1 Mr Yeo Guat Kwang asked the Acting Minister for Manpower how will the Ministry ensure that the Singaporean Core will not be eroded in an economic downturn or during significant downsizing of companies, especially for job areas where there are no dependency ratio ceilings for foreign PMETs.
\tThe Acting Minister for Manpower (Mr Tan Chuan-Jin): Mdm Speaker, if the Member does not mind, I will be addressing this issue fully in the Committee of Supply (COS) debates next week, but I will provide an overview of how we are addressing the question raised by the Member.
Our focus, clearly, is to look after the interests of all Singaporeans. In the process, we take a multi-pronged approach to build a Singaporean Core in the workforce. The critical issue in the long term is how do we develop and raise the capabilities of Singaporeans and calibrate our Work Pass framework to ensure that foreign workers complement and not just substitute Singaporean workers. That is important. We essentially have two broad strategies, and I will sketch them out.
Firstly, it is how we develop a core of Singaporeans in our workforce. First and foremost, training coming in the form of Pre-Employment Training (PET) and Continuing Education and Training (CET) forms an important pillar in this process. We will continue to strengthen this and enhance the initiatives in this framework. For example, we are strengthening Workfare Training Support (WTS) for the low-wage workers. We also have in place Skills Training for Excellence Programme (STEP) which is largely geared towards the Professionals, Managers and Executives (PMEs).
Secondly, we develop a Singaporean Core also by working with agencies. For example, MAS works with the financial institutions to co-fund programmes to nurture young Singaporeans in that sector.
Thirdly, we also look at developing a Singaporean Core by employment facilitation. So we strengthen Government-funded employment facilitation and
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career conversion programmes to help unemployed Singaporeans and Singaporeans who wish to change careers, including PMEs, of which CaliberLink, which we talked about last year, was an important step in that direction.
The second part in our effort lies with how we structure our Work Pass and foreign manpower framework. As we are all familiar, we have put in place a series of changes in terms of the foreign worker levy (FWL) as well as changes to the Dependency Ratio Ceilings (DRCs). Changes are being made at the Work Permit, S Pass and Employment Pass levels. The S Pass and Employment Pass levels, particularly, will have an impact on our PMEs. The idea, as I said earlier, is how we structure it so that it complements our workforce and ensure that there is a level playing field. This is something that I will be addressing fully next week in the COS.
At the Employment Pass (EP) level, we have already taken some steps last year in terms of restructuring the EP framework where we factor in not just the entry-level pay, but also tiering it to take into account experience. This is important because it also ensures a more level playing field for Singaporeans. And we have extended this change into the S Pass framework as well.
A new area that we are looking at would be to look at the way other countries also implement some of their entry for foreign talent at the EP level category. So we want to look at how to make sure that Singaporeans are given fair consideration in the hiring process. The principle of not discriminating against Singaporean workers should similarly apply in downsizing exercises.
The Tripartite Guidelines on Fair Employment Practices (TAFEP) requires firms to make reasonable efforts to train and develop a Singaporean Core. As mentioned during the White Paper debate on population, we are already putting in place a process where we will investigate non-compliance with the Guidelines and, if proven, we will curtail work pass privileges.
The Tripartite Guidelines on Managing Excess Manpower also urge companies to consider other alternative to managing excess manpower and retrench only as a last resort. And if retrenchment is still necessary after considering other options, the company concerned should carry out the retrenchment exercise responsibly. This includes consulting the relevant union and the affected workers, as well as helping the workers look for alternative jobs. In previous downturns, employers have cut back more sharply on foreign workers as compared to the local ones. Over the 2009 downturn, foreign
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employment levels fell while resident employment levels continued to grow, although more gradually. This same trend was seen in previous downturns in 2001, which is post-911, and 2003, during the SARS period.
During the last downturn, there were also steps that were put in place to assist our workers to stay employed. The Government launched the Skills Programme for Upgrading and Resilience (SPUR) to help employers manage their manpower costs and save jobs through providing high levels of support for employers to send their local workers for training. These also helped companies to upgrade their workers during the downturn and build capabilities for them to search for jobs when the economic conditions recover. In addition, there was also the important Jobs Credit scheme (JCS) where they received a cash grant for workers on their CPF payroll. Both SPUR and JCS, during that period, were particularly important initiatives in helping to make sure that our workers at all levels stayed employed.
So, these are tools in our toolbox that we can draw on, or a variance of that as the case may be, depending on our economic situation in the years to come. But the most important point to emphasise is that the best way to ensure that Singaporean PMEs remain meaningfully employed is to make sure that our economy remains healthy and vibrant, and Singaporeans are also equipped with the right attitudes, aptitudes and skills. Strengthening the Singaporean Core will be one of the key focus for our Ministry in this coming year, and this is something that, as I mentioned earlier, we will be talking in greater details at the MOM COS debate.
\tMr Yeo Guat Kwang (Ang Mo Kio): I thank the Acting Minister for the answer as well as the assurance that more will be in the pipeline to help our PMEs and to ensure that we build up a strong Singaporean Core in our workforce.
I would also like to ask the Minister whether he would consider upgrading the TAFEP guidelines to make them more effective so that it would be able to strengthen compliance among the employers.
\tMr Tan Chuan-Jin: I would like to thank the Member for the supplementary question. TAFEP is an important institution. It is still relatively new by all counts, but I think it is beginning to get really involved in dealing with companies on a range of issues. Strengthening TAFEP is something that we are looking at. As I mentioned earlier, one of the key initiatives that we are going to do is that TAFEP will be investigating more thoroughly in terms of
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discrimination practices. Where companies are not responding, TAFEP refer the cases to MOM and we will also take the necessary steps to investigate and take actions to restrict the privileges accorded to companies, as the case may be.
In short, I would agree with the Member that TAFEP is an organisation that we can strengthen in the years to come.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Applications for Long-Term Visit Passes ","subTitle":null,"sectionType":"OA","content":"2 Mr Zainal Sapari asked \tthe Deputy Prime Minister and Minister for Home Affairs what are the reasons for rejections of applications for Long-Term Visit Pass Plus by foreign spouses of Singaporeans who have children of Singapore citizenship.
3 Mr R Dhinakaran asked \tthe Deputy Prime Minister and Minister for Home Affairs as of 31 December 2012, how many foreign spouses of Singapore citizens on Long Term Visit Passes have stayed in Singapore for (i) less than one year; (ii) one to two years; (iii) two to three years; and (iv) more than three years.
\tThe Second Minister for Home Affairs (Mr S Iswaran) (for the Deputy Prime Minister and Minister for Home Affairs): Mdm Speaker, may I have your permission to take Question Nos 2 and 3 together, please.
Mdm Speaker: Yes, please.
\tMr S Iswaran: Madam, as of 31 December 2012, there were 11,736 foreign spouses of Singapore Citizens who were on Long-Term Visit Passes (LTVPs), including the Long-Term Visit Pass-Plus (LTVP+). Thirty percent had stayed in Singapore for less than one year, 19% had stayed for one to two years, 14% had stayed for two to three years and 37% had stayed for more than three years.
Madam, there are increasingly more marriages between Singaporeans and foreigners. Our aim is to help these couples remain together in Singapore. The foreign spouse of a Singapore Citizen is typically granted a LTVP in the first instance. ICA will then require some time to assess that the marriage is stable before it considers the foreign spouse for longer-term immigration facilities.
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The factors considered include the length of the marriage, whether the couple have children from the marriage, and the ability of the Singaporean sponsor to support the family. Where the foreign spouse does not yet qualify for Permanent Residence, we have introduced the LTVP+, an enhancement over the LTVP. The LTVP+ holder is eligible for a range of benefits, including hospitalisation benefits at a level similar to Permanent Residents, and LTVP+ holder is also facilitated in his or her job search as he or she only requires a Letter of Consent from MOM without the need to apply for a Work Pass.
Applications for LTVP+ are considered holistically and there may be a number of reasons, such as the employment status of the Singaporean spouse, as to why the application may be unsuccessful. In such cases, the foreign spouse would be on an LTVP in the interim period, until he or she is eligible for an LTVP+.
Mdm Speaker: Order. End of Question Time.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Supply Bill","subTitle":null,"sectionType":"BI","content":"[(proc text) \"to provide for the issue from the Consolidated Fund and the Development Fund of the sums necessary to meet the estimated expenditure for the financial year 1 April 2013 to 31 March 2014\", (proc text)]
[(proc text) recommendation of President signified; presented by the Deputy Prime Minister and Minister for Finance (Mr Tharman Shanmugaratnam); read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2013/2014, and to be printed. (proc text)]
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","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Supplementary Supply (FY 2012) Bill","subTitle":null,"sectionType":"BI","content":"[(proc text) \"to provide for making supplementary provision to meet additional expenditure for the financial year 1 April 2012 to 31 March 2013\", (proc text)]
[(proc text) recommendation of President signified; presented by Mr Tharman Shanmugaratnam; read the First time; to be read a Second time after the conclusion of proceedings on the Estimates of Expenditure for FY 2013/2014, and to be printed. (proc text)]
","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 [25 February 2013], (proc text)]
[(proc text) \"That Parliament approves the financial policy of the Government for the financial year 1 April 2013 to 31 March 2014.\" – [Deputy Prime Minister and Minister for Finance]. (proc text)]
[(proc text) Question again proposed. (proc text)]
Ms Jessica Tan Soon Neo (East Coast): Mdm Speaker, thank you for allowing me to participate in the Budget Debate. For \"a better Singapore\". That is the essence of this year's Budget.
The strategic thrusts of this Budget are the two main pillars of intensifying the drive for higher productivity and restructuring the economy for Quality Growth and taking major steps to ensure a fair and more Inclusive Society. The point that I want to emphasise is that it is important that the two are taken together.
Otherwise, the initiatives for Quality Growth in this year's Budget taken on its own could, as many have expressed, just lead to higher cost for businesses and have the inflationary impact for Singaporeans who are already concerned with the high cost of living.
On the other hand, for an Inclusive Society, if we only take steps to mitigate income inequalities, especially for the lower- and middle-income group, without quality growth and building capability of all Singaporeans and having quality
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jobs, this will not be sustainable.
Growth and quality growth is absolutely necessary. While growth is important, Singaporeans must also feel that we can actively participate and benefit from this growth – in areas of opportunities, jobs, real income and, more importantly, well-being.
It is important that we recognise that it is precisely the concerns of having or not the chance to actively participate in the growth and benefiting from it that is causing angst that we are hearing many express.
I had said during my speech on the recent Debate on the Population White Paper that it is imperative that we \"pay attention to the concerns of citizens and of what our citizens are experiencing today.\" Worries about the cost of living, affordability of healthcare, especially as we are getting older, access, reliability and affordability of transportation, access to quality jobs, access and quality of education for our children, and affordable housing. Until these concerns are addressed, people are not going to be able to focus on the future of Singapore as many are concerned with addressing their current concerns.
Deputy Prime Minister Tharman touched on the need to strengthen and sustain social mobility. As he rightly pointed out, \"meritocracy alone will not assure us of this\". Education is a key lever for social mobility and we, therefore, must do more and should start early in childhood for the disadvantaged. Members of our Government Parliamentary Committees (GPCs) will touch on this point later. This will also ensure that all Singaporeans, regardless of our circumstances, have the capability and access to opportunities.
This Budget also touches on the importance of well being, especially for older Singaporeans. We must ensure that we take care of our older Singaporeans and address their anxieties over the uncertainties of their quality of life and future, especially after they stop working. While this will vary for each person due to their circumstances, they share concern of health, quality of their daily activities and affordability, as they are drawing from their existing savings once they leave the workforce.
Let me now touch on the first thrust of the Budget which is accelerating our efforts to drive higher productivity of businesses for Quality Growth. Our GPC for Finance, Trade and Industry has been very busy. We have been gathering received feedback from businesses as well as our Resource Panel members. Concerns were raised on the impact of the pace of the measures proposed in
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the Budget to accelerate restructuring of companies. Similar concerns were also raised during the Budget Dialogue that I had with residents who manage businesses.
Many recognised the need for measures to restructure. The tightening of foreign workers inflow is with the intent to accelerate efforts by companies to improve their productivity and compete. Programmes and initiatives are needed to support companies to restructure their businesses and we do need investments to support the development of workers. While many agree on all this, getting the balance and the pace right will be crucial.
Many expressed that if we are not careful, while wages increase and if businesses are unable to upgrade fast enough, this will cause businesses to scale down, move out of Singapore or close, if they are unable to restructure quickly. This will also mean that Singaporeans will not have jobs because many of these smaller companies offer jobs for our Singaporeans today.
The measures on further tightening of the foreign workers inflow will be painful for businesses. So, while recognising current and future manpower constraints, we must ensure that companies, as many of them as possible, especially our SMEs are given the right support to upgrade. We must ensure that businesses not only understand the $5.6 billion Three-year Transition Support Package announced in the Budget but, more importantly, we must make every effort to put in and ensure that as many companies as possible take advantage of these schemes.
The Three-Year Transition Package includes: the Wage Credit Scheme (WCS); the Productivity and Innovation Credit (PIC) Bonus; and the Corporate Income Tax (CIT) Rebate.
The WCS is to support companies co-fund 40% of wage increases for Singaporean employees, earning up to a gross monthly income of $4,000, over the next three years as businesses restructure. I am glad to see the recognition by the Government that acceleration of growth will take time, and hence three years to enable transition, WCS, I must remind everyone is a Progressive Wage System as the intent is to raise wages in line with the market.
While our median total household incomes have risen in the last five years by 17%, much faster than many of the markets in the region, there is a need to raise real wages for Singaporeans in line with market growth and to address concerns of the cost of living for many Singaporeans. I cannot stress more that
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especially for the lower-end wages, there has been stagnation and re-rating has taken far too long.
As WCS is co-funding, companies will have to share the cost of increased wages. WCS enables wages to rise and to some extent without adding to the full cost that companies have to bear and, hopefully, this will avoid full inflationary impact. This will enable workers to also keep their jobs while companies need time to transition for more productive growth. The critical point is that businesses must upgrade. Many have asked what happens after three years. The point is transition needs time but we must transition. We must upgrade. Otherwise, with wage increases, they will not be able to sustain the additional cost and, if not, they will go out of business and jobs will be lost. So, I cannot reiterate this enough – that getting the balance right will be crucial.
I encourage companies to leverage the existing PIC schemes with enhancements in the new PIC Bonus as well, which is really dollar-for-dollar matching over three years and above existing PIC benefits. This Bonus will also benefit smaller companies more as it encourages a minimum spending of $5,000 for businesses to undertake productivity investments.
During a recent pre-Budget Dialogue that I participated in that was run by the Institute of Certified Public Accountants Society (ICPAS), the discussion was on how we recalibrate growth. Industry leaders made good suggestions on the need for the Government to have policies and schemes that are more relevant as companies restructure and move up the value chain, especially in the Service Sector. There were suggestions to support knowledge creation activities, provide greater incentives to encourage greater build-up and exploitation of intellectual property (IP) in Singapore. To differentiate Singapore-based companies, we could also further promote branding to help Singapore sustain our attractiveness as a world-class business hub. There were also suggestions to consider helping companies during the implementation of their investment projects overseas. Especially in the initial period, it would be useful to help tide over unexpected losses in this period, and encourage more companies to venture overseas and yet remain rooted in Singapore.
Another area of cost concerns raised by many businesses is high rentals. Rental forms a significant cost for businesses in Singapore. There needs to be more measures to assist businesses to reduce rental without distorting markets.
While there were no direct schemes this year in the Budget to address rentals, the Corporate Income Tax Rebate (CIT) introduced is targeted to help
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businesses cope with cost pressures during the transition and I guess rental cost could be one of them.
Given the high cost of COEs, allowing owners of commercial vehicles the flexibility to renew their COEs for five years with extension for another five years does help to ease cash flow. There is also the additional cost savings of one year 30% tax rebate for goods vehicles, buses and taxis.
Our success to get as many companies as possible to take advantage of the Three-Year Transition Package and other schemes announced as they restructure will in some way help mitigate the concerns of the inflationary impact with the increased cost.
As we spoke to businesses, there was a call – and I do not know how to say this nicely – there was a call for clarity on the policy measures. This will enable businesses better certainty and help them plan better. There was a sense that although there were directions given on policies to businesses, for example, the tightening of foreign workers' quotas, property cooling measures, and so on, there is a greater need for greater predictability and simplicity.
So, rather than talk about the negative, I will give an example of a positive. Last year, our Resource Panel members cited a very good policy change that was made and this was in the change of rental for Hawkers Centres. This will give an example of how a good policy was made. Simple and achieve the objective. The policy gave clarity on the rental conditions preventing subletting and it did not stipulate a reserve price and hence did not add cost to the process. This directly, therefore, benefitted the hawker and made the process simple and gave certainty.
Let me talk about the further tightening of foreign workers especially in the Services and Food & Beverage (F&B) industries. Members of our GPC Resource Panel discussed the opportunity to better leverage the part-time and hourly wage workforce through WIS. WIS today covers full-time and part-time workers but does not cover hourly wage workers. There is a suggestion for WIS to cover hourly wage workers. Agencies like WDA can play a role in providing a framework to get a base of regularised reliable hourly wage workers and potentially part-time workers as well. We see this trend in mature markets. The outcome will be good as there will be many benefits: it will provide replacement workforce for small and medium enterprises (SMEs); a more flexible wage market; SMEs can also compete better with multinational corporations (MNCs) for resources; and they will enable more Singaporeans to participate in the
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workforce and, perhaps, also attract younger folks. This might give our young folks a little bit more taste of the workforce before really entering it.
Mdm Speaker, let me now touch on the measures in the Budget for a more inclusive society, and also to highlight some of the income inequality issues and doing more for older Singaporeans.
I am heartened that we will be doing more for retirees. I had on several occasions in this House raised my concerns on the need to do more for retirees as they out of the labour force and unable to benefit directly from economic growth. Their concerns and anxieties stem from cost of living and uncertainties as many depend on their savings to finance their living expenses. I had asked that we refine the criteria used for means-testing for eligibility for transfers like GST vouchers and CPF top-ups, and so on. An increasing number of residents that I meet are retirees who may be asset rich but cash poor or are living with their families in private apartments or landed property. Current criteria used would mean that they continue to be left out. I do hope that we can consider this request. This request was also recently raised by Parliament's Estimates Committee.
The middle income group. I would like to touch on the middle income group as this is a large part of Singapore's population and this is the segment that is impacted most by the effects of income inequality. Many in the middle income group are most impacted by the need to care of their parents and children, and they also aspire to have quality jobs. I am glad to see that this Budget has several measures to benefit the middle income – ranging from managing the home front on costs by providing MediFund top-ups, increasing rebates on Services and Conservancy Charges, reducing Personal Income Tax and maid's Levy Tax. It also anchors on the future with measures to level up preschools, having student care centres and expanding the Opportunity Fund to enhance social mobility for aspiring young ones. The Budget also looks into ensuring job prospects continue to have a positive outlook and wages can be boosted by the Wage Credit Scheme as companies restructure for higher productivity.
To address the growing concerns on healthcare and affordability especially with an ageing population, MOH, I am glad to hear, will be conducting a review on healthcare financing.
I did not intend to speak about affordability of cars with the tiered Additional Registration Fees which I felt was fair, given that it is progressive and there was no impact on the economy range of cars. However, with the recent
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announcement on MAS' policy on restrictions on loan tenure and maximum loan-to-value for vehicle loans, I am concerned on the impact on needs-based car owners.
For many families, while they do take public transport, having the flexibility of a car when you need it, does help especially when you have young children and older members in the family. While I understand the need to encourage financial prudence of buyers, the sudden and somewhat drastic changes introduced will make it difficult for many to own even an economy car. Take the example of a Mazda 3 or a Toyota Altis. I believe they fall in the range of cars with OMVs below $20,000 and hence will not see any increase in Additional Registration Fee (ARF). However, with the new financing restrictions, in order to buy this range of cars, with the loan-to-value (LTV) ratio of 60% – I checked this last night – these cars still cost about $130,000 to $140,000 today. You will have to pay approximately $50,000 cash upfront and you are subjected to higher monthly loan repayment amounts, given the shorter loan tenure. I am not an advocate of increasing the car population. I am not an advocate of buying a car because it is an asset that depreciates immediately when you buy it. But I will say to you that there are people who do need to own a car on a needs basis rather than for luxury, and I am worried that this group will be priced out. I am asking that we relook at refining this area for needs-based car ownership which I believe the economy range of cars cater to.
Employment. Access to jobs is important. Current sentiments are that foreign workers compete for the same jobs especially professionals, managers, executives (PME) jobs. There is a perception that this reduces employment opportunities for Singaporeans.
We must, however, be careful that this sentiment does not grow out of proportion as it will impact Singapore's ability to attract the right talent that is needed to complement Singapore's workforce for quality growth and hence higher employment opportunities for Singaporeans.
I am glad that Deputy Prime Minister Tharman point out in his Budget speech that our Employment Pass (EP) policy will ensure that firms in Singapore remain able to recruit the best teams, including both locals and foreigners with the skills and expertise that companies need to compete internationally. At the same time, we must maintain a level playing field for Singaporeans with respect to jobs and progressive opportunities. And there will be – as I understand – further calibration and adjustments to the policies.
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While we put a framework in place to ensure that firms give fair consideration to Singaporeans in their hiring, I think another important area that our GPC members and our Resource Panel members discussed was also about ensuring that a level playing field, not just in terms of access but also in terms of skills and upgrading is done. There was discussion and ideas on the need for continuous up scaling and re-development of Singaporeans to enable them to have the right skills and experience for the PME roles available.
A suggestion was to encourage companies to hire Singaporeans by giving subsidies for Singaporeans who are hired so that they can go for skills training. This is much like the programme that IE Singapore had previously. This scheme gave Singaporeans a chance to live and work in China while they would not have otherwise considered for cost and skills reasons. Why not extend this programme to the PMEs in targeted areas? Economics will encourage employers to hire Singaporeans who are then more eligible as they pick up requisite skills and more effective in the various job opportunities available.
We Singaporeans have a track record of self-reliance and hard work. What we must ensure is that Singaporeans continue to feel that we have access to opportunities and aspirations for better lives for ourselves and our families, and that this does not become out of reach. These include good quality jobs, job security, housing, amount of time spent on commuting, accessibility and affordability to transportation, leisure − I say \"leisure\" because this is an important area that I think Singaporeans do not place enough time and effort on − and worklife balance. I believe that this will be key to uniting Singaporeans to do our part to build a better Singapore for all.
Mdm Speaker, I have, in several of my speeches in this House, said that we must push forward for growth but at the same time we must create an environment that is inclusive, and that people feel that they have \"Hope\" − hope to chase their dreams, and that they are able to achieve more for themselves and their families. The Government plays a crucial role in enabling and creating that ecosystem that Singaporeans feel that they can run their own race and have a fair chance for success. The Government cannot promise success but it must have the vision and provide the environment for Singaporeans to believe that they and their families can do better and to succeed in Singapore. Mdm Speaker, I support the Budget.
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The Senior Minister of State, Prime Minister's Office (Mr Heng Chee How): Mdm Speaker, thank you for allowing me to join the debate.
Building a better Singapore for Singaporeans through quality growth and an inclusive Society − this is the goal of this Budget. The Labour Movement stands with the Government on this because we believe that it is the whole purpose of nation-building − build a better Singapore for Singaporeans through good growth and an inclusive society.
From our perspective, the coming three years will be critical in making sure that this transformation of economy works and that in the process, we value every worker. Actually, if you look at different segments of the workforce, in some ways, the transition has already begun a little while back. Take, for example, in the area of the ageing workforce, the tripartite partners worked hard to enable our older workers to continue contributing and earning, and for companies to hold on to this precious manpower over the last few years. As a result, you find that the whole notion that you have to value the mature worker more in order that the person would be motivated, would want to do so and, at the same time, the company would be able to derive value from what this worker took root. And the result has been positive. So, if you look at the employment rate for older workers aged 55 to 64, for example, it went up from 56.2% in 2007 to 64% in 2012. With the re-employment law enacted and taking effect from 1 January 2012, this effort was given a further boost.
I just cite this as an example of a transition in the area of older workers that has been taking place and my fellow Labour Members of Parliament will touch on other segments of the workforce such as the low wage workers, the PMEs, new job entrants, women workers and the self-employed. In each of these areas we can observe progress. Yes, there has been progress, but I think we must all also agree that much more needs to be done to tackle the serious challenges that we face. We must increase the momentum in each of these areas.
The nub of the challenge that we face, in my view, lies in the low and sometimes negative productivity that we have been facing for the past number of years. Research everywhere has shown that there is a strong correlation between productivity, competitiveness and the long-term standards of living of a country and its population. So when we have chronic low productivity, then what it really means is that it would drain our competitive lead and eventually gnaw away our future.
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We have to tackle this, and we cannot tackle these increasingly difficult times simply by doing more of the same; more of what we have always been doing, for example, in the area of manpower − looking to foreign manpower as a source, to just add to the workforce, and then to use that to solve the problems of production. That was in the past and it has also contributed to a scenario of lower productivity. Going into the future, we cannot do that anymore. Because if we do that, then the pay of our low wage workers will never go up and our middle-income PMEs will also face less than fair competition from a too-easy influx of foreign manpower.
That was why I called for serious Government's attention to flagging productivity back in 2009 and I was glad to see stronger and more focused Government's action since, to spur productivity across different industries. That was also why the Labour Movement pushed hard for the Progressive Wage Model for both Rank and File and PME workers. We must never let up on the skills, productivity and career progression of Singaporean workers but we must help create the proper conditions for a sustained improvement in real wages across the board. This is basic to inclusiveness and social cohesion.
This year's Budget contains important components to strengthen the momentum to transform so that Singaporeans will benefit at the end, and I see three in particular: the tightening of the foreign manpower inflow through lower dependency ratios; increasing the price of foreign manpower; and the WCS.
Tightening on the inflow of foreign manpower and increasing the price of foreign manpower will put pressure on companies to rethink their operating models and methods, and to try even harder and more creatively to tap Singaporean manpower sources.
I know that many businesses have deep concerns about the manpower cost impact. Hence, I welcome the WCS which will lighten the manpower cost pressure on employers as they undergo the necessary and serious restructuring in the coming three years. I urge companies not to hanker after the past anymore and instead focus on this new reality, and transform to emerge even stronger, and the Labour Movement will work with you and support you in this.
With regard to building the momentum to value every older worker, I have three proposals to make. First, I once again urge the Government to initiate tripartite discussions as soon as possible to take stock of the progress of the re-employment law since it came into effect on 1 January last year, and in particular to consider how soon and how best to further extend the re-
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employment age band from the current 62 to 65 years to 62 to 67 years. I made this call because of the tight labour market, the need to slow down the net inflow of foreign manpower, the need for companies to preserve experience and expertise, the improved health profiles of succeeding cohorts of older workers, and the requests from older workers to further facilitate their continued employment where they wish to do so and can continue to work. I call upon the Government to indicate a time frame to start this discussion.
Second, I urge the Government to direct its policy and funding support toward workplace healthcare cost-sharing and insurance arrangements so as to render them more affordable and equitable to both workers and employers. Recently, the Government has reiterated its commitment to the older generation of Singaporeans that it will ensure that healthcare costs for them would be affordable. Older workers are part of this generation of Singaporeans whose efforts and contributions have made Singapore succeed and be resilient. The State should do more to encourage and help our older workers stay healthy. This can be done, for example, through appropriate workplace wellness initiatives, a review of the differential premium pricing and use of ElderShield payout, and grants and tax credits for qualifying corporate health insurance arrangements. Each of these areas has much potential for refinement and improvement.
There is also a need to address the worries of both workers, older workers and their employers, on increasing healthcare costs, both outpatient and inpatient, that are associated with ageing. These worries show up consistently in surveys and research both locally and overseas, and have a direct and adverse effect on the employment and re-employment prospects for older workers. Also, many companies and organisations terminate prior co-payment arrangements with their re-employed workers and re-start them on different arrangements that are generally more onerous to these workers, that is, the re-employed worker having to shoulder more of the cost burden at the point where he is getting older. The explanation commonly given is that the change of the type of co-payment arrangement arose from re-employment being a new episode of employment. In other words, you are a fresh employee even though the person has been working for that company for very many years. And because of this, this has led to calls on the part of workers to say, \"In that case, then give me an extension of the retirement age instead of re-employment because if you do it that way, I am covered under the old arrangements.\"
But as we recognised, re-employment has its advantages. It is more flexible than extending the statutory retirement age. Therefore, the simplest solution would be to allow re-employed workers to continue under their prior co-
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payment arrangements. Our unions are keen to work with the Government and companies to further lower this hurdle to employability and achieve a good outcome for all sides. Addressing this healthcare cost well will be a big step toward activating this resource fully for individual, industry and the national good and, perhaps, the public sector could set an example.
Third, I draw attention to the ADVANTAGE! Scheme. Whether it is big companies or SMEs, finding effective ways to tap every viable local manpower resource will be crucial. Older workers are a valuable, tried and tested resource. This is especially pertinent now as foreign manpower inflow is going to be more tightly managed. Making work and the workplace more age-friendly is no longer just a good-to-have icing on the cake, but will now form a much more core purpose.
The current ADVANTAGE! Scheme has gone through numerous tweaks over the years to encourage the employment, retention and re-employment of older workers. It currently funds efforts through its Capability Development Grant for SMEs and its Employability Enhancement Grant.
According to Government figures released in February this year, the Advantage! Scheme has provided $57 million so far, to help some 3,500 companies recruit and retain employees aged 40 and above since 2005. Altogether, some 25,000 workers have benefited and out of that $57 million, some $24 million or 42% went towards redesigning jobs to make them more age-friendly, with each company on an average receiving $16,000 in grants.
So, we can say that there has been outcome from the Scheme, but it is not sufficient and is not significant enough relative to the number of companies that we have who employ older workers, and relative to the pool of older workers we have and is growing.
As this is the primary scheme to spur such older worker-centric initiatives, we must make sure that it can do the job of helping significant numbers of companies restructure and re-equip to employ and make good use of the growing pool of older workers as our population ages.
I believe that the ADVANTAGE! Scheme needs a significant boost in how it incentivises job redesign for age friendliness, and on helping companies employ and retain older Singaporean workers. The Labour Movement stands ready to actively review the scheme with the Government and to also actively promote the use of such funding with unionised companies so as to make work
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and the continued employment of older workers easier.
Mdm Speaker, valuing every worker is what gives the worker a stake in the economic and social progress of this country, and valuing every worker is the litmus test of our resolve and commitment. In this transformation, we must make sure of that.
(In Mandarin): [Please refer to Vernacular Speech.] Mdm Speaker, in the next three years, our economy must undergo a complete transformation. During the process, we must respect and value every worker. This is because, not only do the companies need to transform during the process, the workers also need to upgrade and work together with the company to achieve this aim.
When we talk about valuing every worker, we definitely must not overlook our elderly workers because these elderly workers made many contributions towards nation-building, and also towards businesses. Therefore, in the next three years, the three suggestions that I have proposed will promote the employment of older workers and their health. In terms of healthcare costs, it will allay their concerns over medical bills.
I hope the Government can help our businesses through various ways and schemes, and take good care of our elderly workers through job redesign. If we can do that, our transformation will be successful.
Mr Baey Yam Keng (Tampines): Mdm Speaker, the PAP government Budgets have always put the lives of Singapore citizens front and centre for the past 47 years. This Budget is no different. We should never take for granted our determination, ability, and effort to balance the Budget, and even to generate a surplus for future generations. Our ability to raise and spend money wisely and prudently allows us to build a fair and just society where the benefits of progress are spread widely to most people.
The Budget is aptly themed \"A Better Singapore: Quality Growth, An Inclusive Society\". It is right to assure an Inclusive Society. It is also right to ensure a cohesive society. A stronger cohesive society will enable us to work together to improve productivity as employers and employees, and to defend our nation as fellow citizens. A progressive taxation structure compels those who have the most to give more to help those who are left behind. Those who have done well in life must know that our society has enabled their ability and
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hard work to achieve their fullest potential. The progressive nature of this Budget taxes high living, not hard work. High income earners who choose not to buy expensive cars or live in the most expensive properties will be minimally affected by the tax increases.
Madam, the intense, important and insightful debate on the population white paper shows that Singaporeans care passionately for a better Singapore. The Government and the people stand side by side to achieve this aspiration. Ensuring social cohesion results in a better Singapore. Diverse views can come together for the survival, success and sovereignty of Singapore.
Nation building has always been our Government's preeminent focus since independence. Therefore, we must support more shared national experiences, strengthen social norms and values, and sustain social mobility to strengthen social cohesion.
Madam, there has been much discussion on what the Singapore Core is, and who forms the Singapore Core. I do not think it is so simply defined as whether one is born in Singapore or not. Affinity, love, loyalty and patriotism are emotional feelings, not a birth certificate in black and white. Flashing a pink Identification Card (IC) does not necessarily mean one is a Singaporean at heart. What do Singaporeans identify ourselves with? Meritocracy and multiculturalism are values we hold dearly. Appreciation and pride of our local culture is another indicator.
Why does Tao Li seem to be more accepted as a Singaporean even though she is born in China? The fact that she spouts Singlish and loves char kway teow must have something to do with it. Our colloquial and rojak language skills and local hawker food may not build us strong linkages internationally in trade but they help us identify ourselves as fellow Singaporeans, especially when we are overseas.
While we all want Singapore to continue to do well economically, we cannot neglect the bedrock of our economy, which is our sense of belonging that binds us as a people who are passionate about making Singapore our home and doing our best for the country.
Local food and its culture are part of our national identity and provide shared memories and experiences across generations. We must be proactive in preserving, protecting and promoting our national identities such as our local food culture. As part of my research for today's speech, I recently met up with
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Dr Leslie Tay of \"ieat ishoot ipost\". He is a popular food blogger and also a medical doctor. He sees patients in the morning and at night, and in the afternoon, he goes around hunting down good hawker food and shares his insights and findings. His passion gets him going and makes his life more enjoyable and fuller. Likewise, as a country, while our budget allocates financial resources to keep our economy going, we must not ignore the intangible things that keep us together.
Using our local food as an example, they are not just perishables to keep our stomach full, to titillate our taste buds, to satisfy our cravings, or just the job of NEA to build 10 new hawker centres, although that is a very much welcomed change in policy. According due attention to our national identity has to be a whole-of-Government effort.
First, we should teach our student to use more local cooking equipment and learn more local food during the Home Economics classes. Why learn only how to use the frying pan when we can also learn how to use the wok? Why only bake muffins when we can also make huat kueh? Why only bake carrot cake when we can also fry carrot cake? Secondly, NEA and AVA may want to balance the importance of preserving local food culture as ensure food hygiene. For example, there are not many coffee roasting places left in Singapore. One of the owners was asked recently by AVA to cool their coffee beans on metal trays rather than on the floor which they had been doing so for more than the past 50 years. Hygiene cannot be compromised, but why not ensure cleanliness of the floor rather than going by the book that assumes trays will always be cleaner. This requirement has reduced the coffee throughput, increased the production time, reduced productivity, and potentially puts their business at risk.
In addition to NHB's work of putting artefacts in museums, and Preservation of Monuments Board marking the Civilian War Memorial as a national monument, we could look at recognising living traditions and cultures such as local food stalls which have heritage value. Some stalls have been around for generations, and together we should find ways to allow them to continue cooking in traditional ways and help them to carry on their trade. In Mandarin, Madam.
(In Mandarin): [Please refer to Vernacular Speech.] We are going to celebrate Singapore's 50th National Day very soon. Local hawker fare has also been part of our lives for the last 50 years. They are a crucial part of our local culture. We should seek out hawker food and hawker stalls with 50 years of heritage, the familiar brands, and accord them with the status of national heritage food. While these master artisan hawkers are still alive, SPRING
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Singapore should help them preserve their cooking methods and the longevity of their business. When the Government cut down on foreign labour, it pointed out that the F&B industry needs to increase productivity. We can understand the Government's intention but the problem is that those who can restructure successfully are probably the group enterprises. These hawker stalls usually only employ one or two helpers, thus MOM could give them more flexibility. On the other hand, if these master artisan hawkers are willing to share their trade secrets, we can also work with MediaCorp to look for humble and hardworking disciples to learn from the masters in reality television shows, and the prize for the winning disciple, besides the cooking skills, can be one year rental wavier at a hawker stall under NEA.
(In English): Madam, we must create and preserve more shared common spaces that are affordable to all Singaporeans. The decision to allow social enterprises to run our hawker centres help ensure that Singaporeans, rich and poor, are able to enjoy local food at affordable prices at the same places. Our hawker centre stalls rents must be kept affordable and not be completely subjected to market forces.
Our public attraction admission fees such as that of the Zoo and Night Safari can cost up to $72 and $116 for a family with two children. These fees are very high for the estimated one-quarter million families earning $3,300 a month at the 20 percentile of Singaporean resident household income level in 2012. Like what Gardens by the Bay has done, we should lower prices of our public attractions for locals, to ensure that our poor and rich enjoy these common spaces. Even as we expand the accessibility of more shared common spaces, we must aim to preserve memories of national importance. This serves an important purpose of reminding us where we come from, so we can be more certain of where we are going. Just when the new Sports Hub is under construction, the recent effort of using the old spectator benches of National Stadium in innovative designs is refreshing and commendable. Many Singaporeans remember the many cheers of joy and tears of disappointment when our soccer team won and lost at international matches. I am glad our National Stadium will not have its naming rights sold, so that our roar can still be called the Kallang Roar.
Sports bring people together, especially when we are supporting our fellow citizens in international competitions. New Zealand has a similar population as Singapore and won 13 Olympic medals in the 2012 London Olympics. Almost all the athletes are born in New Zealand. On the other hand, our Olympic winners are all new citizens brought in under the Foreign Sports Talent scheme. We are grateful for their commitment and hard work. However, we must also
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reflect on the criticism of the approach of bringing in foreign athletes and giving them citizenship to compete for Singapore. The wins of these new citizens can sometimes be a pyrrhic victory. Some of them have left Singapore for the country they were born in, such as Li Jiawei and Li Li. Our sports like bowling, sailing and swimming have local born Singaporeans winning at international competitions and doing us proud. We must continue to promote our local talents. Setting up Sports School in 2004 was the right decision. We hope to see more graduates of the school competing and winning at the highest level. Let us be conscious of ensuring our performance at international sport competitions bring Singaporeans together, and not apart.
Mdm Speaker, we have to encourage the social norms that will encourage marriages even as many adults have expressed willingness to be married in a recent survey. Our declining fertility is due to a lack of marriages. Our resident total fertility rate is very low at 1.2. However, the average number of children born to ever-married females aged 30-39 years is 1.52 and higher at 2.06 for those aged 40-49. Therefore, getting more Singaporeans to commit to each other in marriage is critical to encourage more children. The recently announced marriage assistance procreation package helps, but we can go further given national priority of having more Singaporean babies.
We may have to consider changes in our taxation structure to provide the option for married Singaporean couple to file joint income tax. Their incomes will be taxed at double the tax bracket of a single filer. For example, if the personal income of a single tax filer starts to be chargeable at $20,000, a Singaporean married couple income starts to be chargeable at $40,000 and the subsequent tax brackets would be doubled correspondingly. This applies to whether one or both members of the couple work or have income. This would allow Singaporean married couples to be liable for less income tax and then they can further enjoy more tax incentives when they have children.
Madam, our narrow definition of success related to mainly material success or material possessions likely has compelled many young Singaporeans to delay their marriage so that they can better compete with those without family commitments. Our norms, from using the size of one's pay cheque to define success must shift. I will encourage Singaporeans passionate about this issue to participate in the second phase of Our Singapore Conversation. One of the topics is how do we broaden the definition of success. Every honest job has its intrinsic value. Every honest job contributes to society. We must respect good honest work.
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Our social norm of respecting our multiracial and multilingual society must continue to be strengthened. We have encouraged and supported foreign workers working in the service industries to converse in English to ensure that all Singaporeans are better served. English is a common language to facilitate integration. On the other hand, we must not forget the value and importance of our mother tongues. Our four national languages are used in communication of important government policies. And, in public transport, while the train operators must improve the reliability and the service quality, I recommend that our train operators also takes a more inclusive approach by making announcements in all four national languages whenever appropriate for each station's name.
English is a common language to facilitate integration. On the other hand, we must not forget the value and importance of our mother tongues. Our four national languages are used in communication of important Government policies. In public transport, while the train operators must improve reliability and service quality, I recommend that they also take a more inclusive approach by making announcements in all four national languages whenever appropriate for each station's name. Some may argue that this may be inefficient, but it is important for us to do so for two reasons. First, our elderly who do not understand English would be better served. Secondly, the announcements in different languages remind us that we live in a multilingual society. I remember in the 80s when the MRT just started, there were long announcements in four languages when the trains approach City Hall and Raffles Place interchange stations so that passengers know where to alight to take the next train. As a young person then, it was a very audible reminder to me that I live in a multilingual country, Singapore.
Madam, we must sustain social mobility to strengthen social cohesion. Our meritocratic system works best and will continue to be accepted by all Singaporeans when there is equal opportunity to succeed regardless of family resources. The poor must not feel that hard work and ability are insufficient to work out their stations in life. High social mobility means that the success of our children should continue to depend more on their abilities and hard work than their parents' income and education.
Investing in preschool education and support is critical to ensure equal opportunity to succeed to sustain social mobility. We are providing childcare financial assistance to all mothers – this is good. This helps children to grow up in safe learning environments.
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I support the doubling of our spending on the preschool sector over the next five years to over $3 billion. Investing in children when they are still developing helps them to unlock their potential and contribute more to our economy as productive citizens. I agree that it is also important to bring in more anchor operators so as to benefit more children. This investment will not just increase our nation's competitiveness. It is also what a fair and just society should do. We must take care of the youngest member in our society. We must ensure they have equal opportunity to succeed. We must ensure all Singaporeans regardless of birth and connections can contribute to our country's growth through their hard work and abilities.
Madam, it is unfortunate that the discourse of the population White Paper has been about differences, divides and distinctness. Let us not draw the wrong conclusions from that Debate. We have come far since the founding of our nation. Our Singaporean foodies line up patiently for the best hawker food, regardless if one is a CEO or a cleaner. Our Chinese, Malay and Indian elderly citizens watch TV and enjoy their food and drinks together in coffee shops. Our children play easily together in our HDB playgrounds regardless of race and language. Our national servicemen complete their missions in their uniforms and camouflages, where race and social class melt away. We only have to look around to see how much we already are a cohesive people.
Social cohesion is as critical as a strong economy and robust defence force to ensure the survival, success and sovereignty of Singapore. By ensuring greater shared experiences, stronger social norms and higher social mobility, Singaporeans will be more committed to the country with a stronger conviction of their identities.
I support the Budget because the intent and investment of the Budget will continue to strengthen our social cohesion for a better Singapore, and to ensure the benefits of our progress are widely shared.
Ms Foo Mee Har (West Coast): Mdm Speaker, thank you for allowing me to join the debate. Deputy Prime Minister Tharman has announced a Budget which sends a clear signal that the Government is determined to pursue what it had set out previously as the strategic roadmap of Singapore's future. Restructure for quality growth and build an inclusive society, with a clear focus on Singaporeans. This year's Budget feels like last year's Budget, but at a higher
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intensity.
Despite a much lower GDP growth of only 1.3% in 2012 and a strong push-back by various business groups, the Government has persisted with its long-term strategy of building quality growth driven by increasing productivity. It maintains its unequivocal position to wean businesses off their dependence on foreign workers. But companies can take comfort that ample help is at hand to support the restructuring – Deputy Prime Minister Tharman has announced a comprehensive Quality Growth Programme aimed at helping businesses upgrade, create better jobs and raise wages for locals. I am heartened by the series of measures that build on previous years' efforts to bridge income gaps and promote social mobility towards a more inclusive society. This year's Budget has been even more progressive, with wide ranging measures to help lower income groups move up the ladder, and also a larger tax liability for the affluent on luxury homes, investment properties and high-end cars. The Government has made a concerted effort to address inequality in this Budget.
Mdm Speaker, the pain of restructuring our economy is further intensified with this Budget. Companies have no choice but to take the bitter pill. They are in urgent need of finding new ways to grow, invest in productivity, reduce their dependence on foreign workers and design better jobs that are attractive to locals. I would like to focus my speech on this restructuring journey that Singapore companies especially the SMEs need to undergo to emerge stronger and leaner, and in this process create better lives for Singaporeans.
Whilst few will dispute the need to increase productivity, most of the concerns voiced have been about the rate at which changes have been imposed. Companies need time to attract Singaporeans to replace foreigners in lower value jobs. Yet significant foreign manpower tightening measures have been announced across sectors and skills levels even as businesses are struggling to cope with previous cuts. This is amidst a tight labour market, escalating business costs and continued uncertainty in the external environment. There is heightened anxiety about the compressed period of transition expected of companies, and whether it poses an unnecessary risk to their viability.
To ease the pain of transition, the Budget is packed with \"sweeteners\" to help companies, including a generous three-year transition support package, especially targeted to help SMEs. Clearly, the Government is not trying to pick the winners but is focussed on helping every SME that wants to upgrade itself and help them take advantage of every scheme.
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The WCS is innovative, and unique to Singapore. The Government co-pays 40% of wage increases for Singaporeans earning up to $4,000 per month, for three years. The Scheme covers 70% of Singaporean workers; the wage subsidy goes directly to them. It provides the twin benefits of helping businesses cope with higher wages in a tight labour market as they upgrade, as well as encouraging firms to prefer Singaporeans and pay them better.
Many raised the valid concern that this wage subsidy scheme is not tied to productivity growth, hence the risk of wage inflation without a corresponding productivity gain. I have heard some workers are already expecting a wage increase. This is a real risk, but I see the power in the simplicity of the WCS so that every business from right across the sectors can easily draw on. There is no need to apply for it; wage credits will be automatically paid out to employers.
I have argued that businesses need time to transition their operations to find new levels of productivity as it takes time to establish new processes, familiarise workers with new machines or induct and train them. The WCS helps companies cushion wage increases in a tight labour market, giving them the \"breathing space\" they need to ready themselves for the gains that are to come. The Government subsidy is also helpful to buffer inflation in a tight labour market to prevent cost pressures to be passed on directly to consumers. Hence, this Scheme is therefore an economic measure as well as a social one.
Madam, the WCS will help those who are genuinely on their journey to higher productivity, but it will also mean delaying the closing down of uncompetitive firms through an undeserved cost subsidy from the Government. I urge companies to have the discipline of putting in place their respective productivity gain sharing schemes tailored to their own business. This is to ensure wage increases are tied to productivity gains for sustainability beyond the Government assistance period and serves as an incentive scheme to spur higher employee productivity. Madam, no scheme is perfect, and I am glad that the Government is channelling much of the revenue collected from the foreign worker levy back so that all companies will at least have a chance to have a go at restructuring with strong support from the Government.
Mdm Speaker, as the Government rolls out more and enhanced assistance programmes to spur productivity, it is just as important to increase outreach and simplify access to schemes in order to facilitate adoption. Many SMEs still claim that they are not familiar with the support programmes and find them difficult to access. I urge the Government agencies to be relentless in their outreach, in order to help companies adopt best practices, innovate and upgrade their capabilities, access global opportunities, leverage shared
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facilities, and adopt new technology. SMEs will benefit greatly if \"one-stop\" centres are set up for companies to access a wide range of Government-support schemes.
Beyond process and technology improvements, I believe Singapore companies can do a lot more in people management for higher productivity. Studies have found that happy employees to be the most productive. Singaporean workers work one of the longest hours in the world. According to Gallup's research, only 2% of Singapore's workforce describes themselves as engaged by their jobs compared to the global average of 11%. So, there is much employers can do to go beyond treating their employees as simply a pair of hands, but more as valued talent that needs to be motivated, nurtured and rewarded for high performance. Improving the welfare of staff must be a key cornerstone of any productivity drive.
Mdm Speaker, what is missing in this year's Budget is measures to boost local workforce participation to ease labour crunch. Efforts to tighten foreign manpower must be undertaken alongside initiatives to help employers tap local manpower pools. I was surprised to read in The Straits Times that two-thirds of 500 SMEs surveyed said that inclusive practices such as hiring women and seniors are irrelevant or unimportant to them. Yet women and older workers form a large pool of talent that many employers can tap into.
However, to tap into this source of talent, the workplace needs to be family friendly enough to enable women to work and raise their families at the same time. Also the lack of attractive flexi-work opportunities, including part-time work and home-based work, is a barrier to getting women and older workers back to the workforce. Our success in making flexi-work prevalent in the workplace will unleash a significant pool of Singaporean talent, whilst helping to boost household incomes and reduce income disparity.
The current tight labour market is an opportune time to give pro-family employment practices the impetus it deserves. The Government should accelerate its efforts to champion the benefits of work life balance and provide the know-how and incentives to help companies implement work-life balance and provide the knowhow and incentives to help companies implement work-life strategies. Much more needs to be done to change mindsets and the trust between employers and employees.
I urge the Government to follow the footsteps of other countries in making the integration of work and family a national concern, and not left to the best
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efforts of individual companies or the occasional campaign and promotion by different Government agencies. The large majority of industrialised countries, such as UK and Australia, have some statutory regulations that make it easier for individual employees to request for flexi-work to balance their caregiver responsibilities.
Pro-family employment practices should be set as an integral part of the Tripartite Guidelines on Fair Employment Practices. Whilst not all jobs are suited for flexi work arrangements, the Government should consider legislation in the future to give employees, both men and women, the right to request for flexi work and have their requests seriously considered by their employers. I am very pleased to hear that NTUC is calling for the same set of actions from the Government, as we in the PAP Women's Wing are.
Besides helping companies get access to a wider pool of talent, sensible work-life policies make good business sense as companies with such policies have observed increased employee engagement and productivity, and reduced turnover. Furthermore, it can be a real competitive advantage to companies as a recent NTUC survey found that work life balance is a key factor that makes workers happy.
Mdm Speaker, it would be a big win for Singapore if this restructuring provides more opportunities to enable women not in the workforce to return. The Government should consider extending Back to Work Employment Credit Scheme (BWEC), offering up to 30% to 50% of wage subsidy depending on wage levels, to employers who hire women returning to the workforce for up to a year. This will help employers offset the cost for on-the-job training for these women as they re-integrate back to the workforce as well as any necessary redesign of work arrangements.
This scheme could work in conjunction with an \"Internship Programme\", where women re-entering the workforce after a long break could adjust and gradually re-integrate into the workforce. Internships allow women and employers to \"try things out\" without the fear of committing to something that may not work out in the longer term. A Government agency should be assigned the task of proactively facilitating job matching, career re-entry and pre-placement training.
Mdm Speaker, as part of the foreign manpower tightening measures, I am very pleased to see, for the very first time, the Government shifting its position on the need to make changes to the Employment Pass (EP) framework, to
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ensure Singaporeans are given fair consideration in companies' recruitment process. I have spoken in this House on numerous occasions, calling for enhanced rules. With progressively larger number of Singaporeans holding PME jobs, I have asked that the EP framework must ensure that Singaporeans are considered first for vacancies before employers are allowed to bring in foreign professionals. Such labour market test practices are already in place in many leading international centres such as Hong Kong.
Whilst it is critical that Singapore can continue to move up higher value sectors leveraging on international talent that brings expertise, companies' access to foreign professionals must not adversely impact job prospects for locals. I look forward to MOM instituting a labour market test. I also urge MOM to consider that, in industries where there are few qualified Singaporeans, companies are obliged to invest in the training and development of Singaporeans to fill future openings and guard against vulnerability from over reliance on foreigners in selected sectors.
Mdm Speaker, as companies go through the pain of restructuring, we must be prepared that not all companies will make the transition and there will be companies that will close. There will be vulnerable Singaporeans in this transition, whether they become unemployed or structurally underemployed, due to their skills sets. I ask that the Government set up a Restructuring Fund to help affected individuals and their families tide over such difficult times, whilst supporting them with schemes to rebuild their livelihoods.
Mdm Speaker, I would like to reiterate that the Government can only create an enabling environment, rich with opportunity and facility. I urge SMEs to step up, organise themselves, and leverage the available schemes as much and as quickly as they can in order to take their businesses to higher levels of productivity and competitiveness. SMEs are the backbone of our economy and key providers of jobs. This restructuring must result in a revitalised SME sector that is strong and vibrant, for the sake of Singapore's future.
In conclusion, Madam, I thank the Deputy Prime Minister for a balanced and progressive Budget. I support the Budget.
Mr Zainal Sapari (Pasir Ris-Punggol): Mdm Speaker, amidst our economic uncertainties and population challenges looming ahead of us which contributed an intense debate amongst Singaporeans, one thing remains a
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constant – that Singaporeans ultimately want a better Singapore for themselves, their families and the future generation.
The Government has always been cognisant of this and has been working resolutely together with the NTUC Labour Movement, in improving the lot of workers with special attention given to low-wage workers. Government has also been instrumental with its $100 million funding in supporting the Labour Movement's push to increase productivity and promote best sourcing initiative that will impact 48,000 workers with close to two-thirds expected to see their wages increase by at least 10% over and above current annual increment when these projects are completed.
Companies that have leveraged on the Inclusive Growth Programme have managed to increase productivity and wages of their workers. Let me share some success stories. A cleaning company mechanised their cleaning operations for a commercial building using specialised cleaning equipment tapping on IGP funding. The salaries of the cleaners working in the building were raised from $840 to between $1,000 and $1,050.
Another example, a security company implemented the CCTV Surveillance System and Visitor Management System between the period September and January or November last year. The project was co-funded using IGP funding. The systems improved on the incidence response time for the Security Officer and time taken to register visitors with zero error rate. Their 170 local Security Officers benefitted through 11% annual wage increase.
Last year, at Power Seraya Gas Station, the union together with the management and the cleaning service provider worked together to re-deploy the cleaners for greater work efficiency and productivity. As a result, the cleaners' salaries were increased between $100 and $250. Power Seraya and the unions were able to do it because they were determined to help the low-wage workers. Many companies can do so by putting in that extra effort to work with the service providers to explore solutions to increase productivity. With the Wage Credit Scheme (WCS), such restructuring efforts can be supported to reward the workers through better wages.
Madam, this year's Budget is to help companies restructure for quality growth and reduce the income inequality. The examples I shared showed that it can be done. However, I acknowledge there will be challenges.
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During my house visit last Saturday, I was given an earful by my resident who was upset that the curb on foreign worker supply and the increase in workers' levy would affect her husband's construction business badly. I understand that as Singapore undergoes this restructuring exercise, many companies, especially SMEs, will face much difficulty and continue the call for the Government to relax the tightening of the foreign worker supply. It would also be difficult to ask them to embark on Best Sourcing as they resort to cheap sourcing of services to cut cost.
Mdm Speaker, the efforts to restructure the economy by reducing our reliance on foreign workers and to ensure a sustained real wage increase through productivity improvements can be a painful exercise for many companies, especially SMEs. I hope that the measures announced in this year's Budget will lessen the pain.
I am also hopeful that the WCS will be used by companies to restructure given the tightening of the foreign labour supply. I hope that WCS is not used by companies to increase their bottom lines by using it to subsidise their usual wage increase. All workers deserve fair wages and it is the moral duty of employers to value every worker and ensure gain sharing with special attention to be accorded to the lower wage workers.
A better Singapore requires more than just a strong tripartite partnership between the Government, workers and employers but also for all companies to have the moral responsibility to ensure workers feel the impact of the WCS as Singapore journeys towards creating a better Singapore for all.
NTUC Labour Movement will continue to call upon our workers to undergo a mind-set change to think and do things differently through training and re-skilling to increase their productivity at the workplace for a sustainable real wage increase in this highly competitive business environment. Companies must reciprocate any increase in productivity through better salary increments for the workers.
While there has been a strong call for minimum wage because of the widening income gap and rising inflation cost, NTUC, through our union clusters, has been pushing for a Progressive Wage Model (PWM) that could help workers obtain salary increases based on a wage ladder concept which incorporates skills, productivity and career progression. My other colleagues will provide more examples of the PWM in the various industries. The PWM offers more than just minimum wage but a pathway for workers to earn better
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wages.
Last year, NTUC worked with the Government and the industry players to propose a PWM in the cleaning industry as an alternative to minimum wage. In fact, the PWM will offer workers starting salaries that will commensurate with their skills, productivity and job responsibility. For example, the PWM for cleaners will see them starting with a salary of $1,000 and progressively moving upwards as their skills and job responsibilities increase. The PWM gives recognition to the training these workers have gone through. Through collaboration with NEA, the PWM was tied up to the new cleaning accreditation scheme and Government has pledged to engage only cleaning companies with accreditation. MOE, as a service buyer, has come on board and has seen its 3,600 outsourced cleaners' salaries increase by $300. With the WCS, I hope such transition to a PWM could be done at a faster pace with more widespread adoption across many Government Ministries and Statutory Boards.
Mdm Speaker, while I welcome the WCS, I am, however, very concerned that it may not bring immediate or short-term benefit to low-wage workers who are working under outsourced contracts like cleaners, security officers, car park attendants and many others. Many of these companies are operating on an amount that is already specified and fixed in the contract which may last for two to three years with possible options to extend by another one to three years. Hence, there is little motivation for them to leverage on the WCS to increase the salary of their workers.
Madam, I have personally engaged many service providers and service buyers of cleaning, security and landscape industries. All service providers want to offer better wages to their workers and all service buyers want to offer better tender amount but, it cannot be done at the expense of them losing their business and being uncompetitive. They want a level playing field.
Mdm Speaker, bold results to help low-wage workers require bold actions. A level playing field for these service providers and service buyers can be created through licensing. The Labour Movement has been pushing for a PWM that could help low-wage workers obtain salary increases based on a wage ladder concept which incorporates skills, productivity and career progression.
A bold action that the Government can do is to mandate for PWM to be a requirement for licensing to enable companies to operate in sectors like cleaning, landscape and security, which have a high portion of low-wage workers. This, potentially, could also have a ripple effect on wages of low-wage
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workers in other industries. As the WCS provides a Government subsidy for wage increases, I feel that this will go some way in providing some financial support for companies to adopt the PWM.
As a Labour Member of Parliament, I am heartened that the Government has heard the cries of the labour movement, for example, in increasing the qualifying limit of salary for Workfare Income Supplement (WIS), allowing low-wage workers to get more cash from the scheme to help them with meeting their daily needs, as well as build their CPF retirement savings. The PWM, combined with WIS and WCS, is a viable alternative to minimum wage whose impact has been very controversial in countries implementing it.
Mdm Speaker, another bold action that we must take is to make the National Wages Council (NWC)'s recommendations for low-wage workers mandatory for all companies. Last year, many cleaning and security companies were not able to give $50 built-in wage increase to their workers because of fixed contract amount they received from the service buyers. The NWC should also go beyond just recommending a quantum increase in salary for low-wage workers to providing other possible solutions to address the issue of income inequality.
Mdm Speaker, as a society, we must value every worker and see every honest job as a dignified job worthy of good wages. We want to live in a clean and safe environment, but show much resistance to paying more for cleaning, security and other many other essential services. As such, such jobs are caught in a vicious cycle of low wages and low productivity. Service providers and service buyers must change their mindset to enable low-wage workers to earn better wages. The time to make a difference in helping low-wage workers is now with all the funding support that the Government is providing.
NTUC believes that \"Cheap is not good. Good is not cheap\".
Mdm Speaker, please allow me to speak in Malay. (In Malay): [Please refer to Vernacular Speech.] Many low-wage workers keep facing various pressures and problems, as inflation and daily cost of living continue to rise. The Government has shown its concern towards this issue, and will work together with the unions to improve their situation. I hope many of these workers will benefit from the Wage Credit Scheme.
The Labour Movement is working on a PWM, where low-wage workers will have a chance to receive higher wages if the worker possesses higher skills or
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improved productivity. To make this effort a reality, the Government should make this PWM compulsory for companies that offer services such as cleaning, security and landscaping. To the workers, it is important that they seize this opportunity to upgrade their skills through training so that their productivity can be improved.
Although the Government has plans to tighten the entry of foreign workers, it is important for the workers to continue undergoing training to ensure that they possess the latest and the most relevant skills.
(In English): This Budget is pro-Singapore and pro-worker. This year's Budget builds a better Singapore and can create better lives for Singaporeans. We are restructuring for quality growth and embracing to be a more inclusive and caring society. Madam, I support the Motion.
Ms Sylvia Lim (Aljunied): Mdm Speaker, this year's Budget makes several important statements about the need for social cohesion amidst rising inequality. While income inequality is also large in other global cities, the Government has explicitly recognised that further steps to temper inequality must be taken because we are not just a city but a nation. Indeed, the concept of being a nation implies a people with a common identity, bound together psychologically in community. After all, we are all in the same boat.
While some inequality is useful to provide incentives to invest and to work, high levels of inequality are undesirable. Apart from the socially devastating effects of high inequality, there may be negative impacts on economic growth itself. An International Monetary Fund staff discussion note in 2011 observed that high income inequality was associated with shorter spells of economic growth. The authors found that countries were better able to sustain growth over longer periods of time when levels of inequality were reduced.
We face the twin challenge of needing to improve lives and yet keeping our country cohesive. What makes a society a good one? The influential philosopher John Rawls argued that a good society re-distributes its wealth so that all its citizens have the same opportunity for future success in the form of equal access to public goods such as quality education and healthcare. To this end, it is widely acknowledged that key government responses to inequality should include targeting subsidies to those who need them, and a progressive
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tax system.
This year's Budget continues to target subsidies to households to mitigate the rising cost of living. These include higher Workfare Income Supplement payouts, double GST Vouchers for lower and middle income households, and S&CC rebates. These are, in principle, good measures. The Government has also indicated that it is thoroughly reviewing the financing framework for healthcare. The stated aim of this review is to bring down Singaporeans' out-of-pocket share of medical costs while the Government takes on a larger share, again, focused on lower to middle income groups. This is welcome. The issues of healthcare costs and healthcare inflation are indeed uppermost in Singaporeans' minds, especially with our ageing population. It is also a topic that I have spoken about in previous Budgets. I look forward to the fleshing out of the directions of the review, as promised.
The other strategy which is key to mitigating inequalities is a progressive tax system. Simply put, a progressive tax system should aim to require those who have more to contribute more to the national coffers which will then be used as general revenue and for re-distribution to those in need. I believe Singaporeans on the whole see the wisdom and need for this, including those who are better off. There should be a fair contribution towards our fellow citizens and to the country as a whole.
In my speech, I wish to urge the Government to continue to look for ways to make our tax system more progressive and suggest that there is still room to do so without unrevealing our economic strategies.
What would be the benefits of making our tax system even more progressive? Besides the benefit of mitigating inequalities through re-distribution, having a more progressive tax system is symbolically and psychologically important at the national level. It signifies that Singaporeans are journeying together as one people towards the future with the stronger helping the weaker.
There was a recent study of 54 nations by social psychologist Prof Shigehiro Oishi and others, entitled \"Progressive Taxation and the Subjective Well Being of Nations\". The study analysed data from 54 countries, including Singapore, and concluded that progressive taxation was positively associated with a nation's sense of well being. It was shown that, generally, countries with higher degrees of progressive taxation had citizens showing more satisfaction with their lives, as they evaluated their lives at higher scores. According to this
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study, Singapore was rated in the lower half of countries surveyed in terms of progressivity of the tax system. That is, more than half of the other countries' tax systems were rated as more progressive than Singapore's. As for life satisfaction, Singaporeans ranked their lives less optimistically than those in many developed jurisdictions such as Israel, the United States and countries in Europe.
Though the study measured a subjective index, namely citizens' sense of well being, this measure is important. One's sense would affect one's morale and confidence in the future. These would in turn affect one's desire to procreate – something high on our national agenda.
What is the state of progressivity of our tax system currently? According to the Inland Revenue Authority of Singapore (IRAS) data, the top 11% of income earners already contribute almost 80% of the total tax takings in Singapore. It was noted by Assoc Prof Chia Ngee Choon that Budget 2013 makes a further progressive move by implementing a \"decisive shift\" towards taxing wealth, namely luxury cars and homes, rather than just incomes. Despite these new moves in the progressive direction, I would like to highlight two areas which I believe will make our tax system fairer and more progressive.
First, our regime of personal income taxes. Currently, our personal income tax system is already progressive. For instance, those earning less than $20,000 per year do not pay any income tax. Thereafter, there is a tiered system where higher rates of taxes apply to income earned above certain thresholds. Finally, at the top end, those earning an annual income of more than $320,000 are taxed at 20%. It has been noted by several economists that there is room for further tiering above the $320,000 threshold, as the current tiering catches a wide range of income earners in this top bracket, ranging from a university professor who just makes it to this bracket to a banker who earns millions of dollars a year. I understand that this cut off of $320,000 has not been adjusted for around a decade, while in the mean time, incomes at the higher ends have soared. There is clearly scope to have more tiers at higher rates, say up to 25%, for those who earn above certain higher thresholds. For instance, those earning between $320,000 and up to $500,000 could be taxed at 20%; those earning between $500,000 and $700,000 at 22%; those earning between $700,000 and $1 million at 24% and above $1 million, 25%.
Even at a maximum income tax of say 25%, such a top rate would still be low globally. While some may argue that such a move might reduce our attractiveness as a destination for high earners, I believe Singapore would still have major selling points to them, such as the ease of doing business here and
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low corporate tax rates.
Madam, my second point relates to one of this year's Budget proposals – the move to introduce tiered property tax for residential properties. For owner-occupied homes, higher tax rates are being introduced that raise the tax rates for homes from the current top rate of 6% to a new top rate of 16% by January 2015. It was stated that most retirees will end up paying less property taxes. I would like to ask for clarification about the basis of this statement about retirees. Is it based simply on the fact that only 12,000 residential homes fall within the annual values which now attract higher rates? Or is the statement about retirees based on some analysis of the age of persons currently living in the higher value homes? The Budget attachment entitled \"Measures for Households\", states that owner-occupied homes of annual value of less than $59,000 will enjoy lower property taxes. I am advised that the cut-off annual value of $59,000 for higher taxes could conceivably include an older home in a good location, which retirees may have purchased long ago or which they themselves may have inherited. The Government has explicitly acknowledged in the Budget Statement that there are retirees who are not cash rich even though they may live in homes of significant value. Some considerations and concessions should be given for this.
For non owner-occupied residential units, this Budget will replace the current flat rate of 10% tax to introduce a tiered rate based on the annual value of the property, ranging from 11% to 19% from 1 January 2014; and from 1 January 2015, 12% to 20%. This tiered system being introduced is admittedly more progressive than the status quo. However, as noted in the Budget Statement, the increase will only be significant for investment properties at the high end. In addition, the tiers proposed also expose a potential loophole which could be exploited. It assumes that wealthy people will invest only in high end properties and does not address the fact that a wealthy person could buy multiple units of mid-range properties which would enjoy lower tax rates. A wealthy person may well do this as mid-range properties may be easier to rent out. Under the proposed tiers of property tax, it seems that a person's potentially vast cumulative property wealth falls under the radar and will be taxed at a lower rate than someone who has just one high-end investment property.
Would it not have been fairer as a wealth tax to assess a person's cumulative property interests, rather than to have a per property standalone approach? While it may require more administration, I believe the relevant Government land registries have exhaustive records of who owns residential
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properties and in what proportions.
Madam, to sum up, I acknowledge the Government's attempts in this Budget to introduce further progressivity into our tax system and its focus on targeted help which will go some way to mitigate the inequalities faced by Singaporeans. What is of utmost concern to most Singaporeans is worry over the rising cost of living. This should give us greater incentive to have more progressive taxes which will reduce the need to raise other kinds of taxes which increase the overall cost of living such as the GST. In this regard, I urge the Government to continue to look at ways to introduce more progressivity into our tax system for the well being of our society and the nation as a whole.
Mr R Dhinakaran (Nominated Member): Mdm Speaker, thank you for allowing me to speak and share my views on the Budget for an important year during a period of economic restructuring and when our society is undergoing rapid changes.
I will be commenting on very few areas relevant to the Budget in my speech − strengthening the Singapore core, the foreign workforce regulations, helping SMEs, property prices, and so on.
Strengthening the Singapore Core. In building a Singaporean Core, we must ensure that the needs of Singaporeans are met continuously over a period of time emotionally and economically.
One of our concerns is to lift the fertility rate so that it should at least achieve self-sustenance levels. We must adapt structural changes to the way our society works, the administration thinks and the way the business treats its employees so that it starts to appear as a collective effort.
I would like to take the parenthood package for a start as an example. This package, besides promising the monetary assistance, should also be emotionally attractive to a mother and the couple to have children. What does a young Singaporean woman think today before she decides to have a baby? Will I sacrifice my career? Will this sacrifice of my income lead to the extent that my family suffers? Will I be able to take care of the baby while I continue to work? Will I have help at home to address the baby's needs as my parents are too old and frail to help? Can I afford a maid to help me and the child? Can I concentrate on career even though I would not be certain of my baby's comfort
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at home? There is a whole lot of time, attention and care needed for the baby till she at least turns five years old. It could include visits to doctors for regular illness, check-ups, the need to feed the baby in its early months, buy the essentials like diapers, milk powder, and so on, and eventually, education.
These details explain that the mother's main concern is often the well-being of the child and whether she can ensure that while balancing all her other commitments. The hand-holding by the family, parents, neighbours, employer and Government is needed most in these first five years of the child. Therefore, the assistance in my opinion that should come from the Government should be clearly directed to each of those needs to ensure the means are going to the desired end and not being spent unwisely on non-priority areas. The execution can also be simple to ensure that there is no abuse of these privileges. One such method could be to bring in a comprehensive set of vouchers as a booklet to be given to the young family/mother from the stage pregnancy is confirmed. This could include a set of vouchers to be used with any doctor during the period of pregnancy for a normal set of visits for an expectant mother, including the hospitalisation for delivery. Let an average amount for a delivery be worked out to be given as a voucher to everyone so that there is no cash outflow and the patient gets the benefit directly. Similar vouchers for all expenses for mother and child post-delivery well through the immunisation programme for the child, including buying essentials like milk powder, diapers, and so on.
The employers on their part must work with the Government for a flexi-work hour arrangement at least for half a day and work from home options with ability to claim some support from the Government to do so. This will encourage even SMEs to come forward and do this change in work routine to help mothers.
Childcare is a significant portion where help is needed. Today, a domestic help in the form of maid is too expensive for young couples. We could think of abolishing levy for a period for such families who have an expectant mother or children below the age of 12 years to ensure that good help is available through these crucial years at affordable costs. I note that the present Budget has reduced the levy for the needy but I would like to voice out that levy should be eliminated totally to impart direct benefit that the present way of getting tax rebate, and so on.
Similarly, a statutory effort may be made to include space as a mandatory provision in all office buildings, at or near MRT stations or at clusters of office buildings. The BCA can issue guidelines for these childcare centres. This will ensure that mothers are able to attend to a child in early years while at work by
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having the childcare centre close by. These childcare centres can be run by NGOs and other community organisations, keeping the costs at reasonable levels, while providing much needed support to young mothers and families.
Yet another area, I would like to dwell on is to help assimilate and grow the family nucleus in Singapore for Singaporeans who have married foreigners. These couples have a very high possibility of assimilating within our society and, therefore, they should be encouraged in every way to become part of the society including bringing up their next generation as Singaporeans. But the delay in assimilation into the society affects their growing a family in Singapore and, therefore, not able to add to our Singaporean core. Therefore, decision making in granting them a PR or citizenship in such cases should be at least within 12 months.
The recent years have allowed several S Pass holders who have come to work in Singapore to become PR. While we strengthen the core of Singaporean population for our future generations, our need is to attract and assimilate people only with complementary and extraordinary talents than what is available in Singapore. We must follow an approach similar to Dubai where lower skilled foreign workers or semi-skilled workers are allowed to work as long as needed but not assimilated into the society as PRs or citizens. This will ensure our core Singaporeans are not adversely affected by new immigrants at lower skill levels.
Housing today is a concern with its affordability in question for most young couples. To show a distinct and clear approach to help Singaporeans, we must work towards clear goals like ensuring an allocation of a HDB flat within three months of registration of marriage. This will give comfort to young couples wanting to marry and an independent house to stay will also provide the atmosphere and ambience to help create a family soonest before other priorities take root amongst themselves as couple.
While my speech is by no means a comprehensive set of efforts that should be adopted or a way better than the existing efforts, it is my strong belief that doing more of the same may not bring much desired results. An approach which ensures an all-round support from the family, society, employer and Government besides ensuring the intended benefits are directly used for the very purposes planned is the way to go forward.
Foreign workforce in Singapore. I wish to declare my interest as the Vice President of the Singapore Retail Association. I refer to the Budget speech and
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the several changes proposed to the foreign workforce regulations. While this is certainly going to add to the problems faced by SMEs, it is particularly severe on the retail trade. The trade is bearing the brunt of all the policy decisions in recent years and has been put through them with little help and understanding. The retail business has been one of the support trades for growing tourism-related revenues for several years and has been one of the significant highlights in a tourist's diary on his visit to Singapore. The pleasant experience and service levels experiences are a function of a willing and qualified labour force at the store front of retail outlets. Today, the severe crunch in manpower is compromising on the very strength we have developed over the years.
With local talent far and few, their lack of willingness to take to this trade has been very obvious. We look back at 2009 when our first integrated resorts came in. The traditional retail business provided a ready pool of staff for the integrated resorts and the retail industry faced first labour crunch fairly helplessly. The local retail trade, with its business dynamics of high rents and rents linked to the trade's productivity in perpetuity is nearly a zero sum game. This does not allow retail to pay similar to casinos. But the Government chooses to treat these different businesses as services in general.
In the recent Budget, the quotas and DRC ratios have been defined yet again along the broad guidelines of Manufacturing, Construction, and Services. Services are too broad a definition and can range from fashion, retail, F&B, banking, customer services, professional services and even casinos. This broad definition is used to define the need for foreign staff. Unlike in construction where it appears that everyone agrees the impossibility to hire locals and, therefore, provide a dependency ratio of 1:7, the services are not seen as difficult to hire sector. How much of productivity can be squeezed when there is nobody to serve at the retail stores? Automation in all sectors of retail is hard to imagine. Back-end task in every business gets automated like dish washing in a restaurant, but cooking remains manual. Similarly, the computers used in the retail stores for inventory and data communication is the best of automation we could do, can we eliminate the need for any shopping assistant and keep the clothing stores unmanned with a self-help concept? Is banking sector and retail similar in terms of scope for improving productivity and need for labour to be grouped as one? I urge the Government to avoid painting all these sub-sectors with one colour. A careful study of business processes and the need for different kind of talent and their availability alone can get these DRC limits to be rational.
While we battle our own problems on the need for right labour and the effect on business, I wish to highlight that we need to look at our
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competitiveness and uniqueness in the region rather than in isolation. With the tourist shoppers, we need to realise that most tourists in Singapore are also visiting our neighbouring countries during their visit to Singapore. Today, shopping malls and options are as much vibrant in Kuala Lumpur, Jakarta and Bangkok as in Singapore. Are we losing out to these markets our share of tourist spending on retail? With a severe compromise on quantity and quality of front end staff, can our service levels be as good as it takes to be attractive to these well-travelled shoppers? The shopping hours for our retail malls necessitate a minimum of three to four people in a store. As retailers, there is little more to automate at the front end to improve productivity which has been quoted as an area of improvement consistently. Today, with the labour crunch, retailers are on the verge of extinction as a business. It is time for the Government to help lead this sector on how to improve productivity further and allow retailers to follow suit. Retailers do not know what more can be done when even to have physical bodies at the retail store to serve customers is not possible, let alone get the right talent.
While retailers are sincere in helping locals join this trade, the dynamics of this business as it is, makes it difficult for expecting retailers to continue doing more. The revenues are stagnant if not growing modestly, the rents are rising faster, being linked to the productivity of retailers forever, thereby leaving nothing with the retailers to spare to woo talents into the sector. If the retailer relied on foreign manpower in the last few years, it was because of their loss of talent to integrated resorts, and now even this option is being stopped. It is frustrating when all options are closed and no new avenues being suggested except being linked to generic rules and being clubbed together with trades which have very different dynamics.
Repeatedly, I would like to raise the plight of SMEs in general in dealing with the tightened labour force and the restructuring of the economy. Many SMEs are not in a good state at the moment and are fearful for their future. Singapore's business climate has always been one that has helped attract investments, including FDIs, and thus, this negative business perception and sentiments could significantly affect our investment and entrepreneurship climate.
To be fair, the Budget did contain a number of measures to help SMEs cope better with the pressures of a difficult business environment, especially with that of cash flow. However, these measures could have been fine-tuned to make them more effective in achieving their desired outcomes.
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Take the Wage Credit Scheme (WCS), for example. While this is well-meaning to help Singaporean workers earn a higher income by incentivising companies to share their productivity gains with their employees, this could have been more targeted to help smaller companies, which need this assistance more and probably have more workers earning less than $4,000.
Moreover, what will happen to these businesses after the WCS expires in 2015? They will suddenly be left with a higher wage bill than before and if the business environment or economics is bad, these SMEs may not be able to sustain this wage costs and could probably result in job cuts, since wages are sticky. Otherwise, companies may instead choose to pass on these higher costs onto consumers, which I suspect may already have happened with a tightened labour market, and worsened inflationary pressures within the economy.
With a tightened labour market, employers may start engaging in a wage war to attract new staff or retain old ones. While the WCS may help employers share the burden of this wage war, it could also be true that it may in fact push employers towards this wage war sooner than before as they now know that they have a 40% buffer to do so. Actually, what SMEs may need is to get help to deal with its other cost pressures so that employers have the ability to survive a labour crunch. Besides labour costs, the main cost pressure for SMEs are rental costs, and I urge the Government to see how it can look into helping companies in subsidising these high rentals.
The productivity bonus is also good but, once again, this could have been more targeted to help smaller companies. Moreover, the main obstacle preventing smaller companies from applying to the productivity grants is the cash investment required upfront to invest in productivity measures and automation. I urge the Government to consider making this cash available to SMEs upfront based on an estimate basis so that they will have the muscle to invest in innovation and automation.
I would now like to bring your attention to the continuous rise in property prices in Singapore. Although we have made several sincere cooling-off measures in terms of additional stamp duties and loan restrictions over the past several months, the rise seems to continue unabated. This is one of the serious concerns of the common man, especially young Singaporeans, who find it hard to get a home of their dreams and build the family further. All the efforts by the Government have only helped in boosting revenues out of the additional stamp duties while making it even harder for the innocent and genuine buyer in the market. The speculation and hot money seem to know no end. Having seen the incremental stamp duties not doing the required task in cooling the prices, I
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would like to propose alternative measures which will at least ensure Singaporeans have enough opportunities to buy their houses without competing with foreign investors.
I would also like to point the attention towards measures in a larger land-rich neighbouring country, Malaysia, where properties below RM500,000 are reserved for Malaysians only. This ensures the quantum of monies competing for normal houses is not unlimited. In other words, it is a competition of equals at least in some way.
Mdm Speaker: Mr Dhinakaran, you may have to wind up your speech. Your time is almost up.
Mr R Dhinakaran: This will ensure aspiring Singaporeans and middle income families are not competing with foreigners. I would think a barrier in Singapore could be $2 million, beyond which the market could invite foreign buyers as well. Besides, efforts should be taken to ensure speculative buyers pay a heavy price by imposing stricter rules. Further, to avoid foreigners from speculating, we could impose rules to ensure a foreigner buying a property cannot avail any loan from Singapore banks. This would mean leveraging will not fuel the speculation in the property sector.
I hope the Government will seriously consider my suggestions for those areas as we aim to make the lives of Singaporeans better, to help build a strong Singaporean Core. Thank you, Mdm Speaker, generally I support the Budget.
Mr Christopher de Souza (Holland-Bukit Timah): Mdm Speaker, today I wish to speak on four issues:
(1) The need for wider access and more funding for preschool education;
(2) Flexi and part-time work arrangements for mothers;
(3) Caregiver allowance for those caring for elderly and disabled; and
(4) Private property housing regulation, and how we can borrow from the Australian model.
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And I thank you, Mdm Speaker, for giving me the chance to speak on these four issues.
First, preschool education: quality preschool education should not be a privilege of the well-off in society, but should be made available to all. Subsidies through child development accounts are helpful but we must consider going the broad way and nationalising preschool education altogether. Level the playing field – that should be our focus.
To achieve these aspirations, holistic support is needed. In line with this, the foremost point I will be raising today concerns the preschool sector and the importance of ensuring the affordability and quality of preschool education – not just for Singaporeans who can afford it, but even more so, for those who cannot. What I want to stress is the significance of levelling the playing field.
Research has shown that a child's early years are absolutely critical to their development and subsequent progression into adulthood.
While the Baby Bonus initiative increases the cash gift quantum for children as part of the Marriage and Parenthood Package 2013 and should be welcomed, its benefit could be nullified should private preschool agencies simply decide to increase their school fees commensurately.
What we need, then, is a culture of affordable, good-quality preschool education. How we work towards building up such a culture could either involve tapping on the synergy generated by private-public initiatives – such as that by the welfare organisation Care Corner to give disadvantaged children access to high-quality preschool education – or by subsidies or by going the broad way and nationalising preschool education altogether. The main objective in any one of these options is to level the playing field.
One way of looking at this recommendation that preschool education could conceivably be nationalised would simply be to see it as an extension of the educative years in our schools. Although the Government's previous responses have typically included fears of an over emphasis on academic instruction over social skills and character-building, as well as uniformity over the diversity availed to parents by allowing them to choose from a variety of early childhood education models that best fits the needs of their children, I believe these assumptions can and should be challenged and that we should apply fresh lenses to the issue before us.
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Nationalising preschool education, for example, would allow the Government greater control and regulation over the content of the curriculum, which could be tailored such that social skills and moral values, rather than numeracy and literacy skills, are the developmental goals emphasised.
I would be happy to work with the Government to think out of the box for further preschool permutations in order to level the playing field.
Next, Mdm Speaker, flexi, part-time and work-from-home arrangements for mothers. Many mothers express the desire to combine both career and family commitments. Mothers are a major resource of talent. Incentivising companies to have mothers return to work on flexi, part-time or work-from-home arrangement initiatives should be on the Government's radar. Much good will come out of it.
Besides raising the current standards of preschool education and ensuring that such education remains affordable and accessible not just to families who can afford it, young Singaporean couples can be further encouraged to start families of their own when there are flexi and part-time work arrangements in place to facilitate the balancing of their work and family commitments.
The Government is serious about encouraging Singaporeans to get married earlier and have more children – to achieve a sustainable population and maintain Singapore's economic vitality – and for that it must be commended.
The recent initiatives are certainly a step in the right direction, and a timely and welcome boost to making Singapore more family-friendly. Many mothers have expressed the desire to combine both career and family commitments. This means that companies that are supportive and sensitive to the needs of employees who are mothers or fathers, will in turn be best placed to recruit and retain them, in particular, mothers returning to work after spending time with the children.
Besides improving before- and after-school care facilities for young children – an infrastructural issue which will take a longer time to implement – a more cost- and time-efficient solution would simply be to encourage and incentivise employers to provide part-time or flexible working arrangements for our working mothers or mothers considering returning to work.
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A good initiative in recent years that I would like to highlight today would be the \"Back2Work With U\" job fair organised by the NTUC Women's Development Secretariat (WDS), which aimed to attract both young and older women back into the workforce, both through flexible work arrangements and even more creative solutions like home-based work opportunities. In a survey of 300 women jobseekers by NTUC WDS, almost 40% were found to have registered for the fair because of the home-based work available, with more than half of them citing childcare and eldercare as reasons for wanting to work from home. The \"requests and demand for home-based work are obviously there\", as the Speaker of the House Mdm Halimah Yacob herself acknowledged previously, while calling on the Government to provide for funding for companies to develop this segment of home-based jobs by leveraging on infocomm technology in our networked city.
Significantly, these part-time and flexible work arrangements do not just benefit working mothers. Employers themselves enjoy access to a large and diverse talent pool of employees, as well as greater loyalty from staff. It is about being family- and employee-centric. \"Caring and nurturing\" – those ingredients make a company grow and make the workplace family-friendly.
What is needed is a comprehensive approach that encompasses flexible working options, training, innovative recruitment and support in childcare to create an environment conducive for families and businesses to flourish in.
Third point, Mdm Speaker, caregiver allowances for those caring for the elderly and disabled. The strains felt by caregivers of the disabled and bed-bound are immense. Would the Government consider offering a caregiver's allowance or respite care so that the caregiver can have a well deserved day off a week?
Even as we speak about incentivising employers to offer part-time and flexible work options for working mothers juggling both career and family commitments, we must remember the often \"forgotten army\" of workers who have two jobs every single day, as an employee and as a caregiver. Such flexible work options would also benefit employees who play the simultaneous role of caregiver of elderly parents or disabled family members. This is especially important as our elderly Singaporeans, who built the Singapore we have today, need to be, rightfully, cared for. The pressures imposed on caregivers – which include financial, physical and mental fatigue, in addition to time constraints – are not small. The Government thus has a crucial role to play in
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extending recognition and support to our caregivers.
One of the ways to accord this recognition and assistance is by allocating a caregiver allowance that would help families struggling with caring for their bedridden or bed-bound elderly or physically disabled relatives. The Government could help in heralding a paradigm shift in changing the perception of the caregiver's role. Caregiving is a vocation, not a career, and should be supported and respected. Unlike countries like Australia and Finland which have professional carer support and even carer-recognition legislation, the fact that our caregivers are often family members themselves calls, all the more, for a positive shift in terms of the recognition and assistance that the State can be awarding to them – the caregivers. I have raised this previously.
The need to empower and equip our caregivers was likewise echoed in the launch of a pilot programme called Caregivers Always Ready and Empowered (CARE), which aims to give practical solutions to seniors and their caregivers, as well as larger monthly contributions under Government assistance schemes.
The sacrifices made by family caregivers are significant. We can recognise and support their indispensable role.
The fourth and last point, Mdm Speaker, is the private property housing regulation. Property prices must be kept in check. Foreign demand for property must be regulated. The Australian model should be considered. Using that model would mean that foreigners are allowed to only buy homes in select new developments and can, subsequently, only sell to Singaporeans. This allows Singaporeans to dictate the demand in the resale market and hold the reins on prices. It is a logical move.
This is the fourth time I am raising this in Parliament, and I hope it underscores the priority the Government should attach to curbing foreigner speculation of property and ensuring that Singaporeans, especially young couples looking to start families, are able to buy an affordable home.
These worries are not unfounded, with statistics showing that home prices were 16% higher than the peak in the second quarter of 2008, with foreign purchases accounting for 19% of all private residential property purchases in the second half of 2011.
As mentioned on previous occasions, the Government should − in revising and analysing Singapore's property policies − have regard to existing policy
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frameworks that have been implemented in other countries facing similar supply crunches and booms in demand. The Additional Buyer's Stamp Duty introduced in December 2011 is a good step forward to curb excessive investment by foreign buyers and cool investment demand, but it does not go far enough. I would like to raise the Australian model for our consideration.
In Australia, all acquisitions of residential real estate by foreign interests require prior foreign investment approval. The Australian model essentially allows foreigners to buy new developments while restricting their subsequent sale to Australian residents at a price they can reasonably afford. We can institute this double-prevention model in Singapore as it both tempers investment demand and restricts the resale incentive. It is a nuanced and sophisticated alternative that could address the real challenges faced in Singapore today.
Mdm Speaker, with those four points, I support the Budget.
Dr Intan Azura Mokhtar (Ang Mo Kio): Mdm Speaker, thank you for this opportunity to join in the debate on the Budget. When Deputy Prime Minister Tharman announced the slew of Budget initiatives and incentives, I was heartened that the various measures that have been introduced are clearly for the benefit of the majority of Singaporeans − from the enhanced permanent GST vouchers, to incentives for companies to employ Singaporeans, to the revised and more equitable progressive vehicle and property tax structure. It is evident that the Government has listened and heard the concerns of Singaporeans and is taking bold and decisive moves to address the needs of Singaporeans.
For my speech today, I would like to address three broad areas: the preschool sector; families and healthcare financing.
Before I proceed any further, Mdm Speaker, please allow me to continue in Malay.
(In Malay): [Please refer to Vernacular Speech.] This year's Budget can be described as generous and plentiful in terms of the assistance rendered to Singaporeans, especially the lower and middle income groups, and the elderly.
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I am touched and encouraged, especially with the announcement that $3 billion will be set aside to revamp and strengthen preschool education. Among the steps that will be taken with the increased budget allocation for this sector are, building more child care centres in residential areas and near work places, scholarships for preschool teachers to attain at least a diploma in preschool education, as well as career development and a more structured training for teachers. All these will surely ensure a better quality preschool education for our children. For instance, the higher budget allocated means that our children who face difficulties in reading or Mathematics, will receive more attention and assistance from better qualified teachers.
At the same time, this will also open up opportunities for our community in many areas. Firstly, these steps can bridge educational and achievement gaps for our children who come from less well-off families, by giving special attention to them from early on, to develop their minds and their learning abilities.
Secondly, these steps also provide employment opportunities in the preschool sector. For example, our mothers who are not working can take the opportunity to upgrade their skills through development training in preschool education, and subsequently obtain job opportunities as preschool teachers, assistant teachers, or caregivers in this sector, whether as full time or part time employment. The training and employment opportunities will not only provide our mothers with a source of income, but it also acts as a platform for our mothers to improve their personal skills, and gain employment experience for the future.
In addition, our mothers can nurture and educate their own children even better, as mothers who are more skilled in early childhood education. More can be done by mothers in educating their children at a younger age. As the Malay saying goes \"if you want to bend a bamboo, do it when it's a bamboo shoot\". I would like to urge our mothers, especially those who are not working, to seize the opportunities that are available in the preschool education sector.
(In English): The move to bring in more anchor operators in the Anchor Operator (AOP) scheme that will provide for 16,000 additional places by 2017 is a welcome move. This is important in ensuring that good quality yet affordable preschool education can continue to be provided to Singaporeans who may not be able to afford the high fees charged by some private preschool education providers who may try to convince parents that the more they pay for fees, the
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better quality education their children will get.
The expansion to the AOP will help to ensure that good quality preschool education can still be provided for our children at affordable fees, much like what NTUC MyFirstSkool and the PAP Community Foundation have been able to do for many years. I still remember my PAP kindergarten days, as it was known back then, where the PAP kindergarten was about the only affordable preschool education provider, at a time when almost no one else was interested in providing preschool education. Hence, the $3 billion allocated for the preschool sector in this year's Budget will go a long way in helping Singaporeans have continued access to quality and affordable preschool education for our children.
When I asked some people what was the one thing about the Budget that they could recall – two things seem to stand out. One was the reduced Foreign Domestic Worker (FDW) levy, and the other was the lower car loan quantum of either 50% or 60%.
Hence, while there are many incentives and measures of the Budget that are attractive and will benefit many Singaporeans, there are some areas which I hope the Government can take another look at and review in the near future.
First, the reduced FDW levy is a welcome move by many, especially families with working parents. Many are happy that they would need to pay less levy each month for their FDW. But there are families who need a FDW because they have young children, elderly parents or disabled family members who need special care and attention. And they may not necessarily be middle, upper-middle or high-income earners. The $120 FDW levy, in addition to the FDW salary of about $450, can be quite a strain on the family's monthly expenses. Hence, may I propose that such families be eligible for subsidies of the FDW salary and a further concession of the levy, subject to a review of the family's per capita income and specific needs for a FDW?
Second, the reduced car loan quantum of up to a maximum of 60% was a rather drastic and unanticipated move. This makes it difficult for some middle income families to buy a car, especially when they need one, such as families with young children, elderly parents or disabled family members. One such family is that of Mr Kang, a resident in Jalan Kayu. Mr Kang is a cancer patient and is wheelchair-bound. He needs to drive a car to get himself to work and to ferry his two young children to childcare and school. When I saw him a few weeks ago, he sought my assistance to help him appeal for a waiver of the
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Additional Registration Fee (ARF) and Certificate of Entitlement (COE) because of this physical condition, as he hopes to buy a car. However, I worry for him, especially in light of the lower car loan quantum introduced recently. I hope that some concessions can be made for families such as Mr Kang's to be able to afford to purchase a car that may be a necessity to help them be more mobile. I am sure that putting down a rather substantial cash downpayment for a car may not be easy for individuals such as Mr Kang, who would need the cash for medical treatments − which brings me to my next point on healthcare financing.
The announcement to review our healthcare financing is definitely welcome. In particular, I would like to urge MOH to allow greater flexibility in the use of MediSave by Singaporeans. At the moment, our MediSave funds are used mainly to pay for hospitalisation or for surgical procedures. This is very much recuperative or reactive healthcare expenses. I would like to propose that our MediSave funds be used for preventive healthcare expenses as well. If we can go for regular health checks so that we constantly monitor our health, there may be little need for costly surgeries or hospitalisation later. Hence, there may be substantial cost savings for medical expenses in the long run.
For example, our senior citizens can utilise their MediSave for health check-ups, or for getting their monthly medication for chronic illnesses such as diabetes or hypertension, at the polyclinics or restructured hospitals. A resident I met recently on one of my block visits, Uncle Robert, lamented that he hopes to be able to utilise his MediSave funds for his medical health checks. He shared that although he was asked by his doctor to go for further checks at the hospital, he says that he has been postponing it as he was certain one check would lead to another and the final bill would be quite substantial for him for out-of-pocket cash payment. As a retiree, he said that he did not want to burden his children by asking them for money for his medical checks. But he added that he has several thousand dollars in his MediSave account – if only he could use it for his medical expenses.
I empathise with our senior citizens like Uncle Robert. I have asked this in Parliament before and I hope that our senior citizens can partake in preventive healthcare and pay for it out of their own MediSave accounts – funds that they have accumulated through years of work and being economically active – so that they can feel a greater sense of dignity and independence because they can pay for their own medical expenses.
In addition, I would like for our expectant mothers to have greater flexibility to pay for their pre-natal checks at the hospital or private clinics, from their MediSave accounts. At the moment, under the MediSave Maternity Package,
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up to $450 can be withdrawn from an individual's MediSave account for pre-delivery medical expenses such as consultations, ultrasound scans, or tests, but only if these were done at the same hospital that they deliver their baby in. The claim for these pre-delivery expenses is made only after delivery at the same hospital. I would like to propose that greater flexibility be given to our expectant mothers to pay for their pre-delivery medical expenses whether at polyclinics, private GP clinics, or hospitals which may be different from the one they would eventually deliver their baby in. In the spirit of encouraging and helping Singaporeans have more children, I hope MOH would seriously consider this.
In conclusion, Mdm Speaker, I must say that this year's Budget stands out clearly in two areas. One, it is evident that there is greater equitability in terms of wealth redistribution, and in helping the lower and middle income Singaporeans. Two, it is also clear that more Government intervention and assistance is being made available to help Singaporeans mitigate the cost of living and be gainfully employed. With that, Mdm Speaker, I am happy to support this year's Budget.
Mr Patrick Tay Teck Guan (Nee Soon): Mdm Speaker, I rise in support of the Budget that would help to address the current challenges and future needs of Singaporean workers, especially for the lower and middle income. This is a Budget that will spell long-term changes for Singapore's economy and I am heartened that our workers are placed right in the centre of our Government's considerations. Every worker's gain from this Budget will translate into a better life for them and their families. I am also touched by the common aspirations that have been drawn up for the context of Budget 2013 in that the Government recognises that we would like to have a strong sense of identity and belonging, and that Singapore can be truly a home for our children and future generations.
Rather than to term this as a \"Robin Hood\" Budget, as some analysts have said, I would prefer to describe this as a Budget that values every worker, from the rank and file to the Professionals, Managers and Executives (PMEs). This is not just about simply taxing the rich and distributing to the lower income. This is about a Budget that has set aside specific long-term resources to help different groups of workers at different life stages.
My fellow Labour Members, Mr Heng Chee How and Mr Zainal Sapari, have just shared their views and wishes for matured and low-wage workers as part of this debate and their wishes for these two groups of workers. In fact, last
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Monday, as I was listening intently to the Budget speech, I looked at the Budget from the lens of a PME and listed out what the Government has in this Budget fleshed out for our PMEs, the middle income, or otherwise known as the sandwiched class.
Overseeing NTUC's newly-minted PME Alignment Unit, I also had the opportunity to speak to and engage many PMEs in Singapore prior to and after the Budget. They range from young PMEs to mature PMEs to female PMEs, including freelance PMEs. They shared with me on a variety of issues and challenges they face as they are from different life stages.
Reflecting on the Budget that was delivered last week and some of the views shared by the PMEs I met, I am glad that some firm and resolute steps were taken by the Government to look into some of these challenges that our local PMEs face and addressing them from various angles.
Since August 2011, during the Budget debate and Committee of Supply 2012 and then again recently during the recent debate on the White Paper, I have voiced and advocated on behalf of NTUC and the Labour Movement for labour market testing as well as having a foreign PME dependency ratio. The main purpose of the Labour Market Test is for companies to show evidence that they have carried out the necessary steps such as advertising the jobs and carrying out the due diligence and show proof that no local worker can be found to fill a particular job vacancy before they are allowed to employ a foreign worker. This is practised widely across many countries such as the United Kingdom, New Zealand and Australia. I had also shared and suggested on several occasions the need to also look at a foreign PME dependency ratio for certain sectors and industries with excessive numbers of foreign PMEs.
In fact, I am heartened and happy when the Budget was delivered last week that the Government has responded to NTUC's call and is embarking on a closer study into a framework that will give fair opportunities and considerations to Singaporeans in their hiring practices which are in alignment with the principles behind labour market testing.
Many Singaporeans and union leaders I spoke to recognise and accept the need for foreign workers to help supplement our local workforce and also do jobs which many Singaporeans shun. However, many are concerned with the high concentration of foreign PMEs in particular sectors and industries. I recently met a mature PME in his fifties. He has sterling qualifications and has taken both local and global roles. He was employed at a senior level in the
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financial sector. He was unfortunately laid off abruptly. After he left, his role was assumed by a foreign PME and at a package with expatriate benefits.
By the same token, I have received feedback from a senior management in a large multinational conglomerate sharing how his organisation hired a foreign PME to do an administrative and support role which he felt a local PME could easily have assumed or taken. Such are the anecdotal evidence I have.
However, I do agree that MOM will have to study this concept of labour market testing more deeply. The reason being that a \"qualitative\" approach to labour marketing testing can either be too tight or too loose. Framed too tight, companies will find the hiring process too onerous and cumbersome. On the other hand, if framed too loosely, the concerns of local PMEs are not addressed and solved. Hence, as shared on many occasions, there is the need to also examine the merits of a \"quantitative\" approach such as imposing a Dependency Ratio Ceiling (DRC) on foreign PMEs.
And as we discuss the various possibilities, we should take immediate steps to identify key sectors and companies that have high proportion of foreign PMEs today. Upon identifying them, we need to exert some impetus for them to take conscious and concerted steps and efforts to re-balance the ratio to strengthen the Singaporean Core. We recognise that the change cannot happen overnight, but they should at least be made aware that our Tripartite Guidelines on Fair Employment Practices do state in clear and explicit terms that companies are expected to take reasonable efforts to attract and develop Singaporeans. As such, more can be done to change their mindsets and practices even before the new measures are eventually introduced. The top management such as the CEOs and the Boards of Directors, including their Human Resource teams, must recognise that valuing every local PME is a step forward but a big leap towards a better Singapore.
Notwithstanding, I am glad to note that the voice of the Labour Movement has been heard and that the Government is prepared to change and have committed to looking into the possibility of introducing some form of labour market testing to allay the fears, concerns and challenges faced by our local PMEs.
In the same vein, I am glad that in this year's Budget, the Government has announced firm and resolute measures such as raising the S Pass minimum salary to $2,200 and further tightening on the eligibility criteria for the Employment Passes (EP) especially at the entry level of EP. This is particularly
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important as it positively affects the jobs and livelihood of our junior to mid-level PMEs which include many middle-income or the sandwiched class. In fact, this is a second round of measures after the stricter requirements were introduced during last year's Budget.
The introduction of the Wage Credit Scheme (WCS) was somewhat unexpected to me. Even more unexpected was that the Government did not cut off the eligibility at the median wage or for just low-wage workers as in many previous schemes but have extended to those who earn up to $4,000 per month. This will serve to benefit the junior to mid-level PMEs, including PMEs entering the workforce as they earn between $2,000 and $4,000 per month. In fact, the figure of $4,000 covers 70% of our workforce. When I met a group of PMEs last Thursday night for an informal dialogue and shared about the WCS, many did not realise that even PMEs are impacted through this Scheme and may well enjoy wage increases as the ceiling for the wage credit had been unusually stretched beyond the median salary range of up to $4,000. In more ways than one, it is not the usual Budget.
Earlier on, my fellow Labour Member Mr Zainal Sapari shared on how the Progressive Wage Model (PWM) has helped low-wage workers. I wish to add that the PWM which the Deputy Prime Minister Tharman mentioned in his Budget speech applies not just to low-wage workers but to PMEs as well, as the objective is to work towards raising productivity and wages at all levels.
As part of this PWM which NTUC and the Labour Movement is advocating, Singapore Power (SP), a unionised company of UPAGE (the Union of Power and Gas Employees), under our NTUC's Oil, Petroleum, Energy and Chemical (OPEC) Cluster has been in constant pursuit to improve productivity. SP, the leader of the industry, believes in building a strong Singaporean core and raising wages and productivity. SP has put in place a structured path for Technician to progress to Senior Technician; and thereafter to Technical Officer; Senior Technical Officer; and to an Engineer which earns as much as $7,000 per month. One such example is Mr Abdul Rahman bin Suthamoo who joined SP as a Technician Apprentice. He underwent structured training and within three years, he became a fully qualified Technician. Last year, he completed his diploma through SP's sponsorship and is now a Technical Officer. He has now set his sights on moving up the Progressive Wage ladder to become a full fledged engineer, just like many of his other colleagues who have also taken on degrees and higher degree qualifications and moved up the PWM ladder.
Another PWM example would be the Aerospace and Aviation Cluster, a unionised company under SISEU (the Singapore Industrial and Services
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Employees' Union). ST Aerospace Services Company Pte Ltd needed FAA-licensed technicians to service certain US-registered aircraft. They used to get sub-contractors from Philippines to do this due to a lack of inspectors. Under the programme, the company trains competent technicians to take on the role and become inspectors. Technicians are chosen based on their skills and abilities, regardless of their educational qualifications. As a result of the skills upgrading, they earn a higher salary of around $2,500 to $4,000, as compared to $2,000 to $3,000 previously. To date, there are 23 under this programme.
Finally, I am happy that the Budget has introduced an Enhanced Training Support Scheme for certifiable courses supported by the Workforce Development Agency. This initiative is particularly targeted at SMEs. PMEs currently enjoy much lower course fee subsidy and absentee payroll funding than rank and file workers. In this Budget, both the course fee funding and absentee payroll have been further enhanced, and both rank and file and PMEs now enjoy the same amount of higher course fee subsidy and absentee payroll funding. In fact, I submit that our PMEs should better equip themselves in this uncertain global economic landscape by second-skilling and preparing themselves so that they can fall back on their second skill to stay employed and employable in the event of any economic downturn.
Mdm Speaker, overall, I am happy and thank the Government for a very pro-worker Budget. More than that, I can see that the Government is heeding our NTUC's call to also look after the needs and interests of PMEs. It is my wish that in this three-year transition process, I want to see fair opportunities for PMEs, fair treatment of PMEs and also fair wages for them. This will then help set the stage for better jobs, better pay and better life for them and all towards a better Singapore.
Mdm Speaker, in supporting the Budget, I would like to leave with the notion that much work remains ahead and cut out for us to transform our workplaces, society and our economy. Most importantly, we must value every PME, not just PMEs, but strive to value every worker in this transition and transformation process.
Mr Png Eng Huat (Hougang): Mdm Speaker, many Members in this House have praised meritocracy and shared stories of how the system has brought them to where they are today. But we are humans and who we are and what we become is also determined by the people around us and the
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environment we live in. So, if you are stuck in a deep hole, no amount of talent or ability is going to get you out of that predicament if no one lends you a helping hand or throws you a lifeline to get you out of there. So, I am pleased to know that this Government recognises that meritocracy has its limits in sustaining social mobility, that it is going to do more to ensure a fair and an inclusive society and that it will take steps to mitigate the growing income inequality in our country.
To low-income families, it does not matter whether we should view our high Gini Coefficient in the context of a global city or a country. A hard day's work must equate to a fair living wage. In short, the wage must make ends meet and allow for some cash savings for emergency use and for the little indulgence in eating out or shopping once in a while. Low-wage workers have seen their wages stagnated in the last decade. These Singaporeans will see their wages shrink further when they hit their mid-40s. For them, when it rains, it pours because low-wage workers will also be hit with lower employer CPF contribution once they reach 35 years old. I, therefore, welcome the restoration of the CPF rates for these workers as announced in Budget 2013.
The increase in Workfare Income Supplement payout with 40% of it in cash is also a welcome measure, but I urge the Government to seriously think about increasing the cash component to 50% or more for good reasons. The example of the 45-year-old earning $800 a month cited in the Budget speech will see his take home pay shrink by 3.5% or $28 after factoring the revised employee CPF contribution rate. Using the online Workfare calculator, the difference between the current and new maximum WIS payout for this worker is about $38. So, effectively, this 45-year-old low wage worker will see an increase of only 1.4% in take home pay or an extra $10 a month for Budget 2013.
With core inflation expected to average 2%-3% for the whole of 2013, the extra $10 a month is as good as gone. Although there are measures like GST vouchers and S&CC rebates to help Singaporean families cope with rising cost of living, having some cash at hand before the next pay day comes is what low-income families would welcome more. I am also not too optimistic that the Wage Credit Scheme (WCS) is going to benefit low-wage workers significantly and in the near term. These workers are traditionally hired by companies with low productivity and profitability, and may be heavily dependent on cheap foreign labour to stay afloat. Would these employers want to further erode their profit margin by participating in a state-funded wage scheme, knowing very well that 60% of the pay increase would still come out from their own pockets? The tenet of increasing the cash component of WIS and introducing the WCS is to ensure low-wage workers will have more disposable cash to beat inflation.
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While the WIS is a sure thing, the WCS is not. If employers do not warm up to the Wage Credit Scheme for low-wage workers, their salary will remain stagnant again. Therefore, I call upon the Government to monitor the situation closely and raise the cash component of WIS, if necessary, so that our low-wage workers do not have to skip a meal or medical appointment just to make ends meet.
Madam, while the Budget has addressed the issue of saving more for retirement for low-wage workers by increasing their CPF contribution rate, it has not addressed much on containing the rising cost of living. With rising income, low-wage workers living in rental flats will see a corresponding increase in rental rates. Take the example of the 45-year-old low-wage worker again. If his employer decides to adopt the NWC guideline for 2012/2013, to give a $50 wage increase to those earning up to $1,000, his salary would be $850 a month. But, unfortunately, if he is living in a 1-room rental flat, his rent will also go up by at least $57 − from $33 a month to about $90 a month. So, the entire net increase of $40 in his take home pay is not even enough to service his new rental.
We must also bear in mind that this low-wage worker is taking home less pay now because his CPF contribution rate has been revised from 17% to 20%. Factoring in the $70 from his maximum WIS payout, and the subsequent increase in rental, he is better off forgoing the NWC recommended wage increase because he will end up $17 poorer every month. Most low-wage workers living in rental flats will have mixed feelings about having pay rise. What the \"left hand giveth, the right hand taketh away\" is probably what some of them will feel. The same 45-year-old worker can only savour his wage increase until his existing rental contract runs out. After that, like many of his peers, he would receive a \"rental shock\" when his contract comes up for renewal.
I am sure some Members of Parliament in this House have written to HDB to appeal for a stay or review of the rental rates on behalf of your residents. I believe this Government can do more to ensure that when the salaries of low-wage workers are finally moving up, their celebration will not be short-lived. The 2.7 times jump in the published rental rates from $33 to $90 a month for someone whose salary crosses the $800 mark is just too drastic to begin with. I urge the Ministry to look into this and come up with a more reasonable tier so that low-wage workers living in rental flats can truly appreciate the benefit of Budget 2013 and any wage increments that come with it. This is the least the Government can do for these Singaporeans to make up for those lost years of their working lives earning meagre salaries by helping Singapore to grow.
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Next, I wish to talk about one component of inflation which Singaporeans like a lot, that is, food. Many Singaporeans eat out at hawker centres. Most of them, especially low-wage workers, would have an inkling of what inflation is like from their cup of coffee or plate of chicken rice they order at meal time. When the Minister announced that 10 new hawker centres would be built and run on a not-for-profit basis in 2011, I thought it would be a good idea to offer these stalls to enterprising or unemployed Singaporeans, young or old, to try their hands at running a small business selling affordable cooked food. My hope was short-lived as it was later made known that NTUC Foodfare, a social co-operative, was appointed to run the first new hawker centre in Bukit Panjang. Nonetheless, I still hope the Government will open the remaining nine new hawker centres to enterprising Singaporeans to run as small businesses on their own.
While NTUC Foodfare is touted as a social co-operative, it is still a \"members only\" organisation. To enjoy special prices and value meals, you need to be a union member. If the co-operative is enjoying subsidised rental, then it must benefit all. I am sure inflation bites everyone, not just NTUC union members. The cost pressures on cooked food prices are rentals, staff cost, utilities and ingredient costs. As long as NEA keeps rental reasonable or subsidised, any enterprising Singaporean hawker would have a fair chance to keep cooked food prices affordable. First and second-generation hawkers on subsidised rentals do sell cheaper food items when compared to commercialised food stalls.
I know of one such food stall along Jalan Bukit Merah that sells very delectable vegetarian food. The stall is owner-operated, and has three local staff. It has the cheapest plate of vegetarian bee hoon. It is only $1.50 complete with ingredients, like cabbage, mock char siew, crispy bean curd skins and condiments. The stall has been selling vegetarian bee hoon at cheap prices for the longest time. It is neither a no-frill meal nor a marketing gimmick. And you do not need to be an NTUC union member, Public Assistance cardholder, or senior citizen to enjoy cheap and healthy food. This is what we need in a hawker centre to fight inflation. Fix the rental of these new stalls, say, at $320 a month, which is the high-end of the subsidised rental, and allow Singaporeans to ballot for them.
This will create jobs, keep hawker food affordable and ensure Singaporeans, young and old, remain economically active. Cost of living affects everyone. Low-income families especially would be hardest hit by any price movement, no matter how small, because you do not have any margin for error when budgeting for living expenses. A trip to the doctor, a rise in rental, an increase
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in food prices, or even a day on medical leave will spell trouble for these families. Looking at the latest report on wages, we have about 186,000 people earning $800 and below. I urge the Government to look into improving their lives as we restructure our economy. How we care for the weak, the disabled, the needy, and the least will determine how much we have progressed as a developed nation.
Mr Laurence Lien (Nominated Member): Mdm Speaker, I thank you for the opportunity to take part in this Budget debate. I think that some of the thinking behind the Budget is in the right direction. These include pushing for further restructuring of our economy; further increasing the income levels of the lower income; making the fiscal system more progressive; and increasing investments in preschool education.
My overall reaction to the Budget is that there are many encouraging policy tweaks, but it is still insufficient. I think there needs to be a fundamental rethink of both our economic and social policies. In fact, I believe we need to press the social and economic reset buttons. The Government appears overly constrained by legacy policies and programmes. Our ingrained stereotypes and assumptions of economic and social problems can limit our ability to surface more creative ways of dealing with the challenges faced. Hence, it is timely to conduct a zero-based review of our social and economic policies so that we may generate new thinking. Of course, I understand that, ultimately, changing course is not as easy as pulling down a building and doing a complete reconstruction.
There is urgency because a fair number of challenges we face as a nation are deepening. We need to make changes early, when we can still do so from a position of strength. Last year, I mentioned that Singapore was in a social recession. I do not think we are out of it yet. My staff and I at National Volunteer and Philanthropy Centre (NPVC) have begun what we call \"The Singapore Social Health Project\" to assess the social health of the country.
In our work, we looked at a few overseas models, including Boston and Hong Kong. We tend to watch Hong Kong carefully in economic matters. Perhaps, we should also pay attention to their work in the social space.
The Hong Kong Council of Social Service initiated the project of the Hong Kong Social Development Index in 1999. Through regular reporting, the index
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records and tracks progress of social development in Hong Kong, and assesses the social and economic needs of the entire society. It is an alarm system alerting the general public about social trends in Hong Kong.
Let me share some brief observations on the Singapore project so far. First, my colleagues and I found many missing data items that most developed countries routinely publicise. Our Government has a penchant for data secrecy. Fundamentally, there seems to be fear that people would use data wrongly and against Government. I think this view grossly under-estimates Singaporeans. Most of us who want the data desire insights and analysis that will help us help Singapore. In fact, it is precisely because of the lack of data transparency that people speculate and make up stories that they choose to believe instead. The Prime Minister promised more data transparency in Parliament nearly 18 months ago; since we are still waiting, I await something big.
Despite missing data, it is clear that Singapore is still in a social recession. We looked at nine dimensions of social health. By our assessment, Singapore has a negative trend in five dimensions – individual well-being, family, income security, healthcare, and housing and transport. We are neutral on culture and values, education, and social connectedness and community cohesion, and positive only on civil and political participation.
Let me stress that this is not meant as an audit on Government. Instead, it is meant to get the public and community discussing these critical topics and taking ownership of social issues. The problem-solving must be a joint tri-sector one. The project is still work-in-progress, and NVPC will publicise our findings to solicit feedback and suggestions on how we can improve the work. We are adopting an open-source philosophy as this is a civic community project for the wider Singapore community. We aim to complete the project this year. Eventually, we will build towards a Social Health Index. And I believe in this project because we measure what we care about.
Last year, I mentioned that we need a Social Review Committee to create a new shared vision and new social compact, which were missing from Budget 2012. I am glad that Our Singapore Conversation was started.
The 12 perspectives coming out of the National Conversation are useful and we should use these to articulate the shared vision and values that most Singaporeans would subscribe to, and to guide our social reset. From the perspectives, I would like to boil down to just three desired outcomes that, to me, are the most critical for the social health of Singapore for the future. Let me
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give my interpretation to each of them.
One – a society anchored by values. We value diversity in people, including differences in passions, values and interests. We respect the autonomy and dignity of each person. We value compassion and collaboration. We want to empower people so that they can lead meaningful and fulfilling lives, and be at the service of society. We value our families.
Two – every Singaporean matters. This is something from the Singapore 21 exercise, but is still relevant. We care about social justice and about social mobility; we do not wish for an unequal society where Singaporeans are left behind. We build up the esteem and confidence of each Singaporean, so that they know that they count; we support them as they pursue their passions. We do not judge them for what they can or cannot achieve. We partner the less advantaged, empowering them to use their strengths to help themselves. They are not a problem to be fixed.
Three – vibrant and engaged communities. We want Singaporeans not just to have a giving spirit, but also to be civic minded and to have a greater community ownership, initiating action to help us all progress as a society. We do not over-depend on the Government to solve all problems but are empowered to act in a way that expresses the aspirations of ours and of the communities we belong. Singapore would then be a rich community of communities.
Bearing these in mind, we should ask fundamental questions for each of the social domains that I mentioned. Now, I will just give a few examples:
One, individual well-being: how do we strengthen individual resilience, and provide opportunities for Singaporeans to lead happy and fulfilling lives, while being highly engaged in our work?
Two, income security: how can we revamp our income security system, so that lower income Singaporeans do not just get by, but feel that their children have a good chance of enjoying social mobility, and so that all Singaporeans are adequately prepared for old age and contingencies?
Three, family: how do we nurture marriages and families to be healthy and functioning, and support those coping with multiple needs, not just single needs, at the same time, so that they do not feel they have to drain their life-
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savings to cater to their needs?
Four, education: how do we provide the right educational environment that caters to a diversity of abilities and learning styles among our children and that focuses on nurturing the love for learning, being curious and creative, and being lifelong learners; and the list goes on.
Sometimes questions are more important than answers, especially when we want to generate new thinking.
Next, I move to the need to press the economic reset button. The reality is that businesses in Singapore have had it good for a long time. We have had only four recession years in 47 years. GDP has risen from just under $3 billion in today's prices in 1965 to about $350 billion in 2012. At the same time, our corporate income tax rate was cut progressively from 40% in 1986 to 17% in 2010.
In the process, both companies and residents have relied directly or indirectly on cheap, low-skilled, foreign labour. We enjoy a first world environment, but pay third world prices for many \"blue collar\" services, like cleaning and security.
We probably allowed ourselves to be somewhat complacent. Our high GDP growth hid the fact that we were rather far off from our productivity targets. Income inequality has risen, and real incomes have stagnated for the less-skilled. A major cause was lowly-paid foreign workers suppressing their wages.
Economists may say that the influx of cheap foreign labour is an economically efficient outcome, and that society will gain, after we redistribute the gross economic benefits to everyone such that everyone gains.
But there are two problems. One, are the benefits being redistributed? Yes, I would say but not enough. In fact, as this is happening, the companies and high income earners have been experiencing lower taxes. The well-to-do are not stepping up sufficiently on the giving front either. Donations to Institutions of Public Character as a percentage of GDP have only risen marginally from 0.25% in the year 2000 to 0.27% in 2011, even while tax benefits from donations were increased.
Government has introduced the Workfare Income Supplement. It has been enhanced further this year. This measure definitely helps the low-income,
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although I would add that the cash component can be increased, as the previous speaker just mentioned, and workers under the age of 35 also need encouragement and confidence-building too. But the question is: why is it the Government's role to subsidise wages?
This brings me to the second problem. Even if benefits are properly redistributed, an economically efficient outcome may not be a socially efficient one. In this particular case, we need to consider the impact of redistribution on the psyche, esteem and dignity of the worker. Few people feel good getting hand-outs. It demoralises them because they are reminded that they are not good enough to earn enough for their family. It is better for them to perceive that they can earn a just living wage on their steam, even if at the backend there are regulations to protect them from the vagaries of the market place.
One way to help the less skilled is to consider implementing the minimum wage. As a first step, the minimum wage can be considered for certain vocations. For example, in Germany, there is a minimum wage for construction workers, janitors, among a few chosen vocations. Government can continue to help companies for a period of time.
This is not an expensive gap to fix. For example, if we set the Minimum Wage at $1,500 for a full time resident employee, the total additional cost to the country, whether it is borne by employers or Government is at most 0.5% of GDP, by my estimation.
Of course, I do not wish to downplay the painful business adjustments that many companies are having to carry out today. They have to cope with high real estate prices, high levies, a tight labour market and, consequently, wage inflation. This is part of the new reality because we cannot run an economy that is primarily based on high labour force growth, with the bulk of it low-skilled, and low productivity.
But I also think that we cannot throw money at the problem. The measures that slowly constrict the foreign labour supply to all will eventually work. But this is like chemotherapy; there is collateral damage to good parts of the economy. I think we need to do more surgical-like work to encourage specific industries and companies to restructure, relocate or close. We need industry-specific, microeconomic policies and programmes to deal with the unique context of each industry.
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Next, I will make a short comment on the Wage Credit Scheme. The intention of the scheme is good but I believe the theory of change is flawed. There is no guarantee that productivity will increase; or that it will make any difference to wages, which may simply increase on their own steam.
The deadweight loss of this expensive exercise is potentially enormous, unless of course the main objective all along is to find some innovative way to give monies back to the companies. Obviously, I hope to be proven wrong.
I shall move onto the need for a new economic model for Singapore. In Parliament last month, the Prime Minister said that we must talk further on the economy, among three issues he highlighted. I agree with him. But I do not think it is simply about how we balance having a vibrant economy with other objectives. There is a more fundamental issue. We seem to be in a classic stuck-in-the-middle situation. We have pursued both low-cost strategies and differentiation strategies.
I think we need to strengthen our differentiation strategy. Let me emphasise that a low-cost strategy does not mean low-end industry. But any low-cost strategy can easily be copied by other cities.
One area that we must pay much greater attention to is the promotion of entrepreneurship and new indigenous businesses that have the possibility of becoming local and regional champions. We have been promoting entrepreneurship for many years now. But things have not changed. Why?
I sought out Xu Hongwei, an Asst Prof of Entrepreneurship at INSEAD, based in Singapore, on this matter. He has researched intensively on the entrepreneur's motivation and the creation of an entrepreneurial culture. His research finding shows that non-pecuniary motivations are more important than monetary motivations for people to start a business. The desire to make a lot money is not the most important motivation.
What then are the reasons that people want to be entrepreneurs? One is autonomy: People want to be their own boss. The other is identity fulfillment, which is more about people having a vision about a product or a service, or to pursue a particular passion, or lifestyle.
How do we encourage more entrepreneurship? First, we must promote the right values. We must be driven by intrinsic, even transcendent, motivations.
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Entrepreneurs need to want to create new value and make a difference.
Second, we must create a culture. We need to celebrate all entrepreneurs, not just the successful ones. It must be respected as a legitimate profession.
How can the Government help then? One, I would suggest revamp the education system. MOE's desired outcomes – of nurturing each child to be future-ready is fine but the problem is in the strategies and execution. There must be a lot more diversity in our education system. Our young should be learning more about the Asian countries around us, including picking up Asian languages.
Two, we must encourage our young to try and experiment early. I see a lot of hope in our young. If you visit The Hub at the National Youth Council Academy, you would find many young people in a co-working space using entrepreneurial ideas to create sustainable impact. We need to nurture the ecosystem to support our young entrepreneurs.
If we want to make a significant improvement in productivity, I believe it must be also through an entrepreneurial approach. Automation and skills-upgrading would only make us do the same old things more efficiently. What we need are new ways of creating value.
Lastly, I will talk about balancing the Budget. I expect a social reset will increase expenditure on social development fairly significantly to pay for stronger social safety nets, education and healthcare.
Here are some ideas on how to generate more space in the Budget to accommodate this.
One, reduce expenditure by:
(a) Stopping the top-up of endowment funds. I think it makes little sense to take investment income from an endowment fund, the National Reserves, to start another endowment fund;
(b) Government itself going on a productivity and cost savings drive to model behaviour to the rest of the nation. Cutting Expenditure on Manpower and Development Expenditure by 5% will save nearly $1 billion;
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(c) Reducing Government's share in subsidising the wages of workers; and
(d) Increasing defence expenditure only at the rate of inflation.
Two, increase revenues by:
(e) Taking in an increased amount of proceeds from land lease sales, as leasehold land is a renewable resource;
(f) Reviewing the Net Investment Returns Contribution formula, which is still quite conservative in approach; and
(g) Then, when all else is insufficient, increasing taxes on the higher income and wealthier.
In conclusion, I have kept my speech focused on one main point – we need to carry out a social and economic reset. What underpins this work is the building of a new social contract among the public, private and people sectors. I repeat a point I made last year, we need a more radical review. More critically, we need good leadership – not just from Government, but also from the private sector and civic community. This is a dynamic process.
We have a valuable chance now to bring our National Conversation to a different level. The work ahead would be much tougher because for real progress to happen there needs to be cultural and mindset shifts from all parties, and we will be engaging each other in a way that is unfamiliar. I am confident that the outcome will be worth it. But we must take a leap of faith first.
Ms Ellen Lee (Sembawang): Mdm Speaker, Budget 2013 is a future-oriented Budget. It reminds Singaporeans that we have to think ahead to a time when we have a lot more senior citizens than now, when competition with developed nations makes it impossible for us to achieve the same stellar economic growth that we associate with the past few decades. More importantly, it reminds us that we have to work together as one people to achieve the Singapore that we want for ourselves, for our children and for their children.
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I am happy that this year's Budget featured measures to ensure roughly the same foundation for our children and a bigger safety net for the elderly and those in need of medical help. The Government will expand and top up the Senior's Mobility and Enabling Fund by S$40 to S$50 million to cover a much wider range of assistive devices like hearing aids, shower chairs and motorised wheelchairs. To my many elderly residents in Woodlands, this is good news. Medifund will be topped up by S$1 billion, bringing the total fund size to S$4 billion. The ElderCare Fund will also be topped up by S$250 million this year. Well, my elderly residents are not exactly thrilled. To them, Medifund and ElderCare Fund are carts put before the horse!
To an elderly resident who has retired from his job due to poor health, visits to the clinic when he has inexplicable pains, swellings, aches all over the body – they are much dreaded because they mean denting his already thin wallet further. To them, \"Better not to see the doctor, never mind the pain, my savings will be better protected. I have no job, no children to turn to, I can't afford to repeat the last ordeal of having to pay a few hundred dollars in cash for my stomach problems because the Government said I cannot use more money from my MediSave account.\" In Mandarin, Madam.
(In Mandarin): [Please refer to Vernacular Speech.] Madam, a Grassroots Leader who works as a doctor at a polyclinic shared with me that some low-income patients do not want to undergo medical checkups recommended by doctors because they cannot afford to pay for them. This, to him, is a worrying trend. With an ageing population and rising healthcare cost, many people will face the same plight: they will have less family support as families are smaller, some who do not have children will have no one to turn to when they are old, sickly and need financial help in medical expenses. I think besides providing hospitalisation subsidies, the Government should also help older Singaporeans with expenses of medical screenings, and allow them to use more from their MediSave, so that they could have better knowledge of their ailment and undergo treatment.
This is related to another issue, that is, to strengthen our primary care so that elderly citizens will be able to obtain more affordable and accessible medical services. In this way, with their doctor's recommendation and Government-funded medical screenings, elderly Singaporeans from the low-income group could seek medical help before their condition becomes critical.
(In English): I also receive feedback about the elderly citizens' polyclinic experience which further discourages them to visit the doctor for medical screening advice. The waiting time is too long. The place is crowded. Perhaps
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we should talk about raising productivity by exploring the use of technology to support self-care and physician substitution for routine and less complex care. We should also tap on community resources to do more to encourage our healthy but not so well-off elderly citizens to go for medical screenings and seek help early for their medical problems. It has been suggested by healthcare professionals that healthy citizens be allowed to use their MediSave funds without the current restrictions and not when they are sick. I think that would make many of my elderly residents happier than some of the Budget announcements mentioned.
I would like to comment next on the initiatives to promote inclusiveness and social mobility. Social mobility is close to the hearts of many of my residents, notably the young parents. During the Sembawang GRC Singapore Conversation end of last year, I assured some anxious mothers concerned about the quality of preschool education for their children that the Government would do more to meet their aspirations. Obviously, I welcome the announcement that there will be more preschool Anchor Operators in the market and that by 2017, there will be an additional 16,000 spaces for preschool children. Some of the parents I spoke to, I believe, are not as easily pleased.
The concern of many young parents is not about accessible preschools. For some, it is about having a choice of preschools that are perceived as effective in helping their children cope with the demands of a \"branded\" Primary school, followed by an established Secondary school and eventually a good University. I was asked about the lack of choice of preschools in Woodlands. The truth is, we have preschools, but they are not the brand names which some parents aspired to send their children to. The mindset for some of these parents appeared to be that quality preschool means higher fees are charged, more homework assignments are given or longer vocabulary lists are issued weekly. There was also resistance to the idea that learning through play fosters a healthy growth of the child's imagination. The reason for this is that knowing the right answers to test questions is best for getting ahead of others. In Mandarin, Mdm Speaker.
(In Mandarin): [Please refer to Vernacular Speech.] On one of the long-term objectives of the Budget ‒ to improve social mobility ‒ I suggest that the Government help parents to understand what the Government is doing to improve the quality of preschool education. Some parents may have some misunderstandings in this area as our intention is not to ensure that their children can get admitted to the primary school of their choice, one which they think could help their children do well in examinations. What we want to achieve is to provide a more or less similar foundation for every child, to
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cultivate good and sustainable learning habits, good values, a strong love for learning, respect their friends, and love for the country. To get into the primary or secondary school of their parents' choice would depend on other factors, which include how parents guide their learning and how they inculcate discipline. I noticed, for this matter, the media chose a stand which I personally disagree with, that is, to describe putting more resources into preschool education as \"not to let the children lose out at the starting line\". Such a statement will mislead children into thinking that learning is like a race with his classmates. If I lose, then others will win. We should not see learning as a race. We want to build an inclusive society where everyone is respected regardless of background or if he has special talents, but rather because we are all Singaporeans, we are one body. I would like to remind parents not to just focus on preschool education. Every stage of learning requires attention as our children are not in a sprint but a marathon full of challenges and uncertainties ahead. It requires more than personal abilities, team work is also needed. Therefore, it is important to learn how to respect one another and work together from a young age.
Next, I would like to talk about another topic related to preschool education: the benefits of family support for children. Modern women face many challenges in life and have to balance different roles. Their stress levels were increasing, especially so for those who have to deal with education issues for children from 4 to 12 years old. With rapid changes in technology, society and the environment, students also face higher stress in schools. Faced with these two different types of stress daily, mothers no doubt are in a fix on how to handle the situation. Therefore I urge the Government to put in resources for MOE to conduct courses for mothers to learn how to coach their young children, to conduct effective revision of what children learnt in school, to encourage independent thinking and to help their children build confidence. It is often said that a mother is the first and most important teacher of every child, encouraging mothers to spend more time teaching their children is beneficial to their holistic development. It will also strengthen family cohesion. The funding for this initiative can follow the framework of the Wage Credit Scheme where those from low-income and single-parent families could attend the courses free of charge.
(In English): Mdm Speaker, my final point is about the importance of appreciating the Budget's future-orientation. We should get as many Singaporeans as possible to be engaged in understanding the spirit of the Budget. Let us also involve our youths in schools through their Social Studies programme for the Budget will affect their future a great deal. Highlight to them the importance of balancing income and expenditure. Highlight, too, the
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importance of planning ahead to ensure our continued prosperity. Much is at stake so we should all be reminded that unless we work together as one people, what we plan so hard for will not happen. Mdm Speaker, I thank the Deputy Prime Minister and the Minister for Finance for this future-oriented Budget which I support.
Mr Lim Biow Chuan (Mountbatten): Mdm Speaker, this year's Budget seeks to build a better Singapore for the future. With our strong fiscal position and a surplus from last year, we are able to plan for the transformation of our economy and to build a fair and inclusive society.
I support the Budget and, in particular, the provisions for a higher expenditure of $22.4 billion in the social development sector. Although Singapore had enjoyed good economic growth for the past few years, the benefits have not been spread out evenly amongst all Singaporeans. The constant refrain from many Singaporeans is that Singapore is a great place, a liveable city for the rich but not for those of the lower income. This is because many low-wage workers did not see any meaningful increase in their income. And this is also reflected in the recent Gini coefficient results.
It is thus important that our Government take steps to continue helping the lower income as well as to ensure that our tax regime is tilted to benefit the low and middle income.
Two years ago, in the 2011 Budget Debate, I had called on the Government to extend the workfare eligibility criteria from $1,700 to $2,000. I am glad to note that this year's Budget has expanded the WIS coverage from $1,700 to $1,900. Not quite what I had asked for but certainly something that I am happy about. In addition, the WIS payout has also increased significantly. Mdm Speaker, we should do more to assist lower-income Singaporeans adjust to the increased costs of living.
I also support the increase in the cash assistance to public assistance recipients, the increase in the Singapore Allowance for Government pensioners, the additional $680 million for the extra GST vouchers and the S&CC rebates for HDB flat owners. All these benefits I hope will send a strong signal to the lower and middle income that the Government cares deeply about them and will take appropriate action to improve their living conditions. For those Singaporeans who are better off and did not benefit as much from the Budget,
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I hope that they would acknowledge that they have benefitted from Singapore's strong economic growth and to allow all Singaporeans to share in a better quality of life.
Mdm Speaker, allow me to raise the following concerns.
First, cost of living. One of the main concerns raised by many Singaporeans is the rising cost of living. I received frequent feedback from residents expressing their fear that no matter how hard they work, their income would not be able to catch up with the escalating cost of living.
Chief among their concerns would be the cost of medical care, cost of housing, cost of food and even the cost of cars. Would they be able to afford the increased costs of medical care given that the average lifespan of many Singaporeans would be longer? Looking at the high costs of properties, can they or their children afford a property now or in the near future? What about cars? The current COE prices are astronomical and even a small Japanese car would now cost above $100,000 when it used to cost about $50,000 to $60,000 some years ago. At the end of the day, many Singaporeans ask, \"Has my life become better than it was five or 10 years ago? Is this a better Singapore?\"
It is just incumbent on the Government of the day to make life better for the average citizen. Singaporeans have their own aspirations and dreams. They aspire for a better life; some dream of owning a bigger or better home, maybe a private property. Some also dream of being able to own a car after working a number of years. And many dream of attaining a university degree so that they can find an ideal job or vocation. Many of us also hope for a less stressful job and a better work-life balance.
What can the Government do to help our young achieve their aspiration or the Singapore dream?
Education. In this regard, I believe that the Government's emphasis on educating our young is a step in the right direction. The Government should assist our young to achieve their best by providing them with good educational opportunities. I support MOE's move to provide many pathways to success and to provide more University places to allow our young to achieve their dreams of attaining a University degree.
The cost of providing education to the younger generation in Budget 2013 is a hefty $11.6 billion. This is the second largest expenditure item in the
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Government's Budget; surpassed only by Defence. Yet, many young Singaporeans do not feel that they have benefitted from Government policies which give them a highly subsidised education. Perhaps the Government should do more to inform Singaporeans that they are receiving a world-class education at highly subsidised prices. It is important for Singaporeans to understand and be assured that the Government has invested heavily in education so that all Singaporeans can have better social mobility and then hope towards a better life.
Next, healthcare. Another area of great concern to many Singaporeans is that they cannot afford the expensive healthcare when they are older in age or when they are seriously ill. I am thus pleased to hear of the review of healthcare financing. The assurance from the Government that they will take on a large share of medical costs and will offer more help to the lower and middle income will be a great relief to many. Many healthcare facilities are being built and the healthcare Budget has also gone up to $5.67 billion. I look forward to more details from the Ministry of Health on how they can do more to alleviate the financial burden of hefty healthcare bills.
Next, employment opportunities. Last year, I had called on the Government to monitor the foreign workforce situation carefully. The feedback is that the Government is tightening up on labour market in the wrong area – where Singaporeans do not wish to work.
Singaporeans are asking that the Government impose more restrictions on the S Pass and EP workforce. The fact is that these jobs command a higher salary and they are being sought after by PMET citizens with better education. Singaporeans are naturally upset when their employers terminate their services and replace them with foreign workers on EP or S Pass simply because foreign workers are less expensive. There are also stories that some departments in a company are staffed almost entirely by foreign workers on EP or S Pass. If this is the case, what is the benefit to Singapore if the companies provide employment for foreign workers only? I urge MOM to monitor companies which have such discriminatory practices against Singaporeans and to take punitive action where necessary.
I also propose that we slow down the foreign growth figures for EP and S Pass areas. We should give Singaporeans the opportunities to take up these middle management positions and to develop their careers from there. Like my colleague, Mr Patrick Tay, I urge the Government to make it a criterion that any business that wishes to employ a foreigner on an Employment Pass or S Pass must prove that they have advertised and cannot find a suitable Singaporean
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to take up the job. Salary cannot and should not be the main criterion.
For the lower skilled workforce area, I urge MOM to rethink the dependency ratio. Many companies are lamenting that the squeeze on their foreign workforce is adversely affecting their survival. In addition, the hefty increase in the workers' levy has dealt them a double blow. I do recognise that we need to slow down and manage the flow of foreign workers. However, the low-skill workforce sector is an area that most businesses cannot find Singaporean employees. Too tight a squeeze on the labour market may result in higher costs for everyone. It may also affect the financial viability of our SMEs and other small businesses. If we can strike the right balance, then more Singaporeans will have suitable employment opportunities and less resentment towards the foreign workforce.
Next area is maintaining lower rental costs. One area which has contributed to the higher cost of living is the rental of JTC and HDB properties as well as NEA market and food stalls. Currently, various Government agencies have pegged rental of their premises based on market valuation. This has resulted in a situation whereby each time there is a rental increase, the businesses will also increase their prices to their customers. If they do not increase their prices, the businesses will have to absorb this rental increase. Thus, either the customer or consumer pays for the rental increase or the businesses absorb the increase.
I feel that in today's uncertain economic climate, there is no need for the Government to add to the costs of doing business in Singapore. If the businesses are doing well, let them keep the additional profits. Why should the Government insist on maintaining an increase in rental at the expense of businesses or consumers? After all, we are already providing a three-year transition support package to businesses. The Wage Credit Scheme alone would cost the Government $3.6 billion. It is important that what the Government gives with one hand, it does not take away with the other hand.
I urge the Government to consider a freeze on all rental increases for Government premises, rental flats, hawker stalls and shops for the next three years to prevent an escalation in the costs of operations for businesses.
Next, car prices. In the recent Budget announcement, the Deputy Prime Minister and Minister for Finance announced an increase in the ARF for more expensive cars. Subsequently, MAS announced measures to restrict the loan limit for car buyers.
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I support the move to increase taxes on more expensive cars. It is equitable that those who are wealthier should carry a heavier tax burden. I also support the concept of having a limit to the loan quantum so that car buyers would have to exercise greater financial prudence before they commit to high ticket items like a car. Allowing 100% financing for cars does not seem prudent. However, I feel that it is quite drastic for MAS to change from being able to borrow 100% of the car price to reducing it to a cap of having 60% loan for less expensive cars. Has MAS considered the impact on middle income and genuine car buyers who may need a car but cannot afford such a large upfront cash payment? Would it not be better to revert to the car loan limit of 70% or 80% which was the rule 10 years ago? I urge MOF to consider the impact of the financing limit on the aspirations of the younger generation. I propose that MAS set the financing limit at 70% for all cars for a maximum of five years. There should be a proper balance to ensure that the people with a genuine need for cars would still be able to own a car versus ensuring these people do not overstretch themselves financially.
Mdm Speaker, as stated earlier in my speech, this Budget seeks to build a better Singapore, to improve the lives of Singaporeans and to foster a fair and more inclusive society. The Government is right to take such strong and firm measures to build a better Singapore for the future. Much more can be done and need to be done. I support the Budget.
Mdm Speaker: Order. I propose to take the break now. I suspend the Sitting and will take the Chair again at 3.55 pm.
Sitting accordingly suspended
at 3.34 pm until 3.55 pm.
Sitting resumed at 3.55 pm
[Mdm Speaker in the Chair]
[(proc text) Debate resumed. (proc text)]
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Mr Desmond Lee (Jurong): Mdm Speaker, like many other Members in this Chamber, I helped to facilitate Our Singapore Conversation in my constituency. I agree with Deputy Prime Minister Tharman that, amid the diversity of views, a common set of aspirations is indeed emerging about the future that many Singaporeans want:
(a) A home with a strong Singaporean identity;
(b) A vibrant economy with good jobs and a more fulfilling pace of life;
(c) Strong families, where our seniors age with dignity;
(d) A society that cares for our disadvantaged;
(e) Affordable cost of living; and
(f) A cohesive society where people and Government have a more collaborative relationship.
I see this Budget and previous Budgets, as well as other measures taken by the Government, as clearly supporting these aspirations.
I would like to make four broad points: on PMEs; on SMEs; on pace of life in Singapore; and on seniors.
First, on PMEs. To build a home with a strong Singaporean identity, the Government has, among other things, drawn clearer distinctions over the last few years between Singaporeans and non-Singaporeans on many fronts, such as education, housing and healthcare. It has moderated the intake of PRs and new citizens, intensified integration efforts, restricted the inflow of foreign labour and levelled the playing field for mid-skilled and technically trained Singaporeans.
Madam, notably, for PMEs, Government plans to establish a framework to ensure that firms give fair consideration to Singaporeans in their hiring practices. This goes significantly further than the current Tripartite Guidelines on Fair Employment Opportunities for Singaporeans. I welcome this because even as we remain open to foreigners who can contribute to our economy, add diversity in our perspective, and transfer useful skills and knowledge, and even though we do not want to shield ourselves artificially from overseas
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competition, we should not allow discriminatory practices against Singaporeans in our own backyard. Moreover, our Universities and Polytechnics produce high quality graduates and diploma holders, and many Singaporeans study and excel in top universities overseas. By safeguarding fair employment opportunities for Singaporeans, we will be better placed to build up a core of highly competent Singaporean professionals who can in time become captains of our own industries.
Second, to build a vibrant economy with good jobs, Government has invested heavily in quality growth to help our businesses undergo transformation. This is to reduce reliance on foreign labour, but, more importantly, to boost the wages of Singaporean workers through real productivity gain and to increase the profitability of our businesses.
In last year's Budget debate as well as the debate on the President's Address, I suggested that SPRING Singapore establish innovation hubs and reach out to SMEs, especially traditional ones, to share productivity ideas and best practices. Madam, I would make two further recommendations. One, identify industry leaders in productivity and encourage them to join as innovation consultants to help other SMEs. This can be from within the industry or from across sectors.
Most recently, I met a senior executive of a leading F&B company in Singapore. He was from the construction and manufacturing industries, and had absolutely no experience in F&B prior to joining this company, which was then a fairly small food establishment. Using his systems knowledge from manufacturing and construction, he helped the F&B business innovate, designing new plant and machinery which were designed from scratch to significantly reduce reliance on unskilled labour. Because of this, the company trumped its competition and expanded, wages went up and it is now a major player in the F&B sector, a listed company. Such an individual could be a prime example of an innovation consultant who could help SPRING as an innovation expert.
Two, I would encourage SPRING to send out business consultants and work with business federations and unions to actively catalyse and support industry consolidation as far as possible, especially for industries with fragmented structures. This is important because economic transformation is likely to result in some business failure and retrenchments at the margins of productivity, and we do not want Singaporean workers to get caught between sharp edges or fall through the cracks. Also, coordinate our social safety nets and make sure that they support those who may otherwise fall between the cracks, especially older,
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low-skilled or disabled workers.
Madam, my third point is about creating a more fulfilling pace of life in Singapore. Singaporeans want good jobs and are prepared to work hard, but we also want to spend quality time with our family and friends, pursue our own passions and interests, and give back to the community. In short, we want Singapore to be a home and not a factory; we want to find personal fulfilment as individuals in communities and not feel like economic digits or factors of production.
However, some people worry that talk about restructuring for higher productivity is nothing more than euphemism for fewer people handling more work, and therefore increasing work stress and lengthening working hours.
As it already is, technologies, such as email and cloud computing, have accelerated the pace at which we do things and the volume of workload that we have to manage, while mobile communication technology means the workplace is omnipresent. It intrudes into our homes and accompanies us on family holidays.
I, therefore, strongly urge MOM to work with businesses and federations to have another fundamental relook at work-life balance initiatives, as it has a major impact on quality of life and the sense of rootedness in the country.
The Government is already providing significant incentives via the WOW! Fund and Flexi Works! but it may have to do more to get companies to walk the talk. For instance, it could consider upping the grants for these two schemes or to provide more incentives. It could also establish a work-life balance accreditation and certification scheme so that potential job applicants can decide whether they wish to apply for that firm or another firm.
MOM could also consider surveying various sectors of industry to identify which are those with the poorest work-life balance, and then work closely with those sectors to institute appropriate measures, including, if necessary, by legislation.
Currently, the most significant work-life measures implemented by Government, such as paternity leave, childcare leave and shared parenting leave, are in the context of the Marriage and Parenthood Package, but I think more can be done for employees who are single or whose children have already
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grown up.
Admittedly, Madam, the issue of work-life balance is not straightforward. There are many reasons why work-life balance has a chequered record across various firms. Some companies may only care to pay lip-service to the concept. Others may genuinely agree with it but the operation or the nature of the competition makes it unfeasible. There is no slack in some sectors. There is also the issue of employee mindsets: some may worry that their prospects may dim if they telecommute because of less face-time with bosses and mindsets do take time to change. I also understand that Government will want to be careful about compelling work-life balance initiatives in firms for fear of adding to business costs inadvertently affecting Singaporean workers.
Finally, on building strong families where our seniors can age with dignity. I think many of us cheered when we heard that Government is seriously studying how it can more holistically take care of our senior generation of Singaporeans, whether in healthcare or in other areas. They had fewer opportunities and lower wages, but made modern Singapore possible.
Currently, for healthcare, they would generally have to use their MediSave and their children's MediSave first before being eligible for Medifund support. Many elderly whom I have met are loathed to do so, because they do not want to be a burden on their children.
Madam, recently, one of my elderly residents whom I regularly see at community activities came up to me and told me he had been diagnosed with a particular condition which, though not terminal, would require long-term painful treatment. Although his children were doing well and could manage the medical costs, he instinctively did not want to be a burden to anyone; his wife or any of his children. He also felt it would be a better quality of life for him and he refused all available treatment options. The community leaders and I as well as his family all tried very hard to dissuade him but he was very adamant not to be a burden. And shortly after Chinese New Year, he quietly slipped away and left all of us.
I, therefore, agree with Government that we can and must do a lot more for our older Singaporeans. For instance, I think Government could consider significantly raising the level of Government subvention for seniors on a means-tested basis as well as apply Medifund even more liberally for low income and retired Singaporeans based, if necessary, on the means-testing of their children.
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Mdm Speaker, this Budget is about Quality Growth and about Inclusiveness. It builds significantly on last year's Budget, and goes in the right direction. I support this Budget.
Dr Lim Wee Kiak (Nee Soon): Mdm Speaker, when I was in Secondary school, I always enjoyed and cheered very loudly when we went to support the school for various games. Part of the reason is that I knew that if the school won a particular game, the principal would announce that the next day would be a public holiday for us – we need not go to school. Likewise, this particular Budget is one that we cheered for and we are quite glad we have delivered well.
Our Government and the people of Singapore have done well in the last fiscal year and delivered a $3.9 billion surplus in the last financial year. This is despite the challenges facing the global economy and unlike many developed countries who are facing high national debts, high youth unemployment and unsustainable ever-increasing social spending, Singapore is in a much enviable fiscal position as the Government has always been very prudent and very careful in our spending. There are many words to describe this particular Budget. I will call this the \"PAP\" budget. This is a \"Progressive And Pro-Singaporean Budget\".
In the last Budget, during the recession, the Job Credit Scheme gave job credits to the PRs. In this particular Wage Credit Scheme, it is restricted purely to Singaporeans. In fact, it is a Budget that we should celebrate. I would like to propose to the Government that they should actually declare one day Public Holiday to enjoy the good results. And for this one holiday itself, the national places of interests, such as the zoo, bird parks and other national attractions, should be open for free for Singaporeans, for us to enjoy and celebrate.
Like the previous budgets, there is a focus on helping the needy and the elderly. The social development sector spending at $23 billion accounted for the largest share of total Government spending. If others were to criticise this Government for being too stingy, not spending on social costs, this is wrong. The amount that this Government spent on social spending has almost doubled compared to a decade ago and I support the principle of directing assistance to those who need most rather than equal distribution which will dilute our assistance to our needy.
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On the other hand, it is important to focus our efforts on helping our needy to equip them with skills so they can get better employment and be resilient. I mentioned in this House before that a successful country should be one that needs less and less welfare and social assistance schemes rather than one that implements the most schemes. How has the Government performed in this respect? Are we seeing more people dependent on the ComCare Assistance Scheme and more low-wage elderly workers claiming from the Workfare Income Supplement Scheme since it was made a permanent feature of this Government's Annual Budget? If we are really successful, we should see less and less need for all these schemes.
Today, there is a lot of stress facing Singaporeans. There is stress faced by our young in our ever competitive education system. There is stress at our workplace. There is stress in our daily transport system and also the rise in the cost of living in general. There is stress in taking care of our elderly in our family, especially with the rising medical costs.
I would like to focus my remaining speech on three areas. I am sure many Members of the House will focus on the other aspects of the Budget. The three areas are: taking care of the young; taking care of the elderly; and taking care of the environment.
If we can relieve part of the stress taking care of the young and the elderly from the Singaporean families, we would have helped tremendously and increased the quality of life for the majority.
Taking care of the young – I am happy to note the plan to increase and expand preschools by another 16,000 places by 2017, and also of the establishment of the Early Childhood Development Agency. Spending and investing on our young is investing for Singapore's future. Like many Members in the House previously who have been calling for more to be done for the preschool and childcare sector, I hope the Government can step up to take the lead sooner than later.
I am also happy to note the increase in childcare grant given based on household income to ensure childcare remains affordable even to the lowest income group. However, there is always a tendency for childcare operators to raise their fees immediately after any Government increase in subsidy. I hope the Government can limit the fee increase by the childcare operators.
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There are currently severe shortages of childcare facilities in many young towns and young estates like Sembawang, Punggol and Sengkang. In the Canberra division of Nee Soon GRC, I have childcare facilities with up to 150 children registered on the waiting list of childcare centres. I understand that there will be two new childcare facilities opening in 2014 and 2016 but these 150 children cannot wait that long. Speaking to the childcare operators, the recent increase in childcare grant given by the Government was a big welcome. It has resulted in another wave of increase in demand for childcare. What is the point of increasing childcare subsidy but there are no places in childcare centres available at all for the children?
The current childcare centres are limited by the Ministry's guidelines for the teacher/carer to child ratio. There is also a guideline for the number of children in each childcare based on size of the facilities. While we know that there will be more capacity by 2017, I urge the Government to implement short-term measures to ease the acute shortages immediately. I recommend a review of these guidelines and to allow a temporary increase in capacity in some of these childcare facilities facing the highest demand while waiting for the new facilities to be ready in a few years' time.
I support the move by MOE to run some kindergartens to develop best practices but I hope that the pilot project will develop into something bigger, that MOE will run more preschools in the future. These preschools can be paired with the adjacent Primary schools so we can provide a seamless preschool to Primary school education. I hope that the preschool hours will be longer so that working mothers need not worry about after-school care for their children. The fees should be made greatly affordable, similar to the Primary schools. I know this will be costly for the Government but it is investment for our future.
Taking care of the elderly – the biggest fear for most elderly is the rising medical costs and they are worried that they may become a huge burden to their families if they fall ill. I am glad that the Government is taking proactive steps to do a major review on our healthcare financing. I urge the Government to step up the funding and support for this generation of elderly who had built Singapore. The topping up of the Medifund by another $1 billion to $4 billion now; and ElderCare Fund by $250 million; and Senior's Mobility and Enabling Fund by another $10 million are right steps forward. Are these endowment funds which benefit our elderly increasing at a fast enough rate to cater for our ageing population?
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I suggest we fund this with our Net Investment Income earned from our national reserves. Currently, the Government is already tapping half of the Net Investment Income which accounts for about $7.5 billion annually for our Government's expenditure. Can we increase by another 10%, which is about $750 million annually, to fund the additional amount needed to support our elderly? Our national reserves represent the hard work and accumulation of wealth contributed by our fathers and grandfathers in this generation. Today, many are in their golden retirement years. Is there a need for us to continue to increase our national reserves at a rapid pace? After all, all land sales proceeds go to the national reserves and, with 40% of NNI going back to the reserves, the reserves will not be depleted at all but will be increasing at a slower pace.
Taking care of the environment. The last point I would like to touch on for this Budget is similar to last year's Budget, that there is a lack of green focus. The Government should use the Budget to encourage all of us to adopt a green mindset to change our little red dot to a little green dot and a shining example of sustainable development to the world. I am glad that the green vehicle rebate has been rectified to be based on carbon emission. However, the $20,000 CEV rebate on ARF seems pale to the previous green car rebate. I wonder whether it will make a difference to the green vehicle population in Singapore. Since the implementation of the CEV rebates, have we actually seen a rise in low CEV cars on our roads? We have mooted in this House before to have green COE, but the problem is the definition of \"green car\". I hope the Government can still consider the suggestion of a low carbon emission COE (Green COE) as a sure way of obtaining a buy-in from the population. I doubt the current carbon-emission-based rebate will significantly increase our green vehicles on our roads, and I suspect we have a long road ahead to see to a greater proportion of green vehicles on our roads.
There are already electric motorcycles plying the roads in many cities in China as well as CNG-powered public buses in New Delhi. As public transport is the largest contributor to carbon emission and air pollution, we should transform by starting with our public buses and taxis using green and low carbon emission vehicles.
There is no specific mention or focus on climate change or green industries in this particular Budget. What is the long-term strategy towards a greener Singapore?
Mdm Speaker, a country's success is not measured by economic figures. This point has been emphasised by this Government repeatedly. Our success will be judged by others and ourselves as to how well we take care of those
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who are vulnerable, that is, the old, the young, the sick and our environment. Striving for quality economic growth will enable us to have the resources to achieve all these. This Budget is one step forward towards that. With that, I support the Budget.
The Minister of State for Health and Manpower (Dr Amy Khor Lean Suan): Mdm Speaker, Budget 2013 is a bold Budget. In my view, it reflects a courageous shift in economic and social policy that started some years ago, but which has gathered pace in recent times. It is bold on two counts.
Firstly, it shows the Government's resolve in pressing ahead, despite strident voices from the business sector arguing against the pace of it, with economic restructuring and further tightening of our foreign worker policies. The steps we are taking, of moving the entire economy up the productivity ladder, away from over-reliance on foreign workers can be risky, but is imperative. There are decreasing scale economies from adding more labour to the other factors of production. It was effective for a season, but not any longer. Adding labour to land, raw materials and capital will steadily lose its efficacy simply because many of the labour surplus economies like India and China can do it much more cheaply and better.
Technology and innovation offer a different and more expansive growth strategy, one that supports quality growth with an emphasis on higher productivity, or output per worker. The competitive advantage from this strategy is much harder to attain, and once Singapore takes that path, there is no turning back to a labour-driven growth model. But that kind of innovation and productivity-led growth is a more enduring way to raise wages, especially for the vulnerable income groups, and in a fairly constricted labour environment such as the one we have.
Secondly, Budget 2013 is bold is because it acknowledges that meritocracy alone can no longer ensure social mobility. Meritocracy is necessary as it allows the able to rise unimpeded, and, in doing so, they will buoy up the rest. But meritocracy is insufficient. There are structural impediments that may prevent the able from accessing opportunities. Hence, more needs to be done to strengthen the social safety net, remove these impediments and address the widening income divide.
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I would now like to touch on three key topics of discussion arising from the initiatives announced in Budget 2013.
Firstly, the Wage Credit Scheme (WCS). The Scheme, arguably the centrepiece of the Government's three-year $5.3 billion Transition Support Package to help businesses through this period of restructuring, has been the most widely discussed. MOF estimates that, currently, about seven in 10 Singaporean workers could benefit from the scheme.
It is pro-business because it helps to relieve some of the cost burden of businesses by co-funding 40% of the wage increase of their Singaporean employees as they restructure in a tight labour market. It also incentivises firms to share productivity gains with their employees. It is also pro-Singaporean worker, in making it more attractive to hire Singaporeans.
With the WCS in place for a period of three years, it will give firms, especially SMEs, some breathing space and more time for the productivity improvements they are pursuing to catch up with wage increases, thus benefitting the firms, workers and the economy.
The WCS, which, to begin with, is only transitional in nature, is not primarily intended to be a wage supplement or a wage subsidy and is primarily not meant as a tool to close the income gap. For that, we have the WIS and many other schemes. Instead, the WCS, together with the other productivity initiatives announced, seeks to provide every help possible to enable firms to transit into higher value, less labour intensive operations and continue to root themselves in Singapore for the benefit of Singaporeans, particularly the Singaporean workers they hire.
Some have, however, criticised the scheme as being too liberal and too blunt a tool. The benefits may be skewed less toward SMEs and more toward MNCs with a larger number of employees that may not be affected by restructuring. They worry that there could be abuses of the scheme by firms. Others have questioned if productivity would actually be raised by WCS since the scheme is not tied to any actual productivity gains. Moreover, it is argued that the tight labour market might mean that companies might have to raise pay to retain their workers anyway, whether the worker is more productive or not.
As the WCS works on a \"co-payment\" basis, the fundamental premise of productivity improvements and gains sharing is not compromised as the employer still has to bear the remaining 60%. The WCS must be seen in tandem
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with the tightening of foreign workers, PIC Bonus and enhanced incentive schemes as a package to nudge firms to raise productivity while minimising the pain when doing so and in favour of Singaporean workers.
As a three-year programme, it recognises that some long-term investment in innovation, transformation and productivity that a company puts in, may take a few years to bear fruit, whilst the labour market remains tight and employers have to continue to be competitive in remuneration in order to retain staff.
Nonetheless, to ensure that Singaporean workers do benefit from the scheme, the Government should monitor how effective the firms are in utilising the scheme to upgrade and share productivity gains with their Singaporean workers and, if necessary, give guidance to these firms.
More importantly, to spur more firms to take advantage of the WCS, PIC and other productivity initiatives, the Government, say through the Enterprise Development Centre (EDC), should proactively work with business associations like ASME and specific trade organisations to make every effort to reach out to the businesses, especially the SMEs, who would need the most assistance.
Firms should also step forward to avail themselves of the scheme to restructure, as otherwise they will lose their competitive edge. The Government may consider crediting the companies with WCS on a half-yearly instead of annual basis as this would be more helpful to SMEs who may be grappling with their cash flow due to cost pressures resulting from a tight labour market. Indeed, this is one of the feedback that I have received.
Secondly, foreign worker tightening policy. Firms, especially the SMEs, have voiced serious concerns over further increases in foreign worker levies, cuts in DRCs and the higher qualifying salary for S Passes.
Many lament that it is going to get tougher for them to do business in Singapore and some would be forced to shut down, relocate or consolidate their businesses. A Singaporean resident of mine, who is a renovation contractor whom I met at a house visit, asked me to appeal to the Government not to increase the foreign worker levy further as his margins are already very low. He fears that he will not be able to survive if levies are raised. He says that if he folds, it is not just the foreign workers but he and his other Singaporean employees who will lose their rice bowl.
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The tightening of our foreign worker policies will inevitably affect our SMEs, which are mostly owned by Singaporeans. These SMEs contribute more than 50% to GDP and employ some seven in 10 Singaporean workers. They will be affected more than the MNCs. As noted by Assoc Prof Randolph Tan in a Straits Times article as well as by Minister Lim Swee Say, whilst we restructure to ensure that we remain competitive, we need to carefully manage the pace of change as we are walking on a tightrope.
While cognisant of the social downside of having a large number of foreign workers, if the pace of change is too hurried, for example, by freezing the foreign worker growth immediately, as some are championing, the consolidation may be too drastic and the job losses due to company failures, many of which are owned by Singaporeans, may be irreparable. The ultimate victim may be the Singaporean worker. Hence, the Government has chosen to adopt a calibrated approach to the tightening of the foreign worker policy.
The sectors that rely heaviest on foreign workers like construction and services also tend to have lower levels of productivity and pay the lowest wages. These will be the sectors that find the medicine most bitter. The medicine forces restructuring, but the truth is that some of these sectors like F&B are highly fragmented, low technology oriented, and low skilled.
Leaving them alone will only accentuate and prolong the need for painful adjustment later. It is analogous to poking the property asset bubble with the series of cooling measures against the backdrop of excessive liquidity. In the short term, it hurts the sector, but it can help to prevent a much more painful crash that ripples across many more sectors.
Nevertheless, MTI and other relevant agencies should pay special attention to the vulnerable sectors and formulate strategies, tapping on associations and other groupings to help the companies and, especially SMEs, to upgrade their strategies and tap funding.
The Government will also continue to do all it can to grow our local workforce and improve our Labour Force Participation Rate for older workers and economically inactives through various programmes and incentive schemes. Nonetheless, it must be noted that our total LFPR is already one of the highest in the world and, in fact, higher than many OECD countries. Our male LFPR at 75.6% in 2011 for those aged 15 and above is in fact higher than that of Sweden at 73.9%. Hence, over time, raising the LFPR will have its limits. LFPR for older Singaporeans tends to be lower than that of younger segments
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of the workforce. As our workforce is becoming older, and with a low TFR, our overall LFPR will decrease over time despite improvements across age groups. Hence, the Workers' Party's proposal in its Population Paper to raise LFPR for those aged between 15 and 69 by 0.5% per annum till 2025 to reach some 78.7% is hopeful but unrealistic, as that rate is even higher than Sweden's current 74.8%.
Third, closing the income gap. It is acknowledged that we need to continue to do more to strengthen the social safety net and address the widening income gap. We need to create, and widen, opportunities for Singaporeans to move up the income ladder and attain a higher standard of living for every segment, but especially the lower tiers of our society. We need to do this without diminishing the incentive for them to be self-reliant. In a limited sense, we need quasi affirmative action for the poor.
Slower or stagnating incomes, especially for those who work in jobs at the lower rungs of the income ladder, are a real challenge not just for Singapore but many economies around the world. It is a problem we have to work hard to tackle in order to give every Singaporean a real chance to do well and build a truly inclusive society.
In this regard, I am happy to note that the Opposition also has noted its support for Budget 2013's initiatives to tackle the challenges of the income divide. Budget 2013 does not only continue but redouble our efforts to focus on social equity and uplift the lives of our low-wage workers and the vulnerable elderly. Among others, the income ceiling for Workfare Income Supplement is increased to $1,900 per month to benefit some 480,000 Singaporeans or 30% of our citizen workforce.
Furthermore, the maximum WIS payout has also been increased by 25% to 30%, and the cash component is increased to 40%. This is a welcome move as it will cover more workers and help them with their immediate expenses. It is, in fact, something I had appealed for previously. We should continue to monitor and review the qualifying income ceiling for WIS to account for inflation and income growth for the different segments of the population.
The introduction of a more progressive tax structure through tiered property tax rates and Additional Registration Fee for Cars (ARF) would help to redistribute the fruits of economic growth not just to the low income but also the middle income groups and the sandwich class. This is welcome. But in this regard, even as we may explore the expansion of a more progressive tax
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system as a means to ameliorate income inequity and forge a stronger social compact, we must be mindful that we do not unwittingly reduce our international competitiveness.
I would like to quote Leonard Lim from his Straits Times article dated 2 March in this regard. He noted that studies have shown that the top 11% of earners in Singapore already contribute almost 80% of the total tax takings as compared with 45.1% for the US and 31.6% for OECD countries.
Hence, Singapore is already far more progressive than the US and OECD average in terms of personal income tax. So, there may not be much scope to raise income taxes here without affecting Singapore's international competitiveness. He notes that at 20%, Singapore's top marginal income tax rate is one of the friendliest in the world, but is above our close competitor Hong Kong's top marginal tax rate of 17%. Hence, we need to be careful when we consider options and their possible impact on the economy and our competitiveness before deciding what more we can do going forward to tackle the challenge of social income inequity. But, in addition to this, it is nonetheless that the progressive structure, as announced in Budget 2013, will not have a crippling effect on the upper income groups.
This Budget explicitly recognises that social mobility becomes more difficult to sustain beyond the first few generations who have benefited from our good education system. Efforts in this Budget to promote social mobility and allow everyone a fair chance to move up the social ladder is not confined to only the low income but also extended to the middle income.
To do this, spending, for instance, in our preschool sector, will be more than doubled over the next five years to more than $3 billion, the learning support programme will be extended beyond primary one and two and the Opportunity Fund will be expanded and extended to cover Polytechnic students.
Madam, no Budget in a single year can satisfy all the diverse and often opposing needs of Singaporeans. There will always be some trade-offs and, I submit, \"trade-offs\" is not a bad word or an excuse for poor thinking or a lack of fresh ideas. In my view, Budget 2013 is a well calibrated Budget that builds on our efforts to transform our economy to achieve quality growth that will provide all Singaporeans with a better life and at the same time tackle the short term pains and challenges faced. Madam, I support the Budget.
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Ms Mary Liew (Nominated Member): Mdm Speaker, thank you for giving me the opportunity to participate in this Budget debate. I would like to thank the Deputy Prime Minister and the Minister for Finance for an Inclusive Budget which is pro-workers and a Budget that addresses the hopes of Singaporeans for \"A Better Singapore\".
I would like to raise three areas of concern.
Firstly, Wage Credit Scheme. I welcome the Budget initiative on the Wage Credit Scheme (WCS) which helps companies to restructure their operations and, in turn, share productivity gains with their workers by paying them higher wages. For the Government to co-fund 40% of wage increase over the next three years is indeed commendable. However, I have three points that I would like to seek clarification from the Minister. Firstly, during the implementation process, how can employers be held accountable that their employees will indeed enjoy the subsidies through wage increase? Secondly, plugging some of the loopholes in the scheme where the companies can increase wages as one-off variables. Will the Government insist that some form of balance should be reached on these increments where any normal increment, service increment and productivity that has been realised and can be sustained, should go into the built-in basic wages? As such, it should be a combination of built-in and variable increases and not just one-time bonuses. Thirdly, should the companies be unable to sustain the increased wage cost in the fourth year, will workers then face a freeze in wage increment and, for some, even a wage cut? Would the Government then consider extending the WCS after the third year?
Secondly, cost of living. Mdm Speaker, another area of my concern is the cost of living in Singapore. What we hope for is \"A Singapore with affordable living\". However, in a recent Mercer global ranking of most expensive cities to live in, Singapore has moved up the ranking steadily from 11th position in 2010, 8th in 2011 and, in 2012, became the 6th most expensive city to live in.
According to the same study, the annual household income required to lead a \"comfortable\" retired life in Singapore is the third highest among Asia's major economies, behind Australia and Hong Kong, at $48,773. The survey found that this figure is 68% higher than what was needed in 2011, whereas the median gross monthly income from work, including the employer's CPF contributions of full-time employed residents, rose over the year 2011 by 7.1% to $3,480 in 2012. With these staggering numbers, I foresee Singaporeans trying their whole
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lives to have adequate retirement savings by, perhaps, taking on a second job to put aside more money for their retirement to supplement their CPF savings for a better retirement income.
If the high cost of living persists and is not addressed today, it will escalate into a bigger problem that is difficult to reverse in 20 to 30 years down the road, especially if inflation gets the better of any wage increases. Madam, this impact will be felt most among our lower middle-income group and our elderly population. Inflation in Singapore for 2012 has gone up by some 4.6%. Although MOM has reported that wages have also increased last year by 7.1%, what is significant is that the income gap in Singapore has also widened. Social cohesion in Singapore will be eroded when the poor believe they cannot work their way up. Are there more measures to reduce the widening income gap?
I am concerned for our Singaporean workers, who have put in a hard day's work and still have to struggle with their basic needs. It is time we set up a cost control or review committee under the Prime Minister's Office (PMO) to study the overall impact of all price increases, be it transport or daily necessities, to the overall inflation rate, so we can monitor the multiplier and spiralling effect of these increases.
Thirdly, women in our labour force. Madam, we have a labour crunch in Singapore today. MOM's Labour Force Report 2012 reflects that although we have some 942,000 economically active women in Singapore, we also have some 525,000 women who are aged 25 years and above who are economically inactive and not working. If I exclude women who are 60 years and above, there will then be about 272,000 women who are economically inactive.
Madam, NTUC's Women's Development Secretariat (WDS) under your leadership in 2007, pioneered the Women's Back2Work with U Programme with a focus to help women to return to the workforce by equipping them with the skill and competency to readjust to modern work environment and requirements and, at the same time, to match them with their potential employers. NTUC also introduced the Jobs on Wheels programme in 2012, bringing available jobs directly into the heartlands to women. As at 2012, NTUC has trained some 16,500 women out of 17,570 women whom we have assisted and have found jobs and returned to the workforce.
I would like to share a story of how much help and time is involved to help Mdm Jenny Chua in her 50s, return to work after a 17-year lapse. Jenny Chua chanced upon NTUC WDS when she attended the Jobs on Wheels programme.
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She was delighted to know that NTUC will be able to help her return to work. She responded positively when the staff called and did a screening with her to gauge her eligibility for the two training modules. During the first day of training, she appeared aloof and apprehensive. As she was trained to join the retail industry, she was not sure if she could withstand the gruelling hours of standing after staying at home for the past 17 years. With the encouragement from the trainer and her course mates, she became more confident and cheerful and looked forward to her new employment.
Mdm Jenny Chua shared, I quote: \"I really like my job here. I wanted to leave the job after a week. But my supervisor encouraged me to stay on and give myself more time to get used to the long standing hours. I got my confidence back after attending the training. It has been three months since I started this job. I would like to thank NTUC WDS and my employer Jay Gee Enterprises for giving me an opportunity to be what I am today, instead of resigning to my fate as a stay-at-home mother and grandmother.\" Jenny was very fortunate as she has a supportive trainer, course mates and supervisor to encourage her to stay on in her job when she felt like giving up.
Madam, this is the reality of the situation. For Jenny, she is able to fulfil her obligations at home and at work as her employer Jay Gee Enterprises allowed flexible work arrangement for her to work certain hours and days in the week. As such, she can now be a working mother and grandmother. Clearly, hon Member Mr Dhinakaran from Jay Gee Enterprises walked the talk, as he spoke earlier.
Madam, the journey of helping women to return to the workforce has been most fulfilling despite the challenges we faced. While we encourage women to return to the workforce, we must also recognise that it is a personal choice of the individual that we should respect. However, we will continue to be relentless in encouraging and assisting women to return to work. Since the commencement of the Women's Back2Work with U Programme in 2007, I am heartened to note that the labour participation rate for women in the workforce has increased in 2012 from 66% to 70.9%, where the age group is from 25 to 64 years old. To increase further the participation rate will require continuous commitment from our tripartite partners.
The Labour Movement has for the past six years actively encouraged companies to value every female employee, to make concrete plans to restructure the work and promote a pro-family culture. With the manpower shortage we face, it is even more critical for us to now review what more we can do collectively to help retain women in our workforce and provide a
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fulfilling career while managing their families. Government can incentivise companies to re-employ women who have left their employment for family reasons and retrain them.
Madam, the real issue is for us to nip the problem in the bud. While we can try very hard to help women to return to work, why not ensure that we keep them within the workforce in the first place? After all, prevention is better than cure.
We need to approach this matter holistically. According to MOM's Labour Force Report 2012, about 43.3% of our economically inactive women cited family responsibilities as the main reason for not working. I join previous speakers, Ms Foo Mee Har, Mr Christopher de Souza and others, to urge our Government to take bold steps to empower our women to combine their jobs with family commitments and to help alleviate the difficulties faced by women. I hope that the Government can consider the following four recommendations:
Firstly, to legislate flexible work arrangements where employees are given the right to ask for flexible work, similar to those in UK and Australia. Such flexible work arrangement assists employees to achieve balance between work and family responsibilities. It also helps manage the demand that comes with being parents of a young child or a child with a disability, such as picking-up and dropping-off at childcare, caring for sick children, and attending medical and other appointments. Most importantly, it retains women in the workforce.
To encourage them to work, our Government and employers have to make the employment terms and working environment conducive to women who need to manage their families and those who wish to start their families. For the Labour Movement, we are now working with unionised companies to make flexi-work arrangements happen. We are now identifying the challenges and that requires lots of support from employees as well as employers.
Secondly, incentivise employers. We hope that the Government can give employers more incentives to redesign jobs and provide infrastructure that will allow for flexi-work arrangements.
I hope that the financial support offered by the Government could be further expanded to cover the latest information technology investments that allow workers and women to work from home. There will be a cost involved to set up proper home offices, including broadband installation for functions, such as video-conferencing. But the productivity gained from reducing telecommuting
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time may be worth the investment. SMEs may not be able to afford these costs, and, therefore, if this could contribute to mothers or caregivers being employed and working from home, this may be worth incentivising.
Will the Government extend incentives to companies who may need to spend a longer time to train these women to perform their jobs, and at the same time to encourage mentorship programmes to help these women to integrate into working life?
Most importantly, I would also like to call upon the Government to explore the possibility of further granting incentives to help our women to return to work, perhaps a Back-to-Work Credit Scheme for women.
Thirdly, to increase maternity leave from four to six months – the Swedes are practising a system of parental leave where couples enjoy 13 months of paid leave, plus another three months' leave at a fixed rate. The 13 months can be split between parents, so families can decide which parent would best perform the role at home. By law, employers have to hold a mother's job during her maternity leave, so the job will still be there after one year.
In NTUC, we are proposing incremental steps and not a revolutionary leap to match the Swedish system, but we hope that the Government will continue to look into NTUC's request of a longer maternity leave of six months paid by the Government and, if possible, up to another six months of unpaid maternity leave.
Fourthly, strengthen childcare facilities, infrastructure and others. I am heartened that this Budget promotes social mobility and that the Government will be spending more than $3 billion in the preschool sector over the next five years.
This is timely. We have heard feedback from women again and again that they have no alternative but to leave the workforce due to cost and availability of childcare and eldercare facilities. The greater challenge, Madam, is how to speed up these infrastructure development plans to, perhaps, three years, to make available accessible infant-care, childcare and eldercare infrastructure and centres in Singapore.
As the issue exists today, even if the infrastructure is ready in three years, we have to start being creative today. The Ministry can explore a home-child minder arrangement like what is being practised in Sweden. Women can be
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trained as child minders to look after up to two to three children in their homes like the good old kampong days. The Government's subsidies can then be given to offset the cost for the younger kids who are up to two years old while we beef up the number of childcare centres. This also creates employment for our elderly women as well.
In many developed countries, it is not uncommon for teenagers to work during vacation as child minders. This is something we can look into. After all, women who cannot find a caregiving solution for their children cannot possibly work with peace of mind.
Madam, I look forward to stepped-up efforts to retain women in the workforce and to encourage and assist women to return to work. The Labour Movement will continue to encourage our unions to engage their companies to set up action plans and goals to support employees for work-life balance and harmony. This includes reviewing work practices and systems to allow their employees to manage childcare responsibilities, and to embrace an inclusive workforce where there is greater support for working persons with elderly parents and young children, thereby helping and encouraging new mothers and women to return to the workforce.
Lastly, let us continue to value this under-tapped resource of over 300,000 economically inactive women and residents. We must continue to value every woman worker, and not just every woman worker but every worker in this transition and transformation process. In conclusion, Madam, I support the Budget.
Mr Yee Jenn Jong (Non-Constituency Member): Mdm Speaker, I wish to touch on three areas in this year's Budget: SMEs, new industries and preschools. I wish to declare that I own and operate private companies classified as SMEs. I have previously managed and owned childcare centres though I no longer do so now. Part of my current business supplies products and services to education institutions.
SMEs. SMEs form 99% of business entities in Singapore, employ 70% of all Singaporean workers and contribute 50% to the GDP. SMEs are facing great challenges due to higher rents, higher cost of goods and services and a manpower crunch.
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Deputy Prime Minister Tharman spoke of the pain that companies, particularly SMEs, will go through as the economy restructures to one based on higher productivity. Some companies will not survive the restructuring. I would like to share about the pains of restructuring and some lessons we can learn when an industry restructures.
I happened to have been in an industry segment that underwent very severe restructuring and experienced one of the highest rates of company closures. During Singapore's dotcom peak, I started a company developing e-learning solutions for education institutions. It could not have been at a worse time. From 1999-2000, there were suddenly some 50 companies in this same space, most of them new start-ups fuelled by dotcom investments. Funding very quickly dried up after the NASDAQ crash of April 2000.
But the companies were already formed and operational. The industry demand was much smaller than what these companies had thought it was. These 50 companies fought tooth and nail over the meagre market for customers who were then not yet ready for the services being offered. I witnessed many companies shutting down, merging or being acquired. Companies tried different ways to stay relevant to the market. We, too, experimented with different business models and products, and had to go through the painful process of chopping off unprofitable business segments and to let go of excess headcount in our darkest hour, just to stay afloat. Within seven years, the 50 companies had withered to around 10, and I reckon less than five had respectable growth and profitability. There are some lessons that I have learnt observing this brutal industry restructuring first-hand.
The first lesson is that those that survived had adapted their business processes to merge certain job functions to stay lean. Faced with poor prospects for better revenue, companies had to look internally to keep costs down. Being in a human resource driven knowledge industry, the biggest cost was manpower. Companies had to re-examine business processes to see which job functions could be merged or re-invented to cut costs. Company structures were flattened and employees empowered to do more.
A second and important lesson was that the surviving companies had to find new business models to try to create new revenue sources. There is a limit to how much cost one can cut down to be more productive. Revenue had to increase and companies had to find these revenue sources. Some companies merged or acquired other smaller players to achieve better economies of scale
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or used their combined strengths to create new business models.
The Government is calling for companies to be more productive to overcome the immediate challenges. What is productivity?
Productivity is output divided by input. Financial output divided by labour input is also known as labour productivity, or value added per worker. Output is commonly measured as revenue less cost of purchased goods and services.
In the context of my restructuring experience, survivors changed business model to become lean. By reducing labour input while maintaining the same financial output, there will be productivity gains. But more critically, to make quantum leaps in productivity, financial output has to be significantly increased without a corresponding increase in workforce. This can be done either by expanding the current market or modifying business models to gain new revenue sources or by merger and acquisition.
I believe these lessons can apply to other industries. For example, in the F&B industry, we have heard feedback about the lack of Singaporeans wanting to work in the industry. In his Budget Speech, Deputy Prime Minister Tharman said that over the past five years, the F&B workforce has increased by 31%, with Singaporeans actually making up half of the increase. So, Singaporeans do enter this industry. Yet we hear of a shortage of manpower. The boss of Jumbo restaurant was pictured in The Straits Times clearing dishes.
Deputy Prime Minister Tharman cited F&B as an example of a fragmented industry structure. Could there be too many F&B outlets in this industry chasing the limited customer dollar? Is there too much mall and shop spaces allocated to F&B? When an industry consolidates, manpower that is not fully utilised will be redeployed to companies that most urgently need them to cope with the bustling business. Or some companies may have to reinvent their business model or product offerings to generate new revenue streams.
Given Singapore's limited market size, for meaningful productivity to be sustained through revenue growth, there should also be increased efforts to secure new overseas markets. The role of agencies, such as IE Singapore, becomes even more important. Singapore firms will need to create strong expertise and brands around products with high demand in new markets. We have some successes in areas such as oil rigs, food, and water technologies. The challenge is for the Government to help identify more industry clusters and
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match that with emerging new markets.
The Government has implemented various schemes to help local companies. The Productivity and Innovation Credit (PIC) was introduced two years ago. This year, we have an interesting Wage Credit Scheme (WCS).
While WCS' objective is to help companies share the fruits of productivity increases with workers, I believe it is intended to also provide companies with extra cash. Employers generally give increments to retain workers. WCS will run for the next three years. The 40% share by the Government will be given back to employers only after the end of the year, which will impact the company's cash flow. This means that employers will be careful not to give wage increases unless they have to and can afford to. Employers will likely be giving regular wage increases as they generally would have done so even without this scheme. Cash-strapped companies will still resist wage increases.
Madam, I welcome any scheme that can help local companies cope with the current economic challenges. It will be interesting though to see which companies will benefit from WCS. MNCs, larger companies and more profitable companies have been and will be able to make wage increases. Smaller and struggling SMEs will still not do so. Perhaps the Deputy Prime Minister can share what type of companies will likely benefit most from WCS looking at wage data from the past two years of CPF records. What is the Government's expectation of SME's share of the $3.6 billion payout? If in reality, WCS ends up not helping SMEs much, the Government will need to find more targeted ways to support them.
PIC is given a new push with the new one-for-one top-up grant of $5,000 per year. It is a generous payout over and above the earlier PIC payouts. I think this should get more smaller companies to use PIC as they will get more cash than what they have invested.
The PIC process is relatively easy to administer compared to most other Government grant schemes. While PIC is useful to provide some relief to companies, it is limited in effectiveness for some types of companies which really need a major transformation. And it is not always automation that will help companies restructure. Sometimes, it requires drastic changes to business processes, organisation structures and to business models.
I would like the Government to consider additional ways to help companies restructure. One is in the area of M&A, or merger and acquisition. In fragmented
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industries where there are too many companies chasing the market, it makes sense to consolidate. Merger and acquisition, done strategically, could boost revenues or result in greater manpower efficiency. In Budget 2010, the Government implemented the mergers and acquisitions, or M&A scheme. The scheme is hardly attractive as it allows M&A allowance of 5% of the value of acquisition as tax allowance. Budget 2012 provided for 200% tax allowance on transaction costs. Transaction costs cover professional fees, legal fees and valuation fees.
These two provisions benefit mostly large transactions. To encourage M&A activities amongst SMEs, we need the scheme to be more targeted. The M&A scheme could be graduated to allow higher allowances for smaller SME consolidation and M&A activities. For example, allowances could be, say 30% for deal size of $500,000 or below, another scale at $1 million, and a further lower scale at, say $5 million. This would cover the typical deal size for acquisition of smaller SMEs.
The current scheme allows only for outright purchase of shares. Some acquirers prefer to buy over operations and businesses of SMEs, but not the entire company as they prefer not to be entangled with liabilities that may be associated with the target company. We can loosen the definition of M&A to include such types of acquisitions.
We can also incentivise the acquirers to automate the operations of their acquired businesses to achieve greater productivity and to change old business models. We already have the PIC scheme with its schedule of qualifying activities. We can look at allowing even higher than 400% tax allowances for investment in automation, and higher than the existing cap of $400,000 in tax allowances for merged business entities to get them to speed up investments in productivity improvements for the acquired companies.
Next, new industries. I am glad the Government is constantly looking at new industries to develop as the economic landscape is rapidly changing due to globalisation and technological advancement. This is important as Singapore companies continue to seek areas to fill a niche in.
One area I hope the Government can give more attention to is in renewable energy. Last Saturday, The Straits Times reported energy scenario projections by Shell. The report projected that total energy demand could double in the next 50 years as the world's population rises to 9.5 billion. In a high energy demand scenario, Shell predicted a strong push for the development of solar power as
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an alternative source of energy. By 2070, photovoltaic panels could become the world's largest primary source of energy.
Singapore is constrained by small land size. We have been told that even if all roof tops and building surfaces are covered with photovoltaic panels, we could only have up to 14% of our energy needs being met.
I think this should not stop us from aggressively promoting and pursuing renewable energy installation expertise and technologies at a faster pace so that our companies can export their renewable energy products and services to fast developing countries in regions hungry for more energy.
Our public projects can be more aggressive in using renewable energy. The Government can actively support local companies to build up their abilities to install such set-ups. Just as we had supported local companies to build up capabilities in water technologies to allow them to become global players in this field, we can do likewise now in renewable energy.
Finally, preschools and student care. The Government has planned to more than double its spending to $3 billion for the preschool sector over the next five years. It is good that the Government is acknowledging the importance of early childhood education and is putting a significant investment into it. It is forming the Early Childhood Development Agency to combine the preschool functions of MSF and MOE. This is something that industry players, experts and observers had been calling for.
The Government plans to bring more operators onto the Anchor Operator or AOP scheme. At last year's National Day Rally, the Prime Minister had said that there will be two to three more anchor operators. There will be an additional 16,000 places by AOPs to add to the existing 17,000 places.
I have spoken previously on this issue and I believe this will drastically alter Singapore's childcare landscape. It is currently being served by a diverse number of private and non-profit operators, with a good deal of variety and innovation. The AOP scheme was initiated in 2009. It provides AOPs with easy availability of new centres at typically under 10% of prevailing monthly rental cost of private operators, a generous combination of start-up grants which I worked out to be around $600,000 per new centre, and grants for teacher training and scholarships.
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In return, AOPs are expected to charge fees below the industry median. That is hardly any challenge at all, given that the enormous grants and low rents will easily allow them to achieve this without having to be innovative or cost conscious. The dearth of remaining new sites for non-AOPs have seen rents bided to unsustainably high levels. This Budget has increased salary grants to AOPs. This will accelerate the outflow of teachers from non-AOPs to AOPs. There are two important things necessary for operators to succeed in this industry: location and teachers. Non-AOPs will be choked off in these two key areas.
While it is good that the Government is pumping a lot of money into this sector, the industry is wrongly structured and the huge grant will worsen the situation. There will be negative consequences arising from the current AOP scheme. It will wipe out many existing players, especially operators catering to the low to middle income families. The two current and two to three new AOPs will not have to compete hard to be innovative. A healthy level of competition is needed for operators to be innovative, to continue to offer high quality services at competitively affordable prices. I believe we can structure childcare as a public good, with regular competition by all operators for packages of sites at fees regulated by MSF. With the same level of investment that the Government has planned, I believe this will result in better outcomes for affordability, accessibility and quality.
The higher number of working parents has seen fast rising demand for childcare. These same parents will also need good quality and affordable student care facilities. It can be another important area as a social leveller. I will touch on childcare and student care further in my COS cuts on MSF.
Ms Janice Koh (Nominated Member): Mdm Speaker, thank you for the opportunity to participate in this debate. This year's Budget strikes me as a progressive and compassionate one. Like several Members in this House, I am heartened that the Government is taking the right steps towards building a fair and inclusive society, and addressing some of the concerns of Singaporeans, such as the rising costs of living, the need to reduce income inequality, and recognising that meritocracy alone is insufficient to sustain social mobility in Singapore.
Madam, I would like to touch on four issues in response to the Budget, namely: the preschool sector, healthcare, the Cultural Donation Matching Fund,
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and developing a cultural layer in our national life.
First, on the preschool sector. The Government's decision to double spending on the preschool sector over the next five years to $3 billion is a welcome move. Education is an important social leveller, and accessibility to high-quality and affordable preschool education is a way of ensuring that all our children get the best headstart in life, especially those from low-income and disadvantaged families.
I agree with the Finance Minister that good teachers are the key to a quality preschool sector. As such, it is commendable that resources will be allocated to raising the skills-sets and qualifications of preschool teachers. It will not be easy to grow this pool of teachers nor attract qualified and experienced educators into the industry so quickly. In this regard, I hope MOE will consider following the example of the Nordic countries, where teaching is regarded as a valued profession. We must raise the profile and status of our preschool teaching profession by making sure that remuneration and regard for this sector is sufficiently high, and eventually over the longer term, working towards raising entry levels into the profession to a Bachelor's or even perhaps a Master's degree. And even as we upgrade our preschool teachers, I hope we can also reduce student-teacher ratios for better developmental outcomes, and make class sizes less daunting for our teachers.
Given the high immigrant population in Singapore, we should also do more to encourage preschool integration so as to promote greater acceptance of diversity. Early exposure to world cultures and traditions at a young age will encourage our children to develop a healthy respect for contrasting views and greater empathy for those from foreign lands. In the same way, early exposure to the arts can be hugely valuable to our children's academic, social and creative learning. I hope MOE, in setting up its own kindergartens, will take the lead in establishing such best practices for others to follow.
During the debate on the Population White Paper, I spoke about the need to reduce our psychological deficits and to seek greater equality for all Singaporeans in our social policies. We can start with childcare benefits. If equal access to good quality preschool education is important for our children, then let us provide equal opportunities to every Singaporean child, no matter his family circumstances. Let us provide similar childcare benefits to both working mothers and stay-at-home caregivers. Let us eliminate discrimination based on marital status by allowing single parents to take advantage of Baby Bonus cash benefits, which can be used for their child's educational needs. These will help to ease the financial burden of raising a child, especially in homes where there
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is greater dependence on a sole breadwinner.
At the school level, I am greatly encouraged that the learning support programme will be extended to students beyond Primary 1 and Primary 2, hopefully, to those at the upper Primary levels. Statistics show that one in two Singaporeans with children spend an average of $500 a month per child on tuition. One in three Singaporeans thinks our kids should start tuition at preschool, and 46% feel that tuition is necessary for our children to stay competitive with their peers.
Mdm Speaker, trust in our teachers and in the system to not only look after the educational needs of our children, but to bring out the best in their potential and ability, is hugely important. A good learning support programme available to all weaker students at all levels will provide a safety net for those who fall between the academic cracks. It will go some way towards assuring parents, in particular those from lower income households, that their child will get the necessary support at school, without feeling the pressure to spend scarce financial resources on private, external help.
Second, on healthcare. Madam, the Government's plan to do a thorough review of healthcare financing is a timely and welcome one.
Singapore's healthcare system has been admired for its ability to achieve outstanding health outcomes at very low national cost. However, our system of healthcare financing, which still relies largely on individual responsibility and family support, can take its toll not only on Singaporeans from the vulnerable, lower income segments, but also those from middle income families.
Madam, just a few days ago, a friend of mine wrote to tell me about her mother who was diagnosed with late stage cancer six months ago. The patient sought medical treatment at a subsidised hospital and was prescribed the chemotherapy drug Herceptin, once every three weeks. Herceptin is an expensive drug. Each dose costs $3,000. Despite the high price, the family went ahead because they wanted mom to be given the best possible treatment for her recovery. It turned out to be effective and she responded well. But, as a housewife, she had little in her MediSave, so the costs were borne by MediShield and her family's MediSave accounts. Her grant from the Singapore Cancer Society (SCS) eased the financial burden a little.
However, just last week, she was told by her doctor that the dosage had to be increased by three times, and it would now cost her $12,000 a month for
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treatment. Over six cycles, this would come up to a hefty $72,000. It now is clearly unaffordable. Even after tapping on the entire MediShield payout, the family would have to cough up an additional $27,000, and this time, MediSave was insufficient. She was also no longer eligible for further grants from SCS, and, with no other alternatives in sight, she was advised to sell her flat to finance the medical bill. Going back to her doctor, the patient was told that she could no longer be given Herceptin because she could not afford it, and she now has to continue treatment without it.
Madam, this case may not be a unique one, but we need to understand what this experience does to a sick person. It breaks their confidence in the possibility of their healing. How are we to become a compassionate society when we leave our sick with little choice but to sell their flats to finance their medical bills at a time when they are most vulnerable and should instead be focused on recovering and getting better? How many stories have we heard of elderly patients who decline curative treatments because they are worried about money and are either not comfortable approaching family members for financial help, or are not emotionally ready to give up their family home?
I think, as a society, we need to ask ourselves if we can give each and every Singaporean the assurance of growing old with dignity, and a fair chance of getting good quality medical care should they need it without worrying about impoverishing our families. While I agree that it is prudent to impose co-payments to guard against over-consumption, perhaps there is room to find a better balance, and to consider examples of countries like Sweden and Germany, where an individual's share of the total bill for, say, medicine or outpatient fees, could be capped at a certain percentage of his or her monthly income.
Also, the model of financing the healthcare of our elderly through the use of their children's MediSave accounts puts a huge strain on the children, who, in turn, have to save for their own healthcare needs in the future. We need to ask if this is still a viable option, especially with smaller families where the financial burden is being carried by only one or two children. What about the needs of elderly singles, who may exhaust their MediSave because they have no children to support them?
Currently, MediSave excludes those with insufficient savings in their CPF accounts, which means, low-wage workers, the unemployed, including full-time caregivers and home-makers, the elderly and, in particular, elderly women, are all poorly protected. These Singaporeans also do not enjoy employer benefits,
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which help to defray high out-of-pocket medical expenses.
In its review of our healthcare provision, I hope Ministry of Health (MOH) will consider comprehensive health insurance for every Singaporean, without discriminating against those who are unemployed or low-waged, as well as look at making MediShield even more inclusive, and ensure that those enrolled into MediShield do not drop out due to lack of funds in their MediSave accounts to pay for premiums.
Mdm Speaker, Singapore is amongst one of the richest nations in the world, but our national healthcare expenditure is low at less than 4% of GDP, a far cry compared to many high-income Organisation for Economic Co-operation and Development (OECD) countries and lower than Asian societies like Hong Kong, Taiwan and South Korea. Can we do more to increase our national healthcare spending and provide Singaporeans with a greater sense of security about their future, as we work towards a \"Better Singapore\"?
A recent commentary on this issue in the TODAY newspaper notes that defenders of our existing system will argue for fiscal prudence, and will point fingers at the reckless spending of many financially struggling \"welfare states\". But it concludes, and I agree, that there is no need to choose between two extremes, as there is still a huge middle ground to increase government healthcare spending in such a way to strike a balance between individual responsibility and giving Singaporeans the much needed peace-of-mind.
Third, on the Cultural Donation Matching Fund. Madam, this initiative to provide dollar-for-dollar matched funding for private sector sponsorship to the Arts has been a long awaited one. Over the last few years, artists and arts groups have had to adjust to the pressures of rising costs in Singapore, not unlike the business sector. However, cash and in-kind donations to the Arts have not increased significantly over the last three years, and it has been a real struggle for the local, non-profit arts sector to seek new sponsorships, especially with increased competition from high-profile, international arts and sporting events, which tend to attract corporations who prefer higher mileage for their sponsorship dollar.
As such, matched funding could incentivise arts groups to work harder at seeking alternative sources of private and philanthropic funding, while at the same time, spurring more corporations and individuals to give to the Arts so as to double-up the impact of their contributions.
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How successful this scheme will be lies in the question of who gets to decide on the use of these funds. Ideally, the artists and the arts groups should be given the flexibility to decide how the sponsorship and matched funds are used, and that these monies will go directly to them in support of their fundraising efforts, without heavy-handed interference.
However, if the scheme comes with too many regulations and guidelines that restrict the use of the funds, or, worse still, is used as a means of replacing existing Government arts grants, then that would be harmful for the arts sector. I, therefore, hope that this commendable initiative will be implemented in the spirit of encouraging more private giving to the arts, as a way of strengthening the growth and the health of the independent arts scene here.
Mdm Speaker, I have spoken so far on several specific policies announced in the Budget. I would now like to shift gears and take a look at a broader issue that needs to be addressed, but cannot simply be solved by fiscal measures.
A cultural layer is absent in our national life. I borrow this idea of the need for a \"cultural layer\" from the late theatre practitioner Mr Kuo Pao Kun, who, in 1990, felt that it was critically missing in our society. He was not talking about orchestras, musicals, exhibitions or international concerts. We already had that. Kuo Pao Kun was talking about an aspect of life that involves study and reflection, thought and debate, imagination and creating. It is a way of seeing the world, not through the lens of what he called the \"economic, political and technological\", but through the lens of Philosophy, Culture and the Humanities, like History, Literature and the Arts.
Madam, when our immigrant forefathers brought their diverse cultures and traditions to Singapore, these were largely localised practices and beliefs, which differed substantially between the villages, towns and provinces. Then, we were a divided population without a cohesive outlook. The colonial administration reinforced this weakness of ours. It allowed the pursuit of many fragmented sub-cultures, but discouraged the formation of a broader Singaporean consciousness, so that it could exploit our capacity for hard work and our common desire to seek economic progress and material gain.
Deculturalisation became an advantage in an economic-led growth model. It made us an effective workforce. After Independence, we have continued to put our focus on economic development, and today, of course, we see the fruits of that labour. But we have failed to invest sufficiently in a Singaporean cultural ballast, and we are paying a high price for it. This cultural ballast should be the
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foundation of our achievements as a nation, as one united people. Otherwise, the economic edifice we have built rests on shaky social foundations.
Over the decades, we have developed a mentality that perceives almost everything in political, economic and technological terms. But, as a society, we are now short on those capacities that help us to deal with issues of identity, society and culture, as well as the intangible, the complex, and all those dilemmas and tensions that arise when values and norms collide.
In fact, Kuo Pao Kun observed that Singaporeans are generally impatient with the intangible and the subjective. Writing in 1990, he could not think of another modern nation that could conceive of a national tertiary institution without a fine arts faculty, or where Tamil was an official language but whose national university would not revive its Tamil Studies Department unless there was market demand. Even today, our somewhat utilitarian approach to education has led to falling enrolment rates for Literature and the Humanities. However, if we accept that a cultural layer is necessary to our national life, then we should re-think the goals of our education system to support individual development and holistic learning, we should see the arts, not as \"icing on the cake\" but an essential part of every child's education, heritage should be valued as national treasures, not viewed as a necessary trade-off for economic development, and policies and guidelines should release our creative energies rather than restrict and license creative impulses.
We may have budget surpluses, but, perhaps, we are in cultural deficit. We have the hardware, but we are slightly behind on the software. Lacking the cultural ballast, we are experiencing a crisis of culture and identity today. The idea of the Singapore identity and what that means were raised several times in this House as we debated the impact of a growing immigrant population. Our anxieties over immigration are revealing deeper, more complex anxieties about who we are, how we live and how we perceive ourselves in relation to the world.
Interestingly, it is telling that the NDPC's social health project findings mentioned by my colleague, Mr Laurence Lien, rated the areas of social connected and cohesion, education and cultural and values as neutral. These are the very aspects of contemporary life in Singapore that need to be strengthened, and perhaps if we perform better in these areas, perhaps if our social and cultural health was stronger, we would have the necessary immunity to cope when faced with economic infrastructural and demographic challenges.
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There are, of course, no pat answers as to how we will overcome some of these challenges, which will require us to depend on a sense of shared history and identity as our society becomes more and more diverse. But I would just like to take a leaf from Kuo Pao Kun, who said, more than 20 years ago. I quote, \"I truly believe that the core issue in the next phase of Singapore's nation building is Culture. And the most active agent in this core is the arts, because the central concern about the nation's future rests on whether its people have retained and nurtured its source of creative energy – that dynamic, original impulse which initiated and expected the making of a nation against all odds.\"
Madam, in closing, I would like to return to Deputy Prime Minister Tharman's Budget speech, where he articulated the need for Government to \"shift gears for an economy and society in transition\" and to support our common aspirations, one of which is to build \"A home with a strong Singaporean identity and sense of belonging\".
The policies announced in this year's Budget, including more progressive tax measures and benefits to reduce income inequality and improve social mobility, the review of our preschool and healthcare sectors, as well as new investments to nurture the arts and sports, signal this shift in thinking. Whether these and future policy changes will eventually close our social and cultural deficits remain to be seen, but they are certainly steps in the right direction.
To borrow a term used by the former UK Chancellor of the Exchequer Norman Lamont and Federal Reserve Chairman Ben Bernanke – are we seeing the \"green shoots\" of a social and cultural recovery in Singapore? Perhaps, it is still too early to say, but to the extent that I see Deputy Prime Minister Tharman planting some seeds, I rise in support of the Budget.
Mr David Ong (Jurong): Mdm Speaker, thank you for allowing me to participate in the Budget Debate. Budget 2013 is about quality growth and an inclusive society. It has so far garnered many labels – progressive, prudent, fair, balanced and innovative. Budget 2013 has also been called a Robin Hood budget where wealth is re-distributed for greater social cohesion and an expanded social safety network for those in need.
This Budget seeks to navigate Singapore through a difficult period of deep restructuring by ramping up on labour, capital and land productivity. More importantly to me, this Budget signifies the return to basic and core values. This
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is exactly what this Budget is about, looking after those who need help and sending a strong message of prudence in managing our finances.
Singapore is at a major crossroads today. It is confronted with multiple challenges. Our baby boomers have come of age, the low fertility rate among married couples in the face of an ageing population is worrying, compounded by the inflow of immigrants and the rising costs of living and doing business. These deep structural changes over a short period of time led to growing pains experienced among many segments of our society.
Mdm Speaker, today I focus on the challenges confronting our seniors as well as our SMEs. We have 378,000 residents in Singapore who are 65 years and older now, and this number will triple to 900,000 by year 2030. Our baby boomers and the generations before are the Singaporeans who have helped to build up our nation to where it is today. I am glad that our Deputy Prime Minister and Minister for Finance spoke of a Budget that will provide a home with strong families and where our seniors can age in dignity.
So, I am heartened to read in The Sunday Times\tabout Uncle Seng, who, at age 86, is still going strong and working at the Tanglin Club. Keen to keep on working, Uncle Seng added, and I quote: \"I don't want to retire. There is nothing to do at home, I will be bored, so I might as well keep on working. It's like my exercise.\" But, more importantly, it is more than just an exercise for Uncle Seng. It is about his sense of self-worth and fulfilment and being able to be of value to the company.
[Mr Deputy Speaker (Mr Seah Kian Peng) in the Chair]
I am sure there are more like Uncle Seng who do not want to retire and the likes of Uncle Seng's employers who value and retain older workers. Many seniors have told me that they want to continue working as long as they can. Whilst I am encouraged with Uncle Seng's story and the many older workers who were recently featured in the papers, I am also aware and concerned with the many older workers who are discriminated because of their age.
One of my residents, Mdm Khoo, aged 64, who has a certificate in nursing care and is a certified service professional, is eager to work in the healthcare industry. She tried repeatedly to get a job but was unsuccessful. In her own words, prospective employers do not give her a chance for an interview when
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they learn of her age. She now works as a cleaner because she needs a job to make ends meet.
From such examples, we observe how an elderly's dignity can be affected by such discriminatory mindset in workplaces. I would like to call on the Government, as well as our tripartite partners, to embrace a mindset change in the way we view older workers.
With a shrinking workforce and an ageing population, the time has now come for employers to start looking at older workers as valuable resources that can contribute to their productivity and success, just like any other staff. They should not be simply made cheaper or more affordable for companies to continue to employ them because of their age.
Mr Deputy Speaker, I have spoken in this House before on the review of the retirement age. Notwithstanding the Retirement and Re-employment Act, many seniors still suffer from discrimination in employment opportunities and employment conditions at work. They should not see their employer's contribution rate reduced, be set down for review for re-employment, re-deployment or even termination. Older workers should be given the right to work in dignity and the choice to work as long as they want to. Singapore should move ahead of other nations to do away with a mandatory retirement age and to reconsider paying economically-active elderly fair and equitable wages.
The employer's CPF contribution for older workers 55 years and above was reduced in 1988. The intention was to ensure that employing older workers would not be a financial burden to them. Since then, with improving older worker employment rates and progress in reducing seniority-based wage rigidities, it is time for us to relook employer's CPF contribution for our senior workers. Whilst I am glad that CPF contribution rates were adjusted slightly upwards in last year's Budget, I would ask the Government to consider moving towards a full restoration of employer's CPF contribution, regardless of age. I am cognisant of the add-on costs to employers, but it is time we view the elderly as equal participants in the workforce.
Our Government's focus has been placed on retraining elderly workers for new jobs, but has generated erratic results. Instead, we should approach the issue from the other way round of redesigning jobs to fit the existing skills of our elderly. For example, experienced cleaners in hospitals and polyclinics can be given additional roles as service ambassadors, guiding patients on procedures and providing directions. Value-adding their jobs in this way will
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allow the elderly to receive higher salaries. Our elderly workers represent a pool of untapped and experienced resource. It could also be a source of productivity growth.
The newly introduced Wage Credit Scheme helps to encourage employers to increase workers' productivity in a general sense. To this end, further incentives can be targeted specifically to encourage employers to increase the productivity of our older workers by pro-actively redesigning jobs and the workplace.
With improved health and nutrition, our seniors today are fitter and stronger. They are a \"ready\" solution in our tight labour economy, instead of an over-reliance on foreign workers. In a 2011 MOM survey, only 64% of our citizens aged 60 and above are employed. More can be done to enhance the employability of our senior citizens. Let us recognise our seniors' contribution in nation building, value them as productive resource and pay them a fair wage. Perhaps, the Government can take the lead to restore the employer's CPF contribution for older workers in the public sector.
The rising cost of living is a huge concern for the elderly because it essentially diminishes the value of their life savings. This is especially a problem for those who are not fully supported by their children and cannot find suitable work. Thus, the increase in Public Assistance recently announced is a relief to many needy senior citizens.
Healthcare cost is another concern for elderly citizens. Many elderly Singaporeans need constant and regular medical appointments which often they cannot pay out of their Medisave Accounts. These can be quite substantial when accumulated over the long term. I look forward to MOH's proposals on preventive care and other medical care-related measures to reduce out-of-pocket medical costs.
Whilst the good news is that people are now living longer and healthier, the bad news is that many elderly people are lonely, sad or depressed. This is so even for those living at home with family members. It is a cause for concern as Singapore's elderly population is set to grow sharply in the coming years.
In a study conducted by the NUH, nearly 21% of those over 80 years of age and 16% of those in their mid to late 1970s indicated that they were sad, lonely or in low spirits. Significantly, nine in 10 did not live alone. More must be done to look at preventive care and the mental wellness of our elderly. Support and
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investment on active ageing programmes by VWOs and the People's Association should be stepped up by reaching out not only to the current seniors but further upstream, to those in their mid-40s and 50s.
When it comes to ageing in dignity, we should also not neglect how to uphold the elderly's quality of life in their twilight years. More can be done to ramp up the capacity of elderly homes as the current waiting time to get into a home is daunting. In addition, the Government could also consider extending MediShield coverage to cover a person's natural life time, rather than up to 90 years of age.
Let me shift the focus from the elderly citizens to the traditional pains felt by SMEs as we restructure our economy away from labour-intensive to qualitative growth.
Mr Deputy Speaker, the business community is ready to respond to the Government's call to increase productivity. However, several in the construction industry have fed back that some of the governmental regulations are, in fact, hindering productivity and need review. For example, manpower regulations require the presence of dedicated personnel to perform very specific job functions. Workplace safety officers, health officers and environmental control officers are not allowed to multi-task and companies will be penalised if they do so. Other examples include lifting, signalman and rigger. Regulations should be reviewed to allow for optimal deployment and utilisation of resources that can contribute to manpower efficiency and higher productivity. Our Government may do well to start looking internally on removing such counter-productive regulations.
On taxes, while I agree that taxes should get more progressive, we should do it carefully and avoid a loss of competitiveness. Many companies decide on where to locate their high value hubs based on where their most valuable staff want to live. This applies to our high-end Singaporeans too, especially the young, who are also very mobile. Taxes are not the key consideration and rightly so. But, unfortunately, they are not irrelevant. We should ideally have marginal taxes at the top end. However, it is a reality in Hong Kong, which kept income tax at 15% effective tax rate for the highest income bracket. Therefore, I urge the Ministry to study any progressive taxation initiatives carefully before implementing them. I agree with the general approach in the Budget of taxing wealth, as taxing wealth has less impact on economic vibrancy than taxing income.
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Mr Deputy Speaker, before I conclude, although there are some things I wish this Budget can address and focus on, on the whole, I am happy with this Budget on many fronts. I am happy that this Budget is one which the Government wants to first and foremost look after the well-being of its people and, secondly, I am happy to note that the signal this Budget sends out is to call for our citizenry to live prudently and within our means. Any responsible government must prioritise its programmes to benefit the people. In this light, I am happy to note that the $3 billion allocation to preschool education is crafted with this intent. Although there are some Members in the House that are against the idea of Government giving grants to anchor operators, I think the objective of benefiting the masses cannot be in doubt. Concentrating on anchor operators allows the Government to influence and ensure affordable fees, and allow universal quality preschool education to all. With this, Mr Deputy Speaker, I support the Budget.
Mr Seng Han Thong (Ang Mo Kio) (In Mandarin): [Please refer to Vernacular Speech.] The Deputy Prime Minister and Minister for Finance presented this year's Budget with the theme \"A Better Singapore. Quality Growth, An Inclusive Society\". In reality, Singapore has always achieved quality growth. However, there are concerns that the quality may deteriorate. Singapore has also always been an inclusive society, but there are also concerns whether we can continue to be inclusive.
We know that Singapore is now one of the wealthiest countries in the world. Yesterday, Forbes released the global list of billionaires, with 10 Singaporeans on the list. These are people who have benefited from Singapore's quality growth. Many of them are philanthropists who have supported charities to promote an inclusive society, the Lee Foundation being one of the well-known charities.
However, recently, we have seen many undesirable trends in our society, such as extra-marital affairs. This reminds us that our quality society is starting to change. It has prompted us to question whether Singapore can remain wealthy beyond the third generation. How can we strive for quality growth and, at the same time, remind Singaporeans who have made good not to be corrupted by wealth?
Mr Deputy Speaker, building an inclusive society has always been our policy. In fact, our society has always been inclusive and compassionate. For
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example, in the recent accident where Mr Lim Guang Chin was killed, and because his wife had passed away before him due to cancer, his death meant that their four children became orphans overnight. After members of the public read this story, tens of thousands of dollars in donations were collected in just a few days, to show support for this Singaporean who had to juggle two jobs.
We know that there are many Singaporeans out there who work hard to eke out a living every day. Although they are not well-off, they still have high aspirations and hope that their children will be well educated, that their next generation will not be as poor as they are. However, some recent reports seem to suggest that our society is becoming intolerant of foreigners. This gives others the impression that Singapore is no longer an inclusive society.
However, the truth is that most of us are still very tolerant. We are contented and are aware that foreigners work here to help promote economic growth. Nevertheless, there is a particular group of Singaporeans who are in the lower-income bracket, who experience difficulties in finding a place of their own. It is very difficult for them to even find a suitable job. It is only natural that they want to find a better job. So, the Government's most immediate task should be to house these people and help them find jobs.
Perhaps, the Government over-reacted and tightened the influx of foreign workers which, in turn, affected tens of thousands of small and medium enterprises. If the tightening of the labour policy results in the closure or overseas relocation of SMEs, low-income workers will be the ones directly hit. This is because, once they lose their jobs, it is difficult for them to find another one. If this is the case, will they remain poor beyond two generations?
This Budget is very comprehensive. It also shows that the Government has put a lot of thought into the Budget, and many of the civil servants in the Ministry of Finance have thought over it carefully, to come up with a \"Quality Growth, Inclusive Society\" Budget that covers all aspects in our nation.
Taking a holistic view of the Budget, I think it is focused on two issues. Firstly, how to raise productivity as a whole and, secondly, how to build an inclusive society.
In terms of raising productivity, everybody has his or her own view of how this can be achieved. For many, it is not something that can be achieved as we desire. Neither is it something that can be done just by relying on Government funds. It must be a nationwide effort. For example, when you talk about raising
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productivity of bus drivers, do you want him to drive faster or take more passengers? In fact, what he should do, is to ensure the bus arrives safely and passengers enjoy a safe journey. If he speeds, or quarrels with passengers, or gets involved in accidents, and gets a lot of complaints from passengers, he is not being productive.
The other focus is, how do we ensure that our society is more inclusive? One of the highlights of this Budget is the Wage Credit Scheme. This is a unique innovation of Singapore, and 70% of Singaporean workers who earn less than $4,000 can benefit from it. The Government will subsidise 40% of wage increases for three years. Two years ago, when the Government set the target to increase wages by 30% in 10 years, nobody believed it. But it can be achieved with this scheme, together with an increase in productivity.
However, for SME bosses, ultimately, the issue remains. In the current situation, although there are business opportunities, they do not have the headcount. Bosses say, \"Singaporeans do not want to do these jobs, but we cannot employ foreigners. Without profits, how can we increase wages? We cannot be sure that we can cope three years later.\"
A contractor supplying tents told me, \"You see these tents? Where can you find Singaporeans who are willing to change the light bulbs and install the fans? We cannot live without foreign workers.\" This is a simple example that we can see. We hope that the Government can bear in mind the difficulties faced by SMEs when they implement policies. For these companies, although they are willing to raise productivity, they are unable to do it.
For the low-wage workers, certainly the increase in wages would be good for them. However, they are afraid that once wages increase, prices will also increase. Therefore, although it is a good idea to raise productivity and increase wages of low-wage workers, the question remains: how do we implement these plans? How do we ensure that the beneficiaries will really benefit from it?
There are three areas that I would like to urge the Government to look into. First, I would like to propose that we give small and medium enterprises more time to increase their productivity and restructure. Secondly, the Government should take the lead and refrain from increasing fees. If not, many private companies will follow suit. Thirdly, all policies should not only be people-centred, but also simplified, so that people can easily understand them. This is something that the Government has to work hard on.
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We always say that everybody should be knowledgeable. If they are not knowledgeable, they should at least have common sense. If they do not have common sense, they have to watch more television programmes. Singaporeans are very knowledgeable; they are aware that globalisation has an impact on Singapore. Singaporeans are also knowledgeable because they know that this Government is a good Government that puts the people first, although the Government may sometimes over-react. Singaporeans do watch television programmes, but there is so much variety, they have many choices. If we want to attract Singaporeans to watch Parliament news to understand Government policies, then we have to ensure that our message to them is clear and simple, and not so complicated that one does not know where to start.
Dr Janil Puthucheary (Pasir Ris-Punggol): Thank you, Mr Deputy Speaker. Budget 2013 is a generous Budget. The unexpected increase in revenues and the favourable economic conditions Singapore has seen in recent years have allowed the Government to produce a Budget with a balance between extending assistance to companies and employers and at the same time giving help to Singaporeans, especially the needy and lower-income groups who need it the most. The plans to drive and support economic restructuring are a declaration that we, as a nation, intend to make ourselves relevant to the future, to survive and, indeed, to thrive.
This Budget also cements the shift in approach which the Government has been taking incrementally over the last few years. It increases the transfers to the needy; it re-distributes wealth with an emphasis on the low-income and the elderly, and makes the tax system more progressive and fair. It assumes that as the nation prospers and thrives, we should not presume that all will benefit equally from the opportunities, and it seeks to correct that imbalance. The shift can be seen from the Grow and Share Package, for example, in 2011 where dividends were given to Singaporeans and, again, when Workfare was introduced. Another example is the GST Voucher scheme in last year's Budget, costing $680 million and has become a permanent fixture. Several other measures address education, healthcare expenditure, social mobility and many other factors that burden all of us, but, particularly, the less fortunate of our fellow citizens.
But some may ask: what has happened to \"relying on the family first\"? Where did \"self-reliance\" go? Are we no longer concerned about \"welfarism\"
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and \"the moral hazard\"?
For many decades, the approach was to stress heavily on self-reliance, to not promote welfarism. An approach where, if public funds were to be used, there was always an element of co-payment to prevent over-consumption. In this day and age, the fundamentals have not changed. There is still a need for the able-bodied to work and to earn a living. There is still a need to promote self-reliance and there is still a need to emphasise the central role of the family.
In this Budget, the fundamentals have not changed. There is still a need to attract, encourage and grow businesses. There is a still a need to grow the pie for everyone. There is still a need for those who can, to look after themselves, so that more can be done to support the needy.
However, in these complex, globalised times, where the scale and the pace of change are magnified, some assumptions need to be challenged. This Budget demonstrates that we understand that as life in general gets better, not everybody can keep up. This Budget demonstrates that some people need help to be self reliant, as contradictory as that sounds. Some families need help to break out of their situation and become more independent.
So, what is this shift in policy? It is an over-simplification to say that it is a shift to the left. For the very wealthy and the low-income needy, it is certainly that, with an increase in re-distribution. This socialist approach is helping those at the lower end of society by increasing taxes on the rich and re-distributing to the poor. As a nation, we are very wary of labelling ourselves, but from the perspective of some of our citizens, there is a well-hidden, well-camouflaged and well-used welfare state. This Budget takes further steps in that direction, but, for the broad majority, the fundamentals have not changed.
Sir, one of Singapore's strengths has been that we do not subscribe to ideology for its own sake. Other than sticking to our core beliefs on being a meritocratic system and shaping a fair and harmonious society, we are free of dogma. The Government does not lean on ideology or received wisdom but looks for the right solution for each problem and does what needs to be done in the interest of Singaporeans.
How far are we prepared to abandon dogma or ideology, in the interest of our nation? One thing we appear to be quite dogmatic about is the mantra that \"nothing is free\". There is no such thing as a free lunch. There is always an element of co-payment. The risks are shared between the people and the
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Government, or businesses and the Government, and \"free\" has become somewhat of a dirty word, especially in the provision of public services, such as healthcare, transport and education.
The concern is that anything free is over-consumed and under-valued − the \"moral hazard\", the \"buffet syndrome\". Anything free distorts behaviour. However, this is something that the world of marketing, advertising and consumerism is very well aware of, and takes advantage of. Think of the \"free gifts\" offered in order to attract customers to buy something bigger, something more expensive, something we really did not need. Logic would have it that the cost of the \"free\" gift would have been included in the price of the item and the customer would ultimately have to pay for it anyway, but still, the lure of something \"free\" often works in modifying consumers' behaviour.
Free parking is always attractive, even if you have to use more petrol and walk back to your final destination. The presence of free food is an immediate draw, people tend to pile more onto their plates, and enjoy it, and it is a great way of making sure my students turn up for some seminars. When ERP charges are removed from some roads, motorists would rather sit through a jam, use up more fuel on an ERP-free road. The word \"free\" has a powerful impact on people's minds and does, indeed, change behaviour.
But what if this is exactly what we want to achieve − a change in behaviour? How would we choose the best tool for achieving that on our part?
When choosing a policy tool, the outcome is the issue. An example would be the calls for more healthcare spending or free healthcare. Free healthcare sounds great. Who would not want all the essentials of life taken care of? Unfortunately, when we look at the healthcare outcomes that matter, such as mortality, the quality of life in the last few decades as a senior, there is no correlation. Free healthcare does not change what really matters. Free healthcare achieves one significant outcome − it results in much higher state spending, which is funded by higher taxes. \"There ain't no such thing as a free lunch\". Free healthcare is not free and is not good for your health.
What if we go in the other direction and \"spend more\", taking healthcare as an example? The first point of comparison is: why do other countries spend more on healthcare? Is it that they achieve better healthcare outcomes? Or is it that they do a less than optimal job of controlling their costs? In principle, I cannot object to spending more on healthcare, and we may all well need to in the future. But we need to be very careful about the \"why\" and the \"how\". We
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should be doing so in order to get better outcomes, not just because other countries are doing so. Doing more and spending more are not automatically going to improve our health.
In the US, the medical community is looking actively to reduce the number of investigations performed, procedures done, and medications administered, in recognition of the fact that, sometimes, in spending more and doing more, more errors are made, patients are subjected to needless risks and side effects, and often it fails to affect the outcomes that really matter.
A recent study from, I believe the University of California, Davis, looked at the most satisfied patients in the US healthcare system. They found that the patients that were the most satisfied were those that have the highest healthcare expenditure. So, the patients who were the most satisfied with their doctor were the ones who had the highest amount of money spent on them. The study went on to demonstrate that these were also the patients with the highest risks of death. And you can draw from that your own conclusions. They have: spending more does not automatically assume a better outcome. Let us aim for the right outcome, with the most appropriate tool, not just use a tool for its own sake.
Another example of an inappropriate tool would be the idea that deregulation of the preschool Anchor Operator Programme would automatically result in lower fees through competition. The point was made that land is scarce, sites are rare, and the labour market for teachers is very tight. The reality is that if the Anchor Operator Programme is de-regulated, the competitiveness would not necessarily lower the cost, the Government would no longer have the ability to ensure affordability, and we would largely be held hostage as a society by the operators that are out there in the industry. So, I disagree with that suggestion.
Let me return to things that are free, things that we can potentially make free. Could something free be the right policy tool?
I would like to suggest that in public transport, the concept of \"free\" could be used as a tool for demand management, for reducing the crush at the peak hour. Currently, on the MRT, a discount is offered to incentivise people to travel early. Instead, why not offer a window period where commuters can travel for free? If we can afford it, have all travel on public transport until the start of peak hour, as free. If that is too great a leap, then maybe, for example, a 30-minute window or an hour, ending at 7.45 am, the commuters travel for free. Will this
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distort behaviour? Yes, absolutely, it will distort behaviour, that is the whole point. This will attract more people to change their travel patterns than any discount. It will be far more effective than any discount.
Money has been budgeted for demand management; why not channel the money that is being put aside into just giving free rides during a window period? Instead of using the money to conduct complex research studies, to create and maintain Smartphone apps or generating programmes with rewards and \"free\" gifts that we really do not need, just channel all the money directly into free travel that consumers and commuters will benefit from? Everyone will benefit. Those that travel earlier will benefit from free travel. Those that cannot will have less congestion and be more comfortable.
Sir, on the surface, it may look like we would be shifting to take a more liberal, leftist approach, but, in truth, this would be a pragmatic, utilitarian approach to achieve a concrete outcome, in this case to change the passengers' behaviour to ease congestion. In essence, the Government will still be doing what it has done all these years. Not sticking to a particular dogma or ideology, finding the best way to solve problems by putting Singaporeans at the centre of the issue. We can free ourselves from the idea that nothing good can be free. This idea would benefit Singaporeans, it can be done, and I urge the Government to consider this proposal.
Sir, in this Budget, even when it seems that the economy is made the focus of policies, it is with an end in mind that benefits the people. This Government has taken a citizen-centric approach in serving Singapore, and not an ideology or dogma-centric approach. We do what is needed. We do the right thing. Budget 2013 reinforces this and I support the Budget.
Mr Deputy Speaker: I must say this is one speech where I have heard many four-letter words. But it is one four-letter word that we all love. Assoc Prof Fatimah Lateef.
Assoc Prof Fatimah Lateef (Marine Parade): Sir, Budget 2013 is a follow-up from Budget 2012. It is about quality rather than quantity, productivity rather and changing mindsets, transformation of our economy as we are reaching the status of an advanced economy and nearing the point of diminishing returns, creation of awareness so that targeted stakeholders and beneficiaries can understand and benefit from policies and schemes intended
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for them, and, finally, it is about Singapore's future.
Budget 2013 requires us to reflect and put on our higher order thinking caps. It requires more than a cursory glance and the usual \"What's in it for me?\"
The Economy and Productivity. The owner of an SME came to see me last week. He operates an air-con servicing business. He wanted to appeal for extension for his foreign workers. I asked him about Budget 2013 and what his company was doing in this direction. He shared that he did not really know what else to do to increase productivity as he felt his business was labour-intensive, labour dependent, and he was unsure how automation or mechanisation is suitable.
Now, there are many like him out there, especially from SMEs, of which I have many in my constituency of Geylang Serai. What really is productivity to such companies? To many, productivity is the ratio of output versus the resources required. The output being the quantity of goods and services, whilst the resources and input refer to labour, facilities, energy consumption and materials. Measures of productivity will describe how well resources are being utilised.
But how many people know that productivity is also about: improving methodology of business operations; improving planning and scheduling in a company; improving control; sound company and management practices; and enhancing the level of motivation of the people and staff, which is also closely linked to the work culture and how employers treat employees?
Therefore, although many use the term productivity, it often remains nebulous.
In this aspect, can I suggest that with the centre that MTI is planning to set up, can specific consultation clinics be made available for companies, such as the air-con business I described, to advise and offer customised assistance on restructuring and increasing productivity? It will be a welcome move to them, so that they, too, want to jump on the bandwagon of economic transformation. For them, it is not a matter of \"don't want\" but more of \"don't know\". Also, I would like to offer Geylang Serai as a site for the proposed centre that MTI wants to set up, because there is a new CET centre which is going to come up and it is going to be at the hub of the Geylang Serai Paya Lebar Sub-regional Centre. So, I think it is an appropriate location.
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Companies, employers and employees will need to change their mindsets and be able to ask the right questions. Traditional, stereotyped ways of running an office are going out of fashion and effectiveness. Conservative approaches must be reviewed and renewed. Concerns that work performance is only tagged to the number of hours spent at the office desk are outdated. Flexible work hours and working smart are in. By the way, we must correct the notion that flexible hours are only for ladies. It is also for men.
Lean, six sigma and pro-family practices are also in.
Michael Thien, CEO of Atlas, said \"Every company needs a dreamer… someone to ask ‘why cannot?'\" Companies like his have shown how passion can help small businesses achieve great things.
Innovation is the way forward. We have to get used to it. Consider checking into a hotel that is run entirely electronically – no receptionist, just a self operated machine for your credit card, a scanner for your passport and behold! You have your electronic room key allocated. Want to rent a car? Same thing – no staff. Just a machine to complete your transactions. Have you tried electronic ordering in a restaurant or getting a bowl of piping hot noodles, complete with its condiments, from a machine? Some ideas for consumers and companies to think about.
Can we adapt, think out of the box, live with some level of risk, defy the status quo and upgrade? These are questions we have to ask ourselves.
Next, women: a vital resource. As we are restructuring, did you know we have 62,500 female university graduates who are not working, and 474,000 women of all educational backgrounds below the age of 60 who are also economically inactive? These are people who are neither working nor looking for a job. This is a critical valuable resource for Singapore. How are we going to tap on them? To ignore them is to risk overlooking qualified candidates in a talent-scarce market.
The PAP Women's Wing's recent position paper on Women at Work outlines clearly initiatives and interventions in this direction. In a recent market survey by Mckinsey involving 747 companies in 10 Asian markets, women were under-represented at every level. The higher up the management hierarchy we go, the less visible women became. Two reasons were cited: (1) these women had decided to leave, mostly for family-related reasons; and (2) some were
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stuck in junior positions.
In Singapore, only about 7% of board positions are held by women. In Japan, for the top 100 global corporations, the proportion of female board members is 1.4%. Japan is setting targets to get this number up to 30% by 2020. The Norwegian government on the other hand stated that if companies do not put ladies on the board, it would be forced to discontinue business – a bit harsh, but that got 100% compliance and now 40% of directors are ladies in Norway.
Singapore, I feel, has the potential to lead the way in changing organisation culture for women leadership initiatives. Let us break down stereotypes, such as nursing is a profession for females or engineering is only suited for males. Gender biases must be removed. Let us have more pro-family businesses and practices because, without this infrastructure, it is going to be like having a Ferrari sitting in the middle of a rice field with no road to drive on.
A study by the Singapore Council of Women's Organisations found that there was a need for an initiative to reach out to women to inspire and lead them, as well as to educate and harness their power.
Infrastructure development. Now, finger-pointing at immigrants is not a solution. Ramping up on needed infrastructure is. Being one of the smallest countries in the world, physical space is a real limitation, but we must not allow this to stifle our thinking and mindsets to overcome challenges together. Most developed nations are facing similar issues. Take Australia, for example. An average of 200,000 new immigrants are taken in every year, and similar challenges are faced by cities like Sydney and Melbourne.
Let me use an analogy to illustrate my concerns on infrastructure development. In the Eunos-Ubi industrial area, commercial and industrial developments have sprouted and flourished, with an increase in both human and vehicular traffic. Road development on the other hand has not been able to keep up, resulting in massive traffic jams, delays, unhappiness, highly stressed employers and employees. LTA is now playing a catch-up game. When will this game end? Will we ever reach the finishing line?
Adaptation needs to come into play. Have we considered increasing the number of MRT carriages and platforms from the current four to six or, perhaps, eight? How about more efficient bus services running parallel to MRT routes? Should we bring back the feeder bus services of the old days within estates, since the major trunk route services cannot keep up in terms of frequency and
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numbers? How about double-decker trains and tracks, or having an inner radius subway line whilst awaiting the grander outer radius lines to be ready? These are not impossible for a country that has constructed a \"tunnel that split a river\".
Healthcare. I am one of those who are very proud of our 4% expenditure on healthcare, and I always talk about this when I travel overseas meeting colleagues from first-world nations where the healthcare expenditure is a lot more. But, healthcare is a basic necessity. Our 3M financing system is a good foundational model that requires tweaking every now and then. Healthcare inflation has escalated to the extent that the lower-income groups are facing more challenges today. With the increasing healthcare cost, ageing population and its associated health issues, out-of-pocket payment should be reduced.
I also feel that there can be more liberalisation of MediSave usage. For example, can MOH consider extending its use for several more chronic illnesses, such as rheumatoid arthritis, SLE, a few more common mental illnesses, and also for health screening? After all, health screening is a form of preventive healthcare. Can the ceiling, capped at $400 per annum, be raised to perhaps $500 or $600 per annum, and the administrative fees being done away with?
Whilst waiting for the 30% increase in the number of acute beds and also more long-term care beds, what can we do with the overload we are facing currently? We now have 2.2 beds per 1,000 population compared to the average OECD countries' rate of 3.4 per 1,000 population. However, even with the projected increase, we will only still be at 2.27 beds per 1,000 population. Will we see the end of this catching-up game? It is going to be a major strain, I feel, until we can start moving away from a very predominant hospital-centric care which we are providing now, increase our population's health literacy, and they also have to have greater responsibility towards their own health from a very young age.
Consider this real example in terms of bed utilisation numbers. In the year 2000, there was a total of 725 total knee replacements done in Singapore. By 2012, 12 years down the line, the number swelled to nearly 2,500 – taking up hospital beds. It is not a proportionate increase, and being one of the most rapidly ageing societies, it does not help either.
We also need to ramp up services in our primary care setting to reduce the burden of care in the tertiary set-ups. Can we have an update and timeframe for the proposed Community Health Centres, Family Medical Clinics and Medical Centres which were announced in 2011? How about the private-public
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healthcare institution partnerships? Where are we on this discussion front?
The Prime Minister also announced that we need some 2,000 more doctors by 2015. Are we able to get there on time?
Now, 2013 is also the 10th anniversary since SARS. Restructured hospitals have built up capabilities and expertise, but we will still need a booster to handle higher projected numbers in the event of new emerging infectious disease outbreaks and crises. Indeed, we have a lot to do, now that we have identified the challenges. Sir, in Malay, please.
(In Malay): [Please refer to Vernacular Speech.] The 2013 Budget is a preparation for the new economy, and for the future of the people and country. It also tackles the issues of cost of living, uplifting the status of low and middle income workers, and has generously increased the amount of assistance for the needy. I hope that the community can look at this Budget in an objective and rational manner, and not be carried away by emotional discussions. Use this Budget to begin a change in mindset, to be bolder and more proactive, improve ourselves and our families, try a new business and fulfil the potential for excellence. We must encourage ourselves and our families to uplift ourselves as much as possible. Excellence truly lies in our own hands.
On the issue of learning, in the education sector, more help is being given, beginning from the preschools up to the post-Secondary level. Learning enables us to improve ourselves and achieve success from this generation to the next. Make use of this opportunity. The lack of funds should not hold back our children from continuing their studies. Give them the support and nurture the ability and interest in our children. Knowledge will lead to success.
For education in madrasahs, which is stated in the Compulsory Education Act, can MOE comment on the support given through institutions and madrasahs, or for each student for their secular education?
Another issue that I would like to touch on is lifelong learning, which is important for everyone. For working adults, improve your knowledge through courses that are suitable to your occupation. The CDC, WDA, e2i and MENDAKI Sense can help you. The new skills and abilities will bring about better jobs, higher salary and relevant promotions for you. For those who have retired and for the elderly, there are many activities to keep your mind active. The self-help groups, VWOs and HPB also have programmes for these. For instance, there is
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the Nurture Your Mind course by HPB, which is something good. Running over eight weeks, it provides many activities and learning that can sharpen your mind.
On the issues of business and employment, the SME business sector contains many of our Malay/Muslim businessmen. Some of them will feel the crunch from the change in the foreign manpower quota. I hope that they will use this opportunity to restructure the way they do business and their businesses, as well as to use the available opportunities like the Wage Credit Scheme, Productivity and Innovation Credit Bonus, the rebates for road tax and corporate tax. Take the example of this company called D'Johara Wedding Palace where, apart from opening a restaurant, the same restaurant is also connected to a wedding venue facility because many young couples now prefer to use such venues to hold their wedding, compared to using the void decks currently.
In Singapore, many of our women are not working or have stopped working. For those who can come forward to work, please undergo courses at MENDAKI Sense, courses like SPARKS, Back-to-Work and the Step Out project. More and more women and single mothers are attending these courses, and they become more confident and increase their possibility of getting employed through pro-family and flexi-hour schemes. This is in line with our effort to increase our number of PMETs to two-thirds of our workforce by 2030.
(In English): Sir, change is going to be the only constant in our lives. Singapore's survival will depend very much on how we negotiate these changes and remain resilient. We have started to set the stage for change, through policies, programmes and schemes. We must handle the fear and uncertainties together as a nation. We have to manage the change process and ride the change network. The leadership and those in position, too, must make bolder changes for the betterment of society. We must realise that the impossible of today is merely an opportunity waiting to be brought to life by the power that is within us – the human spirit, an indomitable ally that is within everyone of us. In Singapore, we call it The Singapore Spirit. Sir, I support the Budget.
Ms Tin Pei Ling (Marine Parade): Mr Deputy Speaker, Budget 2013 is in the right direction – it promotes greater redistribution of wealth, more help and care for low income, elderly and less privileged Singaporeans, manages long-
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term foreign manpower growth and strengthens the resilience of our SMEs. Several commentators have also called this a \"Robin Hood\" Budget as the Government takes more from the more able to give to the less fortunate. Therefore, it is in this spirit that I support Budget 2013.
While I understand that the Budget, no matter how comprehensive, cannot cover all grounds, I hope that the Government will continue to pay attention to three areas, which I will elaborate now.
The first area − it is to help SMEs to help Singaporeans. The recent debate on the Population White Paper has clearly set out the need to curb foreign manpower growth. This move is necessary and has to take place at some point in time – in fact, taking the necessary tough measures now today may forestall the need for even more difficult adjustments tomorrow. And, unlike other proposals, the Government's proposal paces the adjustments to enable a soft landing which will be helpful for our SMEs to cope.
However, we need to take care that SMEs are given sufficient space to adapt and transform. There will be some heartaches as they undergo transformation to keep up with the times and increase productivity, but we should avoid excessive pain. We must remember that not all SMEs are the same. They operate in different markets and face different business conditions. Some SMEs may add a certain character to our society, or are emblems of a certain Singaporean way of life. For instance, coffeeshops are common spaces and common focal points for ordinary Singaporeans to come together and enjoy an affordable and delicious meal. Some SMEs are in sectors where you simply cannot mechanise tasks. For example, you cannot simply create standard pre-mixes for machines to whip up delicious dishes. It is like having robots to read out lines in a drama play. I am sure they can do so competently, but the feeling is just not the same.
Over the last few days, I have spoken with a couple of business associations comprising coffeeshop owners and merchants, as well as SME owners from other sectors. They shared their manpower woes, including not having enough manpower, not having the right skill sets or simply some who are quite resistant and unwilling to take on a certain task or even undergo re-training. Whatever these woes are, I believe that their circumstances apply to the rest of the F&B sector as well, especially for the smaller businesses. Hence, measures to provide guidance, flexibility and stability are necessary to help our SMEs cope with the manpower pressures.
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First, on guidance. The Government has to be more proactive in reaching out to small businesses which may not have the capacity and resources to find out about Government help, or to apply for such schemes and implement productivity measures. It should work with business associations to apply best practices, for example, implementing self-service models at food outlets, introducing new innovations, pushing for efficiency gains and quality standards. Through these, perhaps, they can even enjoy efficiency of scale in some innovations and implementation of such measures.
The Government also has to do more handholding as many SME bosses may not be proficient in English or simply do not know what possibilities are available out there. It is difficult to expect them to transform if they cannot imagine what is possible. The Government may even have to take on a bigger role in conducting horizon scanning of best practices and innovations, and share them proactively with the SMEs.
Second, on flexibility. The Government should allow more flexible deployment of staff. For example, a coffeeshop owner may have two coffeeshops, but these coffeeshops are registered separately by virtue of their different locations where they are sited. Can this coffeeshop owner be given the flexibility to deploy his foreign workers between the two locations, depending on the prevailing business conditions? We also need better definition of sectors as the types of businesses increase in complexity and have a more calibrated set of rules governing particular sub-sectors. The Government should also allow businesses to retain already trained foreign workers, whom they had invested in, so that they need not re-train their new workers again and again.
Third, on stability. Efforts to curb foreign manpower growth can bring instability to our SMEs. Hence, maintaining greater certainty and stability in the rest of the business operating environment will be helpful. Keeping business costs low for about one to three years will give businesses the confidence and capacity to change. For coffeeshops, for example, rental cost is almost always on the top of the list of business costs. If they cannot cope, they risk passing on the cost to consumers, who are mainly the lower- and middle-income groups. Hence, rental cost can be a major driver of inflation. Therefore, I would urge the Government to offer rental rebates to SMEs and all those who rent from the Government, to keep the rental rate steady.
Another area to consider is how to disincentivise workers from job-hopping so that there is better predictability. For example, some business owners told me that Malaysian workers, who are apparently preferred over workers of other nationalities, have a much higher tendency to job hop as they know that they
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are, indeed, much preferred. Hence, they requested that the Government set rules to prevent such job-hopping practices, for example, requiring a six-month break when a Malaysian worker quits one employer to go to another. Essentially, what this means is that after a Malaysian worker has quit one employer, this person has to go back to Malaysia for six months before coming back again to work for the new employer.
I should make it clear that by helping SMEs, it is not about helping them to maximise profits. When SMEs fold, it is not just the owners going out of business. It is not just foreigners losing their jobs and being sent back to their own home towns. Helping SMEs means safeguarding the businesses and jobs that many Singaporeans have and helping their families, that is, Singaporean families, to preserve their livelihoods. According to the SPRING website which I just checked today, the fact remains that, today, about 99% of enterprises in Singapore are SMEs. And out of every 10 workers, about seven are hired by the SMEs. This is a significant statistic and it also goes to show and give us a sense of proportion of the kind of impact that Singaporeans may feel if SMEs cannot survive this change. I think this is something that we can all think about.
Mr Deputy Speaker, please allow me to speak briefly in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Mr Deputy Speaker, Sir, this Budget Statement continues to restrict the inflow and growth of foreign workers and the rationale behind the tightening of the foreign worker policy has been clearly explained and discussed in the last few months.
Restricting the growth of foreign workers is a matter of time and because of the tightening of foreign worker policies, many SMEs have complained bitterly. For some of them, it appears to be a matter of life and death. Some feel that they have been forced into a corner and they have to make a livelihood elsewhere.
This year's Budget Statement is not just about restricting the inflow of foreign workers; it has also introduced some goodies. However, I believe the goodies are not enough. I believe that the Government can provide greater guidance, apply greater flexibility and introduce more stable policies. For example, the Government can provide greater assistance and guidance to help businesses transform. Secondly, the Government should allow them to enjoy greater flexibility in terms of manpower, especially in the deployment of foreign workers. Thirdly, provide rental rebates to help SMEs reduce their business cost.
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For SMEs, the pressure of not having enough workers is great. Just as Mr Seng Han Thong mentioned in his speech, although there are many opportunities or \"lobangs\", there are not enough people, not enough headcount for businesses to grab these \"lobangs\" and opportunities. Under such circumstances, I believe SMEs will change in order to survive. However, if they have too many worries, if there are already too many problems that they cannot resolve, then they will really be unable to change. I believe this is not what the Government wants to see.
I would like to state clearly that the purpose of helping SMEs is not to help them increase profits. If SMEs are unable to survive, not only will the bosses of SMEs lose their rice bowls, not only will the foreign workers be sent back to their home countries, but also the Singaporean employees will suffer.
Earlier, in my speech in English, I mentioned that 99% of enterprises in Singapore are SMEs and, out of 10 workers, seven are Singaporeans. From this perspective, SMEs are very important to the livelihood of Singaporeans. So, if the SMEs cannot transform successfully, cannot survive and continue to employ Singaporeans, many Singaporeans who are gainfully employed may be displaced and lose their jobs, their family members and family lives will be greatly affected. Hence, I would like to appeal to the Government to actively seek ways and means to help SMEs transform and to overcome the difficult situation that they are facing.
(In English): The second area that I would talk about is to help the elderly age with greater confidence and dignity.
I strongly welcome the measures announced in Budget 2013 that are targeted at our seniors. I believe these measures bring much needed new help. Still, it is important to ensure that these initiatives, such as the ElderCare Fund, the Senior's Mobility and Enabling Fund, and integrated eldercare service centres, are made easily accessible to the elderly, so that the targeted groups will actually benefit from them. Many elderly do not know what the schemes are, who can apply and how to apply. Hence, the Government needs to mount a more determined and extensive outreach drive. A positive example is the CHAS publicity drive. The outreach should also be aimed at removing any potential stigma of applying for these funds and help schemes.
There are two specific issues that I would like to briefly touch on in this area of helping the elderly age with greater confidence and dignity. The first has got to do with the CPF. The Government should allow greater flexibility in the use
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of MediSave, with a higher annual cap and lower minimum sum. Some elderly feel extremely uncomfortable with having to apply for Medifund and being unable to use their own savings in the CPF. They also fear that they will have to incur out-of-pocket expenses (OPEs) if they fail to secure financial assistance, such as the Medifund.
These OPEs can, perversely, lead to worse health outcomes and greater health expenditure at a later date. A patient who defaults control of chronic diseases, like high blood pressure and diabetes, is only storing up more expensive catastrophic medical problems for later. For example, early diabetes can be controlled with minimum organ damage. If uncontrolled, tragic consequences, such as blindness, heart disease, kidney failure and limb amputations may follow. Out-of-pocket expenses must not discourage elderly Singaporeans from making the right decisions for their health. Hence, while the Government should be applauded for looking at how the out-of-pocket expenses can be reduced, I also hope that more flexibility in the use of MediSave can be looked into as well.
Next, for seniors who are 55 years old and above but who are still working, can we not allow them to tap on their CPF monies – not just their MediSave – in a more flexible manner? I have come across some residents who are just at the threshold of 55 years old, and face the Minimum Sum requirement being imposed on them. However, due to certain unexpected circumstances, they needed to purchase a flat and did not have sufficient cash to pay for it. Nonetheless, they are still working and are able to continue to top up their CPF accounts. More flexibility in the use of CPF for our seniors will give them a greater sense of comfort and confidence.
The second issue that I would like to raise has to do with housing, and this is partially linked to the use of CPF as well. The concept of a studio apartment is good. However, the requirement for upfront cash payment of 100% is too stringent. Some seniors, for whatever reasons, have to seek their own housing. Studio apartment is the option for them, as some are not eligible or unable to find a co-tenant to rent a HDB flat with. Their cash savings may be significant but insufficient. However, they have money in their CPF, and some who are still working will be able to contribute back to their own CPF later. For example, I recently came across a case in which a senior lady, who was working part-time as well, with a mentally handicapped son, who had to right-size to a studio apartment. However, she could only pay for the studio apartment after she had sold off her current 3-room flat which they were still living in. In essence, she needs to do a contra arrangement. But this is apparently not allowed by HDB.
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For this and other cases, can the HDB allow a more flexible payment arrangement for them? Alternatively, can the HDB provide an arrangement that helps to synchronise the sale of an existing flat with the moving in to the new studio apartment? Securing a retirement nest is important to many senior citizens and I believe most would much prefer to live with their own children or family members if they have a choice. However, sometimes, circumstances may dictate otherwise, and we should not make it unnecessarily difficult for them to own their homes.
Another priority is to cater to the needs of the single elderly. My observation is that there is a rising trend of more single elderly looking to rent HDB flats. Currently, they can only do so under the Joint Singles Scheme. The rationale for disallowing only one person to occupy one unit, and thereby maximising the use of the unit, is understandable as there is a finite supply of rental flats. However, we need to institute proper safeguards to protect our seniors. Let me share another case that I encountered recently. This case was about a 73-year-old elderly Singaporean who was co-renting a flat from HDB with another single elderly. The monthly rent was only $26 – this is to be paid to HDB – but the latter made him pay another $185 per month to her as \"rental fee\". The latter had also apparently disallowed him to use electricity and forced him to shower at a nearby swimming complex. He was so scared of losing that unit that he endured it. Had the case not been surfaced to me by a kind-hearted lady in my ward, he would have continued to suffer in silence. Now, apart from this, stories of how single elderly would rather sleep at the void deck than face their co-tenants are also not uncommon.
Hence, I think we need measures to be put in place to prevent bullying of the elderly, and ensuring a peaceful and safe living environment for all. For instance, the authorities could set up the dos and don'ts upfront, impose mandatory community mediation when disputes occur, and impose penalties of differential severity on the bully. Also, it is really challenging to require single senior elderly to search for suitable co-tenants on their own. Often, HDB is kind enough to provide a list of interested tenants so that the senior applicants can call them on their own and try to strike a deal. However, the common feedback that I receive is that this process is not effective as the \"candidates\" on the list tend to find ways of rejecting one another, thereby unduly prolonging the process. Hence, can the HDB consider giving an additional boost and do the matching for them? I anticipate concerns but I think this idea can be considered. First, the \"candidates\" would have to be assessed to be eligible and in real need of a flat by the HDB in order to rent it. This is already done under the current procedures by HDB. Second, when HDB does the matching and allocation, it will minimise time wasted; also, HDB can do pre-screening to determine who
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might be suitable to live with whom, thereby reducing the risk of conflicts later.
Mr Deputy Speaker: Ms Tin, you might want to start to round up your speech.
Ms Tin Pei Ling: With HDB doing the matching, there is certainty that a co-tenant will be found and, thus, for the single elderly who are currently homeless, they can move into the unit first while waiting for the HDB to send in a co-tenant later. In essence, we need to do our utmost to enable our elderly to secure a nest for their retirement and live safely and peacefully in their golden years.
And the third area − which I will do it very quickly − is on mental health. I spoke on this during last year's debate and I am glad that the MOH has made several moves on this front. However, I urge the Government to continue to pay attention to this area. I think more can be done, and I will elaborate more on this during the Committee of Supply debate. But I hope that help for those with mental health needs will always have a special place in the Finance Minister's mind, heart, and coffers, too.
Mr Deputy Speaker, this Budget is a step in the right direction. I hope that the Finance Minister will not stop here, but will continue to make Budgets in this vein. At its core, this Budget represents a new philosophy – that Singapore is not about trying to maximise growth, but sharing outcomes fairly, and moving together as one people; that Singapore is not just about enabling those who are able to get ahead, but is about bringing everyone along throughout the journey. Our SMEs, our seniors, those with mental health needs – they are all part of our community and deserve our help. Pressing ahead without them is not an option. Instead, we must continue to dedicate resources to help them cope with the changes taking place in our economy and society, and deliver programmes to better their lives. Again, with that, I support the Budget.
Mr Gan Thiam Poh: Mr Deputy Speaker, I thank you for allowing me to join this Budget debate. The 2013 Budget is an inclusive Budget that addresses the needs of segments of the population that are most in need of help. At the same time, it is a Budget that is progressive and focuses on providing prosperity and greater equity in the longer term. I think Budget 2013 is a check point. It is a time of reflection and to plan for a better future for all Singaporeans. It is also the time for us to take further steps in transforming our economy, creating a
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fairer society, and improving the lives of all Singaporeans.
The immediate priorities and tasks of the Government are to resolve the challenges of housing and transport. Housing and transport form the foundation of our efforts to create a better Singapore in the future. I would like to talk about these two issues and healthcare, which form the three cornerstones of creating a better quality of life for Singaporeans.
First, let me start on housing matters and offer some suggestions. The rising housing costs continue to cause some anxieties among home buyers, even though a record number of BTO flats was being built. As Minister Khaw pointed out in his blog, HDB would have launched 50,000 flats over 2011 and 2012, with the increased sustained supply stabilising the housing market. However, home buyers continue to be anxious about rising housing costs. One Straits Times Forum writer wanted public housing policy to \"return to basics\", following news of the sale of a $2.05 million executive condominium. Another Forum writer wanted the Government to redefine public housing policy.
The HDB's vision is to provide affordable homes of quality and value. I hope the Ministry can re-look at the main principles of public housing and assess whether they continue to be relevant today. Do we need to return public housing to basics? The fundamental issue lies with whether we see housing as a \"public good\" or a home; or whether we view housing as an asset or a house.
Many young residents shared with me their anxieties of obtaining a new flat. Hence, I welcome MND's move to delink the prices of new flats from the prices of resale flats. I also suggested previously that MND continue to price future new flats at not more than five times the eligible applicants' annual income of the flat type they apply for.
Mr Deputy Speaker, I have been collecting feedback and suggestions from residents and friends as to what are the measures that the Government could implement so that prices of housing are always stable, predictable and attractive and within reach at great comfort to all Singaporeans. Singaporeans could perhaps take less than 10 years and less than 20% of their monthly income to settle their housing loan fully and early. All Singaporeans, regardless of their income capability, are certainly assured of a flat well within their affordability.
Some suggested that we could consider offering lower pricing for longer Minimum Occupation Period (MOP) of eight years to 15 years. However, that
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would only serve to defer the issues faced by Singaporeans today. Others suggested that the Government consider the option of allowing new flat applicants to own a new flat at an attractive and comfortable price but on different terms and conditions that such flats can only be resold to HDB.
I mooted this idea among residents and my friends, and have received mixed reactions. The older residents were supportive of a system where public housing continues to be affordable, even though they have to be resold back to HDB. They shared with me that they just wanted a roof over their heads at a comfortable price with enough savings for retirement. Some also told me that property appreciation did not affect them much as they did not intend to sell their flats in the first place.
Younger residents were concerned that their asset would lose its value, even though most of them wanted to buy low and sell high. Others wondered if we could provide the options of two types of housing. The first type of public housing will be similar to the current system with a resale market. The second type will be a cheaper and no-frills type of affordable housing. They suggested providing this second option to 4-room or smaller flat applicants.
The option of having new basic flats with no resale market would help Singaporeans spend within their means. This will allow them to set aside more cash to pursue their own dreams. They will also have more cash and CPF savings for their retirement, instead of having a higher portion of it locked into their property. However, this option is not without its fall backs. I am concerned that the two types of flats will actually widen the income inequality among Singaporeans in the years to come. Hence, considerable control of property market still remains key to the stability of housing prices. And I hope the Ministry can continue to gather feedback during the Singapore Conversations, to assess whether Singaporeans are ready for these changes.
On the issue of transport, I would like to offer suggestions on how we can enhance the public transport system in Singapore. The aim is to ensure that public transport is not only affordable or accessible to Singaporeans, but also attractive to Singaporeans as a reliable proposition.
Public transport, as Minister Lui mentioned during the debate on the White Paper on Population, continues to be congested. Commuters are frustrated by the overcrowded MRTs and buses during the morning peak hours, outside of the school holidays. The variable waiting times and the increasingly frequent train disruptions add to the source of commuters' frustrations with the public
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transport system.
Some have argued for the nationalising of public transport, so that it can be a \"public good\" to serve the social needs of the commuters. Others felt that the current system should be fully \"privatised\", so that competition among transport operators will increase the effectiveness and efficiency of public transport. Actually, it is not the case of \"either-or\".
Rather than accepting calls of either \"nationalising\" or \"privatising\" the public transport system, I would like to propose a third way of looking at our public transport system. I urge the Ministry to look at certain aspects of our transport system and adopt social enterprise principles to enhance the attractiveness of public transport here.
In Willie Cheng's recent commentary on what makes a social enterprise, he explained that a social enterprise is actually loosely defined as a business with a social mission. He added that debate on the term actually revolved around social impact and profit re-distribution.
To me, most importantly, the social enterprise serves to maximise the benefits for the public and also try to minimise the cost. I hope the social enterprise principle will be introduced to maximise the equality of the service and minimise its costs to Singaporeans. Let me continue in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] An ageing population is one big challenge before us. By 2030, the number of elderly above 65 years old would be 900,000. If the total population then is 6.9 million, 900,000 would be more than 13%, and the elderly who need medical attention may reach 117,000.
There are several trends in eldercare that we need to take note of. One, with longer lifespans, expenses on chronic illnesses and long-term care would go up. Two, with smaller families, it has become more common that two middle-aged persons have to take care of several elderly, and the family alone will not be able to bear the medical expenses of all the elderly.
It is often said that \"the poor are better off dead than sick\". This shows that older people are worried about costly medical expenses. Inflation, rising cost of living and increased medical expenses affect the low-income most. MOH is already reviewing Medifund. I believe the revamped Medifund will better meet the needs of older Singaporeans. However, they need to first use their
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MediShield or MediSave to pay for the medical expenses before they can apply for Medifund. But some elderly are so poor that they may not even have MediShield or MediSave.
As the number of elderly aged above 65 would reach 900,000 in 2030, we need a large number of healthcare professionals to take care of them. Traditionally, older patients prefer to visit the polyclinics, and if they need to see a specialist, they need a referral from the GP in order to see a specialist at subsidised rate. But this would, in turn, add to the burden on all major hospitals, and elderly patients would have to wait for a long time.
The Government can consider renting out spaces at lower prices to family physicians or community hospitals in mature estates so that they could charge elderly patients at rates as low as the polyclinics. This would reduce the burden on the hospitals and the elderly. On increasing the number of healthcare professionals, besides grooming locally and recruiting overseas, we can also encourage retired doctors to return to service. Meanwhile, we can also provide medical services over the phone or on the Internet, to help those who are nursing at home or those suffering from chronic illnesses, so that they do not need to see a doctor so often.
Besides physical well-being, we also need to take care of their psychological well-being. \"Ageing in place\" is a very good suggestion as \"no place is better than home\". \"Ageing in place\" allows older people to continue to live in a familiar environment. This is good for their mental health. We need to expand the scope of \"ageing in place\" and build more elder-friendly facilities in the community.
Senior citizens also need to have sufficient cash after retirement to help them maintain their standard of living. The Lease Buyback Scheme is a good way to do so. Furthermore, the retirement age has been pushed back, with the current statutory retirement age at 62. But they can only withdraw a portion of their CPF at age 55. For some older Singaporeans, they may lead a harder life. The annuity of CPF LIFE may be extremely helpful for some elderly. Can we consider giving out annuities at an earlier age? Of course, this would mean they get a smaller amount every month but, at least, they get some money instead of none at all. This will help them tide over.
(In English): Mr Deputy Speaker, finally, I would like to thank the Government for enhancing the Workfare Income Supplement (WIS) that I had proposed earlier at last year's Debate. I would also like to thank the Government
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for introducing the Wage Credit Scheme which will incentivise employers to raise the salaries of the lower middle-income workers. With that, I support the Motion.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Extension of a Sitting","subTitle":"In Parliament","sectionType":"OS","content":"Mr Deputy Speaker: Order. Pursuant to Standing Order No 2 (5)(d), I propose to extend the time of this day's sitting beyond the moment of interruption for a period of up to 30 minutes to facilitate the completion of business. Mr Gerald Giam.
","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) Debate resumed. (proc text)]
Mr Gerald Giam Yean Song (Non-Constituency Member): Mr Deputy Speaker, despite what was described as an \"inclusive\" Budget last year aimed at creating more opportunities for lower- and middle-income Singaporeans, Singapore's income gap widened in 2012. According to the Department of Statistics, after adjusting for Government transfers and taxes, Singapore's Gini coefficient rose from 0.448 in 2011 to 0.459 last year, indicating increased income inequality. It was much higher than the average of 0.311 in the OECD, after adjustments for taxes and transfers.
In his Budget speech, the Deputy Prime Minister and Finance Minister correctly pointed out that income inequality poses a risk to social cohesion. However, it is not just social cohesion that is threatened by inequality.
Nobel Prize-winning economist Joseph Stiglitz has pointed out that inequality could stifle economic growth, and could result in lower economic efficiency and productivity. A high level of inequality can also lead to lower levels of trust in government and business, an effect that we are clearly witnessing in Singapore. High inequality contributes to slowing social mobility.
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This, in turn, devalues the concept of meritocracy that we hold so dear to in Singapore. A study by several World Bank economists found that an increase in income inequality has a \"significant and robust effect on raising crime rates\".
I am glad to note the Deputy Prime Minister's view that meritocracy alone will not guarantee social mobility. For too long, we have been told that we can attain the \"Singapore Dream\" as long as we work hard and have the talent. This is not necessarily so. There are many other factors that hold an individual back, many of which are beyond his or her control. Some have to do with an individual's socio-economic background, and others are institutional, like our high stakes examination system, which often depends so much on expensive tuition to excel in.
I welcome the moves towards making our tax system more progressive. This is an important step towards a fairer society. Comments by some analysts that this is a \"Robin Hood budget\" are misplaced. Singapore still trails behind many other developed countries in the progressivity of its tax system.
The first step towards building a truly \"democratic society based on justice and equality\" is to acknowledge that we are all in this together. The wealthy in Singapore − and we have the highest percentage of millionaires and the second-highest percentage of ultra high net-worth households – the wealthy must be prepared to contribute their fair share of taxes.
The rich do not exist in a vacuum. They need employees who are engaged and working productively to increase their companies' output and profits. They also need good public infrastructure from the transport networks to the National Broadband Network, all of which are financed largely by tax dollars, to lubricate the gears of our economy.
Sir, I support the idea of providing temporary wage subsidies to firms to help them to employ Singaporeans and to improve the pay of local employees.
The Wage Credit Scheme (WCS) is a generous scheme aimed at encouraging companies to share their productivity gains with their employees. While I believe the WCS will help to raise wages of some workers, I am not sure how effective it will be at raising productivity, which the Deputy Prime Minister said is our \"most important economic priority\".
Perhaps, the Government expects that the productivity initiatives, like the PIC, will see a high uptake and, as these companies benefit from productivity
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increases, the WCS will encourage them to raise wages. But productivity investments made now will only bear fruit some time down the road, by which time the WCS might be about to expire.
The WCS will certainly help firms which already plan to raise wages now. But these are likely to be companies which are already profitable, and will include a disproportionate number of MNCs and GLCs, rather than SMEs. Those which are experiencing a squeeze in profits are unlikely to raise wages even with the WCS, since they will still have to foot 60% of the wage increases for the next three years, and 100% thereafter.
The WCS also does not help firms to hire new local workers in the wake of a tightened foreign worker inflow, since it only subsidises salary increases for existing workers. This is a need which has not been adequately addressed in this Budget.
Many SMEs lament that they cannot find locals to fill their vacancies; they say many Singaporeans prefer to work for MNCs. However, SMEs often have difficulty matching the pay scales of MNCs.
To help SMEs hire more Singaporeans, I would like to propose that the Government provide a temporary wage subsidy for SMEs to hire economically inactive and out-of-work Singaporeans. These include homemakers, the unemployed, and some senior citizens and persons with disabilities. This subsidy should be in addition to the existing Special Employment Credit for persons with disabilities and older workers.
I will call this the \"New Hire Wage Credit\" scheme. It could pay for one-quarter of the first six months' salary of each new hire and should be available for the next three years.
The New Hire Wage Credit would be available to workers earning less than $4,000 per month or the equivalent in part-time pay and only SMEs should benefit from it. Companies would only be able to claim the New Hire Wage Credit for a particular position once, and for new hires who have not benefited from the scheme in previous jobs. This would encourage the SME to put in place good HR practices to help retain the staff, and the new hire to stay on the job longer. In addition, to prevent workers from changing jobs just to take advantage of this scheme, companies would only be eligible to claim under this scheme if they hire someone who has been unemployed for at least the last
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four months.
With this scheme, SMEs will, firstly, be able to attract more Singaporeans by offering a higher starting pay. This will help to meet SMEs' current manpower needs without having to increase the overall foreign worker headcount. Secondly, it will help increase the resident labour force participation rate by increasing the opportunity costs of not working. And, thirdly, it will help unemployed Singaporeans to secure jobs.
I estimate that this scheme will cost about $396 million over the next three years, an amount which can be covered under this year's Budget.
Mr Deputy Speaker, I would now like to speak briefly about productivity. Since 2010, the Government has set itself a goal of raising productivity by 2% to 3% per annum on average over 10 years. It has committed $5.5 billion from 2010 to 2014 to help achieve this. The Government set up the National Productivity and Continuing Education Council (NPCEC) in April 2010 to galvanise the nation to achieve this national productivity target.
The Council has identified 16 priority sectors to improve productivity in. Topping this list is the construction industry, which benefits from a $250 million Construction Productivity and Capability Fund (CPCF) to boost productivity growth.
In his Budget speech, the Deputy Prime Minister has said that raising productivity is our \"most important economic priority\". But what has our productivity drive achieved so far? In 2010, productivity growth was 11.1%, which was a rebound after two years of negative growth of -7.3% and -3.6% in 2008 and 2009 respectively. In 2011, productivity growth dropped to 1.3%. Last year, it dropped further to -2.5% on the back of five consecutive quarters of decline. This latest drop was broad-based, with the manufacturing, construction and services sectors all experiencing declines. In the construction sector, annual productivity growth fell to -0.2% in 2012 despite all the focus of the NPCEC.
Based on current trends, it is hard to see how we are going to achieve the target of 2% to 3% per annum average productivity growth over 10 years. The Government itself does not seem very optimistic. The Deputy Prime Minister has said that this target is \"ambitious but we must make every effort to achieve it\". The recent Population White Paper qualified at least twice that it is \"an ambitious stretch target\".
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I can understand that some productivity initiatives have a long gestation period, but how long will it be before we can start seeing results? Each year that passes with low productivity is one more year that our companies are getting less competitive, and one more year in which our workers will experience slow growth in their incomes.
This year's Budget seems to be focused on enhancing the existing PIC scheme. Is the Government satisfied that the PIC is effective in producing the desired outcomes? If productivity continues to languish below 1% or 2% for a further two quarters this year, will the Government consider more drastic measures before the end of this year to boost productivity?
In conclusion, Mr Deputy Speaker, this Budget has the right focus on economic restructuring, reducing our reliance on foreign manpower and raising the incomes of Singaporeans. I have outlined in my speech some suggestions on how we can better help SMEs through their restructuring journey, while at the same time helping economically inactive and unemployed Singaporeans to find jobs. I hope that with a more distributive Budget, we will start to narrow the income gap and improve the well-being of all Singaporeans.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Adjournment of Debate","subTitle":null,"sectionType":"OS","content":"The Deputy Prime Minister and Minister for Finance (Mr Tharman Shanmugaratnam): Mr Deputy Speaker, Sir, I beg to move, \"That the debate be now adjourned.\"
[(proc text) Question put, and agreed to. (proc text)]
Mr Deputy Speaker: Resumption of debate, what day?
Mr Tharman Shanmugaratnam: Tomorrow, Sir.
Mr Deputy Speaker: So be it.
\tPage: 151
","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.\" – [Mr Gan Kim Yong]. (proc text)]
Adjourned accordingly at 7.05 pm.
\tPage: 152
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