to carry forward would have been much lesser.

The other event that concerns me is, just after the change to NIRC, the world was hit by the worst financial crisis in history. I believe our assets managed by MAS, GIC and Temasek were also adversely affected to some extent, no matter how well diversified they might have been. They should have been recovered to some extent and to varying degrees by now. But I would like to know, though, what was the double impact of us having to draw on our past reserves when it was hit during the crisis and, at the same time, it was a time we really needed to use it most. I would like to find out if our reserves have continued to grow in real terms since then.

Sir, with the current world economic and political situations, I think we have to be even more prudent and cautious and prepare ourselves for more uncertainties and the future crises. This is particularly so in the face of predicted lower expected returns from our reserves in the future. I quote the Finance Minister's reply to former NMP Gautam Banerjee in this House in 2009. I quote, \"The expected rates of return which are estimates of the average returns expected over the next 20 years reflected the GIC and MAS Boards assessment that the future investment environment is likely to be less benign than over the last 20 years. The expected rates of return for the individual asset classes over the next 20 years are in fact generally lower than their historical rates.\"

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The Year of the Rabbit started off with much to be positive about because of last year's unprecedented economic growth. However, we have an ageing population on hand, with an increasing demand on our limited resources and I predict the decreasing tax base, maybe, in the future. Yet, the expected returns on our reserves over the next 20 years are lower in view of the uncertain global economic outlook. We therefore have to start saving more now for our future. I call on the Government to exercise more prudence than what we already have and save for stormy days ahead.

With that note, Sir, I support the Budget Statement.

2.00 pm

Er Lee Bee Wah (Ang Mo Kio) (In Malay ): [For vernacular speech, please refer to Appendix A*. ] I would like to congratulate the Finance Minister and his team for planning a Budget that is comprehensive, far-sighted and that touches on critical issues. The most important and complex issue is the inflation rate. This year’s Budget has addressed the issue and helped Singaporeans cope with the higher cost of living. I would like to state that many residents in my constituency are satisfied with this year’s Budget and the assistance being offered.

I am also pleased that the Government has set aside $10 billion to upgrade the HDB housing estates. With this upgrading, the older housing estates will be rejuvenated with facilities that can meet the needs of residents. It will also ensure homes that are more comfortable, peaceful and something that HDB residents can be proud of.

(In Mandarin): [For vernacular speech, please refer to Appendix A*.] Sir, I am pleased to see that the Government is

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setting aside $10 billion to upgrade HDB estates. This will rejuvenate the old estates and the residents living there will get new facilities to meet their needs, making their home safer and more comfortable. This is truly beneficial to the HDB dwellers and they should be proud of it. However, I hope the Minister can also set aside some money to improve the private estates’ facilities and safety. I raised this issue many times. For example, residents of Yio Chu Kang Garden are facing this problem of having to climb many stairs to go to the pasar or bus stops.

Our ageing population is not living only in HDB estates. Elderly people living in landed properties also need a safe and easy environment to move around. Barrier-free facilities will also facilitate the movement of pregnant and disabled residents. If they have space to move around conveniently, the elderly can interact more and stay healthy. We all know MRT is a popular mode of transport, convenient and indispensable. It is also used frequently by the elderly. I am pleading again here for lifts to be installed at the overhead bridges connected to MRT stations.

Every time I stand under the Khatib overhead bridge, I see an elderly person limping up the stairs with great difficulty. My heart aches. I have raised the issue many times in Parliament. From talking to the elderly people, I can see how hard it is to climb these stairs. I can understand them as I have knee problem too. I am looking forward to the installation of a lift at the Khatib MRT station overhead bridge in this financial year. Last year, the Senior Parliamentary Secretary told us that he would give me an answer in April. I had followed up with him subsequently. I understand that they are still studying but I hope they do not take too long to study.

Regarding transport concessions for the elderly, I hope the Government can

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discuss with the operators to extend the time of concession. This will help the working elderly, cutting the cost of commuting to and from work. Currently, elderly people can only enjoy the concession rate starting from 9.00 am.

Although this year’s Budget is designed to alleviate the impact of inflation, more importantly, it is to teach people how to fish. Sharing financial surplus is a quick and effective solution, but it is nonetheless temporary, unless the Government can guarantee similar Budget every year. We must provide means to Singaporeans to maintain a stable income even in times of difficulty. Can the Budget provide more incentives to people who are involved in skills upgrading?

We have various schemes to help citizens and the business to have higher income and to receive rebates. However, from the feedback I received and the response to media interviews, many Singaporeans know that the Government is handing out bonus, but they do not know how much they can get. Recently, I noticed from my residents’ feedback that more Singaporeans are in favour of self-employment. They can get cash after a day’s work. They like it because this arrangement will give them more freedom. However, without contribution to CPF, they cannot get Workfare bonus. They do not know that they do not have to go through an employer and they can contribute to CPF on their own to enjoy Workfare.

Hence, I urge the Government to do more to reach out to the self-employed, especially the low-income earners, and encourage them to pay to Medisave on their own so that they can enjoy Workfare.

(In English): Mr Speaker, Sir, I now move on to the issue of levy hikes on the employment of foreign workers. The

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Government’s aim is to encourage employers to heed the call for greater productivity. However, in the short term, the levy hikes are painful, especially for SMEs and industries that are highly unpopular with Singaporean workers, such as the construction, services and manufacturing sectors. Some business owners in the services industries told me that they have no clue on how to go about reducing manpower. It is not that they do not want to reduce the manpower. Just like our children may sometimes come to us and tell us: \"Mommy, mommy. I have studied very hard. I spend every minute of my waking hours studying but I still cannot achieve the KPI that you have set, that is, to be in the top 10 in class.\" As parents, do we give our children more pressure? Do we re-examine the KPI? Or do we show them the way by sitting together to re-examine how to achieve what we want?

I hope that the relevant authorities will go one step further and educate the companies on how they can reduce reliance on workers and how to tap the National Productivity Fund (NPF). It is prudent that these companies embrace productivity and work towards reducing reliance on manpower without compromising quality of work. We must reach out to these companies and show them the way or they may simply pass the levy hikes to consumers and cause further inflation. We need to encourage employers to make good use of possible tax rebates and send their workers for further education and training.

We have all the relevant tools and assistance schemes at hand. All we have to do now is to create awareness, persuade them to change their business management mindsets and show them the way. I note with special interest that the implementation of the one-off Special Employment Credit for older Singaporean

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workers covered by the Workfare scheme. I understand that the purpose of this scheme is to encourage employers to continue hiring older workers. However, they may stop doing so once this Credit scheme is fully paid out. I hope the Government will continue to propose long-term measures that will ensure the continued employment of older workers.

I wish to cite the example of Finland, a country that is also ageing. It is reportedly the first country to draft guidelines to improve the appeal of older workers. They introduced the Finnish National Programme on Ageing Workers (FINPAW) in 1998, a five-year programme designed to promote experience as a national asset. Highlights included education campaigns emphasising the value of older workers, worker and management training, research and development work to improve working life for the ageing population, and providing information about older workers. FINPAW was highly effective and it increased the employment rate for the age group 55 to 64 from 36% in 1998 to almost 48% by 2002, that is, 12% increase in four years.

We, too, had a recent campaign to promote experience as a national asset, involving visual advertisements that featured prominent senior citizens who still played active roles in the workforce. I feel it was too passive and did not have the intended impact. We should adopt an active and direct approach. We should give training to employers or management staff to help them understand how to treat their older staff and how they can utilise their older employees’ capabilities to maximum benefit without compromising efficiency. With better understanding about older employees, employers will be keener to hire them.

I am glad to hear that more funding will be allocated to Arts and Culture. When Minister Tharman mentioned this, I was pulling my ears wide and long like

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rabbit's ear, hoping that I would hear something on sports. However, there was no mention about additional funding to promote sports, which came as a surprise to me.

Let me share my experience as Singapore Table Tennis Association (STTA) President. I have been to many primary schools – meeting school principals and teachers-in-charge of sports. I try to persuade them to start table tennis at Primary 1, and very often they tell me that they have used up all their fundings. I have been having meetings practically every week with potential sponsors. Many people know that I am like a \"Professional Begging President\" (PBP). Very often, I present to them the programmes that STTA has. After the presentation, very often, they will tell me that, \"Very good. You have a very good programme but I think that should be the job of Government.\" In the recent funding that was just released, STTA received 43% of the funding that we asked for. Of course, we hope that the Government could do more.

Higher citizen participation rate in sports is highly beneficial to the nation as a whole. Sports is an important catalyst that promotes bonding between people of all ages. Regular participation in sports promotes good health. All these translate to happier and healthier citizens who have greater energy and metabolism which in turn lead to increased productivity. I urge the Minister to set aside more resources to promote a sporting culture in Singapore.

Last but not least, generous payouts and surpluses are possible this year due to cautious spending and effective measures as always. Last year, our Government took swift action, bringing the Budget forward and introducing new measures.

2.16 pm

The Senior Parliamentary Secretary to the Minister for Trade and Industry and Minister for Information, Communications and the Arts (Mr Sam Tan Chin Siong): Mr Speaker, Sir, thank you for giving me the time to join in the debate.

Sir, when the Finance Minister's Budget was released, we read about the many families that will benefit. Some will get a few hundred, others a few thousand dollars. Some told stories of bills that will be paid, new starts to their lives, turnabout at jobs because of training for new skills.

All these, I see as stories of hope, and the people benefited from the Budget have laid out their own plans far ahead. I had a feeling that they would have reached their goals sooner or later and this Budget just made it sooner.

On the other hand, there were also articles and postings on the mainstream and the new media. The Budget was thought to be underwhelming by some. They wrote, \"There is nothing for me. How will I get married if the Government does not help me buy a flat? Why are there no goodies for me if I live in a landed property? How come houses are so expensive? And why are the Growth Dividends just given out near election time?\"

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Sir, I do not know whether anyone can find a perfect answer to all these questions. But I did watch a three-minute YouTube video recently that gave me a reply. It was called, \"Why do you live?\" You can go to YouTube website and type \"Dream Rangers\" and you will get a video. This was sent to me by a grassroots leader. The video is about a group of Taiwanese men, average age of 81 years, who completed a round trip of the island on motorbikes in 13 days. They were nicknamed the \"Dream Rangers\". It was a very slick video. These old men, shaky on their legs but steady on their machines, shouting with joy in their old age as they revved their motorbikes.

The video also showed them in their younger days, yelling and running on their strong legs, splashing by the sea, bursting with energy and vitality, and the wind blowing through their shirts. These five were an original seven in their younger days. Now in their 80s, helmets on their heads and their bodies on the bikes, they were riding to the sea again, to bring the photos of a dead friend and a late wife, to watch the tide go out and also the sun go down on the other end of the sea.

\"Why do you live?\" the video asked. The answer was that \"we live for our dreams\". The video was a very good production, with a good message. I must admit that it turned out to be an advertisement for a bank. This is a bit of an anti-climax actually. But artists need to get their funding from somewhere. If it is not from the Government, MICA or NAC, banks will do just as well, I guess. Nonetheless, it was a good video with a very positive message.

So the answer I find in this video is this: if you have a dream, you live it. If you find a woman you love, you marry her. If you have no money for a large

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wedding in a posh hotel, do it at a community centre. If you do not have a flat, rent a room. Marriage is not just about money and you do not need to wait for the Finance Minister to dish out incentives to get married.

If you want to have a job you dream of having, work at whatever job that you have now, until you get sent for training, until you save up enough to attend advanced courses, until you are confident to go for another job interview. You do not need to wait for the Manpower Minister to put more funds in the Workfare programme.

If you dream of starting a family, or have a baby in your arms, just go for it, do what is necessary, and do not worry about enrichment classes, do not over worry that your child would not be able to score all four \"As\" in school. One or two over-zealous schools may need four \"As\" to meet their KPIs, but your child does not need to do anything but to be the best that he can be. You do not need to wait for the Education Minister – you make your own judgement and guidelines about what grades mean to you and your children.

Sir, my point is that we can each live our dreams, with or without help. If there is help, we get there faster. But if there is not, we should keep trying anyway.

Sir, from the many stories that we have heard and also from our own experiences, it seems that we seldom see courage in completely comfortable circumstances. I have a friend called Hans. I first met him when he was 18 years old. His mother approached the Chinese Development Assistance Council (CDAC) in 2008, referred by our parliamentary colleague, Mr Chan Soo Sen. She has been a single parent for more than 10 years. She supports her two sons and her mother with a full-time job. They live in a 2-room rental flat. This lady had to switch

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to a part-time job in mid-2008 due to medical and other problems. She went for a surgery in 2009.

At the recent medical review at the Singapore General Hospital, she was diagnosed with depressive disorder and other physical illnesses. She was given medical leave from February to August 2011. She now sees the doctor almost every week. And despite her illness, she never gave up and she is determined to work again when she recovers. In fact, there is an employer who is willing to employ her once she is better. Such is the warmth in our society.

CDAC has been helping her family with its assistance schemes, for example, giving her rental, utility and cash grants for the past two years. And Hans has become my friend because CDAC asked me to be his mentor. So I have been meeting and speaking with him and his family in the last two years. Their determination to succeed deeply inspires me. Hans has been serving National Service (NS) since last year and he contributes at least $200 of his NS allowance to his family each month.

Hans did not do well in PSLE. He got into Normal (Academic) stream. However, he did very well in secondary one, topped the cohort and was transferred to Express stream in secondary two. He continued to do well and scored seven points for his \"O\" levels which enabled him to get into a junior college (JC). He did equally well in JC. And he plans to do his degree in life sciences in a local university after his NS. He is now actively applying for scholarships to support his university studies. With his determination and fighting spirit, I am confident that he will achieve his goals.

His brother has been diagnosed as dyslexic since 2005. With no means to seek professional help, his mother has to

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coach her son patiently to improve his auditory skills and learning abilities. He completed his \"O\" levels last year and will join a polytechnic soon to study material science.

The two boys and their mother are very close. I asked Hans what is the greatest thing his mother ever did for him. This is what he said: \"She told me I can do anything if I am determined. Even when I was not doing well in school, she believed in me. She told me that as long as I have a strong will, I will succeed. I trust her because I have seen what she can do. Despite her illness, she still goes jogging with us, she guides me in making major decisions. But the most important thing is she gives me the courage to dream big.\"

Sir, this Budget gave this family some money, it gave them some relief from bills, it gave them a little help. The community, too, gave them some help through CDAC. So I am very happy that the Finance Minister gave $10 million to community self-help groups in the next five years so that they can continue to do more good to help more needy families like Hans. But the core of this family's success lies in the courage of their mother and the determination of their sons. Sir, the victorious overcoming of this family cannot be solely attributed to the goodies that the Budget has given them.

Sir, I do not belittle the billions of dollars in public funds each year. They make a real and significant difference. They set the economy on the right track, they provide education and other opportunities to those who would otherwise not have had them, and they go towards building the large and the significant and efficient infrastructure we have in Singapore.

But, yet, you cannot pay for some of the things in life. You can spend a billion dollars and, say, buy a year's worth of

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resilience, or of the Singapore spirit. But you cannot subsidise someone's courage to live a life of meaning and worth. There is something in life that we have to find within ourselves. Hans and his family have shown us what this something is all about.

There is, for me, a simple way to tell if the Budget brings real benefits to the people and the country. If the Budget hinders us, if it taxes so severely or gives too generously that we lose our motivation to work, if it makes onerous administrative demands on us and on businesses, then it cannot be a right budget.

Sir, a good Budget supports us in our dreams. It gives us \"money enough\" for education, it makes sure that we are fed, it gives us a roof over our heads, to make sure that the basics are taken care of. The rest, we have to do it ourselves, as we should.

Sir, whether we are 81 or 18 years old, we all can be the \"Dream Rangers\". I thank the Finance Minister for a fair and sound Budget, one that does not make onerous demands and has a light yoke for the people as well as the businesses. At the same time, I would like to urge him to think of the people who have small pockets but big dreams, and to consider how much further he can help them in his next Budget.

Sir, with this, I thank you and I support the Budget.

2.27 pm

Mr Calvin Cheng (Nominated Member): Mr Speaker, Sir, thank you for allowing me to join in this debate.

Like some of my hon. colleagues before me, I am concerned about the

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increase in foreign worker levies. Without a doubt, increasing productivity and reducing reliance on cheap foreign workers is a laudable aim; however, the devil, as always, lies in the details.

Sir, I am especially concerned about the impact of this increase on the hospitality industry in Singapore, which not only includes hotels but the many F&B outlets that form a large part of Singapore's SME sector. Anecdotally, these are the industries that find it the hardest to find local staff as Singaporeans do not see an attractive career in being waiters, waitresses or other service staff. Sir, the hospitality industry is vital to Singapore's growth as a tourism centre and if we are serious about growing tourism, the Government needs to pay extra care to this issue.

The problem is that the well-intentioned call to increase productivity when translated into reality may not prove very implementable. The hospitality entrepreneurs I spoke to are tearing their hair out, wondering how they are meant to increase productivity. At the end of the day, Sir, the hospitality industry is very reliant on the human being and much of the service cannot be automated. We may yearn for the day where robot waiters can be deployed but this, at the moment, is science fiction. At the moment, a waiter's work is very personal and although we hear about the use of iPads to take orders, truth be told, the increase in productivity is only marginal. A waiter, being a human being, only has two hands, two legs, one mouth and two ears and can only be at one table at a time to take orders or deliver food. Unless a new technology or new drug is invented to enable a waiter to run faster and move his hands with lightning speed, the number of tables he can wait is going to be naturally limited. No amount of training or deployment of iPads is going to increase this physical limitation by much. One cannot automate a smile.

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The key, therefore, may lie in business processes, including the remuneration schemes that hospitality industries use. When we travel, we notice that in many countries, the service staff are not only local but are often more efficient and provide excellent service when compared to Singapore. They are very much human and probably not on any super human drug. They are also not using cutting edge secret technology either. So how do they do it? One answer may actually lie in remuneration. In Europe and the United States, waiting tables is a viable career choice, paying enough financially to attract locals who are better educated and better trained.

2.32 pm

Mr Lim Biow Chuan (Marine Parade): Sir, I join the chorus of voices to compliment the Finance Minister for an outstanding Budget. In particular, I support the Government's decision to return to the reserves the sum of $4 billion which was withdrawn to fund the Resilience Package last year. It is a financially prudent decision and we should also spend within our means. Sir, having so called \"borrowed\" from the reserves during difficult times, it is only right that we return the borrowed amount when we have recovered from the crisis.

I also support the Government's plans to strengthen our economy and society for the future. Although we had an exceptional growth last year and had accumulated respectable surpluses, we should not simply spend or distribute the bulk of the surplus to the people. Too much cash in the market system would simply add to inflationary pressures. It is a far better solution to plan for sustainable growth over the long term and to grow income and to build up our resources. Hence, to me, to set aside $3.2 billion for the Grow and Share Package and $3.4 billion for longer-term social investments is just about right. Although there have been various feedback to ask for more to be distributed under the Grow and Share Package, I think we should strike a balance and not simply ask for more to be given so that we have more to spend. I am of the view, Sir, that we should

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emphasise to our citizens the fact that the Growth Dividends is partly to help Singaporeans cope with inflationary pressures and not for them to buy another electronic item or splurge on a holiday to an exotic place.

Sir, allow me to make some suggestions on the Budget. Like the hon. Member from Tampines GRC, Ms Irene Ng, I support the Workfare Income Supplement (WIS). However, would the Minister consider extending the eligibility criterion from $1,700 to $2,000 a month? The reality is that with inflation and higher cost of living, the sum of $1,700 is not adequate if there are many dependants in the family. We should use WIS to put more money into the pockets of the lower-income and the lower middle-income so that they can manage their own lives with greater dignity and with knowledge that they have earned their wages. We should seek to make them financially independent albeit with some Governmental help instead of asking them to stretch out their hands and seek financial help from ComCare. Could we also not exclude bonuses in the computation of average gross monthly income? Bonuses are given by most companies at the end of year to reward their staff for their hard work. If the bonuses cause the average monthly income of the worker to exceed the income criteria for WIS, this will have the strange result of making a worker unhappy when he receives bonuses at the end of the year. Sir, I call upon the Government to refine the WIS policy to help the lower-income workers earn more through the WIS.

For the elderly and pensioners, other than the small increase of the Singapore allowance by $20 per month, they will have to manage on their own to cope with inflation. Could the Minister consider doing more for this group of people to

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help them cope with inflation? I recognise that there are Medisave top-ups, but how about some extra Growth Dividends at the end of the year, not just through Medisave but perhaps in cash for seniors aged 60 years and above to acknowledge their contribution to the development of Singapore over the past years. This will help them adjust to the inflationary pressures as costs of living increase.

On the topic of inflation, the Minister has laid out various measures in the Budget Statement to help tackle inflation. Most of the increases in prices are due to increase in the cost of supplies, increase in the costs of manpower and increase in the cost of rentals in all properties. With the increase in foreign worker levy and the increase in CPF, these will likely lead to more price increases as businesses will have to raise prices to cope with the increase in manpower cost. How else does the Government intend to deal with inflation? Can we not try to keep the cost of land lower? How about shorter leases for commercial or industrial properties so as to make properties more affordable? Could we also have a freeze on all Government fees or charges for the next two years so that this does not add to the rising costs? The Government should be aware that once their fees or charges are increased, it will signal to businesses to also increase their charges. I also call on the Government to review all its current fees and charges to ensure that these charges are fair and reasonable. Just yesterday, a grassroot leader informed me that he was slapped with a bill of $3,850 just to connect gas to his home and barely six months ago, the connection cost was $2,750. I cannot understand how the charges for connecting gas can be increased by more than one $1,000 within six months.

Finally, Sir, the Government is spending $10 billion over the next 10 years to rejuvenate estates. The bulk of the money will be spent on the Home

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Improvement Programme (HIP), Neighbourhood Renewal Programme (NRP) and Lift Upgrading Programme (LUP). May I ask the Minister whether there are plans to upgrade private estates as well? Could we not set aside more money to spruce up the common areas within private estates, create more walkways by covering up drains, carry out more repair to drains or railings separating the drains or build more rain shelters or taxi stands, beautify the parks and increase the frequency of cleaning for private estates? One of the most frequent complaints I receive whenever I visit private estates is that the drains and the roads are not cleaned regularly. Sir, doing all these to improve the environment of private estates is to enable citizens living in private estates to enjoy the fruits of economic development in Singapore as well.

With that, Sir, I support the Budget.

2.37 pm

Mr Ang Mong Seng (Hong Kah) (In Mandarin ): [For vernacular speech, please refer to Appendix A*.] Mr Speaker, Sir, this year's Budget is a generous Budget, as Government shared the Budget surplus with the people. As the saying goes, we stick together \"through thick and thin\". When our nation faced the economic crisis, the entire nation worked together with the Government to swiftly overcome the crisis. In FY2010, our economy achieved 14.7% growth. In this year’s Budget, the Finance Minister announced a number of hongbaos, which benefited the elderly, the young and even children. Of course, the size of the hongbaos depends on each individual’s situation. On the whole, everybody is satisfied and praised this year’s Budget.

After the Budget was announced, when I took part in some activities in my constituency, many residents told me they were very happy about the Budget. When

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I attended Lunar New Year events organised by the constituency, associations and companies, we tossed the yusheng (raw fish salad) and everybody was cheering \"Fa!\" \"Fa!\", meaning to strike it rich. The atmosphere was very joyous. As this year’s Budget was announced during the Lunar New Year period, everybody was in a good mood, and it created a harmonious and cheerful atmosphere. Everyone was happy and satisfied with the Budget. Hence, I do not need to spend a lot of time to discuss the contents of the Budget. Today, I will touch on issues that the public is concerned about.

Many Singaporeans work their entire life only to find that when they retire and have no income, the money they have is not enough. As Singapore faces a rapidly ageing population, there will be more and more retirees. According to an editorial in Lianhe Zaobao, dated 23rd February, titled \"One should plan early for life after retirement\", international market research firm, AC Nielsen, recently released an online survey report. According to the report, among Singapore netizens who participated in the survey, only 14% indicated that they have prepared financially for life after retirement. This is lower than the average 22% in the Asia-Pacific region and the global average of 18%. Hence, we must prepare for the future and look into the root cause of Singaporeans’ lack of financial resources in retirement. I would like to discuss this problem by looking at the cash and CPF aspects.

Mr Speaker, food, clothes, accommodation and transport are the four basic needs of Singaporeans. I believe there are no problems in terms of food and clothes. Singaporeans are well-clothed and well-fed. Now, I would like to talk more about transport and accommodation. These are the two areas that young Singaporeans are currently most concerned about. Transport is an area that Singaporeans are

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very concerned about. They bought cars for work. Currently, there are about 600,000 privately-owned cars in Singapore. Considering Singapore has 3.28 million citizens and 500,000 permanent residents, this comes to a total of around four million people. After discounting one million residents below 18 years old, we come to the figure of three million people. Based on this figure, an average of one in five people in Singapore owns a car. This rate is quite high.

If Singaporeans start to own a car from 30 years old, he would likely own a car for life as few of those who own cars will give up their cars totally and switch to public transport. How much would one have to spend on car ownership, from the age of 30 to the retirement age of 62? I believe not many Singaporeans have done their sums.

I have calculated before and would like to share with everyone. If you buy a 1,600 cc car at $120,000, inclusive of COE, a seven-year instalment package means that you would have to pay $1,200 in monthly instalments. In addition, the monthly expenses incurred in terms of petrol, road tax, insurance, maintenance fees, parking fees, ERP fees and the occasional fine meant that the monthly cost would be $2,000 in total. That works out to be $25,000 per year. If the calculation is based on 30 years, you would have to spend $700,000 to $800,000, all these costs are paid in cash. This may be why some retired Singaporeans with no income face the problem of a lack of liquidity.

Some Singaporeans who own cars tell me that they have no choice but to buy a car because they need to go to work and do business. Cars are necessary for their work. The cost of car ownership is high and the burden is heavy, but for the sake

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of their business, they have no choice. We need to help them with these challenges. At the same time, we should also improve the public transport service to make it convenient for Singaporeans. I would like to make three suggestions.

Firstly, the number of ERP gantries has been increasing. We have achieved our original objective of implementing the ERP system, which is \"use more, pay more\". Since we have installed many ERP gantries, I suggest the Finance Minister consider lowering road tax by 20% to lighten the burden of Singaporeans.

Secondly, to encourage more Singaporeans to switch to public transport, I hope the Government can consider and hasten the pace of building office buildings and commercial centres around MRT stations, to make it more convenient for the working people and Singaporeans to switch to public transport, so that fewer would want to buy cars, thus reducing the cost of owning a car.

Thirdly, I hope some Government Ministries and larger corporations will move beyond the city area. Currently, tens of thousands of cars are driven to the city from suburbs like Ang Mo Kio, Clementi, Jurong, Woodlands, Sengkang and Punggol in the morning, then driven back home in the evening causing traffic jams. I hope the Government will develop business centres outside the city area, encourage more businesses to move their offices out of the city, thus reducing the number of cars entering the city. HDB’s move to relocate their headquarters to Toa Payoh is a good example. It boosted business activities in the surrounding neighbourhood and made it more convenient for Singaporeans to process their flat purchase. The Government has announced the development blueprint of Jurong Lake. I hope that the Government will implement similar development plans in other suburban areas at a faster pace to relieve our traffic problems.

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Mr Speaker, next, I would like to touch on the housing problem. As a result of the Government’s home ownership policy, 83% of Singaporeans live in HDB flats, 94% own properties. This extraordinary achievement is a result of the Government’s home ownership policy.

Recently, many Singaporeans are concerned that they will be unable to afford a HDB flat due to rising housing prices. My understanding is that all those who bought flats directly from HDB have made money. Recently, I did a survey with a few hundred grassroots leaders and residents when I attended an activity in my constituency. All the residents who bought flats directly from HDB confirmed that the value of their flats have gone up.

I am sure that all Singaporeans who bought flats directly from HDB have made money because flats are of good quality and are well-maintained by Town Councils. That is why flats have maintained their value and even increased in value. We must thank the Government for their home ownership policy and the efforts of Minister Mah Bow Tan, to enable Singaporeans to maintain and increase the value of their property.

Most Singaporeans use their CPF funds to pay for their mortgage. However, when they reach retirement age, they have no job, no income and not much left in their CPF accounts as most of the CPF funds have been used to pay for the house. They own a 4-room or 5-room flat worth $400,000 to $500,000 dollars, but they do not have cash. In order to help these Singaporeans with financial problems, I have three suggestions to make.

First, retired home owners can consider downgrading from a bigger flat to a smaller flat, for example, a studio flat. When the elderly sell their bigger flat, not only will they have cash to pay for

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expenses in their golden years, they will also have a smaller unit which is easier to maintain and designed to meet the needs of the elderly. I hope HDB will build more studio flats for the elderly soon.

I also suggest that HDB build more smaller flats, for example, 2-room flats, for retirees and low-income families. Not many small flats are available at the moment. Judging from cases seen at the Meet-the-People Sessions, there are not enough small flats to meet demand.

Thirdly, waive the 30-month ban for retirees to apply for a smaller flat after selling their bigger flat. The sale of these bigger units in the resale market will help meet the demand of young families, while reducing the demand pressure on HDB to supply flats. This is a \"win-win-win\" solution which I hope HDB will seriously consider.

Next, I would like to talk about the financial difficulties faced by some low-income families. Let me give you an example. A resident, with a household income of $800, has four children. He owes SP Services around $470 in utilities bill. On the 16th December, he received a letter from SP Services requesting him to pay all outstanding fees by the 24th December or the water and electricity supply to his home will be terminated. He came to ask me for help during the Meet-the-People session. He felt lost and sad. He told me because he ran into financial difficulties, he is unable to pay off all outstanding fees at once. At the same time, he is unable to withdraw his CPF to pay. If the water and electricity supply is cut, he will have to light candles on Christmas Eve. Most Christians light candles and sing carols on Christmas Eve to rejoice in celebration. But this family is lighting up candles because they have no electricity supply. The mood is totally different. In the end, I advised this resident to come up with $50 first. In addition to the $60 utilities voucher that I

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gave him, he managed to get a total of $110 to pay for part of the utilities bill to avoid termination of the water and electricity supply.

Hence, I suggest that SP Services consider allowing their officers to attend our Meet-the-People Session to understand the residents’ problems, so that they can experience first-hand the problems faced by the residents. When they process such cases in the future, they can then deal with them in a more compassionate manner, to exercise greater flexibility so as to help resolve the residents’ problems.

Mr Speaker, I support the 2011 Budget.

2.51 pm

Dr Ahmad Mohd Magad (Pasir Ris-Punggol): Mr Speaker, Sir, much has been said about the many initiatives under Budget 2011. I agree with many of the hon. Members of this House who have labelled this a people-centric Budget. It has indeed offered a slew of short and medium to long-term initiatives to assist Singaporeans, particularly those from the low- and middle-income groups to cope with rising prices and an expanding economy. However, like many of those who have spoken before me, I, too, have some concerns about issues and challenges that lie ahead for Singaporeans and the extent to which this Budget can effectively help to meet these challenges.

Sir, one main worry in the mind of many Singaporeans is rising costs. Inflation rates have been soaring in recent months, attributable primarily to increases in private transportation costs from high COEs to housing prices. The Consumer Price Index shows the year-on-year increase of 18.4% for transportation and 5.3% for housing. The rate for food has

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gone up by 2.8%. Increased global demand for raw food materials and a shortage of supply may have caused prices of raw materials to increase. But I feel that it might not correspond to the increase in prices charged by some of our food sellers. I often hear about hawkers and food sellers increasing prices far beyond this. On average, a glass of teh tarik can cost between 90 cents and $1.20 in many coffeeshops when it used to cost only 70 cents or 80 cents not too long ago.

I am glad that a watch group has been set up to keep tab on profiteering but I would like to ask if the group's scope of responsibility includes a study to understand how extensive this profiteering issue is. If it is just a few hawkers who have increased their prices substantially, then market forces can work things out. If it is more widespread to the extent that consumers do not have many choices, then something needs to be done to arrest the situation. Perhaps the watch group could widen its scope to beyond just food suppliers and keep tab on hawkers and food sellers who indiscriminately increase their prices. These could be quite challenging to track but will assure Singaporeans that their interests are looked after and that they will have an avenue to provide information and feedback on food price increases and excessive profiteering.

Sir, in his Budget Statement, the Finance Minister has said that the Government intends to grow real wages by 30% in the next decade. This is certainly a noble endeavour but I would like to ask whether this proposed growth in real wages takes into account inflation rates. I believe this should be factored in and projected into wage growth considerations in view of global rising prices and the uncertainties that are currently enveloping the world. At the end of the day, I am concerned that Singapore will be an increasingly expensive place to

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live, work and play in. To what extent then can we keep our competitive edge in this region? In 10 years' time, other competitive markets such as China, India and Vietnam will narrow the technological and general know-how gap to compete with us in higher-end industries.

Sir, at the same time, there are also several sectors that are lamenting about the need for growth in salaries now as low salaries and long working hours have caused difficulties in attracting Singaporeans to work in such industries. These include the early childhood sector, special education teachers, auxiliary security officers, and caregivers at elderly homes and facilities. There is a need to further professionalise these industries and further reward workers in these sectors as they perform duties that are critical for different segments of the Singapore population. I would like to know how the Government plans to help companies and organisations in these fields to boost productivity and increase salaries at the same time.

Turning to businesses, Sir, if one wants to be a cynic, one can regard this Budget as taking the approach where a person has his left arm pinched but his right arm soothed with some lotion. As many speakers before me here have said, the increase in foreign workers levy has indeed caused some consternation amongst businesses. Whilst a set of one-off measures will be introduced to help cushion the impact of rising costs on the companies, the reality is that costs are rising especially for companies that are heavily reliant on foreign workers. The construction, manufacturing and service industries will be among the hardest hit by this change in the levy.

Whilst some companies will be induced to introduce ways to increase productivity to enable them to benefit from the various funds and credit schemes aimed at boosting productivity,

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others may just take the easier way out by either hiring less or passing on the increased costs to consumers. If they hire less, it means service levels and efficiency will be affected. If they pass on the increased costs to consumers, it means that consumers will have to bear the burden of the levy increase which further contributes to inflation.

Sir, I believe boosting productivity depends much more on changing mindsets, re-designing tasks and re-skilling workers. Incentives such as the Productivity and Innovation Credit, which was introduced last year and further boosted this year, will help companies financially and encourage them to improve processes and innovate. However, to assess the effectiveness of the productivity and innovation credit, may I ask if there are any statistics on how many companies have claimed and benefited from the scheme, and are there effectiveness measures that are used to track whether the benefiting companies' productivity has indeed increased?

On a social issue, Sir, the Government and the ICA have done much to listen to Singaporeans about their grouses in the rapid intake of foreigners, which I applaud. I would also like to ask that they exercise better discretion in reviewing specific appeal cases. I have a case of a female resident who has just given birth and whose husband has just started a food business and has to travel for extended periods to promote his business in Malaysia. She has appealed to the ICA for a long-term visit pass for her Malaysian mother-in-law to stay here and assist in looking after her baby so that she could continue working. She was told to submit documentation of her husband's income. In spite of having substantiated this twice, the application was rejected. She is now left with little choice but to consider leaving her job and possibly join her husband in Malaysia. She said that she truly regretted very much having her

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baby and would not have done so if she knew it was going to be this difficult for her. She told me outright that she has scrapped any future plan of having another child.

     Sir, I am quite certain there are probably quite a few families in similar predicaments. Denying families of such help is a double whammy for Singapore. We stand to lose professional working Singaporean females from the workforce and turn them off from wanting to have more babies – something that Singapore really direly needs. What is the use of the Prime Minister calling on Singaporeans to have more babies on the one hand when, on the other, we are making it so difficult for those who want to respond to the Prime Minister's call?

     Sir, I appeal to the ICA and other Government agencies to be more discriminating and forgiving in considering such genuine appeal cases.

     Sir, allow me now to speak in Malay.

(In Malay ):[For vernacular speech, please refer to Appendix A*.] Singapore's economy is presently gaining momentum and is expected to grow between 4% and 6% this year. Job opportunities have also increased with recent figures from the Ministry of Manpower showing that there are about 15,000 job vacancies that have yet to be filled. All these are good signs for Singapore, including for the Malay/Muslim community.

For the unemployed or low-wage groups, this is the time to seize the job opportunities available with the help of organisations like the CDC and Mendaki Sense. Even though some lament about facing competition from foreigners, such competition can be overcome if each individual try to arm himself with the

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necessary skills, be hardworking and think positive.

In terms of the global political developments, the Middle East is now in turmoil due to the people in some countries like Tunisia, Egypt, Bahrain and Libya, who already have or are trying to overthrow their governments because the people are too pressured by social problems, especially poverty. I hope that the Malay/Muslim community will not be carried away or influenced by the developments over there because the challenges faced there are specific to the political and leadership problems in those countries. Egypt, for instance, faces a serious poverty problem with almost 40% of its people living on less than US$2 daily. It is very different with the reality of life in our country. Therefore, the Malay/Muslim community in Singapore must focus on their lives here and continue to find ways to improve their own skills, education and levels of achievement.

Moving on to social issues, recently there are some cases of child abuse reported in the papers. These cases involve children who were abused by their stepfather or the boyfriend of the child’s mother. Even though these cases reported are few in number and do not reflect a widespread trend in the community, the horrific nature of these cases is a cause for concern.

Hence, I would like to request for the Government, especially MCYS, to provide more funds and support to Malay/Muslim organisations that run programmes for high-risk families. Maybe MCYS can consider having post-divorce programmes, specifically for men and women who face problems when rebuilding new lives. A programme to build self confidence and self reliance should be implemented for women in this category who have recently gone through a divorce. Since many of them are dependent on their

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husbands for financial and emotional needs, they may not be used to living alone and find it difficult to be independent, especially emotionally. As a result, some of them get involved with a new partner without taking time to really get to know their new partner’s personality. Furthermore, for single mothers who are working, many of them are possibly unaware of the childcare schemes that they can make use of. I hope that MCYS, with the cooperation of Malay/Muslim organisations, can spread the message about the choices available to fulfil this need.

With this, I support the 2011 Budget Statement presented by the Finance Minister.

Sitting resumed at 3.25 pm

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[Mr Speaker in the Chair]

ANNUAL BUDGET STATEMENT

Debate resumed.

Mr Michael Palmer (Pasir Ris-Punggol): Mr Speaker, Sir, thank you for giving me the opportunity to speak on the Budget Statement. This year’s Budget and its focus on strengthening our economy and society for the long term is commendable. I am particularly impressed by this year’s Budget for the following reasons.

First, that the amount of $4 billion that was withdrawn from our reserves to fund the Resilience Package will be fully repaid into the reserves, and in such a

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short time. There is no hesitation on the part of the Government to do so because the safeguarding of our future has always been a priority. That the Government is able to reinstate the funds in such a short time is a testament to the robust measures that were put in place during the downturn which allowed our economy to recover more quickly than most, and we were able to hit the ground running once the crisis was over.

Second, the Budget is impressive because it remains consistent with and improves on the fiscal policy that was put in place last year in our drive towards greater productivity. To this end, we see a significant increase in our National Productivity Fund and Productivity and Innovation Credit scheme. Aside from these monetary incentives, monetary disincentives in the form of an increase in foreign worker levy have also been proposed. This is clearly an unpopular decision for businesses but a bitter pill that we will have to swallow for long-term health. That said, I believe that certain allowances ought to be given in certain sectors that are unable to replace the human touch. I will elaborate shortly.

Third, the Budget reaches out to lower-income as well as middle-income Singaporeans with both long-term and short-term distribution of surpluses. The increase in training support, top-up to Medisave accounts, the increase in the Public Assistance rate, the increase in the household income ceiling for KiFAS and CFAC applicants and a Workfare Special Bonus are but a few of the goodies.

Notwithstanding the host of measures, inflation remains a very real concern for all Singaporeans. In order for the measures in the Budget to bite and alleviate the effects of inflation, the details of its implementation become even more important. For certain measures, I feel that the criteria for entitlement may need to be more finely calibrated.

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In my division of Punggol East, the vast majority of housing consists of 4- and 5-room and HDB executive flats. Many of the owners would fall within the middle- to lower-middle income categories. A recurring issue that my residents raise after each year’s Budget is the fact that the 4- and 5-room and executive flats always receive less in U-Save and Service and Conservancy Charges (S&CC) rebates. The Government’s rationale for this is that the occupants of these flats come from a higher income bracket because they can afford to buy larger flats and, therefore, do not require as much subsidy as those in the smaller flats.

However, often, the occupants of the 4-, 5-room and Executive flats are not only the owners and their children, but also one set of parents and perhaps a younger brother or sister and even his or her family. What is also quite common is that there is possibly only one main breadwinner who supports the household, while the spouse looks after the children and ageing parents. These residents feel the pinch of supporting more dependants while receiving less help. With a higher number of occupants, almost inevitably, more water and electricity will be consumed. The result is that the household costs relative to income may be as high as, if not higher, than some of those living in smaller flats. This is not taken into account when allocating rebates for U-Save and S&CC.

I would suggest that a fairer and more targeted distribution of rebates for U-Save and S&CC could be achieved if, in the criteria for assessing the amount of rebate a household receives, we include household income and the number of family members living in the household. In addition, if we introduce bands for the rebates for each size of flat, and if the amount of rebate received within each band is determined by household income

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and the number of family members living in the flat, this would lead to better and more targeted relief from utility bills and S&C charges.

The next issue which I would like to address is the control on the number of foreign workers in Singapore. The measures currently in place to control the number of foreign workers in Singapore include the implementation of a levy and quota system that determines how many foreign workers each employer is entitled to employ. Both these measures control the numbers that come into Singapore to work either on Work Permits or S-Passes. What small- and medium-sized businesses are now facing is not just an increase in the levies, they are also experiencing a recent trend of rejection of applications to renew Work Permits and S-Passes. In other words, they are being squeezed from all sides – they cannot get new workers, they cannot keep existing ones who are up for renewal even if they are willing to pay higher levies and those whose work passes are still valid are more expensive.

Just last night at my weekly Meet-the-People Session, I met a couple who live in my constituency and who own a small restaurant. They have come to see me on many occasions to appeal against the rejection of the renewal of their employees’ S-Passes and Work Permits. These are employees whom they have trained and who have worked with them for some two years and more. They have tried on many occasions to hire Singaporeans or permanent residents to replace these foreign workers. Advertisements placed for various positions go unanswered or in the one case where an applicant had accepted a position, he did not turn up on the first day of work and was never seen again.

This is but one of many similar experiences that have been related to me by owners of small- and medium-sized

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businesses, particularly in the service industry. They want to be productive and want to hire locally, but they tell me that they cannot find local workers, and technology can only go so far but can never replace the human touch where service is concerned. The end result is that we may see several of these small- and medium-sized businesses closing down because there is no one left to do the work.

Should some allowances not be made for certain sectors where the human touch cannot be replaced and we know that Singaporeans are not willing to do the work? Do we want to impose measures across the board that may ultimately result in some of our small- and medium-sized businesses shutting down?

I would also like to raise a different issue with regard to the other end of the spectrum – the foreigners who come into Singapore on Employment Passes. These are usually for jobs that require a high level of skill or qualifications, with commensurately high salaries. The only criteria that seem to apply to this category of foreign workers are that the person possesses the right qualifications for the job and that his remuneration be fixed and above a minimum level.

We are proud of the high level of education and qualifications of Singaporeans. But are qualified Singaporeans getting a fair chance to vie for these jobs? Do companies just import foreign talent without first looking for qualified local talent? Why not introduce one more condition for the granting of an Employment Pass – that employers show that a Singaporean is unavailable or unable to perform the same job? This criterion is not uncommon. When I did some research, I found that many countries, including the United States, the United Kingdom and Canada, all impose this type of criterion as well. I found that all the countries that I have cited have

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rules which require an employer to show that they have advertised or searched but cannot find a local person who is similarly qualified and is able and willing to do the job on the same terms as the potential foreign employee. Should we not be looking at imposing a similar condition for workers who are to be employed on an Employment Pass?

In our drive to increase productivity and have Singaporeans do the work where possible and reduce our reliance on foreign workers, we ought not to ignore the exigencies and specific needs of each type of industry. Certain sectors can boost productivity by leaps and bounds through the use of technology and machinery. Certain sectors require people to provide a service. For certain jobs, Singaporeans have the qualifications and skills and ought to be hired in preference to someone from overseas where possible but, for some jobs, we still fall short of the skills and experience and therefore must import our talent. A one-size-fits-all approach is not ideal. I urge the Government to be more flexible.

Mr Speaker, Sir, the Budget is indeed forward-looking and one that will stand us in good stead in the long term. Its measures aim to distribute something to everyone, soften the effects of rising prices and pave the way for a more productive and advanced economy. But in the implementation of those measures, we ought to ensure that they are effective at all levels.

With that, Sir, I declare my support for the Budget.

3.36 pm

The Deputy Prime Minister and Minister for Defence (Mr Teo Chee Hean): Mr Speaker, Sir, 2010 was a good year for our economy. Gross Domestic Product grew by an estimated 14.5%, a recovery from the 0.8% contraction in 2009.

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Riding on this rebound, labour productivity also rose by 10.7% based on preliminary estimates.

However, we should not be complacent and declare victory prematurely in our efforts to improve productivity. It is only one year, and the exceptional productivity performance was due to our strong economic recovery. To achieve long-term economic and real wage growth, we need to sustain the momentum of productivity improvements.

Last year, the Government announced a series of Budget initiatives aimed at driving productivity growth for our economy. These include the establishment of the National Productivity and Continuing Education Council (NPCEC), the setting up of the National Productivity Fund (NPF) and the introduction of the Productivity and Innovation Credit (PIC). The Minister for Finance talked about the NPF and the enhancements to the PIC in his Budget speech. Allow me to provide an update on the work of the NPCEC, which I chair.

The NPCEC was set up last year to galvanise the national productivity drive. All stakeholders – the Government, unions, businesses and workers – are represented. We have a good diversity of expertise, experience and viewpoints. The Council has three objectives: first, to prioritise and champion productivity initiatives at the sectoral, enterprise and worker levels; second, to develop a comprehensive, first-class national Continuing Education and Training system; and third, to entrench a culture of productivity and continuous learning and upgrading in Singapore.

Recognising that each sector in our economy faces different challenges, the Council has adopted a sectoral approach, with an initial focus on 12 priority sectors.

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Therefore, instead of talking about productivity in general, in economy-wide terms, what we are trying to do is to focus on each sector and make productivity meaningful for that sector, and use measures in that sector which are meaningful for the companies and the workers in that sector. These 12 sectors were selected based on their potential for productivity gains, contribution to GDP as well as employment size. Government agencies were appointed to lead Working Groups to study the productivity issues in detail and develop productivity roadmaps for each sector. These Government agencies, of course, cannot work on their own. These Working Groups have been hard at work over the past year; they have been consulting stakeholders, engaging experts and conducting studies to determine the specific productivity gaps for their sectors, and developing strategies and programmes to address them.

Sir, the Council has endorsed seven of the 12 sectoral productivity blueprints so far – these are Electronics, Precision Engineering, Construction, Retail, Food Services, Hotels and Logistics and Storage. In addition, we have also endorsed the productivity roadmap for the landscape industry, which is part of the Admin and Support Services sector. Together, these sectors account for about 25% of Singapore's GDP, and about 36% of our workforce. The other Working Groups are scheduled to table their roadmaps for endorsement this year, after discussion with the various industry sectors, and this will bring the total for the 12 sectors being covered to 40% of GDP and 50% of the workforce.

Some Members, such as Mdm Ho Geok Choo and Mr Calvin Cheng, have asked about improving productivity in manpower-intensive industries such as Food and Beverage and Retail. Productivity is not just about automation or cutting manpower. Companies need to

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take a holistic, comprehensive and fundamental re-look at their businesses. Take the retail industry as an example. The retail industry's productivity is only 40% that of the national norm for the whole economy. It also significantly lags that of other international cities like Hong Kong and New York.

SPRING Singapore has developed a multi-pronged productivity roadmap that will improve the skills of both managers and workers, promote service excellence as well as enable local retailers to benchmark their performance against each other and diagnose areas for improvement. SPRING will also drive the adoption of technology to reduce the reliance on manual labour and streamline processes. SPRING is at the stage of finalising the finer details of the roadmap, and they will announce these plans soon.

One company that has already benefited from SPRING's productivity initiatives for the retail industry is Robinsons. With SPRING's support, the company initiated a pilot supply chain integration project with seven of its suppliers. Robinsons automated its ordering processes, which reduced the amount of man-hours needed for this function and cut down the time taken to rectify discrepancies due to human error. Processing orders now takes five days, instead of 7.5 days; and the time taken to perform invoice matching has been significantly reduced by 95%. The suppliers have benefited too, as they are now equipped with the capability and expertise to transact with other major retailers who use the same system through a single interface. Robinsons plans to roll out the next phase with over 100 suppliers. The Robinsons project also exemplifies how we can fundamentally enhance our interactions in the entire supply chain, leveraging on automation for higher productivity.

Apart from the sector-specific productivity roadmaps, the Council has

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also endorsed a number of \"horizontal\" initiatives, which have across-the-board impact in raising productivity. Examples include the SME-Productivity Roadmap (SME-PRO) and the Inclusive Growth Programme. I will touch briefly on each.

Mdm Ho Geok Choo and Dr Amy Khor highlighted that small and medium enterprises need more help to tap on Government assistance schemes, and SME-PRO was introduced to do exactly that. SME-PRO is a joint initiative by SPRING and the Singapore Workforce Development Agency (WDA) that provides a systematic, three-step approach for SMEs to improve their productivity. SME-PRO urges companies to first, \"Be Aware\" of their productivity challenges before \"Getting Trained\" and \"Taking Action\" to break the productivity bottlenecks in their organisations. A dedicated Internet portal – Productivity@Work – was launched as part of SME-PRO to provide businesses with access to information and resources that can help them take action to improve productivity. Since its launch in June last year, which is about eight months, the portal has seen 33,000 unique visitors and more than 100,000 page views. SPRING also developed an Integrated Management of Productivity Activities Assessment Tool (IMPACT) to help companies diagnose the state of productivity in their organisations.

One company that has benefited from this tool is Seo Eng Joo Frozen Food. It is a home-grown company that supplies frozen food products and services to supermarkets and fast-food chains in Singapore. Under the Productivity Management Programme supported by SPRING, business chambers and associations, the company used IMPACT to diagnose its productivity, identify strengths and weaknesses, and take actions to improve its productivity.

It has recruited a productivity manager to spearhead productivity improvement in

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the company. It has also started to monitor and review key productivity indicators to ensure that the efforts are sustainable and kept on track.

Beyond SME-PRO, there are productivity programmes targeted at SMEs which may have fewer resources and may be cash-strapped. SPRING has a scheme which provides \"Innovation Vouchers\" that can be redeemed at participating Knowledge Institutions for consultancy and services. There is also a Micro Loan Programme which offers loans of up to $100,000 for local SMEs with 10 or fewer employees. SMEs that have good ideas to improve their business operations and productivity should approach their business associations, SPRING or any of the related Government agencies for assistance. There is no lack of support for companies who are enthusiastic and want to improve their productivity. MTI will be elaborating further on its programmes to assist SMEs to grow during its Committee of Supply (COS).

The NPCEC also endorsed the $40 million Inclusive Growth Programme (IGP) to improve the skills, productivity and wages of some 25,000 low-wage workers across all sectors in the economy. The IGP is administered by the Employment and Employability Institute (e2i) of the NTUC. IGP is targeted at employers that employ low-wage workers with monthly salaries of $1,400 and below. The scheme provides grants to help employers raise productivity by investing in training their workers and tapping on better equipment and technology – with the condition that the employers share the productivity gains with their workers through higher wages. I was heartened to hear the good progress of IGP reported to this House in January. e2i has updated me that the numbers have continued to grow since then. There are now more than 200 projects lined up under IGP,

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benefiting more than 18,000 low-wage workers. Beyond numbers, what is significant is that in sectors such as Security, Landscape, Hotels and Retail, we are seeing new ways to raise labour productivity and upgrade the skills and wages of our workers. Through IGP, we are witnessing the start of a process of industry development – supported by the Government and unions, but driven by the companies.

Many of us are familiar with Sakae Holdings and may have enjoyed a meal at one of its restaurants. Its Chief Executive Officer, Mr Douglas Foo, sits with me in the NPCEC. He knows that relying on more and more manpower for growth is not sustainable. Sakae is one company that has tapped on the IGP for funding support. It is deploying personal digital assistants (PDAs) and walkie-talkies for its front-end operations to provide on-the-spot ordering and billing, and facilitate communication amongst staff. This will help improve efficiency in food delivery and bill processing by up to 30%. This project will benefit close to 200 workers, who can expect to enjoy a wage increase of up to 15% as a result of the productivity increase.

Embracing innovation and technology is not new to Sakae. The company has undertaken many productivity initiatives over the years, such as using its patented interactive menus for faster order processing, establishing a central kitchen, and implementing an RFID system to track the freshness of the sushi on Sakae Sushi's conveyor belts.

Christina Tan is a worker who has benefited from Sakae's continuous journey of improvement. Ms Tan is 53 years old this year. She was a Service Crew when she first joined Sakae in 2003. In her eight years with Sakae, she has gone on many training courses under WDA to upskill and improve her productivity. Today, she holds the

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position of Senior Service Crew and has seen a 40% wage increase.

With the increase in foreign worker levies, Sakae will be doing even more to reduce reliance on manpower and cut down on manpower costs. Some of the works in progress include self-ordering and self-payment kiosks for takeaway orders; electronic order processing to link up Sakae Sushi's automated order screens with electronic order screens in the kitchen, as well as iPhone Apps for customers to make their own reservations and submit orders ahead of time. The company will be able to benefit from the Productivity and Innovation Credit (PIC) for many of these initiatives. Sakae has shown that even in a labour-intensive industry such as Food and Beverage, productivity improvements through automation, mechanisation and innovation are still possible. I would urge more companies to follow Sakae's lead.

We have also set up a Working Group to review the existing Continuing Education and Training (CET) system and study ways to further strengthen it. The Working Group has presented a compelling vision for our CET system over the next five to 10 years, and I will leave it to the Ministry of Education and the Ministry of Manpower to paint a fuller picture of our future CET landscape for Members. But there are two key changes that I would like to highlight.

First, as the Minister for Finance has mentioned, our CET coverage will be further broadened and deepened to cater to workers of all levels, including Professionals, Managers, Executives and Technicians (PMETs). In the past, the CET system had focused more on training for rank-and-file workers, as the Government was concerned about helping them gain better skills, move into better jobs and earn a better living.

Today, this is still necessary and will continue, but it is not sufficient. We need

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to ensure that our CET system also caters to our PMETs – which would now constitute more than half of our workforce. The shelf-life of their knowledge and skills is getting shorter and needs regular refreshing so that our PMETs can keep up with global advancements and remain competitive in a rapidly changing global economy.

Second, our Post-Secondary Education Institutes (PSEIs) will play a larger role in the provision of CET. Our PSEIs are of high quality, and they are a key strength that we will leverage upon, especially for our PMETs. Our PSEIs currently provide upgrading pathways for working adults to upgrade their qualifications. In Academic Year 2009, about 1,600 students were accepted into part-time diploma programmes. We will expand this, while ensuring the quality of our PSEIs, and adapting content delivery to the needs of adult learners. So, they would not just be taking a diploma programme meant for 17-year-olds and applying it to, say, 30-year-olds with working experience; but adapting the curriculum as well as the teaching methodologies. This will create a more vibrant and exciting CET landscape for all Singaporeans.

Sir, some people have likened improving productivity to a race; a marathon perhaps, and one without end. This makes productivity sound as though it is only for the super-fit and too much effort for most people. Even the super-fit become exhausted running a marathon. I look at it more like brisk walking and I am sure Mayor Teo will like this analogy. You do not have to be super fit to do brisk walking; anyone can do it. You do it regularly, a couple of times a week, every week. It does not exhaust or drain you. As you brisk walk, you build up your heart and lung capacity, your muscles and your stamina. You become trimmer and fitter, and find that you can do more and go further. Soon you get hooked on it, and it

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becomes a habit to exercise regularly and keep improving your fitness, and you find you are ready to take on new challenges. Improving productivity is a long-term and continuing process. Improve and you will stay ahead; stagnate and you will fall behind.

Even as the remaining five Sectoral Working Groups finalise their productivity roadmaps and present their proposals to the Council, our work does not and cannot end here. Some Members, such as Mdm Ho, have asked whether the productivity movement has been a success and asked for a stock take. I am not looking for quick solutions. Productivity requires continuous effort over the long term. We have got off to a good start, developing strategies for seven of the 12 priority sectors and opening up availability through various programmes to about half of the first $1 billion put into the National Productivity Fund (NPF) last year to fund productivity initiatives over the first five years. The Minister for Finance has just announced in this Budget that the Government has decided to put in a second $1 billion into the NPF this year. So funds are there to support productivity efforts that prove their worth over the next 10 years. This is going to be a sustained effort. We will continue to monitor, track and review the implementation of the sectoral productivity roadmaps. As I said, we will use sector-specific and sector-relevant measures. We will also look at other sectors beyond the initial 12 because there is room to improve and be even better in every sector of the economy. At the same time, we will further enhance horizontal, economy-wide productivity drivers like CET. However, we must be prudent in our spending and prioritise our efforts, to ensure that every agency, every industry association, every company and every worker is part of our national productivity drive, and that we

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support programmes that work and modify or discontinue those that do not.

Let me share with the House some areas that the Council will focus on in the year ahead.

First, we cannot rely on just more training or automating even more intensively to increase productivity. Well-trained workers and efficient processes now form the new \"baseline\" that our companies must start from. To move beyond this, it is critical for us to create value through innovation.

Innovation can create value and boost productivity by giving you new products and access to new markets. Let me give you an example: Tan Seng Kee Foods Pte Ltd is a local manufacturer specialising in fresh noodle products – so basically, Hokkien mee and kway teow. In the past, Tan Seng Kee's products were limited to the wet markets, mini-marts and food courts in Singapore due to the short shelf life of just a few days. With the help of SPRING's Technology Innovation Programme for SMEs, the company spent over a year in R&D to develop Kang Kang Pasteurised Fresh Noodles, which can last two weeks when stored in ambient conditions, and even up to six months with refrigeration. Tan Seng Kee is now able to extend its reach into supermarkets such as 7-Eleven and Cold Storage, not just wet markets and the mini-marts. The company has even started to export to Dubai, and has plans to penetrate the Indian and European markets in the near future. The expansion to new markets is projected to increase their revenue by more than 50% in the near term.

Second, we need to leverage on the strengths of systems and networks. Each company, no matter how large, has limited resources on its own. However, if we look at the sector-wide system of companies, we can reap economies of scale and develop industry-wide strategies

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for productivity improvements. The construction industry is one example where much work is in progress and much work needs to be done to improve productivity. The Building and Construction Authority (BCA) has leveraged on systems to improve construction productivity by formulating a five-year Building Information Modelling (BIM) Adoption Roadmap to implement BIM across the sector. BIM is a 3D modelling tool for construction, and it enables all parties in the value chain to visualise the design better, detect design problems early, and enhance planning, management and coordination for projects. This integrated approach results in time and cost savings for the entire project. Under the roadmap, BCA is working towards mandatory BIM e-submission of architectural, structural as well as mechanical and electrical plans for building works for regulatory approval by 2015. The public sector will drive BIM adoption by working towards specifying this as a requirement in new building projects from next year. The industry itself is also playing a part – BCA is working with industry groups such as the Singapore Contractors Association Limited and Association of Consulting Engineers of Singapore to obtain software licences for their members to reduce the cost of adopting BIM. So the industry groups have come on board and they will help their members in the adoption of BIM. I think this is the right approach.

We also need to find and leverage more on network advantages. As a small and open economy, one of Singapore's key competitive advantages lies in our networks – not just external but also our internal networks. We can take advantage of our compact size and increase the networks between firms and between sectors. The Government cannot do this alone. We need more ground-up initiatives – from the unions, trade associations or chambers of commerce. An example of how these networks can benefit

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companies is the Stevedore Net, a collaborative platform developed by the Stevedore Association together with 19 stevedoring companies. This allows the industry to move away from its traditional reliance on the exchange of paper-based documents. The mobile-enabled platform helps stevedoring companies automate their day-to-day operations and facilitates real-time information exchange between the stevedores, their customers and the port. When fully deployed this year, the project is expected to bring about 10% productivity improvement for the companies, reduce vessel turnaround time by up to half a day and save them ship chartering fees of more than $1 million a year. The Government supported the project by providing financial support under iSPRINT, a scheme to encourage SME infocomm adoption introduced by the Infocomm Development Authority in partnership with SPRING and the Inland Revenue Authority of Singapore (IRAS).

Third, we need to develop our greatest competitive advantage – which is our people. As a baseline, we need to ensure that our CET system provides good training and upgrading opportunities for our workers so that they can upgrade their skills, work smarter, and be more productive. But we need to look beyond that as well. I met Professor John Van Reenen from the London School of Economics in August last year. Professor Van Reenen has done much research in productivity. One of his studies found a close link between good management practices and higher productivity. And he quantified this. He had a five-point scale. And a single-point improvement on this five-point scale in the management practice score could increase output as much as a 25% increase in the labour force or a 65% increase in invested capital. So the quality of management practices is key. He advocates that the best way to raise productivity is to ensure that there are good management practices in the private sector.

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We clearly need to ensure that our managers have the management know-how to drive productivity in their organisations. Our CET system must offer specialised courses to help managers embrace and drive productivity. And one such programme is the WSQ Certified, Productivity and Innovation Manager (CPIM) programme offered by the Singapore Manufacturers' Federation for managers and supervisors, to equip them with productivity tools and concepts to drive productivity efforts within their organisations. The programme was launched in May last year. As of December 2010, about 140 participants from 25 companies have participated in this programme.

We need more of such training programmes. WDA is working with Nanyang Polytechnic to offer industry-focused productivity courses for managers and supervisors in the Retail, Food & Beverage and Hospitality sectors. MOM, MOE and WDA will continue to expand the landscape for managerial training in the year ahead.

We are also doing more to raise the overall quality of human resource management in Singapore. MOM is driving this effort, working to establish Singapore as the HR centre of excellence in Asia – a centre that sets standards, provides directions and creates new knowledge for human capital management and leadership development. Together with the EDB and the Singapore Management University, MOM is seeking to establish the Human Capital Leadership Institute as the premier HR and leadership institution in the region, anchoring world class Asia-centric HR and leadership executive programmes in Singapore, driving pan-Asian research, and developing cutting edge human capital solutions for Asia.

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I have identified innovation, networks and management. Last, we will put more emphasis on making the fundamental shift towards a culture of continuous improvement and learning. This will be crucial in driving sustainable productivity growth. Quantitative indicators only tell us half the story; like what Mrs Mildred Tan mentioned, we also need the mindsets and behaviour of our employers and employees to change.

Many stakeholders have already taken up the call to focus on productivity. The Labour Movement, in particular, has shown their commitment by spearheading the Inclusive Growth Programme, and I urge them to be even more aggressive in breaking productivity bottlenecks. Industry associations have also been actively involved in the productivity movement. The Singapore Hotels Association has formed a Productivity Steering Committee to identify solutions that can drive productivity growth in the hotel industry. The Committee has conducted a review of hotel operations and published a very comprehensive report with recommendations on best practices and solutions related to systems and work processes, and automation and technology. Here again is an example of how we are looking at specific industry sectors and seeing how they can develop processes which are relevant to them.

Aside from the industry associations, companies further up the value chain can also influence those that work with them, raising productivity of the sector as a whole. This requires a fundamental shift in industry mindset across the entire value chain, which is not easy. Take the construction sector for instance. I had an interesting meeting over lunch with various industry groups which represent the various layers, segments, of the construction industry. Developers must change their procurement model such that their consultants come up with buildable

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designs and contractors adopt technologies and processes that facilitate ease of construction downstream. A few progressive developers such as City Developments Limited are actively driving their project partners to adopt dry walls, pre-fabricated toilets and other productive construction systems in their projects. Similarly, in the public sector, HDB's stipulation of a minimum percentage of precast components in its housing projects has had a positive cascading impact on its consultants and contractors who have since become adept in precast design and erection respectively. We need more of this. The subject of productivity in the construction sector will be addressed more comprehensively during the Estimates for the Ministry of National Development.

For companies like CordLife Singapore, which is one of the leading cord blood banking companies in the region, the focus on productivity is not just about improving processes but ensuring that their employees have the opportunity to continually improve and upgrade their skills for even better service delivery. In November 2010, CordLife started with the establishment of the CordLife Academy, a corporate learning division of CordLife Group. The Academy provides a structured and formalised programme to build capabilities and competencies in all employees, and to encourage innovation and creativity that translates into higher productivity, greater efficiency, better employee performance and greater work satisfaction. SPRING co-funded the development of the programme. The pilot run of training will be held for all 60 staff in its Singapore operations as well as the various country heads before being extended to more than 300 staff in the rest of its operations in Asia. The project is estimated to increase staff productivity by 10%.

We need to see such positive attitudes and mindsets cascade down to every

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company and every worker in Singapore. Miss Penny Low asked how the Government can encourage more companies to take up productivity measures. Sir, we are all familiar with the saying that you can lead a horse to water, but you cannot force it to drink. So we have the schemes and resources but the drive to raise productivity must ultimately come from our companies and from our workers themselves, who see the rewards of bigger markets and higher profits, and more secure and higher paying jobs.

Mr Speaker, Sir, we have made a good start in our national productivity drive. I am heartened that many have already stood up to be counted – particularly the unions, some of the industry associations, and many enlightened companies. But we need many more to do so. We need to continue to walk, briskly, down the road less travelled, the one that is more difficult that involves restructuring and change, but which brings the promise of more sustainable and more inclusive growth for the future. And together, I am confident that we will succeed and build a better and more productive future for Singapore.

4.10 pm

Mr Hri Kumar Nair (Bishan-Toa Payoh): Sir, thank you for allowing me to participate in this Debate. Members of the Opposition have criticised this as an election Budget; that the Government has been unduly generous to win favour. At the same time, they say that the Government is not doing enough to help Singaporeans deal with rising costs. So, which is it? I think it is less a case of an election Budget and more one of election posturing from them.

But the criticisms ignore two fundamental points. First, the amount given out in immediate social benefits is less than the amount we are paying back to our reserves. Many were uncomfortable when we dipped into our reserves to help

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Singaporeans during the last recession. We are now paying back all that money – a move even the hon. Member for Hougang supports, but other critics are reluctant to acknowledge because it is against their DNA to say anything good about this Government. More importantly, Singaporeans can be assured that financial prudence will always be the hallmark of this Government, election year or not.

[Mdm Deputy Speaker (Ms Indranee Rajah) in the Chair]

The second is the context in which we are debating this Budget and the reason why we dipped into the reserves in the first place. Just over two years ago, the financial and economic experts around the world said that the sky was falling and the world was spiraling into the next Great Depression. All around the globe, economies shrank, hundred-year-old institutions disappeared overnight, jobs disappeared, vanished and homes were lost. Thousands, if not millions, suddenly discovered that the monies they had diligently squirrelled away for their retirement were no longer there. Many developed countries are still trying to turn things around and are embroiled in bitter in-fighting. Our problems are the opposite. We were one of the first countries to bounce back. Instead of unemployment, we do not have enough workers to fill the jobs created. Instead of worthless homes, we are grappling with rising property prices. Instead of recession, we have, beyond all expectations and odds, achieved double-digit growth. And, improbably, instead of Budget deficits, we have a surplus. It is only right that Singaporeans share in some of that surplus, election year or not.

But a large part of the debate so far has been concerned about the fringes. Tweaks which Members would like to see

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include a larger cash component for WIS, raising U-Save eligibility limits or reviewing foreign workers levies. But this Budget, and any Budget, should be more than that. A Budget should be about who we are, what we think is important and where we see our future. In this regard, I would like to raise three issues.

First, social welfare and jobs. The Government's philosophy has always been to encourage a strong work ethic. We calibrate our social assistance to help those in need without creating a disincentive to work or upgrade skills. If enough people find it easier or more profitable to fall into the net, it will collapse under their weight. This is a difficult balancing act. The introduction of WIS, while necessary back then, has somewhat blurred the line. And it will get fuzzier if WIS becomes a permanent feature. But WIS is only a band-aid; a plaster. We must not just keep Singaporeans employed but upgrade their skills at the same time. That is the only way for them to genuinely move up. I would therefore ask the Government to address the disconnect between what employers are saying: that it is difficult for them to find Singaporean workers or that Singaporean workers quit after a few days because the work is too hard or too far away. And what the workers are saying: that companies prefer foreign workers because they are supposedly cheaper, better and faster. Everyone has an anecdote to support the argument he is making. The owner of a food centre in my constituency recently told me that he cannot find cleaners although he is willing to pay up to $2,000 a month, and so he does not mind paying a higher levy to secure foreign workers. Then why is it that I have cleaners earning $600 a month coming to see me for assistance? Why the disconnect?

The truth probably lies somewhere in between but what is the real situation on

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the ground? Can we not end this debate? The real question is whether our job matching or training efforts are robust or comprehensive enough to address both sides' complaints. I urge the Government to have a more robust system not just to ensure employers do not turn to foreign workers as a first option but to have disincentives for those who turn down a job or a better job for no good reason, and yet seek social assistance.

4.18 pm

Mrs Josephine Teo (Bishan-Toa Payoh): Mdm Deputy Speaker, thank you for allowing me to join in the debate.

I would like to focus on one aspect of the Budget which was rather unexpected. This was the announcement of planned increases in foreign worker levies. I have observed many different reactions but would just like to highlight one.

Madam, there is a stubborn refusal by some businesses to embrace the productivity challenge. Their common refrain is that there is a limit to how much we can automate and so tax credits for productivity and innovation are not very useful. I feel quite sad that these businesses have already made up their minds that there is no solution. I agree with Deputy Prime Minister Teo that there is more to productivity than automation.

Productivity is not just about \"same revenue, lower cost\". It is also about \"same cost, higher revenue\". So, we can have two shops, for example, with the same shop space and same number of workers, but if one shop's products and services generate higher revenues than the other, then it is more productive in

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terms of the use of labour and space. Quality matters to customers, not just price. So do services, speed, capabilities, design, and so on.

To deliver better capabilities and quality, staff must be better trained and equipped. Jobs need to be redesigned, industries need to be redeveloped. The Deputy Prime Minister earlier shared many examples of companies and industries that have already responded to the challenge. We need many more to come on board to fundamentally transform our economy. It is really important that we recognise it is not just managing the bottom line but growing the top line, and that is why the labour movement advocates \"cheaper, better, faster\" as an economy, and not just \"cheaper\" only. We really need to do this, otherwise we do not create the conditions for sustained wage growth. And so, continuous productivity, improvement and innovation must become the rule and not the exception.

Madam, I would like to shift a little and talk about something else. I note that the Finance Minister has taken pains to ensure two things in the Budget. Firstly, the hongbaos totalling $3.2 billion are slightly less than the $3.4 billion investments for the future. The second point is that these commitments were made after we have returned $4 billion to the reserves. The news headlines have been mostly positive and they stand in sharp contrast to other countries' budget announcements.

Take Ireland, for example. When their budget was unveiled in November last year, the headlines were gloomy. The Daily Mail said, \"Stricken Ireland cuts spending to the bone\", while another paper quoted former Prime Minister Brian Cowen – his government lost the elections after such a drastic budget – as

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saying that \"No one will be sheltered from that budget\". One other headline went so far as to say, \"Fear and anger as Ireland prepares savage budget cuts\" – very strong language and not at all happy.

Let us move to France. The budget deficit in 2010 was 148.8 billion Euros. The International Herald Tribune called this \"A French tradition: Pain in the provinces; As Paris cuts spending, rural enclaves are left to struggle\". It is a very gloomy picture, indeed.

In comparison, Singapore is unusually successful in managing our budgets. That is something we should not take for granted and why I wish to share a cautionary tale with Singaporeans. This has to do with the United Kingdom.

In fiscal year 2000/2001, the Labour government in the UK ran a budget surplus of £15.4 billion, and that was a surplus of 1.6% of the GDP then. But between the years 2001 and 2005, public expenditure rose by 4.4% in real terms every year, nearly double the rate of economic growth over the same period. So, in fiscal year 2004/2005, it chalked up an estimated deficit of £34.4 billion, which was 2.9% of the GDP. This was a huge deterioration in its structural balance – about £50 billion over four years. The Labour government really went on a spending spree. The then Chancellor of the Exchequer (Finance Minister) was Gordon Brown. And in 2005, the Economist magazine commented that – and I shall quote this – \"Gordon Brown's fiscal imprudence will help him into 10 Downing Street (the Prime Minister’s residence), but he'll pay in the end\", and they noted that \"Prime Minister Brown will have to sort out the problems that Chancellor Brown created\".

Well, true indeed, the Labour Party led by Prime Minister Gordon Brown eventually lost the elections and the right to govern. So, a spending spree, a so-

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called \"election budget\" can cost a party in power, rather than help it, contrary to what the public thinks and contrary to what the opposition claims. The key is really whether the spending is something we can afford, that really benefits people not just for the short term but also for the long term.

As it turns out, in June 2010, the newly elected coalition government in the UK announced an emergency budget. In that budget, the value-added tax, which is a consumption tax, was raised from 17.5% to 20%. Also announced were major reductions in government spending which would see over 300,000 civil servants lose their jobs. Some £11 billion of welfare cuts would also be made by 2015, not so far off, and these included cuts to child-benefit rates and housing benefits.

Madam, I am not making any prediction about the Finance Minister’s next promotion after this year’s Budget bonanza, and what happens after. There are just two points I wish to make.

As the UK example shows, without good growth, we cannot increase spending without bankrupting ourselves.

The second point is that the price of a bad budget is inevitably paid by people in the form of higher taxes and cuts to public spending, which they have become used to or have come to rely on. Conversely, the benefits of a good budget are enjoyed by the people in the form of sustained growth and societal progress.

Therefore, in my view, Singaporeans should evaluate the Budget on what it does for them today and in the future, and not whether it favours any political party in the short term. That is the only worthwhile yardstick. So, how do we know that this Budget will benefit Singaporeans in the future? Interestingly, there are useful lessons from the past.

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I did a bit of digging and found that in the Budget of 2001, which is a decade ago, Dr Richard Hu, who was then Finance Minister, had announced in February that year that he had a very good budget. It produced headlines such as \"$1 billion bonanza for businesses\", \"Generous tax cuts for individuals\". And this one can also apply this year, it says \"Goodies for everyone: Generous to a fault\". This was a decade ago – in 2001.

Unfortunately, despite the good Budget, the economy went into a tailspin after September 11. And as a result, the Government had two rounds of off-Budget measures. The second round announced in October was worth some $11 billion. It included a $2.4 billion tax relief package for firms and individuals, $2 billion worth of reliefs for individuals. Cabinet Ministers took a pay cut of 17.3% to signal the gravity of the economic situation facing the country and the need for wage restraint. Salaries of other political appointment holders and senior civil servants as well as allowances of Members of Parliament were reduced by 10%. In light of the rising jobless rate – which was expected to hit 4.5% at the end of the year – the Government also set aside $809 million in the form of employment assistance schemes for workers and executives.

What if we roll back the clock 30 years earlier to 1981? It was Mr Goh Chok Tong’s last Budget as the Finance Minister. Mr Tan Soo Khoon said it was \" ...difficult to throw brickbats at the Minister this time\". So it was also a very good Budget – $9.6 billion. It included a reduction in the highest marginal tax rate for individuals from 55% to 45%, which is still a lot higher than what it is today. It is hard for me to imagine people in that tax bracket paying 45% taxes then, much less 55%! And the reason for the cut – \"… to promote individual drive and enterprise\". He also gave $10 million,

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which in those days must have been worth a lot more, to fund more R&D in public institutions.

Senior Minister Goh said then: \"It is our ability to enlarge the economy through intelligent hard work which allows us to reduce tax rates even as Government expenditure increases. We must press on vigorously with economic restructuring. We must bring about a qualitative change in economic activities by the end of the decade.\"

With your indulgence, Madam, let me go even further back to the Budget of 1971 – 40 years ago. I was three years old then, and Singapore was a fledgling nation. Finance Minister Hon Sui Sen was new to politics and was delivering his first Budget, having taken over from Dr Goh Keng Swee. Mr Hon outlined four \"dark clouds\" hanging over Singapore then – and they will sound a bit familiar – inflationary pressures, state of the US economy, accelerated withdrawal of the British military presence and shrinking entrepot trade.

In particular, the British withdrawal could take some $350 million out of the GDP then, which was quite a lot. Nearly 17,000 civilians and 2,000 locally enlisted personnel would lose their jobs, bringing unemployment to 5%. This was 1971.

The SAF at that time also needed $300 million to expand. Mr Hon was keen to develop our tourism. Plans were underway for the Jurong Bird Park, a zoo – not in Mandai but in Seletar – and a cable car system from Mount Faber to Sentosa. An American consultant estimated that it would cost $300-$400 million to develop Sentosa. This was 40 years ago.

That year, against all expectations, Mr Hon did not raise taxes. He counted on the record number of very large industrial

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projects to raise tax revenues to fund our development. He gave $9 million to develop medical specialisation in our hospitals and to boost the re-planning of public hospitals. With the $17 million in payroll taxes, he allowed reimbursements to industrialists for approved training or apprenticeship schemes in skills that were in short supply. He also cautioned Singaporeans that year that the previous year’s 15% growth was not likely to be repeated. That sounds almost like this year.

What is the legacy of these Budgets in the 10, 30, 40 years that have passed? You will not find many grand statements in our Budgets, very few flashy projects and yet the evidence of achievements is all around us. There are very consistent themes in all these Budgets – recognise the challenges ahead, be cautiously optimistic, do not over-tax, use resources wisely, save for a rainy day, provide relief in tough times, keep investing in training, skills and capabilities, build for the future, capture growth opportunities, help workers and businesses stay competitive, keep growing the economic pie, and always share pains and gains with the people.

It has not changed very much. And it feels almost uncanny. You can change the Finance Minister and adjust the numbers by a factor of 10 or 100, and their Budget speeches still sound quite alike! But as a Singaporean, I think the real message is that each Budget on its own does not transform our country, but consistent, tenacious and thoughtful management of our Budgets by a serious and caring Government will help to make Singapore a much better home for all of us year after year. It is a uniquely Singaporean way that we can all be very proud of.

Madam, like his distinguished predecessors at various junctures in Singapore’s history, Finance Minister

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Tharman has delivered an outstanding Budget – quite similar to past Budgets but nonetheless outstanding. It is a Budget that carries on the good tradition of prudence and yet introduces innovative ways to help Singapore transform. It cares for and shares with Singaporeans, and also invests in strategic areas like the economy, education and eldercare. It is a Budget that is smart but also has lots of heart.

I can say confidently that this Budget has the full and resounding support of the Labour Movement and all of us in the unions.

Madam, I support the Budget.

4.35 pm

Mr Viswa Sadasivan (Nominated Member): Mdm Deputy Speaker, I join the other Members who spoke before me in applauding the Government for a sophisticated Budget that addresses the needs of segments of the population that are most in need of assistance. At the same time, it is a Budget that is prudent and goes beyond technical solutions and focuses on providing stability, prosperity and greater equity in the long term.

My speech will focus on managing the stress and fall out in the short term as we change the way we grow and further enhance productivity. But, first, I would like to talk briefly about the growing concerns about inflation and rising Consumer Price Index that will have an across-the-board effect.

Inflation in January hit a 25-month high at 5.5% – much higher than the 4.65% that analysts predicted. The Consumer Price Index (CPI) also rose at a seasonally adjusted 1.3% in January from a month earlier. Economists expect inflation to further peak at 6% in the months ahead. The price of essentials, such as food, has gone up by a significant

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0.9%. With the continuing crisis in the Middle East, we must expect petrol and energy prices to keep rising. The Finance Minister did highlight that \"imported inflation\" will remain a key long term economic and social threat to Singapore. Precisely because it is imported and there is little we can do to prevent it, we need to ensure that we monitor the effects of growing inflation carefully and evaluate whether measures taken by the Government are providing sufficient relief as intended.

In terms of direct help to offset the effects of inflation and increase in CPI, the Workfare Special Bonus will come in handy to help the lower-income households. Middle-income households especially stand to gain from the higher CPF contribution and marginal tax savings. And overall, households will gain from a wealth effect through Government transfers. However, these may not be enough in the final analysis to provide prompt relief, especially given the expected trajectory of inflation.

A key approach adopted by the Government to tackle the long-term effects of imported inflation is to systematically raise real income through enhancing economic growth by upping productivity. The aim is to increase real income by an ambitious 30% over the next 10 years. It is difficult to argue with the logic of this approach, especially as a long-term solution for an enduring problem. But it is highly unlikely that in the immediate future we will see a spike in productivity enough that will result in real income rising to help us deal with the effects of growing inflation.

As we are embarking on much needed long-term solutions to find a new equilibrium, we would need to widen and strengthen the economic and social safety net in the form of more direct financial assistance and subsidies for households in the interim. At a systemic level, some

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form of monetary policy adjustment, at least as an interim measure, may be necessary, even though it would have an impact on our export-driven businesses.

Mdm Deputy Speaker, I would now like to talk about the impact on our SMEs resulting from measures announced to change the way we grow our economy. No one can disagree with the logic: to survive, Singapore needs to raise productivity significantly, which will in turn increase real incomes of Singaporeans and systematically reduce our reliance on foreign workers. And, yes, we have no choice but to start initiating the changes now.

The issue is not with the principle of the matter but, it would appear, the modalities. I would like to focus on the impact on the Smaller- and Medium-sized Enterprises (SMEs).

SMEs in Singapore and, in particular, the \"micro\" and \"small\" companies face various business challenges. Two of the key challenges they face, especially in today’s inflationary environment, are as follows:

First, manpower issues – SMEs and particularly the \"micro\" SMEs have difficulty hiring and retaining talent. Singaporeans, especially fresh graduates, continue to gravitate towards the \"safe havens\" of large MNCs because of perceived better job security, career prospects, comfortable work environment and growth opportunities. As such, SMEs, especially the smaller ones in less \"sexy\" sectors, are continuing to have to pay a premium to compensate for what they are perceived to be lacking in.

The second challenge is cashflow. The adage \"cash is king\" is a bane for many of the smaller SMEs who, because of growing inflation, continue to struggle

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to make ends meet, month on month. For these companies, any further increase in business costs could have a debilitating effect.

It is relevant, therefore, for us to consider the impact this Budget would have on SMEs. Specifically, I would like to focus on the impact of the proposed increase in foreign worker levy on SMEs in the services and construction sectors.

While we recognise the need to reduce the dependence on foreign workers, the increase in levy at such short notice represents an immediate and significant challenge for SMEs in these two sectors. First, there will be an impact on cashflow. For these two labour-intensive sectors, labour cost comprises a significant proportion of total cost. So even a small increase in labour cost is likely to have a significant effect on the cashflow and the profit margins disproportionately.

For the services and construction sectors, the average total increase in foreign worker levy – at $280 and $330 respectively – is higher than that for the manufacturing sector at $160. Yes, it is some relief that the increase will be spread over a three-year period, but the increase is significant and will have a drastic effect on the cashflow and profit margins of the companies.

To offset this increase in labour cost, companies will be forced to consider alternatives, which indeed is the aim. However, for many companies in the services sector, the scope for automation or process innovation is limited. The F&B sector is a classic example where this substitution can be challenging. Already, we have reports of F&B chains and restaurants stating that they would have no choice by to pass on the costs to consumers.

For the construction sector, on the other hand, a key challenge likely to be

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faced by companies, in the interim at least, will be in finding locals willing to do the work. It is true that our construction sector has a lot of catching up to do in terms of innovation and process improvement but even with the best of effort, it will take a year or so before the desired transformation can take place effectively. In the meantime, it looks like they would have little choice but to hire foreign workers at a higher levy and suffer the effects of higher business cost which, in all likelihood, will be passed on, leading to inflation.

Mdm Deputy Speaker, Sir, let me now touch briefly on the Productivity and Innovation Credit (PIC) scheme, the National Productivity Fund (NPF) and other Government schemes. From what I understand and hear from businesses, especially in the services sector, these schemes appear to be tailored more to suit the needs of companies that can restructure through automation, leveraging on technology and R&D, and whose processes can be restructured more easily.

Take the example of a small SME in the knowledge-driven sector, which is typically talent intensive. Small practices that offer quality legal, training and consultancy services would be examples of such companies. For these businesses, there is limited scope for R&D, investment in design, acquisition and registration of Intellectual Property (IP), automation or business process re-engineering. Where they need assistance in is in IT, computerisation of search and cataloguing functions, and training and exposure for staff in high-end skills such as process-driven creative thinking and streamlined analysis which will result in productivity and innovation. Currently, such companies find it hard to qualify for the various Government schemes. I believe there are many SMEs who fit the bill – profitable enterprises wishing to improve in

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productivity and innovation but who feel left out.

In this regard, I am heartened by Deputy Prime Minister Teo's assurance just a while ago that the Government, especially through SPRING Singapore, has specific schemes targeted at SMEs and also in the sectors that I highlighted. He highlighted examples of innovation vouchers, the innovation and technology programmes, both of which are driven by SPRING Singapore. It would be useful if these schemes could be publicised even more because, speaking to many SMEs, I do not believe that they are aware of some of these schemes.

Mdm Deputy Speaker, let me end by making a few suggestions for the Government’s consideration.

First, to continually review the PIC scheme, NPF and other Government schemes so that they remain relevant to the needs of smaller enterprises in the services sector. It would be useful if the schemes can include less tangible innovations. Further, what companies can claim under the training track could be widened beyond the existing WSQ and ITE programmes, so that more customised packages can be designed to meet the needs of companies that are less process-driven, and where behavioural, attitudinal, analytical and creative thinking imperatives have a greater bearing on productivity.

4.47 pm

Mdm Cynthia Phua (Aljunied): Mdm Deputy Speaker, I would like to thank the Finance Minister and my GRC colleague, Second Minister for Finance, Mrs Lim Hwee Hua for delivering a Budget that brought only smiles to the face of the majority of Singaporeans.

It is, as far as my memory can recall, one of the best if not the best Budget Statement made in this House. I say this not because there are many giveaways. I say this because this Budget showcases this Government at its best in balancing the needs of the people and its responsibility to the nation as a whole. The Budget is targeted at the core group of Singaporeans who are most in need of assistance because of rising inflation – the low income and the middle income.

The Government has shown itself as a government run by a team of very responsible leaders who will not hesitate to opt for prudence and not extravagance when it involves spending from our reserves, even when it is a General Election year. I salute its decision to return $4 billion to our reserves so that we can look ahead with greater confidence.

We have made many bold initiatives in this Budget, such as relinquishing our heavy reliance on foreign workers and pushing for productivity. We have expanded financial help to middle-income families to help them cope with bringing up children and the elderly. The Growth Dividends will come in useful for families to cope with inflation. In particular, I greatly support the Government’s plans for the Silver Community Trust and the Elder Fund. I believe that these will expand our infrastructure and expert care to provide more comprehensive care for the elderly in the community.

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Innovation and creative centres. I note that the Budget focuses on an important element that will propel our engines of growth – productivity. We must maintain and increase our productivity rate if we are to stay abreast of a very competitive global market. Rising costs of production without corresponding increase in productivity will only send our economy down the slippery road. However, I would like to raise the many concerns by the Small and Medium Enterprises. Many have expressed that while they welcome the increase of $2 billion in National Productivity and they appreciate the Productivity and Innovation Credit, time is their concern. Innovation and productivity take time to materialise. In the meantime, the foreign worker levy would have increased and this would further burden them and add to the inflation. They hope that time can be allowed for them to adjust to the foreign worker levy hike and have asked that the increase can be in smaller instalments.

I am glad of the forward-looking of most Small and Medium Enterprises. With less reliance on foreign workers, the enterprises will look for creative solutions. I would like to give an example from the ground. A few years back, we did not allow foreign workers to wash cars at the petrol stations and many petrol stations installed automatic car washers. There were complaints of the quality of the brushes and instead of doing more research on the brushes – and because MOM allowed foreign workers – many quickly employed teams of foreign workers to hand wash cars. And, now, you see every petrol station has empty spaces because the automatic car washer has been taken out and teams of foreign workers/car washers are there now.

Many small and medium enterprises are also worried about not having time and capacity to look into measures to increase productivity. Although Deputy Prime Minister Teo has listed the pro-SME

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initiatives but they are appealing for creativity and research development centres to be set up for the various industries and seeded by the Government and led by bigger firms. With expertise and resources made available, all enterprises would get a leg up on innovative ideas and creative solutions. For example, the construction industry experienced much improvement when HDB took the lead in prefabrication. Recently, HDB’s research centre studied the practicability of using LED lighting and as such the PAP Town Councils were able to tap onto their findings and obtain a bulk contract based on the results of the study.

Taking into Deputy Prime Minister's idea on industrial-made strategies, another area in the construction industry where productivity can be improved is the installation of dry fit partition walls, which was also mentioned by the Deputy Prime Minister. The initiative has been taken by a few developers but they are in the private sector. With the reduction of foreign work force, we have to review the impact on the wet wall programme because HDB, being the main developer for public housing, is building volumes of HDB flats. If HDB could take a lead in the industry to look into dry fit walls, which have already been proven to provide sound and fire-safe installation and in protecting residents' privacy and keeping them safe. If HDB could take a lead, the productivity of the construction industry will definitely improve.

In conclusion, on productivity, I would like the relevant agencies to continue to work harder to reach out to the Small and Medium Enterprises. I would take the Deputy Prime Minister's suggestion of the brisk-walking concept further. The installation of these creative and innovation centres, based on industry, will be the vitamin supplements for this productivity growth and for this continued effort in productivity.

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Land use. In recent years, our population has increased significantly. We are at five million strong, going on to six million. We need homes, schools, hospitals and facilities to accommodate this surge of one million in population. Do we have sufficient space to build more homes and relevant supporting facilities? In such a high density area, we need to have very strong planning capability so that we are able to build, if not in tandem with the rise in population, at least be as close to it as possible. In Singapore, 95% of people own homes and 90% of these people are living in public housing. We continue to have a supply crunch of office space and then of housing. Many a time the Government had to hurriedly intervene. We should learn the lessons from here. We should be like car drivers, constantly looking at the rear view mirror to see what is behind us as we drive ahead to the future. There will then be lesser need for the Government to intervene and introduce measures to temper rising property prices too often.

I urge the Government to have a more coordinated and centralised planning centre for land use planning and also management. In view of a high density of land use, any change in land use, whether it is plot ratio or change of views, will affect a great number of people. We need to consult and obtain feedback from more people and sectors, not just representatives from the various Ministries but also from the private sector, including industrial, manufacturing, commercial and retail sectors. And with wider participation from private sectors, our planners can be more sensitive to the required changes and can quickly anticipate a change of the land use, especially with any population movement. Our building programme can then be carried out more smoothly and be in sync with the rise and fall in demand for

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houses, offices and even hotels and shopping centres.

One other area of concern in land use and management is the determination of the cost of public infrastructure. Some of the infrastructures are dictated by the Government for the private developers to develop, such as the integrated bus interchanges in HDB town centres. In such development projects, the cost of the land has been tendered by the private developer but it is used for the public infrastructure, and this market land cost must be comprehensively accounted for as a cost of public infrastructure. And once the total cost is properly accounted for, the opportunity cost of each infrastructure can then be assessed against its demand and competition of land use from the various needs.

Caring for the children. I was elated for our families with young children. The Child Development Credit for younger children and the enhancements to the Kindergarten Financial Assistance Scheme and Centre-based Financial Assistance Scheme for Childcare will be of great assistance to them. We have taken a giant leap by increasing the income ceiling to $3,500. Many of the housewives in this income bracket had previously found no incentive in looking for a job. The raised income ceiling would enable families to put the children in childcare centres and the women can then re-enter the workforce. I would like MCYS to consider making kindergarten and childcare fees free of charge for children from low-income families drawing below $1,700 per month, so that they can begin their education from the same starting point as the other children from more affluent families. If they have a good foundation, they will most likely do well in their studies and break away from the poverty cycle in future.

Madam Deputy Speaker, with that I support the Budget.

My take for Budget 2011's considerations focuses on the elderly and are as follows:

One, empowerment of seniors. Madam Deputy Speaker, with the ageing population, there is increasing need to engage and empower the elderly themselves to take the lead in initiating plans and activities affecting their well-being and interest. In this way, they can not only better address their own needs and aspirations but, at the same time, be their own voice and advocate provision of greater opportunities for seniors' involvement in matters pertaining to their well-being. For example, encouraging retired seniors to helm or work in the aged care sector to enable them to have their own voice and be advocates so as to provide an opportunity for their inclusiveness and for them to contribute to the society. At the end of the day, I assume they would

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know better as to what they want for themselves.

Two, holistic approach to caregiving. Caregiving will always be a prime issue in an ageing population. In view of its complexities and scope, a multi-pronged approach is necessary among stakeholders. It is time that I urge the Government to set up a registry of caregivers. This will provide an invaluable source of data on the profile of the caregivers at large, and even more, what their needs and concerns are, their expectations of services and the extent of support which they need. I am sure these needs will surely multiply given an ageing population. If it is structure-based, policies and strategies can be better mounted to provide the necessary support. The present scenario of caregiving in Singapore, I believe, is largely fragmented or uncoordinated. But this can be improved and developed further with the set-up of the registry.

Three, allowance for caregivers scheme. The set-up of the registry will have a significant impact with wide-ranging effects. With the registry, it will provide the support to our caregivers. For instance, the Government may consider, amongst other things, granting financial assistance such as an allowance for caregivers. This allowance can perhaps be credited into their CPF accounts. These credits into caregivers' CPF accounts will eventually benefit them in their old age, thereby reducing the need for State's assistance in the long term.

Madam, we should do what we can to encourage and strengthen the informal long-term care sector now. Strengthening the informal long-term care sector will also be in line with Government's policy to rely less on foreign workers. Otherwise, with the ageing population issue, we can be overwhelmed in the long run if we are not prepared. There is only this window of opportunity and we have to do it now.

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Four, extension of Community Silver Trust to informal long-term care sector. Still on caregivers, Madam, I am aware that there are also Singaporeans who may still choose to care for their elderly/disabled family members themselves. These caregivers forgo their own careers or opt for lower paying jobs for flexible work arrangements in order to care for their elderly/disabled family members. May I recommend that the Finance Minister consider extending the Community Silver Trust to the informal long-term care sector as well.

This leads to point five on a different matter: on the recognition of frontline community workers, those at the ground providing direct service to the community. Greater recognition of all frontline community-based services workers besides the social workers per se will facilitate and promote a multi-disciplinary approach in meeting community needs as well as meeting the professional development and retention of professionals which are so essential for the sector. An example I know of concerns an elderly man and his wife attending a community-based activity centre in the East. He faced tremendous amounts of stress caring for his wife who has schizophrenia. The wife did not receive regular follow-up because he was not able to afford the transport costs to IMH, leading to incidences of relapse of her condition. Eventually, the caregiver himself developed depression and suicidal tendencies. Fortunately, with the timely intervention of the staff at the centre, a tragedy was prevented and the couple is now receiving the assistance they need.

And that brings me to my final point, addressing a rising tide – dementia. Incidence of dementia will increase with an ageing population. Caring for a person with dementia can be very stressful and, in most instances, a long-drawn affair. More resources need to be channelled

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towards supporting valuable research, translating the findings into better and effective methods in addressing this worrying trend. More should be done in this direction.

Madam, finally, in conclusion, the majority of seniors I feel will be happy with this Budget, especially with the Growth Dividends they are going to receive while acknowledging that the Government cannot cover all grounds with one Budget. Madam, with this forward-looking Budget, with a long-term perspective, we are well positioned to meet the needs of this ageing population and provide the best care for our seniors.

Once again, I support this Budget.

ADJOURNMENT OF DEBATE

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The Minister for Finance (Mr Tharman Shanmugaratnam): Mdm Deputy Speaker, may I seek your consent to move that the debate be now adjourned?

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Mdm Deputy Speaker: I give my consent.

Resolved,

That the debate be now adjourned. – [Mr Tharman Shanmugaratnam].

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Mdm Deputy Speaker: Resumption of debate, what day?

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Mr Tharman Shanmugaratnam: Tomorrow, Madam.

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Mdm Deputy Speaker: So be it.

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ADJOURNMENT

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Resolved,

\"That Parliament do now adjourn.\" – [Mr Mah Bow Tan].

Adjourned accordingly at

Six Minutes past Five o'clock pm.

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APPENDICES

Annex to Announcement by Mr Speaker

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28th February,2011

	(1) Amusement Rides Safety Bill (2) Private Lotteries Bill (3) Legal Profession (Amendment) Bill

	ABDULLAH TARMUGI
	Speaker
	Parliament of Singapore

	ABDULLAH TARMUGI
	Speaker
	Parliament of Singapore