1 Dr Lim Wee Kiak asked the Minister for Education (Higher Education and Skills) (a) how frequently does the Ministry review the courses offered by the polytechnics so as to stay relevant to the needs of industries; (b) what are the two least popular courses; and (c) how many courses have been cancelled last year because of a lack of student interest.
\tThe Senior Parliamentary Secretary to the Ministers for Education (Ms Low Yen Ling) (for the Minister for Education (Higher Education and Skills)): Mr Speaker, the polytechnics strive to ensure that their courses are relevant to the needs of industry. Every year, they review the range of their diploma course offerings and make changes to drop or start new courses. In addition, every three years or so, they do an in-depth review of the curriculum of each course. For courses in sectors, such as information technology (IT), the curriculum is reviewed more frequently, given the fast-changing nature of the industry.
Popularity of a course can be measured in different ways, such as ratio of applications to places, or the aggregate score of the last student posted to the course. The popularity of courses changes from year to year, so I would rather not disclose which are the two least popular ones this year. It is also a disservice to students currently in these courses.
In 2017, seven full-time courses were retired, partly due to a lack of interest from students, and partly to reposition them to meet the needs of industry better.
Minister Ong Ye Kung will address this issue further at the upcoming Committee of Supply debates.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Deepening Students' Understanding of ASEAN","subTitle":null,"sectionType":"OA","content":"The following question stood in the name of Mr Kwek Hian Chuan Henry –
2 To ask the Minister for Education (Schools) what is being done to help deepen students' understanding of ASEAN in our mainstream schools.
\tMr Murali Pillai (Bukit Batok): Question No 2, please.
\tThe Senior Parliamentary Secretary to the Ministers for Education (Assoc Prof Dr Muhammad Faishal Ibrahim) (for the Minister for Education (Schools)): Mr Speaker, the Ministry of Education (MOE) develops students’ understanding of the Association of Southeast Asian Nations (ASEAN) throughout their time in school. In primary Social Studies, students are introduced to the origins, member countries and purposes of ASEAN as part of appreciating how communities in ASEAN member countries are connected through cultural, economic and geographical ties.
At the secondary level, students expand their understanding of ASEAN and its member countries through subjects like History, Geography and Social Studies. Students study the key forces and events that shaped the histories of Southeast Asian member countries and appreciate the importance of ASEAN in forging friendly relations with countries in the region. They explore environmental issues related to the social and economic development in Southeast Asia and learn about the role of ASEAN in maintaining regional stability and security.
At the pre-university level, students deepen their understanding of the opportunities and challenges confronting ASEAN. Through History, students discuss the effectiveness of ASEAN in promoting peace, security and economic development in the region. They examine the role of the ASEAN Free Trade Area in regional economic development in Economics and Geography. In General Paper, students also engage in discussions about regional issues, including perspectives of ASEAN.
When investigating issues related to ASEAN and its member countries, teachers take into consideration age appropriateness, learning load and learning goals for each level. They use authentic case studies and multiple perspectives to enable students to have a deeper understanding of these issues.
Schools also enhance students' appreciation of ASEAN through meaningful occasions. For instance, the annual commemoration of International Friendship Day celebrates the region's diversity and emphasises the importance of good relations between Singapore and her neighbours.
Students interact with their counterparts from the different member countries when they undertake overseas learning journeys in Southeast Asia. Schools also organise ASEAN-themed forums to engage students to discuss pertinent regional and international issues. In addition, through the ASEAN Schools Games, our student athletes not only spar with the region’s best, they also forge friendships and gain greater cultural awareness of their fellow athletes from the different ASEAN countries.
Mr Speaker: Dr Lim Wee Kiak.
\tDr Lim Wee Kiak (Sembawang): Mr Speaker, I would like to ask the Senior Parliamentary Secretary regarding our students' understanding of ASEAN. Is the Ministry now happy with the current level of awareness that our students have of ASEAN? What is the yardstick and what does the Ministry do in terms of measurements? Does the Ministry do surveys to see what is the current level of students' awareness? I am happy to hear of all the activities that have been organised. The question is whether these are effective and what more can be done.
\tAssoc Prof Dr Muhammad Faishal Ibrahim: Sir, as I mentioned earlier, it depends on the age-appropriateness. At the different levels, we introduce the different sets of knowledge and discussions that we want our kids to have. At the curriculum development level, we have measurements to look at how our students have grasped what they have learnt. Nevertheless, as the Member can see, things are ever-changing, especially for this year, as we have assumed the Chairmanship of ASEAN. We want to take this opportunity to engage our students, see how they can discuss in class and work with the Ministry of Foreign Affairs to see how they can get involved in the process.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Proposal for Association for Intermediate and Long-term Care Institutions","subTitle":null,"sectionType":"OA","content":"3 Ms K Thanaletchimi asked the Minister for Health whether the Ministry will consider forming an association for intermediate and long-term care institutions that is similar to the Association of Small and Medium Enterprises so that these institutions can collectively benefit from sharing of best practices, standards, staff training and economies of scale.
\tThe Senior Minister of State for Health (Dr Lam Pin Min) (for the Minister for Health): Mr Speaker, institutions providing intermediate and long-term care services can, indeed, benefit from the sharing of best practices, standards, staff training as well as pooling of resources for better economies of scale. Today, there are already representative bodies that organise such efforts, sometimes in collaboration with the Ministry of Health (MOH) and the Agency for Integrated Care (AIC). Examples include the Singapore Hospice Council and the Association of Private Nursing Home Operators. In addition, most of the voluntary welfare organisation (VWO) providers in this sector are members of the National Council of Social Service (NCSS). NCSS' key roles include raising the capabilities of the VWO members and strengthening partnerships among them.
These representative bodies are complemented by AIC, which plays the roles of sector developer and coordinator. AIC convenes regular sector-wide platforms to raise the quality of care, build up competencies and facilitate effective practices across the sector. In recent years, AIC has promulgated standards, such as the Enhanced Nursing Home Standards and Guidelines for Home and Centre-based Care, and convened industry committees to develop strategies and initiatives in quality improvement and manpower development. AIC has also brought providers together for better economies of scale in areas, such as procurement of consumables and organisation of transport services, and intends to extend this to new shared services, such as security and waste management.
The current structures are serving us well. We will continue to assess how we can better promote the interests of the Intermediate and Long-Term Care (ILTC) sector and to raise the level of industry practices and professionalism of ILTC sector workers.
Mr Speaker: Ms Thanaletchimi.
\tMs K Thanaletchimi (Nominated Member): Sir, I have a clarification. In regard to AIC that is being the focal point of bringing all the ILTC institutions together, there are different forms of ILTC institutions. Some are VWOs, some are privately-owned, some are kind of supported by MOH. How can they among themselves cross-learn the best practices and, at the same time, be more cohesive to be able to transfer skills and share skills where it is needed, because there are small and big institutions within the ILTC sector?
\tDr Lam Pin Min: I would like to thank Ms Thanaletchmi for the supplementary question. Indeed, she is right that there is a bit of unevenness amongst the various providers. That is why MOH felt that it is probably not the right time to have an ILTC association as such. With AIC being the sector developer and coordinator, we are able to help each and every individual operator to level up. I would like to assure Ms Thanaletchmi that we have not precluded the idea of an ILTC association in the future. We will watch this space very closely.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Top Five Industries where Freelancers Venture Into","subTitle":null,"sectionType":"OA","content":"4 Dr Lim Wee Kiak asked the Minister for Manpower (a) which are the top five industries that freelancers are venturing into; and (b) whether more grants and mentorship programmes will be given to support freelancers outside of the creative industry.
\tThe Second Minister for Manpower (Mrs Josephine Teo) (for the Minister for Manpower): Mr Speaker, I will be answering Question No 4. The top five occupations for self-employed persons (SEPs) without employees, or more informally \"freelancers\", are taxi drivers, real estate agents, working proprietors, insurance agents and private hire car drivers.
The Government provides skills development and training support for all workers, both employees and SEPs, through initiatives, such as those under SkillsFuture (SSG). All SEPs, not just those in the creative industry, can access subsidised courses offered by Continuing Education and Training Centres appointed by SkillsFuture Singapore as well as certifiable courses that receive funding support of SSG. Eligible trainees can also apply for a training allowance under the Workfare Training Support scheme. We encourage all workers, including SEPs, to take advantage of such schemes to upgrade and improve skills and competencies continuously.
Mr Speaker: Dr Lim Wee Kiak.
\tDr Lim Wee Kiak (Sembawang): Mr Speaker, I would like to thank the Second Minister for her reply. Let me just ask her one supplementary question regarding the top five industries that freelancers have ventured into. The Second Minister mentioned there are schemes to help them. How well are these schemes currently taken up? Can more be done to help them? I understand that this group is also not a permanent group; they are a transient group. Some of them will be freelancers for a while, and then they will find a full-time job, and then they may go back again. The issue now is how to help them to continue to upskill. We are also worried about them being stagnant in one position and miss out the entire innovativeness of the economy as the economy improves. Can the Second Minister update us as to how much the freelancers in these five industries utilise the schemes she just mentioned?
\tMrs Josephine Teo: Mr Speaker, the Member is right that we also want the self-employed persons to be able to keep up with all the changes that are happening within our economy.
Where there are associations, for example, the sports coaches or the National Taxi Association, there have been mechanisms for outreach and we can certainly intensify the efforts. The plan is to do so. I will be talking about this during the Committee of Supply debate for the Ministry of Manpower.
Where there are no associations, it becomes a bit harder. The reason is because if you look at the landscape of self-employed persons, although the numbers have been largely stable over the years, the occupations are very varied. There are at least 100 occupations among all self-employed persons. They keep changing as well.
One assurance I can give to the Member is that where there is an association, where the self-employed persons have come together and they can identify common needs among themselves, then there is a way in which we can work with them to enable more of them to keep up with skills development.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Profile of Those who Seek Help from Service Agents at MRT Stations","subTitle":null,"sectionType":"OA","content":"5 Ms Sun Xueling asked the Minister for Transport what is the average daily number of requests for help that the pool of 150 service agents employed at MRT stations to assist commuters with the ticketing machines receive and what is the demographic mix of those who seek help.
\tThe Minister for Transport (Mr Khaw Boon Wan): Mr Speaker, commuters can use cash to top-up their travel cards at the ticketing machines found at every Mass Rapid Transit (MRT) station. What is gradually being withdrawn is the cash top-up service at the Passenger Service Centre (PSC).
To help commuters make adjustments, some 150 service agents are deployed at MRT stations to help commuters with the ticketing machines. The service agents helped a few hundred commuters per day in the beginning, but the number has since come down significantly. Based on our sample count, the estimated breakdown of these commuters who needed help is: 42% seniors, 35% working adults, 19% foreign workers and 4% others.
Mr Speaker: Ms Sun Xueling.
\tMs Sun Xueling (Pasir Ris-Punggol): I thank the Minister for the explanation. I would like to enquire if there is a sense that the same group of commuters, perhaps the 42% senior citizens, would require repeated help in this area. If so, how can we help them to remember how to do so, perhaps for a longer period of time?
\tMr Khaw Boon Wan: Anecdotally, there were some who tried it and felt it was still difficult. So, they came back and we helped them. We take a very flexible and patient approach. My philosophy is quite simple: technology must help us and help consumers. We should not try to get consumers to change in order to fit technology, especially if it is difficult. But, at the same time, I think consumers do need some nudging. If you do not nudge people along, we would still be using bullock carts.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Bicycle Ownership Trends","subTitle":null,"sectionType":"OA","content":"6 Dr Lim Wee Kiak asked the Minister for Transport (a) what are the statistics on bicycle ownership in Singapore; (b) how many people use bicycles as part of their daily commute; (c) whether the drive towards the Walk Cycle Ride SG vision is on target; and (d) whether the rise of PMDs is undermining this vision.
\t
\tThe Senior Minister of State for Transport (Dr Lam Pin Min) (for the Minister for Transport): Mr Speaker, based on the Land Transport Authority's 2017 Household Interview Travel Survey, about a quarter of households own bicycles and about 125,000 people use them for their daily commute.
Our Walk Cycle Ride aspiration is for Singaporeans to choose to walk, cycle and ride public transport, instead of driving. We have set a target of 75% of peak hour trips to be on public transport by 2030. The mode share of public transport has risen from 64% in 2013 to 67% last year. We expect it to rise further as more rail lines are launched. The increasing use of personal mobility devices as a first- and last-mile mode of travel has also contributed towards this vision.
Mr Speaker: Order. End of Question Time. The Clerk will now proceed to read the Orders of the Day.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Debate on Annual Budget Statement","subTitle":null,"sectionType":"OS","content":"[(proc text) Order read for Resumption of Debate on Question [19 February 2018], (proc text)]
[(proc text) \"That Parliament approves the financial policy of the Government for the financial year 1 April 2018 to 31 March 2019.\" – [Minister for Finance.] (proc text)]
[(proc text) Question again proposed. (proc text)]
Mr Murali Pillai (Bukit Batok): Mr Speaker, Sir, being the penultimate speaker in this marathon Budget Debate stretching to a third day, there is always this pressure not to cover the same ground as the speakers who have gone before me. I had to revise my speech several times. I realised through the revisions, they have helped me better understand what is at stake in this year’s Budget. So, it is not all that bad being the second last speaker. I cannot speak for Mr Saktiandi Supaat though.
This House has heard impassioned pleas from hon Members on the focus areas for this year’s Budget. For instance, there have been clarion calls to further increase social spending to take care of less fortunate people and improve their social mobility, address more issues associated with the ageing population, and providing better opportunities for all, young and old.
At the same time, all hon Members have agreed that we need to ensure that the Budget is financially prudent. There are divergent views on how this can be achieved. It is important that we in this House try our best to build a consensus on at least the broad areas of strategy that this Budget represents. Everyone must agree that we should not dissent for the sake of dissent. So, what should be the framework for us Members to build this consensus? I will return to this question shortly.
But before that, I want to, first, deal with a point made by hon Member Ms Kuik Shiao-Yin in her speech yesterday. It may be useful to outline her speech first. She said the Government's decision to increase the Goods and Services Tax (GST) to 9% is justified as a pragmatic decision. She said the Government's decision not to raise the Net Investment Returns Contribution (NIRC) to above the 50% mark is also justified as a pragmatic decision. She further cites a report in support of the view that the Government is excessively prudent with its large Reserves. She then asked how much is then enough for us. She also said \"every tilt towards the side of pragmatism is simultaneously a tilt away from the side of our ideals\".
With respect, I do not see pragmatism on one hand and being true to our ideals on the other as binary choices giving rise to a zero-sum game. This kind of approach would give rise to polarising views which would make it harder for us to reach a consensus on what is the right approach to be taken in our Budget.
Let me explain by dealing with the example of Reserves that she raised in her speech. Ms Kuik asked how much is enough for us. From my perspective, no one can tell. In a financial crisis, the value of assets, especially those marked to market will shrink. We saw that in the Global Financial Crisis when the international bank shares dropped. We cannot predict with any certainty how much we need to overcome the next big crisis that will hit us. As an analogy, think of the Indian Ocean tsunami. Nobody predicted that. We can only make an educated guess.
Using the pragmatism/idealism dichotomy that she raised, what should the Government then do? Should it be idealistic, assume that the world is kind and, if Singapore, a small country with no natural resources, needs help to prop up its finances, it will get help, and it will be treated fairly, equally and equitably? With due respect, is this a realistic assumption?
Or should it be pragmatic, because it is a steward of 3.6 million Singaporean lives and that of their progeny, and ensure that the Reserves can be tapped to save us from the next crises whenever it may happen?
As a father who has a stake in the future of his children, I am clear in my mind what the Government should do. What is more important, I would respectfully suggest, is to appreciate whether the approach taken in this Budget is in keeping with our values. This is how I suggest we can forge a consensus as Members on the Budget.
I would like to quote former United States (US) Vice President Joe Biden, who said, \"Don’t tell me what you value, show me your budget and I’ll tell you what you value\".
Members of this House would recall the debate on the Government White Paper on Shared Values in 1991 in this House during the tenure of the second-generation leaders led by Emeritus Senior Minister Goh as Prime Minister. The first three shared values are: (a) nation before community and society above self; (b) family as the basic unit of society; and (c) community support and respect for the individual.
The Budget reflects these values. Investment in economy and infrastructure is needed to secure the future of Singapore as a nation. This is not growth for growth’s sake, as emphasised by Minister Heng. It is about making sure that our families remain intact and we and our family members enjoy a good standard of living.
There is also a healthy dose of idealism in this Budget. Just look at the plans that the Minister has suggested to take advantage of the opportunities within Asia and the Association of Southeast Asian Nations (ASEAN). At same time, the funding of the investments is done in a prudent way, which is also in keeping with our values in putting our nation first.
The GST is proposed to be increased in the next term of Government after carefully studying all other options. The hon Member for Aljunied, Mr Low Thia Khiang, said reference to this is a distraction and unnecessary. With respect, I fail to see how this can be so. We have already been committing to expenditure well into the 2030 and beyond. Surely, a responsible Government should also signal how it plans to raise the revenue for the same period.
Reserves are not being used to fund expenses. I endorse this forceful point that was made by hon Member Mr Christopher de Souza yesterday on the danger of using proceeds from land sales, which make up our Reserves, to fund expenditure. That is not to say Reserves cannot be used. The way the Budget is pitched, it represents a fair usage of Reserves and allocation of responsibilities between the present and future generations.
Borrowings for infrastructural developments are to be secured by guarantee, subject to the President's approval, which, in turn, is secured by the Reserves. Payment obligations on the loans would also fall on the future generations.
The 50% NIRC rate, in my view, represents a fair balance between ensuring a bright future as a nation and the present funding needs of the community. There is no loading in favour of one or another. This better represents our Asian values. Once we change this, it will be a slippery slope and there will be a tendency to adjust a higher percentage to accommodate for higher expenditure.
This is my answer to the hon Member Asst Prof Mahdev Mohan who suggested in his speech yesterday that the Government listen to views expressed by some Singaporeans that the NIRC rate should be increased. Mr Speaker, may I speak in Tamil, please.
(In Tamil): [Please refer to Vernacular Speech.] Yesterday, Asst Prof Mahdev Mohan spoke about the Government listening to the people's concern on raising revenue. I agree but this is not enough. There are several opinions on this. As such, the Government should consider and decide which approach will be suitable for the people, and then the Government should explain its decision clearly to the people.
(In English): Next, the concrete steps in providing greater support for families recognise the primacy of the family as the basic unit of society and the important role it plays in nation-building.
Finally, the programmes to support individuals, especially our seniors, are consonant with the values of community support and respect for the individuals. For these reasons, I support the Budget because it accords with our shared values.
Before I leave this point, I would like to return to an aspect of the speech Ms Kuik Shiao-Yin made in reference to JC and polytechnic students she spoke to, constantly using the word \"uncertain\" when asked to describe their future. If I were there at the discussion, I would acknowledge that, indeed, our future as a nation and as individuals has and will always be uncertain. This has been the case since 1965. We survived because we remained together, worked hard putting the nation before community and community before self.
I would point out that we are in a better situation than before because of a prudent and forward-thinking Government. I would highlight the importance of being resilient and the need for the students to be the best they can be for themselves, their families and our country. If our youths can accept this, we can be sure that we will have a strong future. Having said that, I have three observations to make on the Budget.
First, the Wage Credit Scheme (WCS). Minister Heng decided to extend WCS to overcome near-term challenges because, in his words, \"Some firms remain concerned about business costs\" even though our economy has picked up. We, therefore, will see a second extension of WCS which has been running since 2013.
Based on estimates, the Government would have committed up to $7.2 billion for this programme. For the period 2013 to 2015, it is about $3.6 billion; 2016 to 2017, it is $1.8 billion; and an additional $1.8 billion for the next three years.
In 2015, when the Government first proposed the extension of WCS in Parliament, concerns were raised in this House. The hon Member Assoc Prof Randolph Tan warned that WCS may land up in delaying the adjustments that businesses should make in order to complete restructuring. In other words, WCS should not unwittingly become a wage subsidy crutch.
The hon Deputy Prime Minister Mr Tharman Shanmugaratnam explained then that there is a need to adopt a phased approach whilst the foreign manpower policy is tightened and the labour market becomes tighter. Otherwise, there would be an impact on weaker businesses, especially startups. There is also a need to support those who are rejoining the economy and may need time to enhance their skills and increase their productivity.
I support this approach but, given that this is the second time an extension is being sought, I am of the view that the WCS criteria should be sharpened so that we focus on the firms which are concerned about business costs. I do not see why a muscular company, say, a Government-linked company or a listed company, can benefit from WCS in the same way as a small enterprise.
Also, the drivers for WCS, when implemented in 2013, were the need to improve productivity and the tight labour market. Productivity growth for 2017 is 4.5%, highest since 2010. Citizen unemployment rate for 2017, based on the Ministry of Manpower's (MOM's) preliminary figures, stands at 3.3%, better than in 2013 when it was 2.9%.
In light of the improved situation, why does the Government see a need to further extend WCS by another three years, which is a year longer than the first extension, which was for two years?
Second point, promoting partnership. Minister Heng Swee Keat identified the forging of strong partnerships as a third key enabler to capture future opportunities, especially in Asia and ASEAN in particular. He pointed out: \"Competition is not the only driving force in our economy. Cooperation is also key.\"
He went on to identify platforms for partnership, such as Partnerships for Capability Transformation (PACT), Global Innovation Alliance, ASEAN Innovation Network, and announced the setting up of the Infrastructure Office.
I support the focus on capturing future opportunities in Asia and ASEAN to grow the Singapore economy. There is, however, a need to overcome the default mindset of companies which are used to competing with one another. This will not be easy. Also, PACT contemplates large organisations to partner small companies. This is not a partnership of equals. Recognising this, in a Business Times article published on 8 November 2016, Mr Lim Hwee Seng and Ms Bernadine Huang of PricewaterhouseCoopers (PwC), stated as follows:
\"This scheme remains out of the reach of the smaller-scale small and medium enterprises (SMEs). More often than not, large organisations will choose to work with the bigger SMEs, and not the smaller ones. We suggest for PACT to be extended to allow bigger-scale SMEs to work together with smaller-scale SMEs and not just large organisations vis-a-vis SMEs.\"
How would the Government promote the forging of strong partnerships in these circumstances? In particular, how would it ensure that the smaller SMEs would benefit from PACT? This is especially important in the technology space where there are a good number of startups and small companies which could potentially benefit from venturing overseas in partnership with large organisations.
I note that the 2001 Economic Review Committee, in its report which was issued in 2003, a similar call was made. It promoted a cluster approach amongst companies venturing overseas, where larger companies lead a cluster of enterprises, including SMEs.
May I ask what has been the Government’s experience in promoting such partnerships? What lessons can we draw from the past?
Final point ‒ strengthening social safety nets for those in need. I am very heartened to note the concrete plans for Budget 2018 to build on the SG Cares movement. On the aspect of financial support for charities, I note that the total donations have increased from $2 billion in 2011 to $2.7 billion in 2017.
One big contributor is Tote Board, through its grant-making activities across sectors, such as Arts, Community Development, Education, Health, Social Service and Sports. In financial year (FY) 2016/2017, Tote Board approved disbursements of $459 million to these sectors. This amounts to about 17% of the donations. In the past five financial years beginning from 2012, Tote Board collected an average of about $150 million from casino entry levies per year, which is used to fund its grant-making activities.
Casino entry levies have not changed since 2010, not even adjusted for inflation over the past eight years. May I ask why this is so? Increasing the casino entry levy will enhance the safeguard to protect Singaporeans and Permanent Residents (PRs) from the ill-effects of gambling and, at the same time, allow charities to be better supported through Tote Board’s grant-making activities. With that, I support the Budget.
Mr Speaker: And finally, we have Mr Saktiandi.
Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Speaker, Sir, like what Mr Murali Pillai has mentioned, I think it is a great honour to be the last speaker. But I think Mr Murali has done great justice in terms of trying to wrap up some of the points made by other Members. I am not sure whether I should try and keep it brief or try to be on point.
Mr Speaker: Brief is always good.
Mr Saktiandi Supaat: But I find that the Budget takes a very detailed approach to the challenges that Singapore will face in the next five years and the Minister for Finance has scrutinised the various revenue platforms and carefully considered how best we should manage this against our expenditure, especially on building the infrastructure necessary for the future and the rising expenditure on healthcare and security. The hallmark of this Government has always been to plan ahead, including this time round, providing forward guidance on its fiscal plans.
Based on the past two days' debate, I think it has also led to a healthy discussion on our fiscal sustainability and reserve adequacy as well. This is an important issue to lay bare, in particular, for a small and open economy such as Singapore, as huge amounts of money move in and out of Singapore all the time. This is of benefit to us, especially as a financial centre, but it can bring with it risks that we need to buffer against, so as not to take risk leading to major job losses. And I think that is the penultimate key issue ‒ the job losses that might arise from this.
After yesterday's debate, I was looking at statistics overnight. For example, to put things in perspective, based on 2016 data, Singapore's foreign direct investment (FDI) stock is S$1.4 trillion. This is quite substantial. This is no fun and games. This is a huge amount. If there is a loss of confidence or catastrophe and, let us say, 30% only of the FDIs were to move out, it will wipe out S$400 billion. And we should note that the Monetary Authority of Singapore's (MAS') official foreign reserves are only $370 billion, and this is just 30% of the FDIs. \"FDI\", if I may define it, is actually the amount of investments by foreign multinational companies (MNCs) or multinational enterprises investing in Singapore. This S$400 billion is what actually leaves Singapore's shores, and we will need money to rebuild for jobs if this goes out. And I remind Members again that this is only 30% of the FDI amount.
So, we are fortunate to have a good team handling our Reserves. They have been able to secure good returns from year to year to supplement our Reserves. I must, at this point, congratulate them and the Ministry of Finance (MOF) for an excellent job.
The point made by Ms Kuik Shiao Yin in her speech yesterday about being pragmatic and shifting from pragmatism and moving away from idealism, I think is the point that I shared just now in terms of statistics. So, being pragmatic today is actually quite important so that tomorrow's kids can have a space to realise their dreams and ideals. That is an important point I want to share today from that perspective.
I am glad also with the Minister for Finance's assurance in his speech that we need to take the right approach to have future generations in part bear financial responsibility for infrastructure projects that are built for future needs.
At this juncture, Mr Speaker, please bear with me. I am trying to share a bit in terms of using a localised version of the island parable sketched by the late American economist Paul Samuelson of Massachusetts Institute of Technology to set the context about the overlapping generational issues that we face before my comments and questions later on.
Let us assume we have this island which is home to unusually tall rambutan trees ‒ Samuelson uses cocoa trees and I am using rambutan trees here to give a localised version ‒ and also hungry people ‒ one young and one old generation ‒ and little else. The rambutan trees are our surpluses and reserves, and the fruits are our returns from our reserves. The trees reflect the island's strong fundamental. So, the young among the people would climb the trees and pick the fruits. Take note that the fruit must be eaten quickly before it is spoilt by the hot weather. The older people are physically incapable to climb and pick the fruit. Neither could they buy fruit from the young, as they have nothing to offer in exchange. So, if the elders had saved the fruit from their youth, it would not work. The stockpile would have rotted with the passage of time. So, the solution: the young gives to the old the fruit they pick and, in return, the next generation will do the same for them when they, too, grow old. Thus, the young sort of pays it forward. This also serves as a link between two generations. The scheme works, Samuelson pointed out, only because “new generations are always coming along”.
I will pause at this moment and say this may be an oversimplified world I am painting, but the same core values and principles have been applied in Singapore. So, past and current generations always looking forward and thinking about the future and caring for the less fortunate.
In Singapore’s context, things have evolved with practical policies introduced in the past 50 years. Our young can acquire a durable asset, say, a Housing and Development Board (HDB) flat, and our Government buys reserve assets and can replant half the rambutan fruits or seeds to grow more rambutan trees. At a future date, they sell these to cash out and take care of themselves. Thus, when the young get older, they can rent or sell the HDB flat to the next generation. In most cases, this kind of saving and investing does far better to serve the people. Capital accumulation enlarges the economy’s productive capacity, thereby creating wealth. Saving and investing both store value and add to it, turning one rambutan fruit into a whole tree. Retirees can, therefore, expect to get more out of their investment than they put in, not to mention other long-term initiatives that we have already built up over the years, such as Central Provident Fund (CPF) and ElderShield, for future retirement and healthcare needs.
So, Mr Speaker, my first question is related to the fruits from the replanting of the rambutan trees. We should make sure we continue to plant more rambutan trees and not go down the path of eating too much rambutans. In fact, we should have a balanced diet ‒ our NIRC (or rambutans) ‒ when we can find other sources of food or tax revenue. After all, too much rambutans may not be good for us. We can get a sore throat. Besides, even when we take other sources of food from other plantations or trees, we have consistently taken care of those plantations with fertilisers and tender loving care by offsets and other measures to ensure all is well and more fruits can be produced in the future.
So, back to my first question to the Minster, will the trees continue to bear fruits at a rate we need? Can we and future generations continue to plant trees, even as some of the older trees wither and die? It would be good, too, if the Minister could say whether or not we can continue to expect such returns from the Government Investment Corporation (GIC), MAS and Temasek in the next few years or decades. If this is achievable, then perhaps there could be a chance for the proposed GST hike to be deferred to a later date.
I wholeheartedly agree that it is important to save for rainy days and keep a substantial Reserve. I am glad that the Government is looking at ways to address the overlapping generation usage of our future infrastructure, especially in the next economic phase of Singapore. This Budget is a good start. In particular, the issue is about optimal financing and that the user pays. Rather than just building up funds now for future infrastructure projects, I am glad that the Budget highlighted efforts to fund infrastructure projects by a debt structure to finance the construction of infrastructure. In principle, under such a debt structure, the cost of funding the infrastructure project should be amortised over time, so that each generation pays for the benefits they get from using the infrastructure project.
In our case, it may be useful to earmark a certain amount of Reserves or NIRC to use to “guarantee” the bonds or borrowings for an infrastructure project. To segment spending for infrastructure projects and other expenditures in our Budget explicitly would give taxpayers a better picture of where their money is going to, and how they will benefit from it. In fact, this is a feedback from one of my residents ‒ trying to give a better picture of where the money is spent and how you benefit and the usage of Reserves as well.
So, the key word here is “earmark” for the guarantee to lower the financing costs. But the returns from the infrastructure project must make sense. If future users cannot afford to pay, lenders can tap on that collateral and assume ownership of it. For example, in the context of the rambutan story, build a fence around one rambutan tree and use that as collateral to borrow money to construct the bridge to the next island, so that we can build more rambutan trees there, and not sell the rambutan tree. We can use the toll for the bridge to next island to eventually pay for the bridge. Most importantly, the future users of that bridge will pay for the bridge. No need to chop down the rambutan tree.
As mentioned in the Budget speech, borrowing arrangements for Statutory Boards and Government-owned companies which build infrastructure would form one part of the solution for funding large investments. However, contingent liability is a potential future issue that must be taken into account, given the unpredictable nature of the global economy and the financial markets. So, it is an issue and concern I have. Contingency liabilities could build up for future generations, affecting the ability to obtain funds in future. Does the Ministry see an issue in the build-up of contingent liabilities for future generations?
Moving ahead, we will also have to evaluate how a GST increase in the near future would impact on the lower-income and middle-income groups. If GST is to be increased, how much of it is expected to be ploughed back to reach those in need? Will more resources be pumped into existing assistance schemes to mitigate the impact of rising living costs? It would be prudent to explore means to collect the revenue efficiently, and quickly and fairly allocate it to reduce further inequalities.
Furthermore, as the Government moderates the pace of various Ministries' budget growth and looks out for ways to be more efficient and effective, there will be decision inflexion points with tradeoffs at the margins. I am concerned if some of the decision points and tradeoffs may lead to reduced spending in specific areas of education and skills training, in particular, the Institute of Technical Education (ITE) segment of the student population. They constitute about 25% of the post-secondary cohort each year and are a significant future labour force with key skillsets for us to be future-ready.
I have visited and met students and staff of ITE as part of the Council for the Development of the Singapore Malay/Muslim Community's (Yayasan MENDAKI’s) Future Ready Unit's efforts to enhance the awareness of the younger generation about being future-ready and to instill the importance of SkillsFuture and lifelong learning. Without a doubt, the Government has provided excellent support and resources to ITE.
In the last 25 years, ITE has made tremendous progress to provide skills training for full-time students and Continuing Education and Training (CET) skills upgrade for in-service workers. Recently, ITE had made further advancement by providing new upgrading pathways for its alumni and in-service workers through the programme called Work-Learn Technical Diploma (WLTD), which is a path towards higher certification through apprenticeship model.
Another ITE programme, which in my view is excellent, is the Global Education Programme (GEP). This programme provides ITE students with a holistic education by exposing them to new skills, global mindsets and perspectives, and a better understanding of the culture and lifestyle in other countries. It has proven to be life-changing for some of the students and is impactful, especially for those who come from humble backgrounds.
So, I hope the Government will ensure that the support for programmes like those in ITE and, for example, programmes like the ITE WLTD and GEP, will not be affected, and future demands for development resources will continue to be given to ITE. This is even more important in Singapore’s next phase of development where skills meritocracy is essential.
Another resource that I hope will not be affected are the financial assistance support for ITE students. More than 50% of ITE students qualify for some form of financial assistance and they generally come from diverse challenging backgrounds. The application and checks because of means testing can be very onerous for these families. So, the ITE schemes allow more direct assistance to the students and their families. I do hope that tradeoffs from the reduction in the budget growth do not lead to reductions in the ITE Opportunity Funds, for example.
Mr Speaker, this is a progressive Budget that seeks to prepare Singapore to cope with significant future expenditure growth. The Government is clearly seeking solutions to do so without putting too much burden on the current generation and these efforts should be lauded. I hope there will be no more rambutan trees being cut. Sir, I support the Budget.
Mr Speaker: After 54 speakers and a short detour on how speakers are rostered, Minister for Finance.
The Minister for Finance (Mr Heng Swee Keat): Mr Speaker, Sir, first, let me thank Members of the House for the thoughtful and wide-ranging debate over the past two and a half days. As you said, over 50 Members have spoken for more than 10 hours, and if I were to do a point-to-point discussion, it will take us beyond 10.00 pm tonight. So, in line with my Ministry's policy of limiting Ministries' budget growth to 30% of gross domestic product (GDP) growth, I shall try to keep it to about 30% of 10 hours. [Laughter.]
Mr Speaker: Thank you.
Mr Heng Swee Keat: I am glad that the Budget has sparked many thoughtful conversations among citizens and fellow Singaporeans. Many Singaporeans have shared their perspectives with me in the course of various consultations and engagements, as well as with the other Ministers. I am grateful for the feedback that has helped us to refine our thinking and ideas along the way. This is important because the Budget is not an accounting exercise. It is a strategic and integrated plan for the future, about how all of us can come together to achieve our shared aspirations.
As we learned in Our Singapore Conversation, many aspire for a home where we can make a good living and fulfil our potential, regardless of where we start in life; where we can live purposeful lives, and enjoy our silver years surrounded by the care of family and community; and where we feel assured that our aspirations and needs can be met.
This Budget is about how we allocate resources to achieve these aspirations, through: (a) a vibrant and innovative economy, with diverse opportunities for all; (b) a smart, green and liveable city that we can be proud to live in; (c) a caring and cohesive society where people look after one another, especially the disadvantaged and the vulnerable; and (d) a sound fiscal system that provides for Singapore’s needs in a fair and sustainable way.
Our Budget theme is \"Together, a Better Future\". I am glad that many Members agree that we can achieve a better future if we work together. I would like to cover three key themes in this debate. My Ministerial colleagues will talk about the respective issues under their purviews at the Committee of Supply (COS).
First, I will explain our approach to revenues and taxes, and why this is the sustainable, responsible and fair way to meet our future needs. Second, I will talk about the urgency of transforming our economy. Third, I will speak about how we can, together, build a more caring and cohesive society.
Let me start with our fiscal strategy. In this debate, two main questions have been raised: why do we need to spend more? What are the roles of taxes, Reserves and borrowing in meeting our revenue needs?
First, let me explain why we need to spend more. I explained in the Budget Statement that we face structural and sustained increases in expenditure in a number of areas – healthcare, security and other social spending.
Government healthcare spending is projected to rise by nearly 0.8 percentage points of GDP from 2.2% of GDP today to around 3% in the next decade. That is $3.6 billion more in today’s dollars. Why this rise?
First, we will spend more due to an ageing population. Already, Government subsidies for seniors' healthcare needs are more than six times that of a young person. From now till 2030, the number of seniors will double from about 450,000 to 900,000. This alone will increase healthcare spending significantly.
Second, the number of citizens who have chronic conditions is rising. Without taking action on diabetes, the number of diabetic patients aged 18 and above could rise from 450,000 in 2015 to 670,000 in 2030. We are working hard to arrest these trends.
Third, new medical technologies, new treatments, procedures, diagnostic tools and drugs can lead to a higher quality of life, but they could also cost more.
Next, annual security spending is also expected to rise by about 0.2 percentage points of GDP as we invest more to counter rising threats. The scale and magnitude of terror attacks around the world in recent years are signs that the terrorism threat has heightened. This threat has come closer to our shores, given the Islamic State of Iraq and Syria's (ISIS’) ambition to establish a caliphate in the region encompassing Singapore. As ISIS loses ground in Syria and Iraq, ISIS fighters’ return to Southeast Asia presents a serious threat to Singapore. The recent Marawi crisis in southern Philippines is a sign that extremist terrorism is now endemic in the region and may take many years before the security problem is rooted out. Around the region and at home, we have also seen more cases of self-radicalisation.
In addition, the range of threats has widened. In recent years, we have seen an increasing number of high-profile and damaging cyberattacks around the world, like the WannaCry ransomware incident, which affected computer systems around the world. With rising security threats and a wider range of threats, we will need to continue to invest in security to keep Singapore safe.
Preschool spending is expected to double in the next five years to $1.7 billion a year in 2022, an increase of about 0.1 percentage point of GDP from today. This is a vital investment in our future generations, ensuring that they have a good start in life. Two in three preschoolers will have a place in a Government or Government-supported quality preschool, up from one in two today.
Apart from these recurrent expenditures, we are investing in key infrastructure to build a better home and ensure we remain one of the world’s leading global cities. And we have to be prepared that expenditures could rise further than what we project now.
Healthcare spending, even in countries that are prudent like Japan and Germany, is around 10%-12% of GDP. New medical technologies could accelerate spending trends.
A sudden escalation in terrorist threats or geopolitical tensions could significantly increase the security spending required. A decade ago, we could not have predicted the rise of ISIS and the speed with which terrorism has spread and evolved around the world.
Our responsibility is to ensure that we make timely decisions and have enough revenues to meet our future expenditure needs readily, amid an uncertain future. In making the additional investment, we are doing so on a strong foundation. Government spending to date has achieved good outcomes.
Indeed, as Miss Cheryl Chan has noted, it is not about how much we spend, but how well we spend. We achieve very credible outcomes, with overall expenditures of about 19% of GDP in FY2018. This is less than half of what the OECD countries typically spend. We think carefully about how to design and organise our underlying delivery and funding systems and consider the roles of all stakeholders. Let me illustrate this in three areas: education, healthcare and law and order.
This is a chart showing how 15-year-olds from different countries do on the Programme for International Student Assessment (PISA) test for science, compared with how much the government spends on education. One group is the Nordic countries, which typically spend about 7% to 8% of GDP. Various OECD countries form a second group, around the OECD average. They typically spend about 4% to 6% of GDP. A third group comprises East Asian societies – Japan, Hong Kong, South Korea. They tend to spend less, with PISA scores on the higher end.
Where is Singapore? We spend about 3% of GDP and do well compared to other countries. The conclusion is the same even after we consider private expenditure on education, such as enrichment classes. It is not just in taking tests that our students do well, but other skills like collaborative problem-solving. And this does not capture the immeasurable character-building work that our schools do in cultivating traits in our students, such as perseverance, responsibility and valuing hard work.
The next chart shows healthy life expectancy against government and statutory healthcare spending. Countries to the right of the chart spend more of their GDP on healthcare, while those to the left spend less. The higher up a country is on the chart, the longer its residents live in good health.
Green points represent the younger societies, while red points are the more aged ones, and amber ones are somewhere in between. Many governments spend around 6% to 10% of their GDP on healthcare. As Members can see from the charts – 6% to 10%.
Compared to other countries shown on this chart, Singapore spends less on healthcare, yet achieves a high healthy life expectancy, higher than the OECD average. Even with population ageing, we expect to spend less than other countries with similarly aged populations.
Similarly, we are able to get effective outcomes for our spending on policing. We were ranked top in the 2017 Gallup Global Law and Order Index, which gauges people’s sense of personal security and their experiences with crime and law enforcement when living in their respective jurisdictions. This is despite our spending being at the lower end when compared to various jurisdictions. That said, Singapore must stay vigilant as a society and as a country.
How have we been able to achieve this so far? It is through a whole-of-society effort.
In education, we achieve good outcomes because we have invested in our schools and a dedicated corps of educators who believe in developing every child to their fullest potential. We have engaged parents who do their best for their children’s education. We have community groups, charitable foundations and individual donors who support students and families in need.
In healthcare, we are able to lead long and healthy lives because we have a well-designed healthcare system and dedicated healthcare professionals, with a system of incentives aimed at delivering value, rather than volume of treatments. We have citizens who take responsibility for their own health and strong families who look after their aged parents. And we have caring and dedicated voluntary welfare organisations (VWOs) that run many services in the community.
In security, we enjoy safety today, not only because we have built up robust and sophisticated systems and a strong corps of Home Team officers. It is also because we have National Servicemen and volunteers who serve with pride, and a united, law-abiding and vigilant community that stands against crime.
This is the power of partnership, and of a whole system that encourages everyone to take responsibility. It explains how a tiny country like Singapore with no natural resources can have world-leading outcomes with moderate levels of taxation and spending. This is the Singapore way and we must continue to build on this ethos. In particular, managing the cost of healthcare must be a whole-of-nation effort. We all need to do our part to keep healthcare cost growth sustainable.
In this respect, I appreciate the useful suggestions by Ms Sun Xueling on how we can be more efficient, effective and smart in spending. The Ministry of Finance (MOF) will elaborate more on how we are doing so at the Committee of Supply.
While we must instill prudence as a value in managing our resources, we must also appreciate that the major structural expenditure drivers that I have spoken of will entail billions of dollars of additional spending a year. The needs they address cannot be met by just squeezing more out of every dollar.
Having explained why we need to spend more, let me now talk about how we plan to finance this in a fair and sustainable manner.
Ms Tin Pei Ling and other commentators have asked if we could fund the increased spending for the future with a windfall surplus like the one we had in FY2017.
The surplus in FY2017 was largely due to one-off, exceptional factors that we do not expect to occur every year. The main increase came from an exceptional Statutory Board Contribution from MAS due to unexpected currency translation gains and investment gains from a global rally in equity and bond markets. The increase in Stamp Duty collections was generated by the recent property market pick-up.
We cannot fund our plans to secure Singapore’s future on the basis of episodic windfalls. If we are fortunate to have these occasional windfalls, we should do the responsible thing and save most of it for our future needs. We should not plan for our future in the hope that markets will always continue to move in Singapore’s favour. That is why we are reserving the bulk of the FY2017 surplus for future needs like the Mass Rapid Transit (MRT) development plans and ElderShield subsidies. The Government is also sharing some of the surpluses through the SG Bonus.
Let me explain at this point our approach to financing our needs. There are essentially three ways of doing so: raise taxes; borrow; or draw on our Reserves. Each of these ways serves a purpose; each involves risks and tradeoffs. We have decided on our approach only after deep and serious study – first, of our spending needs, followed by the options available to fund them.
Mr Louis Ng can be assured that in the process, many public officers from MOF, MOF agencies like the Accounting and Corporate Regulatory Authority (ACRA), Customs and the Inland Revenue Authority of Singapore, and other agencies spanning different policy and operational areas, debated the ideas rigorously with me and their own bosses. In the process, they pushed back on many ideas but also gave me fresh perspectives and feedback. They were certainly not afraid of speaking up or disagreeing with me or with the other Ministers for that matter.
So, let me now turn to the roles of each of these methods – taxes, borrowing and Reserves.
Let me, first, explain why we have decided to raise taxes. This is not an option that we have taken lightly. Not just because raising taxes is unpopular, but because the Government should, as far as possible, avoid taking people’s hard-earned money and deciding on their behalf how the money should be spent, unless it has to do so for critical social, economic or national needs.
Certainly, we should not shy away from addressing the need for taxes, where we see areas of collective need that can be better met by Government provision. These include areas like healthcare, supporting the elderly and retirees, investing in our people through preschools and SkillsFuture, and strengthening our security. As Mr Liang Eng Hwa reminded us, many Members in this House have fought for the Government to do more in these areas. But we should also consider the costs and how to fund them.
Looking ahead, we have needs that occur year after year. The responsible way for us to fund such spending is to raise taxes. As Er Dr Lee Bee Wah pithily reminded us, you do not fund recurrent spending needs by hoping to strike 4D. Or by borrowing with your credit card.
Each generation should strive to pay for its own spending through sustainable means, instead of drawing down more than is prudent from the Reserves or by borrowing and passing on the cost of current spending to future generations.
In particular, for the broad-based needs that I have mentioned, a broad-based tax like the GST is appropriate. As then-Minister for Trade and Industry, Mr S Dhanabalan, said at the Debate on the GST Bill in 1993, it is critical to have a “tax system that will make an immediate and direct connection between demands for public service and the private purse”. This is important so that we understand that whenever we increase demands for public services, we should also pay more. Mr Lim Biow Chuan gave us all a timely reminder that when the Government pays, it is the taxpayers who pay.
Let me now address some key questions that have been raised with respect to the GST increase and other tax changes: first, how we decided on the timing of the GST increase and its announcement; second, how we sized the GST increase relative to our needs; third, how we take care of our lower-income and ensure that our overall taxes and benefits system remains progressive; fourth, how the tax changes will affect our competitiveness.
First, there have been questions on the timing of the GST increase that I have announced. In planning our finances, we take the long view. We seek to understand major trends holistically and how they may affect Singaporeans. We assess carefully what we need to do in response and how we should find the resources to support our plans. This is how we had determined that we will need to raise GST sometime in the period from 2021 to 2025.
By announcing the GST increase early, we are being honest and upfront about our national needs and setting out what needs to be done. We are giving ample notice to citizens and businesses that we will need to raise GST. Members of Parliament (MPs), such as Mr Lim Biow Chuan and Asst Prof Mahdev Mohan, have spoken about why we need to do this, to set out a clear direction for the future.
I hope that it helps everyone to understand our shared challenges in the coming years. Indeed, we must have such important discussions about our future, well in advance. This is important because it is not just Government finances that will be impacted by trends like ageing, but individual citizens and their families. We must all prepare for what is to come. This will also help us to better determine an appropriate offset package that can help with the adjustment.
But we know that there are always uncertainties. That is why we have given a timeframe of 2021 to 2025 as to when this increase would need to take place. I would like to assure Members that, just as the decision to raise GST was not made lightly, the Government will exercise care in deciding the timing for its implementation. Before we move to raise GST, we will carefully assess the prevailing economic conditions as well as our needs at that point.
Second, let me address questions over how the GST increase is sized relative to our needs. As mentioned, a two-percentage point increase in GST rate is expected to raise revenues worth about 0.7% of GDP per annum. This estimated amount is before we account for the amount needed to fund the enhanced GST Voucher (GSTV). On the other hand, the expenditure drivers that I earlier mentioned – healthcare, security and preschools – already exceed this amount. These are serious commitments that we must budget for, and there are risks that overall spending could rise further.
So, the two-percentage point GST increase will not fully cover our expenditure needs, but only make the fiscal gap more manageable, in conjunction with other measures to manage expenditure. It is thus the prudent and responsible approach to raise GST in good time, instead of hoping for expenditure to fall.
Third, let me address concerns over the fairness and progressivity of an increase in GST. I understand that some are worried about the impact of a GST increase on the cost of living, not just among the lower-income, but also among many middle-income households. Let me assure everyone that we are mindful of the impact of tax changes on households, particularly the lower-income, and will help them to adjust while maintaining a fair and progressive system of taxes and transfers.
As I have mentioned in my Budget Statement, GST should be seen together with the rest of our taxes and transfers system, including the GST Voucher scheme. The Government provides structural GST offsets through the GST Voucher. This is a permanent scheme, an integral complement to GST. For the lower-income, we provide substantial offsets. This is a targeted way of making the GST package a progressive one. For retiree households, they also get significant GST offsets.
In addition, we have schemes and programmes to support the less well-off. This includes the Workfare Income Supplement and Silver Support. From education to healthcare and housing, our social programmes provide higher levels of support for the lower- and middle-income households than they do for the well-off, with lower-income households benefiting the most.
We also provide support for the middle-income. First and foremost, our approach to supporting the middle-income is to create good economic growth, as the best form of social security is a good job. Second, we keep the tax burden low, so that Singaporeans get to keep as much as possible of what they earn. Finally, in recent years, we have expanded the support for Singaporeans to take care of their children and aged parents, easing the burden on the \"sandwich generation\" which Mr Desmond Choo spoke about.
So, when you look at the overall balance of taxes and transfers, lower- and middle-income households receive significantly more benefits from transfers than what they pay in taxes. The middle-income group gets $2 in benefits for every dollar of tax that they pay. The lower-income group gets about $4 in benefits for every dollar of tax.
As I have mentioned in the Budget Statement, we will continue to absorb GST on publicly subsidised education and healthcare.
When we eventually raise the GST, we will enhance the permanent GST Voucher scheme to provide more help to lower-income households and seniors. We will also implement a transitional offset package, with lower- and middle-income households receiving more support, to help them adjust.
Mr Lim Biow Chuan and Er Dr Lee Bee Wah also asked if we intend to set up a Committee Against Profiteering (CAP) to combat any illegal profiteering due to GST hikes. When we last raised the GST in July 2007, most businesses did not use GST as an excuse to raise prices beyond the GST increase. The then-CAP looked into the complaints to manage profiteering.
Similarly, when we raise the GST to 9%, we expect businesses not to exploit the situation and use the GST as a cover to raise prices. If necessary, the Government is prepared to convene a similar CAP.
There have also been concerns that consumers may choose to shop abroad for daily products and there will be more attempts to evade GST. Today, we limit the value of goods that can be brought into Singapore for their personal use without GST. Customs and Immigration and Checkpoints Authority (ICA) officers enforce this, and we will continue to have an appropriate level of enforcement when the GST is raised.
While we have announced the GST increase this time, we continually consider all other taxes and sources of revenues to meet our expenditure needs. Some Members have asked if we are doing enough to tax wealth, and if those with higher income are contributing a fair share.
Dr Intan Mokhtar has suggested raising personal income taxes (PIT). We have raised PIT in recent years to further enhance progressivity. We increased the marginal tax rates for higher-income earners with chargeable income exceeding $160,000 and raised the top marginal rate from 20% to 22% for those with chargeable income exceeding $320,000. This took effect from YA2017. We also introduced a cap of $80,000 on PIT reliefs, taking effect from YA2018. Under the present PIT structure, about half of our workers do not pay personal income tax. Among those who do, the top 10% pay about 80% of our PIT revenue.
Any review of PIT rates must ensure that Singapore remains attractive. Just yesterday, Hong Kong has announced a reduction in PIT in their Budget. We will be moving in the opposite direction if we are to raise PIT when all jurisdictions are competing for talent, including our Singaporean talent. We will continue to monitor and review our rates but, for now, our view is that PIT rates are reasonable for us to remain attractive, given the intense global competition for talent.
Mr Ong Teng Koon and Mr Yee Chia Hsing suggested that we look closely at wealth taxes. Aside from taxing income, our current approach to taxing wealth is mainly through taxes on assets that cannot be tax-planned away easily, unlike other methods like estate duties. That is why we have enhanced our property tax regime in the last decade to make it more progressive, and to meet our spending needs. For residential properties, 86% of property tax collected comes from non-owner-occupied residential properties, and owner-occupied residential properties with an annual value of $30,000 and above.
In this Budget, we have made moves to improve the progressivity of our stamp duty regime, so that those who can afford a higher-value residential property pay more taxes on their purchase. I thank Mr Seah Kian Peng and Mr Yee Chia Hsing for their strong support for this move. On average, we collected about $8 billion in recent years from property tax and stamp duty. This is a significant proportion of our revenues. We will continue to review this area closely.
Mr Yee Chia Hsing and Ms Foo Mee Har suggested reviewing taxes on alcohol and gambling. We regularly review such duties and we will take these suggestions into consideration.
On the introduction of GST on imported services, Mr Thomas Chua mentioned the $225 billion worth of imported services reported by the Department of Statistics. I wish to clarify that this includes all business-to-business (B2B) services, and vastly overstates the imported services which we will introduce GST on. Our move to levy GST on imported services will not affect most businesses. This is because most businesses can claim full refund of the GST they incur on inputs that they procure for their businesses, including imported services. Thus, businesses affected by the GST on imported B2B services are primarily financial institutions and residential property developers which do not get such full refunds.
Mr Pritam Singh asked if this will yield additional revenues. We estimate it could yield additional revenue of about $90 million per year. But let us be clear that this is a move to defend our current revenue base from being eroded as more transactions move online.
Finally, let me talk about keeping our fiscal system pro-growth. Dr Intan Mokhtar has made suggestions to raise corporate income tax rates, particularly for MNCs and large firms. Let me elaborate more about our environment today. Around the world, there are significant changes and uncertainties in the global tax environment. There is ongoing discussion worldwide on international tax rules for combating tax avoidance under the Base Erosion and Profit Shifting (BEPS) project. In 2018, the US reduced its headline corporate income tax rate from 35% to 21%. It also made other changes to make it more attractive for US companies to invest at home. This may spur cuts in corporate income tax rates around the world.
Singapore must remain sensitive to these global trends that impact us. We are a small and open economy, subject to the full forces of competition in a globalised economy. It is important for us to remain a competitive and business-friendly location. In 2017, $9.4 billion of fixed asset investments and $6.5 billion of total business expenditure were committed. When the projects are fully implemented, about 22,500 jobs will be created.
The increase in GST is not expected to impact our competitiveness significantly, which is a concern raised by Dr Lim Wee Kiak. The future GST rate of 9% is not high by international standards as this chart shows. The OECD average is 19%. So, our new rate is less than half of that. Among countries in the region, many others have GST standard rates that exceed 9%. Some countries are also contemplating raising GST. Japan, for example, plans to raise its consumption tax rate from 8% to 10% in October 2019.
In summary, we have taken a principled approach to meet the general population's future needs through a broad-based GST increase, while ensuring that our overall system of taxes and transfers remains fair and progressive and is supportive of growth.
I have spoken at length on the first way of financing our needs through taxes for recurrent needs. Let me now move on to the second way, which is borrowing. Borrowing is a reasonable option for major long-lived capital investments with high capital expenses, because the benefits of these assets are enjoyed mainly by future generations, in fact, many years down the road. This is an option that we are pursuing for major long-term projects like Changi Terminal 5.
Ms Tin Pei Ling and Mr Saktiandi Supaat raised concerns on whether borrowing will result in unsustainable debt and interest payments and they have raised an important point. Indeed, we aim to live within our means. We should not over-borrow and burden future generations with unsustainable debt, as we have seen in other countries. The stark difference is that unlike some other countries, we borrow not to spend on recurrent needs like healthcare, education and security, but to invest in long-term infrastructure. Such long-term investments will continue to yield economic benefits and position Singapore well for the future.
We are strategically leveraging the strength of our financial position to optimise our borrowing. To reduce financing costs, the Government is considering the provision of guarantees to back borrowings by our Statutory Boards and Government-owned companies. The Government is consulting the President's Office and the Council of Presidential Advisors (CPA) on this proposal, including the details of how it will be structured. So, many of the points that Mr Saktiandi mentioned earlier on will be discussed in great detail.
This way, we can tap on the Government's triple-A credit rating and the strength of our Reserves without directly using it. This is how we are helping the current and future generations. We are able to do so only because we have planned our finances soundly and accumulated strong Reserves. We are one of only 11 countries in the world, and the only Asian country, which has a triple-A credit rating, which represents the solid foundation and safety net that our forefathers left for us. We do not and cannot take our credit rating for granted. I am glad that Members, like Mr Sitoh Yih Pin, Mr Liang Eng Hwa and Mr Ong Teng Koon, think that this is a sensible approach and recognise the value in this.
Now, I will talk about the third way we have been financing our needs, which is our Reserves. Our Reserves have been painstakingly built up over half a century by our Pioneers and previous generations. We have inherited this nest egg and must act as responsible stewards. That is why, over the years, we have carefully deliberated and developed a comprehensive set of rules to safeguard and manage the use of our Reserves. Our Constitutional rules protect our financial assets and land as past Reserves. As land sales convert physical assets into financial assets, the proceeds from land sales are rightly fully protected as past Reserves as well.
This principle of asset conversion is sound. It is irresponsible to mislead people that the principle suddenly does not apply when we use just, say, 20% instead of 100% of land sales proceeds.
Mr Pritam Singh made such a suggestion and if I may use an analogy: suppose our forefathers left us with five plots of land and, each year, we sell one plot, 20% and use that money. In five years, there will be no land left. So, that is the fallacy of using 20%.
Now, instead of using the proceeds of land sales, or any part of it, for spending, the proceeds of land sales are added to our Reserves, which are invested in a globally diversified portfolio. From the returns, we take 50% as NIRC to supplement our budgetary needs. This achieves a balance between supporting the needs of the current and future generations.
Today, contributions from Reserves are already the largest contributor to our revenues. If we did not introduce the NIRC framework, we would have had to double our PIT collection or our GST collection to raise the same amount of revenues.
And yet, some have suggested increasing the NIRC spending cap from the current 50% to 60% or using a portion of land sales proceeds for recurrent social spending. All this sounds very tempting. It seems relatively painless to do so compared to raising taxes. And you may be wondering why do I not take a painless way? But is it the right thing to do? Certainly not.
The rules on Reserves were debated and agreed in this House. We enshrined them in the Constitution. We deliberately introduced rules on land sales and the 50% NIRC cap so that we do not succumb to the temptation to draw more from our Reserves to fund current expenditure or eat into the principal sum.
To amend the rules as a first resort is ill-disciplined and unwise. This would defeat the purpose of enshrining the 50% cap in our Constitution. Moreover, if as soon as we need more money, the first thing we do is relax the rules, that is the surest way to change Singapore's basic orientation, from saving and building for the future, to living for today and letting tomorrow look after itself. We must not give in to the temptation to chip away at our strategic national asset.
Indeed, as many Members agreed, we should not over-rely on NIRC, which is already the largest source of our revenues. An over-reliance will hurt our ability to respond to changing circumstances in the future.
We are stewards of the Reserves for our future generations, as what our forefathers had been for us. It was thanks to the astute Dr Goh Keng Swee and other forefathers, who had the foresight of investing our Reserves in a long-term and diversified portfolio early, that Singapore has built up a nest egg.
Since then, each generation of Singaporean leaders has upheld that discipline of running balanced budgets, setting aside surpluses, having professional managers manage our Reserves for long-term gain. Our founding generations resisted the temptation to spend more from our Reserves.
What if Dr Goh and our other forefathers had said, \"We are saving too much of our surpluses\", \"we should spend more on ourselves and leave less for our children and grandchildren\"? Would we have this inheritance from which we are now benefiting so handsomely and debating how to use more of it? We would have nothing.
Today, the constitutional arrangements for the use of Reserves represent this discipline we have set for ourselves. As the Prime Minister said in 2008, it is about \"our commitment to continue growing our Reserves, while allowing the Government to tap on part of the investment income for current spending\". Deviating from these rules in a sustained way will put this critical balance at risk and may compromise the long-term health of our Reserves and the country. Be it NIRC or land sales proceeds, we must uphold the discipline in tapping on our Reserves in a sustainable way.
And to be clear, we prepare for the future not only within our own lifetime, but our children's and children's children. The average life expectancy of a Singaporean child born today is over 80 years. A lot can happen in such a lifetime. Just think about what the world has gone through in the last century.
In the first 50 years of the 20th century, a person would have lived through two world wars and the Great Depression, the advent of nuclear weapons and the establishment of the Bretton Woods system that governs the international financial order today, including the setting up of the International Monetary Fund (IMF) and the World Bank.
In the next 50 years of the 20th century, a person would have lived through the Vietnam War, the formation of ASEAN, major advances in technology, such as the space race and the Internet, the rise and fall of communism and the Asian Financial Crisis.
As we now come into the 21st century, we are moving from a unipolar world to a multipolar one, with growing tensions between major countries and concerns about global and regional stability. If anything, developments that we are witnessing today remind us that the future is ever-changing and uncertain, as recognised by Mr Liang Eng Hwa and Mr Henry Kwek. What is clear is that in the aftermath of a crisis, be it financial or geopolitical, there are usually many years of subsequent weak economic performance. Employment and economic output tend to fall for a sustained period.
For example, the US unemployment rate only recovered to pre-Global Financial Crisis levels last year. It took a decade. Unemployment rates in some European Union (EU) countries have not recovered even after 10 years.
In turn, with crises like these, Government revenues are likely to decrease, at the very moment when we need resources to support our people and economy, a view shared by Assoc Prof Randolph Tan. That is why our Reserves are critical to help us overcome such challenges, especially since we have no natural resources.
Ms Kuik Shiao-Yin raised the IMF's general guidance on reserves adequacy. IMF's guidance is meant to specifically address capital flight risk, which is the risk that the Singapore dollar deposit holders will switch out to foreign currency because there is a loss of confidence in our currency. That is but one of many scenarios which our Reserves have to deal with.
So, the examples I gave of the last century, and all the major events and the potential impact, should serve as a very important reminder about the role of our Reserves. Also, even major countries, very well-developed countries, whether it is the US or the EU, are not immune from financial or economic crises. In fact, ironically, the last global financial crisis originated in the most developed parts of the world. But its impact was felt all around the world.
So, however much that Singapore develops, however much the world develops, we must be cognisant and we must be prepared to deal with unforeseen events, to deal with crises which can have a very significant impact on Singapore and around the world. We need to be prepared for crises that go beyond just a currency crisis.
More importantly, we must have the humility to recognise that we can never predict what will happen in our lifetime, much less our children's lifetime, or their children's lifetime. So, what we must do is to give them the best chance of a better life, whichever way the winds of change may blow. What we have inherited from the past, we also owe to the future. That is our moral obligation.
Members of the House, what I have elaborated on is on the overall approach that we are taking to fund our growing needs.
I have listened carefully to the speeches of Members of the Workers' Party to see if they could offer an alternative approach. But as far as I can tell, the Workers' Party supports the thrusts that I spoke of. In fact, no one has asked the Government to cut back on any specific item. On the contrary, they have asked the Government to do even more. Assoc Prof Daniel Goh asked the Government to do more in many areas, like giving Silver Support to those living in large flats. Mr Dennis Tan asked the Government to enhance elderly care support. Ms Sylvia Lim spoke about inequality and what we must do.
It is easy to ask for more. Not a single one of the MPs, except Mr Pritam Singh, even mentioned what it would cost, nor how to fund it. In fact, not a single one mentioned about how much it would cost for each of the ideas that you articulated.
Only Mr Pritam Singh spoke about other ways of funding it. Mr Pritam Singh offered a few options. He suggested using revenues from land sales and increasing the NIRC cap. I have explained earlier, clearly, why we cannot, and should not, use this. He asked if we can rely on GST on imported services. I have explained that the yield is small, less than $100 million, and that we need to do this to protect our revenue base. He even suggested that through our Smart Nation efforts, we can increase tax collection from self-employed hawkers and taxi-drivers!
Mr Pritam Singh cannot be serious. Any serious-minded person will appreciate that not one of these is a viable alternative to a GST increase. These are distractions, and Mr Low Thia Khiang asked us not to be distracted, so I hope that you could have a discussion with Mr Low Thia Khiang. Instead of taking a principled stance, Mr Pritam Singh would rather withhold his support for the GST increase by adopting a \"wait-and-see\" posture.
It is easy to fall back on politically expedient options and pretend that they will solve our long-term challenges. But this is a dishonest and irresponsible approach. If we were to do this, future generations of Singaporeans could easily end up in serious deficit. Then, we will be having a very different conversation about our future.
I think the Workers' Party should come clean to the people. Do they want the Government to increase healthcare or social spending? Does the Workers' Party want the Government to increase healthcare or social spending, as all its various MPs have spoken, item by item? If yes, how does the Workers' Party propose to pay for the increase?
So, I am glad that Mr Low Thia Khiang, who is not here today, appreciates our longer-term challenges and the significance in positioning Singapore as a Global-Asia node. But I was puzzled that he characterised the GST debate as a distraction, and that he would rather debate this at election rallies. The Workers' Party MPs have been elected into Parliament! You are sitting in Parliament! Parliament is exactly the place to debate serious issues affecting our nation's future.
I have set out, as clearly as possible, why our spending needs will rise and the options for meeting these needs. All your MPs have spoken and said let us do even more. I have also given very clear notice, way in advance, of the need to raise GST. And I am prepared to answer your queries.
So, I really hope that the Workers' Party MPs, having run on a slogan of a First-World Parliament, is not just using attractive election slogans, with no real intent to take your Parliamentary responsibilities seriously.
I hope that when the elections come around, the Workers' Party will not turn around and use the GST to distract people from the longer-term issues that we face. These are serious long-term challenges that we should do our best to address and not take this as electioneering or as political play. We owe it to Singaporeans to do the right thing.
Ultimately, as many MPs and Nominated MPs have pointed out, our fiscal approach is about giving expression to our shared values. Embracing the virtue of work and responsibility, where each generation works, earns and contributes its share. And being good stewards of what we have been given today and doing our part to leave behind something better for our children and grandchildren.
This approach reflects who we are as a society, not one based on narrow notions of individualism, where each generation lives for itself and demands a chunk of the pie, but one based on notions of family and mutual support, where all generations take care of one another, and come together to build a better, stronger nation. As the Malay saying goes: \"Serumpun bak serai, sesusun bak sirih\" − we are not only stronger when we come together as one, we look good, too.
Another way in which we safeguard our future is to ensure that future generations of Singaporeans inherit a green and liveable city. With the introduction of a carbon tax at an initial rate of $5 per tonne of emissions from 2019 to 2023, we join many countries that have done the same to step up global efforts to address climate change.
Dr Lim Wee Kiak asked about helping businesses to reduce carbon emissions. We will set aside funds from 2019 to 2023 to support them in improving energy efficiency. This will help businesses lower their energy costs and potentially more than offset the impact of the tax. By taking early action, companies that improve energy efficiency and reduce emissions can become more competitive internationally.
There are many exciting opportunities in the cleantech sector.
When Deputy Prime Minister Teo and I visited the Energy Research Institute @ NTU (ERI@N) last year, we were very encouraged to see that our support for research and development (R&D) was enabling our researchers to do good work, like on perovskite cells, which Mr Leon Perera mentioned. These cells have the potential to be cost-effective in generating solar energy. These efforts will allow us to compete and collaborate with companies around the world that are making a big push on the green economy. Households can also do their part to reduce energy consumption.
I hope that these moves will foster a change in mindset and our energy consumption habits and evolve into a wider green movement that will make Singapore a cleaner, greener and even more liveable city, as Dr Teo Ho Pin mentioned.
The Minister for the Environment and Water Resources will share more on our efforts on environmental sustainability and the Year of Climate Action at COS.
While the announced increase in GST rate has received the most attention, let me remind everyone that the most critical challenge that we are facing is in transforming our economy. Growing our economy is not only the best way of ensuring strong and sustainable revenues, it is also the most important way for our people to realise their aspirations.
This task is growing more urgent by the day, as structural changes in the global economy and technological advances disrupt the status quo, as pointed out by Mr Ang Wei Neng. Our strategy is to position Singapore as a Global-Asia node of technology, innovation and enterprise, which Mr Lee Yi Shyan spoke about and supported.
This means fostering pervasive innovation throughout our economy. It means building deeper capabilities in our firms and our people; and it means forging stronger partnerships at home and abroad, to build scale and ride on the region’s growth together. As Mr Henry Kwek pointed out, ASEAN presents great opportunities, with over 640 million people and a GDP of over US$2.5 trillion.
I am glad that many Members, including Mr Sitoh Yih Pin and Assoc Prof Randolph Tan, agree with our strategies to position Singapore for the new global economy.
Members have raised thoughtful questions on the progress of our economic transformation and preparing our workers for the jobs of tomorrow. Let me address these in turn.
We are seeing encouraging signs of progress. In the recent Singapore Business Federation (SBF) National Business Survey, nearly three in four companies reported that they introduced new processes or training to improve efficiency. More than eight in 10 said that they had expanded their operations overseas, up from under six in 10 in 2016.
As Ms Foo Mee Har highlighted, we need to urgently press on with the implementation of our Industry Transformation Maps (ITMs) to achieve economic transformation. I urge all stakeholders – businesses, trade associations and chambers, the Labour Movement and Government agencies – to double down on transformation efforts and to communicate the importance and urgency of transformation to their members.
Some of our companies are developing know-how to move into higher value markets. Take Esco Group, for example. From a clean room supplier for MNCs in 1978, it has reinvented itself as a developer of innovative medical devices, such as the Miri Time Lapse System, which is used to improve the success rate of in-vitro fertilisation (IVF) procedures.
We have seen how companies in traditional industries are transforming their businesses through innovation. One example is LHT Holdings, which started off as a saw miller in 1977. With support from the Agency for Science, Technology and Research (A*STAR), it became the first company in Singapore to commercialise radio frequency identification (RFID)-tagged wooden pallets in local and overseas markets.
Our startup scene is also taking off. In 2017, about US$1.4 billion (S$1.85 billion) was invested in the local startup scene, more than 10 times the amount invested five years ago. This means more resources for our startups to scale.
One success story is PatSnap, which has developed innovation intelligence software that uses deep learning artificial intelligence (AI) to decipher global trends in innovation. PatSnap’s founder, Jeffrey Tiong, interned in the US as part of the National University of Singapore (NUS) Overseas College Programme. There, he found intellectual property (IP) due diligence extremely cumbersome. In 2007, Jeffrey set out to develop a platform that would make IP due diligence cheaper and simpler, with support from NUS Enterprise and some initial grant support from the Government. PatSnap now has over 4,000 clients in over 40 countries, tapping on engineering talent from all across the globe.
Another example is Multi-Currency Exchange and Data Acquisition (M-DAQ), a home-grown financial technology (fintech) firm headquartered in Singapore, which has developed cutting-edge foreign exchange solutions to process local currency transactions for some of the largest global e-commerce platforms. The company processes more than $3 billion worth of transactions per year from this line of business alone.
Behind these successes lie the spirit of innovation that Mr Azmoon Ahmad and Ms Chia Yong Yong spoke about. We must press on with our efforts to support a culture of innovation, as Ms Denise Phua reminded us of.
Internationally, people are paying attention to the increasingly vibrant innovation scene in Singapore. This year, Singapore climbed three places in the Bloomberg Innovation Index to become ranked as the third most innovative economy globally.
Google has substantial operations in Singapore, with more than 1,000 staff in functions, such as engineering and R&D. Just yesterday, in collaboration with the Nanyang Technological University (NTU), Alibaba opened in Singapore its first joint research institute outside China, to undertake research on AI.
These are encouraging signs of progress and we must build on this momentum.
Over the years, our broad-based schemes have built awareness about productivity and innovation. In 2016, about 85% of small SMEs in the Singapore Chinese Chamber of Commerce and Industry’s (SCCCI's) Annual Business Survey reported that they adopted productivity measures, such as automation, digitalisation and upgrading worker skills. In 2017, this increased to almost 93%.
We are making a push for firms to deepen their capabilities at every stage of growth through a comprehensive range of targeted support. Even so, we must always bear in mind that Government grants are meant to catalyse companies’ transformation and should not become permanent support.
Mr Murali Pillai and Dr Lim Wee Kiak asked about WCS. It is a transition scheme that we extended but will taper down. It provides temporary support for businesses that raise wages for Singaporean workers while they press on with efforts to transform and become more productive, as Mr Chong Kee Hiong mentioned.
We must continue to invest in our people to ensure that they are equipped with relevant skills to take advantage of new opportunities, as Ms Sun Xueling and Miss Cheryl Chan observed.
Arif Rahman has made good use of such programmes. After his GCE \"O\" levels, Arif took various odd jobs. Last year, he underwent a Tech Skills Accelerator Web Development Immersive boot camp. Today, he is a full-time front-end web developer at Indorse, a social network for professionals to showcase their skills.
The effort to upskill and reskill our workers requires close partnership among employers, the Labour Movement and the Government, as Mr Heng Chee How and Mr Patrick Tay highlighted. This tripartite approach is a key strength of our system.
I am happy to see our efforts to support workers gain momentum. The number of placements through Professional Conversion Programmes (PCPs) in 2017 is about 3,700, more than double the placements in 2016.
Even as we support Singaporeans in the pursuit of opportunities, we need to ensure that Singaporean workers remain sufficiently protected, as Mr Ang Hin Kee and Mr Ong Teng Koon spoke about. For those who are self-employed by choice, we aim to better address their concerns and challenges, for instance, in legal protection, social security and skills development. For those who would prefer regular employment, we are keen to help them do so.
The tripartite workgroup we formed last year has identified several key common challenges that self-employed persons faced. MOM has accepted the recommendations in the workgroup’s report which was released last week, and will further elaborate on their strategies at COS.
Mr Zainal Sapari and Dr Intan Mokhtar have brought up the situation of low-wage workers and suggested reviewing employer CPF contribution rates for older workers. We support low-wage workers by encouraging sustainable wage increases underpinned by regular work and productivity growth. We provide additional support for low-wage workers through Workfare and assistance for healthcare, housing and their children’s education. For older workers, we support their employability through the Special Employment Credit and Adapt and Grow programmes, and their training through SkillsFuture. However, in mandating higher CPF contributions for older workers and better benefits for low-wage workers, we must be mindful not to impose too many barriers to their employment.
Ms K Thanaletchimi and Assoc Prof Daniel Goh have brought up the concerns of women at work, and Ms K Thanaletchimi also spoke on flexi-work arrangements. The Minister for Manpower will share more about the various schemes to help our workers at COS.
Businesses have asked about the role of foreign manpower in Singapore. As Mr Melvin Yong and Mr Heng Chee How highlighted, our ageing population and shrinking resident workforce are major challenges. Economic growth will slow, unless our businesses make full use of this narrow window, before our workforce shrinks further, to redouble their efforts to raise productivity. At the same time, we need to allow for a calibrated inflow of foreign workers, especially in areas of critical shortages.
China, the world’s most populous country, launched its \"Thousand Talents Plan\" or \"千 人 计 划\" in 2008, to draw in the best talent from around world for strategic projects. Today, China has far surpassed its initial targets. For us to thrive, we must be equally strategic to develop our Singaporean talent and to draw in the right complement of international talent. As Ms Foo Mee Har observed, in this way, we can draw in the skills mix to support new industries that create better jobs for Singaporeans.
This is not the first time that we are making a major push to transform and upgrade our economy. All of us have a part to play: Singaporean workers, to continually upgrade their skillsets to be ready for the future; Businesses, to press on to innovate and build deep capabilities and partnerships; trade associations and chambers (TACs), to step up to encourage firms to do more, and do better together. As Dr Tan Wu Meng put it, we must move ahead boldly to safeguard our continued survival and prosperity. Let us have confidence, keep our eyes on the horizon, and move forward together.
All our efforts to steward our resources and grow our economy are ultimately about forging the kind of society we want. First, we need to stay cohesive and united as a society, with opportunities for all; second, we need to build a caring society, with people who are passionate about contributing to the common good. Ms Chia Yong Yong put it well when she said that Singaporeans should have \"minds unafraid to dream\", surrounded by a community with hearts big enough to accept failure.
Ms Jessica Tan, Mr Ganesh Rajaram, Ms Kuik Shiao-Yin and Mr Kok Heng Leun have talked about the importance of addressing inequality, fostering opportunity and enhancing social integration. I agree with them that we cannot allow social stratification and inequality of opportunity to erode our precious social harmony. Singapore must continue to be a society where everyone, regardless of background, has the opportunity to do well based on personal efforts and talent.
How we achieve this is inextricably linked to our economic strategy. As Ms Jessica Tan and Dr Tan Wu Meng have pointed out, diversified and broad-based growth creates opportunities for Singaporeans to pursue their aspirations, and this is the best way to help all Singaporeans progress in life. Rather than focus on how the pie is divided, we should grow the pie so that we can all enjoy a larger slice.
Mr Ganesh Rajaram shared a powerful story of how he was able to move up in life. Indeed, many in my generation were fortunate to benefit from our system of education and meritocracy. As our economy grew, and our society becomes more settled, the rate of mobility slows too, and we must redouble our efforts.
Our approach is to give Singaporeans a good chance of realising their potential at various stages in life. This starts from the early years. We are investing significantly in the early childhood sector to provide our children with more accessible, affordable and quality preschool. We started the KidSTART pilot in 2016 to provide children from low-income families with early access to health, learning and development support.
We ensure that all our students, whatever their family background and circumstances, have access to a quality education. The OECD PISA study found that about half of the 15-year-old Singapore students from the lowest quarter by socioeconomic status performed in the top quarter of students in all countries, after accounting for socioeconomic status. And that is the extent to which our education system and our parents' efforts have been able to uplift. So, in other words, our system and our collective effort have enabled them to surpass their international peers in a similar socioeconomic position in their own societies.
For students in the lowest 20% of households by socioeconomic status, half of them in the 1985 Primary 1 cohort progressed to post-secondary education. And this rose to nine in 10 for the 2000 Primary 1 cohort.
We are broadening pathways for success. Our students’ interests are diverse. Some have academic interests, some have more specific skills-based interests, others want to be entrepreneurs.
We have been systematically moving beyond fixed streams and excessive focus on examinations, towards enhancing the education system to nurture all talents and skills and the holistic development of every student. This has been the Ministry of Education's (MOE's) approach for many years. Budding entrepreneurs have programmes to support their interest, including the NUS Overseas College that Mr Jeffrey Tiong of PatSnap embarked on. We prepare our students to participate in the global economy through initiatives, such as ITE GEP.
Mr Saktiandi Supaat can rest assured that we will continue to invest in ITE and offer financial support to students in need. And beyond the schooling years, we are investing strongly in SkillsFuture. It gives everyone the opportunity to move into new areas of the economy in line with their aptitude and interests.
Ms Sylvia Lim asked about longitudinal studies on social mobility. MOF released two occasional papers in 2012 and 2015 on social mobility. We found that cohorts from 1969 to 1982 have, indeed, experienced good social mobility. There is also an ongoing longitudinal study on child cohorts being conducted by NUS.
But bridging the social divides is not just a matter of fostering opportunities and closing the income gap. As a society, we must be mindful not to allow invisible, intangible divides to fester. I agree with Mr Ganesh Rajaram that divides can only be bridged if Singaporeans work together to ensure that every child is equipped with perseverance, confidence and resilience to succeed.
As the Government, we also invest heavily in our common spaces. The hawker centres which are an integral part of our daily lives and our cultural heritage; the parks which bring us together in appreciation of our City in a Garden; and the HDB neighbourhoods which eight in 10 of our resident households call their home.
Apart from creating common spaces, perhaps the best way to bridge social divides is to nurture our common values, by building a caring society.
A good society is not just one where each of us is able to do well for ourselves. It should be one where we all feel a sense of responsibility towards one another, a spirit of caring. Just as we have achieved good outcomes in healthcare, education and security by working together, all of us play a part in building such a society.
It starts with strong families. Mr Gan Thiam Poh and Mr Darryl David spoke about the importance of mutual care and support within the family. Indeed, most of our seniors are able to count on their family for support. And we must strive to keep families strong. The enhancements to the Proximity Housing Grant will help to do so.
Mr Desmond Choo and Ms K Thanaletchimi spoke about the stress that caregivers face. Caregivers play a vital role in our society and deserve great respect for the support they give their families. We are committed to supporting caregivers. Besides the financial schemes that defray the costs of caregiving, we also offer tangible support to caregivers through respite services in some of our senior care centres and nursing homes, so that caregivers can rest and recharge. We are also expanding the Community Networks for Seniors (CNS), which will better link up different stakeholders with needs in the community. The Prime Minister's Office (PMO), MOH and the Ministry of Social and Family Development (MSF) will say more about Government support for caregivers at the COS.
Many Members, such as Dr Lily Neo and Ms Chia Yong Yong, spoke of the good work that our VWOs do in the community. We recognise the invaluable contributions they make and are encouraging more support for them, through the 250% tax deduction for donations made to Institutions of a Public Character (IPCs), matching grants for donations raised, and the Business and IPC Partnership Scheme (BIPS).
As Ms Joan Pereira, Ms Tin Pei Ling and Miss Cheng Li Hui have suggested, we will continue to review our policies to enable our seniors to contribute meaningfully, stay active and independent, and age with confidence. But no single stakeholder has the resources to meet the community's needs alone, to address the structural shift in our demographics, or to foster opportunities for all. The consolidation of senior-related services under the Agency for Integrated Care (AIC), and the continuing efforts to strengthen social service delivery through our Social Service Offices (SSOs) will enable us to do more with the resources we have, and better care for our seniors and vulnerable families.
As Ms Rahayu Mahzam said, the community's involvement in initiatives, like the Silver Generation Ambassadors programme and CNS, is necessary to strengthen our social support networks and last-mile delivery. That is why this Budget seeks to strengthen partnerships between the Government and the community, and to encourage a spirit of giving in every Singaporean. We want to foster a caring society through the SG Cares movement, bringing together individuals, informal groups, community organisations and corporates to partner one another, and better reach out to those in need.
Ms Denise Phua asked if we can encourage people to donate their SG Bonus. We are studying how to facilitate this and will provide more details later in the year. Everyone can be part of this ecosystem of giving, regardless of age or background.
I met Asyraf at an ITE graduation ceremony. Asyraf dropped out of school at Primary 4 as his mother was unwell and did not even sit for his Primary School Leaving Examination (PSLE). NorthLight School gave him a second chance, which he was determined to seize. He did well enough to move on to ITE, continued to excel, received a scholarship in 2014 from the Building and Construction Authority (BCA) and, in 2017, graduated from Singapore Polytechnic. Before National Service (NS), Asyraf went back to NorthLight School and volunteered his time by supporting the teachers in teaching Facility Technology, and by sharing his experience with his juniors. He is now on the NorthLight School Alumni Council, even while he serves NS. Asyraf shows us that anyone can give back. And as Ms Denise Phua and Mr Vikram Nair have reminded us, for those who have done well, it is even more important to think about how you can give of yourself to help others.
This partnership and spirit of working together is not just a good to have. It is the best way forward, towards a nation which shares a set of common values, and a better home for all of us.
Mr Speaker, Sir, it is not quite 10.00 pm yet but let me conclude.
As I said from the start, this Budget is about our future. Over the past two days and earlier this morning, this House has reaffirmed our vision for the kind of future we want.
Members have expressed support for measures to position our economy for the future, so that Singaporeans will have opportunities to pursue their aspirations, regardless of where they start. We have supported moves to foster a more cohesive and caring society so that we can better care for our elderly and the vulnerable amongst us. And there has been broad support for the fiscal measures to provide for our longer-term needs.
Such a future will not be ours unless we do the hard work for it and make preparations. As Mr Christopher de Souza put it, it starts with being rigorous and working on options that matter rather than being ideological. Ultimately, the test of what we do is whether it works.
Our success will depend on our unity of purpose and our collective spirit of enterprise and caring. We can only make it through this journey, if we work together.
It is by working together, that we have become one of the healthiest, best educated and safest countries in the world, while keeping our spending low. It is by working together, and pooling our resources, that we have built up a strong fiscal foundation and the Reserves to protect and provide for us through the ages. It is by working together and deepening partnership that we can build scale, create value and ride the growth of the region together. And it is by working together, and partnering one another as a community, that we can best reach out to and care for our fellow citizens in need.
Together, we have built, and are continuing to build, a nation that we can be proud of. We have made better lives for ourselves.
Together, let us make a renewed commitment to pass on a better country for our children and grandchildren – a country where a child is given the best start in life, no matter her parents’ background; where she can grow up in a green, safe and globally-connected city; where she can apply her talents in an economy full of exciting, fulfilling jobs; where she can live a long, healthy and meaningful life with many opportunities to give back to the rest of her community; and where she can have some assurance and protection from the vagaries of the world over the course of her life, through the financial provisions that we have made.
This is the kind of commitment that those before us made, so that we have a better life today and a strong foundation on which we can build our dreams.
This is the kind of commitment that I hope all of us, not just in the Government, not just in this House, but Singaporeans everywhere, will come together to make in this Budget to build a better future for all of us, and give our children the best chance of a better life.
This is how, together, we can ensure that Singapore will continue to thrive and prosper, generation after generation. Thank you. [Applause.]
Mr Speaker: The Question is, \"That Parliament approves the financial policy of the Government for the financial year 1 April 2018—\". Yes, Ms Sylvia Lim.
Ms Sylvia Lim (Aljunied): Yes, Sir, I have clarifications for the Finance Minister. I have four clarifications for the Finance Minister. But before that, I would like to thank him for touching briefly on longitudinal studies. I will be taking this matter up further with MOE at the COS.
On the first clarification, the Finance Minister referred to Mr Low Thia Khiang's speech yesterday. I am sorry Mr Low is rushing to Parliament right now after attending to some family matters. And he mentioned that somehow, the Workers' Party was not being upfront because we did not want the Government to distract this debate by announcing the GST.
Now, if I heard him correctly, actually, his speech was focused on supporting the Government's accurate identification of the challenges going forward with becoming a Global-Asia node and so on. He did actually specifically say that it is fine for the Government to announce the GST hike, or intended hike, in advance of time and we can actually have a separate debate about it. His main point was that by doing it in this Budget, it distracts the debate from the other things that are being done in the Budget because everybody is focusing on this thing which is not even a Budget measure. So, that is the first thing. And of course, there was a bit of a cut and thrust about whether we should debate it at the election rally and we do welcome the early announcement because we think the voters should also make a decision on this.
The second clarification is about the Party position on the announcement of the GST – and I think Mr Pritam Singh may also elaborate on this further – about why it was said by him that we cannot support the announcement at this point in time.
Now, the Government itself is not definitive about when this is going to happen. It may be seven years from today. And, of course, we do note that in the run-up to the Budget discussion, there were some test balloons being floated up about the fact that the Government needs to raise revenue. And immediately the public seized on the fact that Deputy Prime Minister Tharman and perhaps other leaders had earlier said that the Government has enough money for the decade. So, the public pointed out, \"Hey, you know, is this a contradiction?\" And I rather suspect, myself, that the Government is stuck with that announcement. Otherwise, if the announcement had not been made, perhaps we would be debating a GST hike today.
Earlier on, Minister Heng also said that the Government has not made a decision on when, because it has itself to look at prevailing conditions, economic conditions and also our needs at that time. Fair enough. Similarly, I do not think we will be in a position to take a stand on that until the information is available at the relevant point in time. So, I think it is ridiculous for the Government to expect us, as a responsible Party, to support something when all the information is still not available and we do not have a crystal ball.
Related to that, I should clarify, in case anybody misunderstands, that it is our intention to support the Budget when the vote is called but this should not be mistaken as a support for this announcement of some possible GST hike in a later Budget. It should not be mistaken as such.
The third clarification, I think the Minister touched on why it is not prudent to use land sales as part of Government revenue. This is an issue that we have debated before. But the analogy he gave was, we have five parcels of land and if every few years, we sell one parcel, there will be none left. But I think the Minister can clarify that it is not quite like that. Land sales actually include many leases which do come back to the Government after the tenure of the lease. It is not a case of it being gone forever. Or even 10 years for the commercial leases.
Finally, my last clarification is, the Minister pointed out about the social mobility insofar as educational attainment of 15-year-olds in the performance of science in the PISA report to say that our poorer students are doing better than their poor counterparts in the OECD countries. I have filed a Parliamentary Question on this before. But I think the report also highlights that as far as equity is concerned, our poorer students seem to be further behind our richer students − the gap internally, domestically − compared to the OECD countries. So, is it not really comforting for our poorer students to tell them that they are doing better than their poorer counterparts in other countries when really, in their class, they are actually further behind them, on the average?
Mr Speaker:\tMinister.
Mr Heng Swee Keat: I thank the Member, Ms Sylvia Lim, for her question. First, on the first point about my reference to Mr Low Thia Khiang's point. Actually, when I was listening to him yesterday, I thought, I was very happy that he supported the point that I made, about making Singapore a Global-Asia node of technology, innovation and enterprise. He went on to talk about the various moves that the Government made over the years to look ahead and position Singapore to be able to meet new challenges and secure new opportunities because the world is changing very quickly.
So, he made a very good speech on our engagement, particularly with China. I was very surprised that towards the end of that very good speech, he then got distracted by this statement. He said: \"Sir, the unfortunate thing about this Budget is that it is looking forward too hastily for future revenue streams by prematurely announcing the GST hike. This has become an unnecessary distraction from the vision articulated in this Budget, and is a real distraction causing the Government to lose its focus in getting buy-in for the vision\".
This is, in fact, a real distraction because, in fact, if the Workers' Party truly believes that all the things you and your Members have advocated − spend more on this, spend more on this group, spend more on these others − and that you agree that all these will require new revenue measures, then why do you not just say that \"Yes, we are very happy to support this so let's now talk about how we are going to position Singapore for the future.\" I will be very happy to discuss this with the Member, who can file a Motion, a separate Motion, to discuss that.
But bear in mind that this is a Budget Debate and if we do not talk about a tax increase, we do not debate the tax increase in this very forum, in this very session for the Budget Debate, then where else are you going to do it? And to suggest that you do it at the election rally is just a complete distraction. Right?
Does the Member want to be constructive and say that in any election we talk about serious things, about how we are going to position Singapore for the future, how we are going to create a better life for all Singaporeans? Rather than to seize on issues that will make people unhappy and say, \"Oh dear, you know, the Government is going to tax you and all that and, therefore, you know, this is a bad move.\" You must square your position.
Does the Member accept, first and foremost, all that we said, that we do need to spend more, whether it is preschool, whether it is SkillsFuture, whether it is healthcare, whether it is revamping the economy, whether it is security? Do we need to provide for that? And if it is, as I said, very clearly, in today's debate, in my round up, I said that even the two-percentage point increase in GST does not fully cover the expected increase in healthcare expenditure. Is it not right for us to say that we know that there is one item that is definitely going up and we will not even have enough to manage that one item? Can we take one measure first, and look at how we can meet that?
So, Mr Pritam Singh's argument about \"I can't support this at this point because it is so far away, I don't know your revenue pattern, I don't know your spending pattern and, therefore, I don't know what you can do and, therefore, I'm not going to support it.\"
I do not think it is a rigorous or an honest position. It cannot be, right? If you know, as an individual, that you do not have enough money to even pay for your basic meals, should you not provide for some of that? Never mind that I do not know what other things we have to spend on. I mean that, that is very simple to understand and I really do not understand why you want to create this… or I must know everything before I can decide on anything.
I think if I had taken that approach, if previous Finance Ministers had taken that approach, that I must know every item of expenditure before I can support you, before I know how much to raise, we would have been in serious deficit long, long ago.
So, I am very grateful that previous Finance Ministers, Governments and Prime Ministers, have been extremely prudent in making sure that when we know something is coming, do not avoid it, do not pretend that it is not coming and then mislead our people and say that \"Therefore, without knowing, I cannot support\".
The question for me is very simple, \"Do you support all those increased spending? Or are you contradicting all your MPs' positions yesterday where everyone spoke about doing more? And if you do, then tell me how much is it going to cost? And even to fund a fraction of what you have suggested, where is the money going to come from, and would a two-percentage point increase help us in some ways? Do you disagree with the fact that our healthcare expenditure will go up and, if you do not disagree, then the question is how do we find the revenue sources to meet that?
So, that is the answer to your first question, and also your second question about why your Party's position, about why you cannot support at this point. So, now that I know that it is your Party's position, I am even more puzzled because I wonder why all your MPs, every single one of them, spoke about \"let's do more\". In fact, none of them had suggested that \"No, no, no, you should cut back on this item or that item.” In fact, “Very good, whatever you do, double up, do more.\" So, the question is, if I accept all your proposals, I have to redo the expenditure sums again and look at what else we need to do.
So, I think that is quite a distraction. I hope Mr Low was not distracted somewhere.
Now, as to your point about the land sales, and why my five land parcel analogy is not a correct one. The basic fact is this: most of our land sales are of pretty long leases − 99 years; for industrial land, some 30 years, some 60 years. If you sell that land for 99 years, you are not going to get back that land until 100 years later. If you are rigorous about it, you really ought to be spending no more than 1% of that land sale proceeds even if you want to use land sales proceeds because that is what the land is worth for a year.
But for Mr Pritam Singh to say, \"Oh, don't worry, let's take 20% of the land sales and, therefore, use that\", is it not the equivalent? And you are not going to get the land back over the length of the lease. So, that stream, that upfront capital payment, ought to be considered over its lifespan and, therefore, it is not proper. Several MPs had spoken yesterday that even for building infrastructure, we should be considering lifecycle costs. So, I think we better do our financing properly.
Then, on the Member's point about the PISA score and the students, we are not saying that we have a perfect education system. In fact, there are many things which I am very happy that Minister Ng Chee Meng and Minister Ong Ye Kung are continuing to do, building on the works of previous Finance Ministers, to continue to raise —
Some hon Members: Education Minister.
Mr Heng Swee Keat: Sorry? Education Minister, yes. Did I say \"Finance\"? Oh okay. I am not hinting at any changes! I got distracted! [Laughter.]
Well, they continue to build on this good work. That all these changes have taken place for many, many years and the fact that our students are doing so well, it is really a tribute to our educators, our parents, to the many self-help groups. The numbers which I have shown are done by the OECD study, not just of PISA but, in fact, of various areas in which they are looking at our kids, including in areas like collaborative problem-solving. Our kids are ranked best in the world in this. We must give credit for this.
As a former Education Minister, I can tell you that the reason why collectively we are ranked so high, the very important reason is this: in every country, you can find one good school, one of the best schools which the elites would go to. In Singapore, if you look at the performance of students across our schools, you can see what a high average it is.
So, when I say \"Every school, a good school\", it is not just a feel-good thing. Because I really think that we must give credit to all our educators, to all our principals, to all our parents for the hard work that they put in so that, regardless of which school you go to, the child has the best chance of success.
Beyond the basic foundation as they move into post-secondary education, that we have many more pathways for them to excel. It is right and proper that we look at what have been achieved, rather than look at what has not been achieved and, therefore, pick on that one narrow area and discredit the work that has been going on by so many good people. [Applause.]
Mr Speaker: Mr Pritam Singh.
Mr Pritam Singh (Aljunied): I would like to thank the Finance Minister for his round-up speech and the additional figures that the Finance Minister gave. Sir, I have some questions for the Finance Minister. One of the hardest things I had to do with this Budget actually was to try and assess how a GST hike can be staved off, given the Government's Budget.
Just as a matter of perspective on the question of using our Reserves as a source of income, the Government's reliance on Reserves has quadrupled from 2006 to 2011, from about $2 billion to about $8 billion. Since then, to the upcoming financial year, it has doubled from that. So, when the Minister says that the Workers' Party is irresponsible and dishonest, I respectfully have to disagree with him on that account. With that as a preamble, I have five questions for the Minister.
First, in his Second Reading speech, when the Constitution was amended in 2015 to include Temasek in the NIRC framework, Finance Minister Tharman Shanmugaratnam said that Temasek's inclusion would increase the NIRC’s share of GDP from 2% to about 3% on average over five years. But today it stands at 3.4%. Does this tentatively suggest that the Government actually has more income from NIRC than it originally planned to have, with more likely to be realised in the future, in view of the fact that the NIR formula tends to smoothen out investment cycles? That is the first question.
The second question has to do with the point I raised in my Budget speech, which is whether there is any scope for raising NIRC from 60% to 70% for a short period of time to oversee large infrastructure spending, with the view to return this back to 50% on the condition that the revenues from such infrastructure must be returned to the past Reserves. This would free up more of the Government's Budget in the respective financial years for recurrent spending and this was one suggestion I put forward to stave off the GST hike, and I am not sure whether the Minister replied to that.
The third question is with reference to the NIRC portion of this year's Budget: how much in dollar terms of the $15.8 billion originated from the Net Investment Income (NII) component of NIRC, and NIR component respectively?
Fourthly, how does the Government determine which investment entity – MAS, Temasek or GIC – gets a larger component of land sales revenue for investment, in view of the different risk thresholds that each entity assumes?
Finally, is there a mechanism or basis by which the Government determines how much of the Reserves it requires to maintain the strength of the Singapore dollar? Is there a mechanism for that?
Mr Heng Swee Keat: I thank Mr Pritam Singh for his questions. The Member's first question, about the fact that our NIRC is, in fact, becoming an increasing source of revenue for the Government: that is correct. This number has been doubling; from $2 billion to $8 billion to $16 billion that the Member mentioned. So, in that regard, that is why I said, it is now the single largest source and, therefore, we should be careful in having a more diversified source of revenue.
The Member asked about whether the fact that the overall NIRC contribution is 3.4%, when the Deputy Prime Minister Tharman Shanmugaratnam has said that it is between 2% and 3% over the five-year period. Is it because we are getting more? Well, the markets have been doing better. But bear in mind one thing, the NIRC is about long-term investment. It is about long-term investment. And, therefore, we cannot work based on short-term fluctuations and decide that well, henceforth, in the future, we would have this 3%, 4%, 5% that we can rely on. It does not work that way.
I was at the MAS when the Global Financial Crisis happened. I can tell you that I spent many days and nights and weekends looking at the market and how it was going to affect us. I attended so many meetings among global central bankers, Chief Executive Officers (CEOs) of companies, of financial institutions, with finance ministers in the developed world and with major central banks. You find that none foresaw the problem. There were warnings about some of these by some analysts, but none foresaw the problem, and the impact was huge.
We must accept that there will be market volatility which you cannot predict. And it is not sound to build our finances on short-term fluctuations, whether up or down. That is why the NIR formula has a built-in way to smoothen these asset fluctuations. You do not want to have a situation where financial markets are doing very well, that the Government spends a lot more, and then when the markets go down, which is probably when we need the resources most, that you have very little to meet those needs. Let us be very careful about over-interpreting the number.
The Member's other comment about raising the NIRC contribution to 60%-70% for a short period for infrastructure, is this not another way of touching your Reserves, changing the formula, to use it and say, at some point, I would put it back? I do not see the logic of that argument. In fact, what we are doing, or what we are hoping to do, is that we want to have proper discipline and scrutiny of borrowing for infrastructure. That is why we are going to discuss with the President and CPA. We think that a proper way of doing this is to issue bonds in the market so that investors can scrutinise those numbers and see that these are viable projects. Then, seeking the approval of the President and CPA to provide a guarantee. So, again, there is another layer of check but, at the same time, that layer of guarantee allows us to access funding at probably a better rate.
So, we are using the strengths of the Reserves strategically but without touching the Reserves so that the Reserves can continue to be invested for long-term gains. That is the approach and, therefore, whether you are taking 50%, 55%, 60% or 70% for a short period of time, it sounds like it is a costless option. It is not. It cannot be done that way. The way that we are proposing is conceptually sound and financially sound.
The Member asked about how the land sales proceeds get to MAS, GIC and Temasek, and how do we divide that? We have a whole-of-Government Reserves Management Committee chaired by the Prime Minister and there we look at the risks and returns of different entities, the risks and returns across the different markets and allocate it for long-term gains, taking into account both the returns as well as the risks at the current market environment.
The Member's last question about the basis of the Reserves for the strength of the Singapore dollar, let me clarify. There has been a lot of misunderstanding on this point. Certainly, strong Reserves help us to anchor confidence. But MAS' needs in terms of what it does as a central bank is very different from almost all central banks in the world. All central banks in the world adopt an interest rate policy. Whether it is the US Federal Reserve (Fed), the European Central Bank (ECB) or the Bank of Japan (BOJ), the central bank announces certain policy rates and then they undertake certain operations to get to that rate if they need to, but the announcement itself and the anticipation of the announcement have very major impact on the economy. That is how they conduct monetary policy. In our case, our monetary policy is centred on the exchange rate.
Again, I must give great credit to Dr Goh Keng Swee and his team very early on, for deciding on this most unusual way of dealing with our monetary policy. The reason is this: the exchange rate has a far bigger impact on the state of the economy than interest rates. We are a very open economy and, therefore, the exchange rate affects economic activity in a far more significant way.
The MAS regularly updates our trade numbers and updates our economic model to see if that remains valid. From looking at the studies that they have done, I am convinced that it remains the right policy: to have an exchange rate-centred policy to be able to manage the economy.
The Reserves are not just about maintaining the strength of the Singapore dollar. The MAS manages our official foreign reserves and it undertakes operations in the market in order to get to the desired band. It also makes policy announcements regularly so that the market is clear about the official assessment of the economy. The market may or may not agree and, in which case, you will see currency movements. But I must say that MAS has done a very good job over the years and so the market generally accepts MAS' policy announcements.
In terms of maintaining the strength of the Singapore dollar, the Reserves play a very important crisis role which was what was tested during the Asian Financial Crisis. When speculators were speculating on the positions of other currencies, they did not touch very much the Singapore dollar because they know of two very fundamental reasons. One, our finances are sound; that our fiscal policy at the various stages of the crisis is sound. And that is why I mentioned that we are one of 11 countries with a triple-A credit rating. All these firms who are doing credit ratings look at the numbers very carefully before they give us a triple-A rating. So, that is one important anchor.
Two, speculators know that should they try to attack the Singapore dollar, it is not just our official reserves that they have to contend with. We also have reserves that are invested in longer-term assets and that we will be able to mobilise, if we need to.
So, those are the very important defences that we have for the Singapore dollar, and the very fact that the Singapore dollar has risen is not just because of our monetary policy. The fundamental reason is that our economy has been doing better, that the real economy has got its position correct, that we have been upgrading and revamping the economy over the years and, therefore, the currency moves up, in order to play the equilibrating role.
Mr Speaker:\tMinister Shanmugam.
The Minister for Home Affairs and Minister for Law (Mr K Shanmugam): Thank you, Mr Speaker, Sir. Can I seek a clarification from Ms Sylvia Lim who said that there was a trial balloon when the Prime Minister spoke last year, and because of the public reaction, the Government backed down but was stuck with this announcement and, therefore, this announcement has been made of a future GST increase. Can I invite her to agree that that is a thoroughly hypocritical and dishonest statement, and typical of the statements she makes in this House? Let me explain.
Would Ms Sylvia Lim agree that the Prime Minister first talked about a tax increase during the National Day Rally – I think it was in 2013? And that the Finance Minister talked about the tax increase in the Budget last year, a year ago? The Prime Minister, when he spoke about the likelihood of a tax increase late last year, referenced to the Finance Minister's statement earlier in the year. Does she not know all these facts?
If one, with some commonsense, puts those facts together with another set of facts, which is that Deputy Prime Minister Tharman Shanmugaratnam and the Prime Minister had said that the Government had enough funds for this term, if you put those two sets of Government positions together, is it not absolutely clear that (a) we do not need money for this term, and (b) we will need to raise taxes for the future?
Given that the positions have been consistent and Ms Sylvia Lim will also know that, for example, that when we first talked about GST, it was mentioned in 1986, but it came into force much later, in 1994.
So, given those sets of facts, would Ms Lim be prepared to withdraw the very serious allegations she makes, that this Government announces something late last year, trial balloon, public reacts, we quickly backed down, but we are stuck; basically, making an accusation that the Government is behaving willy nilly, dishonestly.
And if she will not withdraw those baseless suggestions, will she set out what the facts are for making the suggestion, whether she still stands by the suggestion, and repeats it?
Mr Speaker: Ms Sylvia Lim.
Ms Sylvia Lim: Mr Speaker, I would like to thank the Law Minister for his questions. I can understand why he wants to accuse me of various things, because he probably was not happy about past debates where I had disagreed with some of his legislative changes, and in typical fashion, he always accuses me of dishonesty, when, as far as I am concerned, I acted honestly.
Sir, the basis for my statement was that it is my belief that the announcements by the Government earlier on, that they had enough revenues for this term of Government, have now tied their hands as to when the GST increase can kick in.
One can look at the principles that our Government uses for budgeting, which are usually very conservative, and we also have heard the Finance Minister talk about the fact that we must be prepared for all contingencies, so, if those announcements had not been made, we may be facing a GST increase in this Budget Statement.
As to the chronology of events that the Minister recited, I do not have them on hand, I have to go back and check – to be fair to him – but this is my honest belief.
Mr K Shanmugam: Seeing what the facts are, as I have set them out, would Ms Lim agree that the suggestions are baseless, and are you prepared to withdraw that this Government behaved dishonestly?
Ms Sylvia Lim: Sir, I never said that the Government behaved dishonestly. I said that the Government is stuck with the announcement that they have enough money for the decade.
Mr K Shanmugam:\tThe implication, based on what you have said, is that a trial balloon was floated with the obvious intention that a tax increase was going to be announced now, but because of the public reaction being so severe, the Government has backtracked and has changed its mind, and has announced it as a future tax increase. Is that not what you have said? And if that is not what you are saying, please say so clearly.
Ms Sylvia Lim: Sir, I clearly said that it was my suspicion. I clearly said that. You can check the Hansard. And it is my honest suspicion.
Mr Speaker: If Members can wait until I call them.
Ms Sylvia Lim: So, am I not entitled to have a view?
Mr Speaker: Minister Shanmugam.
Mr K Shanmugam: We now have confirmation that there was a suspicion. Does Ms Lim agree that it does not accord with the standards of a First World parliament and honest debate, for someone to come here and start talking about, \"This is my suspicion\", \"I cannot back it up\", \"It is contrary to all the facts\", \"In fact, I have not checked the facts; now that you have recounted the facts, I'll go back and check. But I have my suspicions.\" Would she agree that that is contrary to the standards of a First-World parliament?
Secondly, I am not the only one to accuse Ms Lim of dishonesty. I think a phrase, a Latin phrase will be ringing in her mind: \"suppressio veri, suggestio falsi\t\". Somebody very eminent, a High Court Judge, said that about Ms Lim.
Mr Speaker: Ms Sylvia Lim. Unfortunately, we do not have translators for Latin.
Ms Sylvia Lim: Mr Speaker, Sir, as far as I know, there is such a thing as parliamentary privilege. And if I recall earlier debates, even People's Action Party (PAP) MPs were encouraged to come to the House to convey even rumours, so that the Government has the opportunity to refute them. This is the value of this Chamber. I do not agree with the Minister that I am somehow not up to standards. This is what we as Members of Parliament have to do to get better clarity on matters of public interest. Of course, the Government can rebut our speeches robustly – that is fine. But I do not think I am disentitled to come to Parliament to advance honestly-held beliefs or suspicions.
Mr Speaker: Within limits. Minister for Finance.
Mr Heng Swee Keat: Mr Speaker, thank you. I want to thank my colleague, Minister Shanmugam, for reminding me that I have not answered this part of Ms Lim's question.
Ms Lim says that she is saying this on suspicion. I believe Ms Lim is a lawyer and also a Police Officer before. I, too, have been a Police Officer before. So, we both know that the first thing when we have a suspicion, is to go out and interview witnesses as part of our investigations. I want to present myself as your witness, because I have been working on this ever since I became Finance Minister.
I want to confirm that the statement made by Deputy Prime Minister Tharman: that we have enough revenues till this term of Government, is correct. We have done all our projections and that is an accurate and truthful statement.
If you were to look at circumstantial evidence, why did I not set a timeline for that? I said that it depends on the prevailing economic conditions, it depends on a number of factors which I will continue to carefully monitor. And that we must not get distracted with one-off events, one-off surpluses. I made that very clear in my Statement.
If, indeed, we were so short, would it not be the logical thing to say, \"Let's do it now\" and find some ways to do it? We did not. I said that it is between 2021 and 2025.
Having told Ms Lim that I have been working on this ever since I became Finance Minister to look at all our revenue projections and expenditure projections again and discussed with the Prime Minister and Deputy Prime Ministers – that the statement is correct. It is an honest assessment of our position, which remains accurate till today. That is why I did not have to do a GST increase now, in this Budget.
It was not a case of floating any trial balloon. If you remember, I said it at the last Budget that we have to look for revenue measures. I said it again at a constituency visit at Cairnhill-Moulmein a few months after that. Then the Prime Minister said it in November last year. So, on the basis of all the evidence that I am offering, will Ms Lim withdraw her comments?
Mr Speaker: Mr Sylvia Lim.
Ms Sylvia Lim: Sir, I have listened to the Finance Minister's response. I still feel that there is nothing wrong with what I have said. But I have noted his answer.
Mr Speaker: Are there any other clarifications? Ms Kuik Shiao-Yin.
Ms Kuik Shiao-Yin (Nominated Member): I thank the Finance Minister for the extended explanation he has given on taxes, borrowing and Reserves, I will definitely be referring to the Hansard when I prepare for future General Paper (GP) lectures.
I have a request and a clarifying question. The request is: can I request that slides be made available to the public and that MOF engage with youth educators, specifically for GP, Social Studies and Economics, to help them facilitate a deeper conversation with young people about this? Because I think it is a conversation that is going to come up again and again. Many teachers actually feel very inadequate at explaining this and may give a wrong understanding.
For the clarifying question, I understand that the full size of the Reserves can never be revealed for strategic reasons, but the absence of public information about the size of Reserves and the rate of return makes it quite hard for the average lay person, especially the educators, to have a meaningful conversation about it.
The problem with the vacuum of information is alternative narratives are filling the gap – some are obvious, deliberate misinformation and some are just different from the Government's story.
I read an Overseas-Chinese Banking Corporation (OCBC) Economist's suggestion that we could split the Reserves into two parts: one as a base for generating the NIRC that can be publicly disclosed; and the other that is used to deter currency speculations can be kept secret. I was wondering if the Finance Minister could give his take on this suggestion.
Mr Heng Swee Keat: I thank Ms Kuik for her questions. On the first request: can we make the slides and the information available to our people and our educators? The answer is, certainly. And if there are particular information or analyses that she thinks are useful, I would be happy to get my colleagues to work on that, because I think an informed discussion is important.
As to the second question, Ms Kuik understands the need for our Reserves numbers not to be revealed because it serves as a strategic asset. I hope she appreciates that, in a world of major currency transactions every day, even the size of our Reserves is tiny by international standards. It is tiny by the amount of transactions that are going on around the world every day. And we are an important financial centre.
So, the answer to the suggestion on whether we can split it into two parts: I have actually considered that, but I do not think it is sound because there will still be speculation as to how big that part is. Two, the MAS' official foreign reserves are actually in the data. It is publicly available as to how big the MAS' official foreign reserves are. A way of thinking about it is that that forms one part of it, but, as for the rest, should we look at it more? Should we reveal more? No.
Having gone through the Asian Financial Crisis – I was serving as Principal Private Secretary to Minister Mentor then – and I was looking at how various countries were managing their reserves and managing the currency speculators, it was the most important lesson for me as a young officer then. Never underestimate how the profit motive can destroy countries. It happened very, very swiftly and I have to say that, rather unfortunately, many of the countries that were very deeply affected, adopted policies that looked very good at that point in time. It seemed like they were doing the right thing, but the reserves were gone very, very quickly, and it took them years and years to rebuild them.
Having gone through the Global Financial Crisis when I was running MAS, I was even more concerned. We all thought that maybe only developing countries are vulnerable to financial crises. But when this crisis happened, it originated from the most developed economies in the world, amongst the most sophisticated financial centres, in the US, in Europe, and then it spread to all the rest of us. We, in Asia, were lucky that all those new products and new innovations had not had such a strong foothold yet, although they were coming.
Let us be very careful about dealing with finances, dealing with our Reserves, dealing with our global financial market. It is easy to suggest, \"Let's do this, and that\". But we really have to think through the implications very, very carefully, and we must continue to monitor how global financial markets are developing.
Even as I speak, new rules are being made; not only about global finances but about global taxation. And these rules are going to change. In my Budget speech, I spoke about how the centre of economic activity is moving towards Asia. I also added a line that the global order will change. I think Mr Low Thia Khiang hoisted that point.
Therefore, let us think very hard about all the things that we need to do and make sure that we provide sufficient buffer.
Mr Speaker: And on that the note, the Question is, \"That Parliament approves the financial policy of the Government for the financial year —\"
Mr Leon Perera (Non-Constituency Member): Sir, can I seek a clarification?
Mr Speaker:\tI am moving on. The Question is, \"That Parliament approves the financial policy of the Government for the financial year 1 April 2018 to 31 March 2019.\" As many as are of the opinion say \"Aye\".
Hon Members say \"Aye\".
Mr Speaker:\tTo the contrary say \"No\". Yes, Minister for Finance.
Mr Heng Swee Keat: Mr Speaker, Sir, this is an important Motion on a very important issue. And after the debate that we have in Parliament, the Workers' Party has not made clear its stance on the Government's financial policy. So, I either have a clarification from Ms Sylvia Lim now that she supports the financial policy of the Government, or I would ask for a Division, Sir.
Mr Speaker: Ms Sylvia Lim, would you like to respond?
Ms Sylvia Lim: Yes, Sir, I thought I made it clear earlier that we support this Budget, as far as the measures in the Budget go. But the GST announcement was an announcement which is not being implemented in this Budget. So, in accordance with the usual procedure, I do not think we are voting on the announcement; we are voting on the measures.
Mr Speaker: Minister for Finance, would you like to proceed with a Division?
Mr Heng Swee Keat: Mr Speaker, Sir, this debate is a debate on the financial policy of the Government, and I have articulated in this Budget the financial policy of the Government. Therefore, the financial policy includes the policy to raise GST in the coming years, between 2021 and 2025. So, I think I will ask for a Division, Sir.
Mr Speaker: Let me state my opinion on the collected voices. As many as are of that opinion say \"Aye\".
Hon Members\tsay \"Aye\".
Mr Speaker: To the contrary say \"No\".
Some hon Members say \"No\".
Ms Sylvia Lim: Speaker, to make clear, we are unable to support the announcement on the GST hike.
Mr Speaker: For this particular Motion, we are voting on the Budget Statement. We either vote \"Yes\", \"No\" or \"Abstain\". So, we will proceed with the Division. Will hon Members who support the Division, please rise in their places?
More than five hon Members rose.
Mr Speaker: Thank you. Clerk, ring the division bells.
After two minutes –
Mr Speaker: Serjeant-at-Arms, lock the doors.
[(proc text) Question put, \"That Parliament approves the financial policy of the Government for the financial year 1 April 2018 to 31 March 2019.\" (proc text)]
Mr Speaker: Minister for Finance, you have called for a Division, would you like to proceed with a Division?
Mr Heng Swee Keat: Yes, Sir.
Mr Speaker: May I remind Members to please sit at your designated seats. You should only start to vote when the voting buttons on your armrests start to blink. Members may now begin to vote.
Members are advised to check that their names are registered according to their vote indication when the voting results are shown on the display screen.
Mr Speaker: I will proceed to declare the voting results now. There are 89 \"Ayes\", eight \"Noes\", and zero \"Abstentions\". The \"Ayes\" have it.
[(proc text) Resolved, (proc text)]
[(proc text) \"That Parliament approves the financial policy of the Government for the financial year 1 April 2018 to 31 March 2019.\" (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Estimates of Expenditure for the Financial Year 1 April 2018 to 31 March 2019","subTitle":"Committee of Supply – Paper Cmd 13 of 2018","sectionType":"OS","content":"[(proc text) Order read for consideration in Committee of Supply [1st Allotted Day]. (proc text)]
[Mr Speaker in the Chair]
The Chairman: Main and Development Estimates of Expenditure of Singapore for the financial year 1 April 2018 to 31 March 2019, contained in Paper Cmd 13 of 2018. For convenience, I shall take the totals for each Head of Expenditure in the Main and Development Estimates as they appear in the last columns of the schedules of estimated expenditure under the Main and Development Estimates Outlays for financial year (FY) 2017 on pages 6 and 7 respectively of the Command Paper.
A total of 530 amendments to the Estimates of Expenditure have been submitted this year. The guillotine times to the discussion of the Heads of Expenditure under Standing Order 92(7)(a) have taken into consideration the earlier commencement time of a Sitting, the reduction of Question Time and the extension of sitting times of the Committee of Supply for each allotted day.
I must remind hon Members that the total time for discussion of each Head of Expenditure includes the replies from the front bench. With the assistance of the digital timer in the Chamber, I trust that hon Members will be able to keep to the speech times indicated against their amendments. I would urge hon Members both from the back and front benches to adhere to their time limits, as I will be very stringent in my time-keeping.
I shall deal first with the Heads of Expenditure in respect of which amendments stand on the Order Paper Supplement. Head U – Prime Minister's Office. Assoc Prof Fatimah Lateef.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head U (Prime Minister's Office)","subTitle":null,"sectionType":"OS","content":"Assoc Prof Fatimah Lateef (Marine Parade): Mr Chairman, I beg to move, \"That the total sum to be allocated for Head U of the Estimates be reduced by $100.\"
Evolution and adaptation of the Public Service. Change is the only constant, they say, and with our Public Service, it, too, will be busy evolving, moving forward and making adaptations. Singapore’s sustainability depends very much on the ability of our Public Service to do this and to keep relevant. This will be crucial to take Singapore through the current generation and into the future.
Issues such as: (a) our demographic changes and the rapidly ageing populace; (b) gender mainstreaming and equality that we all want to see; (c) the economic transformation; (d) maintaining safety and security using the latest technology; and (e) our journey towards becoming a Smart Nation will dominate work in the Public Sector.
The officers will need to face head-on technological disruptions with a renewed mindset and perspective. They will need to keep abreast as they will be leading society through policies.
To negotiate the changes, they must top up their capabilities, be change makers and embark on continuous education. They must be able to, what I would call, learn, unlearn and relearn, as needed. Learn and relearn is quite obvious, but the ability to unlearn is important, too, so as not to be stuck in old school ways of doing things. Versatility and agility will be the words of the day.
Moreover, with the more discerning public and highly-educated younger generation with higher expectations, the effectiveness and efficiency of the Public Service, as defined today, will certainly need a review and a relook.
How are we preparing our Public Service officers for all these – the technological disruptions – with the use of artificial intelligence (AI), virtual reality (VR) ways of handling issues and yet still keep them comfortable and acing the face-to-face human correspondence and communications that they need to do with the various sectors, including the public? How do we strike that balance? How will they be upskilled with deeper and more sophisticated digital capabilities?
Mr Lee Yi Shyan (East Coast): Mr Chairman. The day before, I spoke about Singapore as a thriving hub in the Pacific Century. While the current external conditions are favourable, Singapore’s continued growth will largely depend on whether we are able to stay relevant. Our future success is not a given. An ageing population, shrinking workforce, international competition and technological disruption – as has been discussed in this House – and other unforeseen calamity could set us back, especially if we are unprepared, unable to adapt and unable to reinvent ourselves.
While these risk factors are not unique to Singapore, our responses can be. But we will have to face them squarely in order to find solutions to address them. To do so requires courage, imagination, discipline and organisation.
Singapore has one of the most efficient Public Service systems in the world. But past achievements are no guarantee for future success. It is easy to lose our vigilance. We cannot allow efficiency to be replaced by bureaucracy, urgency by complacency and creativity by paralysis.
I would like to ask, in this time of rapid changes, how would our Public Service exercise its leadership in helping Singapore navigate the way forward? Could we expect the Public Service to lead change? How would the service anticipate future problems?
Mr Chairman, many of the issues we face today are complex and multifaceted in nature. For instance, I spoke about the need to nurture a multilingual environment for Singaporeans to use their mother tongues frequently and naturally. If this idea is accepted, whose responsibility would it be to see to the creation of such an environment? Another example would be demographic-related issues. How would a wide range of solutions be coordinated amongst different agencies responsible for service delivery?
Mr Chairman, just as the Government rolls out the 23 Industry Transformation Maps (ITMs) to transform our industries, is there a similar masterplan to transform our Public Service to be a smarter Government? How would the service glean the world's best practices for our own learning? Would our service invest in its own research and development (R&D) as part of a smart Government?
Finally, I would also like to ask the Prime Minister, given that a number of Ministries are making sustained investments in new infrastructure in billions of dollars, would the Ministries take the opportunity to groom our local players, develop new capabilities and jobs for the economy? Could all large budget Ministries be given industry development and job creation key performance indicators (KPIs)?
Mr Seah Kian Peng (Marine Parade): The Public Service may not be the first that comes to mind to be associated with the words \"speed\" and \"innovation\", but citizens' demand for greater speed, effectiveness and transparency in public service delivery is increasingly acute.
At times, I feel the role of the Public Service has become that of a marketer – successfully meeting consumer expectations – no longer one-way, top-down, nor linear.
At the same time, we ought to bear in mind that these are our fellow citizens and not consumers. This is not a one-shot game where we carry out a transaction, make them happy and not worry about their long-term interests or their relationship with us as a community.
Remembering that the Public Service builds public value, and that we share a common interest with all Singaporeans, we need to care for them and not treat them as in a transactional relationship. We need to redesign our service and map the citizen journey around key values which we all share, not just the pursuit of bureaucratic goals and departmental interests, but also, not populist demands or individual outcry. We need to strike the right balance.
In finding this balance, we must ask ourselves audibly from time to time, in our bid to be citizen-centric, are we stymied by bureaucracy or a lack of incentives from the service to innovate or being too quick to penalise risk-taking?
Likewise, the way we serve citizens will also need to change to keep up with the times, as well as our changing demographics. For one, our senior citizens might not be as savvy as our digital natives. But we must cater to all segments of society and continue to deliver to everyone the services they need in ways most natural to them.
So, how can our Public Service continue to evolve so that we deliver the best services we can to our citizens, and that our public officers can remain effective in their roles?
Finally, my heart also goes out to all our civil servants. Their work gets harder each year with rising expectations from the public. A danger is that we will take refuge behind increasing rules and regulations so as to deal with complexity, but to disregard these in the pursuit of short term \"customer satisfaction\" as online mass agitation becomes ever louder and pervasive. Even as we find ways to increase the productivity and responsiveness of our officers, we must also enable them with skill and discretion, to say no to unreasonable requests.
Mr Louis Ng Kok Kwang (Nee Soon): Sir, in my Budget speech, I spoke about how we can improve our Public Service and made suggestions. Can the Prime Minister's Office (PMO) consider implementing a 360-degree appraisal review system for all public servants? Can PMO consider putting in place internal quality service managers (QSMs) to look into and ensure that feedback from public servants is looked into? Can PMO also ensure that all public servants have direct communication channels with the top management through regular and frequent all-hands meetings and through pigeon-hole sessions?
We should also better recognise public servant contributions and skills beyond their formal academic qualifications. And we need to ensure they work in an environment where they can develop and apply rules in a more flexible way, so as to better serve Singaporeans.
Sir, no system is perfect. We can always improve. I thank Minister Heng for sharing that public servants working under him have no fear of speaking up. I hope that this is the same for all Ministries and Statutory Boards and I would be glad to be proven wrong in saying that public servants fear speaking up.
Ms Sylvia Lim (Aljunied): Sir, while Singaporeans elect the Government and their Members of Parliament (MPs) to make laws, there are benefits in consulting outside this Chamber and putting out the Government's intentions well before Bills come to Parliament.
First, policymakers and lawmakers may not be able to foresee gaps and unintended consequences. Secondly, opportunities to the general public to participate and comment on draft laws will foster greater trust between the Government, Parliament and citizens. It will build confidence that policies were not being rushed and that citizens could participate meaningfully in policymaking.
To this end, I would like to ask if there is a guideline or standard operating procedure (SOP) on how Ministries should approach law-making. I would divide my discussion into two parts: the pre-Parliament stage and the Parliament stage.
First, the pre-Parliament stage. When is public consultation on a Bill a must and when is public consultation deemed not needed? There are many positive examples of public consultations where a Ministry would publicise the consultation and invite public comments on draft legislation, after which it publishes a summary of the comments received and the Ministry's responses.
Are there any guidelines about the consultation period? It goes without saying that the consultation period should give sufficient time for people to respond. The recent consultation on the Films (Amendment) Bill illustrates the problem when the consultation period was too short, initially for a period of about 11 days in the month of December, which is generally a month where persons may also travel. It was sensible then that the Ministry extended the consultation period after request from the public.
In recent times, there were instances when laws seemed to be rushed. For instance, the Administration of Justice (Protection) Bill was only put up on the feedback unit Reaching Everyone for Active Citizenry @ Home (REACH) portal after it was presented in Parliament for First Reading and a petition filed on this Bill was somehow not sent to the Public Petitions Committee.
While a Ministry may certainly choose to adopt other methods of consultation, for example, closed-door focus groups or stakeholder discussions, I would say that this should not replace an open consultation on the actual Bill if the Government wants to have a bigger buy-in, especially in controversial matters.
I next move to the Parliament stage. There seems to me some scope for improvement, too. Regarding the explanatory statement to Bills, sometimes, we find explanatory statements that simply repeat the wording of the Bill without explaining how the clauses will improve things.
On the other hand, we do see some more helpful explanatory statements. A recent example is the Public Sector (Governance) Bill where it was stated that the clause setting out the Minister's powers over public bodies was necessary due to inconsistencies in existing legislation and to avoid duplication.
Here, an attempt is made to give a reason for the new law. One useful initiative is the ongoing pilot by the Attorney-General's Chambers (AGC) to show the changes made by Bills in tracked mode, but I believe this is currently only available to MPs. I hope this can be available to the public to facilitate greater understanding of changes made.
Finally, Ministers' statements to Parliament at the Second Reading of Bills should be as clear as possible. One recent example is the Protection from Harassment Act (POHA) when, in a 2017 Court case, the Government tried to claim that it was a person entitled to seek relief under POHA. This was rejected by the Court of Appeal as invalid because nowhere in the Second Reading speech of the Minister was Parliament told that the Act was intended to apply to persons who were not human beings and not vulnerable.
Ms Chia Yong Yong (Nominated Member): Sir, I have spoken previously on my respect for the Public Service and I have recently spoken again with foreigner friends who have also spoken about how clean, efficient and effective our Public Service is. Of course, at the same time, they have also talked about how they tend to be aloof and clinical.
Ground sentiments are slightly different. They understand that there is a lot of work that the Public Service has to do but they cannot understand why the Public Service cannot understand them. So, I think there is a disconnect, and it is this disconnect that we need to address.
Also, as our society evolves and the needs and demands become more complex, the voices become louder and people are more sophisticated. So, the Public Service has to keep up. As the world changes and we enter into Industry 4.0 with innovation and change, we need to keep up, we need to know what is happening and we need to be ahead.
But the concern has always been whether our Public Service is afraid to change because we have been so successful, and whether or not, if we change, the success formulae might be tweaked to our own detriment.
Hence, I filed this cut to ask a few questions. The ruling party aside, our continued growth and bonding and success as a country continue to depend on this machinery frequently referred to as the \"zheng hu\" (in Hokkien) which is, in effect, the Public Service. So, while I understand also, before I go into that, Sir, the need for a rotation, it breaks the continuity of management and responses to issues. It may also inhibit a vigorous review of a predecessor's initiative or the work of a team under that predecessor.
Moving on to my questions, Sir, what efforts have been undertaken by the Public Service to understand ground sentiments, address misapprehensions and implement policies in line with declared intent conveyed through Ministerial speeches? What are the agencies that have recognised within the last five years the necessity to change their operating mindsets and models? How did the recognition come about and how have such changes been implemented? What are the results of such changes and what is the public perception? How does the Government achieve buy-in from civil servants on the ground in the shaping and implementation of policies initiated from top management and Ministers?
I ask these questions because I think it is important that if there are changes and there are good effective changes, these should be effectively and properly communicated to the citizenry.
Mr Cedric Foo Chee Keng (Pioneer): Mr Chairman, my cut today is to discuss whether our Public Service can be more innovative. We start from an enviable position. We have the Public Service Commission (PSC), which has, over the years, helped build an efficient, honest and talented Public Service sector.
Nevertheless, there are some areas that our public sector needs to pay close attention to. Over time, complacency can set in. Cross-Ministry and cross-agency collaboration is sometimes challenging. Citizens are also now expecting more from governments as innovation and the Internet of Things (IoT) in the private sector have enhanced many of their experiences.
More importantly, other governments have leap-frogged and have improved their interactions with their citizens with the advent of new technologies. Therefore, our public sector, good as they are, must also up its game.
Another important reason for the public sector to improve efficiency and productivity, as many of my colleagues have pointed out, is the fact that a tax increase has been announced. It behooves the Government to deploy resources productively and, indeed, to innovate almost as a habit, and at every citizen and enterprise touchpoint.
The private sector offers some good examples of how this can be done, such as centralised procurement and also shared service centres. With centralised procurement through aggregating demand across Ministries and agencies, cost savings can be had. Shared service centre, in the areas of information technology (IT), human resources (HR), finance, facility management and so on, can also provide significant productivity benefits as there is standardisation of processes as well as economies of scale.
The digital economy offers even more avenues for citizens to interact with the Government in ways that were not possible in the past. There is this \"Moments of Life\" project, a strategic initiative that bundles relevant Government services across all agencies based on milestones of a citizen's life, that has been announced. I applaud this effort and look forward to hearing from the Minister an update on this very interesting project.
Another area which is often in the way of innovation is policies, rules and regulations. Some of these are necessary and remain relevant. But many are out-of-date and are in need of urgent review.
Chairman, being part of an efficient Public Service also involves cutting red tape and unnecessary bureaucracy. Externally, this improves Government services. Internally, it avoids officers being bogged down by unnecessary administration instead of focusing on higher value-added work. I would like to ask how the Public Service intends to review its rules, regulations and internal processes to improve productivity and staff empowerment.
The Chairman: Mr Leon Perera, you can take both cuts together.
Mr Leon Perera (Non-Constituency Member): Mr Chairman, based on a Parliamentary exchange in 2012, other than the Corrupt Practices Investigation Bureau (CPIB) and Auditor-General, Public Service officers can direct whistleblowing complaints to PSC. I would like to ask what measures are in place to ensure that all civil and public servants know what are the channels available to each of them inside and outside their organisations to report perceived wrongdoings.
I ask this because many whistleblowers in any organisation may hesitate to complain to a department within their organisation. Is it currently made clear to all civil and public servants that they can highlight problematic acts without fear for their careers, provided that the reporting is in good faith? Also, is PSC the whistleblower reporting point for ethical lapses for the whole Public Service, including for lapses relating to the recent requirement that a political officeholder cannot instruct the civil servants to act with respect to a person or persons and, if so, is the PSC properly resourced to handle such complaints?
Mr Chairman, Sir, each year, Government Ministries and Statutory Boards produce annual reports. In some cases, printed copies are sent to various stakeholders, including Members of this House. I am not sure how many of these printed copies are retained by the recipients for long. I would like to suggest that, in future, annual reports be produced only as softcopy files. These can be posted on the website. Users can print these for their own use if they want to. Since they have to print for the printing themselves, it is likely that they would only print the pages they need. This would save the Government money and it is greener, with few implications for the wider public.
Some other countries have formalised guidelines to minimise printing of Government annual reports. For example, the New South Wales government in Australia goes so far as to say that government departments and, I quote, \"may only externally print hardcopies where express permission is granted by the relevant Minister following clear justification on need and demand\".
Ms K Thanaletchimi (Nominated Member): Sir, last year, at the Public Service Leadership dinner, Deputy Prime Minister Teo shared the need to prepare Singapore and Singaporeans towards a Smart Nation. In working together, the Deputy Prime Minister highlighted that the digital and future economy can drive growth, innovation and productivity. Digitalisation will transform the way we work and deliver public services and create many new economic opportunities. It is important for the Public Service to continue to evolve and reinvent itself to meet the needs of Singaporeans today and in the future. The digital government strategy is not far-fetched. However, it is imperative that the Public Service attract the right talent and retain them so as to better prepare the rest of the workers for digitalisation.
The inauguration of Government Technology Agency (GovTech) is a clear signal to show the Government’s drive towards growth, innovation and productivity in the digital world and future economy. GovTech aims to provide engineering support to Smart Nation projects as well as to rejuvenate old e-Government services. Hence, we can look forward to more citizen-centric services through the use of technologies, such as data science and analytics, thereby transforming our Public Service delivery.
Within the public sector, there is a need to transform processes and strengthen digital capabilities of our public agencies, the employees and Singaporeans as a whole. While the public sector embarks on this journey, there must also be parallel efforts to ensure that the public servants as well as Singaporeans at large are not left out, especially those who are mature and seniors. Essentially, they must also be willing to be behind this change.
The Public Service, being the largest employer, must ensure Public Service employees are also given appropriate training to adopt, adapt and stay relevant for future jobs. No one can escape the waves of change in the digital world. It is, therefore, important that the Public Service and its agencies keep up to the speed of change. The Public Service and its agencies, too, should take stock of jobs at risk and future jobs in demand so as to ensure that workers of today and tomorrow are placed in future jobs.
I am contented to hear that the Public Service is taking the lead to invest in strategic capabilities, such as digital, data, engineering. May I request the Deputy Prime Minister to provide an update in this area? What are some of the capabilities built in the Public Service to prepare Singapore towards the digital economy? One of the strategies under the Committee of the Future Economy is to build strong digital capabilities. What are the future plans to further build such capabilities within our Public Service to enhance delivery of public services to our citizens? On the whole, how is the Public Service responding to technological disruption?
Mr Vikram Nair (Sembawang): Sir, in January 2012, this House debated the recommendations of the White Paper titled “Salaries for a Capable and Committed Government”, put together by a distinguished committee led by Mr Gerard Ee.
That was a vigorous debate in which many Members of the House took part and was one of the few times the Workers' Party put forward an alternative proposal. However, in the course of the debate, it emerged that, in fact, the differences between parties were relatively narrow and the benchmark salaries derived from both calculations would not be that different, notwithstanding different approaches to calculation.
The benchmark adopted by this House for setting Ministerial salaries was to use the median salary of the top 1,000 income earners, as it was anticipated that people with the calibre to be Ministers and managing large budgets of hundreds of millions of dollars should be comparable to this group.
At the same time, a 40% discount was applied to this benchmark to indicate that this was public service and people should not come forward for money. The principle was that money should not be a disincentive to serve but it certainly should not be the main incentive.
Now, the salaries of other public appointment holders were set at specified fractions of the Ministerial salary benchmark. Of course, salaries cannot be set in stone, as income levels and Government expenditure change over time. The White Paper recommended this benchmark be reviewed every five years.
In the 2015 Committee of Supply debate, my colleague Mr Edwin Tong had asked PMO about whether it was time to review the benchmark with the five-year mark approaching. At that time, Deputy Prime Minister Teo mentioned that he did not feel the benchmark needed to be reviewed and commented that it had worked well.
Well, it is now 2018, after the five-year timeline to review what the White Paper had recommended. I would like to ask PMO whether any steps have been taken to review the benchmark and, if so, whether any changes will be made.
Mr Liang Eng Hwa (Holland-Bukit Timah): Mr Chairman, in 2012, the Parliament debated and endorsed the White Paper on \"Salaries for a Capable and Committed Government\", which consists of recommendations from the Ministerial Salaries Review Committee. Among the recommendations, the Committee recommended that the salary framework be reviewed every five years.
Given that we have passed the five-year mark, I would like to ask Deputy Prime Minister Teo whether the Government has conducted a review. If there was, indeed, a recent review done, what are the recommendations and whether there will be adjustments made to the Ministerial salaries as per the framework established?
Mr Alex Yam (Marsiling-Yew Tee): Singapore needs good leaders, leaders that can steer the country to the forefront of innovation, create opportunities for growth, delicately manoeuvre the path of diplomacy to ensure the nation’s continued survival.
To achieve that, we need capable, dedicated men and women of integrity to step up to the plate. But how do we attract these people, who often are already established or are establishing a steady career path, to forgo their attractive remuneration, perks and benefits to join the Government?
To ensure an honest and competent government, a benchmark for Ministerial salaries was first introduced in 1994 to ensure that salaries were kept competitive to attract people of the right calibre to step forward to lead the country. Political service and public service require sacrifice, and many of our past and present Ministers are good examples of this. Most importantly, we have been practising a system that promotes transparency with no hidden perks. These principles have been the cornerstone of our Government, which has always espoused a clean and transparent governance model.
But there is a need to be realistic as well. While many heads of banks, industries and businesses often earn more than our Ministers in terms of salaries, bonuses, perks and allowances because of their responsibilities, our public officeholders, who handle Ministries with larger budgets and an even greater impact on the country and the population, should also be paid fairly.
The benchmark for public officeholders was finetuned subsequently and the last review was carried out in this House in 2012, agreed to by this House. The details were laid out earlier by our hon Member Mr Vikram Nair and I will not repeat them. This has remained unchanged since. The Committee to Review the Ministerial Salaries that recommended benchmarks also recommended a review at the five-year mark, which we have since crossed. It is, therefore, perhaps opportune for the Deputy Prime Minister to update if a review has been conducted and adjustments, if any, will be made to this benchmark?
Dr Teo Ho Pin (Bukit Panjang): Sir, the Committee on the Future Economy (CFE) has proposed the development of ITMs to guide our industries to move into the future. To date, 23 ITMs have been launched focusing on creating jobs for Singaporeans in various strategic industries. The Government has also launched the SkillsFuture programme to equip Singaporeans with skills for future jobs.
Sir, in this regard, I wish to seek clarifications from the Prime Minister as to whether the public agencies have a Public Sector transformation map which is aligned with the 23 ITMs. As we create new jobs which require new skills in the industries, the public agencies must also correspondingly upgrade and deepen the skills of public officers to better serve the public and business community.
Sir, I would like to propose that all public agencies develop their respective Public Service transformation maps to improve public services and upgrade the skills of public officers. With digitalisation and emerging technologies, public agencies should also adopt these technologies to further improve their productivity, efficiency and customer service.
Over the years, many Government agencies have outsourced part of their services to private service providers in areas, such as project management, facilities management, management of public hotlines and so on. In the process, some public agencies have lost expertise or capabilities in these areas, thus resulting in some lapses, as highlighted by our annual Auditor-General's findings.
We need to relook into the skills required by our public officers to better manage outsourced projects or services so as to achieve better public accountability in using public funds. At the same time, the public agencies must set up systems to be interfaced with industry practices. For example, the introduction of the Building Information System (BIM) for building projects by the Building and Construction Authority (BCA) sets the pace for the digitalisation of building designs. It also provides better coordination among different stakeholders of building projects, thus enhancing productivity and reduce wastages.
Sir, I wish to seek the Prime Minister's update on the following: one, what are the skills upgrading plans for staff in our public agencies; and two, how do we measure the desired outcomes of these skills upgrading programmes?
Assoc Prof Dr Muhammad Faishal Ibrahim (Nee Soon): Sir, some agencies, for example, the Ministry of Education (MOE) and the Singapore Police Force (SPF) have unified their schemes of service to promote greater opportunities for career progression and development for non-graduate officers. This means that officers without graduate degrees can be eligible for similar opportunities as graduates and can move up to higher positions of responsibility if they perform well.
I feel that these are good initiatives and convey an encouraging message to current and future officers that they can aspire to a fulfilling career in the various public agencies regardless of their academic qualifications, as long as they have the required skillsets and can contribute well in their roles. This is consistent with the larger SkillsFuture movement which calls for the private sector to look beyond paper qualifications. The Public Service should also respond to the call, given it is the largest single employer in Singapore.
I would like to ask the Deputy Prime Minister if the initiative to go beyond paper qualifications and better recognise skills has been adopted across the whole of the Public Service. Are there concrete examples on how these initiatives have benefited individual officers? Are there also examples of officers who have progressed well in their careers based on good performance and skills, despite not having traditional academic qualifications?
The Chairman: Mr Patrick Tay, you can take your two cuts together, please.
Mr Patrick Tay Teck Guan (West Coast): Sir, first, recognition of skills and competencies in the Civil Service. I wish to ask for a progress update on the Civil Service's efforts on not focusing on paper qualifications alone but instead on the applicants' and staff's relevant skills and competencies.
This is with respect to new entrants, mid-career and older workers in areas of recruitment, selection, salaries, promotion, re-employment and career progression. I am particularly concerned in light of the number of mature and re-employed workers in the Civil Service as well as the focus on paper qualifications in the hiring of many of these entry level positions at Career@GOV.
Given technological disruptions, many organisations both within the public and private sectors have gone digital and their workplaces have been transformed. We must be prepared for these changes, given that the Public Service is the largest single employer in Singapore and should thus set a good example for other employers.
The way we serve citizens would also need to change to keep up with the times. We see a few good initiatives, for example, parking.sg, self-help e-services from various major agencies. All these changes would mean that the internal working environment within the agencies will need to change. We cannot work in silos and there must be greater collaboration across agencies and the eradication of duplication.
Therefore, I would like to ask the Minister in charge of the Civil Service how the Public Service could ensure that all officers, especially those who are more experienced and perhaps more used to the way things were, will remain effective in their roles and remain fully engaged.
The Chairman: Deputy Prime Minister Teo.
The Deputy Prime Minister (Mr Teo Chee Hean): Mr Chairman, before I begin on the work of the Public Service, let me address the points raised by Members Mr Vikram Nair, Mr Liang Eng Hwa and Mr Alex Yam on the salary framework for political officeholders.
The current framework is based on the 2012 White Paper on salaries for capable and committed Government. Members may recall that the Prime Minister appointed an independent committee in May 2011 to review the basis and level of political salaries to help ensure an honest and competent Government.
The committee's recommendations contained in the White Paper were thoroughly debated over three days in this House and endorsed in January 2012. The endorsed salary framework was implemented with effect from May 2011. I last updated this House on this subject during the 2015 Committee of Supply (COS). I had informed the House that the salary framework was working well and that the Government was maintaining the salary level established by the 2011 Review Committee.
The 2011 committee had suggested reviewing the salary scheme after five years. In line with this, the Prime Minister formed a fresh committee last year to review whether the salary framework remains appropriate and valid against its intended goals and what adjustments may be useful, and whether there is a need to adjust the salaries should there be a change in overall salary levels based on the proposed framework.
The committee's conclusion is that the scheme remains relevant and sound. But the committee recommended adjusting the salary levels to match the updated benchmark and also some finetuning on the National Bonus conditions. The Prime Minister has written to the committee to thank the committee for its work and the well-considered recommendations. The Government has decided that since the scheme remains valid and the economy is still in transition, we will not change anything now and will maintain the current salary structure and level. We will review the matter again after five years or when it becomes necessary.
Mr Chairman, the 2017 committee comprises nine members headed by the 2011 committee chairman, Mr Gerard Ee. The other eight members were Dr Abdul Razak Omar, Mr Thomas Chua, Mrs Fang Ai Lian, Ms Eu Lin Goh, Mr Stephen Lee, Ms Mary Liu, Mr Ramasamy Dhinakaran and Mrs Mildred Tan. These independent members are experienced and well-established in a range of sectors: social and community service, business, trade union and professional services. Two of these eight members, Mrs Fang Ai Lian and Mr Stephen Lee, served on the 2011 committee while six were new. In 2017, the committee reviewed the salary framework and submitted its views and recommendations to the Prime Minister in December last year.
Let me now take the House through the substance of the committee's views and recommendations.
First, the committee reaffirmed that the current salary framework laid out in the 2012 White Paper is a simple and effective salary framework for political appointment holders and MPs and remains true to the three key principles which this House had arrived at through consensus in 2012. In fact, this consensus on the principles included Members of the Opposition party. These three principles were:
(a) salaries must be competitive so that people of the right calibre are not deterred from stepping forward to lead the country;
(b) the ethos of political service entails making sacrifices and, hence, there should be a discount in the pay formula; and
(c) there should be a clean wage with no hidden perks. The salaries should be linked to the individual performance of political appointment holders and the socioeconomic progress of Singapore Citizens.
The 2017 committee affirmed that these principles remain relevant and should be retained. These principles form the cornerstone of a system that ensures competitive salaries while maintaining transparency and accountability.
Second, the committee assessed that the current salary benchmark strikes a good balance between paying competitive salaries and displaying the ethos of political service and recommends continuing the use of this benchmark to determine the total annual salary of a Minister at a grade of MR4.
The salary benchmark which is based on the medium income of the top 1,000 earners who are Singapore Citizens reflects the calibre of the people Singapore needs for good Government while the 40% discount from this signifies the ethos of political service.
Third, the committee recommended retaining the current pay structure for political appointment holders. The committee assessed that the structure is simple and easy to understand. There are direct links to individual performance and national outcomes. All salary components are clearly spelt out with no hidden benefits and all salary components are within the benchmark.
In particular, the committee reviewed the existing indicators in the National Bonus framework and recommended retaining them as they adequately covered the spectrum of the Government's efforts at the macro level. The National Bonus is linked to real gross domestic product (GDP) growth rate which tracks how well Singapore is growing economically as a country and unemployment rate of Singapore Citizens which tracks whether growth translates to jobs for Singaporeans. The income-related indicators reflect whether jobs translate to better income for all Singaporeans, including average and lower-wage workers.
However, the committee has also recommended a few adjustments. One, to adjust political salaries annually in line with annual benchmark movements. On this, the committee noted that the benchmark has increased by 9% since 2011 or a compounded growth rate of 1.5% per year over this period. But there has been no adjustment made to political salaries over the period. Two, to review the ranges for the National Bonus indicators to take into consideration changing economic conditions and national outlook and, three, to adjust the allowances for Non-Constituency MPs (NCMPs) from 15% of the allowance for elected MPs to 20% to recognise that NCMP have full voting rights in Parliament, from April 2017.
As I have stated earlier, the Prime Minister has written to the committee to thank the committee for its work and its well-considered recommendations. However, the Government has decided not to make any changes and to maintain the current salary structure and level. Let me explain why.
The committee has affirmed that the current salary structure for political appointment holders, including the National Bonus framework, remains relevant and sound. Therefore, we should maintain the structure.
While the MR4 benchmark has increased by 9% since 2011, or the compounded growth rate of 1.5% per year over this period, the Government knows that the 2017 MR4 benchmark is lower than the 2016 MR4 benchmark. Hence, the Government has decided to maintain salaries at the current level and watch the salary trends further.
With your permission, Mr Chairman, may I ask the Clerks to distribute chart 1 of the salary benchmark since 2011.
The Chairman: Please proceed. [A chart was distributed to hon Members.]
Mr Teo Chee Hean: Thank you. The Government has also decided to maintain the current National Bonus indicators and not make refinements to the wages for the National Bonus indicators. The economy is going through a period of transition and the Government has decided to watch the changing economic conditions and outlook further rather than making any refinements now.
The Government has also decided to maintain NCMP allowances at the current level and consider any change where other adjustments need to be made.
So, Mr Chairman, if I may summarise. The 2017 committee has reviewed and reaffirmed the key principles that form the underlying basis for determining political salaries. The committee is also of the view that the existing salary framework remains relevant and sound in ensuring a flow of capable leaders committed to the continued success of Singapore and Singaporeans. The committee has also recommended that salaries be adjusted by 9%, together with some refinements in the elements within the framework. The Government has decided not to make any changes now and to maintain the current salary framework and salary level. The Government will, of course, keep this House fully informed of any changes to the salary structure or level.
I have taken Members through the substance of the views and recommendations from the committee. The Government is releasing the Review Committee's report.
Now, Mr Chairman, let me thank the Members for their views and their continued support for the work of our public officers. Over the past few days, Members debated how to position Singapore on a firmer footing for our future generations. We are progressing well on our economic transformation, with the Public Service working closely with industry, our unions and workers to deepen their skills and prepare for the future.
The PMO-Strategy Group is working closely with our agencies and other central agencies, such as the Ministry of Finance and the Public Service Division (PSD), to adopt a systems approach to planning and coordination. This includes areas, such as scenario planning, budget, manpower, population, land, security, climate change and new opportunities in the Digital and Future Economy. We have formed the Smart Nation and Digital Government Group last May to accelerate our Smart Nation efforts.
Assoc Prof Fatimah Lateef and Mr Lee Yi Shyan cited demographic challenges which stem from our low total fertility rate (TFR). Agencies have worked together to strengthen our support for marriage and parenthood in the key areas of housing, preschool and support in the workplace and the community. Minister Josephine Teo will give an update of our population priorities and strategies to ensure that we are well-prepared for the future later on during this COS for PMO.
Climate change is also a whole-of-nation issue where all countries need to take action now to safeguard our collective future. Together with other countries, Singapore will do our part to reduce our emissions. To do so in a cost-effective manner, the carbon tax is a decisive move. Its merits were discussed extensively during the Budget Debate. The transition period and support will help our companies and consumers make the adjustments. Minister Masagos Zulkifli will provide more details in his speech on our implementation plans in the COS for Ministry of the Environment and Water Resources (MEWR).
Singapore needs to remain economically competitive and be a smart, green and liveable city with opportunities for Singaporeans of all ages. As Mr Sean Kian Peng and Mr Lee Yi Shyan pointed out, technological progress and increasing digitisation are effecting rapid changes globally. Minister Vivian Balakrishnan will provide a progress update and outline new Smart Nation initiatives.
We will help our people and our companies make adjustments for the future and continue to raise the capabilities of our public officers to deliver better public services. This is what a Caring, Competent and Trusted Public Service has to do, and what many Members, such as Assoc Prof Fatimah Lateef, Mr Seah Kian Peng, Mr Lee Yi Shyan, Mr Louis Ng, Mr Cedric Foo, Ms Chia Yong Yong and Dr Teo Ho Pin, have suggested.
We will continue to strengthen our institutions to operate in a more integrated way. The recently passed Public Sector Governance Act strengthens our corporate governance and accountability. Mr Leon Perera asked about our internal framework for reporting wrongdoings, and this is an internal disclosure framework. It is working well. Officers know about it. About 320 cases were reported to the internal disclosure framework in 2017. The number has remained stable over the last three years. Of these, about nine in 10 were followed up by formal investigations, with 134 resulting in some form of disciplinary action. However, many of these cases did not involve the misuse of public funds and did not reflect serious gaps in the Public Service's systems of checks and controls.
So, the system is there, it works well, public officers are aware of it. And, as I have said before, there are also avenues for public officers to report to the PSC or also to the Head of the Civil Service and our enforcement agencies, including the Police and the CPIB, and Mr Leon Perera knows that these are very effective organisations.
On annual reports, I completely agree with Mr Leon Perera. We should only print them when we need to. In fact, this is the policy that we adopt, and I take the suggestions to heart and we will see how we can reduce publication of physical copies further.
Mr Lee Yi Shyan also cited the intensified competition among Asian economies and asked how we could adopt an innovation culture more widely. The Public Service will continue to help and partner Singaporeans and companies to seize new opportunities. As the various sectors of our economy are transforming for the future, the Public Service has also embarked on its own transformation to be more innovative, work smarter through technology and deliver better public services for our people. Minister Ong Ye Kung will speak more on the transformation effort later but, here, I would like to highlight two areas. First, raising the digital capabilities of our Public agencies; and second, deepening the skills of our Public Service officers.
Dr Teo Ho Pin, Assoc Prof Fatimah Lateef and Mr Lee Yi Shyan asked how the Public Service as a whole is upgrading and reinventing itself. All our agencies are working on enhancing their digital capabilities, which will allow them to deliver more integrated services for Singaporeans and businesses. An example is the new Housing and Development Board (HDB) Resale Portal. Buyers and sellers of HDB resale flats can now complete the process in half the time, or just eight weeks, since the start of this year.
Real estate agents benefit from this, too, as they can also free up the time they spend on administrative work and focus on offering more value-added services for their clients and, of course, members of the public benefit when they are doing resale flat transactions, whether they are buyers or sellers. Senior Minister of State Janil Puthucheary will elaborate on our Digital Government efforts later.
Ms Thanaletchimi and Dr Teo Ho Pin also asked what the Public Service will do to prepare our workforce for technological disruption. Last year, I spoke about training 10,000 public officers by 2020 in digital capabilities, such as data analytics and data science, for policy formulation, service delivery and corporate services. We are on track. More than 4,000 officers have attended training courses as at the end of 2017.
To expand our reach, the Civil Service College will partner Institutes of Higher Learning (IHLs) so that every public officer can deepen their skills and have access to tools for this digital age. We also support our officers of all ages to transform, upskill and innovate, so that they are ready to take on new roles. This is also a question that Mr Patrick Tay asked.
At the Inland Revenue Authority of Singapore (IRAS), for example, more than 400 staff ambassadors, called LEverage Analytics, Design and Digitalisation (LEA:D) Advocates, support their peers through change and learning new skills. Several LEA:D Advocates are 55 years and older. They have stepped forward to share with others how they have picked up new digital skills to analyse large volumes of data and digital applications to automate data entry.
Dr Teo Ho Pin rightly pointed out that, ultimately, building a tech-enabled workforce is not an end in itself. It must benefit our citizens through more effective delivery of services. To maximise the benefits and savings, operating models and business processes must also be re-engineered and jobs redesigned so that our officers can immediately put their new skills to use.
Mr Chairman, Sir, let me thank Members once again for their strong support for the Public Service. Let me conclude by assuring this House that we are gearing up as One to ensure that the Government and the Public Service are ready to embrace the challenges and create a better future for our current and future generations.
With your permission, Mr Chairman, Minister Ong Ye Kung will now elaborate on the Public Service’s transformation efforts.
The Minister for Education (Higher Education and Skills) and Second Minister for Defence (Mr Ong Ye Kung): Mr Chairman, every industry is undergoing transformation and disruption. The Public Service and its 145,000 employees are no exception.
Transformation is not new to the Public Service. From computerisation in the 1980s, the Public Service (PS)21 Movement in the 1990s, the Public Service has pushed itself to change with the times. Today, as Deputy Prime Minister Teo mentioned, we will need to find opportunities amidst the challenges of technological disruption and slowing workforce growth.
The question is: what areas should we focus on? To answer that question, let me first talk about the state of the Public Service today. It is generally healthy. It continues to uphold the values of honesty and integrity, strives to serve the public better, and we are able to attract our fair share of talent. These are the critical aspects of a functioning and effective Public Service.
Today, Ministers and the Public Service work closely together to continue to deliver public housing, healthcare, education, transport, maintain law and order, keep Singapore safe and secure, attract investments, regulate various sectors, ensure social mobility and so on.
So, to Ms Chia Yong Yong’s question whether public servants have buy-in to Government policy, I would say, by and large, public officers are committed to policies set by the elected Government. It does not happen that way in every country, and it did not happen here just because public officers are yes-men or yes-women. In fact, Ms Chia is correctly worried that we do not want buy-in to be weakened over time. So, what she said is actually the opposite of Mr Louis Ng's concern that public servants are not speaking up and opposing the Government's policy.
The system works today because of the mutual trust and respect between Ministers and public officers, which have been built up through years of working together. Public officers know that national policies are developed in the long-term interest of Singapore and Singaporeans. Ministers have confidence that when they set the policy direction or make a policy speech, the Public Service will back them up with diligent implementation.
But public officers are not public figures, so Ministers understand that they have to do the heavy lifting in engaging the populace and speak up for public officers when they are unfairly criticised. This is something that we must continue to work on and not let it be weakened.
Citizen engagement, including co-creation with the public, has been a major focus since Public Sector Transformation started in 2012. So, on Ms Chia Yong Yong’s question again when she asked about whether public servants understand ground sentiments and whether sufficient effort has been put in to engage the ground, the Public Service has, over the year, expanded both digital and community outreach channels. For example, the People’s Association (PA) has a Kopi Talk series; the Ministry of Communications and Information's (MCI’s) REACH Listening Points and Facebook Live Chats enable agencies to engage broader segments of society in understanding the people's sentiments.
We have also been growing our citizen engagement capabilities. For example, the Citizen Engagement Seed Fund was set up in 2016 to encourage agencies to trial innovative engagement approaches. This fund has supported 16 projects by various agencies which have created new opportunities for citizen participation. These projects include the Ministry of Health's (MOH’s) Citizens’ Jury on Diabetes, and the Singapore Tourism Board’s envisioning exercise for Chinatown and Little India.
To Ms Sylvia Lim's question, it has become the norm for agencies to do public consultations on legislative amendments. Over the past one year, Ministries have done consultations over a wide range of Bills. These are very useful exercises to solicit the concerns the public may have on the Bills, or suggestions that can improve both the policy thinking as well as its implementation.
The extent and approach to consultation and the duration of consultation, however, are determined by each Ministry, depending on factors, such as the nature of the legislative amendment, impact of the changes and also the level of public interest. In certain circumstances, such as when the Bills are time-sensitive or revisions are routine, a Ministry may decide not to conduct a public consultation exercise.
Ms Sylvia Lim also mentioned that Bills can be better presented and Second Reading speeches can also be improved. We take note of all that and, as always, we are always striving to improve.
Another area which the Public Service is continuously improving on is the last mile of service delivery and the touchpoint with the public. The basic nature of Public Service is that it serves the masses. So, the first challenge is that service delivery can be impersonal. Further, because the system must work for the masses, consistency in application of rules is critical. Otherwise, we get invidious comparisons between citizen A and citizen B. So, the second challenge is that the system can be inflexible and does not cater sufficiently to exceptions.
Assoc Prof Fatimah Lateef, Mr Cedric Foo, Mr Seah Kian Peng and Mr Patrick Tay asked how the Public Service is innovating, raising productivity, especially in the context of technological advancement. I think tackling these two challenges is a good, down-to-earth start.
To tackle impersonality, we can leverage technology. Today, our smart phones and apps can communicate with us in an individualised way even though they are automated systems. So, the Health Promotion Board's Health365 App is like a fitness buddy to us. And the Central Provident Fund (CPF) Board has launched a CPF Retirement Planning Service, where frontline officers use technology to transform citizens’ data into personalised infographics to provide citizens with personalised advice on CPF matters. As a result, the conversations between the CPF officers and the public became richer and more meaningful. Senior Minister of State Dr Janil Puthucheary will speak more about the efforts we are taking to fully leverage technology to deliver public service.
The second challenge of inflexibility is much harder to overcome. It involves tempering a system that is consistent and six sigma reliable by design with the recognition that there are exceptions, rules are not perfect, and human judgement and discretion are needed from time to time.
In the Public Service, my view is that the key innovation is not so much driven by technology, but by our humanistic instincts to make a sound judgement, to take a bit of risk, to take responsibility for our decisions. And we need to empower middle management, even ground officers, to be able to do that, while ensuring that the integrity of the system not to give special favours remains intact.
Making this change pervasive will truly transform the Public Service delivery to be even better in meeting citizens’ needs. To bring about a change in human behaviour, we need to make changes to the system that influences it most, which is the HR system.
This brings me to Mr Louis Ng's question. In fact, during the Budget Debate, Mr Ng expressed concern that there is a culture of compliance, public officers dare not speak up for fear of getting into trouble, and they gave up trying to improve things because such efforts would be in vain and, therefore, some of them say \"Let's stop caring\".
Mr Louis Ng may not be aware, but the Public Service is undergoing a major transformation. An exercise has started in 2012 in order to serve the public better and be ready for the future. And it is self-initiated, demonstrating the long-standing ethos of serving with heart and commitment, and always striving to do better for Singapore.
The Head of Civil Service has called on public officers to have a \"constructive discontent\", of being dissatisfied with the status quo and wanting to do better. I have urged the service to be bold – \"think big, start small, act fast\".
This deep change cannot happen if the Public Service does not welcome ideas from its own officers. As Mr Louis Ng has acknowledged, many Permanent Secretaries and Chief Executive Officers (CEOs) engage staff directly to hear them out. And I agree with him that there ought to be across-the-board practice. In fact, all agencies today conduct regular employee engagement surveys, and many carry out other organisational development initiatives. One of which is regular 360-degree feedback, to better develop our Public Service leaders.
We have also put in place a system, such as the Public Sector Transformation Award, to recognise officers who display constructive discontent, and make the effort to effect transformative change. We have also recently incorporated into the bonus system a mechanism for agencies to specifically recognise officers for their innovation and enterprise.
Notwithstanding all these efforts, like all big and complex organisations, when there is change, there will be those driving it, those supporting it, those worried about it, those wanting change in a totally different direction and some resisting it. It is not just the Public Service. This happens in every organisation.
We are determined to succeed in this exercise and overcome the challenges and obstacles. The main obstacle is ourselves. Mr Louis Ng and Mr Kok Heng Leun quoted me on this in their speeches during the Budget Debate and I thank them for that. But the next question is: if you accept that the biggest obstacle is ourselves, the next question is: who does \"ourselves\" refer to? And the answer really is: it starts with me.
So, for me as the Minister, I constantly have to ask myself: am I giving policy directions that are bold enough, clear enough and empowering enough for my staff? For a Permanent Secretary or CEO, he will ask if he has built an effective organisation with the forward-looking culture that can embrace change. For a Director, he will ask if, within his area of responsibility, he has sufficiently made improvements, made Public Service more effective, service the public better and empowered, motivated and rallied his troops, the people reporting to him. And for an individual officer, he will ask whether he has acquired the skills to do the job better and serve the public better.
If the starting point is that everyone else is an obstacle except yourself, then I say you need to care more about doing your work and doing your part, recognising that there are pros and cons to every proposed change, and that effecting change involves patience, persistence and a hard slog.
Mr Louis Ng, although he is not a Public Service officer, as an MP and a public figure, he can do his part, too. If some civil servants tell you they dare not speak up, you can assure them that, from your own experience, you have always spoken up and never got into trouble.
If they feel the system does not allow them to make a difference, ask them what it is that they want to change. If it is a philosophical shift in Government policy, like selling land to pay for healthcare costs, then you have to explain to them this is not the policy of this current Government. If it is something that makes things better but their immediate supervisor is not supportive, then inform their Permanent Secretary or the Head of the Civil Service, or have a word with me, and I will see to it.
Where the Public Service has fallen short, it will address the problem. But when generalisations that tar the entire service with the same brush are made in public and, worse, further spread through media, it does not do justice to our officers. It discourages and undermines improvement efforts. So, I say to Mr Louis Ng, be part of the change, work with and encourage the Public Service as it strives to transform itself to build a better future for Singapore.
Assoc Prof Dr Muhd Faishal Ibrahim, Mr Louis Ng and Mr Patrick Tay asked a very pertinent question how the Public Service can look beyond paper qualifications, to recognise skills and competencies. And I believe Dr Teo Ho Pin asked that question, too.
This has important relevance to the SkillsFuture movement. We want to encourage Singaporeans to uncover their passions and aptitudes in a diverse range of skills and master them through lifelong learning. We want a meritocracy of deep skills, not one of past academic results. The behaviour of employers plays a big part to engender this culture.
Hence, the appraisal system in the Public Service is based on performance and demonstration of skills and competencies. A public officer is recognised based on his contribution and delivery of results, with past academic results having no bearing.
But what I think the Public Service can continue to improve on is the recruitment criteria, how schemes are structured and how people are placed into the schemes. For certain schemes, where officers have to analyse data, develop policies or even help lead large complex organisations, we do need to look out for applicants with cognitive skills, and academic results is one proxy to measure that.
However, for work that is vocational or skills-based in nature, and there are plenty in the Public Service, there is much less need to sort or select based on academic results, or structure diploma and degree holders into different schemes with different salary scales and structures. Instead, we should continue to recruit based on the applicant's passion, skills and aptitudes for the specific vocation.
Hence, one change that we can implement for such skills-based jobs is to merge existing schemes for diploma and degree holders. And beyond the point of recruitment, it is on-the-job performance that determines the officer's progression. If we do not do this, we can have a situation where someone without a degree but has mastered the craft after many years of experience and on-the-job training is pegged below a fresh degree graduate doing the same job. This does not do justice to mastery and craftsmanship.
PSD has done this merger for the generic Management Executive Scheme in the Civil Service in 2015. And as Assoc Prof Dr Muhd Faishal mentioned, MOE has also done this, so diploma and degree graduates now all come under the same Education Scheme. There are many other examples.
One most recent example is the Air Traffic Control Officer (ATCO) scheme. Changi Airport is one of the busiest airports in the world. To keep our skies safe and secure, we need highly skilled and competent Air Traffic Controllers (ATCOs) to plan, guide and direct air traffic in and out of Changi Airport. The Civil Aviation Authority of Singapore (CAAS) prepares ATCOs for the job through a very rigorous skills-based training programme.
Since July 2017, all ATCOs, regardless of their academic qualifications, will be placed to the same grade and receive the same salaries once they are assessed and found to have the skills required for the job. PSD will work with other public agencies to identify other areas and other schemes where we can implement this.
There are, however, situations where the profession or the industry feels that a separation of schemes between diploma and degrees is necessary. In those cases, we will establish a clear, performance-based pathway for an officer to upgrade from the diploma scheme to the degree scheme.
This is what the Ministry of Social and Family Development (MSF) will do for the Social Work profession. Today, certified social workers need to be social work degree holders. As such, those who hold relevant diplomas, for example, the Social Work diploma from Nanyang Polytechnic, can enter the sector as social work associates (SWAs), playing a supporting role to the degree holding social workers. To enable more diploma holders to become social workers, MSF has endorsed a new pathway. From the second half of this year, SkillsFuture Singapore, the Singapore University of Social Sciences (SUSS) and Nanyang Polytechnic will introduce a new work-learn programme for SWAs.
Through this programme, diploma graduates and promising SWAs with work experience will be able to undergo social work training with suitable employers, while attending classes at SUSS. This is a work-learn pathway, recognising that social work is really a craft and is skills-based in nature. At the end of the three-year programme, the trainees will attain a Bachelor of Social Work and be certified a social worker. Minister Desmond Lee will speak more about this at the COS for MSF.
Mr Chairman, I will conclude by talking about an agency that has been making a successful leap in changing its mindset and operating model. One public agency that is really this is the National Parks Board (NParks). Its vision has evolved over the years from creating a Garden City to having a City in a Garden.
This reimagining of its mission led to innovative projects that integrated nature with our urban landscape, such as Gardens by the Bay, a garden built on prime, reclaimed land, for an extended Central Business District (CBD), which is now a popular destination for locals and a must-see for tourists. There is also the Botanic Gardens, a national park within the city centre, now a United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage Site and a source of pride for Singaporeans.
In my dealings with NParks, I found that they put citizens' interests at the centre of whatever they do. From just providing a park near where you live, they are linking all the parks now through an island-wide Park Connector Network (PCN) so that they become one big park accessible to all.
In recent years, NParks has integrated into parks, public facilities, such as the Woodlands Integrated Healthcare Cluster, the Singapore Armed Forces Reservists' Association (SAFRA) Clubhouse at Chua Chu Kang, and the Singapore Institute of Technology Campus in Punggol. In Sembawang, it stepped forward to undertake the sprucing up of the only hot spring in Singapore into a Hot Spring Park for the public to enjoy.
NParks also uses technology to help officers work better and more productively. For example, information of trees is now captured in a digitalised platform, accessible on officers' mobile devices, and sensors are now being trialled and installed to detect tilt in trees so that mitigating measures can be taken early by the NParks officers.
NParks' people are valued for their skills and passion in this field. All officers are hired into the same Management Executive Scheme. About one third of them hold certifications in arboriculture, horticulture and park management. Our City in a Garden is the best place for these officers to polish their craft.
The Public Service never leads in terms of remuneration and benefits. This is our operating philosophy. We see what the industries are offering and try our best to be competitive so that we have our fair share of talent.
But where it concerns defining our missions, adopting of new technologies or HR practices in response to emerging opportunities or national challenges, we must be prepared to be pioneer implementers and make that demonstrative impact. This is our role in Singapore's transformation journey, to continuously improve our service to the public and build a better Singapore.
The Chairman: Mr Gan Thiam Poh.
Mr Gan Thiam Poh (Ang Mo Kio): Mr Chairman, what measures does the Government have to review our population strategies so that we will have a vibrant economy and a cohesive society?
Young people are needed for a dynamic economy and to support older people who are living longer lives, some of which are years of poor health, resulting in high medical costs. However, our birth rates have been low, hovering around the TFR of 1.2 for years. We are just not producing enough.
For a cohesive society, it is necessary to have the majority of residents who are Singaporeans at birth, growing up with common life experiences to facilitate a stronger national identity and a sense of unity. Immigration can only be implemented at a measured pace because social integration and cultural assimilation can pose challenges.
Will the Ministry share with the House its plan to reboot our population growth strategies and policies?
Mr Kwek Hian Chuan Henry (Nee Soon): There is a beautiful saying, \"having a child is like having a little piece of your heart running outside you\".
My wife and I are expecting our first born in the coming days. Parenthood changes people. I find myself wondering aloud: what kind of Singapore will my child grow up in? Will Singapore still remain open, an exciting land of possibilities? Or will we become an insular country laden by debts arising from an ageing population?
Today, Singapore is in a good position. We have achieved balanced and inclusive economic growth, provide substantive benefits to our people, while holding taxes relatively low.
This is partially because we attract international firms and talent which contribute significantly to Singapore's economy while shifting considerable tax burden away from Singaporeans, including the GST that we talked about earlier.
But our ageing population and the accompanying increase in social spending could knock us off our current balance. What are the consequences for the future generations if our current demographics and immigration trends continue? What are the tradeoffs that we need to make in the next 10 to 15 years? For example, will we still be able to maintain our low tax rate and high level of benefits to citizens at the same time?
Beyond our current strategy of strengthening the Singapore Core, plugging infrastructure gaps, strengthening integration, improving productivity, and ensuring quality immigration, what other immediate steps must we take now, so that our people support a Singapore that remains open to the world?
Mr Vikram Nair: Sir, I agree with my colleagues that having children is a wonderful thing and we should try and have more children if we can. Unfortunately, Singaporeans have not been very productive in this respect, myself included.
Historically, Singapore's growth has, therefore, been supported not only by organic population growth, but also by a sizeable transient workforce. As a successful and economically vibrant city, we remain an attractive place for foreigners.
What is the Government’s current approach on managing foreign worker inflows so that we can ensure our businesses remain competitive? At the same time, what is our approach to ensure that we also assuage the concerns of Singaporeans that these foreign workers may take away rather than add to employment opportunities for Singaporeans?
The Chairman: Do work harder, Mr Vikram. Mr Alex Yam.
Mr Alex Yam (Marsiling-Yew Tee): Mr Chairman, on the contrary, my wife and I were blessed to welcome our third new addition to our family in December. So, apart from sleep deprivation that has once again visited upon my house, longer nights, messier clothes and a much rowdier house, I must say, with all honesty, that having our three boys has made our love stronger and our home happier, our troubles forgotten and our future so much more worth living and fighting for. So, congratulations are in order to Mr Henry Kwek Hian Chuan in advance.
Indeed, parenthood is not just a diaper-changing experience, it is a life-changing one. You learn how sacred and special it is to have given life, to have in your responsibility the care of a new life that is not just a part of your life but quite literally part of you.
Parenthood should not be scary or difficult. Yes, admittedly your life changes, it is no longer yours alone as your vocation becomes one of a steward of a precious life. Things change, sometimes dramatically so.
Yet, despite all the joys of extolling the wonders of parenting, our TFR continues to be low in Singapore. That said, this is not one of those Uniquely Singapore problems. TFR has been in decline worldwide for the last 50 years. The question is, has joy gone out from parenthood? Or is there just too much pressure in society?
If we look at the Department of Statistics numbers, it is clear that a larger cohort of young Singaporeans will be entering their peak marriage and childbearing ages in the next decade. The question that some would definitely ask will centre around what further support or money will the Government be able to provide to encourage Singaporeans to marry earlier and to help build stronger families for Singapore's continued survival.
Let us be honest. The Government has provided lots of practical assistance which I do not have to repeat. With all the grants and support extended to young Singaporeans, this ought to be the best time to have children. But are these measures enough?
I think what is glaring in the conversation, not just in Singapore, but in many other countries facing low TFR, is just how overtly nationalistic and wider societal demands there are to justify families having more children. In Russia, they launched a \"Give Birth to a Patriot\" scheme and Taiwan politicians refer to the low TFR as a \"threat to national security\". Even in Denmark, a government-sponsored advertising campaign went even further by simply asking Danes to, forgive me if I pronounce this wrongly, \"Knald for Danmark\", which I will not attempt to translate for fear of the hon Speaker's censure.
The country's survival, economic growth, national duty, patriotic mission – all big words. Important but missing in all of these campaigns is, most important of which, the love that parenthood truly brings, the importance of marriage, the joy of family life.
How do we encourage fruitful marriages without relying on focus on national needs? How do we emphasise the joy of family without the need to refer to tax burdens and incentives? Those are perhaps more critical questions for us.
How do we, therefore, support young Singaporeans in their very personal parenthood journeys without being too intrusive? How do we build a city and a culture that will both value the career aspirations of the young and yet have a strong support network for parenthood and family life?
Can we reduce the unequalness of our grants and schemes that segregate mothers between those who are working and those who are not? This discriminates between both groups who are equally noble in their duties as mothers.
Can we do more for adoption and thus perhaps reduce abortion rates?
Most of all, apart from the policies we have in place, which are useful nonetheless, how do we let young couples know that despite the sacrifices involved in parenthood, our society, our country, our Government recognise and support it.
The Chairman: I am not sure what the slogan is, but certainly the videos are quite entertaining. Mr Melvin Yong.
Mr Melvin Yong Yik Chye (Tanjong Pagar): Mr Chairman, I will be more direct. Our population is ageing rapidly and we are not having enough babies. According to a recent study by the United Overseas Bank (UOB), 2018 will see, for the first time in our history, the percentage of our population aged 65 and older, matching those younger than 15 years. At this rate, seniors will more than double the percentage of our youngest residents in 2030.
Researchers from the Institute of Policy Studies (IPS) estimated there will be 91 elderly citizens for every 100 working-age Singaporeans by 2080. If fertility rates in Singapore remain at current levels, the study projects that the ageing population will cause a drag of 1.5 percentage points on per capita GDP growth every year until 2060.
Over the years, the Government has rolled out many Baby Bonuses and incentives to encourage parenthood. Why has Singapore's TFR remained low? Will it continue to decline? What more can we do to encourage Singaporeans to have more babies?
Ms Kuik Shiao-Yin (Nominated Member): Last year, the Government announced that working dads would finally get two weeks of paid compulsory paternity leave where they used to be entitled to one. The Government also legislated for working mothers to go from sharing just one of their 16 weeks of paid maternity leave to sharing up to four weeks with their husbands. This is one area where the gender gap is skewed more in favour of women than men, so I am quite glad we are making strides for the rights of men.
I hope we can make things fairer for fathers because that would definitely make things fairer for mums as well. The Centre for Fathers' Chief Executive Peter Quek has said that today's fathers are a lot more hands-on in raising their children and they are the beginnings of a cultural shift and more men actually want to step up to the plate to be more participative caregivers to their kids and also to their elders. Some men are actually even choosing to be full-time caregivers because it comes down to a simple decision between husband and wife about who can drive the car and who cannot, or whose parent is the one who needs care or who has a greater chance at being fast-tracked in their career and who does not.
Full-time male caregivers are particularly courageous because they know what they are doing runs up against the grain of predominant assumptions about gender roles. Though these men are clear and have no regrets about their choices because they see the impact they are making on their kids and the elders in their care, they still feel hesitant and some even say they feel ashamed about letting other people know what they do for work.
I find this really troubling because they have nothing to be ashamed about and they are doing really noble work with long intergenerational impact and it is the same work that women have been doing for years, by the way.
What can we do to further recognise the gifts that fathers are to their children, and how can we help to affirm that men are just as powerful, impactful and necessary a caregiver to their children as women are? I hope we can offer a longer quantum of parental leave for parents to share as they wish. This would help families to make the decisions that are most appropriate for their context.
I was going to actually just push for having working mothers share up to eight weeks of their 16 weeks of paid maternity leave with their husbands. But my fellow Nominated MP, Asst Prof Mahdev Mohan, in the tea-room just now, who is a new dad, said, \"Eh, why not push for more?\" So, okay, on his behalf, why not 16?
Allowing more flexibility of leave to be shared between husband and wife would be really useful for working couples who are in this scenario where the woman has a better-paid job and better career-advancement prospects than her spouse. If they prefer that she remains in full-time employment while he goes part-time or leave the workforce for a season, then they should be allowed to make that decision rather than be forced into arrangements that are just dictated by gender. This will help couples feel a lot freer to manage their families and finances as they wish and this will also have an impact on the overall output contribution and productivity of our labour force.
To reduce disruptions to the labour supply, maybe there can be restrictions placed on how this additional leave is to be taken. I think the United Kingdom (UK) manages that by saying that leave should be taken in weeks rather than days.
Similarly, the same amount of adoption leave that is available to mums should be available to dads. Or alternatively, a longer quantum of gender-neutral adoption leave can be offered for parents to share as they wish.
I will end my cut with a request. At the 2017 COS, then Senior Minister of State Josephine Teo announced that the Government was undergoing a three-year pilot where Public Sector officers and their spouses would be given an additional four weeks of unpaid infant leave per parent. She mentioned that the length of the pilot was necessary for the National Population and Talent Division (NPTD) to test the impact of longer parental leave in a variety of work settings and that NPTD will be using this experience to get a clearer idea of whether a nationwide rollout was feasible. So, I hope the Second Minister can give an update to the House of any useful insights that have already emerged from the pilot.
Mr Seah Kian Peng: When I first became an MP in 2006, I had pushed for paternity leave for six consecutive years of COS. So, I was delighted that we finally put this into law.
I thank Ms Kuik Shiao-Yin for speaking on behalf of fathers. I must declare my interest. I have been on the board of the Centre for Fathering longer than I have been an MP. So, paternity leave is close to my heart. I know that the take-up rate for paternity leave in Singapore was 44% in 2015 and 38.5% in 2014. What do we make of this statistic?
To me, the situation is akin to less than half of eligible mothers taking up their maternity leave benefits. My questions to the Minister are as follows.
What was the take-up rate in 2016? What about for 2017 when Government-paid paternity leave was further extended to two weeks? Since the period of it taken by fathers is generally much shorter than those taken by mothers, why is the take-up rate of paternity leave still less than 50%? So, if we know the underlying causes for this low utilisation rate, how are we addressing them? Even if some dads and mums were to feel that the two-week leave is not much in the grand scheme of things, the fact that so few take it up should lead us to relook this policy.
Sir, in a way, it is the role of the Government to support and not dictate the role of fathers. So, I do not want to force paternity leave down the throats of families which do not want to take it. However, if the obstacle is something else, something that we can address as a matter of policy, then I think we are in a position and we ought to fix it.
Ms Tin Pei Ling (MacPherson): Sir, preschools, infant and childcare centres offer crucial support for working parents and influence their decision on whether to have another child. They also ensure that our young children receive the appropriate stimulations to promote healthy mental and physical developments, which form the essential foundation for their further learning as they move up the education system and even into adulthood.
To avoid a class divide as early as this, we must all the more ensure that children of low-income families receive quality early childhood education and care. Therefore, what more is the Government doing to ensure sufficient provision of affordable and quality preschools and care centres at the infant and childcare stages? Beyond just having more centres, what other support is the Government offering to encourage families to send their children to preschools?
The Chairman: Ms Sun Xueling, can you take the two cuts together?
Ms Sun Xueling (Pasir Ris-Punggol): Like childcare, infant care options weigh heavily on the minds of parents. I am concerned that some well-meaning parameters, such as space-to-infant ratio has overly limited the number of places the centre can provide for infants. What can the Ministry do to ensure affordable and quality infant care places so that young mothers have real options to put their infants in infant care so that they can go back to the workplace post-maternity leave?
Mr Chairman, I am glad to hear that since its launch in 2013, 1,500 companies have benefited from the Work-Life Grant which provides funding and incentives for companies to offer flexible work arrangements (FWAs). However, I am puzzled as to why, based on the 2016 survey when about eight in 10 companies are willing to let their employees go on a planned time-off or to telework to attend to personal matters and one or two companies are willing to let their employees work from home on certain days of the week, FWAs are not more prevalent in Singapore's workplaces.
Can the Ministry share where the gaps are since employees are keener on FWAs and employers, based on the survey, are willing to let employees benefit from FWAs?
The Ministry has been systematic in promoting FWAs for employees, defining such arrangements as being flexi-time, flexi-place or flexi-load. I would like to enquire if similar commitments should be placed on employees to ensure that FWAs are taken on responsibly. I am keen to see FWAs are being rolled out on a sustainable basis in society, and that can only happen if both employers and employees see the value in the arrangements.
Lastly, on the implementation front, can we consider rolling out FWAs on a sectoral basis? Can we work with some queen-bee companies in these selected sectors to get early buy-in? In fact, can we push the boundary by legislating FWAs for selected industries?
The Chairman: Mr Darryl David. You can take your two cuts, please.
Mr Darryl David (Ang Mo Kio): Thank you, Mr Chairman. My speech will also contain quite a few number of \"F\" words, specifically flexible, family and friendly. In recent years, a number of companies have implemented flexi-work schemes where employees can choose to start and end work within a range of agreed times. Progress in digital technology has also been the catalyst for the development of collaborative project management platforms that have reduced the need for employees to be housed in the same physical workspace.
These practices have facilitated the gradual transition of business models from those that focus on office presence and facetime to those that emphasise deliverables. These initiatives are, indeed, starting to make an impact in helping employees better manage demands from work and family.
On the public housing front, significant progress has been made in housing to support couples that start a family early, and enhancements made in preschool provision have also helped dual-income families better manage the education needs of their young children.
Despite these measures, the 20- and 30-somethings remain concerned about their ability to manage their work and family aspirations. How can the Government better support work and family aspirations, and encourage private sector companies to introduce more family-friendly workplace policies?
Sir, at the cultural crossroads of global flows, Singapore, like many of the multicultural cities in the world, has welcomed, and will continue to welcome, people from around the world for many years. And there are, indeed, those who have come to our shores who end up making Singapore their permanent home.
While the Government needs to be mindful about managing the socioeconomic impact of immigration on Singaporeans, many of us will agree that immigration certainly leads to a richer and more diverse society. However, as we go about forging a national identity and building an inclusive Singapore, we need to ask ourselves what can be done to manage this new diversity in our society that has been brought about by immigration?
A Canadian Prime Minister, whose country was rated by a study as the second-best for migrants to live in, once said, and I quote, “Diversity is our strength.” As we move forward, and as our society welcomes its share of new citizens, I hope that the Government can share how it plans to strengthen integration and build social cohesion such that we, as Singaporeans, can also view diversity as one of our strengths.
Ms Rahayu Mahzam (Jurong): I will take my two cuts together. Singapore attracts people from all over the world. They want to work and live here and raise their families here. We have seen many different communities come to Singapore to make it a home, enjoying our social fabric. These new communities bring with them their language, culture and these add vibrancy to our cultural landscape.
However, it is inevitable that, from time to time, we see some tensions as people learn to appreciate different cultures and ways of life. Some may feel uncomfortable with or suspicious of people and communities whom they are not familiar with. In Malay, there is a saying \"tak kenal maka tak cinta\", which means \"you do not know so you do not love\". When you do not know someone, it is easy to attribute faults or make that person a common enemy.
On occasion, I hear complaints of lack of friendliness and of noise attributed to the newcomers in our community. These may seem like petty issues, but it affects our day-to-day lives. At a more serious level, the newcomers are seen as taking away all our jobs and breaking our families. These negative sentiments need to be addressed.
We need to accept that global boundaries have become porous and that Singapore's economy is also dependent on it being open. Some people may be here only for a temporary period. Some may be new citizens. In any case though, they are part of our big community. For Singapore to do well, the community needs to be cohesive and integrated. There needs to be platforms to encourage interaction and foster understanding. I understand that there are many efforts in place to integrate the different communities. What more can be done to strengthen integration and bring about greater cohesion?
I have been married for about six years before I became pregnant with my baby. I delivered a baby boy last year when I was already 37 years old. My experience is not an uncommon one. We do see many people marrying later and having children later in their lives. Many of us get caught up with our careers and may not plan the time for finding a partner and building a family. It takes effort and time to find the right partner. And most Singaporeans want to have all things in place before they start a family. This will also take time.
Of course, it is best if we can encourage Singaporeans to get settled down and have children when they are younger. But the reality is that this may be easier said than done. With couples marrying later, more married couples may face difficulties in conceiving or have challenges during pregnancy. Will the Government provide more support for these couples, such as through enhancing assisted reproduction technology co-funding or raising the age limit to 40 years and above?
The Chairman: Order. I propose to take the break now.
[(proc text) Thereupon Mr Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 3.15 pm.
Sitting accordingly suspended
at 2.52 pm until 3.15 pm.
Sitting resumed at 3.15 pm
[Mr Speaker in the Chair]
[(proc text) Debate in Committee of Supply resumed. (proc text)]
[Mr Speaker in the Chair]
The Minister, Prime Minister's Office (Mrs Josephine Teo): Mr Chairman, I thank Members for their thoughtful questions and suggestions. I am very pleased, of course, to know that several Members are contributing to our TFR – Mr Henry Kwek and his wife, Mr Alex Yam, Mr Desmond Choo recently and Ms Rahayu Mahzam and Mr Louis Ng, not so long ago. And I do echo the Chairman's exhortation that everyone else who can help, please chip in.
Mr Alex Yam has shared with us what is happening in Russia. And, as it turns out, they have established the scheme called the Order of Parental Glory and they did so in 2009 because Russia also has severely low rates of birth. And what happens is that to receive the Order of Parental Glory, you go to the Kremlin and the President presents it to you. But in order to qualify, you have to have seven children. So, I think if we can get there, I am sure something can be arranged at the Istana.
At last year's COS debate, I focused on how we can support Singaporeans to marry and raise a family. Today, I would like to take a longer-term view and share more broadly about how our population strategies prepare us for the future.
We want to work towards a Singapore population that can, one, support a vibrant economy, so Singaporeans can earn a good living; two, enable a cohesive society, where people from different backgrounds can live in harmony; and three, sustain a stable citizen population over the long term, where citizens have a strong sense of national identity.
It is a delicate balancing act to meet all three objectives. This is more than just the numbers. It is also about sensitivity towards how connected people feel with our evolving society. At the same time, we face two long-term challenges as we shape our strategies: first, a rapidly ageing population; second, our low TFR, which many MPs have spoken about.
Mr Gan Thiam Poh and Mr Henry Kwek asked about the Government's strategies to secure a bright future for Singaporeans in view of our demographic challenges. In this debate, I will provide an update on our population strategies and outlook, how we are planning ahead, as well as further measures to support marriage and parenthood.
Mr Chairman, we have three broad strategies to shape a healthy population profile. First, to enable all Singaporeans to age with purpose and grace. Second, to make Singapore a Great Place for Families where marriage and parenthood are achievable, enjoyable and celebrated. And third, to maintain a careful balance in our foreign worker as well as immigrant flows.
Let me start with the first strategy, which relates to a Motion debated in Parliament last month. Members will recall that the debate reaffirmed that \"seniors are a gift to society\", and we need a \"whole-of-Singapore effort\" to build a \"nation for all ages\".
Our ambition is to enable all Singaporeans to age confidently with purpose, grace and dignity. We are making good progress. Today, Singaporeans are living an average of 74 years in good health, compared to 67 years three decades ago. Many who wish to continue working past the legal retirement age of 62 have been able to do so with our re-employment policies. More than four in 10 residents aged 65 to 69 are employed. This is the fifth highest employment rate when compared against the 35 Organisation for Economic Cooperation and Development (OECD) countries.
About six in 10 of active CPF members are now able to set aside the Basic Retirement Sum in their Retirement Accounts when they turn 55. By 2020, this proportion is expected to increase to seven in 10.
But as Senior Minister of State Dr Amy Khor shared last month, we must continue to deepen our efforts at three levels: at the individual level, to enable seniors to continue pursuing their passion or causes, to work as long as they wish to; at the family level, to empower caregivers to give better support to our seniors to age-in-place; and at the community level, to build stronger communities of care, to complement family support for seniors.
We also want our seniors to stay healthy as they live longer. With good health, more seniors who wish to work can do so. That is why we raised the re-employment age from 65 to 67 last year. We also provide employers wage offsets through the Special Employment Credit to encourage them to employ seniors. Last year, under the Adapt and Grow initiative, we enhanced support for mature professionals, managers, executives and technicians (PMET) jobseekers, to make it more compelling for employers to hire them.
We also recognise that with extended longevity, families worry about their ability to manage should serious disability strike. This is why, having introduced MediShield Life, MOH is reviewing ElderShield to strengthen support for seniors requiring long-term care.
We will continue supporting Singaporeans to lead active lives well into their silver years, contributing to the economy and society while enjoying strong bonds with their families and communities. At the same time, we should find meaningful ways to support families who are bringing up the next generation.
This is why our second broad strategy to shape a healthy population profile is to make Singapore a Great Place for Families. This means strongly supporting Singaporeans' aspirations to marry and have children so that both are achievable, enjoyable and celebrated.
Singaporeans continue to value families, and the pace of family formation remains strong. Over the last four years, the number of citizen marriages and births has been above the past decade's average.
But as Mr Melvin Yong and Mr Gan Thiam Poh highlighted, our TFR has remained low. It has hovered at around 1.2 in recent years. Last year, our TFR fell to 1.16. Why this apparent contradiction, when the number of births has been higher in the past few years?
With your permission, Chairman, may I display some slides on the LED screens?
The Chairman: Yes. [Some slides were shown to hon Members.]
Mrs Josephine Teo: This chart shows our citizen population by five-year age groups. From the 1950s to mid-1960s, we experienced a \"Baby Boom\", where births reached elevated levels. These cohorts are now in their mid 50s to 60s.
When many of these \"Baby Boomers\" married and started having children, we saw an echo effect in the late 1980s and 1990s where births also reached elevated levels. These are the cohorts which Mr Alex Yam spoke about.
Today, many of these \"echo Baby Boomers\" would be about 20 to 30 years old. They are included in the denominator used for calculating TFR. But they are only just entering the peak child-bearing ages. Compared to earlier cohorts, more of them are not yet married or have not started having children. When they do, we can expect the numerator, which is the number of births, to increase further. TFR could then also increase.
Like Mr Melvin Yong, Members may wonder if our TFR will further decline, as parenthood competes with other priorities. Or could this dip be more like that of the year 2010, where it appeared to have been due to couples holding back parenthood plans in 2009 because of the Global Financial Crisis? We cannot say for sure. But based on many interactions with young people, I remain convinced and optimistic that we should continue to strengthen support for young families.
Consistent with my own observations, our surveys show that a large majority of young Singaporeans want to marry and have children. However, what is also very clear is that these are not their only life goals. Half of the singles aged 21-35 whom we surveyed in 2016 wanted to focus on their career or studies before marrying. Almost eight in 10 said that travelling was an important life goal.
One couple who managed to start a family, while pursuing their interests, are Kenny and Peiru. They are a sporty and adventurous couple who enjoy travelling and exploring the outdoors. As they were about to get their keys to a new Build-To-Order (BTO) flat in Punggol Waterway, they planned for their wedding. They knew that they wanted a meaningful occasion with family and friends and decided this was achievable without over-spending.
Soon after getting married, Peiru found that she was expecting, and the couple put their sports and travel plans on hold. However, as soon as Peiru was out of confinement, they resumed their active lifestyle but, this time, with a new focus – making sure that baby Faith is part of it. In fact, they recently took Faith on a family-friendly coastal hike in Perth, slightly less challenging than what Kenny and Peiru are used to, but it is a start.
Just like Kenny and Peiru, young Singaporeans today have many opportunities to pursue their passions. They may also prefer having their own home or establishing themselves financially before settling down.
These factors have contributed to Singaporeans marrying and having children later. Two decades ago, the median age of Singaporean women at first marriage was around 26. Today, it is around 28. The median age of mothers at first birth has accordingly increased from 28.6 to 30.5.
However, couples who marry later are more likely to face difficulties conceiving. Medically, it is well-established that one's chances of conceiving diminish sharply after the age of 35.
For some couples, it is not that they set out to marry late. It is just how their lives unfold. The Government cannot interfere with how people go about finding a partner, or whether and when they start trying to have children. These are personal decisions. But we can help those who are ready to settle down.
Mr Alex Yam spoke about the Government's support for Singaporeans to marry and have children earlier, and we thank him for his suggestions. Since 2001, we have invested significant resources in a comprehensive Marriage and Parenthood Package. We recently strengthened support, especially for young Singaporeans, in three main areas.
Mr Chairman, may I have your permission to distribute a compilation of the Government's key support for marriage and parenthood?
The Chairman: Yes. [A handout was distributed to hon Members.]
Mrs Josephine Teo: First, we helped more couples get a home of their own more quickly. Since 2015, more than 50,000 new BTO flats have been launched, with priority allocation for first-timers. The vast majority of couples like Kenny and Peiru that applied for a BTO flat in a non-mature estate were able to select a flat by their second try, and all were able to do so by their third try. To provide faster access to housing, HDB will start to launch 1,100 flats with shorter waiting times of around two and a half years this year. And I understand that there is another batch of 2,000 to be launched in 2019.
Second, we enhanced preschool support to give parents greater peace of mind that their children are well taken care of while they work. Ms Sun Xueling and Ms Tin Pei Ling had asked whether we can do more. The Government is committed to ensuring that every parent who wants a preschool place for their child will be able to have one. Over the past five years, we increased preschool capacity by 50%. There are now about 7,800 infant care places and 140,000 childcare places. We also ramped up affordable, quality places through the Anchor Operators (AOPs), Partner Operators (POPs) and MOE Kindergartens, with a focus on new estates with many young families.
Today, a median-income family who enrols their child in an AOP pays about $350 a month for full-day childcare, after Government subsidies. The Early Childhood Development Agency (ECDA) will continue to increase provision of affordable and quality infant care and childcare places.
Over the next five years, there will be 40,000 new full-day preschool places to meet the needs of parents. At the same time, we will continue to safeguard the safety and well-being of children in preschools, including through regulation on space norms, which Ms Sun Xueling asked about. MSF will elaborate more on ECDA's preschool efforts later in the COS debate.
Mr Darryl David and Ms Sun Xueling asked about the progress made in encouraging more family-friendly workplaces. We have, indeed, strengthened work-life support to help working parents achieve both career and family aspirations. Today, a working couple can access 20 weeks of paid leave and two weeks of unpaid leave in their child's first year.
Ms Kuik Shiao-Yin suggested increasing leave support for fathers and extending adoption leave to adoptive fathers. Today, adoptive fathers already enjoy the same Paternity and Shared Parental leave provisions as biological fathers. We have also progressively enhanced our leave provisions for fathers over the years.
For instance, we introduced Paternity Leave in 2013 and doubled it to two weeks in 2017. Similarly, we increased Shared Parental Leave from one to four weeks over the same period. In total, fathers, including adoptive fathers, can tap on up to eight weeks of leave to care for their children in the first year of birth.
Our unions know that each time parenthood-related leave is enhanced, there is some risk of inadvertently denting the employment prospects of parents and causing some friction with other employees. Given the recent enhancements to the legislated leave provisions, we will give businesses some time to adjust. In the meantime, the Public Sector is piloting an additional four weeks of unpaid infant-care leave, for both fathers and mothers, to test the general viability of longer parental leave. It is only six months since we implemented that pilot. The take-up is encouraging. We have got more than 80 staff who have taken it up. It is still a bit too early to form a view. But I think the feedback from these staff who have taken the extended leave is that the leave has been very helpful.
We will also continue to encourage more fathers to make use of the enhanced leave provisions to care for their children. Since Paternity Leave was introduced five years ago, take-up rates have increased from 25% to 46%. As Mr Seah Kian Peng pointed out, there is still room for improvement. The Government pays for the Paternity Leave in full and we hope it helps employers to be supportive of employees who are new fathers.
In addition to parental leave, we have strengthened support for workplace flexibility. More than 350 employers, covering about 250,000 employees, have adopted the Tripartite Standard on FWAs. This was launched just about six months ago. Three in four of these employers are from the private sector, including small and medium enterprises (SMEs). I believe Ms Sun Xueling will agree that this is a good first step, as a society, in moving towards encouraging FWAs. But there is much more to do. We will encourage more employers to sign on to this Standard to distinguish themselves as employers with progressive workplace practices. I will speak more on the issue of FWAs during the COS debate for the Ministry of Manpower (MOM).
At the same time, these support measures would not work if employees do not have the confidence to tap on them because of unsupportive supervisors or co-workers. This is why the Government takes a multi-pronged approach to helping Singaporeans achieve their marriage and parenthood aspirations, including by encouraging employers and community organisations to lend strong support.
We will continue to enhance our policies where possible. Today, I will outline five further enhancements.
First, we will do more to help couples own a home faster. As announced by Minister Heng Swee Keat last week, we have enhanced the Proximity Housing Grant to provide more support for couples who wish to live together with or near their parents. Some young couples are ready to settle down earlier in life and wish to apply for a BTO flat. We will provide more flexibility in our grant and loan processes to better support them in owning a home. Minister Lawrence Wong will share more later in the debate.
Second, we will provide more assistance for couples who face difficulties conceiving. This is also what Ms Rahayu Mahzam suggested. Today, eligible couples receive co-funding of 75% of the costs of Assisted Reproduction Technology (ART) treatment. From 1 April 2018, we will raise the maximum support available, from $6,300 to $7,700 for fresh cycles; and from $1,200 to $2,200 for frozen cycles.
Third, we will enhance healthcare assurance for young families. Today, all newborn citizens receive a MediSave grant of $4,000 that can cover their MediShield Life premiums up to age 21. We will go further and extend MediShield Life to cover serious pregnancy and delivery-related complications so that expectant parents can have less to worry about. MOH will share more details in the coming months.
Next, we will strengthen work-life support. While we have significantly enhanced parenthood-related leave provisions, there are sometimes unexpected caregiving needs that put families under stress, for example, congenital conditions or sudden illnesses among infants, or in cases of multiple or pre-term births.
Our fourth enhancement is to introduce a new Tripartite Standard to encourage employers to provide caregiving leave in such instances. To promote voluntary adoption by employers, such leave will be unpaid and kept to four weeks. The Standard also provides up to two weeks of unpaid leave for employees with immediate family members who are hospitalised. So, this Tripartite Standard will really help the sandwich class, that is, those who have to look after the young as well as the seniors in their homes.
The fifth enhancement is to extend and enhance the Work-Life Grant. We will provide more support to businesses to encourage the adoption of FWAs, in particular, job sharing. These will make it easier for employers to implement practices that enhance family-friendliness. I will share more in a few days.
Besides these policy enhancements, employers, co-workers and the community can also provide strong support. For example, Mr Alex Yam will be glad to know that the PA's Embracing PArenthood Movement, which celebrates young families, reached out to 30,000 parents and caregivers across 250 celebrations held nationwide last year. I have attended some of these very joyous occasions that signal to the new parents that you are not alone and that the whole community is here to support. And so, through this Movement, several parent support networks have also been formed. We will continue to strongly support Singaporeans to start families sooner rather than later. Making Singapore a Great Place for Families is a continuous effort. The Government will do its part and work with employers and community organisations to keep up the momentum.
Mr Vikram Nair and Mr Henry Kwek asked about our foreign workforce and immigration policies. Our third strategy to achieve a healthy population profile is to maintain a careful balance in foreign worker as well as immigrant flows.
Our total population growth has slowed considerably. Growth was 1% per year over the last five years, compared to 3% per year for the previous five years.
Mr Chairman, I would like to show one slide and this has got to do with our working-age citizen population. Our working-age citizen population will soon shrink. Even with immigrants, the number of Singaporeans aged 20 to 64 is projected to peak at 2.2 million around 2020 and then it will decline thereafter. Without immigration, it would have started to shrink earlier and decline at a much faster rate.
Recognising this trend, we have started transforming our economy towards lower manpower reliance and more productivity-driven growth. Recent results are encouraging. As Minister for Finance shared last week, last year's productivity growth was the highest since 2010. We should press on to raise productivity in all sectors of our economy. However, to sustain a healthy growth momentum that provides good jobs for Singaporeans, some workforce growth is still necessary. Therefore, we will continue to support higher labour force participation among locals and balance these efforts with a calibrated flow of foreign workers that complements our local workforce.
From 2013 to 2015, foreign employment grew but at a much slower pace than the earlier years. In fact, since 2016, due mainly to cyclical factors in the Construction and Marine and Offshore Engineering sectors, foreign employment fell even as local employment expanded.
MOM has also stepped up efforts to emphasise complementarity between the local and foreign workforce. The Fair Consideration Framework (FCF) sets out clear expectations for companies to practise fair hiring. The Human Capital Partnership Programme supports progressive employers who are committed to strengthening local-foreign complementarity. A new Capability Transfer Programme will support businesses, associations and professional bodies for the specific purpose of building up local capabilities through the help of foreign expertise.
By focusing on local-foreign workforce complementarity, we continue to see good employment outcomes for Singaporeans. Employment rates for those aged 25 to 64 are on an upward trend. Unemployment rates have generally remained low. And over the last five years from 2012 to 2017, real income at the median and 20th percentile of full-time employed citizens grew by 3.9% and 4.3% per annum.
There is more to be done. For example, we can better match local jobseekers to occupations with significant vacancies and help them access new jobs that are being created. This will benefit both businesses and the local workforce. MOM will provide a fuller update later in the debate.
From now till 2020, workforce growth will be around 1% to 2% per year. This is significantly less than in the past. From 2010-2020, we are looking at 1% to 2% growth. Compared to the previous decades, you will see very clearly that workforce growth will slow significantly in this decade. Having said that, we think that it is a more sustainable pace going forward. We appreciate businesses' efforts to make adjustments, and the economic agencies will continue providing strong support through various schemes and programmes.
While managing foreign workforce flows to complement the local workforce, it is also important that we carefully manage immigration flows. Without immigration, not only will our working age population shrink rapidly, the total number of citizens will eventually decline.
This is why, each year, we take in a carefully balanced number of new immigrants. Last year, 22,076 Singapore Citizenships were granted, about the same as in the past few years.
Mr Gan Thiam Poh asked if our immigration policy will change, given our low TFR. I would like to show another slide. If our current citizen population was able to replace itself with a TFR of 2.1, we can have a stable citizen population well into the future. What you see on the chart is that our citizen population is 3.4 million today, or as of 2017. And if you project well into the future, assuming a TFR of 2.1, then even without immigration, the citizen population is stable.
But, at the current TFR, and if there was no immigration at all, our citizen population will shrink in the long term. You see that through the blue line which assumes a constant TFR of 1.2 and no immigration. At around the current rates of immigration, we are close to achieving the same effect as if we had full-replacement TFR.
The dotted lines, one that shows immigration of about 15,000 Singapore Citizenships granted a year; the other dotted line higher on the graph, 25,000. Members will see that between those two dotted lines, we will be able to mimic the situation as if we have replacement TFR.
Therefore, we do not expect any major changes to our immigration policy presently. In other words, with a moderate level of immigration, we can prevent the citizen population from shrinking in the long term.
We have also taken in a steady number of Permanent Residents (PRs) each year, many of whom take up citizenship eventually. The PR population remains largely stable at around 530,000, with 31,849 PRs granted last year.
But as I said earlier, it is more than just the numbers. We are selective about the profile of our immigrants, because it affects how we grow a strong national identity. This is why we prioritise not only those who can contribute, but those who are also prepared to sink roots in Singapore and can integrate well here.
A significant proportion of citizenships granted each year have family ties with Singaporeans and/or lived here for some time. Kenny, whom I mentioned earlier, was born in Malaysia, and he came here to study when he was 18. There are many examples like him and Peiru, where a Singaporean marries a foreigner and both have chosen to settle in Singapore to raise their young ones.
Mr Darryl David and Ms Rahayu Mahzam asked what more can be done to strengthen integration. It starts with how we see ourselves and how our nation was built up.
As Prime Minister Lee reminded all of us in his New Year Message, \"Our forefathers came from China, India, the region and beyond, leaving their families behind, to seek better lives here. They came as sojourners, with no intention to stay. But slowly, this changed. They brought their families over or formed families here. They built hospitals, schools, mosques, temples and churches for their communities. They brought their own cultures and traditions, interacted with one another, and wove these strands together into a rich and diverse tapestry. Over time, out of their shared experience grew a Singaporean identity, a shared sense of being rooted in Singapore\", end quote. The journey of integration starts with this understanding and is deepened though relationships, which have to go both ways.
Today, one in three marriages are between a Singaporean and non-Singaporean. Just as Peiru's family opened their hearts and welcomed Kenny into their lives, so, too, can Singapore continue to welcome people who are able to contribute, and certainly those who are committed to sinking roots here. And in the same way that Kenny has won over Peiru's family through his words and deeds, Singaporeans hope that newcomers can adapt to our local cultures and social norms and, for immigrants especially, to fully embrace our way of life.
To facilitate this process, the National Integration Council works with its partners in the community, workplaces and schools to help newcomers settle in better and appreciate Singaporean values and way of life. Over the past three years, the Council, under the leadership of Minister Grace Fu, has supported more than 320 ground-up integration projects by 150 organisations. These projects encourage immigrants and locals to bond over various interests, such as sports and volunteerism. Companies and schools have also stepped up to organise events on their own.
Ultimately, integration involves all of us. Integration will always be a work-in-progress and take time. As Ms Rahayu Mahzam correctly points out that while we seek to preserve the character of our society, we must also maintain a sense of openness to those joining us. This duality must firmly remain embedded in our DNA. It is the foundation on which we can build a harmonious, multiracial and multicultural society that stands the test of time.
Mr Chairman, I have outlined our approach for achieving a healthy population profile. We are also investing in building up quality infrastructure. Agencies have been planning ahead to create a vibrant and endearing Home in which Singaporeans can live, work and play. These include plans to build new towns, such as Tengah and Bidadari, and extend our rail networks. The Downtown Line has fully opened, and more lines, such as the Thomson-East Coast Line, Jurong Region Line and Cross-Island Line, are on the way.
The size of our population will be an important input for planning. Given recent trends in foreign employment and the current pace of immigration, we expect that (a) by 2020, total population is likely to be below six million; (b) by 2030, the total population is likely to be significantly below 6.9 million, as Prime Minister Lee announced previously.
Our long-term infrastructure plans are well in place and being steadily implemented. The respective Ministers will update on the progress of the plans under their charge.
Mr Chairman, to conclude, we have planned ahead to address our long-term challenges of an ageing population and low TFR, to ensure a healthy population profile that improves the lives of each generation.
Together, we can work towards a bright future in 2030 and beyond: (a) where Singapore remains a great home to build families and grow old together; (b) where our economy is vibrant and able to create good jobs for Singaporeans; (c) where society is open yet cohesive; and (d) where there is quality infrastructure to meet our needs.
Our strategies have Singaporeans’ interests at heart. We are well prepared for the future and have a strong foundation upon which to keep building up a nation that we will always be proud to call home.
The Chairman: Mr Gan Thiam Poh.
Mr Gan Thiam Poh: Mr Chairman. I thank Minister for the reply —
The Chairman: Is this a clarification?
Mr Gan Thiam Poh: Yes, a clarification. I just want to ask the Minister. I noted that the Minister mentioned that the immigration rates more or less will be stable. But can that rate be sustained, because all these new immigrants will one day become old? They will be part of our ageing population.
The Chairman: I will permit this clarification. Keep all clarifications to the end, please. Does the Minister want to give a quick response?
Mrs Josephine Teo: No, Mr Chairman. I agree and I hear the Member's question. I will certainly respond to him later during clarification time.
The Chairman: Thank you. Mr Zaqy Mohamad.
Mr Zaqy Mohamad (Chua Chu Kang): Chairman, since the Prime Minister launched the Smart Nation initiative in 2014, we have seen various initiatives implemented and many of these elements are already embedded within various ITMs.
Smart Nation has since evolved with the national agenda and I believe that Smart Nation needs to be inclusive to all and I would like to make special mention for the inclusion of seniors to enable better ageing, those with special needs and the vulnerable in the community.
It would be great if Smart Nation can leverage on assistive technologies and even AI, which may be able to augment the capabilities of our seniors and enhance their employability in the workforce.
We should also make use of health telepresence, sensors and smart logistics to reduce the need of our seniors and caregivers to make visits for checkups and collecting medication. Technology has the potential to also help bridge greater collaboration between patients, caregivers and medical care.
On that note, I would like to ask how we can better involve seniors in our Smart Nation initiatives so that they can also feel and identify with its intended benefits. With an ageing population, this segment will become one of our largest user segments.
For those with special needs, I would like to ask whether there are plans to study how we can make it easier for them to be economically active, better cared for and more mobile? What is Smart Nation’s agenda for our special needs community?
Chairman, Sir, the Smart Nation and Digital Government Group (SNDGG) was formed last year under PMO to bring together under one umbrella all the various Government tech agencies and teams.
Can PMO update us on how the approach towards Smart Nation has evolved under SNDGG? Does PMO have concrete goals and specific timelines on its push towards Government digitalisation and what are its plans to ensure that the digital rollout is on course?
As an advocate of Smart Nation, I hope to see how our Government’s digitalisation efforts can help the vulnerable better. With the Public Sector (Governance) Act in place, we should aim to use technology to speed up approvals for social assistance and other schemes that can help the vulnerable. I have seen many low-income families or elderly get caught in the process because of lack of documentation or access to information, especially in complicated family situations.
As we drive more digital services in Government, I would like to propose a goal that any applicant for social assistance or Government schemes should not be required to provide any documentation if the data already exists within the Government systems. Better yet, if we can put a goal to reduce processing time for all social assistance or financial scheme applications by a significant proportion as a result.
In addition, we should also develop smart systems that can empower frontline Government officers to make quicker assessments to approve help schemes and cut through the bureaucracy of approvals more quickly. We should leverage the Government’s vast sources of touchpoints and data across agencies to provide the frontline officers with a more holistic view of cases, to make quicker and better decisions.
Smart Nation, if done well, Mr Chairman, will be a gamechanger for Singapore. However, for that to happen, Singaporeans must understand it, feel its impact and stand to benefit from it.
Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, our Smart Nation initiatives (SNI) have been launched in earnest and it is pervading across almost all sectors of our society. SNI is about harnessing the full power and potential of digital and smart technologies to create a whole new dimension in jobs and business opportunities. I also have the impression that SNI is also about planning strategically about our future technology infrastructural needs. We have seen how, today, we are able to get many things done without even moving out of our seats in the office or at home. But there are areas we need to look into. Allow me to share one example where a doctor remarked that he finds there is just too much to pick up − he shared with me − and navigating the digital maze is just too onerous. The thought that crossed my mind was, if a professional finds it difficult, then what about the elderly in our community, especially those with low literacy?
At the same time, we read of disruptions in the digital age. The spread of viruses, hacking, theft from bank accounts, and the occasional technical glitches. Mailboxes are bombarded by spam mails that flood the mailbox purportedly from Government Ministries and even the Singapore telecom companies (telcos). Singtel subscribers shared with me almost daily that they get such mails and even the anti-virus could not stop these spams. So, how are we addressing these issues? How can telcos and banks, whose services are widely used by individuals and businesses, act against phishing and spams?
Despite all these, we cannot stop moving ahead in digital technology. Can we have an update on our SNIs and how much progress we are making in terms of software and hardware, including our data and tech infrastructure investment plans? What are the targets for the next three years to 2020 and beyond? How far ahead are we, compared with other nations? What else must we do to ensure that we are not left behind? In essence, what is our Smart Nation narrative at this juncture?
Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, at the core of Singapore’s Smart Nation vision is how digital technologies are leveraged to improve the lives of our citizens and enable our businesses to innovate to meet the aspirations of our people. So, how is the Government making digital services more citizen-centric and providing anticipatory services?
Technological disruption and digitalisation are bringing about rapid changes. To remain globally and regionally competitive, Singapore has to harness digital technologies and accelerate the transformation of our economy and society. How have the Smart Nation Strategic National Projects benefited Singaporeans and businesses? Have these strategic projects simplified and improved life and work for citizens? Has digital technology and the digitalisation of businesses driven economic productivity? If so, how?
While the Government plays a strategic role in making Singapore a Smart Nation, one of the goals of SNDGG is to lead the development of the Smart Nation in partnership with the public, private and people sectors. Can the Minister share the progress of the engagement and partnership of SNDGG with the private and people sectors? Has there been progress of public support for technology adoption and what more can be done to accelerate it?
Asst Prof Mahdev Mohan (Nominated Member): Mr Chairman, the Budget places a premium on the role of our SNIs. When I was reading for my Masters at Stanford University more than a decade ago, I was inspired and over-awed by the entire experience but, in particular, nothing impressed me more than a module in law, science and technology. At that time, it was just a module. Ten years later, it is the entire Masters focus group altogether.
That focus group or cluster combines the resources of renowned Stanford faculty experts, alumni practising on the cutting-edge of Technology Law, technologically-savvy students from the United States (US) and beyond, and it is located in the heart of the Silicon Valley – the inspiration for Smart Nation and Smart Technology. Is this what we are going towards? Is this paradise?
As we learnt, when we were debating on the rise of fake news and the responses that this House should take in time through the Select Committee's report, we noticed that there can be a \"dark side\" to tech. For fake news, we know we have to find ways to prevent, detect and combat it. You can patch news software, but you cannot patch reputation when it has been harmed.
Just as fake news can be damaging to reputation, big data and AI can perhaps be more damaging. It can be insidious and far-reaching. The potential for harm resulting from big data is all around us. It is embedded in the network services that we use daily. It is used in our smartphones, smart cars, global positioning system (GPS), even washing machines, and it is controlled with respect to and could be deployed by a coterie of very powerful companies.
Smart Nation strategic national projects are set to use these big datasets. While big data, granted, has an enormous potential to improve public services and business productivity, should we not bear in mind that there are also individual privacy concerns when data is used in new tech applications, services and research without our mindful, prior informed consent?
I say \"mindful\" because every time we download a new app, we agree to the \"terms and conditions\", but how many of us actually appreciate every line when we tick that box?
Mr Chairman, complex questions have arisen and will continue to arise. Let me give three examples. Who derives the benefits from this aggregate data? Is it the private companies? Is it our Government? Is it agencies? Or is it all of the above? What harm is done to individuals who have their data mixed with other persons', without any concern for maintaining identifiable, anonymised information? What duty will the Government and these corporations have to protect individuals' privacy and minimise any harm that could arise?
The New York Times very recently raised a specific example, which I would like to share with the House and I think would apply equally in Singapore. They suggested that the medical profession has, as a core ethic, the statement: first, do no harm. That is the oath they would take. The Silicon Valley tech entrepreneurs have a different mantra, Mr Chairman. Theirs is \"build it first, ask for forgiveness later\".
I would not want to change this work ethic partly because that is where innovation is born. But having said that, how do we square these diametrically opposed ethos? What happens then when you combine both these worlds – public health and Silicon Valley – when medical big datasets are crunched, processed and unthinkingly analysed by certain programmers for private benefit?
Technology is not neutral. The choices that get made in building technology also have these social ramifications.
In light of all of these, I would like to ask: will the Government, PMO and the relevant agencies consider taking a leaf from the UK Parliament which, a few years ago, established a Select Committee for this purpose?
The Chairman: Finish up, please.
Asst Prof Mahdev Mohan: Would we have a Select Committee, and could we look into doing so?
Mr Desmond Choo (Tampines): Chairman, Smart Nation is not merely about technologies but also a transformation in itself, a way of life and a way of conducting businesses. To be pervasive, we need to tackle barriers to adoption, such as multiple platforms for cashless payment and the lack of manpower, to implement these changes.
SNI involves the National Strategic Projects which cover five main areas, such as National Digital Identity, e-payments and Moments of Life. Could the Minister update on the progress in these five main areas? What efforts are in place to integrate SNIs into our ITMs?
For Smart Nation to succeed, it must also have sufficient competent manpower. Yet, competition for such talent is keen. The Ministry can consider also tapping on converting mid-career talent by adapting the Professional Conversion Programmes (PCP) for public sector needs. These are after all good jobs for Singaporeans. The desired scale of the Smart Nation movement requires that info-communications technology (ICT) officers in other parts of the Government are also trained and equipped to take on the new initiatives. Will sufficient training be put in place to ensure alignment and scalability?
Accelerating the take-up of SNIs might perhaps require greater policy leverage. For example, waiting for free market forces to reduce the number of e-payment systems might take too long because of substantial installed base effect and innovation resistance.
In a huge economy like China, there are really only two dominant e-payment systems. The Government or us can consider picking winners or legislating to require interoperability of our e-payment service providers or along the lines of the Cross-Carriage Measure that has been applied to the telcos.
The Chairman: Mr Teo Ser Luck, you can take the two cuts, please.
Mr Teo Ser Luck (Pasir Ris-Punggol): Mr Chairman, the Smart Nation project excites and raises a lot of high expectations amongst the businesses and citizens. However, many are still unclear and they all have different expectations of what is to come and what are the outcomes.
Local startups and SMEs hope that the Smart Nation project could provide them with opportunities or even a lifeline for their businesses, and many look at the Smart Nation project as a way to innovate, create and bail out their businesses. Most of them hope to work with the Government in such projects. And learning from smart cities like Estonia and Barcelona, many of the local tech companies and industries over there were involved in the projects very early on in the stage.
Smart Nation can become a platform and opportunity for our local businesses to scale their businesses locally and overseas. As we have the aspiration to become an innovation hub, we need to give our local businesses more opportunities to participate in the Smart Nation project. For individuals, there is a lot of expectation of what is to come, and whether they could catch up. Some of them wonder if this Smart Nation project is just another system to collect data, or just for data collection. Or would it be a very difficult transition, especially for the elderly? Or would this Smart Nation project make them smarter, as some joked?
The private sector needs to be given a chance for projects to participate in the Smart Nation project, and individuals need to adapt and learn. But the Smart Nation project's success cannot be solely dependent on the Government's efforts. It needs to be a collective effort among the Government, citizens and businesses.
So, I would like to ask PMO: how is the Government going to work with the industry? What are the possible areas of collaboration? And what tangible outcomes can citizens and industries expect?
Dr Tan Wu Meng (Jurong): Mr Chairman, Smart Nation is more than a buzzword. It can be a movement across Government and the economy, bringing people and businesses from different walks of life on board, for example, across public and private sectors, inspiring and attracting engineers, coders, user interface designers wanting to transform an industry or even dare to change how the world sees technology, starting in Singapore.
It also needs to have tangible benefits for the economy and jobs for people from all walks of life beyond just the technology sector. So, we need to look, too, at how Smart Nation can empower businesses to grow faster, work smarter, do better.
We see this in a very small way today, even with today's technology. Online delivery platforms have helped local small food and beverage (F&B) businesses serve customers further away, a broader clientele, a broader customer base with less floor space needed.
But when it is easier to implement cashless transactions, when it is easier to do identity authentication, either with a touch of a fingerprint or recognition of your face, all these basic services, if opened up, can be application programming interfaces (APIs) for businesses and other service providers to build upon throughout the Singapore ecosystem.
Can PMO share more about how Smart Nation can contribute further to Singapore’s economy and jobs? And how can businesses and citizens, people from all walks of life, contribute to the Smart Nation movement in a way that is constructive and empowering?
Ms Tin Pei Ling: Sir, I declare that I work in a firm offering relevant solutions, including e-wallets and biometric technology.
E-payments and National Digital Identity (NDI) are key thrusts of our Smart Nation strategy. These can help citizens enjoy greater convenience and control in how they go about interacting with businesses and the Government in their daily lives. A few questions to ask.
On e-payments, what is the adoption rate right now? How is the Government ensuring that our people, especially our elderly, are digitally ready? Cash always works and is a powerful substitute that discourages e-payment adoption. But we cannot do away with this option or else many elderly and micro merchants will suffer. There are also practical constraints to adopting e-payments for micro-businesses, for example, a lack of precious real estate at their stalls, and they have to operate several machines in order to process a transaction, cash becomes much faster. Given this, how will the Government work with private players to overcome these practical challenges? Are we still on track to implement and proliferate e-payment in Singapore?
NDI will be built upon SingPass. But SingPass has been fraught with issues lately. How will this affect or delay the implementation of NDI? How will the Government ensure that NDI will be robust and secure enough since citizens use it to access services and potentially sensitive and personal information?
Finally, the Government can play the role of setting the right policies and getting the basic infrastructure up. But Smart Nation requires all of the public, private and people sectors to work together. How then is the Government working with the local private sector players in implementing e-payments and NDI, as well as developing use cases or practical applications for them?
Mr Darryl David: Mr Chairman, SNI was launched in late 2014 with the aim of applying digital and smart solutions to provide better services to our residents and businesses. Since then, a number of new Government agencies and interagency task forces have been set up to drive our efforts to achieve that vision. It would thus be good if the Government could provide an update on the progress of the various strategic national projects mooted under SNI and link this progress to some tangible outcomes related to those projects.
The development of SNI requires a pool of talent with bold vision and strong technical competencies. We, therefore, need to grow our talent base and groom individuals to possess a strong mastery of information systems science and the application of actionable intelligence.
The creation of a talent pipeline takes time and we have to put in place a robust ecosystem that supports the training, development and deployment of these talents. Could the Government share what specific steps it is taking to ensure that we have sufficient large and diverse talent bases to deliver on the Smart Nation projects and goals?
Ms Sun Xueling: Chairman, the Government has been encouraging the private sector to embrace digitalisation so as to increase productivity and develop new trajectories of growth. Similarly, citizens have been encouraged to go cashless and use technology to achieve greater conveniences in daily living.
These efforts are worthy but, without foundational pieces, such as digital platforms and enabling infrastructure, private initiatives may achieve piecemeal success at best or, even worse, run into technical difficulties during implementation. I would thus like to understand how we are progressing in our five strategic national projects which can lay the foundation for which our society can make better use of digital technology.
Recently, a second outage hit SingPass and the Complementarity Assessment Framework (ComPass). This prompted some IT professionals to express concerns about the robustness of the gateway systems and their impact on our new national digital identity system. What investments would the Government be making to ensure the running of reliable, resilient and secure systems?
Mr Chairman, we need a concerted and sustained effort to conceptualise, build and manage Smart Nation-related projects. We should embark on Smart Nation as a new nation-building project. What that means is that we need a whole-of-Government approach, an all-talent-on-board drive. We have been hiring ICT professionals piecemeal from the private sector. Given the enormity and strategic importance of Smart Nation to Singapore, I suspect that we also need ICT talents who understand where we are and the legacy issues we may have and where we hope to get to. It is a Singaporean Smart Nation vision that we want to get to, one that is inclusive and beneficial to all in Singapore.
As such, how can we grow ICT leaders within the public sector with experience to drive and manage our Smart Nation ambitions?
Mr Png Eng Huat (Hougang): Mr Chairman, an e-registration plan for future election was unveiled last May. The Elections Department (ELD) said it will pilot a system that will scan the barcode on a voter's identity card to shorten the waiting time for voters at polling stations. As I understood from the news, the electronic system is only for registration. Voting will still be conducted using paper ballots with a pen.
Under section 42 of the Parliamentary Elections Act, which describes the manner of voting, subsection (2A)(b) states that \"the number, name and description of the voter, as stated in the copy of the register of electors, shall be called out\". With the proposed e-registration, the need to call out the voter's particulars would no longer be necessary.
This archaic practice of calling out the voter's particulars, directed at the polling agents, makes sense only if the integrity of the registers of electors is in doubt. After contesting in three elections, I have no reason to doubt the accuracy of the registers of electors to require a line-by-line checking by my polling agent on polling day.
The call-out can also be heard clearly in some polling stations due to the acoustics. Anyone with a mobile phone can secretly record the particulars of the voters as the names and National Registration Identity Card (NRIC) numbers are enunciated slowly. Some People's Action Party (PAP) polling agents would echo the particulars in an even louder voice, which is neither necessary nor provided for under the Elections Act.
Next, a new process to let registered voters to go to any counter in the polling station to get a ballot paper and to cast the vote into any available ballot box was also proposed last May. I welcome this change. The votes in the ballot boxes will be mixed in the counting stations. So, it makes no sense to require a voter to go to a particular line and to use a particular ballot box at the polling station.
It is also about time to replace the antiquated voting booth which was in use for many elections. The existing booth allows four voters to vote simultaneously but, because of its A-frame design, it does not offer much privacy. It is also not very user-friendly for persons with disabilities. With the proliferation of personal mobility aids of all shapes and sizes, the booth is certainly due for an overhaul.
In conclusion, would PMO confirm whether section 42 subsection (2A)(b) will be repealed with the introduction of e-registration?
Mr Murali Pillai (Bukit Batok): Mr Chairman, Sir, last month, Transparency International released its annual Corruption Perception Index. A hundred and eighty countries were ranked. Singapore came in 6th. This is an improvement over last year's ranking when she emerged 7th.
I would like to acknowledge the unstinting devotion of CPIB officers, past and present, in ensuring that Singapore remains one of the least corrupt countries in the world. Singaporeans have confidence that so long as CPIB secures evidence of corruption and wrongdoing against a person, it will take action and bring the person to Court to face justice, regardless of his or her background.
The principal tool of CPIB is the PCA which was enacted in 1960. It has been revised from time to time to ensure that CPIB officers are provided with the legal support necessary for their work.
In 1966, recognising that in a small country like Singapore, strict territorial limits would be insufficient to address potential mischief, the extra-territoriality provisions making Singapore Citizens liable for the offence of corruption overseas was introduced.
Notwithstanding the latitude of the provision, the primary focus of CPIB was on reigning in corruption in Singapore or corrupt acts outside Singapore which have a detrimental effect within Singapore.
The international landscape, however, has evolved. Recognising that some countries are less adept at handling domestic corruption, the international community has sought to require countries to enact criminal provisions aimed at discouraging legal persons, meaning corporations and natural persons, from engaging in corrupt practices overseas, especially with respect to offering bribes to foreign government officers. Both the United Nations (UN) Convention against Corruption, of which Singapore is a signatory, and the OECD Anti-Bribery Convention mandate this. Under the UK Bribery Act, it is an offence for a UK company not to have taken reasonable steps to prevent the occurrence of bribery overseas.
In light of these developments, I have the following suggestions.
First, to expand that extra-territoriality provisions in PCA to include corporations registered in Singapore.
Next, I suggest that the punishment provisions be relooked to ensure that they have a deterrent effect, especially with respect of corporations which cannot be jailed.
Finally, I would like to revisit a point I made in my Parliamentary Question in February 2017 about introducing an offence for corporations that fail to prevent the commission of offences, such as bribery. The Government, in its reply then, felt there was no need to do so, having regard to the Singapore situation. I respectfully suggest that the Government should relook this position, given the international dimension that I have outlined in my speech.
Mr Dennis Tan Lip Fong (Non-Constituency Member): Mr Chairman, recently, Keppel was given a combined total penalty of US$422 million in the US, Brazil and Singapore arising from their acts of corruption in the Petrobras bribery scandal in Brazil.
Presently, anti-corruption policies seem to be something of an afterthought in Singapore Inc. Disclosure of the existence of an anti-corruption policy by public-listed companies is startlingly low.
According to Assoc Prof Lawrence Loh's \"Findings on the Singapore Governance and Transparency Index 2017\", it seems that out of 606 listed companies surveyed which had released annual reports for their financial years ending 31 December 2016, only 8.7% had disclosed relevant policies and practices relating to anti-corruption. Does this reflect the general attitude of companies towards anti-corruption policies?
It is startling that the existence of bribery contracts and payments somehow seemed to have escaped the notice of Keppel's senior management, board of directors, audit committees and external auditors for 14 years. Could this point to the weaknesses in our current company and auditing regime?
The Code of Corporate Governance requires, among other things, audit committees to review the policy and arrangements by which persons may raise concerns about possible improprieties and ensure that arrangements are in place for such concerns to be raised and independently investigated and appropriate follow-up action to be taken. However, only listed companies are required to follow the Code of Corporate Governance. In any event, the Singapore Exchange (SGX) rules only require listed companies to comply with the Code of Corporate Governance on a \"comply or explain\" basis.
It is timely for the Government to review and enhance existing company regulations. All listed companies should set out their appropriate policy on anti-corruption measures and other improprieties. The Government should consider having inspections and subject non-compliance to penalties on the shoulders of the companies, directors and audit committee members. The Government should also review and enhance the requirements for whistleblowing policies in companies.
The Government should also consider enhancing the requirements of the independence of the board. Norwegian company law dictates that where a company has controlling shareholders, the independence of the board is principally intended to protect minority shareholders. This is a principle we should consider. For example, an independent director in our Government-linked company should have no past or present political affiliation to the ruling party or occupational affiliation to the Public Service.
The Government should also review the PCA to consider if it is sufficiently adequate to fight modern forms of corporate corruption today. It is not as easy to successfully prosecute corporations, as opposed to individuals, under PCA, due to the way that the legislation is framed. The OECD Anti-Bribery Convention recommends the establishment of liability of legal persons for the bribery of foreign public officials. Should we not expressly include the offence of bribery of foreign public officials by both individuals and companies in PCA?
Finally, the Government should consider adopting a \"failure to prevent bribery\" offence similar to section 7 of the UK Bribery Act 2010. Such a measure would effectively impose a duty on businesses to enact adequate procedures to prevent persons associated with the business from committing bribery. Jurisdictions, like Australia, are also considering introducing section 7 type of offences into their own anti-corruption legislation.
Asst Prof Mahdev Mohan (Nominated Member): Mr Chairman, we have heard from the previous hon Members about the Keppel Offshore and Marine (O&M) and the SembCorp Marine bribery scandals. The scandals are a cautionary tale.
I would like to focus the House's attention on how lapses of corporate governance could be prevented in the first place. What would we do, going forward, to stop this from happening again? And even if we cannot avoid the risk altogether, how would we minimise and mitigate that risk? To be frank, Mr Chairman, we can ill-afford the reputational damage of a prosecution, deferred or otherwise. Going forward, we have got questions which I would like to pose to PMO.
In practice, do publicly listed companies, particularly Government-linked ones, properly audit payments of large sums of money over a long period of time? Is there full, frank and meaningful disclosure of related-party transactions? Is there a diverse board of directors, composed of competent directors who are more than just a mere rubber stamp for key decisions?
And these questions are directed at all listed companies and not just Government-linked companies. More specifically, is proof provided or are meaningful explanations given that there is an independent element to the board that is able to exercise independent judgement on corporate affairs? And, finally, are appropriate stewardship obligations and principles that guide engagement with investors complied with by these listed companies? These questions are important, Mr Chairman, and I pose this to the Monetary Authority of Singapore (MAS) in particular, because we understand that there is a review of the Code of Corporate Governance, as we have heard earlier, that is going on at the moment.
Currently, this applies to listed companies in Singapore on a \"comply and explain\" basis and is being reviewed to enhance corporate governance standards and practices in Singapore. Could MAS tell the House more about the origins of this review, in light of the question that has been posed, what is MAS' wish going forward? I understand that they cannot pronounce or take a position because this is an ongoing review, but what led to this review? Is it an occasional review? Is it a periodic review? And are there certain points that we would like to instill in our corporate culture in Singapore?
Beyond the ongoing review of the Code, would MAS comment on whether the burden of maintaining market integrity solely rests on regulators or has it gone beyond this to substantially shift to market participants, such as financial institutions (FIs), as well? Are FIs, in turn, expected to adhere to rules of responsible business conduct? Given that publicly listed companies face pressures of quarterly earnings, how does MAS intend to restore ethical responsible business conduct which is particularly relevant to the financial industry? That is, how would MAS intend to instill a culture that places values above and beyond profits?
Finally, speaking of OECD, Mr Chairman, the OECD guidelines for multinational enterprises and its grievance and regulation mechanism, the national contact points for responsible business, are well-known. They are unique in the field of corporate responsibility, as far as it relates to foreign direct investments. While the guidelines are not legally-binding, these recommendations are instructive and persuasive to the 48 governments that abide by them. As a matter of soft law, would MAS consider utilising these guidelines as a benchmark or coming up with guidelines of their own which might be useful, going forward?
The Chairman: Minister Vivian Balakrishnan.
Dr Vivian Balakrishnan:\tWe are in the midst of a digital revolution. I think everyone knows that, and we know that it is transforming our economy, our society, our jobs.
During the previous industrial revolution, the people and the regions that first got it were the first to adopt the latest technology, achieved a headstart and they made enormous fortunes and amassed great power. In fact, I often think we are speaking English today because the last industrial revolution began in England and spread to Europe. The beginning of every new technological shift is often characterised by an initial Gilded Age, an age when there are greater inequality and profits amassed by the few who get it and have access to the new means of production. It takes time for new skills to be commoditised, the means of value creation to be more widely disseminated, and then you get a larger middle class. We saw such a golden age in the immediate aftermath of the Second World War, with a demographic dividend, mass education and a massive investment in infrastructure.
We believe that the current digital revolution reflects such an inflection point. The pace of change, however, of this revolution will be much faster than the previous industrial revolution. And that is why we need to ensure that all Singaporeans, and I emphasise all, master the new skills, and that our economy is rapidly restructured. Then, and only then, will our people have good jobs with good incomes and then we can remain a cohesive and fair society. So, this is the context, the narrative, behind our Smart Nation efforts.
I am glad to inform Mr Zaqy Mohamed, Ms Jessica Tan, Mr Saktiandi Supaat and Mr Teo Ser Luck that we are making good progress. The formation of SNDGG last year, chaired by Deputy Prime Minister Teo Chee Hean, has enabled us to be even more coordinated and responsive in the execution of our strategy.
In particular, we are accelerating the delivery of our Strategic National Projects. These form key digital platforms and infrastructure and are essential for a vibrant and innovative digital economy and for us to enhance our Government services. These projects are on track and let me quickly give Members some specifics.
First, on National Digital Identity. Ms Tin Pei Ling, I believe, asked about the progress of the National Digital Identity and of e-payments. Both are essential if we are to achieve seamless, convenient and secure digital transactions. We will launch the SingPass mobile app in the second half of this year. I think Members would be aware of the current SingPass system. It has got two-factor authentication, but that requires you to either have a hard token or to receive a short message service (SMS) message. The new SingPass mobile app will enable citizens to authenticate ourselves more quickly and conveniently. It will allow biometric authentication, and Singaporeans who are overseas will not have to wait to receive an SMS probably at some charge before they can log on to SingPass.
A secure digital identity will also enable our citizens to share data safely and securely with other organisations. This point is important because we have already linked 70 Government services and 30 banking services to MyInfo. The purpose of MyInfo is to eliminate repetitive form-filling and document verification and it will also enhance accuracy. This will increase convenience, improve service standards and reduce processing time. For instance, the processing time to open new bank accounts and credit card applications has been reduced by 80%. Backroom processes have become efficient. I have heard Mr Zaqy Mohamad’s point that maybe we need to take this same methodology to social assistance as well to reduce repetitive form-filling and speed up backroom processes.
Private companies can innovate and build on top of these platforms. Ms Tin Pei Ling will be pleased to note that we are enabling businesses, through the MyInfo Developer and Partner Portal, to integrate their own digital services into MyInfo, which is the Government-initiated secure data platform. Since the portal’s launch in November 2017, just three months ago, more than 150 businesses from various industries have expressed interest in doing so and we look forward to onboarding more later this year.
Let me say a few words on e-payments. We are not going cashless for its own sake. And we are certainly not doing it for tax collection. The ultimate objective is to lower transaction costs for all businesses and for citizens who are purchasing goods and services. It is to expand opportunities and, especially for small companies, freelancers, entrepreneurs, the gig economy and the small handicraft maker. You want them to be able to access this at the lowest possible transaction cost in order to enhance competitiveness and participation in our economy.
PayNow was launched by our banks last year to allow easy and immediate funds transfer using the recipient’s NRIC or mobile phone numbers. So far, it has been used mostly for mainly peer-to-peer (P2P) payments, between persons, and more than $370 million has been sent on this basis through the PayNow system. But this is only the beginning. Our public agencies will shortly start using PayNow as well.
In March this year, CPF Board will allow eligible CPF members over 55 to receive their lump sum withdrawal through PayNow. What is the advantage? It means the funds will be transferred within the same day, hopefully on their birthday, rather than waiting five days, which is the current turnaround time.
We will also be piloting the use of PayNow to disburse Edusave Award monies to Institute of Technical Education (ITE) and polytechnic students. This will surely be more efficient than having to bank a cheque.
This year, we will also launch PayNow Corporate, which will enable businesses to link their bank accounts to their Unique Entity Numbers (UENs). They will be able to use PayNow in order to pay other businesses and also receive payment from consumers. In other words, this will now become business-to-business (B2B) and business-to-consumer (B2C) as well.
We will be promoting the adoption of the Singapore Quick Response (SGQR) code, which will be a national QR code standard. This will increase consumer convenience but, more important than that, it will also enable cheaper and infrastructure-light payments systems, which will benefit especially smaller businesses.
I am also glad that the Network for Electronic Transfers (NETS) and EZ-Link are working together to enable the EZ-Link card acceptance at NETS terminals and vice versa. Frankly, this is long overdue. But we welcome and encourage, and, in fact, we want to make it a rule from now on, to achieve interoperability of wallets and payments systems. This will make it much more convenient for consumers and businesses.
Another Strategic National Project is the Smart Nation Sensor Platform. This aims to put in place an integrated nationwide sensor platform to improve municipal services, city-level operations, planning and security. You may not feel the direct impact of this straightaway, but a better and more systematic use of sensors and data will enable us to build and run a smarter, greener and more liveable city, including more responsive and reliable public transport, better public security and improved urban planning. The trials for various aspects of the Smart Nation Sensor Platform are ongoing right now.
Ms Jessica Tan and I think Mr Cedric Foo quite rightly emphasised that digital services should be citizen-centric and anticipatory. The Moments of Life initiative is one example where we are reorganising Government services to provide personalised, customised services at a citizen-centric level.
You used to have to navigate your way to access the myriad of services that the Government provided. Then our next step was to have a \"No Wrong Door Policy\", meaning it does not matter which door you knocked on, it was supposed to work and bring you to the right place. Frankly, I think we need to reorganise the Government so that the delivery of our services is organised based on the citizen rather than the agency providing those services. And this is actually not a question of technology but of re-engineering our processes. And if we succeed, then the doors should disappear.
In June 2018, we will release an app for Singaporean couples starting a family or with children aged six and below. We will call this app – and we have not thought of a better name yet – \"Moments of Life (Families)\". It will allow parents, when they have a new baby, to register the baby's birth online, apply for Baby Bonus, view medical appointments and immunisation records and search and register interest for preschools. We will test this out for families with babies born in public hospitals first and then roll it out further. Additional services will be added over time. And if the concept works, we will look at other \"Moments of Life\".
On Smart Urban Mobility, we are pursuing initiatives to use digital technologies to enhance comfort, convenience and reliability of our public transport systems and support our vision of a car-lite Singapore. The Ministry of Transport (MOT) will convey more later.
Besides ensuring progress in these Strategic National Projects, we also need to get our approach to data sharing and protection and system resilience and cybersecurity right. Harnessing the power of data will be increasingly critical for the Government, businesses and citizens as well. Data, in a sense, is the new currency of the digital age.
I share Assistant Prof Mahdev Mohan's concern that increased data sharing and data use have to be done in an environment where personal data and privacy are robustly protected. Hence, we have the Public Sector Governance Act which takes effect in April. It outlines a set of data-sharing practices for the Government, including using only non-identifiable information for policymaking and planning. Individual officers will be held accountable for safeguarding the information, and the Government will appoint trusted data custodians who will have central oversight over the anonymisation of datasets before they are shared across agencies. This clarity is to encourage safe data-sharing in order to enhance policymaking and improve service delivery, and to do so securely.
Assistant Prof Mahdev Mohan made other points on the social, legal and ethical dimensions of digital technology and we will study these points carefully. These are valid concerns. For the private sector, the Personal Data Protection Commission is conducting ongoing public consultation to ensure that the laws of personal data protection remain relevant.
Let me move on to resilience and cybersecurity. We must also build our Smart Nation on a reliable and secure foundation. Many Members have highlighted this – Ms Sun Xueling, Mr Saktiandi Supaat and Ms Tin Pei Ling.
Ms Sun and Ms Tin referred to the recent SingPass episode. Basically, what happened was that a software bug was introduced when they updated the two-factor authentication system within the SingPass server. That led to progressive slowness and eventually a crash. Unfortunately, this bug was in the backup system, too. That is why we had two crashes. GovTech is currently investigating the incident and will provide a more comprehensive update when it is completed. But I take the Members' point that, for essential platform technology, we cannot afford to get it wrong.
The Government imposes stringent reliability and resilience requirements for all our critical ICT systems, and we adopt a \"security-by-design\" approach to building this infrastructure. We conduct regular and rigorous audits, and any findings are followed upon thoroughly. I think the staff in GovTech know that I am quite obsessive and I drill down to details, so I give the engineers a slightly hard time. But I think this tension is necessary. We also work with our business associations to promote cybersecurity, because it is not enough for the Government to be secure, but businesses also need to adopt good cyber hygiene and to make that a business priority. And, of course, we should remember that citizens also have to play their part. Minister Yaacob Ibrahim will share more details on our national cybersecurity efforts later.
At its core, the Smart Nation is more than just the deployment of technology but really must expand opportunities and improve the quality of life, enhance jobs and raise salaries.
Dr Tan Wu Meng highlighted the impact on the economy and jobs creation. We know that automation, robotics, data analytics and additive manufacturing, or 3D printing, will certainly disrupt manufacturing and logistics chains. For a place like Singapore, a city, an entrepot, a port and airport, surely, these have profound implications on us.
We risk becoming irrelevant if we do not transform our infrastructure, systems and skills quickly enough. To do this, we need to ensure that workers all across the segments, as well as our SMEs, are able to take advantage of digital tools and master new skills. Minister Yaacob Ibrahim and Senior Minister of State Janil Puthucheary will share more details on our TechSkills Accelerator and SME Go Digital programmes.
As Ms Jessica Tan, Dr Tan Wu Meng, Mr Teo Ser Luck and Ms Tin Pei Ling have also highlighted quite rightly, the Government cannot build a Smart Nation alone, and we need to involve citizens and businesses.
In this spirit, we are opening our national platforms. I gave the example earlier about MyInfo. Ultimately, our National Digital Identity and e-payments systems need to be open for private sector, not only to just log on, but to actually build innovative new services on top of these platforms.
GovTech will conduct regular industry briefings to share the Government’s strategic ICT plans and the pipeline of projects. We have this programme called Innoleap. This basically allows the Government to go to the private sector or to the research institutes, set out a problem statement and let the companies offer solutions based on their own expertise.
We will work with research institutes. We also have a grant called the Translational Research and Development for Application to Smart Nation (TRANS) Grant. We have a need; you have a capability; you have a service. Give us your best offer. If it works, we use it; we pay you; we feed our own local ecosystem. We invite the public and industry to contribute more ideas, more solutions, novel solutions, especially through Ideas!, which is a whole-of-Government crowdsourcing portal.
I agree with Mr Zaqy Mohamed, Ms Tin Pei Ling and Mr Saktiandi Supaat that we must push ahead with digital technology but, at the same time, we must make sure nobody gets left behind, regardless of age and background and, I am also inclined to say, linguistic ability and special needs. We need to make sure that all our projects are inclusive-by-design. After all, if you pick up any modern handphone today, they are multilingual by design. They have assistive technology by design. And I am going to push to make Government services adopt that same inclusive approach.
We will also be raising the standards of Government digital content, basically checking our websites, portals and services to make sure they are state of the art. Basically, we have a league table, and we assess everyone's website and tell them which ones do not work, which ones are not ready and so on and so forth. Minister Yaacob Ibrahim and Senior Minister of State Janil Puthucheary will further elaborate on the MCI's digital readiness initiatives.
Let me conclude. The digital revolution can be either exhilarating or terrifying, or both. It all depends on whether we are ready. That is why we have embarked on Smart Nation. That is why we need to do so with a great sense of urgency.
We need to ensure that there are good jobs and opportunities for all. The Government will continue investing in infrastructure, creating open platforms, sharing open data, facilitating skills upgrading and encouraging our businesses to adopt the latest technologies. And you have heard the Budget provisions for that. Ultimately, this has to be done with an even greater sense of urgency as a whole-of-Government, whole-of-society, whole-of-nation effort.
The Chairman: Senior Minister of State Janil Puthucheary.
The Senior Minister of State for Communications and Information and Education (Dr Janil Puthucheary): Mr Chairman, many members have spoken about the unprecedented pace of technological innovation we are experiencing today. Singapore’s Smart Nation effort seeks to seize the opportunities presented by these changes to create jobs and improve the lives of our people.
The Government will lead the way by transforming itself to become even more digital and data-driven. Digitalisation is also a key component of the Public Sector Transformation efforts. Our vision is to be a Government that is digital to the core. We will release a Digital Government Blueprint in the middle of 2018. Today, I would like to explain just a few of the initiatives that will form part of this blueprint, in response to Members' questions.
Ms Jessica Tan asked how the Government is making its digital services more citizen-centric. In the design and delivery of our services, we have and will continue to drive a user-centric approach. If I may just share about two of these services with Members.
The first is the Business Grants Portal. Launched in January 2017 at www.businessgrants.gov.sg, it brings different Government agencies' business grant applications to one interface. This portal removes the need for businesses to approach different Government agencies separately for grant applications and avoids the need to repeatedly provide similar information for each grant application. Instead of an agency-centric approach, this platform has been designed around the needs of businesses.
During the development process, engagement with businesses and their feedback have resulted in modifications and improvements to the portal, for example, the ability for company information to be automatically extracted from the Accounting and Corporate Regulatory Authority (ACRA) for grant applications. The engagement with businesses streamlined the application process by at least 15%.
The second user-centric service I would like to highlight is at the other end of the development process. The Business Grants Portal is mature. It has been launched, tested and has had many modifications. The service I am about to describe is very nascent. We are designing it and beginning the journey. We are trying to develop a Digital Medical Certificate (DMC). Patients today have to store and submit paper MCs to their employers. This can be inconvenient for both parties. The employee has to take the trouble to submit a copy and potentially an extra form. The business has to process the paper copy and also store records properly. Instead, digital MCs stored securely online can be easily retrieved and shared as instructed by the patient. Apart from convenience, this will also save costs from printing and processing. At SingHealth institutions alone, more than 1.1 million paper MCs were issued in 2017.
The design challenge, of course, is to separate the MC from the existing health records, and to make sure that it does not in any way impinge upon the delivery of healthcare services. It will take some time to get this design right. We will start testing this concept at one SingHealth clinic in May 2018. We will start a small pilot to monitor the user experience, learn quickly what works, what does not, what is easy and what is more difficult, before expanding to more clinics. Start small, iterate quickly, have a bigger vision in mind. This is the approach we intend to apply to other Digital Government projects. This will allow the Government to be more agile in harnessing technology. Not all the projects will succeed, and some may evolve to be quite different from the original concept. But this is to be expected in the pursuit of innovative solutions.
Ms Sun Xueling had asked for details on the Government's digitalisation efforts to support our Smart Nation vision. Beyond designing services to be more user-centric, we will also design them to be digital end-to-end. Our aim must be for citizens and businesses to be able to interact with paperless Government services from start to finish anytime, anywhere and on any Internet-enabled device.
To achieve this is not a matter of simply putting services online. It requires the re-engineering of Government processes and our digital infrastructure. It is a significant undertaking and we are committed to making it happen.
One example of how we will re-engineer our digital infrastructure is the Government Technology Stack. The Tech Stack adopts the same platform approach used by tech and software giants, such as Google and Amazon, where common software and hardware services are shared across the organisation. In our case, by all Government agencies. These common assets are reusable and modular. There is a built-in resilience and it allows agencies to quickly develop and improve new digital services in a cost- and manpower-efficient manner. More importantly, citizens and businesses will experience a more consistent and connected user experience across the spectrum of Government services, since they rely on the same infrastructure.
We are still developing the Tech Stack, but some foundational pieces are already in place. One example is the application programming interface (API) Exchange. An API is a common “pipeline” which makes it possible for information to flow between different software applications. The GovTech API Exchange was used in the MyInfo pilot that was just described, to allow banks to onboard new customers using Government-verified data. Compared to using more traditional development methods which would have taken typically more than a year, this pilot was developed within just four months and at a lower cost.
Ms Sun Xueling, Ms Thanaletchimi, Mr Darryl David and Mr Desmond Choo also asked how we are building digital capabilities and developing talent within the Government. Our vision for digital transformation is only possible if we deepen our existing engineering and digital capabilities, build new capabilities and also attract the best technical talent to the public sector.
To achieve this, we will be developing a Centre of Excellence in IT and Smart Systems within the Government. The Centre of Excellence will have capability centres in a number of fields: data science and AI, application design, development and deployment, ICT infrastructure, cybersecurity and sensors and the Internet of Things (IoT). These centres will house multidisciplinary teams of data scientists, software developers and designers who are experts in their respective domains.
This Centre of Excellence will provide an in-house pool of technical experts to implement innovative projects within the Government and deal with challenging problems, for example, the design and architecture of IoT infrastructure solutions as part of the Smart Nation Sensor Platform. The team also collaborated with the Municipal Services Office to build the OneService mobile app, providing its expertise in user experience design and software prototyping to create a better way for citizens to give their feedback on municipal issues.
This approach will also assist in raising the capabilities of officers across the Government. For example, the Data Science and AI capability centre designs curricula, and partners training providers to help provide public officers the tools to learn about data visualisation and machine learning techniques. The officers can then more effectively analyse their data for better policy outcomes.
Talented and competent professionals are crucial to deepening these public sector capabilities. We need to recruit Singaporeans who have committed themselves to applying technology for the public good. If I may, allow me to highlight two such engineers, Mr Chong Rong Hwa and Mr Lim Zui Young.
Rong Hwa is the older of the two, mid-career, and is a Lead Cybersecurity Specialist in the cybersecurity capability centre. He previously worked as a Senior Manager in FireEye, a Cybersecurity and Malware Protection company in the US, and currently leads a team of hackers that \"red-team\" to identify security issues in Government systems before others do, so that we can pre-emptively resolve them. He has had prior experience as a junior officer in the old Infocomm Development Authority (IDA), before going overseas. He has then had years of experience overseas in the private sector within the cybersecurity industry, and now he is playing a key role in making our digital services not just agile, but also secure and resilient. He came back to Singapore and to the public sector for several reasons, including family considerations, but also the opportunity to have a career development pathway around deeper technical skills, not just management skills.
Zui Young is much younger. This is his first job and he was hired immediately after graduation. He is a Development Operations Engineer in the Application Design, Development and Deployment capability centre. He earned a Master’s in Information Systems at the Singapore Management University (SMU) and now works on the Hive Agile Testing Solutions (HATS). They have developed an inhouse automated software testing tool, reduced manual testing costs and developed more robust and stable Government digital services. He worked on the Business Grants Portal.
The Government will ensure that there is sufficient technical talent like Rong Hwa and Zui Young to achieve our Smart Nation ambitions. We will launch a Smart Nation Scholarship later this year to attract passionate and capable technologists to the Public Service. This scholarship aims to attract and groom a pool of talent for a technical leadership career in the Public Service. The scholarship will be open to students who have completed their junior college or polytechnic studies and are keen to pursue a full-time infocomm-related degree in either a local or overseas university.
This career pathway for scholarship holders will include working in technology agencies like GovTech, the Cyber Security Agency (CSA) and the Infocomm Media Development Authority (IMDA). I encourage budding technologists with a passion for public service and an eagerness to take on the technical challenges of the digital age to apply for the Smart Nation Scholarship. More details will be released later this year.
In conclusion, Mr Chairman, the initiatives that I have shared today will all come together as part of the broad Digital Government Blueprint, complementing the Transformation of the Public Service, and moving Government services to be truly digital end-to-end and, most importantly, citizen-centric.
The Chairman: Minister Chan Chun Sing.
The Minister, Prime Minister's Office (Mr Chan Chun Sing): Mr Chairman, let me take the cuts on the ELD and CPIB on behalf of the Prime Minister.
First, may I thank Mr Png Eng Huat for his confidence in the secrecy of our voting processes. I would also like to thank the Member for his support for the ELD's recent innovation for e-registration and the refinements to the layout of our voting booths. We note the Member's suggestions on the design of the booths and the reading out of the names. Let me make a few clarifications.
First, on the booth design, we will continually refine the booth design with our stakeholders. We actually have a new prototype for the Presidential Elections (PE) 2017 and we will continue to refine this as we go along.
On the second issue, I will note the Member's suggestion on the reading out of the names. May I just clarify that we do not read out the NRIC of the voters? What we do is that we read out the name and the serial number of the voter in the polling station registered. So, we thank the Member for all these suggestions and we will take into account all these suggestions in the next review of the Parliamentary Elections Act.
If I may inform the House, ELD had actually conducted road shows and planned to introduce e-registration at a few constituencies during PE 2017. However, as PE 2017 was not contested, ELD's current plan is to implement e-registration of voters at the next election.
On the issue of CPIB and anti-corruption, let me, first, thank Mr Murali Pillai and Mr Dennis Tan Lip Fong for their various suggestions. CPIB is acutely aware of the evolving challenges of corruption and we can never be complacent. We must always be vigilant, especially in the current era, where issues straddle beyond our sovereign territory. I thank both Members for the various suggestions which CPIB will take into account in our regular reviews and we will do what is possible and practical to uphold the integrity of our system, especially in the face of transnational, cross-border challenges.
Singapore is recognised as one of the least corrupt countries in the world today. The latest Transparency International of Corruption Perceptions Index of 2017 where Singapore was ranked 6th out of 180 countries was again testament to the effectiveness of our anti-corruption framework.
The corruption situation in Singapore remains under control. However, we must not be complacent. As we say, low crime does not mean no crime. This can be seen from the corruption statistics released by CPIB in recent years which show that Singapore has one of the world's lowest incidence of corruption. Nevertheless, while absolute numbers are low, we note that the majority of the cases come from the private sector. This is why the CPIB recognises that it is important to engage the private and business sectors to enhance their awareness of anti-corruption measures and to share the best practices with them, as suggested by Mr Dennis Tan Lip Fong.
I will share some recent efforts by CPIB. In 2016, CPIB published a guide book for private sector use, called Practical Anti-Corruption (PACT), a guide for businesses in Singapore which sets out to guide business owners in developing and implementing an anti-corruption framework within their companies.
[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]
Members may also be aware of the International Organization for Standardization (ISO) 37001, the anti-bribery management system that was launched in October 2016. This is a newly developed international standard to help businesses and companies implement anti-bribery compliance programmes. Supported by the Standards, Productivity and Innovation Board (SPRING) Singapore, CPIB was the National Convenor and led a national working group comprising representatives from the trade associations, industry bodies and academia to develop the standard. The Singapore Standard ISO 37001, Anti-Bribery Management Systems, was subsequently launched in April 2017 in a seminar organised by CPIB, in partnership with SPRING Singapore.
CPIB continues to be proactive in engaging the private sector. It conducts regular prevention talks and also periodically participates in business sector conferences in its anti-corruption efforts. Enhancing anti-corruption measures in companies ultimately requires constructive public-private sector cooperation and partnership. Companies must realise that they are ultimately responsible for the proper and ethical conduct of their businesses and recognise that they also play a vital role in our national anti-corruption efforts in preventing, detecting and reporting corrupt behaviour.
Let me now turn to PCA. PCA is a key instrument in our national anti-corruption framework. It is thus pertinent that PCA is periodically reviewed to ensure that it remains relevant and effective in combating corruption, especially on some of the issues raised by both Members that concern the trans-border issues.
The last substantial review of and amendments to PCA was in 1989. The amendments then included increasing the maximum fines for several offences under PCA and adding an offence of giving false information. Since the 1989 review, the landscape and context in which corrupt offenders operate has changed. The modus operandi of corrupt offenders has evolved and corrupt transactions of a transnational nature have become more prevalent. Our PCA has to remain effective to deal with the many manifestations of corrupt practices and conduct.
In this context, CPIB and the Attorney-General’s Chambers (AGC) have been reviewing PCA. This exercise involves a careful study of the current PCA to establish areas where amendments, refinements and updates may be necessary. I would like to thank both Members for raising worthy issues for consideration in the review of PCA.
A review of PCA is an important undertaking and would include the comprehensive engagement of different stakeholders and a public consultation to ensure that feedback is solicited in an exhaustive, comprehensive and wide-ranging manner. It goes without saying that all MPs will have the opportunity to contribute their feedback and suggestions at the appropriate juncture as we seek to enhance our legislative tools to fight corruption.
The Chairman: Minister Ong Ye Kung.
The Minister for Education (Higher Education and Skills) and Second Minister for Defence (Mr Ong Ye Kung): On behalf of Deputy Prime Minister Tharman Shanmugaratnam and the Minister in charge of MAS, I would like to respond to the cut filed by Asst Prof Mahdev Mohan.
Mr Chairman, I thank the Member for sharing his views. Maintaining market integrity is an important objective for the regulator. But there is only so much that supervision and enforcement can do. Integrity and good corporate governance have to be internalised by market participants and have to be part of a deep and widespread corporate culture.
The responsibility for high ethical standards and sound business practices falls chiefly on the board, the CEO and senior management, as well as leadership at all levels of the organisation. It cannot be outsourced or devolved. The leaders have to take charge, put in place the structures and practices, and walk the talk.
So, good corporate governance is a combination of both effective supervisory efforts and corporate self-discipline and leadership. This is especially important for the financial sector because the stability of our financial system depends critically on the trust and confidence that the public places in our FIs.
Fortunately, FIs in Singapore have generally acquitted themselves well. There have been occasional lapses and MAS takes them very seriously, working with the FIs concerned to ensure that they address the lapses and put in place measures to minimise recurrence.
Notwithstanding, MAS plays an active role to encourage and foster such a corporate culture amongst FIs. In fact, this has become an increasingly important dimension in MAS' supervisory approach, which comprises three prongs: first, promote a culture of trust and ethical behaviour amongst FIs; second, monitor and assess FIs’ culture and conduct; and third, enforce against misconduct by FIs or their employees whenever necessary. Let me talk about them in turn briefly.
First, promote a culture of trust and ethical behaviour. MAS has been engaging FIs regularly, such as through dialogues with boards and senior management of FIs, to promote desirable industry conduct, understand their challenges and also facilitate sharing of best practices.
MAS has also published guidance on good practices observed from our thematic reviews in areas, such as corporate lending and anti-money laundering controls. This will assist FIs in benchmarking their practices against best-in-class industry standards of conduct. In addition, MAS has collaborated with industry associations to promulgate good market practices. One example is the Singapore Foreign Exchange Market Committee Guide to Conduct and Market Practices for Treasury Activities, which is currently undergoing review.
Further, when we enact new legislation or guidelines, MAS will engage the industry and explain the intent behind the changes and what problems they were intended to solve. That way, we hope FIs will have greater buy-in for the changes and not comply for compliance's sake. MAS will soon be consulting on new guidelines to strengthen individual accountability and conduct across the financial industry.
Second, monitor and assess FIs' culture and conduct. This, in engineering terms, is like preventive maintenance. It is essential because downstream control weaknesses and misconduct can be avoided if signs of weak culture or poor ethics are identified early. In its inspections and supervisory reviews, MAS does not just review governance policies and control processes but also evaluates if the FI has a supportive culture that incentivises the right behaviour.
For example, during inspections, MAS officers will meet with ground staff to assess if the \"echo from the ground\" resonates with the \"tone from the top\", in other words, whether the desired culture and risk appetite determined by the board and senior management have been effectively cascaded throughout the organisation. MAS also looks for potential red flags, such as whether risk and control functions have sufficient stature and whether incentive structures bring about responsible risk-taking and ethical conduct.
MAS is also developing analytics capabilities to enhance its surveillance of FIs' market conduct practices. This includes making better use of data from complaints, misconduct reports and regulatory returns.
Finally, enforce against misconduct. All said and done, this is still necessary and is an integral part of our system to promote good corporate governance. Unlike culture, which is implicit, this is the explicit part where we have to take action when anyone flouts the rules and regulations.
MAS has a reputation of being a no-nonsense regulator. It will come down on FIs when lapses lead to control deficiencies, regulatory breaches or criminal offences. The enforcement actions taken by MAS in recent years have led to the removal of directors or executive officers, composition fines, revocation of licences of FIs, as well as referral to the public prosecutor for criminal prosecution. Not every one of these actions is published in the media but they have a salutary effect on the FIs concerned.
Other than enforcement action, there is, of course, the lighter regime of the Code of Corporate Governance, which applies to listed companies on a comply-or-explain basis that Asst Prof Mahdev Mohan asked about. MAS set up the Corporate Governance Council last year to review the Code. It is timely to do so, given that we live in a rapidly evolving business and global business landscape. The last review was done a number of years back, in 2012. So, it has been a while. The Council consulted many stakeholders and studied the systems across various countries, including OECD Principles of Corporate Governance. On the OECD Guidelines mentioned by Asst Prof Mahdev Mohan, some of the guidelines related to disclosures are already in the Securities and Futures Act and SGX listing rules.
The SGX listing rules also contain other important safeguards that deal with self-dealing risk arising from related party transactions and require listed companies to put in place robust and effective internal controls to address finance, operational and compliance risk.
The recommendations of the Council are now undergoing public consultation. Some of these go to the heart of what Asst Prof Mahdev Mohan has raised, including his question on how to promote responsible conduct amongst listed companies which may face pressure to show good financial performance. The Council will carefully evaluate the feedback received before making its final recommendations to MAS, which will, in turn, issue a revised Code in the later part of this year.
We will continue to maintain the current arrangement where FIs that are systemically important are subject to even higher corporate governance requirements, compared to other listed companies, in terms of director independence, board composition and the establishment of specific board committees. They are also expected to comply with more stringent disclosure requirements, such as in the areas of risk management and remuneration.
So, in sum, getting governance, culture and conduct right is crucial to maintaining public trust in our FIs and the reputation of our financial sector. The board and senior management have a critical role to play and, as far as FIs are concerned, MAS will continue to partner them to foster a strong culture and good practices.
The Chairman:\tWe do have some time for clarification. Mr Melvin Yong.
Mr Melvin Yong Yik Chye: Mr Chairman, I have a clarification for Minister Josephine Teo. She has described at length and quite extensively the support measures to make Singapore a great place for families. But are our current measures and enhancements to support Singaporeans' marriage and parenthood aspirations enough?
Because many of these incentives have been around for some years. What else can we do to encourage young married couples to have children and, for those who already have one child, to have even more children?
Mrs Josephine Teo: Mr Chairman, I want to thank the Member Mr Melvin Yong for his question. Earlier on, I was talking about Russia and the Order of Parental Glory. Deputy Prime Minister Teo pointed out to me that the Order of Parental Glory that Russia has, requires seven children, before you can make it to the Kremlin to receive this Order. But in Soviet times, actually you need 10 children in order to receive the Hero Mother of Soviet Union Award. Our package of support does not require 10 or even seven kids. One kid will do!
We provide quite a wide-ranging suite of schemes. I distributed the compilation earlier. The handout will show that it is quite comprehensive, and the schemes have also been progressively enhanced. If you add them all up, it is about $3 billion each year.
But I think in addressing the question that Mr Melvin Yong brought up, it is perhaps useful for us to take a step back and ask what has happened to our TFR over a longer time horizon. If we did that, we can make two observations. The first is that TFR has been below the replacement level of 2.1 for about 40 years. And the second is that it has stabilised at around 1.2 since 15 years ago. So, let me try and say a bit more about each one of those two observations.
First, on the decline of TFR. The sharpest decline we experienced was in the 1960s and then the 1970s. That period coincided with rapid urbanisation as well as economic growth, and the pattern is quite similar to the developed East Asian societies and even in the Nordic countries. So, quite a similar pattern.
The second observation that TFR has stabilised around 1.2, that is also a level that is quite similar to the East Asian societies of South Korea, Taiwan, Japan. We all developed rapidly around the same time, and it had that sort of an effect on our TFR.
What other causes? I shared last year during the COS debate quite extensively so I would not attempt to repeat everything in its entirety. But I would say that based on my recollection, we did highlight that in the case of South Korea, there is a very extensive programme of support and it, too, has not achieved the same results as the countries that it drew inspiration from when designing those support programmes. So, the upshot is that we cannot conclude that financial, legislative support alone is enough.
On the other hand, we must be cognisant of what could have happened without the support measures. Could it be possible that TFR in South Korea and also Singapore would have fallen further without these support measures? What matters appears to be that, more than a package of support measures, society as a whole needs to make marriage and parenthood achievable, enjoyable and celebrated. All three things have to come together.
For millennials, this is the part we are very mindful of. I think we must recognise that they have career aspirations. Most of them want to remain active in the workforce. They want to achieve their potential. Especially for the women, there is so much more room for us to improve. Mr Chairman, if you let me show a slide, I hope to illustrate the point.
The Chairman: Yes, please, but can you keep your answers concise? [A slide was shown to hon Members.]
Mrs Josephine Teo: Thank you. I will try my best. If we take a look at our female labour force participation rate for Singapore, we reach the highest level up to the age of 29 and then it drops and it does not recover. Japan actually is lower than us at the younger ages; the black one is below the red line but after the drop it recovers and there is a double hump. Let us take a look at Sweden. It remains high, all the way up to women in their 50s.
So, how do we address this in the case of Singapore? It is the reason why the current priority is: one, more preschool places near homes, near workplaces to enable women to continue working and have that peace of mind; two, sharing of parental responsibilities that Ms Kuik Shiao-Yin spoke about − more support for not just mums but also dads, more workplace support, FWAs, and I will share more during the COS debate on MOM.
The Chairman: Thank you. Mr Louis Ng.
Mr Louis Ng Kok Kwang: Sir, I thank Minister Ong Ye Kung for responding to my Budget speech. Can I ask if the 360-degree review will be made available to all public servants and how regularly this will be done? Can the Minister also respond to the idea of an internal QSM? I do thank Minister Ong also for sharing that all public officers can speak up without fear of getting into trouble. And I am keen to be part of the solution, which is why I spent the past year meeting, listening to and working with public officers and now share their concerns with everyone. I will take Minister Ong's advice and will be more careful about generalisations of public officers.
Sir, I also wholeheartedly thank Minister Josephine Teo for announcing the additional four weeks of unpaid leave —
The Chairman: Sorry, no speech, please. Just clarifications.
Mr Louis Ng Kok Kwang: — unpaid leave for parents of multiples or pre-term babies. This means a lot. But can I ask whether there are plans to legislate this? I also have to add that after looking after twins for a year, there is no way we will have seven kids.
Mr Ong Ye Kung: The 360-degree feedback: today, it has been implemented quite broadly across senior officers. PSD, in the next two, three years, will extend it to all senior officers. But 360 is largely a developmental tool − 360-degree feedback appraisal. So, I do not think it is useful to extend it to all public officers but, certainly, to senior officers who are leaders, who have to work with people around them − up, sideways, down. This is useful for them.
But the issue is not really 360-degree feedback as a mechanism but to make sure that the Public Service and also the individual agencies have a culture of wanting to do better, embracing change, prepared to be innovative and to have people who do this in the right spirit. That when there is big change, they try to support it or, if they cannot support it, they get out of their way or, if they have totally different ideas, be able to voice them up, debate, come to a resolution and then support the direction forward. I think this is really about building that right organisation culture.
So, likewise, it is not really about whether you have internal QSM or not, but whether the organisation believes in engaging its people. And I do think I agree with Mr Louis Ng that all public agencies ought to engage their people. All public agencies today do conduct staff engagement surveys periodically. And in that process, you do have to engage your people. So, this is very much encouraged.
Finally, I thank Mr Louis Ng for acknowledging that making sweeping generalisation statements on Public Service is not helpful. So, let us work together and let us all be part of the change and be part of the transformation.
Since I am at the podium, Mr Chairman, I realise I did not quite answer one of Ms Sylvia Lim's clarification just now in one of her cuts where she mentioned during the Administration of Justice (Protection) Bill, her petition filed on the Bill was, I quote her, \"somehow not sent to the Public Petitions Committee\". So, I thought I had better clear the air and \"what somehow\" really meant.
This is, if Members recall, in 2016. The First Reading was July, I think 10 July. The Second Reading was 15 August 2016; I checked that this is the correct date. The petition was filed on 10 August 2016, five days before Second Reading. So, if it had come to the House on the Second Reading, it would have been referred to the next Sitting. By then, it would have been moot because we would have already had the Second Reading debate.
If Members remember, a Motion was, therefore, tabled to refer the petition to Parliament as part of the Second Reading debate, instead of sending it to the Public Petitions Committee. And so, a general assent was called, everyone in the House agreed and we had a full debate. Mr Kok Heng Leun, who filed the petition, and Ms Sylvia Lim, were also present. Ms Sylvia Lim had a full speech, many clarifications, long debate I remember and then also voted on the Bill. So, the process is transparent and open. I thought it is good to clarify this.
The Chairman: Minister Josephine Teo.
Mrs Josephine Teo: Mr Louis Ng asked whether the unpaid leave for unplanned emergencies can be legislated. In fact, legislation is always an option. We legislated paternity leave. But as Mr Seah Kian Peng pointed out, even with legislation, the utilisation is only 46%. When you consider that South Korea legislates paternity leave, in fact, of a much longer duration than we have, the utilisation is, if I am not mistaken, just about 2%.
So, the real question is not whether we can or we cannot legislate. The real question is why, even with legislation, utilisation is not always 100%. I think that has got to do with the fact that, at workplaces, people do not always feel that they can use their entitlements. And that also has got to do with culture, whether there is a comfort that there will be no push back from the employers, that performance appraisal is not impacted, that co-workers are not unhappy because you go away. These things do not happen overnight. They take time to change. What we have attempted to do is, when there is a new leave type, perhaps we start with a tripartite standard first. Let the employers who are ready and willing, come on board, and then expand this group. Because what you really need to do is to promote a new culture. This culture of support is harder to try and bring about, but it is the right thing to do.
The Chairman: Mr Alex Yam.
Mr Alex Yam: Mr Chairman, one clarification to seek from Minister Josephine Teo. Before having children, the first most important step is getting married. I understand from an NPTD survey that was commissioned in 2016 − the Marriage and Parenthood Survey − showed that 83% of young Singaporeans want to settle down. However, if you look slightly further down in the survey, it is a little bit more worrying because 59% of singles are not seriously dating and 41% have never dated seriously before. And of those not dating seriously, 42% prefer to leave dating to chance. It means, if it comes along, it comes along.
Is there more that the Government can do to promote the environment and to encourage young Singaporeans to perhaps date more with a mind of settling down and then, eventually, having children and, perhaps, having seven children?
Mrs Josephine Teo: The short answer to that question is that I am really open to suggestions. If you know of a way in which the Government can do this without coming across like nannies and without being thought of as being very intrusive in people's private affairs, I think we are certainly keen.
The Social Development Network, under the charge of MSF, continues to support the private dating scene, primarily from the point of view that this is not always something that is the Government's core competence. Expanding the network where private sector players have the right creative ideas to bring people together, that continues to be an emphasis. I just want to reassure the Member that the Social Development Network is continuing its work. It has not stopped its work at all.
The Chairman: May I remind Members that clarification time is for clarifications and not speeches. So, please keep your questions succinct and may I also ask the front bench to keep your answers short, too. Ms Rahayu Mahzam.
Ms Rahayu Mahzam: Sir, I would like to direct a clarification to Minister Josephine Teo. I am happy to hear that there will be enhancements to the Assisted Reproduction Technology Co-funding scheme. I have some residents who have approached me because of the age limit of the scheme. So, I am wondering whether the Ministry will be open to consider extending the scheme to those who are above 40 years old.
Mrs Josephine Teo: The empirical evidence for Assisted Reproduction Technology success rates is quite stark. For women aged between 35 and 39, the success rate is 18%, in other words, less than one in five. Once you cross into the next five-year band, from age of 40 to 44, it is less than 8%, which means less than one in 10.
The challenge for the Government is that if you make the support available to those above the age of 40, it does give the impression that there is a reasonable chance for you to succeed. Otherwise, how is it that the Government can justify using taxpayers' money to subsidise this? This is something that is of great concern to us, whether we give the misimpression that there is a chance of succeeding even though that chance is very low. So, for the time being, there will be no change.
The Chairman: Mr Patrick Tay.
Mr Patrick Tay Teck Guan: I am directing this clarification to Minister Vivian Balakrishnan. Earlier on, the Minister mentioned about introduction of personal biometric identifiers. Is there a timeline where this will be rolled out for Singapore?
Dr Vivian Balakrishnan: I was simply referring to the SingPass mobile app that will make use of the biometric feature on your smartphone.
The Chairman:\tIf there are no further clarifications, may I ask whether the Member Assoc Prof Fatimah Lateef would wish to withdraw her amendment?
Assoc Prof Fatimah Lateef: From \"Moments of Life\" to preschool education emplacement, to couple-hood and sub-fertility issues, also including Smart Nation, AI and even voting during the General Elections, we have discussed it all. It has been fruitful. We thank the Deputy Prime Minister and all the Ministers who have responded to our questions vividly. Also, we look forward to the journey together with our Public Service. We would like to thank all our Public Service officers who have been working really hard, researching and also putting at top form our Public Service in Singapore that is well-known globally. We look forward to the journey that we will take with them. Mr Chairman, I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $749,618,900 for Head U ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $186,585,400 for Head U ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head N (Ministry of Foreign Affairs)","subTitle":null,"sectionType":"OS","content":"The Chairman: Head N, Ministry of Foreign Affairs. Mr Vikram Nair, you may wish to take both cuts together.
Mr Vikram Nair (Sembawang): Mr Chairman, I beg to move, \"That the total sum to be allocated for Head N of the Estimates be reduced by $100.\"
As in previous years, I would like to kick off the debate with a broad overview of developments in international affairs and ask the Ministry of Foreign Affairs (MFA) for its views on their potential implications for Singapore.
In 2017, the geopolitical landscape continued to evolve rapidly. China’s strategic and economic clout remains on an upward trend. Members would have noted China playing a more active and assertive role in global affairs in recent years.
The Belt and Road (B&R) initiative continues to play a growing role in regional and global development, supporting infrastructure investments and big projects. China is clearly becoming an outward-looking global power, ready to play a bigger role in the world and many countries hungry for investments appreciate this.
At the same time, observers have juxtaposed China's rising prominence on the international stage against perceptions of the declining United States (US) influence in the region. The US' decisions to pull out of key multilateral deals, like the Paris Agreement on Climate Change and the Trans-Pacific Partnership (TPP), also support this concern that the US is becoming more inward-looking and less interested in taking the lead on global issues.
Closer to home, unresolved tensions persist on the Korean Peninsula. Barely a few months ago, the North was escalating its nuclear testing and boasting that it was getting close to having a nuclear weapon and intercontinental ballistic capabilities. It appears that the two Koreas are trying to ease tensions at the moment, which is to be welcomed, but the underlying issue of nuclearisation of North Korea remains.
Around the world, other national and international challenges abound. Countries are grappling with transnational terrorism, sluggish economies and structural challenges of demographics and integration, and the worrying trend of growing nationalist sentiment.
These issues are often interrelated. The growing threat of terrorism has been spurred by the Islamic State of Iraq and Syria (ISIS), which has been fighting primarily in Iraq and Syria. They have mastered the art of using social media to radicalise individuals. The wars themselves have caused record numbers of refugees to flow outwards, including to places like Europe.
This, in turn, has led the local politics in these countries to become increasingly nationalistic and unfriendly to immigrants and refugees, often characterising them not only as economic threats but also as potential breeding grounds for terrorists. This has led to the growth and popularity of far-right movements in many developed countries.
Another hallmark of our times is the development and democratisation of technology that would have been unthinkable just a few decades ago. Anyone and everyone can publish information online. At the same time, individuals, companies and governments have almost all their private information in digital form, making it potentially easy to access such information, both legally and illegally, by hacking and gaining access to existing databases. We are not yet fully cognisant of the effects that technologies, such as digital media, will have on us and our societies.
What does MFA see as the major challenges facing Singapore? How can Singapore continue to navigate and protect our interests in an increasingly complex and uncertain geopolitical environment?
Singapore has traditionally been an important participant in regional agreements and partnerships. These include both formal frameworks, such as the founding of the Association of Southeast Asian Nations (ASEAN) and their other related work as well as dialogues to bring together important partners. Our Shangri-La Dialogue for Defence is one good example of this.
Recently, there have been media reports on the revival of the \"Quadrilateral Security Dialogue\" among the US, Japan, India and Australia to deepen security cooperation and to coordinate alternatives for regional integration. These four countries are good friends of ours and have a shared commitment to the existing \"rules-based order\" as a key mechanism for protecting and projecting their own principal security and economic interests.
It seems like it would be helpful for Singapore and, potentially ASEAN, to engage and support such initiatives. What is MFA's view of how Singapore and ASEAN will be affected by such regional initiatives?
Mr Low Thia Khiang (Aljunied): Mr Chairman, Sir, the shift in global economic weight to Asia was highlighted in the Budget Statement this year. We witness the opening up of China as an awakening of an economic giant. But China would also face a severely ageing society and rising labour costs over time. In these respects, if it could maintain political stability, India may have the advantages and better growth prospects in the longer term. The ASEAN Economic Community could also emerge as an economic powerhouse if the 10 countries could garner the political will to establish a single market.
This shift in global economic weight to Asia poses new diplomatic challenges for us, especially when the US is going through a relatively incoherent phase in its engagement with Asia because of domestic politics. Singapore is not caught between a rock and hard place, but among three powers, namely, China, India and the US, while deeply embedded in ASEAN.
The South China Sea threatens to become the great game for the powers. The prime example is India's strengthening military and economic ties with Vietnam, which include an oil concession in disputed waters of the South China Sea and the warming of US-Vietnam ties in an effort to counterbalance China. ASEAN seems divided and the countries distracted by domestic strife, with ethnic conflicts becoming a major issue for the grouping, Myanmar is an example.
Our ties with ASEAN are deep. We also have strong ties with China, India and the US. As ASEAN Chair, how can we bring these deep and strong ties to help maintain the balance of power in Asia? With our experience in fostering grassroots multiracialism, what can we do to build deeper ties to the peoples of Southeast Asia and bring diverse communities closer together to build a more resilient ASEAN?
Ms Sun Xueling (Pasir Ris-Punggol): Chairman, many of us in Singapore watch with bated breath as the United Kingdom (UK) voted on the Referendum on its European Union (EU) membership and, more recently, when the US voted for its 45th President. These were divisive campaigns marked by catchy populist slogans and contagious promises. The results showed a deep frustration with the status quo and anxiety about the future in a globalised world marked by free trade.
In January 2017, a newly elected President Donald Trump signed an executive order pulling his country out of the TPP. It would have been an ambitious trade deal that would account for 40% of global economic output and 26% of world trade. Singapore would have benefited greatly from it.
Singapore thrives on an open economy, and trade is our lifeblood. Given these developments, what is MFA's view on the prospects for free trade and economic integration around the world? Further, Singapore takes over the chairmanship of ASEAN this year and will strive to deepen regional connectivity. With this year's theme of resilience and innovation, efforts will be underway to uphold the regional order to better deal with emerging security challenges, tap new ways to manage and mine digital technologies and push ahead with regional economic integration. Singapore, as Chairman, will also aim to achieve a high quality Regional Comprehensive Economic Partnership (RCEP), a trade pact involving all 10 ASEAN member states and six countries which ASEAN has Free Trade Agreements (FTAs) with.
What is MFA's view on the ability of ASEAN to achieve real economic integration regionally versus bilateral trade agreements with the major economies?
Mr Liang Eng Hwa (Holland-Bukit Timah): Sir, we are entering a challenging economic environment. Growth in developed markets is slowing while protectionist sentiments appear to be on the rise.
As a small and open economy with foreign trade more than three times its gross domestic product (GDP), Singapore is particularly vulnerable to global economic shifts. In this regard, one of Singapore's strategies is to continue diversifying our international connections.
There is a growing number of emerging economies that are attracting global interest and offering opportunities for our businesses. Singapore should consider how to strengthen our partnership with these countries. Looking beyond our traditional markets like Southeast Asia and China, I would like to highlight four regions of emerging markets with economic potential.
Beyond our traditional economic partners in the EU, there is scope to explore greater cooperation with promising markets in Central and Eastern Europe as well as Russia and Turkey. I know that the Singapore-Turkey FTA came into force last year. Could we have an update on Singapore's engagement with Europe and Euro-Asia?
There have been several high-level visits to Latin America in recent years, including then President Tony Tan's State Visit to Mexico in 2016, which was the first by a Singaporean Head of State to the region. The Prime Minister will also be visiting Argentina later this year for the Group of 20 (G20) Summit. In view of the increase in high-level exchanges with Latin America, how has our relationship with the region's two main trade blocs, the Pacific Alliance and Mercosur, progressed?
In South Asia, apart from India where we already have a strong economic presence, countries like Sri Lanka and Bangladesh have good economic growth potentials. We have an FTA with Sri Lanka, and the Bangladesh Prime Minister is visiting Singapore. I am sure it will provide opportunities for us to further strengthen economic cooperation.
In sub-Saharan Africa, notwithstanding its challenges, the countries continue to embark on a path of development and urbanisation. This presents us with opportunities in areas where we have expertise, such as urban solutions, water, waste management, energy and logistics. What further steps are being taken to broaden and deepen Singapore's engagement of these emerging markets and what more can be done to open up new economic opportunities there?
Mr Vikram Nair: Sir, ASEAN originally started with a small group of non-Communist Southeast Asian countries. At that time, during the Cold War, ASEAN was an important alliance where countries were largely aligned on political matters and sought to foster cooperation and economic growth together.
When the Cold War ended, ASEAN grew and welcomed more countries into the alliance, focused on economic growth and cooperation. This was the era that Francis Fukuyama described as being the \"End of History\", by which he meant the end of historic contests of ideologies.
In recent years, though, ASEAN's plans have grown and there have been plans for greater economic integration, including a common market for goods and services. At the same time, differences have emerged among members on certain issues, such as the South China Sea, making it difficult for them to reach consensus.
In 2018, Singapore will take the reins of the ASEAN Chairmanship. This is an important opportunity for Singapore to exercise leadership and contribute to ASEAN's role in the region. What are our priorities for our year as Chairman?
To maintain ASEAN’s relevance and value, it will be important that we continue to strengthen the economic integration to tap the potential of a market of over 600 million people with a rapidly growing middle class. What can ASEAN do to remain forward-looking to chart a better future for the region?
Finally, I have highlighted some of the challenges and I am sure my friends will highlight more later. What will ASEAN do to get through both its internal and external challenges, and what can we, as Chair of ASEAN, do to help foster consensus on these difficult issues?
Assoc Prof Fatimah Lateef (Marine Parade): Sir, Singapore is chairing ASEAN this year. Our aim is to connect people and economies seamlessly across the region. It is also critical to lead the way in keeping the economic integration vibrant and the region competitive. The Minister for Foreign Affairs said, \"We gain more by working together\".
Several initiatives are in the framework and I would like to highlight three.
One, the formation of a network of ASEAN Smart Cities. Here, boosting cybersecurity is also in the pipeline and on the agenda. Secondly, a model ASEAN Extradition Treaty; and thirdly, an ASEAN-wide self-certification regime, where ASEAN citizens will be considered for preferential treatment.
Can we have details, sustainable goals as well as timelines for some of these proposed initiatives and what are some of the challenges we can expect to face?
Also, knowing that ASEAN comprises nations in various stages of development, modernisation and urbanisation, the harmonisation and alignment, as well as contributions, will have differences and will surface discrepancies. How is Singapore planning to handle these?
Mr Pritam Singh (Aljunied): Chairman, Sir, ASEAN commemorated its 50th anniversary last year. As a pioneer founder of ASEAN and as a respected and constructive diplomatic stakeholder, it is apposite that Singapore finds itself as the first Chair of ASEAN after the celebration of its golden jubilee in 2017. It is apposite because Singapore is seen as an important thought leader, both within and outside ASEAN. Singapore has the potential to shape and determine the substance of the discussions that take precedence among our regional partners because of our reputation as an honest broker.
Singapore has chosen the themes of resilience and innovation as its Chairmanship tagline with a view to building a future-ready ASEAN which is adaptable and forward-looking.
In addition to a variety of issues that Singapore would be pursuing under its Chairmanship, is the Model ASEAN Extradition Treaty. The prospect of such a treaty is potentially an important development in addressing some of Singapore’s bilateral flashpoints that have reared their ugly head in the past, at times, with certain political leaders in Indonesia. Such an extradition treaty could inject a newfound trust and confidence into the Singapore-Indonesia relationship which, like ASEAN, also celebrated its golden jubilee last year.
Singapore’s chairmanship of ASEAN this year presents a signature opportunity for MFA to showcase strong thought leadership to push for an early agreement on the Model Extradition treaty that would support the rule of law within ASEAN and catalyse the signing of bilateral extradition treaties between neighbouring countries. Does the Minister have any preliminary timeline with regard to discussions on the Model Extradition Treaty?
ASEAN has also committed to the ambitious objective under the aegis of the ASEAN Economic Community of doubling intra-ASEAN trade between 2017 and 2025.
Last year, Singapore announced that it was focusing on steps to enhance e-commerce through its National Trade Platform, a one-stop trade information platform for customs clearance, trade logistics and trade finance. Alongside this specific initiative, it would also appear that the prospect of the ASEAN Single Window would allow local Singaporean businesses to connect to more customers throughout ASEAN.
Mr Chairman, all foreign policy begins at home and I request some information from the Minister on the roles the Ministry plays from a whole-of-Government perspective in translating foreign policy initiatives into economic outcomes for enterprises in Singapore in view of our economic transformation plans.
Finally, the Minister has gone on record in the aftermath of the ASEAN Foreign Ministers' meeting earlier this month to say that discussions on the Code of Conduct (COC) for the South China Sea are likely to be very complicated even as the situation is a lot calmer.
Mr Chairman, one of ASEAN’s interests in COC is to ensure that trade and freedom of movement of sea traffic, particularly commercial traffic, is unimpeded. It would appear that China’s interests in the South China Sea are territorial to the extent that it wants a high degree of control of its immediate backyard, behaviour which does not appear to be primarily driven by a desire to bully ASEAN, but rather is consistent with modern big power behaviour in regions adjacent to its immediate borders, regardless of whether such a power is an Anglo-Saxon one or not.
What more can Singapore do to smooth over the concerns China has about the South China Sea and secure a stable future between ASEAN and China going forward?
Dr Teo Ho Pin (Bukit Panjang): Sir, in 2015, the 10 ASEAN member states established the ASEAN Economic Community (AEC), integrating a potential market size of about US$2.6 trillion serving over 600 million people. The AEC Blueprint 2025 was also adopted by ASEAN leaders to provide broad directions to guide the next phase of economic integration from 2016 to 2025.
Sir, based on feedback from our local business community, many firms are not familiar with the details of AEC. The business community and our people also do not understand the benefits of AEC. In order to help our local businesses to seize business opportunities in AEC, it would be useful if MFA and the Ministry of Trade and Industry (MTI) can organise more industry-focused talks and forums. Such meetings will also provide opportunities for our business leaders to forge partnerships with other ASEAN business leaders.
Sir, I support the Finance Minister’s proposal to launch a new ASEAN Leadership Programme to help our business leaders to build networks and expand their business overseas. Instead of just focusing on our business leaders, we can extend this programme to other business leaders in ASEAN. In this way, more opportunities can be created for our business leaders to forge partnerships.
Sir, I wish to seek clarifications from the Ministry in the following: first, what are the key deliverables of Singapore’s position as ASEAN Chair? Second, an update on the AEC’s progress and achievements to date.
Ms Sylvia Lim (Aljunied): Chairman, separate surveys completed by researchers in a university and a private polling firm indicate that Singaporeans have greater ambivalence, less interest and less sense of belonging towards ASEAN, compared to our ASEAN partners. According to one of these surveys, only 13% of Singaporean respondents indicated an interest in ASEAN news and information. There is indifference and even scepticism towards ASEAN, even though there is some acknowledgement that the grouping benefits Singapore in terms of economic opportunities and regional stability.
I find these results not satisfactory, since our future is inextricably linked to the success of ASEAN. Given that these views are about how Singapore relates to and interacts with our closest neighbours – countries with which Singapore has to work with closely with on various issues. I wonder if such sentiments and ignorance might harm Singapore in the longer term.
I would like to ask the Minister for Foreign Affairs if he thinks that the relatively low opinion of ASEAN among Singaporeans is of concern for Singapore’s foreign policy and interests. May I request that the Minister share with the House the reasons why he thinks this issue is anything to be worried about? I would also like to ask the Minister if he intends to do anything to promote more positive views of ASEAN among Singaporeans, especially given the fact that Singapore is serving as ASEAN Chair this year.
If the Minister wishes to pursue such action, I would like to invite him to explain what these initiatives are. I would also appreciate the Minister informing this House about how he expects such plans to continue past Singapore’s chairing of ASEAN, and how they relate to the ASEAN Social Cultural Community.
Mr Christopher de Souza (Holland-Bukit Timah): Sir, while there is no easy solution for the humanitarian crisis in the Rakhine state, it is, nonetheless, an issue ASEAN should be concerned about.
Firstly, the humanitarian situation in the Rakhine state is still a cause for concern, even though Bashan Char is being prepared and repatriation is underway. Excluding those internally displaced who fled in earlier incidents of violence, since August 2017, more than 688,800 Rohingyas have fled the Rakhine state, exponentially expanding refugee camps beyond their capacity, and without adequate water or sanitation. Of these, about 60% are children, of whom some have suffered separation, being orphaned or even being raped.
Secondly, the mass displacement across territorial boundaries threatens regional stability. Terrorists have also used this issue to recruit more people, including those in Malaysia, to join their cause.
Thirdly, all ASEAN states have expressed a deep commitment to the importance of human rights, for example, Article 14 of the ASEAN Charter, which forms the basis of the ASEAN Intergovernmental Commission on Human Rights (AICHR), the ASEAN Commission on the Promotion and Protection of the Rights of Women and Children (ACWC), and the ASEAN Human Rights Declaration.
ASEAN has concertedly alleviated humanitarian situations previously, for example, the earthquake in Aceh in December 2016. Therefore, I would like to ask: one, what can ASEAN do in response to this humanitarian crisis? Two, how can the ASEAN Human Rights Declaration, ASEAN Charter and other ASEAN legal agreements form a stronger basis for engaging Myanmar to take greater humanitarian action? And three, as ASEAN Chair, what can Singapore do to alleviate the humanitarian situation?
The Chairman: Mr Amrin Amin, you can take both cuts.
Mr Amrin Amin (Sembawang): Mr Chairman, China's growth has been impressive since the country opened up to the rest of the world. It is expected to register 6.4% growth in 2018. China’s growth, affluence and rising middle class represent opportunities for Singaporeans and Singaporean firms. Already, many Singapore companies are invested in China.
Singapore has always strongly believed in China’s growth prospects. Singapore is China's largest foreign investor since 2013 and one of China’s top trading partners in ASEAN. Singapore was also the first Asian country to sign a comprehensive FTA with China which paved the way for the subsequent ASEAN-China FTA. Last year, Singapore and China agreed to work together on the B&R Initiative.
China's prosperity and growth have brought about greater confidence among the people of China about their country. China is widely seen as a rising power and becoming more prominent in the international arena. Given our stake in China's growth, Singaporeans have an interest in our engagement with China and the state of our bilateral relationship. Could MFA provide an update on the Singapore-China relationship?
A key force shaping the geopolitical environment is US-China relations. China's rise has fuelled speculations of a fundamental change in world order. Projects like the B&R Initiative signal China's increasing global influence. Such trends have contributed to a broader concern of a tussle between the US and China in the near future, as both sides may jostle for strategic space and influence.
For Singapore, both the US and China are important partners. We have close cooperation with both countries, extensive trade and investment links and many people-to-people exchanges.
Given the brewing rhetoric of a strategic rivalry between the US and China and in view of our good relations with both the US and China, we have a stake in ensuring good, stable US-China relations.
What is MFA's view on the state of US-China relations? As both countries are strategically important for Singapore, how will Singapore be affected by any fluctuations in US-China relations and how can we mitigate such an impact?
Ms Jessica Tan Soon Neo (East Coast): Mr Chairman, Singapore and the US enjoy strong, multifaceted and long-standing relations, spanning the defence, economic and security fields. In 2016, the US was Singapore's largest source of foreign direct investments (FDIs), while Singapore was the US' second largest Asian investor after Japan. Defence ties are excellent, with both sides working together in the area of counterterrorism. The Prime Minister's visit to Washington DC in October last year at the invitation of President Donald Trump reaffirmed the mutually beneficial nature of the bilateral relationship.
However, in the past year, we have also witnessed the US' withdrawal from TPP as well as the Paris Agreement on Climate Change, amongst other developments. These actions have led some to question the US' commitment to the rules-based global order that it has underwritten since World War II, and the effects that this could have on Singapore.
So, can the Minister provide an update on the state of Singapore-US relations and how Singapore has been working with the US to ensure that bilateral relations remain stable?
Assoc Prof Dr Muhammad Faishal Ibrahim (Nee Soon): Sir, Malaysia, Indonesia and Brunei are our closest neighbours. Aside from direct air links to all three countries, we share land borders with Malaysia, and maritime boundaries with Malaysia and Indonesia. We have large amounts of trade and investments flowing between us and our neighbours. The people of our countries share long-standing historical and familial ties. With Brunei, we share a close friendship, one which both sides have often described as a \"special relationship\".
There has been much progress in bilateral cooperation between Singapore and our three neighbours. Most recently, Singapore and Malaysia have jointly lowered tolls on the Second Link. There are more companies investing in Indonesia than before. Our youth exchanges with Brunei continue to grow. Our close ties are underscored by our special Currency Interchangeability Agreement with Brunei. As with all neighbours, we sometimes have differences, too. One example is how the Malaysians have sought revision and interpretation of the 2008 International Court of Justice (ICJ) Judgment on sovereignty over Pedra Branca, Middle Rocks and South Ledge.
I note that Malaysian Prime Minister Najib Razak has just participated in the 8th Singapore-Malaysia Leaders' Retreat in Singapore. Minister for Foreign Affairs Dr Vivian Balakrishnan also recently visited Jakarta, where he met several political officeholders and politicians. In addition, Deputy Prime Minister Teo Chee Hean visited Brunei last year, where I was a delegation member.
My question has three parts. First, would MFA be able to update Members of the House on the state of our bilateral relations with our three closest neighbours, including key takeaways from the recent visits? How will we work to maintain our relations with our closest neighbours for the benefit of our peoples? Second, as Malaysia enters into election mode, what is MFA's view on its impact on bilateral relations, if any? Third, following the commemoration of our 50th anniversary of formal diplomatic relations with Indonesia last year, what are some of the bilateral projects that we can look forward to that will help to strengthen our relationship with Indonesia and maintain the positive momentum of bilateral ties?
The Chairman: Mr Baey Yam Keng. Not here. Mr Cedric Foo.
Mr Cedric Foo Chee Keng (Pioneer): Mr Chairman, my cut is on Singapore's relations with Japan and the Republic of Korea and how we can improve cooperation with these countries for mutual benefit.
Singapore has excellent relations with Japan and Korea. However, such good state of affairs needs to be nurtured continually. Over the past year, I would like to ask the Minister whether there have been high level exchanges for both Japan and Korea. Additionally, were there also business-to-business and people-to-people exchanges between Japan and Korea on the one hand, and Singapore on the other?
Many Japanese and Korean companies have also made investments and set up offices in Singapore to tap the growing Southeast Asia market. Singapore is also host to many Japanese and Koreans living, working and schooling here. Similarly, some Singaporeans are also drawn to study and work in Japan and Korea, embracing their culture and bringing back with them many valuable experiences.
I would like to ask the Minister on the areas in which Singapore can improve our cooperation with Japan and Korea. For example, both Japan and Singapore are experiencing ageing societies. I think there are many lessons we can learn from each other.
Both Korea and Japan are also technologically advanced countries. They have many global leading companies. Is Singapore looking into avenues where these companies can partner our local enterprises, especially our small and medium enterprises (SMEs), to access their respective markets and even to partner with to access third countries' markets?
Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, Sir, I understand that Australia and Singapore enjoy a strong relationship. Our relations have deepened over the past few years with the signing of the Comprehensive Strategic Partnership (CSP) in 2015, representing a significant upgrade of ties across multiple sectors. This strong relationship is exemplified by substantive cooperation at the government-to-government level, as well as at international forums, including those involving ASEAN. Besides the frequent exchange of high-level visits, we also have the Singapore-Australia Joint Ministerial Committee, a unique dialogue mechanism involving foreign affairs, defence and trade ministers, which has been going on for two decades now.
Our defence relations are robust. Over the years, Australia has generously allotted space for our Singapore Armed Forces (SAF) soldiers to train. This, alongside a history of co-deployment and operational cooperation, is a testament to the high level of trust between our two countries. On top of that, our people-to-people ties are healthy. Australian universities remain to this day a favourite for our tertiary students, and roughly 400,000 Singaporeans visit Australia annually. Australians readily reciprocate this, with over one million of them visiting Singapore every year.
With these in mind, I invite the Minister for Foreign Affairs to update the House on Singapore's relations with Australia, as well as the ongoing implementation of the 10-year CSP, which is in its third year.
Mr Murali Pillai (Bukit Batok): Sir, Singapore and ASEAN enjoy a strong relationship with India. This was exemplified in January 2018 at the ASEAN-India Commemorative Summit where the ASEAN countries and India reaffirmed their commitment to strong ASEAN-India ties.
In a Forbes' article dated 10 January 2018, it was reported that World Bank and the International Monetary Fund (IMF) projected India to be the world's fastest growing large economy for the rest of this decade as well as the world's fifth largest economy soon.
This is happening in tandem with the shift in the global economic weight towards Asia that the Minister for Finance mentioned in his Budget Statement. With its economic growth, India has become an increasingly important power on the world stage. A growing India represents significant opportunities for Singapore and Singaporeans. I seek an update from MFA on the state of our relations with India.
The Chairman: Assoc Prof Fatimah Lateef, you can take both cuts together.
Assoc Prof Fatimah Lateef: Sir, the networks and developments in the Middle East continue to be very dynamic and vibrant. Change seems to be ongoing all the time, including the geopolitical and humanitarian issues. Not surprisingly, some of our businesses and entrepreneurs view the region through a more guarded perspective. Despite all these, there is still movement into the region, and some new markets have taken shape.
How will our engagement with the Middle East progress and proceed? What are the current emerging markets that we are exploring and with the view towards our economic expansion in the Middle East? These will, of course, be dependent on our diplomatic ties with the region. Thus, how does the Minister foresee us moving forward here?
The last year has seen the Middle East issue taking centrestage yet again. Ongoing issues persist and new conflicts, too, have surfaced. One of the long-term controversial matters is the Israeli-Palestinian issue. Singapore has always supported a two-state solution and we are one of the 128 United Nations (UN) Member States that voted in favour of rejecting the US' decision tabled at the United Nations (UN) General Assembly recently.
With an understanding of the changes that have evolved, how will we continue to uphold our principle? How do we also continue to engage both sides in the long-drawn conflict, moving forward? What about our relations with the other countries in the area, such as the United Arab Emirates (UAE), Kuwait and Oman?
Mr Kwek Hian Chuan Henry (Nee Soon): Mr Chairman, the geopolitical situation has gone through significant changes over the past few years. Europe, by and large, has remained a source of stability. This has created a stable environment for us to further our long-standing relations and good economic ties with Europe.
Can I ask MFA: how are we strengthening our relations with our European partners and with the EU as a whole? Beyond economic cooperation, how can we deepen our cooperation with our European partners in other areas, such as connectivity? And besides traditional areas of collaboration, are there new areas, such as technology and innovation, which we are exploring?
Also, given the rising importance of the Arctic shipping route, Singapore has strategically placed itself as an observer within the Arctic Council. I note that there has been an increased interest in developments in the Arctic, and these are well-covered by the media. Major countries have also recently made important announcements regarding their Arctic plans. How will Singapore respond to the opportunities and potential challenges for Europe, including the Arctic?
Lastly, in the various overseas work trip I have been to, I have witnessed the calibre and dedication of our ambassadors, our non-resident ambassadors and our MFA officers. Their hard work has continued to advance the interests of our country, and I would like to offer them my sincere appreciation.
Mr Louis Ng Kok Kwang (Nee Soon): Sir, we are faced with issues, such as terrorism, cybersecurity, a growing refugee crisis, the list goes on. And these issues are often worsened by climate change. A 2017 World Economic Forum poll involving 30,000 millennials from 186 countries found that climate change was their top concern.
Another growing concern is the refugee crisis. I visited the Rohingya refugee camps in Bangladesh last month, and what I saw and heard were painful and beyond words. I saw little children's childhood shattered; I saw young people all alone, having watched their family members get killed. All these issues are complex and interlinked, requiring resolute political will by the international community to work together.
Singapore has always been a strong supporter of multilateral approaches to global issues. How is Singapore working at the ASEAN level, particularly as the current Chair, as well as at the international level, to address challenges, such as climate change and the Rohingya refugee crisis?
Mr Sitoh Yih Pin (Potong Pasir): Mr Chairman, Singapore has, historically, positioned itself as a centre for global exchange and a key hub for trade and investment. This remains true today. We are now one of the world's most highly connected cities and are exposed to and facilitate massive flows of data and information with other cultures and economies.
Our economy is diverse and complex. To remain relevant and competitive, we fight and compete for ideas, opinions and talent in the global marketplace. In this matrix, therefore, it is inevitable that we become susceptible to external influences. Consequentially, Singapore will now not only need to rally support for its foreign policy positions with our international partners, such as our ASEAN neighbours, but also domestically amongst us Singaporeans. Over the past year, there had been several instances that reflect this. I shall briefly highlight two.
The South China Sea dispute has been widely reported in the mass media and commented upon in governmental and academic circles. A territorial dispute between some of our ASEAN neighbours and China alludes to a larger geopolitical strategic tussle for global influence between the dominant global superpower, that is, the US, and a rising China.
The situation in the Rakhine state in Myanmar is another potentially divisive issue within ASEAN. There are divergent views on this complex intercommunal issue among ASEAN member states, and it could undermine ASEAN unity.
Singapore assumes the Chairmanship of ASEAN this year. One of the focuses of our chairmanship year is to strengthen the collective resilience of ASEAN members. Based on this backdrop of recent incidents and events, it is clear that within consensus-based ASEAN, there are members with strong divergent views, both within ASEAN and with our dialogue partners. ASEAN will not only have to navigate fishes amongst its member states but also with external actors. As such, the diverse and sometimes contrasting interests of different ASEAN members and other external influences could cause various actors who may seek to influence Singapore, as ASEAN Chair, in order to get their way on the regional platform.
I invite the Minister to share with us on how we can, as a country, respond to these possible external challenges and influences.
Mr Baey Yam Keng (Tampines): Singapore is a small country located in Southeast Asia, one of the most diverse regions in the world.
Maintaining strong political, economic and people-to-people ties with other countries in our region is essential. Working together allows us to leverage our collective strength as a region of over 600 million people with a combined GDP of over US$2 trillion. This would create opportunities for our people.
With the rise of China projected to become the world’s largest economy by 2032, it is understandable that the developments there have occupied most of our attention. But as the Chinese saying goes, 远亲不如近邻, while the majority of Singaporean forefathers came from China, it is equally, if not more important, for Singapore to build and maintain strong relations with the countries in our immediate Southeast Asian region.
Among the ASEAN members, given the proximity in terms of geography, language and culture, there is natural familiarity of Singapore and Singaporeans with our immediate neighbours: Malaysia, Indonesia and Brunei. However, let us also not forget or neglect our other neighbours.
Mr Chairman, I have observed first-hand, as part of the Prime Minister's delegation to Vietnam in March 2017, and then-Speaker Mdm Halimah Yacob's delegation to Laos in September 2014, how we build upon our multifaceted ties and complementarities to strengthen mutual understanding and cooperation.
In this context, I would like an update from MFA on Singapore’s engagement of our fellow ASEAN countries, in particular, Cambodia, Laos, Myanmar, the Philippines, Thailand and Vietnam.
Mr Cedric Foo Chee Keng: Mr Chairman, Sir, on resources for MFA, geopolitical developments happen around the clock and are often unpredictable in nature. Our civil servants from MFA have the unenviable task of regularly monitoring global geopolitics 24/7 so as to provide timely and well-considered responses.
As Chair of ASEAN in 2018 this year, Singapore will have to take on more responsibilities, playing host to the ASEAN member states and key partners at many high-level meetings in Singapore. MFA officers will have to react round-the-clock to develop and coordinate well with fellow ASEAN member states and key partners, as well as across the entire Singapore Government, in order to ensure a successful chairmanship. This is important so that Singapore's chairmanship can produce progress in regional cooperation that benefits Singapore and also other ASEAN states.
Given the demands placed on MFA, particularly this year, does MFA have the necessary resources to carry out its work with adroitness and sensitivity, as they always have?
Mr Desmond Choo (Tampines): Mr Chairman, Sir, Singapore's Foreign Service Officers play important roles in defending Singapore's interest in the global arena, be it representing Singapore at multilateral meetings, responding to international crises or rendering consular assistance to Singaporeans in distress overseas.
Given the increasing demands on MFA's work, there is a need for MFA to ensure that it has sufficient manpower and competencies to meet these challenges. How will MFA ensure that its officers are equipped with the necessary training, knowledge and capabilities to fulfil its mission? Has MFA also explored tapping on mid-career applicants for these posts and, if so, what percentage of its Foreign Service Officers are made up of mid-career entrants?
How can MFA also work with overseas Singaporeans and agencies, such as Enterprise Singapore, to enhance its capabilities?
The Chairman: Ms Joan Pereira, you have two cuts. You can take both together.
Ms Joan Pereira (Tanjong Pagar): Mr Chairman, given our fundamental realities as a small country and an open economy dependent on global trade, Singapore is exposed to the headwinds of global developments. This has been compounded by technological innovation. We all know technology bridges physical distance. When we watch videos or read accounts of events that take place far from Singapore, it does not matter that they may be happening thousands of miles away. They have an effect on us intellectually, as well as emotionally, and shape our views on how Singapore should conduct itself on the international stage. At the same time, social media has led to a greater proliferation and contestation of narratives in the marketplace of ideas, with fake news being a growing and very real threat.
Given these developments, it has become even more important for the Government to communicate clearly to Singaporeans to foster greater awareness and understanding of the foreign policy stance that Singapore takes. What are the key principles that Singaporeans should know on Singapore's foreign policy? As a multi-ethnic and religious country, how concerned should Singaporeans be that foreign policy issues may be dragged into the domestic discourse?
Singapore is ASEAN Chair this year. Could the Ministry share with the man-in-the-street what it means for Singapore to be ASEAN Chair? What are its significance and impact on us as a nation?
Mr Chairman, as a country whose only resource is its people, Singapore believes that human resource (HR) development is vital for economic and social progress. We take this very seriously. Last year, the World Economic Forum ranked Singapore top in Asia for developing human capital. Globally, we were ranked 11th out of 130 countries. Singapore benefited from technical assistance provided by other countries and international organisations in our early post-Independence years. We are now in a good position to help others by sharing our development experience.
I understand that our main conduit of assistance has been through the Singapore Cooperation Programme (SCP), and we have worked with various partners to deliver training programmes for developing countries. How has SCP supported our engagement of other countries?
Mr Ong Teng Koon (Marsiling-Yew Tee): Mr Chairman, Singaporeans are going overseas to live, study and work in increasing numbers. Many of them have become prominent leaders in their chosen fields. Despite spending many years abroad, there is a large number of such Singaporeans who continue to maintain ties with families and friends here. They remain spiritually rooted in Singapore and are proud to be Singaporeans and not just because they missed the local hawker food. In many ways, they are also the face of Singapore to those with whom they interact in their new countries. They are also often called upon to explain and, sometimes, to defend Singapore's policies and actions.
Given their unique position of being Singaporeans immersed in another society and culture, is there a role for overseas Singaporeans to advocate for Singapore, presenting our point of view to the rest of the world? If we believe that this can be a significant source of soft power for Singapore, I would like to ask the Minister what can we do to help them in their role.
Miss Cheng Li Hui (Tampines): Singaporeans are increasingly well travelled. Many Singaporeans work and study overseas and based in foreign lands for many months and even years. Many also make short business trips and holidays.
When we are abroad, we are largely on our own and would have to be alert and careful. But despite our best plans, our overseas trips can often be thwarted by unforeseen circumstances that could range from natural disasters to terror attacks. These are beyond the control of any of us and it can create stress for Singaporeans overseas and even pose dangers to their lives. The affected Singaporeans would then require assistance and support, and their families and friends back home will also be concerned with their status and well-being. We do not need to look far for past examples. Many Singaporeans who had made travel plans to Bali last December were unable to proceed due to Mount Agung's eruption. Terrorist attacks in European countries, as well as unrest in other parts of the world, will require Singaporeans to be ever vigilant when abroad.
In view of the potential dangers that Singaporeans may face overseas, what are some of the measures that MFA has taken or is planning to take to assist Singaporeans in such circumstances?
The Chairman: Minister Vivian Balakrishnan.
The Minister for Foreign Affairs (Dr Vivian Balakrishnan): Mr Chairman, now, to discuss my day job in MFA. I want to thank all the Members for your very insightful contributions and comments. I want to commend Mr Low Thia Khiang, Ms Sylvia Lim and Mr Pritam Singh for your also very constructive comments. In fact, I listened to you very carefully and I could not find anything to disagree with you. And I am sure our foreign partners will notice that there is bipartisan support for our approach to foreign policy. Indeed, as a small open state, we need the bipartisan support. So, I am grateful for your constructive contributions and for the bipartisan support that we enjoy.
There are at least three key political issues, if I could summarise. First, how do we manage our relations with the major powers, given the rapidly evolving geopolitical balance of power? The second set of issues is, as ASEAN Chairman, how do we strengthen ASEAN’s unity, centrality and value proposition, and value proposition not just for outsiders but including our own people? The third political issue is that Singapore is an open multiracial, multi-religious city-state, a sovereign country in the heart of Southeast Asia. How do we protect our unique identity, our domestic unity and our sovereignty from the inevitable foreign influence and, especially from the primordial pulls of ancestry, race, language and religion? And yet, as Mr Low Thia Khiang mentioned yesterday, this cultural arbitrage is also Singapore's competitive advantage. So, we need to be aware of all the opportunities as well as the challenges that confront us because of our unique position.
In his Budget Statement, the Minister for Finance identified three major transformations. Members have heard about them.
A shift in the global centre of gravity towards Asia, and that, basically, as Mr Low says, is China, India and ASEAN itself.
Second, the emergence of new technologies and the impact it will have on jobs, the economy and even attitudes to free trade.
Third, an ageing population. The ageing population is especially an issue that confronts Singapore and China, and the fact that, in contrast, for ASEAN as a whole, 60% of ASEAN is below the age of 35.
These three trends present us with both opportunities and threats. What we are trying to do is that as Asia grows, to make use of our unique identity, unique position and even our unique cultural arbitrage in order to ride on our region's growth and dynamism.
But even as we do this, we must also be mindful that there are multiple transboundary pitfalls. For instance, protectionist nationalism is on the rise. Terrorism is a clear and present threat. In the midst of the digital revolution, cybersecurity breaches and “fake news” have eroded trust in institutions and divided societies. In fact, sometimes, they have even become a tool of foreign policy.
Singapore’s foreign policy, given our unique position, has always been guided by five key principles.
First, Singapore has to be successful and vibrant. If we are not successful, we are not relevant. As Minister Mentor Lee Kuan Yew said a long time ago, the world will not miss us if we disappear as a small state. There is no irreplaceable function that a small state provides the rest of the world.
Second, we must preserve our ability to make independent sovereign decisions based on our own national interests, and we must not become a vassal state. We are not for sale and we are not going to be easily intimidated.
Third, Singapore aims to be a friend to all. What this means is that we do not wish to be forced to choose sides, nor to be caught in proxy battles.
Fourth, we promote and we believe in a global rules-based order with international law and international norms. If you think about it, this is essential precisely because we are a small state.
Fifth, we must be a reliable, credible and consistent partner. For us, we do not have the luxury of changing, flip-flopping, changing our views quickly over time, or saying different things to different partners. We need to be reliable, credible and consistent.
I will start by addressing our relationships with the major powers. Mr Amrin Amin asked about our relationship with China. Many Members have also asked about US-China relations and their dynamics, and how that affects us.
With China, our relations, our track record of cooperation are deep, long-standing and substantive. Last September, Prime Minister Lee Hsien Loong visited Beijing at China’s invitation. The timing was significant because it was just a couple of weeks before China's 19th National Congress of the Communist Party of China. We did not expect that they would have the bandwidth; nevertheless, they invited the Prime Minister.
When the Prime Minister met President Xi Jinping, President Xi emphasised that Singapore and China had no fundamental disagreements, no conflicting interests and no differences on basic principles. I am quoting him and we will convey the exact words in Chinese words to the media later on. In fact, this is our own long-standing belief. We have always believed that a successful China, a stable China, is good for our region. The rise of China and the elevation of hundreds of millions of people from abject poverty to middle class is the biggest story of our lifetime. And, as Mr Low Thia Khiang said yesterday, as people with Chinese ancestry at a cultural level and emotional level, we must take pride and joy in that achievement. But we are also aware that we are not Chinese citizens and Singapore is the only political entity, the only state in the world, where Chinese are a majority, but we are not under the Communist Party of China.
We have always consistently supported China's strategic economic development. This is clearly evident from our unique government-to-government projects: Suzhou Industrial Park, Tianjin Eco-city and, more recently, the Chongqing Demonstration Initiative. In fact, surprisingly, Singapore has been the largest foreign investor in China since 2013. Of course, our role will have to evolve because, unlike the past two-and-a-half decades when we were investing and we were moving concepts and ideas into China, today, China has become a net exporter of capital and technology. So, our role inevitably must evolve to keep up with the times.
The other point that we must anticipate and must expect from time to time is that there will be issues of differences between Singapore and China. After all, we are two sovereign states with very different national circumstances. So, we must expect differences in perspectives and we must not get flustered even when pressured. This is to be expected. This is almost par for the course in international relations because you cannot expect two countries’ interests to be completely identical. It is no secret. I mean we have had some bumps along the way, but I would say these episodes over the last two-and-a-half years have helped both sides to understand each other’s position better. I think it has made for a more mature relationship.
Currently, we are negotiating an upgrade to the China-Singapore FTA. This will further enhance market access for our companies and create more jobs for Singaporeans. Of course, we also want to see more Chinese companies accessing opportunities in Southeast Asia through Singapore.
Our multifaceted cooperation is constantly evolving. Both sides have identified new areas for cooperation. We have the Joint Council for Bilateral Cooperation (JCBC), co-led by Deputy Prime Minister Teo. We have now identified finance, legal and judicial sectors. One example was the inaugural Singapore-China Legal and Judicial Roundtable held last year. These initiatives will complement the existing high-level fora on economic cooperation, social governance and leadership. All, again, are incidentally chaired by Deputy Prime Minister Teo. These extensive and high-level engagements between China and Singapore epitomise the long track record that builds trust and confidence.
The B&R Initiative is another major opportunity of cooperation. When I visited China in June last year, Foreign Minister Wang Yi and I agreed to establish three platforms to deepen B&R cooperation: first, on infrastructural connectivity; second, on financial connectivity and support; and third, to look for opportunities for third-party collaboration, including joint training for officials from other B&R countries to work and to exploit opportunities that the B&R Initiative provides.
The potential is huge. Singapore accounted for 85% of total inbound investments to China from B&R countries. And nearly one-third of China's outbound investments to B&R countries actually flow through Singapore. I did not quite believe these figures. I double-checked with my staff and they said yes, these figures are from China itself.
We are working together to connect the overland Silk Road Economic Belt with the Maritime Silk Road through a new \"Southern Transport Corridor\" which links Chongqing in western China, to Beibu Gulf in Guangxi. Our businesses can expand into western China through Chongqing, just as Chinese companies can use Singapore as a gateway into Southeast Asia. This creates a \"mutual hub effect\", which benefits businesses and people. And, as I said, by interconnecting the overland Silk Road with the Maritime Silk Road, it still maintains Singapore as a hub.
Let me turn to the US. The US is a long-standing, close strategic partner. We have had mutually beneficial relations over the last 52 years. Defence ties form the backbone of the bilateral relationship. Let me give a recent example. When Hurricane Harvey struck last year, we quickly deployed four Republic of Singapore Air Force (RSAF) CH-47 Chinook helicopters and 34 of our own servicemen from a training detachment in Grand Prairie, Texas, to help with the relief efforts. RSAF was able to work seamlessly with their American counterparts because of the regular training between both sides. We have 1,000 SAF servicemen training in various detachments in Arizona, Idaho and Texas on the F15s, F16s, Chinooks and Apaches. No other foreign state has more troops on US soil.
Our strong trade, investment and business ties with the US are underpinned by the 2004 US-Singapore FTA. In 2016, the US was the top foreign direct investor in Singapore, with investment stock worth S$281 billion. The US is Singapore's largest trading partner in services and the third largest trading partner in goods. Our total trade with the US stood at almost S$140 billion.
There are over 4,200 US companies here, which help create good jobs for Singaporeans. US exports to Singapore and Singapore investments in the US support over 250,000 American jobs. This is a statistic we shared with President Trump to make the point that he has real skin in the game in Southeast Asia and, especially in Singapore. Singapore is the second largest Asian investor in the US, second after Japan, and Asia’s No 1 buyer of US commercial property. And, I think, these are investments.
Last month’s Singapore Airshow showcased our strong defence and economic cooperation. The US fielded the largest foreign delegation with 170 exhibitors. US aerospace exports to Singapore totalled almost US$5 billion in 2016.
These deep economic linkages have given Singapore access to US markets and US technology and allowed Singaporeans to learn with and from the best in the US, including the academic and research institutes.
Prime Minister Lee's visit to Washington last October reinforced these fundamentals. President Trump described Singapore as one of the US’ “closest strategic partners in Asia”. President Trump has accepted Prime Minister Lee's invitation to visit Singapore later this year. We look forward to receiving him.
There have been questions about the US' commitment to the liberal world order and free trade as we know it. One statistic which I think Members of the House should be aware of is that, in 1960, the US GDP was 40% of global GDP. In 2017, although the US GDP has grown, as a proportion, it has shrunk to 25% of the global GDP.
The reason for giving Members these statistics is to make you all appreciate that it is a completely legitimate political exercise within domestic US politics to ask why they should unilaterally underwrite the global world order as we have known it for the past 70 years when their share is shrinking. I say this because you need to look for deeper trends beyond the headlines and the personalities. But the point we make is that the US has had a headstart here. The US has enormous investments in Southeast Asia; the US has significant reservoirs of goodwill. It is theirs to lose, even as they sort out their domestic political questions.
For us, because of our close relationship with both the US and China, clearly, we hope that there will be a stable US-China relationship because, if they maintain the peace, there will be peace, stability and prosperity in the Asia Pacific. We enjoy good relations with both. We want, and, in fact, are well-suited to be part of the common circle of friends. Remember my earlier point about not being forced to choose sides.
So, we must anticipate that there will be an element of competition between the US and China. But the big difference from, say, the Cold War, is that the US and China are highly interdependent in a way which was never present in the relationship between the Soviet Union and the US.
So, we hope that both sides will see that there is too much to lose by confrontation and conflict. We, of course, view a trade war with great concern. We have seen some early salvos, for instance, the tariffs that the US is imposing on solar panels, even washing machines. The target was China and Korea. But because Singapore also makes solar panels, we also become collateral damage. This illustrates the danger of a full-blown trade war.
Let me turn to ASEAN. It has always been a cornerstone for peace and prosperity in our region. ASEAN unity enlarges our strategic and economic space, amplifies our voices on the international stage, and promotes an open and rules-based inclusive regional architecture. The alternative, if we did not have ASEAN, is to become a bunch of vassal states operating on the principle of “might is right” and being an arena for proxy wars. I think Mr Low Thia Khiang also mentioned that yesterday.
Therefore, ASEAN is a cornerstone of our foreign policy. We will work to strengthen the ASEAN-led regional architecture by working with our ASEAN member states and our dialogue partners.
Our dialogue partners have proposed various regional initiatives. For instance, I mentioned the B&R Initiative just now. More recently, Members may have heard the US, Japan and India talking about a Free and Open Indo-Pacific. Without getting into the details, I would just like to share with Members how I view all these proposals. I basically ask three questions.
First question: whatever the proposal is, whatever the label is, what does your proposal mean for ASEAN Centrality and unity? In other words, will these initiatives keep ASEAN at the core of the regional architecture of Southeast Asia, or will they, wittingly or unwittingly, pull ASEAN apart and force us to choose sides? That is my first question.
Second question: whatever the plan or initiative is, does it facilitate trade, investment, infrastructure and connectivity? Clearly, an economic agenda, because ASEAN has got such growth potential in the next two to three decades. Trade, investment, infrastructure and connectivity are a strategy.
Third question: whatever the initiative, does it support a world order based on international law? And for us, in particular, because we are a port, an island, a city-state, the 1982 United Nations Convention on the Law of the Sea (UNCLOS) is sacrosanct.
Our Chairmanship of ASEAN is an important opportunity for us, in our own small way, to make a positive contribution to a substantive and forward-looking agenda. Ms Sylvia Lim mentioned her concern that, according to a survey, only 13% of Singaporeans expressed interest in ASEAN. I share her concern. But my own take is that I think we take it for granted. After 50 years, we have taken it for granted that there is no war in Southeast Asia, that we transact with one another, have mutual interdependence, investments, trade. When we have disputes, we go to the international courts and we resolve disputes according to international laws. That is at the political level.
Actually, if you look at the people level and you ask yourselves, tourism numbers – Singaporeans are great travellers and ASEAN is our immediate neighbourhood. Huge numbers of Singaporeans travel to ASEAN. If you look at schools and you ask the schools about school trips, lots of trips. On service learning, the Singapore International Foundation (SIF) volunteers, even when you look at both formal and informal volunteer groups and what our students and young people do in the more rural areas, even in Indochina.
If you ask our businesses what their investments are across Malaysia and Indonesia, actually, if you do a proper catalogue, I think we are fully invested in ASEAN. It is just that, I think, we take it for granted. But I take the Member's point. We need to raise the flag of ASEAN more. I am always intrigued that if you go to any ASEAN member state embassy, you will see us flying two flags ‒ our own national flag and our ASEAN flag. But you do not often see the ASEAN flag in Singapore. So, I take the Member's point that we do need to fly the flag more and to make our people appreciate how important ASEAN is to us.
Our Chairmanship themes for this year are “resilience” and “innovation”. It expresses our hopes for ASEAN to meet future challenges, particularly to deal with emerging issues like digital disruption. After all, this is what we are also doing at the local level. How do we deal with the digital revolution? In fact, this is an opportunity for us to do more with our fellow ASEAN members.
One key initiative is the ASEAN Smart Cities Network. We envisage it as a platform for ASEAN cities to share best practices, urban solutions, new technologies. But I think the most important thing is we are looking for interoperability, whether you are talking about e-payment systems, ASEAN single trade windows, facilitation of travel, facilitation of even the ASEAN self-certification regime in order to make it easier to export goods and services. We want to do all these because, in fact, there is tremendous potential for intra-ASEAN trade.
Someone asked about the model ASEAN Extradition Treaty. Negotiations are not over yet but making good progress. As ASEAN Chair, we will have to work hard to maximise our common ground and keep ASEAN united. Let me also tell Members very honestly that it will be difficult. For instance, some Members ‒ I think it was Mr Louis Ng and Mr Christopher de Souza ‒ asked about the situation in Rakhine state.
Members are familiar that one of the founding principles of ASEAN is non-interference in domestic affairs. So, we cannot directly intervene. But I would say this is a humanitarian disaster of the highest order. Secondly, if this problem is not resolved properly, we will end up creating yet another flashpoint, yet another sanctuary for extremists and terrorists, and it will become another transboundary threat. So, in our own quiet, behind-the-scenes way, we have to try to make a positive difference.
ASEAN agreed to mobilise the ASEAN Coordinating Centre for Humanitarian Assistance (AHA) to deliver assistance to the affected communities in Myanmar and, when we delivered it, we insisted that it should be delivered without discrimination. All communities who need help should receive our help.
To date, the AHA Centre has delivered at least two loads of relief supplies worth US$500,000 to the Myanmar government. We have also deployed an ASEAN Emergency Response and Assessment Team to assist in the humanitarian relief efforts.
We had an ASEAN Foreign Ministers' Retreat last month. Myanmar gave us a briefing, and we urged Myanmar to continue implementing the recommendations made by the Advisory Commission on Rakhine State which was led by former UN Secretary-General Kofi Annan. We encouraged the expeditious commencement of the voluntary return of the refugees. But it has to be done in a safe, secure and dignified way, without undue delay. Frankly, these are easier said than done when you consider what has already transpired on the ground.
We have also emphasised that the responsibility for resolving this complex problem ultimately rests with Myanmar and the stakeholders within Myanmar. Singapore and ASEAN will continue to do our part by encouraging all partners to work towards a long-term and comprehensive political solution, and to create a conducive environment for affected communities to rebuild their lives. So, this is an example. There will always, from time to time, be an issue that tests our fundamental principles and our ability to make a positive contribution.
Another area that we are focused on right now is the ASEAN-China relationship. We are reaching the end of our third year of our coordinatorship of the ASEAN-China Dialogue relationship. In these three years, we have been able to strengthen the relationship despite the challenges, and it will culminate with 2018 designated as the \"ASEAN-China Year of Innovation\".
This year, 2018, marks the 15th Anniversary of the ASEAN-China Strategic Partnership, which we will commemorate with a statement on the ASEAN-China Strategic Partnership Vision 2030. This sets a roadmap for the future of the strategic partnership.
ASEAN and China will also commence negotiations on the Code of Conduct of Parties in the South China Sea this year. This is a significant milestone. It will serve, we hope, to reinforce the rules-based regional order. And as ASEAN-China coordinator, we will continue to be an honest broker. We will work closely with all sides to narrow the differences. I cannot promise it will be delivered soon because of the complexities involved.
Ms Sun Xueling asked about economic integration and free trade. Actually, free trade all over the world is unfairly blamed for the economic problems that, in fact, are the result of technological disruption. We believe – and we have been discussing it during the Budget Debate – that the answer is not to build walls or to retreat from global competition. We believe we have to double down on restructuring our economies, upgrading the skills of our people, supporting innovation and pursuing business opportunities globally.
This is why the AEC is important. This was launched in 2015. I have been told that, so far, that plan had 609 measures and 536 of them have been implemented. But without getting into the fine print, the point is that AEC is an attempt to enable our companies to better access ASEAN's dynamic market of more than 600 million people where, as I have said earlier, 60% are below the age of 35 and there is enormous investment opportunity.
Fundamentally, I am glad that we do not argue about this in Singapore because, in Singapore, trade is our lifeline. No other state has a trading volume that is three-and-a-half times its GDP. It is trade that allows our companies to expand beyond our small market and to create jobs for Singaporeans.
Although I have said that global consensus is eroding, the outlook is actually not so bleak. For instance, the 11 remaining parties of the TPP have concluded talks and, on 8 March, in Chile, Minister Lim Hng Kiang will have to make a long journey to sign the Comprehensive and Progressive Agreement for TPP (CPTPP). Frankly, this exceeded my expectations. However, even with just 11 members because the US has pulled out, it still represents about 500 million people, and a $10 trillion-dollar economy collectively. We will continue to leave the door open for the US. We will wait and see.
In the meantime, we also hope to make substantive progress this year on RCEP. This RCEP comprises 10 ASEAN members and the six dialogue partners with whom we have existing FTAs, that means, India, China, Japan, South Korea, Australia and New Zealand. Some people have asked us if CPTPP and RCEP are two rival blocs or rival agreements. I say no. As far as Singapore is concerned, these are complementary building blocks because what we envisage ultimately is a Free Trade Area of the Asia Pacific.
Members would also know that we just signed an FTA with Sri Lanka last month. There are some complexities involved with the EU-Singapore FTA that we are sorting out. It has been signed and it is just a question of ratification.
Singapore is an associate member of the Pacific Alliance, which consists of Chile, Columbia, Mexico and Peru. Mercosur is also looking at exploring an FTA with Singapore as a step, ultimately, perhaps to a regional agreement between Mercosur and ASEAN. I have been in this business long enough to know that when I used to go to South America 10 or 15 years ago, they were not interested in FTAs with us or with ASEAN. Yet, the mood has changed. The tide has changed.
Assoc Prof Dr Muhammad Faishal Ibrahim asked about our immediate neighbours. So, let me report, first, Malaysia and Indonesia. We know these are our closest neighbours, of utmost importance. And with the right spirit of cooperation, we embark on win-win initiatives, strengthen bilateral ties and allow our companies to tap on the dynamic Malaysian and Indonesian economies.
But you know as well as I do, our relations will always be complex, and issues will surface from time to time. When they do, again, have a sense of perspective. Do not let a single issue derail the overall relationship.
With Malaysia, we have continued to set new milestones recently. At the 8th Singapore-Malaysia Leaders' Retreat in January, Prime Minister Lee and Prime Minister Najib Razak officiated the opening of the Marina One and DUO joint venture developments, which have a combined Gross Development Value of S$11 billion. Members will remember that these projects came about as sequelae to the settlement of the Points of Agreement on the Malaysian Railways (KTM) land.
We also signed the Johor Bahru-Singapore Rapid Transit System (RTS) Link Bilateral Agreement. The RTS Link, when completed in 2024, will dramatically change the way hundreds of thousands of travellers who shuttle between Johor Bahru and Singapore each day.
Then, we also have the Kuala Lumpur-Singapore High Speed Rail which is also progressing well. The tender for the Assets Company was called last December. It will close in June. The results of the tender will be announced in about a year's time and will be conducted in a fair, open and transparent manner.
Such long-term strategic projects enhance our interdependence, give us all a greater stake in each other's success and demonstrate the tangible benefits of stable and positive ties.
There have been questions even about Pedra Branca at the International Court of Justice. Let me just put it very simply. We will not let this issue define or derail our relationship. The most important point is this, that when we have a difference, we seek peaceful resolution according to international law.
I should say or should remind Members that Malaysia will soon hold its General Election. Again, we know from past history that every time election rhetoric heats up, sometimes, Singapore becomes part of the political fodder. On our part, we must ensure that we do not get drawn into their domestic politics, nor will we allow the import of foreign countries' politics into Singapore.
With Indonesia, our bilateral cooperation remains deep and multifaceted. Last year, Singapore and Indonesia commemorated \"RISING50\" – the 50th anniversary of diplomatic relations. We have been working to enhance economic linkages in digital economy, tourism and skills training.
Singapore remained Indonesia's top foreign investor in 2017, with realised investments at US$8.4 billion. We are each other’s second biggest source of tourists.
The recently launched joint venture in Central Java, the Kendal Industrial Park, is doing well. Thirty-six companies have committed as tenants, with investments valued at over S$600 million, and with the potential to create 5,000 jobs.
We are also working with Indonesia on a digital industry cluster in Batam and to participate in the tech startup ecosystem in Jakarta which, by the way, has quite a thriving digital scene.
We also continue to work closely to strengthen counterterrorism efforts.
And since I used to be the Environment Minister, I need to say that we appreciate the concerted efforts of President Joko Widodo and the provincial leaders to manage the haze situation. This year, it is better. We are committed to working with Indonesia to tackle this transboundary issue.
I just visited Jakarta last month, had a good series of meetings with my counterpart Ibu Retno Marsudi and other Indonesian leaders across the political spectrum. There is consensus across the board that the Singapore-Indonesia partnership is valuable and brings mutual benefits, and so long as we can continue this positive tenor, we can manage the inevitable differences which still remain.
Overall, we believe in the \"Prosper Thy Neighbour\" policy. We want Malaysia and Indonesia especially to succeed – good for us, good for the region.
Brunei is a close and special friend. We celebrated the 50th Anniversary of the Currency Interchangeability Agreement (CIA) in July 2017, during the fourth State Visit of His Majesty the Sultan. And this CIA is a unique long-standing arrangement that has brought economic benefits for both Brunei and Singapore. It has lowered business costs and allowed us to interoperate.
Prime Minister Lee attended the Sultan's Golden Jubilee celebration last October, which is another occasion to reaffirm our close relationship.
Members may have heard that Brunei had a Cabinet reshuffle recently. We are familiar with many of the new Ministers because we have had regular exchanges over the years. And we are looking forward to working with the new team to further take our special relationship to new heights. We continue to foster close ties among the younger generation of Bruneian and Singapore leaders through the annual Young Leaders' Programme, led by His Royal Highness Crown Prince Billah and Deputy Prime Minister Teo Chee Hean.
There were some questions on relationships with other key partners – Japan, Australia and India.
With Japan, our relations are close and multifaceted. Last month, we hosted Foreign Minister Taro Kono. Deputy Prime Minister Tharman Shanmugaratnam visited Japan in February, and the Prime Minister will be there in June. We are elevating cooperation in traditional sectors like trade and connectivity and also examining emerging areas like science and technology. They have the Japan Society 5.0 vision which is very similar to our Smart Nation effort, and because of their lead with technology, we are looking at this as another platform for cooperation. And both of us are ageing societies and that is another common challenge. We will have to see how we can reorganise our societies and use technology to deal with this.
Australian Prime Minister Malcolm Turnbull made an official visit in June 2017 for the 2nd Annual Leaders' Summit. Prime Minister Lee Hsien Loong will be going to Australia later this month. Our close friendship with Australia is underpinned by shared historical experiences and shared strategic perspectives. We elevated our ties with Australia to a Comprehensive Strategic Partnership in 2015, and implementation is well on track. One point I would just highlight is that no other country provides as much space for us to train in as Australia. When you go there, it is multiple times the size of Singapore.
Mr Low Thia Khiang mentioned the emerging importance of India. India's population will exceed that of China, I think, by 2024. And unlike China, India remains young. India hosted an ASEAN-India Commemorative Summit in New Delhi in January, which the Prime Minister attended. We have made good progress on the India-Singapore Strategic Partnership, particularly in smart cities and defence. Prime Minister Narendra Modi is scheduled to deliver the keynote address at the Shangri-La Dialogue in June this year. We look forward to discussing ways to further expand our bilateral ties. Senior Minister of State Mohamad Maliki will give Members more details.
Let me conclude by saying that our diplomatic relations are in good order, and Members would have noticed, I have been more relaxed last year than in the previous year. But we need to stay alert to known unknowns and unknown unknowns or \"wild cards\".
What are these known unknowns? The tensions on the Korean Peninsula. Singapore has been implementing the United Nations Security Council (UNSC) Resolutions fully and faithfully. We hope that the recent talks between the Republic of Korea (ROK) and the Democratic People's Republic of Korea (DPRK) will help them arrive at a peaceful resolution and, ultimately, we hope that there will be a denuclearisation of the Korean Peninsula.
How we in Singapore weather external shocks boils down to our domestic resilience and unity. I think it was Mr Sitoh Yih Pin who asked about domestic support for foreign policy. So have the Members of Parliament (MPs) from the Workers' Party. Ms Joan Pereira asked about our public diplomacy efforts. Members' questions are really centred on whether we can maintain domestic support and unity for our foreign policy. That is why I said I am grateful that there is bipartisan support in this Chamber.
International issues will increasingly be dragged into the domestic discourse. Our open, multiracial and multi-religious society gives many opportunities for foreign actors who are trying to test our resolve or even undermine our unity.
Singaporeans must be well-informed not only about the multitude and diversity of views but must also appreciate the corresponding tradeoffs that we have to weigh up. Singaporeans also have to be discerning towards \"fake news\" and not allow ourselves to be distracted and divided.
I wanted to quote our former President Dr Tony Tan at the S Rajaratnam Lecture last year. He said that when someone sends you a message, take some time, reflect on the message, and ask yourself what it really means. Think carefully about who stands to benefit from the proposed message and whether it is in Singapore's own national interest. On this front, MFA has been stepping up its outreach to Singaporeans at various levels. And we do need strong and informed support from the public because foreign policy begins at home.
I also want to thank Mr Desmond Choo and Mr Cedric Foo for their questions on MFA officers and resources. I think Members have noticed that MFA is the Ministry with the smallest budget. It is okay, I am not asking for more. I am actually very proud to have some of the most talented and dedicated officers. Over the years, MFA has worked on a rigorous selection system and an equally rigorous nurturing system. This includes even bringing in mid-career entrants with the relevant skillsets and experience.
It is up to us to optimise our limited resources to provide our officers with continuous training. But I think, most of all, what really motivates our officers is that sense of meaning and significance that they are advancing Singapore's interests, protecting sovereignty, expanding opportunities for businesses, looking after Singaporeans who get into trouble. And that is especially for our consular services, which, for most Singaporeans, is the public or human face of MFA.
I would like to add that the MFA families pay a very heavy price – the trailing spouse who has to compromise his or her career; the children of MFA diplomats who are deprived of a Singaporean childhood. We should bear in mind that this is a family enterprise. What I have tried to do in my time there is to give credit and to emphasise family, and to tell my officers that they never need to be embarrassed about saying that they need to do something or that they need to take some time out because they need to address family needs. I am sure you would all agree.
Let me conclude by saying we must maintain a realistic view of the world as it is, not as we hope it to be. We have to seek the right balance, promote regional unity and pursue global economic opportunities wherever these arise. In terms of style, we will continue to adopt a quiet, friendly but firm style of diplomacy. We will be honest, competent, reliable and constructive partners.
Most of all, diplomacy begins at home. Our foreign policy rests on a domestic consensus on our national interests. I will continue to work with all Members in this House to reach out to Singaporeans to build a deeper appreciation of the fundamental truths, the hard truths, that underpin our foreign policy, and to develop a shared national instinct against external attempts to pressure, influence or divide us. [Applause.]
The Chairman: Senior Minister of State Dr Mohamad Maliki.
The Senior Minister of State for Foreign Affairs (Dr Mohamad Maliki Bin Osman): Mr Chairman, Minister Vivian Balakrishnan spoke about Singapore’s main foreign policy priorities. I will elaborate on Singapore’s relations with countries in the region and beyond.
For good reasons, we place great importance on engaging our regional neighbours. Our future is inextricably linked to the region. A peaceful and stable Southeast Asia is a necessary condition for Singapore’s security and prosperity. ASEAN is our largest trading partner with 630 million people and a combined GDP of US$2.55 trillion. In 2016, Singapore’s trade with ASEAN amounted to US$217.1 billion – more than a quarter of Singapore’s total trade. Last year, around a third, or 6.2 million, of our total visitor arrivals came from ASEAN. We see tremendous potential and opportunities in our region as ASEAN is expected to become the fourth largest economy in the world with a GDP of US$10 trillion by 2030. With 60% of ASEAN’s population under the age of 35, there are also demographic dividends to be reaped.
Therefore, we have pursued collaborative relations with our Southeast Asian neighbours, in particular, the provinces and regions outside the capitals of our two closest neighbours.
Malaysia and Indonesia are large dynamic markets. There are opportunities to deepen our engagement at the state and provincial levels. We have had visits by leaders from Sabah, Sarawak and Johor, as well as from Jambi, North Sumatra and Kepulauan Riau (KEPRI). We have visited places like Malacca, Perak, South Sumatra and West Java. There is much unfamiliarity with Singapore in these places and vice-versa, especially among the youths.
It is important to understand our neighbours at the local level and provide opportunities for them to know us. What happens at the local level has an impact on their national politics and economies. Some provincial leaders have also taken higher office at the national level. There are also potential economic opportunities in these states and regions for our businesses. Given our close proximity, Singapore cannot be immune. For instance, I have met pesantren students as well as undergraduates in Riau and Jambi. The students were keen to discuss various topics, ranging from maintaining religious and racial harmony to the Singapore education system. Both the students and I came away richer from having better understood each other’s perspectives.
Mr Baey Yam Keng asked about our relations with other Southeast Asian countries. We keep up regular high-level exchanges to deepen bilateral ties. Last November, President Halimah Yacob attended the Royal Cremation Ceremony of His Majesty the late King Bhumibol Adulyadej of Thailand. Prime Minister Lee Hsien Loong visited the Philippines and Vietnam twice last year. Emeritus Senior Minister Goh Chok Tong and Minister Vivian Balakrishnan visited Myanmar, while Minister Vivian Balakrishnan also made introductory visits to the Philippines and Cambodia. We hosted Laos Prime Minister Dr Thongloun Sisoulith as well as senior Vietnamese leaders. I also visited Brunei twice last year, including for Hari Raya Open Houses. We have been doing this for several years now, and our friends from Brunei likewise visit Singapore during the Hari Raya season.
Such interactions also provide opportunities for Singapore companies venturing into the region. For example, Avoidance of Double Taxation Agreements with Laos and Cambodia came into force last year. We are also in the process of negotiating a Bilateral Investment Treaty with Myanmar, which will give better protection for our companies. International Enterprise (IE) Singapore recently signed a Memorandum of Understanding (MOU) with the Philippines Bases Conversion and Development Authority for Singapore to participate in the development of New Clark City.
While Southeast Asia remains the cornerstone of Singapore’s foreign policy, we should not lose sight of important regions elsewhere. In this globalised world, events elsewhere also affect Singapore. I will talk about three regions in particular – South Asia, Africa and the Middle East.
First, South Asia. In response to Mr Liang Eng Hwa and Mr Murali Pillai, South Asia enjoys long-standing linkages to Southeast Asia. Politically, South Asia is an important part of the larger Indo-Pacific region which adjoins Southeast Asia. Economically, the region is driving growth in Asia. South Asia's GDP is fast approaching US$3 trillion.
Our relationship with India remains broad-based and deep. Singapore is India’s 10th largest trading partner and second largest foreign investor. We have made steady progress through the India-Singapore Strategic Partnership, particularly in skills development and smart cities. We also worked with our economic agencies to support our companies’ expansion efforts in India. For example, PSA inaugurated the Bharat Mumbai Container Terminals, which is now India’s largest container terminal. In keeping with India’s moves to digitalise its economy, we are also exploring new areas of cooperation, such as in financial technology (fintech). India’s technology startup scene is fast developing, with over 5,000 tech startups in 2017 alone. Singaporean startups, such as Anchanto, Shopmatic and ViSenze, are venturing into India to tap on its potential.
With the decentralisation of the government in India, we have actively engaged individual states, such as Maharashtra, to support Singapore’s business interests. Following the State’s Chief Minister Devendra Fadnavis’ visit to Singapore last year, a joint working group to share expertise and speed up investment proposals was proposed. We have also been supporting the development of Andhra Pradesh’s new capital city, Amaravati. India's Act East policy has put a spotlight on connecting the northeast of India to Southeast Asia. We have launched a third skills centre in Guwahati, Assam, last year, after Delhi and Udaipur. Singapore’s experience in technical and vocational training is helping India upskill its youth and support our business interests.
We recently signed an FTA with Sri Lanka during Prime Minister Lee Hsien Loong's visit to Colombo. This is Sri Lanka’s first modern and comprehensive FTA that not only highlights the economic opportunities but also provides savings for Singapore’s companies. Bangladesh has also significant potential. Singapore contributed the highest net inflow of FDI to Bangladesh in the past two years. Bangladesh Prime Minister Sheikh Hasina will visit us in a few weeks' time. We will discuss economic cooperation and investments by Singapore and Bangladesh companies.
Next, Africa. Africa is a vast continent of 54 countries that we cannot ignore. While many of us may be unfamiliar with Africa, Members would be surprised how many Africans know about Singaporeans and Singapore. I am constantly reminded during my trips to Africa of Singapore's reputation there, and the goodwill and trust that Africans have of us. Many leaders from these countries have told me that they have all read founding Prime Minister Lee Kuan Yew’s memoirs and want to learn more from us.
As Africa grows, we seek to position Singapore to take advantage of the economic opportunities. Africa’s GDP is expected to reach US$3 trillion by 2030. Our trade with Africa has been going strong, reaching S$8 billion in 2017, an increase of 13% from 2016. This year, we will host the 3rd High-Level Ministerial Exchange Visit from Africa, which will focus on how Singapore can partner Africa in smart city development.
We are working to put in place key economic frameworks, such as Avoidance of Double Taxation Agreements and Bilateral Investment Treaties, so that Singapore companies will find it easier to do business in Africa. We are also making progress in aviation connectivity. Ethiopian Airlines relaunched flights to Addis Ababa, in addition to direct flights to Mauritius and South Africa. Expanded air links will help boost business and tourism.
Assoc Prof Fatimah Lateef asked about our engagement in the Middle East. It remains an important region for Singapore on several fronts. Singapore's total trade with the Middle East grew by about 24% to S$52.7 billion last year.
Economic reforms in many Middle East countries provide unprecedented opportunities. For instance, Saudi Arabia’s Vision 2030 and National Transformation Programme 2020, hold bold and comprehensive reforms to diversify its economy from oil and to open up the country. Our companies can tap on opportunities in areas, such as infrastructure development, healthcare and smart technologies.
There is also good momentum in economic exchanges with UAE, our largest trading partner in the region. A Singapore company, Rotary Engineering, won a contract to build 12 storage tanks for Dubai’s Emirates National Oil Company, increasing storage capacity by 50%. Last year, the UAE Embassy in Singapore, the Singapore Business Federation and the Abu Dhabi Chamber of Commerce and Industry, set up the UAE-Singapore Business Council to link up companies and investors.
Our presence in the Middle East extends to North Africa and Central Asia. My visit to Lebanon in May 2017 marked the first visit by a Singapore political officeholder to Lebanon since 1974. We rekindled our ties with the Lebanese leadership and agreed to explore cooperation in areas of shared interests, such as counterterrorism and technical cooperation. This year, I plan to bring a business delegation to Morocco to explore prospects for economic collaboration. A few days ago, Singapore and Tunisia signed an Avoidance of Double Taxation Agreement. Besides these, we continue to engage Iran. At the political level, I visited Iran last year and the Singapore Business Federation has mounted business missions to explore the Iranian market. For Central Asia, I met both the Mayors of Astana and Almaty during their visits to Singapore last year. They had promising discussions with Singapore companies to explore economic ties with Kazakhstan.
Our people-to-people ties with the Middle East are strengthening. The number of Singaporeans travelling to, living, studying or working in the Middle East is increasing. Wherever I have travelled, I have met many who have visited and spoke fondly of Singapore.
Our universities have many exchange programmes in the Middle East. Over 500 students have participated in Singapore Management University's (SMU’s) Business Study Missions to the Gulf Cooperation Council (GCC) countries. The National University of Singapore (NUS) Overseas College in Israel has also allowed many to experience Israel’s dynamic economic, business and entrepreneurship culture. Since 2007, NUS’ Middle East Institute has promoted a deeper understanding of the region by regularly inviting academics and experts from the Middle East for lectures and workshops.
Our engagements in the Middle East take place against the backdrop of a dynamic and complex region with rapid developments. Events unfolding in the region reverberate across the world. Last year alone, we saw the Gulf diplomatic crisis and the Israeli-Palestinian issue erupt. I had the opportunity to listen to different sides involved in the disputes. Singapore respects their position and we do not take sides. It is our hope that all parties will be able to resolve their differences amicably.
Singapore has maintained our consistent and principled position to uphold international law and support the peaceful resolution of disputes, including on the Israeli-Palestinian conflict. This has always been our approach, regardless of the vagaries of Middle East politics.
Minister Vivian Balakrishnan had explained in January 2018 Singapore’s vote in favour of the UN General Assembly resolution on the status of Jerusalem. Singapore’s vote was based on a key principle of Singapore’s foreign policy, which is the promotion of a rules-based global community, governed by the rule of international law, including abiding by UNSC Resolutions and the peaceful resolution of disputes. We voted in favour of the resolution as it reaffirms previous UN resolutions, rejects any decisions or actions which purport to alter the character and status of Jerusalem, and calls for all States to comply with existing UNSC resolutions on Jerusalem. Before this, we had also voted in favour of UN General Assembly Resolution 37/123C in 1982, which deplored the relocation of diplomatic missions to Jerusalem, which was a violation of UNSC resolution 478 (1980). Any unilateral and premature action that might alter the status of Jerusalem will impede progress towards a just and durable solution to the Israeli-Palestinian conflict. The future status of Jerusalem should be decided through direct negotiations between Israel and the Palestinians. Let me elaborate in Malay.
(In Malay): [Please refer to Vernacular Speech.] The status of Jerusalem is a complex and sensitive issue with a long history. Any unilateral and premature action that might alter the status of Jerusalem will impede progress towards a just and durable solution to the Israeli-Palestinian conflict.
The future status of Jerusalem should be decided through direct negotiations between Israel and the Palestinians. Singapore has good relations with both the Israelis and Palestine. We have urged both parties to resume direct negotiations and make progress towards a just and durable solution to the conflict.
Therefore, at the recent UN General Assembly, Singapore voted in support of the resolution to reject any decisions or actions that may change the nature or character of the status of Jerusalem. This is consistent with Singapore’s vote in favour of UN General Assembly Resolution 37/123C in 1982, which deplored the relocation of diplomatic missions to Jerusalem.
Our long-standing view is that a two-state solution will help to bring peace and security to both parties. Singapore’s unwavering position on this issue has enabled us to be taken seriously and regarded as a friend who can be trusted and relied upon, and who can play a constructive role in international affairs.
(In English): Mr Chairman, our interests in the Middle East also stems from mutual interest to counter religious extremism together. I have just returned from Kuwait, where the Global Coalition to Defeat the Islamic State in Iraq and Syria (ISIS) discussed how we can build on our successes and continue cooperating to eliminate terrorism. Singapore has played an important role in the region's counterterrorism efforts, lending early support to the Defeat ISIS Coalition. We are the first Southeast Asian country to join the Coalition, and the only Asian country to have contributed both military assets and personnel to anti-ISIS efforts. Ultimately, our contributions towards the security and stability of the Middle East will help keep Singapore safe and secure.
Ms Joan Pereira asked how the SCP supports Singapore’s engagement of other countries. Through SCP, we have shared Singapore’s development experience with over 117,000 foreign officials from all over. SCP participants form a reservoir of goodwill and support for Singapore in international fora as well as their home countries. Past SCP participants include Lao Prime Minister Dr Thongloun Sisoulith and several current leaders, ministers, mayors and governors of neighbouring countries. SCP gives us a useful platform to broaden our cooperation with other countries. We have joint training partnerships with developed countries like the US and Japan, as well as developing countries like Thailand and Argentina, or countries in the region and beyond.
Given the growing number of Singaporeans living and travelling overseas, Mr Ong Teng Koon’s question on their role in advocating for Singapore is timely. In today’s globalised and digitalised environment, foreign affairs are no longer the privileged purview of professional diplomats alone. Increasingly, Singaporeans, especially those living abroad, play a role, too.
When overseas, our citizens may often be asked to explain Singapore’s policies and actions. To do so effectively, an open mind and a friendly disposition help to bridge differences. We do not seek to impose our views on others. By the same token, we must be conscious of who we are and defend what we stand for. We are an independent, sovereign, multiracial country in Southeast Asia. We are not a Chinese, Indian or Malay state, and we must never act based on ethnic or religious identity. When we deal with a foreign country, whether in business or social settings, we should stand firm against external pressures and influences that undermine our national identity, interests and values.
How tall and strong Singapore stands in the international community depends on our own unity and cohesiveness. Whether our people are in Singapore or abroad should make no difference. On our part, as we expand our space, secure our position and advance our interests internationally, MFA will continue to engage Singaporeans overseas. Our embassies regularly organise activities to stay in touch with local Singaporeans and keep them updated on developments in Singapore.
Mr Chairman, I will now turn the floor over to Minister of State Sam Tan to continue.
The Minister of State for Foreign Affairs (Mr Sam Tan Chin Siong): Mr Chairman, MFA has been working closely with our economic agencies to create more opportunities for our people and businesses in Asia, Europe and Latin America. I will elaborate on our efforts to strengthen Singapore’s connectivity to these partners and international organisations through diplomacy and trade.
Apart from the US, nine of our top 10 trading partners are from Asia. Around 40% of Singapore’s merchandise exports were delivered to Northeast Asia last year.
China has been Singapore’s largest trading partner since 2013, and the top investment destination since 1997. Singapore, on the other hand, has been China’s largest foreign investor, also since 2013, while China is Singapore’s largest source of tourists and tourism receipts. Statistics aside, Singaporeans can see and feel the growing economic ties with China. How are we managing this very important relationship in economics and beyond? Mr Chairman, Sir, now please allow me to elaborate in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Mr Chairman, 2018 marks the 40th anniversary of then-Senior Vice Premier Deng Xiaoping’s visit to Singapore in 1978.
It is often said that \"If you do not forget why you started, your mission can then be accomplished.\"
Successive leaders have built upon the strong foundations laid by founding Prime Minister Lee Kuan Yew and Deng Xiaoping to break new ground. We have institutionalised frameworks that allow officeholders and officials to work together, address common challenges and seek new areas of cooperation. Beyond the three Government-to-Government projects, namely, the China-Singapore Suzhou Industrial Park, Sino-Singapore Tianjin Eco-City, and China-Singapore (Chongqing) Demonstration Initiative on Strategic Connectivity or Chongqing Connectivity Initiative, we also have seven business and economic councils with Guangdong, Jiangsu, Liaoning, Shandong, Sichuan, Tianjin and Zhejiang. We also share many other links in multiple domains, such as culture, education, healthcare, technology and smart nation development, among others. It is for this reason that both sides have described our relations as an \"All-Round Cooperative Partnership Progressing with the Times\".
Mr Chairman, the global economic landscape is expected to further transform in the coming years. As a centre for trade, transport, and finance, Singapore can partner different companies seeking to venture into Southeast Asia, China, India and other key markets. The Chongqing Connectivity Initiative-Southern Transport Corridor (CCI-STC) will shorten trade routes between western China and Southeast Asia and beyond to Europe. Singapore is also well-placed to provide financial, legal and advisory services to support commercially viable B&R projects. Several Chinese banks have already issued B&R bonds in Singapore.
Confucius said: \"Do not worry about not being known, just prove your worth.\" In other words, do not worry that you are unknown to others, so long as you have the real capability and are learned, other people will accept and appreciate you.
Singapore's relevance to the world depends on our continued success and ability to innovate, adapt and improve. Many Chinese delegations have visited Singapore on study trips and attended courses over the years. We are an interesting case study to the Chinese and other partners, not only because we share good relations, but also because of our pragmatic and time-tested approaches. However, it is not a one way traffic; we are learning from each other and working together for mutual benefit. Today, both sides continue to exchange views through high-level platforms, such as JCBC, the Singapore-China Social Governance Forum, the Singapore-China Forum on Leadership and the Singapore-China Legal and Judicial Roundtable, and so on. Going forward, for Singapore to thrive in the global arena, we have to be resourceful, firmly uphold international law, and do so in a respectful but not submissive manner. If Singapore is to continue playing a constructive international role and protect our interests, we should strive to punch above our weight, expand our international space and create more opportunities for Singaporeans to broaden our horizons and establish our global presence.
(In English): Mr Chairman, now allow me to continue in English. Sir, mutual learning has characterised Singapore’s development journey. As we push on with our Smart Nation vision, we can learn from others. Mr Cedric Foo sought an update on our cooperation with Japan and the ROK. As mentioned by Minister Vivian Balakrishnan, Japan's \"Society 5.0\" initiative broadly converges with our Smart Nation priorities by leveraging technology and innovation to advance its economy and also to resolve social issues. We are also keen to develop a partnership with the ROK on innovation and smart cities.
Mr Henry Kwek had requested for an update on our relations with Europe. Sir, Europe remains a long-standing partner for Singapore. While the impact of Brexit unfolds, Europe continues to be a key market and valuable partner in innovation, education and skills development. For example, we are partnering France to expand into industries of the future, such as Fintech, Smart Cities and Emerging Technologies.
The EU is our largest source of FDI. In a climate of increased protectionism, we support our European partners' strong commitment to free trade. While we work towards ratifying the EU-Singapore FTA, we have also begun negotiating the Eurasian Economic Union (EAEU)-Singapore FTA. I am also happy to report that the Singapore-Turkey FTA came into effect last year.
Sir, we continue to strengthen connectivity with Europe. Air traffic between Singapore and the EU has grown at an annual average of 3.8% in the past five years. We have launched direct flights to Stockholm and Athens and will do so for Warsaw and Berlin. Region-to-region connectivity will also be enhanced when we conclude the ASEAN-EU Comprehensive Air Transport Agreement (CATA). With increased connectivity, Singapore will stand to gain from increased investment, tourism, trade and employment.
Further afield, Singapore is an Observer in the Arctic Council. Melting ice caps and new Arctic sea routes present both challenges and opportunities for Singapore. Shipping traffic could be diverted in the long run, but Singapore companies could leverage the emerging sectors in the Arctic, such as shipbuilding and repair, port management and offshore engineering.
Mr Liang Eng Hwa asked about our engagement of emerging markets. In this regard, we are tapping on the economic potential of Latin America and deepening links across the Pacific. We are negotiating an FTA with the Pacific Alliance and with Mercosur soon. These FTAs will give us access to a combined market of almost 470 million people that accounts for 90% of Latin America's GDP.
Although the world appears more integrated than before, we cannot take the status quo for granted. As a small state grappling with forces beyond our control, Singapore must strongly support a rules-based multilateral order underpinned by international law, a point that was emphasised by Minister Vivian Balakrishnan earlier.
Mr Louis Ng asked about our role in the international community. At the UN, Singapore will continue to uphold our reputation as a principled, responsible and reliable country and partner. In July this year, we will attend a High Level Political Forum in New York to share our developmental experience in relation to the Sustainable Development Goals under the 2030 Agenda. We will continue to participate in negotiations on the implementation guidelines of the Paris Agreement on Climate Change.
At the invitation of the G20 President, Argentina, Singapore will attend the G20 Summit and related meetings in Buenos Aires later this year. Comprising 20 major economies that account for 85% of the world GDP and two-thirds of its population, the G20 makes decisions that affect the rest of us. It is, therefore, important and also an honour for Singapore to participate in the G20 to offer our perspective and contribute where we can.
Let me now address Miss Cheng Li Hui's question about assisting Singaporeans in distressed situations overseas. Singaporeans are among the world's most-travelled people. Consular assistance for overseas Singaporeans remains one of MFA's more visible core functions. Last year, 2017, was a very busy year. We responded to a number of overseas incidents, including multiple attacks and natural disasters at tourist hotspots. For example, when Mount Agung erupted in December last year, our crisis response team was on the ground to help Singaporeans affected by airport closures. We also assisted Singaporeans who were involved in road traffic accidents in the US, Australia and, closer to home, in Malaysia.
We will continue to do our best to assist Singaporeans who are caught in difficult situations overseas. However, we also urge our fellow Singaporeans to continue to practise personal responsibility and self-reliance and vigilance as our MFA staff are not able to be everywhere all the time. So, in this regard, I was heartened that many Singaporeans travelled to Johor on their own to join in the search-and-rescue efforts for our two missing hikers in Mount Pulai recently. Likewise, local Singaporean communities abroad are often the first line of support and assistance for one another, and also to fellow Singaporeans travelling to that part of the world, especially when the nearest MFA representation is far away.
And on our part, MFA will endeavour to provide useful and timely information to Singaporean travellers through technology. For example, we provide country-specific travel information on our revamped MFA website and are working with Government agencies and relevant partners to broaden our reach via various platforms, such as AskJamie@MFA, Chatbot and the Singapore Airport Terminal Services (SATS) travel application. However, given the free flow of information and disinformation, we hope that Singaporeans will continue to be vigilant and discerning and not to take information at face value. This will prevent a repeat of the false reports about riots in Batam last year that caused a lot of unnecessary alarm and anxiety to Singaporeans.
Sir, to conclude, on behalf of the MFA family, I would like to thank Members of the House and also all Singaporeans for their support to MFA as we advance Singapore and Singaporeans' interests internationally.
The Chairman: We do have just a few more minutes for clarifications. Are there any clarifications? Yes, Mr Vikram Nair.
Mr Vikram Nair: I would like to thank all the officeholders for a relatively positive update, with good relationships everywhere. But let me just focus on one point that the Minister flagged out. And that was the threat of fake news. Is there any concern that the Minister has about fake news, say, from foreign state actors or players that we may have to be concerned about?
Dr Vivian Balakrishnan: Yes.
The Chairman: Any other clarifications? Mr Low Thia Khiang.
Mr Low Thia Khiang: May I know what is our relation with North Korea like?
Dr Vivian Balakrishnan: There is a North Korean embassy in Singapore. I personally have not met the Ambassador. North Korea also attends our ASEAN Regional Forum (ARF) meeting. But our approach, as I have explained earlier, is to just fully comply with UNSC Resolutions. That is our regulatory and our enforcement approach.
Let me paint the larger dimension behind North Korea. If North Korea effectively nuclearises, quite apart from the dynamics with the US, the other consequential effects are what it means for South Korea and Japan, and whether they will also take the view that they need to have their own deterrence.
Again, to use the Cold War analogy, when you have two superpowers working on deterrence based on mutually assured destruction, well, we survived. But can you imagine a Northeast Asia, which, as Mr Low Thia Khiang will know, unfortunately, historical wounds not fully healed, and all of them nuclear-armed and all promising mutually assured destruction, I think it is a very dangerous situation. So, as I said, we do not have a say, but we will comply with all UNSC Resolutions.
The Chairman: If there are no other clarifications, can I invite the Member Mr Vikram Nair to consider withdrawing the amendment?
Mr Vikram Nair: I would like to record my thanks to the Minister, the Senior Minister of State, Minister of State and, of course, all the MFA staff carrying our flag in many, many countries around the world. Thank you for doing us proud. I seek leave to withdraw my amendment, Mr Chairman.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $476,502,000 for Head N ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $26,000,000 for Head N ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply Reporting Progress","subTitle":null,"sectionType":"OS","content":"The Leader of the House (Ms Grace Fu Hai Yien): Mr Chairman, may I seek your consent to move that progress be reported now and leave be asked to sit again tomorrow?
The Chairman: I give my consent.
[(proc text) Resolved, \"That progress be reported now and leave be asked to sit again tomorrow.\" – [Ms Grace Fu Hai Yien.] (proc text)]
[(proc text) Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Adjournment","subTitle":null,"sectionType":"OS","content":"[(proc text) Resolved, \"That Parliament do now adjourn.\" – [Ms Grace Fu Hai Yien.] (proc text)]
Adjourned accordingly at 7.58 pm.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Opening of New Primary and Secondary Schools in Punggol Central and Punggol Way","subTitle":null,"sectionType":"WA","content":"1 Ms Sun Xueling asked the Minister for Education (Schools) in which year will the new primary school along Punggol Central (near Sumang LRT Station) and the new secondary school at the junction of Punggol Central and Punggol Way start taking in open enrolments of students and in which year will the schools start operations.
Mr Ng Chee Meng: There are currently nine primary schools and three secondary schools in Punggol. The Ministry of Education has plans to build three new schools – a primary and a secondary school at Punggol Central, and a primary school at Northshore Link, to meet the needs of residents from new housing developments in Punggol.
Construction of the schools is expected to start soon, and we will provide more details on when the schools will open in due course.
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