1 Mr Lim Biow Chuan asked the Minister for Manpower whether the CPF Board will (i) amend its policy to allow automatic withdrawal of the CPF payout when a member reaches 65 years of age and (ii) allow members who wish to withdraw their CPF funds later than age 65 to then indicate their choice in an opt-out form.
2 Mr Patrick Tay Teck Guan asked the Minister for Manpower whether the CPF Board will be reviewing the opt-out scheme for payouts and allow automatic CPF payouts when a member reaches 65 years of age.
3 Ms Jessica Tan Soon Neo asked the Minister for Manpower given the feedback and concerns received regarding the CPF payout under the Retirement Sum Scheme, whether the CPF Board will consider revising the default option for CPF payout age to 65 years instead of the current 70 years.
4 Miss Cheryl Chan Wei Ling asked the Minister for Manpower (a) whether sufficient public communication was done prior to the letters being sent to individuals with regard to the option on the timing of their CPF payout; (b) whether there are other approaches to notify the general public of this option before the official process kicks in; and (c) for those who have earlier failed to notify CPF that they wish to receive their payouts upon age 65, whether they are allowed to do so at any point of time before they turn 70.
5 Ms Foo Mee Har asked the Minister for Manpower (a) what can be done to ensure that the public understands that the CPF payout age remains at 65 years of age; and (b) how can engagement with CPF account holders be improved to facilitate easy access to CPF funds at payout age.
6 Mr Liang Eng Hwa asked the Minister for Manpower (a) whether the CPF payout starting at age 65 can be made as a default option; and (b) whether the CPF payout starting beyond age 65 can be made simpler and more appealing as an option.
7 Mr Chong Kee Hiong asked the Minister for Manpower whether the Ministry will consider making the age of 65 the default option for CPF monthly payouts while providing incentives for CPF members who opt for the payouts to be deferred.
8 Mr Png Eng Huat asked the Minister for Manpower since the start of 2018 (a) what is the number and proportion of members on the Retirement Sum Scheme (RSS) who activated their CPF payouts upon reaching their Payout Eligibility Age (PEA); (b) what is the number of members who, having missed the activation deadline, appealed to start their payouts before age 70; and (c) whether the Ministry will consider setting the default automatic CPF payout age of RSS and CPF Life scheme to the PEA to further simplify the activation process.
9 Assoc Prof Walter Theseira asked the Minister for Manpower (a) for each year of age between 65 and 70 what is the proportion of eligible CPF members who apply to start payouts; (b) for members of the 65 to 70 age group receiving payouts, what is known about their use of payout monies, in particular, the extent to which payouts are retained in low-interest deposit accounts instead of used for expenses; and (c) whether and to what extent there are cases of financial hardship due to eligible members not applying to receive payouts.
\tThe Minister for Manpower (Mrs Josephine Teo): Mr Speaker, may I take Question Nos 1 to 9 together, please.
\tMr Speaker: Please do.
\tMrs Josephine Teo: I thank the Members who have raised important questions. There are several key questions I hope to address in this reply.
The first question is whether the Central Provident Fund (CPF) Payout Eligibility Age has been shifted from 65 to 70. The answer is no.
As Members are aware, the Payout Eligibility Age (PEA) is the earliest age at which CPF members can start their monthly retirement payouts. From 1 January 2018, the PEA has been 65. It is still 65 today. We have not shifted the PEA from 65 to 70, as was alleged by a spurious online post. Members can start their retirement payouts any time from 65.
The second question is whether the policy has been changed to now require CPF members to come forward to start their retirement payouts. The answer is again no.
This is in fact a long-standing practice and there has been no change. Members can instruct the CPF Board when to start their retirement payouts at any time after they reach their PEA. Members are in the best position to decide based on their individual circumstances. It is also the same approach as in many other countries.
There is no advantage for the CPF Board or the Government to want members to defer their payouts beyond 65. Those who defer their payouts in fact enjoy the higher interest paid on their CPF monies.
Members who have reached their PEA can instruct the CPF Board at any time to start their retirement payouts. Let me explain how the process works for those on the Retirement Sum Scheme (RSS), which is the main retirement payout scheme for members born before 1958. The members are now aged 61 and above.
About six months before their PEA, RSS members will receive a letter from the CPF Board informing them that they can start their payouts any time from PEA. The form to start payouts is attached. Members only need to fill in basic information – their name, NRIC, contact details and bank account details. This gets sent back to the Board. Alternatively, members can apply online through the CPF website or come to a CPF Service Centre. Members who do not instruct CPF Board to start their payouts are reminded through their Yearly Statement of Account.
The third question is why the payouts start automatically at age 70. In the past, some RSS members had their savings intact in their CPF accounts until they passed away. They never touched it at all. This is unsatisfactory. We therefore introduced a Latest Payout Start Age of 70 for members turning 70 from 2018.
Even if such members have not applied to start payouts, CPF Board will start the payouts for them. But I must again emphasise, if a member wants to start his payout before 70, he can do so any time from his PEA; he does not need to wait till 70. In other words, the Latest Payout Start Age is not the same thing as the PEA. It is a way to ensure members get to enjoy the benefit of their CPF savings by 70 at the latest.
Members of the House may therefore recall that in October 2016, Parliament agreed to amend the CPF Act to bring this into effect. Some Members who are still in the House today spoke in support of this amendment, including Mr Chong Kee Hiong, Er Dr Lee Bee Wah, Mr Louis Ng, Mr Png Eng Huat and Mr Saktiandi Supaat.
Several Members have asked if CPF Board should automatically start payouts at age 65. Some are concerned about those experiencing financial hardship. I appreciate the reasons for Members’ questions and also share your concerns.
There are in fact tangible benefits to members when they start their payouts later. Members earn more interest and enjoy enhanced payouts. With every year that they defer their payouts, their CPF savings will earn risk-free interest of up to 6% a year, which is well above the interest rates they would get in the market. This 6% includes the extra interest of 1% for the first $60,000 and additional extra interest of 1% for the first $30,000. For members on CPF LIFE, for every year deferred, the payouts go up by up to 7%. For five years of deferral, that is up to 35% more.
Members may therefore prefer to start their CPF retirement payouts later. This is especially so if they have other savings to draw on that are earning low interest or if they are still working. But if the payouts automatically start at 65, such members will also automatically not get the benefits of deferral.
At the end of 2017, six in 10 members on the RSS who had reached their PEA that year did not start their payouts. Even by the time RSS members reach 70, about half have not come forward to start their retirement payouts.
Some among them may have consciously decided to keep their savings in CPF because they had no need of the payouts and also because they wanted to earn the higher interest. Others may not have known they could have started their payouts earlier and thus did not instruct CPF Board.
The right thing to do, therefore, is to reach out to those members who may not have a good understanding and give them clear and simple information to help them make their decisions. With the benefit of knowledge, those who wish to can still start their payouts any time after 65.
The fifth question, which Ms Foo Mee Har, Miss Cheryl Chan and Mr Liang Eng Hwa have asked, is whether the CPF Board can improve its communications with members. The answer is yes.
While CPF Board has stepped up outreach efforts, there is much room for improvement in the way it communicates key issues such as starting payouts. For example, we will review the letters sent to members who are approaching their PEA, so as to avoid misunderstandings which confuse members unnecessarily.
The Board has also started to invite all members reaching PEA to attend and benefit from a CPF Retirement Planning Service from the start of this year. This is a face-to-face service in which a CPF Board officer provides personalised guidance.
In addition, we will work with other agencies to reach out to CPF members. For example, where appropriate, staff at the Social Service Offices (SSOs) will ask members who approach the SSOs for financial help whether they have activated their CPF payouts and assist them to do so if they wish. We will also collaborate with the Silver Generation Office to communicate this issue to elderly members.
Mr Speaker, I would also like to take this opportunity to clarify the position for CPF LIFE, which is a relatively new scheme.
Members who joined CPF LIFE prior to July 2015 may have been confused whether they too have to come forward to activate their payouts when they reach PEA. Some pointed out that the Latest Payout Start Age of 70 was not mentioned in previous communications with them.
Let me assure these members that nothing has changed for them. They joined CPF LIFE before July 2015. Back then, there was no flexibility to defer CPF LIFE payouts and the policy letter has already stated that the payouts would start from their PEA. For such members, CPF Board will indeed start payouts at PEA, unless otherwise instructed. In fact, by the end of 2018, about 35,000 of such members had already started to receive their payouts upon reaching their PEA, which is what they expected.
Members who joined CPF LIFE after July 2015 will be like members on the RSS. They can start their payouts any time between their PEA and 70, by instructing CPF Board.
Mr Speaker, allow me to conclude. All members can start their payouts any time after PEA by issuing a simple instruction to CPF Board. This has not changed.
However, the exact payout application process and letters sent to members may vary, depending on each member’s particular circumstances, such as whether they are on RSS or when they joined CPF LIFE. Hence, CPF members should not rely on letters sent to others. They should instead contact CPF Board if they are in doubt about any letter sent to them.
With your permission, Mr Speaker, may I ask the Clerk to distribute handouts summarising the key points of my reply?
Mr Speaker: Yes, please. [A handout was distributed to hon Members.]
Mrs Josephine Teo: Thank you. Mr Speaker, for brevity, I have circulated the English version of this handout. But I want to assure Members that we are producing it in all four official languages, and they will be made available to you to disseminate to your residents, whoever may feel that this is useful. We will also be happy to collaborate with Members to share relevant information with their residents through talks and seminars. This offer will hold at any point in time that Members wish to activate it.
\tMr Lim Biow Chuan (Mountbatten): I thank the Minister for clarifying that the Payout Eligibility Age (PEA) has not shifted from age 65 to 70. I think this is very important and very re-assuring for CPF members. But I am concerned that about 60% of CPF members do not come forward to withdraw their CPF when they reach 65 years old. The Minister said that about half of CPF members do not come forward to withdraw their CPF even when they have reached 70 years of age.
This is an area of concern because this is not a small number of people. Could it be that a large number of these CPF members may not do anything about it because they do not know the procedure? Or could it be that they have forgotten about the need to apply to withdraw their CPF savings? It is a big number. If we are saying just a small percentage, then I can understand that, well, perhaps they do not read their mail or that they forgot about it. But it is quite a large number, and I am concerned.
The Minister had said that the CPF Board starts their payout automatically for a member when the member reaches 70 years of age. If CPF Board can do so at age 70, why not make the payout automatic at the age of 65? Just credit to their account automatically, unless the member opts out and chooses to fill in an application to say that they do not want to do so. I think the point is that we need to assure every member that CPF Board will be able to honour any request to withdraw their CPF savings when these are due for payment. And really, this is about preserving the good faith and trust in CPF Board.
So, I urge the Minister to try to dispel any doubts that the CPF Board is deliberately withholding members' CPF monies, even though they have reached the PEA. I just wanted to add that I appreciate the benefit of higher interest rates. In fact, when I reached 55, I made a conscious decision to leave my monies with CPF Board, simply because the interest paid on the CPF savings is much better and as the Government has re-assured us repeatedly, it is risk-free. So, thank you, Minister.
\tMrs Josephine Teo: Mr Speaker, the Member Mr Lim has asked a very important question. The points he has raised are not trivial at all. I must share with Members that I gave serious thought to the possibility of shifting the automatic start date to 65. But there are several concerns, and I should share them with you.
There may be a group of members who are aware of the benefits of payout deferral. But they forget to come forward to instruct CPF Board to defer their payouts. There will be such individuals. Mr Lim may become one of them.
Another group may not be aware but actually they do not need the payouts just yet, even after they have reached their PEA. It is entirely possible that this group will grow over time. After all, between the age of 65 and 69 today, our employment rate is about 40%. With good health, we can expect more people to want to work longer. If, indeed, they are still receiving incomes, they may find that the CPF payout is somewhat unnecessary at that point in time.
Both groups may not be so happy that CPF Board made an assumption to start their payouts that deprived them of the benefits, if we were to have such a mechanical approach.
Also, there is another concern that weighs heavily. I am quite wary of making yet another sudden change. We have, for years, told CPF members that their payouts start when they instruct CPF Board – this has been the long-standing instruction. Tomorrow, if we decide otherwise, how can we be sure everyone gets the message? That is the central lesson we have learnt. Every time there is a change, it actually takes a long while for people to get used to it. Each time we make another change – we say that people on the previous system get to keep that previous approach, and from then onwards, this group has a different treatment. Those kinds of changes actually risk confusing people even more.
On balance, I suggest that we focus on improving the communications for the policy as it currently stands. With the benefit of knowledge, CPF members can still start their retirement payouts any time after 65. If we keep to this consistent line, there is less risk of further confusion.
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\tMr Liang Eng Hwa (Holland-Bukit Timah): I am glad that the Minister said that the CPF Board will review the letter that is sent to members when the members reach age 65. I hope that the CPF Board can review this particular statement that is made in the letter, \"No action is required if you wish to start your payout at age of 70\". This line is in bold; it is repeated twice. This is the only line that is in bold. Perhaps that is the reason why people are confused and are thinking if there is a shift in the payout age.
Indeed, like the Minister said, this is a new policy after some changes over the years. Perhaps, more thoughtful communication should be put out, should be considered, so that there are no unnecessary anxieties caused to the members.
\tMrs Josephine Teo: Mr Speaker, I wholeheartedly support what Mr Liang has suggested. We definitely can improve the way we communicate with CPF members. Today, CPF Board engages with members through a variety of means. Letters are just one of them. CPF Board administers quite a wide range of Government schemes – MediShield Life, MediSave disbursements, Silver Support, and Workfare Income Supplement. If you put together all the letters that CPF Board sends out, there are about 220 types. Obviously, some of them have the risk of not being entirely clear. We will definitely put effort into improving them.
There is also an avenue which we want to encourage CPF members to use. There are five CPF Service Centres islandwide. Each of these CPF Service Centres is staffed by officers who are conversant in all the major languages, especially, of course, our four official languages. Even if a member was unable to understand the letter that has been sent to them, we hope, by the very fact that they saw the CPF logo, that they will know that they can always approach the Service Centre. The staff will be happy to take them through in a language they are comfortable with. That is something we will make as a commitment.
In fact, CPF Board has already started inviting members to come forward. At the age of 55, the invitation is extended to every member. From this year onwards, once they reach their PEA, which is 65, we will equally invite the member to come again, so that CPF Board can provide personalised guidance, face-to-face. Any question that is not clear, any doubts that members have on the spot, make the explanation available to them and reassure them.
\tMr Png Eng Huat (Hougang): I just have a supplementary question for the Minister. Did MOM reach out to those people who did not activate their payout at PEA, or even beyond 70, to find out why? Perhaps do a survey to this group of people, since we know who they are?
\tMrs Josephine Teo: There are two parts to that question. Do we reach out to them? The answer is yes, because everyone gets the Yearly Statement of Account. CPF records will show whether the member has reached the PEA but has not activated payouts, in which case CPF Board will remind the individual that \"You have reached the PEA. You are eligible to start your payouts. Here is the form, activate it any time you want\".
The second part of it is, do we ask them why they have not started or activated their payouts? Here is where, I think, we have to be a little bit careful. People have a right to their privacy. CPF Board must be quite mindful that not everyone wants to tell the Board the reasons for their actions. Therefore, if we want to establish, amongst those who have not started their payouts, who actually is aware and made a conscious decision not to start it, who is not aware and did not come forward to instruct the Board, this would be quite a major exercise. We think there is some value in doing so but we will have to find a way that the member does not feel very intruded upon.
\tAssoc Prof Walter Theseira (Nominated Member): I thank the Minister for her comprehensive reply. I have three supplementary questions.
First, I think some of the public unhappiness is, perhaps, due to the gap between the retirement age at 62 and the PEA at 65. Some are concerned that they have difficulty making ends meet between retirement and the start of the payouts. Would the Ministry consider aligning the retirement age with the PEA in the future, to allow for a seamless transition between work income and CPF income?
Second, regarding the default \"out\" at the moment, I think it is a good move because it improves retirement adequacy. But, at the same time, members may want assurance, as other House Members have said, of knowing that their payouts will commence and that the mechanism for paying out is sound. Could we consider starting with, perhaps, a lower payout at first at the PEA and then scaling up to the full payout at 70 or on application of the member?
The last question is, what is known right now about the use of payouts at the earlier PEAs, that is, are the payouts used for expenses or do they sit largely in zero percent or close to zero percent savings accounts? It seems that studying this and publicising it may allow the public to understand why we have this policy and how it helps them.
\tMrs Josephine Teo: Mr Speaker, I thank the Member for his supplementary questions. Let me deal with the first one on retirement age.
In Singapore, together with Japan, besides the retirement age, there is actually the re-employment age. We are, to the best of our knowledge, the only two countries in the world that have the provision for re-employment. In the Singapore context, the re-employment age, when it was first implemented, was to age 65. This was in 2012. Then, in July 2017, we raised the re-employment age to 67. So, in fact, Singaporeans have the assurance of employment beyond the retirement age of 62, all the way up to 67. In any case, both the retirement age and the re-employment age are being reviewed. A tripartite workgroup was set up last year and is making good progress. I hope to be able to update Members during the Committee of Supply (COS) debate.
Let me turn to the second question. I believe the Member had suggested, if you are concerned about starting the payouts at 65, why not start with a smaller payout? I think it can be looked into, but I suppose the question the members will also have is: how do you decide what is a \"small\" payout? If you are going to start with a small payout, why not just start with the whole payout?
The third, I am very glad that the Member asked this question. What is the typical use of the payout? We do not have very clear indications about what happens to the payouts once they start being streamed out on a monthly basis. There is good reason to also not be too precise about the use of those monthly payouts because they will be co-mingled with contributions from other family members and perhaps, personal savings. It will be very hard to tease apart what part of that money can be attributed to CPF payouts or what part is attributed to children's allowances.
But what people do with their withdrawals at age 55 is instructive. Our survey suggests that slightly over half of the members, after taking the withdrawals from their CPF accounts at the age of 55, just put it in a bank account, earning much poorer interest rates. That actually is a very useful reminder that people are not always so savvy about what is the best deal that they can get on their savings. There is some merit to the current practice of automatically deferring it for them, because they get to earn a much better interest rate. When they want to start their payouts, it is still available to them anytime.
\tMs Foo Mee Har (West Coast): I thank the Minister for her very comprehensive response. I would like to refer to a recent exchange on the Forum Pages of Lianhe Zaobao on the CPF Retirement Sum Scheme. A CPF member had complained that CPF Board would stretch his payouts over 28 years until he is 93, when he thought it should be 20 years, on the assumption if the tenure was shorter, he would get more over these 20 years.
So, I would like to ask the Minister for Manpower the basis by which payouts for CPF RSS are calculated. So, how do you calculate? Why do you decide it is 28 and not 20? Can CPF members have the flexibility to choose the tenure of the payout period within the prescribed limits? And why do we still have the CPF Board maintain this CPF RSS and only apply to people with lower CPF balances, and not include everyone on the CPF LIFE Scheme, which I believe is a superior scheme?
Mr Speaker, may I have a second supplementary question which relates to this discussion about the important decision of starting at 65? The question the Minister could answer is whether a CPF member who has chosen payouts to begin at 65 – later found out it is a better deal to delay and want to stop the payout and ask to defer to 70, can this be done? If this request is made, how do you then calculate the payouts for the remaining period? Let us say this person has enjoyed it for a year and then ask at 66, \"I want to defer to 70\", what happens? And that would inform the decision some of the Members are asking for automatic trigger at age 65. What happens?
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\tMrs Josephine Teo: Mr Speaker, Singapore has one of the highest life expectancies in the world. In 2017, more than half, one in two Singapore residents aged 65 was expected to live beyond 85. One in five of them was expected to live to about 95 or above. When designing the RSS payouts, initially, they were meant to last 20 years, taking into account the base interest rate on the Retirement Account, which is now 4%. So, consider the fact that they will earn 4%, consider the fact that RSS payouts should last 20 years, then you work out what the payout will be.
A current RSS member reaching his PEA of 65 will get a base payout that will last till approximately 85. What this means, however, is that more than half of the members still alive at 85 will have no CPF payouts at all. This will be a major cause for concern. The better solution for the member to managing this longevity risk is CPF LIFE, which provides lifelong payouts. However, because CPF LIFE is mandatory only for those turning age 65 in 2023, with $60,000 in Retirement Account balance, most of our elderly will still not be on CPF LIFE but remain on the RSS.
With this concern in mind, the Government introduced the CPF extra interest about 10 years ago and the additional extra interest in 2016. This bonus interest, provided by the Government, is used to extend the RSS payouts beyond 20 years. In this way, the members will enjoy payouts for longer and there is less risk that their savings will run out. But we also put in a cap, so that the payouts do not extend past 95 years old. This will already cover about four in five elderlies. About 80% of them will be covered by this duration extension.
To the question of whether members can request for shorter payout duration under RSS. In general, the extra interest and the additional extra interest provided by the Government is used to extend the duration of the RSS payouts and reduce the risk of members outliving their savings. In some cases, the CPF Board allows flexibility for members to request for a shorter payout duration. For example, members may have topped up beyond the full Retirement Sum and would have their payout duration extended. They can come forward and discuss with the CPF Board how to get it shortened for higher payouts.
RSS members can also consider joining CPF LIFE. Because of risk-pooling, not only will they enjoy lifelong payouts, but they may also enjoy higher payouts. In fact, I am happy to share with the Member that about 92,500 RSS members have taken up CPF LIFE voluntarily. They were not mandated to do so, but they probably either did their own sums or visited a Service Centre, were shown what the payouts will look like under CPF LIFE and then decided on their own accord to sign up. The question is, why keep the RSS, why not make everybody come onboard? This is one of the challenges for CPF LIFE and indeed many Government schemes. When we introduce changes or new schemes, we have to be very careful to whom it applies. The RSS members were told that they were on RSS. We do not just decide on their behalf that they will henceforth be on CPF LIFE.
For newer cohorts, when CPF LIFE was introduced, it was made mandatory. That is because they have the benefit of advanced understanding and knowledge. But for those who were already on the prior scheme, we are very careful about changing things for them. The solution really is to reach out to them, show them how it works for them and let them decide.
To the Member's final question, on whether an individual, having started his payouts, can decide to stop and defer to 70. Here, I want to be very careful about not making a generalised statement. As I explained, the circumstance may differ for every individual. So, I would urge the member to come forward, we would look at his particular circumstances and if it serves his interest, it is helpful to him, we will see how to support him.
Mr Chong Kee Hiong (Bishan-Toa Payoh): I thank the Minister. It is very important to encourage those with lower CPF balances to defer their withdrawal till 70 years old so that they can get a higher payout down the road. That is one of the key objectives of this scheme. Could the CPF Board consider providing even more incentive to encourage this group, such as those with less than basic Retirement Sum in their CPF balance an even higher tiered interest rate for their balances so as to give them more incentive to defer their withdrawal?
\tMrs Josephine Teo: The incentives are already very generous. For every year of payouts deferred, those on CPF LIFE stand to get higher payouts of up to 7% more. If they defer it for all five years, they get up to 35% more. However, not everyone has hoisted this on-board. I am aware that the former Minister for Manpower, Mr Lim Swee Say, for example, has conducted multiple engagement sessions in his constituency, helping his residents understand the benefits of deferring their payouts. I would very much like to encourage all Members to do likewise. CPF Board will be very happy to support you in this endeavour. The incentives are there, it is very much for the CPF members to take advantage of them.
Ms Jessica Tan Soon Neo (East Coast): I thank the Minister for the clarification, as I think there has been so much confusion. Having that discussion is important.
I would just like to ask a supplementary question with regards to the default age of the payouts. I understand that the rationale for putting the default at 70 is to allow for the additional benefits to the member. But at the point of the letter going out to the members, is it possible to just make it simple for them to confirm if they wish to withdraw? I know they can withdraw at the start of PEA. But it is a matter of emphasis. So, can they allow for the member to just confirm whether he wishes to have the payment, starting at 65? Because it gives the assurance that they can do it. Today, it seems that it is the other way round. It is just a matter of emphasis. And if they say no, then you can do the rest of the communications on the benefits, or if they say yes, just to confirm with them the benefits of keeping it there. It is just to give the members the assurance that they can start the payouts.
\tMrs Josephine Teo: The short answer is yes. We will have to take a look at the letters. I think it is best to message-test. It is probably best to gather some members and ask them which letter is intuitively easier for them to understand. We will do so.
Mr Png Eng Huat: Just one more question for the Minister. For members who did not want to start their payout at PEA, will they be reminded again every year until age 70?
\tMrs Josephine Teo: Absolutely. They are reminded year after year, through the Yearly Statement of Account.
\tMr Saktiandi Supaat (Bishan-Toa Payoh): I thank the Minister for explaining the payout at 65 and 70. I have a specific question with regards to a certain segment of the population. For example, if somebody is mentally incapacitated before 65, will it affect his trigger at 70 or 65, in the situation where he does not have a Lasting Power of Attorney (LPA) at 65? How will the CPF Board handle this situation at the point when the person reaches 65 years of age? What I mean is that, if somebody is mentally incapacitated at 65 and he does not have an LPA, does he have to wait until it is triggered at 70? Or is there a specific situation in such circumstances?
\tMrs Josephine Teo: I would not want to speculate. The specific circumstances may differ. But in principle, the same rules apply to this individual. If by 70, there has been no instruction received, the CPF Board will also stream out the payments. The challenge, of course, is whether you have the right details, such as bank account details. If he does not have the LPA, it would be very hard to see how the CPF Board could be instructed to start the payouts even before 70. But we will have to look at the specific instance, so I think best not to speculate.
\tMs Foo Mee Har: I just wanted to clarify my earlier supplementary question. First, I think, the Minister mentioned CPF LIFE only applies to CPF members with minimum $60,000 balance. Why is that so? Why can we not let everybody enjoy CPF LIFE?
\tMrs Josephine Teo: Everyone can enjoy CPF LIFE. But there are certain members whose balances are not very high. They might find a lifelong payout at those levels not very meaningful. Again, we do not presume to decide on their behalf. We say that if your balances are below a certain amount, it is better for you to decide and let us know. Quite a number have decided that they will come on-board. They are part of the 92,500 that I shared. Members not on CPF LIFE can still come on board. We will not deny them the opportunity to do so. It is just that we do not decide on their behalf.
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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":" Monthly Payout for ComCare Short-to-Medium Term Assistance Recipients","subTitle":null,"sectionType":"OA","content":"10 Mr Louis Ng Kok Kwang asked the Minister for Social and Family Development in each of the past five years (a) how many ComCare Short-to-Medium Term Assistance recipients are first-time applicants; (b) what is the median monthly payout for first-time applicants; (c) what is the median number of months the first-time applicants have received the assistance; and (d) what percentage of first-time applicants have reapplied for assistance within 12 months of receiving ComCare.
\tThe Minister for Social and Family Development (Mr Desmond Lee): Mr Speaker, ComCare is part of the multiple layers of assistance provided by the Government to support low-income individuals and families. Households that require help to tide over a period of financial difficulty are provided with ComCare Short-to-Medium-Term Assistance (SMTA). Depending on the needs of the household, our Social Service Offices (SSOs) may provide financial assistance in cash, help with household and medical bills, and refer them to agencies such as Workforce Singapore for employment assistance or Family Service Centres (FSCs) for further support. As the needs, profile and size of each household is different, the quantum and duration of assistance they require may also vary.
Between 2015 and 2017, the number of households that received SMTA at any point in time was between 14,000 and 16,000 households. We do not have readily available data on how many of these were first-time SMTA applicants. The median monthly assistance quantum that a household on SMTA received was about $400 and the median duration of assistance in a year was about six months. These figures exclude other forms of Government assistance and subsidies that households could be receiving, such as MediFund for medical expenses, subsidised rental housing, financial assistance for school fees or childcare subsidies and so on.
Among households whose SMTA ended in 2016, about 25% households reapplied and received SMTA within 12 months. These families may have faced new challenges or changes in their family, work or health circumstances. We do not have five-year data available.
Beyond these statistics, it is important to understand the challenges families face in overcoming their issues and the support that will help sustain their self-reliance. The Ministry of Social and Family Development (MSF) will continue to study these trends in close partnership with stakeholders in the community, particularly those who are working directly with families in need.
\tMr Louis Ng Kok Kwang (Nee Soon): I thank the Minister for the reply. I have two clarifications. First, how can we ensure that we have a social safety trampoline, as Deputy Prime Minister Tharman has suggested, rather than a social safety net? So, how can we reduce this 25% repeat applicants?
The second clarification is whether MSF has studied whether, if we increase the duration of providing support during the first application, it would lead to a reduction in the number of times they will re-apply? Which means, if we help them longer the first time, the chance of them coming back to re-apply for ComCare would be reduced. So, maybe not six months, which is the median; but whether we have studied giving them nine months, and perhaps these applicants will not come back to apply for ComCare again?
\tMr Desmond Lee: Mr Speaker, I thank the Member for his abiding interest in seeing how we can establish a trampoline as well as a social safety net. A trampoline to help families with the potential to overcome the challenges to be able to stand on their feet and be able to support their own selves, and a safety net to catch those who fall through temporarily or even for a longer duration of time.
The Member may be aware that last year, we announced efforts to develop, all across the island, SG Cares Community Networks. These are networks of social and healthcare agencies within each town. We seek to integrate the support that all these organisations – both Government and people sector – can provide so that we can give more holistic assistance to families, especially those who face complex needs.
We also announced last year our intentions to launch hubs in rental housing estates so that we can bring together the agencies and the Voluntary Welfare Organisations (VWOs) that have been working very intimately and closely with families living in rental housing. As the Member may know, rental housing families tend to face a plethora of complex difficulties. With that integration, coordination and support amongst different agencies, we hope to better able to partner these families, tackle their issues holistically, chronologically, and systematically. Empower them, partner them, and support them. So, that is what we hope to achieve.
As I said earlier in my reply, ComCare is but one of a suite of assistance schemes that help to stabilise a family's needs, and meet their basic needs, whilst working with them to address other upstream issues.
On the Member's second point, I think what he meant was whether we should consider increasing the duration as opposed to what he said, \"reducing the duration\". Certainly, six months is the median. There are some families whose needs may be more short-term, for example, they may need, say, two to three months of assistance before they transit to a new job which they can secure with or without assistance; or they may require longer-term assistance because they may be undergoing more structural training, for example. So, median is median. There are those who get fewer than six months and those who get longer than six months.
The SSOs, together with our agencies, such as Family Service Centres, would assess the needs of the families holistically, and then make the necessary decisions as to what that appropriate duration would be. But going forward, we need to work together in a more integrated fashion with the community, with our VWO partners and with other Government agencies, so that we provide assistance in a way that empowers, and in a way that supports more effectively.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Employment Screening Process for Foreigners Applying for Work Permit","subTitle":null,"sectionType":"OA","content":"11 Er Dr Lee Bee Wah asked the Minister for Manpower (a) what is the employment screening process for foreigners applying for a work permit; and (b) in the past three years, how many applicants have been rejected because of their unsatisfactory records.
\tThe Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister for Manpower): Mr Speaker, apart from assessing work permit applications on whether they meet our Work Pass rules such as dependency ratio and source, the applicant will also be screened for any security antecedents and adverse records. This screening of applicants helps to minimise incidence where undesirable persons are inadvertently allowed to work in Singapore. Between 2016 and 2018, around 8,400 applicants were rejected per year, on average, as a result of this screening.
\tEr Dr Lee Bee Wah (Nee Soon): I have one supplementary question. Many residents expressed concern about their maids borrowing money from unlicensed moneylenders and some have been sent back. So, they are asking when these maids apply to come back to Singapore to work, do we issue them work permits or is it on the Ministry of Manpower's (MOM) list that these maids are not allowed to come back?
\tMr Zaqy Mohamad: Generally, as part of policy, as foreigners who have infringed MOM's regulations, they will have their adverse record marked. For this case, if the maids' employers want to appeal, they can certainly appeal, but I am not sure if the Member is asking for them to return, or she wants them black-listed.
Er Dr Lee Bee Wah: Not to return.
Mr Zaqy Mohamad: Not to return. So, I suppose the employers also have an option to blacklist them as well for such adverse conduct, for example, that they want MOM to take note of. We will certainly take note and mark it in the list.
\tEr Dr Lee Bee Wah: Does it mean that the employers have to report to MOM so that next time, the maids would not be allowed to come back because they are involved in unlicensed moneylending? Definitely, for those cases that Police is aware of, the maids should be stopped from coming back automatically, without needing the employers to prompt MOM.
\tMr Zaqy Mohamad: When I talk about adverse conduct, when we talk about moneylending, it applies to unlicensed moneylending. If it is unlicensed, certainly, that is adverse conduct and so, it will go into the record without the need for the employer to report this.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Requirements on Overseas Retailers for Supply of Labour on Installation Works ","subTitle":null,"sectionType":"OA","content":"12 Mr Ong Teng Koon asked the Minister for Manpower (a) whether overseas retailers of consumer goods are allowed to supply labour to install such goods in Singapore for Singapore customers if such labour do not have the requisite permits to work in Singapore; and (b) if not, whether the Ministry has any enforcement plans to keep the playing field level for local retailers.
\tThe Minister for Manpower (Mrs Josephine Teo): Mr Speaker, foreigners working in Singapore must hold a valid Work Pass, and those who install consumer goods such as furniture and air-conditioning from overseas retailers are not exempted from this requirement. This helps to ensure that all businesses are operating on a level playing field.
Under the Employment of Foreign Manpower Act, illegal workers can be fined a maximum of $20,000 or subjected to imprisonment of up to two years, or both. The Ministry of Manpower (MOM) has also taken action to bar such illegal workers from entering and working in Singapore for up to two years. Anyone with information on such illegal workers should report to MOM. Information can be found on our website.
\tMr Ong Teng Koon (Marsiling-Yew Tee): I wish to ask the Minister, as a clarification, whether she can give more assurances to small businesses. For example, a resident whom I visited was a furniture reseller. Can there be assurance that MOM is doing what it can to try and level the playing field to protect our businesses? A lot of them feel aggrieved that they have been prejudiced by retailers from Malaysia who cross the Causeway and help to deliver and install furniture in consumers' houses in Singapore.
\tMrs Josephine Teo: Mr Speaker, I can give the assurance to the Member as well as the furniture retailers that we take this seriously. Every year, we take several hundred employers, several hundred of such illegal workers to task. It is not enforcement action in theory. Enforcement action is actually carried out. If there is any reason to suspect that such overseas retailers are indeed flouting the rules, please help us by letting us know so that we can take action.
\tMr Ong Teng Koon: Mr Speaker, I would like to ask the Minister whether she can clarify how we can take action against retailers who are registered businesses outside of Singapore.
\tMrs Josephine Teo: Mr Speaker, we do not take action against them for being retailers registered outside Singapore. We are saying that if they carry out activities that are against our rules, let us know if you observe such incidents happening. Our enforcement officers cannot be in every household that is installing furniture. We rely very much on information. Of course, whenever the information is received, we also have to do our due diligence and to follow up quickly.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Jobs Lost to Technologies and Automation Versus Jobs Created","subTitle":null,"sectionType":"OA","content":"13 Miss Cheng Li Hui asked the Minister for Manpower whether the Ministry monitors and keeps track of the number of jobs lost to new technologies and automation vis-à-vis the number of jobs created in Singapore.
\tThe Minister for Manpower (Mrs Josephine Teo): Mr Speaker, there is no internationally accepted conventions on estimating job creation or losses due to new technologies and automation, as the effect is both direct and indirect. However, in our national manpower statistics, we do monitor employment numbers, which have continued to grow even as technology and automation are transforming industries. In 2018, total employment increased by about 40,000 and that is excluding foreign domestic workers, with particularly strong growth in the technology intensive Infocomm and Media sector.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Requirement for Shared Bicycle Service Operator’s Financial Viability for Licensing Application","subTitle":null,"sectionType":"OA","content":"14 Assoc Prof Walter Theseira asked the Minister for Transport (a) whether the Government takes into account a shared bicycle operator's ability to meet financial obligations to staff, vendors and the public when considering licensing status; (b) when a licence is cancelled, whether any monies from security deposits and licence fees are made available for claims by vendors, employees and the general public; and (c) if so, what order or process shall apply to determine claim entitlements.
\tThe Senior Minister of State for Transport (Dr Lam Pin Min) (for the Minister for Transport): Mr Speaker, the Land Transport Authority (LTA) requires applicants for full bicycle sharing licences to submit audited financial statements for review and considers their financial standing when granting licences.
The licensing framework for bicycle-sharing operators focuses on regulating the indiscriminate parking of shared dockless bicycles. The licence fees which LTA collects from the operators are meant to cover regulatory costs, so that these costs are not passed on to taxpayers. The use of the security deposits is restricted to specific circumstances stated in the Parking Places Act. These are: serving as surety for an operator’s compliance with licence conditions or standards of performance, meeting any unpaid financial penalties imposed on an operator, and recovering the costs incurred by LTA in removing and disposing of bicycles, should an operator fail to do so after its licence has been cancelled. If none of these circumstances arise, LTA will not make a claim on the security deposit.
While the security deposit and licence fees may not be used to repay private debts, vendors, employees, companies and consumers who are owed monies by the operators have other recourse. Companies and consumers with claims against any operator can seek redress through the civil courts, while the employees can also approach the Tripartite Alliance for Dispute Management for assistance to resolve their salary disputes.
[(proc text) With Speaker's permission, Assoc Prof Walter Theseira asked a supplementary question to Question No 14 after Question No 15 had been dealt with. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Number of Recipients and Income Criteria for Silver Support Scheme","subTitle":null,"sectionType":"OA","content":"15 Ms Sylvia Lim asked the Minister for Manpower since the inception of the Silver Support Scheme in 2016 (a) how many Singaporeans who initially received payouts were assessed to be ineligible in subsequent years; (b) what support does the Scheme give to those between the bottom 20% to 30% of elderly Singaporeans; and (c) whether the Scheme's criteria for household monthly income per capita of $1,100 will be reviewed to exclude the income of the applicant's siblings living at the same address.
\tThe Minister for Manpower (Mrs Josephine Teo): Mr Speaker, the Silver Support Scheme targets support at the bottom 20% of elderly Singaporeans aged 65 and above. Coverage may, however, extend to include up to the next 10% of elderly. Eligible elderly receive cash payouts of between $300 and $750 every quarter, according to the type of HDB flat they live in. Recipients living in smaller flat types receive higher payouts. The median quarterly payout has been $600, corresponding to the payout quantum for eligible elderly living in a 3-room HDB flat.
The automatic means-test assessment is done annually to take into account changes in circumstances of the elderly, to ensure Silver Support reaches those with lesser means as the Scheme was intended to do. In 2016, about 143,000 elderly received Silver Support payouts. Of these elderly, 33,000 no longer received Silver Support in 2019. About 14,000 had passed away while 18,000 had seen their household incomes rise above the eligibility threshold. At the same time, 42,000 elderly who were not receiving Silver Support in 2016 were assessed to be eligible for Silver Support by 2019. So, there is a net growth. Overall, the number of elderly eligible for Silver Support and the total annual amount paid out to recipients have been increasing each year. Right now, the Silver Support total payouts annually is about more than $330 million.
The Ministry of Manpower (MOM) will review the Silver Support Scheme from time to time to ensure that it continues to provide meaningful support to the elderly who had low incomes throughout their lives and who now have little or no family support. We will also continue to assess appeals from those who have missed the income criteria on a case-by-case basis.
\tMs Sylvia Lim (Aljunied): I have two supplementary questions for the Minister. The first is, I would like her to clarify whether the scheme target group remains the same. In other words, is it still targeted at the bottom 20% of the elderly, with some support for those between 20% and 30%? Because lately, some of the collaterals, including replies that we have received from the agency, do not seem to mention this second group of those between the bottom 20% and 30%. So, I would like the Minister to clarify whether this group between the bottom 20% and 30% is still within the target of the scheme.
\t
\t
The second supplementary question concerns sibling income. The Minister has earlier said that the Ministry will review from time to time the relevance of the means testing criteria. I would like to ask the Ministry to pay special attention to the consideration of sibling income, as the sibling would probably be of the same generation and also elderly, and if both of them are living together, it is likely that one or both of them do not really have other family support. So, it would be good for the scheme to look at those cases on a more generous basis.
\tMrs Josephine Teo: Mr Speaker, to the Member's first question, yes, the target group has not changed. It remains the same.
On sibling income, I should give a little bit of background as to why we used per capita household income. The whole idea is that if people are living in the same household, it is more reasonable to expect that they are providing mutual support to each other. There are, of course, other ways of measuring a person's level of support. You could, for example, include their family members who do not live in the same household. But having considered the different options and assessed which one of it is more intrusive to establish, we finally settled on using the household income. I accept the fact that within the same household, the level of support may not be identical. So, for those who are non-family members, in other words, for example, they are unrelated people living in the same household, we do not include their income. But if they are related, including siblings, their incomes are included. However, if on a case-by-case basis, there is reason for us to consider otherwise, then we will also assess them.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Requirement for Shared Bicycle Service Operator’s Financial Viability for Licensing Application","subTitle":"Further follow-up and clarification","sectionType":"OA","content":"The following question was moved earlier –
Assoc Prof Walter Theseira asked the Minister for Transport (a) whether the Government takes into account a shared bicycle operator's ability to meet financial obligations to staff, vendors and the public when considering licensing status; (b) when a licence is cancelled, whether any monies from security deposits and licence fees are made available for claims by vendors, employees and the general public; and (c) if so, what order or process shall apply to determine claim entitlements.
Mr Speaker: I would like to provide a bit more airing on Question No 14. Assoc Prof Walter Theseira, do you want to follow up?
Assoc Prof Walter Theseira (Nominated Member): Mr Speaker, thank you for your indulgence. I first have a clarification. First, I just want to clarify from the Senior Minister of State that regarding the security deposit, other than statutory purposes laid out in the Parking Places Act, is the Senior Minister of State saying that any remaining sums will be forfeited into the Consolidated Fund and will not be available to any private claims? I just wish a clarification there.
Then, I have a supplementary question in general. As we know, this is a regulated activity which forms an important first- and last-mile link in our public transport system. So, I just want to clarify that stakeholders, the public, would have expectations that the licensees have been scrutinised by the Government and because of those expectations, I wonder if the Government could consider whether it can at least protect, for example, the employees and the commuters who perhaps have a greater expectation that the licensee has been properly regulated than perhaps the vendors who are commercial companies engaging in business-to-business transactions with their eyes open.
The Senior Minister of State for Transport (Dr Lam Pin Min): Mr Speaker, I would like to thank Assoc Prof Walter Theseira for the supplementary questions. I think the answer to the Member's first question is correct: the remaining sums will not be available to private claims. Based on the current Parking Places Act, the purpose is as laid out in the reply that I have alluded to just now.
With regard to the Member's subsequent question, we have started this licensing regime for bicycle sharing operators very recently. In fact, we have only started this for a couple of months and we are actually looking at how this will pan out. The main purpose of this licensing regime is to manage the indiscriminate parking situation that we have faced in the past. If you look at the current situation, since the implementation of this licensing regime, there has been some improvement. But we are still closely monitoring this situation. And we hope that, with time, we will be able to see whether we need to make adjustments in order to accommodate what Assoc Prof Walter Theseira has suggested.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Integrating Unemployed but Employable Persons with Disabilities into Singapore Core","subTitle":null,"sectionType":"OA","content":"16 Ms Anthea Ong asked the Minister for Manpower what steps is the Ministry taking to (i) leverage the investment and efforts by Workforce Singapore to include and integrate unemployed but employable persons with disabilities into the Singapore core and (ii) advise and collaborate with social sector agencies to ensure that persons with disabilities are prepared adequately for the future economy to prevent them from further marginalisation.
\tThe Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister for Manpower): Mr Speaker, under the Adapt and Grow (A&G) initiative, Workforce Singapore (WSG) and its partners provide job matching services and programmes to help jobseekers overcome mismatches in skills, wages or job expectations. Persons with special needs can tap on these services too, as well as the programmes to find suitable employment, particularly the Open Door Programme (ODP) and Career Trial. In the past three years, more than 1,600 persons with special needs have been placed, that is, found jobs, found placements, through these programmes.
The ODP, which is administered by SG Enable, provides dedicated support for employers to hire, train and include persons with special needs in the workplace. The programme provides employers with recruitment and job support services, as well as grants to redesign jobs for persons with special needs to upgrade their skills and even train co-workers to work better together with persons with special needs.
Some employers may be unsure whether a particular person with special needs would be suited for the job, while persons with special needs may also be unsure whether the job and work environment are suitable. Therefore, we have the Career Trial programme which offers an opportunity for jobseekers to train and work for employers for a short stint of three months, during which time the jobseeker receives a training allowance from Workforce Singapore (WSG). Since April 2018, all persons with special needs who are hired after the trial will receive retention incentives and their employers will also receive salary support.
Under the Third Enabling Masterplan, the Ministry of Social and Family Development (MSF) has been actively engaging persons with special needs and their caregivers to better understand their aspirations, needs and challenges. The Government is also working closely with social service agencies and other partners in the private and people sectors to improve education, training and job placement for persons with special needs and identify suitable employment opportunities for them.
\tMs Anthea Ong (Nominated Member): Mr Speaker, I thank the Minister of State for the clarification. As to what concerns me, and I think I have got to share with Members of the House that last week, it was reported that in terms of the number of people with disabilities who are in employment which was given by MSF as 8,600 to a Parliamentary Question I filed; against the total number of people of disabilities, we are looking at a percentage of about 4.88%.
So, in itself, without even comparing to what or how the other countries are doing, I would like to ask the Ministry and maybe even MSF, is there something of a national target that we are internally working towards? At 5%, given the resources we have and how fast the nature of work is changing, I do fear that this group of people with disabilities would be further marginalised. It will not bring them into the workforce and, on top of that, also continue to upgrade and prepare them for the future of work. Could I please ask the Minister of State what sort of plans do we have in that regard?
\tMr Zaqy Mohamad: I thank the Member for her supplementary question and, certainly, as an aspiration, we are both aligned. We want to see more inclusive workspaces here in Singapore. Specific to that article, I think much of the data was picked up from data available in the public space. However, in recent years, the Government has also started to collect more comprehensive data on persons with special needs. So, in the meantime, just bear with us because we will be releasing more accurate estimates of the employment and unemployment rates for persons with special needs later this year, once we have a better picture of the situation.
But overall, if you look at where we are today compared to, say, four or five years ago when we first set up SG Enable, then subsequently we developed WSG to come in to support, we have worked quite closely to look at how we can improve employability. I think the situation has improved, as I have mentioned. Today, we have got 1,600 being placed in the last three years. Certainly, we can do better. But if you look at the schemes out there, are there enough schemes? Perhaps, it can be improved. But what are the schemes like? If you look at the Open Door Programme, for example, we give training grants of up to 90% to employers to employ persons with special needs. And if you look at the Job Redesign Grant, for example, we also support up to 90%, capped at $20,000 per special needs worker for employers to redesign jobs to employ them, to modify their work environment and processes to be more inclusive for persons with special needs.
On top of that, if you look at the Special Employment Credit, the Government provides up to 16% wage subsidy to employers to employ persons with special needs regardless of age for those above 65. This goes up to 22% of wages for employing someone with special needs who are more senior.
So, to a certain extent, overall, there is support, but what I hope is that we can get more enlightened employers on board. We want employers to be enlightened. I think Members of this House have friends, neighbours, industry contacts, employers who can help and join this inclusive workplace initiative or aspiration for all of us. Certainly, we can all do more. But I hope that we can get more employers on board because the engines are there, the schemes are there. Certainly, we can all work together towards this aspiration.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Expanding Types of Cases to be Reported for Workplace Accidents ","subTitle":null,"sectionType":"OA","content":"17 Mr Louis Ng Kok Kwang asked the Minister for Manpower whether the requirement for reporting work-related or workplace accidents can also include cases where an employee who meets with an accident is placed on light duty by the doctor for more than three days, whether consecutive or not.
\tThe Minister of State for Manpower (Mr Zaqy Mohamad) (for the Minister for Manpower): Mr Speaker, today, reporting is required for all work injuries resulting in medical leave of more than three days, consecutive or otherwise, or hospitalisation for at least 24 hours. This is in line with the reporting criteria in other developed countries, such as those in the European Union.
We are studying the possibility of making it a requirement to report all work injuries resulting in any instance of light duty or medical leave. This has been included in the public consultation on amendments to the Work Injury Compensation Act (WICA) which was launched just this year in January. It will allow us to have a more comprehensive picture of the extent of work injuries and will help improve the targeting of prevention efforts. We will share more details when the proposed amendments to WICA are finalised this coming April.
\tMr Louis Ng Kok Kwang (Nee Soon): Sir, I thank the Minister of State for the reply. Can I just confirm that we are having a list of specified injuring similar to what the UK has, which is that regardless of the number of medical certificates (MCs) or number of days of light duty, mandatory reporting is required?
The second clarification is whether we can follow what we do for occupational diseases where it is the doctor that reports the occupational diseases rather than the employers, that is, whether the doctors will in the future do reporting for work-related accidents rather than the employers?
\tMr Zaqy Mohamad: At this moment, what I can commit is that we are looking at all forms of injuries that result in light duty medical leave. Specific to the list in the UK, I cannot confirm right now. But may I suggest that the Member submits another Parliamentary Question so that we can make a comparison. I have not done a comparison for this particular Parliamentary Question but, generally, all work injuries that result in light duty medical leave will be covered in the new WICA, subject to some of the consultation exercises that we are having.
The second question was with regard to the practice with doctors. That is to be further studied. Let us take it up with the Ministry of Health (MOH) to study this.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Recruiting More Preschool Teachers by 2020","subTitle":null,"sectionType":"OA","content":"18 Mr Dennis Tan Lip Fong asked the Minister for Social and Family Development (a) what are the specific steps that the Government is taking to recruit 3,000 preschool teachers by 2020; and (b) considering that less than 1% of preschool educators are men, whether there are plans put in place to recruit more men into this sector.
\tThe Minister for Social and Family Development (Mr Desmond Lee): Mr Speaker, the Government has been investing in the early childhood sector to provide families with access to affordable and quality preschool. To support the expansion of the preschool sector, we have put in place measures to attract more people, both men and women, to join the sector. At present, there are around 18,000 preschool educators in the sector. We will closely monitor our efforts to grow the sector as we aim to meet our targets.
To attract more post-Secondary students, the newly established National Institute of Early Childhood Development (NIEC) plans to admit about 700 students to their new Diploma in Early Childhood Development and Education programme for Academic Year 2019, which is double the intake in 2015. The Early Childhood Development Agency (ECDA) also offers training awards to encourage students to pursue Early Childhood courses at the NIEC and the Singapore University of Social Sciences (SUSS). These awards provide students with full sponsorship of their course fees, learning resource grants, professional development grant, monthly study allowances and professional networking opportunities, and that are pre-employment efforts. Now, I move on to mid-career transitions.
To attract more mid-career entrants, we have rolled out the Professional Conversion Programme (PCP) for Preschool Teachers and the Place-and-Train Programme (PnT) for Educarers. People who are looking to switch careers or re-enter the workforce can apply for these programmes, and can earn a salary while undergoing a mix of on-the-job coaching and classroom-based teaching or training. To facilitate their entry to the sector, the Government provides subsidies for the training courses and salaries. I move on to skills pathways.
To provide greater clarity on the career pathways and opportunities for Early Childhood professionals, ECDA, with industry partners, had introduced the Skills Framework for the Early Childhood Sector. This is supported by moves to retain and support in-service professionals to deepen their skill competencies, such as Professional Development Programmes (PDPs) and the ECDA Fellows Programme. ECDA has also been working with Anchor Operators to enhance the career prospects for their educators by creating 1,000 more senior professional positions by 2022.
Apart from manpower programmes, we have been working with industry partners to streamline work processes and reduce educators' administrative workload under the Industry Transformation Map (ITM). More recently, ECDA rolled out a National Campaign for the Early Childhood Sector to create greater awareness of the sector and career opportunities, and to foster greater respect and recognition of the profession.
Through these efforts, we have seen more people, including men, who are interested to join the sector today. Over the last five years, the intake of mid-career entrants enrolled in professional early childhood certificate or diploma courses have increased by more than 70%. The intake sizes of Pre-employment Training students for similar courses have also increased by two times, with the proportion of men enrolled in the diploma courses doubling.
In tandem with the expansion of the sector, salaries for early childhood professionals have been rising steadily. Based on ECDA's 2016 survey, basic salaries for educarers with a professional Certificate range from about $1,800 to $2,100 per month, salaries for teachers with a professional teaching Diploma range from $2,200 to $3,000, and salaries for principals with a professional leadership Diploma range from $3,100 to $6,000. These salaries have increased by about 15% since the previous survey in 2013, outpacing that of the general market for similar job sizes which grew by about 8% over the same period. Also, based on the 2017 Polytechnic Graduate Employment Survey, the starting salaries of full-time early childhood Diploma fresh graduates have increased by about 20% to $2,300 since 2013. ECDA expects salary growth for early childhood educators to continue to outpace that of the general market.
ECDA will continue to work with NIEC and other partners to create more progression opportunities and areas of specialisation, such as in Mother Tongue Language teaching, Learning Support and Early Intervention, and Outdoor Learning. Some of these areas, such as Outdoor Learning, may provide scope to attract more men to the sector, which at this point in time is a very low proportion.
Together with its partners, ECDA will press on to uplift the early childhood profession and ensure that the preschool sector provides rewarding and meaningful careers.
\tMr Dennis Tan Lip Fong (Non-Constituency Member): I thank the Minister for his comprehensive reply. Just one supplementary question. Could the Minister please share, what are the challenges that the Ministry have faced in trying to increase recruitment in this area as a whole?
\tMr Desmond Lee: There are whole range of factors which we have assessed that may make it competitive to bring in more people into the early childhood sector. One of them, of course, is more qualitative – it is people's perception of what an early childhood sector job entails. And there are certain common misconceptions that an early childhood educator is a nanny or a caregiver, rather than a teacher, a person who guides and grows a child in the early years of their development. So, to address that, we have launched, last year, a national campaign. Having consulted many members of the profession about what kinds of misperceptions people may have and testing with them to see whether it resonates with them. Some of the messages, videos and profiles that have gone out seek to address people's minds, for both those who are considering entering the sector, and of course, the parents who influence and guide their children on what kinds of jobs to aspire towards, to have a more accurate view on the importance of early childhood.
Science and data have shown that good early childhood education impacts not just the cognitive development of the child, but the holistic development of children – ages zero to three, zero to six, these are very important ages, and we want to grow the sector.
We attract most of our entrants through career conversion. Many people, after working in various sectors, decide that they want to enter the sector. And we find that that is also a very stable group of people. In fact, three quarters of those joining the sector becoming educators in the preschool sector are mid-career entrants, with the remaining one quarter coming from the Pre-employment Training sector. And the PCP and Place and Train have been very helpful in that regard. One quarter of those who are mid-career entrants come under the Place and Train and PCP.
So, mindset is one, creating pathways is another to attract people into the sector.
The Member also asked about men, whether we are able to attract more men so that we grow the pool of potential applicants into the sector. And I have spoken to senior educators because I wanted to understand this phenomenon when I joined the Ministry of Social and Family Development (MSF). You know there are very, very few men who are preschool teachers. In fact, I just met one last night at some event. One preschool teacher who was a man and the rest were women. When I speak to preschool senior educators, they talk about cultural factors. They say that firstly, there is a mindset amongst people that the preschool sector is more suited to women. Women are very good carers and educators, but I think men can also equally play a role in that regard. But there is this mindset.
A second belief, believe it or not, some of the senior educators told me that some parents are not comfortable with male teachers, for example, showering children and many preschools across the sector decide to allow only women to shower children. And of course, all these play a part in the cultural mindset.
So, a whole range of factors, but as I have given in my comprehensive reply, we are tackling them: cultural mindset, misconceptions, salaries, progression pathways, mid-career pipelines, specialisations, senior positions and pathways that assure people that they can grow in the sector by picking up certain skills. So, we continue in this regard, and we hope to achieve our targets as stated.
\tMr Speaker: Order. I would like to announce a very generous budget for tea break, not in terms of quantity or quality, just in time. And just to state that there is no bearing on the generosity of the Budget later either. So, I suspend the Sitting and will take the Chair at 3.30 pm.
Sitting accordingly suspended
at 2.54 pm until 3.30 pm.
Sitting resumed at 3.30 pm.
[Mr Speaker in the Chair]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Annual Budget Statement","subTitle":null,"sectionType":"OS","content":"The Minister for Finance (Mr Heng Swee Keat): Mr Speaker, I beg to move, \"That Parliament approves the financial policy of the Government for the financial year 1 April 2019 to 31 March 2020.\"
This year marks 200 years since Sir Stamford Raffles landed in Singapore. Archaeological finds and records show that Singapore’s history stretches back at least 700 years, serving as a trading emporium in the region.
The year 1819 was a key turning point in Singapore's development. The British decision to declare Singapore a free port plugged us into an emerging network of global trade. This, and subsequent developments, transformed Singapore into a global node. In our bicentennial year, let us reflect on the twists and turns in our history so as to chart a path forward for an even better future for our people.
Today, we are in a different phase of globalisation, with new forces reshaping the global environment. In last year's Budget Statement, I mentioned three major shifts: (a) the shift in global economic weight towards Asia; (b) rapid technological advancements; (c) and changing demographic patterns.
A fourth major force that is gaining prominence is the decline in support for globalisation. Some countries are benefiting from globalisation, while others are questioning its value. These four major forces are interacting in complex ways, at the global, regional and national levels.
On the global stage, the trade frictions between the US and China are developing into a deeper strategic competition of strength and of governance systems. This is raising geopolitical uncertainty. Closer to home, ASEAN has enjoyed over 50 years of peace and stability, with bright economic prospects. Together, the 10 economies of ASEAN are projected to become the fourth largest in the world by 2030, with the size of the middle-class doubling. Innovation and entrepreneurship are also thriving. In recent years, Southeast Asia has grown several new \"unicorns\", or companies with valuations in excess of US$1 billion.
Working together, ASEAN nations can maximise our potential. But, closely connected neighbours will have occasional differences.
A couple of issues have surfaced recently with Malaysia. When such differences occur, Singaporeans must stay united as a people and present our positions firmly and calmly. We have worked through difficult bilateral issues with our neighbours in the past, based on mutual respect and common interests and in accordance with international laws and norms. Singapore will continue to seek to resolve issues in the same spirit.
Domestically, we need to address longer-term challenges, including ageing, social mobility, inequality, economic transformation and climate change.
The changing global and domestic landscape presents both challenges and opportunities. We will continue to chart our way forward confidently in the Singapore way, building on our distinct strengths and our Singaporean DNA.
We must respond to challenges with grit and determination. There were episodes in the centuries of Singapore's history where our island’s fortunes waned due to external forces. These are sobering reminders that we have to constantly build up our security and resilience, and plan long term.
Singapore's success has roots in our port, which thrives on openness and connectivity. These traits have been forged into our identity as a people. As a multicultural society, our openness to diversity is our strength. It has inculcated a global mindset and deepened our knowledge of Asia. We must continue to cultivate cross-cultural literacy among our youth and encourage them to build bridges with peoples across the world. We strive to be a place where people and ideas congregate at the frontier of global developments. We want to be a Global-Asia node of technology, innovation and enterprise.
We turn our size and strategic location into an advantage. Technological shifts have spread economic activities more widely and, at the same time, made cities more important as key nodes of enterprise and innovation. As a city-state, we are nimbler and can adapt to changes faster. We serve as a neutral, trusted node in key spheres of global activity. Like Sang Kancil, the small but quick-witted mousedeer, we can make our way in the world.
Budget 2019 is a strategic plan to allocate resources to build a strong, united Singapore. In this bicentennial year, let us draw on our strengths, and our Singaporean DNA – openness, multiculturalism, and self-determination – to continue to progress.
At a fundamental level, we must keep Singapore safe and secure. This allows us to preserve our way of life and forge our own destiny. We must continue to transform our economy, for only a vibrant and innovative economy can provide opportunities for our people to realise their potential. We must continue to build a caring and inclusive society, one where we look out for one another, and all of us play our part in weaving a tightly knit social fabric. We must continue to build Singapore as a global city and home for all, keeping it smart, sustainable and globally connected. Last but not least, we must achieve these goals in a responsible and fiscally sustainable way.
We are using our financial resources to help realise our strategies for a strong, united Singapore. But financial resources alone do not get us there. We call on all Singaporeans to partner with the Government and support one another to succeed in this endeavour.
A safe and secure Singapore gives us the confidence to chart an independent course. But we cannot take our peace, prosperity and stability for granted. Singapore is vulnerable to the fluctuations in our region and the world.
Against an increasingly uncertain geopolitical environment, our commitment to defence and security cannot waver. Diplomacy and deterrence are the twin pillars of our approach.
The Ministry of Foreign Affairs (MFA) works continuously to build good relations with our neighbours and the major powers and to promote a rules-based international order with international laws and norms. A strong Singapore Armed Forces (SAF) lends weight to our diplomatic efforts and ensures that negotiations with Singapore are taken seriously. Should diplomacy fail, we must stand ready to safeguard our interests and defend ourselves. The Home Team also works round-the-clock alongside other security agencies, to ensure a safe environment for all. We also now have the Cyber Security Agency of Singapore leading our efforts to protect our Critical Information Infrastructure from cyber threats, and to create a secure cyberspace for businesses and communities. These are fundamental to our sovereignty, our success and to safeguarding our vital interests.
Singapore is one of the safest cities in the world. Our crime rates are consistently low, but we must not be complacent.
Security threats are evolving and becoming more complex. A strong SAF remains a bulwark against threats to our way of life. Terrorism threats to Singapore remain high. We continue to detect individuals in Singapore who have been radicalised by terrorist propaganda. Globally, we see a rise in attacks perpetrated by radicalised individuals and cells. Such attacks are hard to prevent. We must stay vigilant.
Beyond physical threats, malicious cyber activities are growing. The networked nature of our society has enhanced connectivity. But this can be exploited to disrupt and divide society through cyberattacks, the spread of falsehoods or other means.
In particular, foreign actors will try to influence our domestic affairs and politics. This is not new, but new technologies have made it easier for others to mount attacks with greater ease and intensity and with more sophisticated tactics.
To stay ahead of these threats, we must continue to innovate and build new capabilities to meet our security needs. Both the public and private sectors have a major role to play.
The Ministry of Home Affairs (MHA) will set up a Home Team Science and Technology Agency by the end of this year to develop science and technology capabilities to support the Home Team's operational needs. These capabilities will strengthen the Home Team’s ability to carry out its mission of safeguarding Singapore. The Minister for Home Affairs will speak more about this at the Committee of Supply (COS).
The private security industry has been stepping up efforts. A good example is Certis, which has redesigned its business processes, infusing technologies such as big data and artificial intelligence (AI) to deal with security threats.
MHA will also help to transform the private security industry through innovation and technology to meet growing needs and be an effective partner to the Home Team.
Our Total Defence approach will continue to keep Singapore safe and secure, with every Singaporean playing a part. At the national level, we plan long-term and take measures, such as stockpiling critical supplies, diversifying our sources of water supply, and strengthening our food security. As a people, we must have the psychological and emotional resilience to face crises stoically. As threats get more sophisticated, Singaporeans must stay vigilant and guard against non-conventional forces that threaten to divide us.
National Service (NS) has forged a deep understanding in our people that each and every one of us has the duty to defend our nation. When our young people serve NS, families and employers support them in every way possible.
With our Smart Nation drive, digital technology has become an integral part of our lives. To harness the digital advantage, we must be prepared to also deal with the threats that arise inevitably from its more pervasive use.
Digital Defence has now been incorporated as the sixth pillar of Total Defence.
Like the other pillars of Total Defence, Digital Defence involves everyone – individuals, community groups, businesses and the Government. We must all play our part to be secure, alert and responsible online, be it through practising good cyber hygiene, being vigilant against fake news and helping one another use technology safely.
Last year, the Ministry of Defence (MINDEF) launched the Cyber National Servicemen scheme, training National Servicemen \t(NSmen) with the Singapore Institute of Technology (SIT) to raise our cyber defence capability.
The Government is also engaging our tech community with programmes, such as the Government Bug Bounty Programme, to achieve a higher level of collective cybersecurity.
Given its strategic significance, the Government will continue to invest a significant share of our resources – about 30% of our total expenditure this year – to support our defence, security and diplomacy efforts. This spending is significant, but indispensable. We will invest more, if the need arises, to protect the sovereignty of Singapore and the well-being of Singaporeans.
Everyone has a role to play to keep Singapore safe and secure. Let us continue to stay united in defending our home and our way of life.
A vibrant and innovative economy provides our people with the opportunities to realise their potential and to have a better life.
Our efforts to transform our economy are bearing fruit. In tandem with the global expansion, the Singapore economy grew by 3.2% in 2018. Good growth translated into good outcomes for our workers. Over the past five years, the real median income of Singaporeans has grown by 3.6% per year. Global growth is expected to moderate in 2019, while uncertainties and downside risks in the global economy have increased.
Over the years, our sound monetary and fiscal policies have enabled us to weather global economic crises and keep inflation stable. These provide a stable environment for investors to make long-term investment decisions.
Beyond maintaining a supportive macroeconomic environment, we need to build a sound microeconomic foundation, so that resources can be allocated to their best possible uses and to undertake structural reforms to enable our workers and firms to adapt and stay competitive.
Every firm and every worker will need to work differently, master new skills and use technology well. And we must continue to create new opportunities, including through partnerships with others.
In Budget 2016, we launched the Industry Transformation Maps (ITMs), which drive transformation at the company, industry, and economy-wide levels. Each ITM integrates four key pillars of transformation: jobs and skills; innovation; internationalisation; and productivity. These are mutually reinforcing pillars to maximise impact.
To coordinate efforts, the Future Economy Council brings together leaders from the Government, industry, trade associations and chambers (TACs), unions and academia.
After three years of intensive work, I am glad that all 23 ITMs have been launched, covering about 80% of our economy. We are seeing good progress, aided by the global economic upturn in recent years.
Productivity, as measured by real value-added per actual hour worked, grew by 3.6% per year in the past last three years, higher than the 1.6% per annum growth recorded in the preceding three years, from 2012 to 2015. In particular, we have seen strong performance by outward-oriented sectors such as manufacturing, while others like construction and some services industries continue to show weaker productivity growth.
But this is a continuing journey. There is much more we can do, especially in sectors like domestic services. We must press on. Let me now outline three key thrusts in this Budget to support industry transformation: first, building deep enterprise capabilities; second, building deep worker capabilities; and third, encouraging strong partnerships, within Singapore and across the world.
The basic building blocks of a vibrant economy are strong, competitive companies that maximise value creation. Hence, the first thrust is to support the building of deep enterprise capabilities.
Companies at different stages of growth have different needs. The leadership of each company is in the best position to lead and drive changes, while our agencies can provide support at each stage of growth.
A vibrant start-up ecosystem encourages budding entrepreneurs to try out their business ideas. Such an ecosystem enables entrepreneurs to connect to mentors, prospective business partners, customers, and investors.
Two years ago, we launched Startup SG to provide holistic support for start-ups and entrepreneurs. Such support ranges from co-investments and proof-of-concept grants to mentorship and physical space.
Our start-up ecosystem is flourishing. There are now over 220 venture capital deals per year in Singapore, worth close to US$4.2 billion. This is a significant rise from the 80 deals worth US$136 million in 2012. Today, more than 150 global venture capital funds, incubators, and accelerators are based in Singapore, supporting start-ups here and in the region.
Start-ups can only thrive if they scale up and venture into new markets. To help them do so, we will provide support in three areas: providing customised assistance, better financing options, and supporting technology adoption. Customised support can enable firms to identify and overcome the unique challenges they face and scale up quickly.
Enterprise Singapore will launch a Scale-up SG programme in partnership with the private and public sectors. Scale-up SG will work with aspiring, high-growth local firms to identify and build new capabilities, to innovate, grow, and internationalise.
To support innovation, we will launch a pilot Innovation Agents programme, for firms to tap on a pool of experts to advise them on opportunities to innovate and commercialise technology. [Please refer to Annex C-1.]
Having smart, patient capital that attracts investors with the expertise and the right time horizon is another way to help firms scale-up. Over the past few years, the Government has worked on improving access to private capital for start-ups and small- and medium-sized enterprises (SMEs). The pool of private equity and venture capital managers in Singapore has grown. The Monetary Authority of Singapore (MAS) has simplified the regulatory regime for venture capital managers and launched a US$5 billion private markets programme to encourage global private equity players to deepen their presence here.
To further deepen the pool of smart, patient capital, the Government has, since 2010, set aside $400 million through two rounds of fund injections for the Co-Investment Programme (CIP) to invest in our SMEs, alongside the private sector. So far, the Government’s investments have catalysed approximately $1.3 billion of additional funding for our SMEs.
This year, I will set aside an additional $100 million to establish the SME Co-Investment Fund III. As part of the CIP, it will catalyse investment in Singapore-based SMEs that are ready to scale up. We expect that this will bring in at least $200 million of additional funding. [Please refer to Annex C-1.]
Loan financing remains an important source of funding for SMEs. Our banks have been responding. DBS provides a Business Capabilities Loan for innovative SME projects, UOB provides financial support for technology investments and overseas ventures, while OCBC finances new SMEs which lack the track record typically required for credit assessment. To catalyse these further, we will enhance the accessibility of loans.
Today, our economic agencies have different financing schemes. To make it simpler for companies, we will streamline the existing financing schemes offered by Enterprise Singapore into a single Enterprise Financing Scheme that will cover trade, working capital, fixed assets, venture debt, mergers and acquisitions, and project financing. This will be launched in October this year. [Please refer to Annex C-1.] In addition, the Enterprise Financing Scheme will provide stronger support for companies that have been incorporated for less than five years. The Government will take on up to 70% of the risk for bank loans to these young companies, compared to the current 50% under most existing loan schemes.
To support viable SMEs in their day-to-day operations, I will extend the SME Working Capital Loan scheme, for about two more years, till March 2021. Since its launch in June 2016, the scheme has catalysed more than $2.5 billion of loans. We expect the extension to catalyse a further $1.8 billion. Support for working capital will be folded under the Enterprise Financing Scheme from October. [Please refer to Annex C-1.]
Our companies and workers must stay on top of rapid advances in technology, especially in digital technology. We will continue to help our SMEs adopt digital technologies. We launched the SMEs Go Digital programme in Budget 2017. Since then, around 4,000 SMEs have adopted pre-approved digital solutions.
We will expand the SMEs Go Digital programme. First, accountancy, sea transport and construction will get their own industry digital plans, with more sectors to be added later. These will guide SMEs on relevant digital technologies and skills training programmes. Second, we will expand the number and range of cost-effective, pre-approved digital solutions that will be supported under SMEs Go Digital, to boost technology adoption among SMEs. [Please refer to Annex C-1.]
MAS and the Info-communications Media Development Authority (IMDA) will also jointly pilot a cross-border innovation platform for SMEs, known as the Business sans Borders, with an Artificial Intelligence-enabled marketplace to help our SMEs match with buyers and vendors globally.
To help companies in the services sector capture opportunities from digitalisation, the Ministry of Communications and Information launched a pilot of the Digital Services Lab (DSL) in November last year. The DSL brings together industry and the research community, to co-develop digital solutions with sector-wide impact. For example, the DSL is exploring the development of solutions to integrate the logistics chain for retail in malls. [Please refer to Annex C-1.]
Besides digital technology, we will support our firms to integrate technologies and re-engineer business processes to raise efficiency and enhance product development.
Last year, I announced the Productivity Solutions Grant (PSG), to help firms adopt off-the-shelf technology. This year, we will extend the Automation Support Package (ASP) by two years. Introduced in Budget 2016, the ASP supports firms to deploy impactful, large-scale automation, such as robotics, Internet of Things (IoT) solutions, and other Industry 4.0 technologies. Since its launch, the ASP has helped more than 300 companies to automate their operations and raise productivity. We will extend the ASP to encourage more companies to do so. [Please refer to Annex C-1.]
The Agency for Science, Technology and Research (A*STAR) will extend its operation and technology road-mapping efforts to more companies and sectors to guide them to make the best use of technology in alignment with their business goals.
In the same spirit, our Government agencies must embrace technology to serve companies better. We have made progress in this area.
The Business Grants Portal launched in 2017 provides a one-stop shop for businesses to identify and apply for the right grant for their plans. To make it easier for businesses to transact with the Government, the Ministry of Trade and Industry (MTI), and relevant agencies are developing a one-stop portal, with a pilot to be launched for the food services sector by the third quarter of 2019. Businesses will deal with only one point of contact, instead of up to the 14 different ones today.
The Building and Construction Authority (BCA) and the Housing Development Board (HDB) are also testing the use of drones to inspect building facades more effectively. Learning from these pilots, Government agencies will continue to innovate, and improve the ease of doing business.
Let me now touch on other ways to help build deep enterprise capabilities.
We have more than 200,000 enterprises in Singapore, ranging from large multinational corporations (MNCs) to our neighbourhood shops. Today, across each of the four pillars of our ITMs, different agencies provide support in each area. While helpful, companies have given feedback that we could streamline these. I agree. To better support this broad base of companies with diverse needs, we will draw resources from each agency, but focus support in an enterprise-centric way to better help enterprises at each stage of growth. This will be done in a tiered manner.
Firms with large and complex needs or with strong growth potential will be provided a range of customised support by the Economic Development Board (EDB), Enterprise Singapore, and other agencies.
The large numbers of SMEs facing common challenges will be supported through scalable solutions that are easy to adopt. For instance, I recently visited Precursor Assurance, a local accounting firm. Precursor has developed an integrated digital solution with modules for corporate functions, such as HR, customer relationship management, and finance. SMEs can simply plug-and-play and scale up the use of these modules when they expand.
For medium-sized companies that are seeking to grow, we will provide targeted support, in each of the different industry clusters to better address their needs as they grow. The Minister for Trade and Industry will provide further details.
I have touched on the measures to support our enterprises to build deep capabilities so that they can succeed in the global competition. But our ultimate goal is to enable our people to continue to have good jobs and opportunities, and to be at their best. Hence, the second thrust of our economic transformation in this Budget is to deepen the capabilities of our workers. As the Chinese say, \"活学活用，学以致用；终身学习，终身受用\". Our people need to be nimble to build industry-relevant skills throughout their lives.
We want our people to have the skills, knowledge, and attitude to adapt and thrive in this competitive and technology-intensive environment. In this regard, the leadership of companies plays a key role. The leaders of successful companies are those who are committed to raising the capabilities of their workers by redesigning jobs and reskilling their staff. These capabilities are key to the companies’ successes.
I recently visited FairPrice’s distribution centre, which has adopted automated storage and retrieval systems to improve the efficiency of its online store’s operations. Among the staff I spoke to were Mr Amzah bin Mohammad Ali and Mdm Lee Yin Fong. Between them, they have worked at FairPrice for 30 years. I asked how the new technology has impacted their work. They told me that FairPrice's training has helped them to quickly pick up new skills to make use of new systems, and their work environment is more pleasant and conducive.
FairPrice is a good example of how an enterprise can strive to serve her customers better, deploy technology and new ways of working, and at the same time, redesign jobs and reskill workers so that everyone is better off. Many enterprises are doing this, and I urge more to take this approach.
On the part of the Government, we will continue to invest in our people across all stages of their lives, from preschool to work.
Over the years, we have instituted a range of support measures for workers, including the Workfare Income Supplement (WIS), Special Employment Credit (SEC), and Professional Conversion Programmes (PCPs), to name a few.
These range from helping low-wage workers and older workers through wage support, to equipping young graduates to have a good start in their careers and enabling experienced professionals to access new jobs. In particular, NTUC has been working closely with its member unions and companies to enable workers to learn new skills and grow.
With the national SkillsFuture movement and the Adapt and Grow initiatives, we have made a stronger push to enable our people to reach their fullest potential throughout life, and help Singaporeans affected by restructuring.
Our investments in supporting our people in their careers, including Adapt and Grow initiatives and continuing education and training, reached more than $1.1 billion in FY2017.
Our people are making good effort to invest in their learning, with good outcomes. The percentage of residents in the labour force who participated in training grew from 35% in 2015, to 48% in 2018. From 2016 to 2018, more than 76,000 jobseekers found employment through the Adapt and Grow initiative.
Workers, firms, unions, and TACs all need to play a part to continue this progress. Workers need to embrace upskilling and reskilling and make the most of new opportunities both locally and overseas.
Firms must step up training and job redesign for their workers, as they are well placed to know the skills that workers need as their sectors evolve. One example is Mr Abdul Jalil Bin Idros, who started as a technical officer at YTL PowerSeraya. Over the years, the company sponsored his Bachelor’s and Master's degrees in Electrical Engineering. Through continuous learning as he worked, Mr Abdul Jalil moved from maintenance to managing plant upgrading projects. He is now training his colleagues in cybersecurity and systems operations. He received the SkillsFuture Fellowships Award in 2018 for his exemplary efforts.
Besides workers and firms, unions, TACs and professional bodies need to spearhead the reskilling and the upskilling of workers in various sectors. I am heartened by the Institute of Singapore Chartered Accountants' collaboration with the Singapore University of Social Sciences (SUSS) to develop the joint Business Analytics Certification programme. This programme, which was launched a year ago, equips accounting professionals with practical skills in data analytics.
We will continue to enable our experienced professionals to build on their experience to move into new growth areas. Since the establishment of the PCP in 2007, over 100 PCPs have been launched in about 30 sectors. This year, we will launch new PCPs relating to blockchain, embedded software, and prefabrication to prepare our people to move into new growth areas.
In 2015, we launched the Career Support Programme to provide wage support for employers to hire eligible Singaporeans who are mature and retrenched or are in long-term unemployment. We will extend this programme for two years. [Please refer to Annex C-2.]
We must also ensure that the benefits of enterprise transformation are passed on to our workers. Starting from 1 April 2020, all transformation efforts supported by Enterprise Singapore's Enterprise Development Grant must include positive outcomes for workers, such as wage increases. I know that NTUC and the unions are putting in extra effort and resources to support our firms and workers in this.
Although some firms have done well to deploy their staff efficiently, productivity growth has been uneven across sectors.
The manufacturing sector, which faces strong global competition, has done well. In the services sector, while some firms have done well despite a tight labour market, some segments like the food and beverage (F&B) and retail remain very labour-intensive. Growth in S Pass and Work Permit holders in the services sector has also been picking up pace. The number has risen by about 3% per annum or 34,000 in the last three years. In particular, the S Pass growth in services is the highest in five years. If this trend persists, foreign manpower growth may will be on an unsustainable path.
We need to act decisively to manage the manpower growth in services, and encourage our companies to revamp work processes, redesign jobs, and reskill our workers. Our workforce growth is tapering, and if we do not use this narrow window to double down on restructuring, our companies will find it this even harder in the future. Relying on more and more foreign workers is not the long-term solution – other economies are developing too. What we need is to have a sustainable inflow of foreign workers to complement our workforce, while we upgrade our Singaporean workers and build deep enterprise capabilities in these sectors. We must enhance the complementarities of our local and foreign workers.
The basic approach to our foreign worker policies has remained consistent. Based on evidence on the pace of foreign worker inflows, and the progress being made in raising productivity across sectors, we need to calibrate our policies.
The Government recognises the economic headwinds and cost pressures ahead of us. But if we do not take action early, our firms will find it harder to compete in the years ahead, and our workers will be left behind.
After much deliberation, we will adjust the workforce quota for the services sector and reduce the services sector Dependency Ratio Ceiling (DRC) in two steps, from 40% to 38% on 1 January 2020, and to 35% on 1 January 2021. We will also reduce the services sector S Pass Sub-DRC in two steps, from 15% to 13% on 1 January 2020, and to 10% on 1 January 2021.
We are announcing these changes about a year ahead, to give companies time to prepare. For firms whose existing workers are in excess of the new limits, the DRC will apply as and when these firms apply for renewals of permits. [Please refer to Annex C-3.]
To support firms as they adjust to these changes, we will put in place the following measures, till FY2022.
First, the 70% funding support level for the Enterprise Development Grant was due to lapse after 31 March 2020. I will now extend this enhanced funding support for three more years, up to 31 March 2023.
Second, we will do the same for the Productivity Solutions Grant, and expand its scope to support up to 70% of the out-of-pocket cost for training. [Please refer to Annex C-3.]
Separately, firms can continue to apply for additional manpower flexibilities in certain cases.
The Lean Enterprise Development Scheme provides support to firms that undertake transformation projects which lead to more manpower-lean businesses. Transitional manpower flexibilities can be considered if firms need more resources in the short term to transit to new operating models.
On a case-by-case basis, firms can bring in foreign workers with specialised skills that are in demand globally. This is provided that they still face a shortage after having given fair consideration to Singaporeans. The Minister for Trade and Industry and the Minister for Manpower will provide more details at the COS.
As the Marine Shipyard and Process sectors have only begun showing early signs of recovery, I will defer the earlier-announced increase in Foreign Worker Levy rates for these sectors for another year. [Please refer to Annex C-3.]
I have spoken on how Budget 2019 supports the building of deep enterprise capabilities, and the building of deep worker capabilities. Let me now touch on the third key thrust to support economic transformation – building deeper partnerships within Singapore and across the world. To succeed, companies need to both compete and cooperate – compete to differentiate themselves and cooperate to solve common challenges.
Our TACs can play an important role in developing industry-wide capabilities. This includes supporting members in getting business advice and improving access to local and international networks. TACs have done well in helping our companies build overseas partnerships. For example, the Singapore FinTech Association has forged many partnerships with foreign FinTech associations, and the Singapore Business Federation (SBF) has organised Singapore’s commercial participation at numerous overseas trade fairs, including the 2018 China International Import Expo.
The Singapore Chinese Chamber of Commerce and Industry has also developed the Trade Association Hub, which now houses 39 TACs, to raise the level of services for members. SBF is also working closely with our TACs.
We will strengthen our support for TACs through the Local Enterprise and Association Development (LEAD) programme. Enterprise Singapore will be developing five-year roadmaps with TACs that have demonstrated strong leadership and shown ambition to do more for the business community. This will enable them to take on a more strategic and longer-term approach in driving industry transformation. These TACs will be able to access funding and potentially take in public sector secondees through LEAD.
We will also develop stronger partnerships around the world, at the Government-to-Government and Business-to-Business levels. Our TACs, such as the SBF, have developed international linkages for our businesses.
Over the years, we have negotiated Free Trade Agreements (FTAs) with partner economies, which enlarge our businesses’ access to new markets. Just last week, the EU-Singapore Free Trade Agreement (EUSFTA) and the EU Singapore Investment Protection Agreement (EUSIPA) received the European Parliament’s consent with a clear majority.
To draw greater value from these trade networks, we will streamline and digitise our trade processes further to raise efficiency. This will enable easier access to overseas markets, and help our firms make better use of these FTAs.
Last year, I launched the Networked Trade Platform (NTP) to streamline trade processes and provide a one-stop information management system for traders. We will also be working with partners to facilitate the secure exchange of electronic trade documents, to unlock further productivity gains.
Members will appreciate that the three key thrusts I have just announced – building deep capabilities in our enterprises, in our people, and forging deep partnerships – build on the ITMs that I announced in Budget 2016. With the progress we have made, we are better prepared for major changes that are coming our way.
One major change is the speed of advancements and convergence of new technologies – it is what some have dubbed the Fourth Industrial Revolution or Industry 4.0. This will transform the way we invest, trade, and consume.
Over the years, we have forged deep partnerships with the G3 economies of US, Europe and Japan, as well as China, India and ASEAN. With the centre of economic gravity shifting to Asia, and with the technological depth of our partnerships with the G3 economies, we should position Singapore as “Asia 101” for global MNCs looking to expand into Asia’s growing markets, and as “Global 101” for Asian companies ready to go global.
For our next phase of growth, as we press on with industry transformation, we will continue to build Singapore’s position as a Global-Asia node of technology, innovation and enterprise. This will open up new opportunities for our firms and our people to ride on the wave of the Fourth Industrial Revolution.
Our efforts to achieve this will build on the same three key thrusts as laid out for the broader economic transformation: first, investments in research and innovation by our universities, research institutes, and our firms; second, investments in our people; and third, building global partnerships.
First, we will continue to invest in R&D to support the push to make innovation pervasive. We have set aside $19 billion as part of our five-year Research, Innovation, and Enterprise 2020 (RIE2020) plan. Our investments in research and development (R&D) in our universities and research institutes are bearing fruit.
The National University of Singapore (NUS) and the Nanyang Technological University (NTU) are ranked the best in Asia in areas such as materials science and chemistry, and among the top 50 globally for engineering and computer science. Many of our researchers are regarded by their peers as among the world’s best, especially in areas such as AI, quantum technologies, and biomedical sciences.
A*STAR has research institutes that are highly regarded. Together with our universities, they are actively working to translate research findings into innovation, in partnerships with industries. But for R&D to make an impact, our companies must take the lead. Members of this House will be encouraged to know that some sectors are moving ahead – including two “old economy” sectors.
First, despite digital advancements, we still need brick-and-mortar buildings. The construction sector, seen as low-tech and labour-intensive, is now using Integrated Digital Delivery. This makes use of Building Information Modelling and other digital technologies, connecting different players working on the same construction projects. This has raised productivity and created new high-value jobs such as 3D modellers. Site productivity has improved by about 15% over the last eight years.
Second, in the digital age, we still need food, not just bits and bytes. The agriculture and food production sectors are transforming. For example, the Agri-Food and Veterinary Authority of Singapore's (AVA) Marine Aquaculture Centre and Temasek Life Sciences Laboratory have developed the \"St John's Sea Bass\". This fish is less susceptible to disease and can be bred in 30% less time. A start-up, Allegro Aqua, is looking to bring more St John's Sea Bass to the world.
Another example is Temasek Life Sciences Laboratory's \"Temasek Rice\", which produces four times as much rice per hectare as compared to regular breeds of rice.
To tap on the demand for high-quality food and to build on our progress, Enterprise Singapore's investment arm, SEEDS Capital, has appointed seven partners to co-invest in Singapore-based agri-food start-ups, to catalyse more than $90 million of investments.
Leading MNCs and our large local companies are also establishing their R&D centres in Singapore in different areas of technology. We now have 14 corporate laboratories in our universities, doing cutting-edge work ranging from cyber-physical systems to power electronics.
Last year, we opened four corporate labs with major companies – Applied Materials, HP, Wilmar, and Surbana-Jurong – to work on advanced manufacturing, biochemicals and smart cities.
I recently visited LUX Photonics Consortium, which brings together researchers in NUS, NTU, A*STAR, and the industry, to translate cutting-edge photonics research into practical applications.
There, I met Nanoveu, a Singapore start-up specialising in nanotechnology applications. One of its prototype products, a high-tech screen protector, promises to allow long-sighted users to see clear images on digital devices without their glasses. And to see 3D objects from 2D films, that is another project. I am sure this House will support the enabling of us to see issues, far or near, with greater clarity and perspective! I also met Technolite. Our Helix Bridge and new buildings such as the Jewel at Changi Airport are lit in scintillating ways by Technolite. The company is embarking on R&D to take its products to a new level. So, I wish Nanoveu and Technolite success, to light up our lives and to let us see better!
To keep the momentum going, we will continue to invest in Centres of Innovation at our Institutes of Higher Learning (IHLs) and research institutes, and to support companies in innovation.
Enterprise Singapore is collaborating with industry partners to establish a Centre of Innovation in Aquaculture at Temasek Polytechnic to promote aquaculture. This Centre will bring together aquaculture firms to improve our food resilience.
Enterprise Singapore will also launch a Centre of Innovation in Energy at NTU, building on earlier investments at the Energy Research Institute at NTU (ERI@N). The centre will collaborate with the Sustainable Energy Association of Singapore to drive industry-led innovation in areas such as energy efficiency, renewable energy, and electric mobility. [Please refer to Annex C-1.]
We will share more about these exciting new research initiatives at the Research, Innovation and Enterprise Council meeting next month.
The spirit of entrepreneurship is critical for all these endeavours – having a vision of the future, and taking practical actions, day in, day out, to explore a range of possibilities and solve a myriad of problems. It is the grit and determination of our entrepreneurs that make a difference.
Mr Sim Wong Hoo, CEO of Creative Technology, brought us the popular Sound Blaster cards in the 1990s. Creative Technology went through a difficult patch after its initial success with the Sound Blaster, but Mr Sim and his team pressed on. After 20 years of R&D costing US$100 million, the company recently launched the Super X-Fi, a technology that recreates the holographic sound experience – or 3D sound – with headphones, personalised. It has already won 14 awards at the 2019 Consumer Electronics Show in the US. Having tried it myself, and having heard the endorsement of audiophiles, including some in this Chamber, I am happy that Mr Sim and his team are at the cusp of a major breakthrough. And I wish them every success.
Mr Sim’s story illustrates the point that to succeed, we must learn, we must walk the ground, and we must persist.
I have touched on our efforts in Research, Innovation, and Enterprise. Singapore as a Global-Asia node will bring new opportunities for our people, in new frontiers. The second thrust is to prepare and develop our people to make full use of this node. We are partnering firms to invest in our people, including young Singaporeans, to provide them with opportunities to gain working experience abroad.
For students who are currently in IHLs, we will combine the current local and overseas internship programmes into a single Global Ready Talent Programme. It will have enhanced funding support for our students interning overseas with Singapore firms.
The programme will also support high-growth Singapore firms to send Singaporeans, with up to three years of working experience, for postings in key markets such as Southeast Asia, China, and India. [Please refer to Annex C-2.]
By giving young Singaporeans overseas exposure, they can develop new skills to better support our firms' overseas expansion. For instance, Oceanus Group, a local seafood supplier, sent interns from Republic Polytechnic to its operations in China in a range of jobs. One of their former interns, Bernice Chan, is now a management trainee in Oceanus' farm in Fotan, China.
Our third thrust is to build global partnerships, so that our firms and people can forge new areas of collaboration with other innovation centres.
In Budget 2017, we started the Global Innovation Alliance (GIA), one of the Committee on the Future Economy's recommendations. We have now established nine nodes in global start-up hotspots such as Bangkok, Beijing, Berlin, Jakarta, and San Francisco. These GIA nodes give our entrepreneurs and students opportunities to learn and build networks globally.
We are also bringing the global innovation community to come together in Singapore, to explore and collaborate.
Last year, we held the third edition of the Singapore FinTech Festival. This is now the world's largest fintech event. As part of this Festival, the Global Investor Summit brought together investors on our Meet ASEAN's Talents and Champions (MATCH) platform. These investors expressed an interest to invest up to US$12 billion in ASEAN enterprises in fintech, info-communications technology, and medtech over the next three years.
Another technology event, the Singapore Week of Innovation and Technology (SWITCH) brought together more than 350 exhibitors, and 1,000 promising start-ups and financiers from 75 countries.
To maximise impact, this year, SWITCH and the Singapore FinTech Festival will be held in the same week in mid-November. We can draw in even more entrepreneurs, investors, innovators from around the world to explore and collaborate in technology innovation in this Fourth Industrial Revolution. These various programmes on economic transformation and jobs build upon our efforts and investments over the years.
To summarise, our economic transformation is progressing well. But, we must persist with our industry transformation efforts. At the same time, the pace of technological innovation is rapid, and global economic weight is shifting towards Asia. We will position Singapore as a Global-Asia node of technology, innovation and enterprise.
Economic transformation is critical. We expect to spend $4.6 billion over the next three years on the new and enhanced economic capability-building measures in Budget 2019, and to support Singaporean workers: $3.6 billion will go towards helping our workers to thrive amid industry and technological changes; and $1 billion will go towards helping firms build deep enterprise capabilities. But let me emphasise that supporting companies and supporting workers are mutually reinforcing – stronger companies provide better jobs and pay for workers, and highly skilled workers make companies stronger.
I am confident that we can continue to make good progress. Our enterprises and TACs, workers and unions, and the Government must continue to work closely together. As long as we stay relevant and useful to the world, we can continue to create opportunities for our people and enterprises.
I have spoken about how we invest to secure our home and grow our economy. At the heart of these efforts is the desire to improve the lives of current and future generations of Singaporeans.
Our approach to social development has served us well. We invest heavily to bring out the best in our people. We believe that access to quality education enables Singaporeans to realise their potential. We strive to ensure that all Singaporeans, regardless of background, enjoy a quality living environment and have good access to healthcare. And we provide targeted support to those who are less advantaged, so that they too can have a fair chance to succeed; and to those who fall on hard times, so they can bounce back. Our efforts were affirmed by the World Bank when they ranked Singapore top in the Human Capital Index last year.
We recognise that Singapore, like many advanced economies, will have to deal with issues such as: (a) maintaining social mobility; (b) supporting healthy and purposeful ageing; and (c) fostering a stronger sense of unity amid polarising forces. Over the past decade or so, we have significantly increased our social spending. Social Ministries’ expenditures have doubled from $15 billion in FY2009, to $30 billion in FY2018.
The social measures in Budget 2019 are part of our long-term plan to build a caring and inclusive society. They are driven by three main strategies.
First, uplifting Singaporeans to maximise their potential and to provide access to opportunities through their stages of life. We pay particular attention to children from disadvantaged backgrounds, to give them a good start in life. With increasing lifespans, we are helping older Singaporeans stay in the workforce, so that they can earn and save more for retirement.
Second, providing greater assurance for healthcare. We will continue to strengthen support for the healthcare needs of Singaporeans. In particular, we want to help our seniors stay active, healthy and engaged in their silver years.
Third, fostering a community of care and contribution through strong partnerships. We strive to nurture an ethos in our society where we support one another, giving a helping hand where we can. Those who succeed should help to uplift others, just as they have benefited from the support of others around them. As the Chinese say, \"同舟共济，共创未来\". We are in the same boat, and weather the storms together. We progress together and forge our future together.
I will first talk about how we are supporting our children, workers, and seniors to access the best opportunities, through each stage of life.
We invest heavily to provide a world-class education for young Singaporeans. This is to bring out the best in every child, no matter his or her starting point. I know that this is an area of deep concern for many Singaporeans. Many of you expressed this during feedback sessions, and through your actions in giving time and money to help children in need.
Preschools support parents in laying a strong foundation for children – by helping to develop children’s cognitive, language, social and emotional skills. Therefore, we are spending more to enhance the accessibility, affordability, and quality of early childhood education and care. The Government spent about $1 billion on the preschool sector in 2018. This is more than two and a half times of the $360 million that we spent back in 2012.
And this support continues throughout the schooling years. The Government subsidises over 90% of the total cost of educating our children. This means that a child entering primary school in 2018 will receive over $130,000 in education subsidies by the time he or she completes secondary education. Children from lower-income families get even more support, for example, through the recently enhanced Ministry of Education (MOE) Financial Assistance Scheme.
We have been doing more to better support children from disadvantaged backgrounds, by intervening earlier, with new forms of proactive and targeted support.One such effort is KidSTART. KidSTART practitioners, preschools, and community partners work together to provide health, learning, and developmental support for children and their families. Since the pilot began in 2016, more than 900 families have been supported by KidSTART.
Last year, we set up the Uplifting Pupils in Life and Inspiring Families Taskforce (UPLIFT). This taskforce will pilot upstream interventions and partner communities to help disadvantaged children and their families, to ensure that no child is left behind.
A recent initiative is the UPLIFT scholarship for Independent Schools. This will provide a monetary award of $800 per year for eligible lower income students in Independent Schools, to cover their out-of-pocket expenses.
The taskforce is also looking at how to strengthen after-school care and support for disadvantaged students in school-based Student Care Centres. The Minister for Education will speak about this, and other initiatives spurred by UPLIFT at the Committee of Supply (COS) debates.
Our support for Singaporeans continues into their working lives.
Workfare and Silver Support is a key pillar of our social security system. The two schemes supplement incomes and mitigate inequality in the working and retirement years respectively.
The Workfare Income Supplement (WIS) scheme provides cash payouts and CPF top-ups for workers whose earnings are in the bottom 20%, with some support for those slightly above. The scheme has raised their incomes, encouraged employment, and helped them save more for retirement.
We will enhance WIS to better support lower-wage workers. From January 2020, the qualifying income cap will be raised from the current $2,000 to $2,300 per month. The maximum annual payouts will also be increased by up to $400. Older workers will see higher increases in payouts. For example, workers aged 60 and earning $1,200 a month will now receive $4,000 per year from WIS, or almost 30% of their wages. These enhancements will cost an additional $206 million a year. In total, we expect the enhanced WIS to cost close to $1 billion a year, and benefit almost 440,000 Singaporeans. [Please refer to Annex D-1.]
As our society ages, older workers will make up an increasing share of our workforce. Today, about one in four of our workforce is aged 55 and above. They continue to make important contributions to our economy and society. Some are giving back by mentoring the younger generations, while others wish to continue working.
We are doing more to help older Singaporeans earn more, save more, and have greater peace of mind during their retirement years. I appreciate the concerns and suggestions regarding the retirement adequacy of older workers, raised by members of the public and the PAP Seniors Group, among others. And I thank the Members of this House for your views during the recent debate on the motions on ageing with purpose and support for caregivers.
The Government has set up a Tripartite Workgroup to study the concerns of older workers. The Workgroup is reviewing policies such as the retirement and re-employment age, and the CPF contribution rates of older workers. They will present their recommendations later this year.
To support employers in hiring older Singaporean workers, the Government introduced the Special Employment Credit (SEC) scheme in 2011. Since then, we have extended and made changes to the SEC in response to labour market and economic conditions.
We have also introduced an Additional SEC (ASEC) scheme to encourage employers to hire workers who are above the re-employment age. I am happy that companies have responded by hiring older workers, tapping on their experiences, and supporting them in upgrading their skills.
With a tighter labour market and more Singaporeans choosing to work longer, more companies will be hiring older workers.
The Government will study better forms of support to continue to help workers to remain productive, earn more, and save more for retirement. We will review the relevance and structure of the SEC and ASEC, in tandem with the recommendations from the Tripartite Workgroup on Older Workers. In the meantime, I will extend the SEC and ASEC for another year, until 31 December 2020. To support this extension, I will top up the SEC Fund by $366 million.
Taken together, Members will see that the Government has been making significant investments in education and employment for our people, from early childhood to the working years. Our aim is to help Singaporeans fulfil their potential at each stage of life.
We are improving the lives of our people by enabling them to be the best that they can be. We enhance our people’s sense of well-being and dignity, without the burden of welfare schemes elsewhere, which weaken people's sense of agency and independence.
As more Singaporeans enter their senior years, healthcare needs will grow. Over the years, we have implemented major changes to make healthcare more affordable, accessible, and comprehensive. We have also been providing greater social support within the community to help seniors stay active, through programmes, such as the PA Wellness Programme and the Community Networks for Seniors.
Our second social strategy is to provide greater healthcare assurance. First, doctors at our neighbourhood clinics provide primary care that is easily accessible. This helps us stay healthy. To enhance access, we will make it more affordable to consult doctors in our neighbourhoods.
We introduced the Community Health Assist Scheme (CHAS) in 2012. CHAS subsidies help lower- to middle-income families by making primary care and basic dental care at clinics near their homes more affordable. Over 97% of existing CHAS and Pioneer Generation cardholders have access to more than one CHAS clinic within 10 minutes from their homes.
We will enhance CHAS subsidies at GP clinics in three ways: first, as the Prime Minister announced at the National Day Rally last year, we will extend CHAS to cover all Singaporeans for chronic conditions, regardless of income; second, lower- to middle-income Singaporeans who are CHAS Orange cardholders currently receive CHAS subsidies for chronic conditions only. We will extend subsidies for common illnesses to this group; and third, we will increase the subsidies for complex chronic conditions.
CHAS makes it possible for more Singaporeans to turn to GP clinics near their homes to manage their chronic conditions. But we must also put in the measures to ensure that CHAS clinics are delivering good outcomes. To this end, the Ministry of Health (MOH) will be looking at how to help CHAS clinics better track their patients' progress and outcomes. In a similar vein, MOH will also review its clinical guidelines for care provided at CHAS dental clinics, to ensure that the care delivered is appropriate to the needs of the patient.
With these changes, we expect to pay out more than $200 million a year in CHAS subsidies. The Minister for Health will provide more details on these changes at the Committee of Supply (COS) debates.
A second way to provide greater healthcare assurance is that we will strengthen financial protection for long-term care. As we age, the chances of having one form of disability or another rises significantly. MOH estimates that one in two healthy Singaporeans aged 65 could become severely disabled in their lifetime and may need long-term care.
Some of us face a higher risk, some lower. But regardless, \"low risk\" does not mean \"no risk\". The best way of protecting ourselves is to lead a healthy lifestyle and take preventive actions. At the same time, we need to guard against unpredictable events. The most efficient way is to help one another, by pooling risk through an insurance scheme.
Today, we have MediShield Life, for all Singaporeans, to provide financial protection against large hospital bills for life. As we live longer, there is a higher chance that we will need long-term care towards the end of our lives. We need to prepare for this.
The Ministry of Health (MOH) has announced that it will be introducing the new CareShield Life from 2020, an enhancement of the current ElderShield scheme. CareShield Life will provide lifetime coverage, with higher monthly payouts of at least $600 a month for those who become severely disabled. This offsets the costs of long-term care for individuals and their families.
The Government will provide subsidies and premium support to ensure that CareShield Life premiums are affordable. We will also offer participation incentives for existing cohorts, born in 1979 or earlier, to join CareShield Life, so that they are better protected should they need care in the future. CareShield Life will offer much greater peace of mind for Singaporeans.
In addition, we will also launch ElderFund next year to help severely disabled, lower-income Singaporeans who need additional financial support for long-term care. This includes those who might not be able to join CareShield Life, or have low MediSave balances.
The cost of long-term care is not only high, but will increase as our population ages. Last year, I earmarked $2 billion for premium subsidies and other forms of support for Singaporeans. This year, I will set aside another $3.1 billion.
The Government will put this $5.1 billion into a new Long-Term Care Support Fund. This will help fund the CareShield Life subsidies and other long-term care support measures, such as ElderFund. This is a significant commitment to help Singaporeans with their long-term care needs.
As the Prime Minister mentioned at the National Day Rally last year and the Tribute event earlier this month, we would also like to express our appreciation and support for our Merdeka Generation. The Merdeka Generation is a resilient and independent generation. They played a critical role in our nation's development.
The Merdeka Generation was among the earliest batches to serve National Service, build up our public services, and modernise our economy. They came together to forge our multicultural and multiracial society.
One member of the Merdeka Generation is Ms Barbara D' Cotta. Ms D' Cotta started work as a special education teacher at the age of 19 to help support her mother. In 1984, she was among the first batch of teachers to attain a Certificate in Special Education. Throughout her life, she continued learning, and completed her Bachelor in Special Education in 2016, at the age of 57!
Today, she is a Specialised Teacher for students with hearing deficiencies and a volunteer interpreter. She is also pursuing her Master of Special Education. She is an excellent example of lifelong learning and giving.
I am glad to have met Ms D' Cotta and many others who built our nation at our Merdeka Generation Tribute event. They continue to be an active generation, contributing in their various capacities – at work, in the community, caring for their families, and learning something new.
The Merdeka Generation Package is a gesture of our nation's gratitude for their contributions and a way to show care for them in their silver years. It will provide them better peace of mind over future healthcare costs, while helping them to stay active and healthy.
The Merdeka Generation Package (MGP) comprises five key benefits.
First, to support their active lifestyles, all Merdeka Generation (MG) seniors will receive a one-time $100 top-up to their PAssion Silver cards. They can use this to pay for activities and facilities at the community clubs, entry to public swimming pools, public transport, and more. We will also work to introduce more active ageing opportunities for seniors, such as lifelong learning under the National Silver Academy and volunteerism under the Silver Volunteer Fund.
Second, we will provide a MediSave top-up of $200 per year for five years. This will start from this year until 2023. This will help them save more for their healthcare needs. This is on top of the GST Voucher – MediSave top-ups that eligible seniors aged 65 and above receive every year.
Third, MG seniors will receive additional subsidies for outpatient care, for life. They will receive special CHAS subsidies, for common illnesses, chronic conditions, and dental procedures. The subsidy rates will be higher than the CHAS Blue subsidies. All MG seniors will receive these enhanced subsidies, regardless of income, including those who do not have a CHAS card today. At polyclinics and public Specialist Outpatient Clinics, they will receive 25% off their subsidised bills. This is on top of the prevailing subsidies available.
Fourth, MG seniors will have additional MediShield Life premium subsidies for life. All MG seniors will receive subsidies for their premiums, starting from 5% of their MediShield Life premiums, and increasing to 10% after they reach 75 years of age. This is on top of the means-tested subsidies that lower- to middle-income Singaporeans are already receiving.
Finally, we will provide an additional participation incentive of $1,500 for MG seniors who join CareShield Life when it becomes available for existing cohorts in 2021. In addition to the $2,500 previously announced, this means that all MG seniors who join CareShield Life will receive participation incentives totalling $4,000 each. This will cover a significant portion of their premiums, and is on top of the regular means-tested premium subsidies. I hope that this will encourage our MG seniors to join CareShield Life, to have peace of mind against the risk of high long-term care costs.
Some details are in the following table. (See Table D-1.)
The Merdeka Generation Package will benefit close to 500,000 Singaporeans. Those born in the 1950s and who obtained citizenship by 1996 will be eligible for the MGP. In addition, we will extend the MGP benefits to those born in 1949 or earlier but missed out on the Pioneer Generation Package (PGP), if they obtained citizenship by 1996.
All eligible seniors will receive the MGP benefits, regardless of their income. They will be notified by April 2019, and will receive their Merdeka Generation cards starting from June 2019. The Minister for Health will provide further details and the implementation timeline for the MGP benefits at the COS.
The Merdeka Generation is aged 60 to 69 today. Singaporeans' lifespans are increasing – our life expectancy is now 84.8 years. This is good news. It also means the Merdeka Generation will be able to enjoy the benefits for many years. The Ministry of Finance (MOF) and MOH, in sizing the budget for these benefits, have taken this into account.
We estimate that the package will cost over $8 billion, in current dollars, over the Merdeka Generation's lifetimes.
This Budget, I will set aside $6.1 billion for a new Merdeka Generation Fund. With interest accumulated over time, this will cover the full projected costs of the Merdeka Generation Package.
The Merdeka Generation will enjoy many key healthcare benefits for life. We hope that this will go some way in providing greater peace of mind for the Merdeka Generation and their families. This is a significant commitment by the Government.
It is important that the Government of the day continues to monitor the patterns and cost of healthcare utilisation, and life expectancy over the next 30 years or more, so that the Government is able to meet this commitment. To better prepare for increasing lifespans, we should encourage everyone to set aside something for the future.
To help Singaporeans who are younger than the Merdeka Generation with their future healthcare expenses, I will provide MediSave top-up of $100 a year, for the next five years, for Singaporeans who are aged 50 and above in 2019; and who do not receive the MGP or the PGP. [Please refer to Annex D-2.] This is a generation who are even younger and healthier, and I hope that everyone will make the extra effort to stay active and healthy.
Our third social strategy is to foster a community of care and contribution and build strong partnerships in our society. The Government will continue to make every effort to care for our seniors, the disadvantaged, and vulnerable families.
The ComCare Long-Term Assistance scheme provides basic monthly cash assistance to those who are permanently unable to work and have little family support to support their living expenses. Additional assistance is provided for households with additional needs, such as medical supplies. We will raise the cash assistance rates for this scheme.
For example, a two-person household, where both are on ComCare Long-Term Assistance, will receive an additional $130 a month. This brings the total cash assistance to $1,000 a month. The Minister for Social and Family Development will provide more details at the COS.
To help Government pensioners who draw lower pensions, we will increase the Singapore allowance and monthly pension ceiling by $20 per month each, to $320 and $1,250 respectively. This will benefit about 9,300 pensioners.
Working alongside the Government, individuals, non-profit organisations, and corporates have all been playing their part – contributing their skills, their time, and their hearts. As we reflect on our history and culture in this bicentennial year, we see this spirit of helping one another as a community in action over time.
In the past, our forefathers who arrived in Singapore banded together mainly within their ethnic groups, forming various clans and associations, as the support of the Government then was inadequate. Today, I am glad that this spirit extends across ethnic and religious lines in our society.
In the last few months, we have received many good suggestions from members of the public on cultivating this community spirit to help those in need. As our society ages and new needs emerge, we hope everyone will lend a helping hand.
One good example is Mr Shaleem Khamalluden and his friends from PALS Singapore. PALS stands for Peace and Love Society, a non-profit organisation that provides a support network for Singaporean youths from all backgrounds. Through sports events and workshops, Shaleem and other like-minded volunteers have been helping young Singaporeans learn skills to overcome challenges such as bullying and cyber-addiction. To date, they have touched the lives of about 800 youths.
Another example is Dr Rose Sivam, who started My Home, Your Home. With her husband as the chef, Rose and her family bring together people from various backgrounds, including those with disabilities and children with special needs, to share a meal in her home. This is another good example of our community spirit – how we care for the less privileged and build unity in our diversity.
I am heartened that many other Singaporeans, too, have stepped forward in their own ways to make a difference within their community, and I encourage everyone to do their part.
I spoke about the SG Cares movement at last year’s Budget. It seeks to bring together the public, people, and private sectors in partnership, create a greater collective impact and grow as a community of care and contribution.
This year, we continue to build on the SG Cares movement. We will have three measures to mobilise our people across all age groups, and across the public, private, and people sectors.
First is growing the spirit of volunteerism in our youth. Many of our secondary school students are already active volunteers and are giving back to the community. We want to sustain this momentum as they move to IHLs, and later into the workplace. We are working with Youth Corps Singapore to nurture youth community leaders in our IHLs, who can in turn rally their peers to be involved in the community on a sustained basis.
Second, our seniors have an abundance of skills and experience to make meaningful contributions. To enable more of them to do so, we will work with community partners and companies to encourage volunteerism among older workers. This will also enable our seniors to stay active and contribute to the community, at work and when they retire.
Third, the Government is encouraging all public officers to volunteer, under the Public Service Cares initiative. Today, each Ministry has a senior officer appointed as the Giving Ambassador to champion volunteerism. More than 85% of public officers are making monthly donations.
Going forward, Public Service Cares will strengthen capabilities in Corporate Social Responsibility and create larger-scale and sustained volunteering opportunities for public officers across agencies. For example, they can take part in house visits to share healthcare and active ageing schemes, or guide seniors in using their mobile devices at digital clinics.
This will also help Public Service officers to better understand citizens' needs, and co-deliver services with the people and private sectors. This is the Public Service's contribution to the SG Cares movement.
The Minister for Culture, Community and Youth will be sharing more on SG Cares at the COS. [Please refer to Annex D-3.]
The spirit of giving back has a special meaning this year, as we commemorate the Singapore Bicentennial. Therefore, I will launch two special initiatives in support of this.
First, I will set aside $200 million for a Bicentennial Community Fund. Today, we encourage individuals and corporates to give back to the community in various ways. Donations to Institutions of a Public Character (IPCs) qualify for a 250% tax deduction. Businesses also enjoy a 250% tax deduction on qualifying expenditure when their employees volunteer or provide services to IPCs under the Business and IPC Partnership Scheme.
The new Bicentennial Community Fund will provide dollar-for-dollar matching for donations made to IPCs in FY2019. With this, we hope to further encourage more Singaporeans, including younger Singaporeans, to embrace the spirit of giving back.
At the same time, we are encouraging IPCs to reach out to more donors. The fund will be designed to ensure a good distribution of support for all donations to IPCs which currently do not receive Government matching, and to increase the impact of the good work they are doing.
We have also enhanced our one-stop platform, Giving.sg, to better match donors and volunteers with meaningful causes. This platform provides charities with an easy and secure way to establish an online presence, and to receive donations digitally. Donors, too, can quickly navigate and find a worthy cause that matches their passion and commitment, and start on their giving journey.
Details will be shared by the Ministry of Culture, Community and Youth (MCCY) at a later date.
Second, I will introduce a $1.1 billion Bicentennial Bonus. From time to time, when our finances allow, we share the surpluses with Singaporeans, and provide more help to those with specific needs. With this Bonus, I hope that all Singaporeans, young and old, will join us to commemorate this significant moment in Singapore's history.
The Bicentennial Bonus has several components [Please refer to Annex D-4]:
For lower-income Singaporeans, I will provide additional help with their daily living expenses. I will provide up to $300 through a GST Voucher – Cash (Bicentennial Payment). This will benefit 1.4 million Singaporeans. In addition, lower-income workers who received WIS payments will get a Workfare Bicentennial Bonus. They will receive an additional 10% of their WIS payment for work done in 2018, with a minimum payment of $100. This will be given in cash.
I will provide a 50% Personal Income Tax Rebate, subject to a cap of $200, for YA2019. I have set the cap at $200 so that the benefits go mostly to middle-income earners.
For parents with school-going children, we will provide additional support for their children's education.
Each year, the Government contributes to the Edusave accounts of all Singaporean students at primary and secondary school levels. This helps to pay for school enrichment activities, to better develop students holistically. This year, we will provide a $150 top-up to their Edusave accounts. This is on top of the annual Edusave contributions that they already receive from the Government. In addition, Singaporeans aged 17 to 20 will receive up to $500 in their Post-Secondary Education Accounts (PSEA). This will go towards helping parents to save for their children’s tertiary education.
We will also provide additional support for older Singaporeans, who are near retirement.
I will provide a CPF top-up of up to $1,000 for eligible Singaporeans aged 50 to 64 years old in 2019, who have less than $60,000 of retirement savings in their CPF accounts. This will be credited into the Special Account for members aged 50 to 54, and the Retirement Account for members aged 55 to 64. About 300,000 Singaporeans will benefit from this CPF top-up. The majority of these recipients will be women. Many of them left the workforce early, and took up important roles as mothers, caregivers, or housewives. As a result, they had fewer years to build up their savings. This top-up is a way to recognise their contributions and to help them save more.
In addition to the CPF top-up, Singaporeans in the age group of 50 to 64 who qualify for Workfare will also benefit from the WIS enhancements that I mentioned earlier.
Most of those in the 60 to 64 age group will also receive the Merdeka Generation Package, while the rest will receive the five-year MediSave top-ups. These are all on top of the targeted benefits such as the GST Voucher.
Together, we hope that these measures will provide greater peace of mind for our older workers now and later in their silver years.
In addition to the special Bicentennial initiatives, we will provide another year of Service and Conservancy Charges (S&CC) Rebate to HDB households. Eligible Singaporean households will receive S&CC rebates of between 1.5 months and 3.5 months. This will cost $132 million and benefit about 930,000 households. [Please refer to Annex D-2.]
Finally, I will top up the Public Transport Fund by $10 million to continue helping commuters in need with their transport expenses, such as through Public Transport Vouchers for lower-income families.
The Government keeps a close watch on the cost of living. Over the years, we have done much to alleviate cost pressures – whether in healthcare, education, or day-to-day expenses. Good macroeconomic management has enabled us to keep inflation low, while the Singapore dollar has been strengthening over time. Many Singaporeans who go on overseas vacations would appreciate this. Over and above these favourable conditions, this Budget continues to provide significant support for Singaporeans, especially our seniors and lower-income households.
Budget 2019 supports the Government’s long-term strategy to build a caring and inclusive society. This is our continued effort to improve the lives of our people and our future generations.
Today, our shining little red dot can hold its own on the global stage. But as the Minister for National Development has said, \"we are not done building Singapore\". Infrastructure takes time to build, but once built, can serve us for a long time. We must take a long view for our development plans.
The upcoming Urban Redevelopment Authority (URA) Master Plan 2019 will guide our urban development over a 10- to 15-year time frame. It ensures that our limited land can be optimised to meet the needs of current and future generations. The Minister for National Development will share more details at the COS.
The long-term transformation of our city must start with our HDB estates, where most Singaporeans’ homes are. It is important that we keep our living environment first-class. Many cities have large tracts that slip into disrepair over time – we must avoid that. We must strive to make every town in Singapore green and liveable, by rejuvenating them systematically over time.
As our home, and a global node, our city has to be well-connected within and with the world. Within Singapore, we now have about 230 kilometres of MRT lines. This will rise to about 360 kilometres in the 2030s when major MRT projects, such as the Cross Island Line are completed.
To enhance our global connectivity, we are increasing the capacities of our airport and seaport. This will strengthen our role as a key node within Asia and to the world. Connecting to future growth, knowledge, and cultural centres in Asia and beyond will not only benefit Singaporeans, but also add to the connectivity and vibrancy in our region.
Beyond the next decade, we must also plan for climate change. Climate change and rising sea levels threaten our very existence. As a low-lying island nation, there is nowhere to hide when sea levels rise. Other small island nations like the Maldives are already facing the risk of flooding, with severe implications
The Government is studying the implications carefully and will come up with measures to prepare ourselves adequately. Our Climate Action Plan, which was launched in 2016, sets out the strategy for mitigating and adapting to the impacts of climate change, especially on our infrastructure.
In line with the Action Plan, low-lying roads near coastal areas have been raised. Changi Airport Terminal 5 will also be built at 5.5 metres above mean sea level. The use of polders and dikes is already being piloted on Pulau Tekong. These will help us to learn how to deal with rising sea levels.
To protect ourselves against climate change and rising sea levels, we will have to invest more. Together with existing infrastructure needs, our total bill for infrastructure will increase significantly. It is very difficult to project spending needs way into the future, but the different Ministries have done some preliminary estimates. We will continue to do our best to look forward, develop fiscal plans well in advance, and put in place the right approach to finance such long-lived major infrastructure. Each generation should contribute its fair share.
Tackling climate change requires global cooperation. Singapore is committed to doing our part. It is the responsible thing to do for our children and future generations.
The carbon tax will be applied on this year's emissions. This is an important signal to companies and households to reduce emissions and adopt energy-efficient practices.
As individuals, we too must change our ways and work towards becoming a zero-waste nation, by adopting the three \"R\"s: reducing consumption, reusing, and recycling.
The Zero Waste Masterplan will be launched in the second half of this year. Among other issues, it will look at better management of food waste, e-waste, and packaging waste including plastics. The Minister for the Environment and Water Resources will provide more details at the COS.
Given our dense urban environment, air quality and greenery are especially important. The National Parks Board (NParks) has done an excellent job in greening Singapore – our island has more than 40% green cover. This improves our living environment and our air quality.
But diesel exhaust is highly pollutive and adversely affects our people's health and quality of life. Many cities in Europe have announced restrictions on diesel vehicle usage. We have taken steps to discourage diesel consumption. Over the years, we have implemented schemes to encourage early renewal of diesel commercial goods vehicles and to also account for the impact of vehicular emissions. We have seen positive results. More owners are shifting towards more environmentally-friendly engines such as electric hybrids. We are glad to see a drop in the numbers of new diesel cars and taxis registered.
We also restructured diesel taxes in 2017 to shift away from an annual amount of tax towards a usage-based tax system. We permanently reduced the annual special tax on diesel cars and taxis, and re-introduced the volumetric diesel duty.
To continue the restructuring of diesel taxes, I will raise excise duty for diesel by 10 cents per litre, to 20 cents per litre. This takes immediate effect.
At the same time, I will permanently reduce the annual Special Tax on diesel taxis by $850. I strongly urge taxi companies to pass on the savings to their drivers, like they did in 2017. This will on average reduce the impact of the duty increase by more than three-quarters for taxis. I will also permanently reduce the Special Tax on diesel cars by $100. This will, on average, reduce the impact by more than half.
To help businesses adjust, I will provide a 100% road tax rebate for one year and partial road tax rebate for another two years, for commercial diesel vehicles. I will also provide, over three years, additional cash rebates of up to $3,200 for diesel buses ferrying school children. [Please refer to Annex E.]
Building a more sustainable environment makes our quality of life better, and also creates economic opportunities.
Just as we closed the water loop, we can now turn our attention to closing the waste loop. There are already start-ups tackling this challenge. Two companies, UglyGood and Tria, have been working on innovative ways to convert food-related waste into useful products. These are good examples of opportunities in our zero waste movement. So I hope to see more of such initiatives in the coming years.
Our beautiful living environment can also be enhanced through the smart use of technology, as a part of our Smart Nation efforts. To reduce energy use, we have implemented district cooling in the Marina Bay area. To improve our quality of life, we have started rolling out pneumatic waste collection, and trialled smart urban mobility solutions.
Buildings can also be designed to be environmentally friendly, for example, by being energy efficient and producing enough renewable energy to run itself. The Building and Construction Authority (BCA) was the first to retrofit its academy in 2009, making it the first retrofitted net-zero energy building in Southeast Asia. This year, NUS’s School of Design and Environment launched SDE4, a brand-new net-zero energy building.
These initiatives contribute towards making our environment more sustainable and pleasant. The National Research Foundation will continue to fund research and innovation in urban solutions and sustainability.
Our public housing policies have also been uniquely successful because of our long-term planning. Today, we are not just building new flats. We are improving the quality of life for Singaporeans through the rejuvenation of our public housing estates.
Our plans for the rejuvenation and renewal of our city includes the Home Improvement Programme (HIP), the Neighbourhood Renewal Programme (NRP) and the Remaking Our Heartland (ROH) initiative. For the longer term, we have announced HIP 2 and the Voluntary Early Redevelopment Scheme (VERS). These are plans that will keep our living environment first-class over the coming years.
The Minister for National Development will be sharing more on these plans to build endearing homes for our people at the Committee of Supply (COS) debates.
Singapore's ability to plan for the long term is our strategic advantage. But the best-laid plans to develop our people and transform our city can only be realised with a sound fiscal plan. Our fiscal discipline and prudence gave us the resources to respond decisively to unexpected challenges, such as the 2008 Global Financial Crisis. We must not take this for granted.
While our nation's needs are growing significantly, we must continue to take a disciplined and prudent approach. We will pursue new investments using a differentiated fiscal strategy, taking one approach for major infrastructure investments, and another for recurrent social and security expenditures.
First, infrastructure investments. Some of these are major, long-term projects, such as the development of Changi East and rail projects such as the Cross Island Line. Others, such as infrastructure to protect us against climate change, are contingent on the future state of the world. It is challenging to predict their exact timing and requirements.
For these large and lumpy expenditures where the benefits span many generations of Singaporeans, paying for them through some borrowing is fairer and more efficient. Borrowing, done in a responsible and sustainable manner, will help instil financial discipline and distribute the share of funding more equitably across current and future generations. In the 1980s, the Government borrowed to build our first MRT lines. Our Statutory Boards and Government-owned companies have also continued to finance many major infrastructure projects through borrowings.
For the development of Changi East, the Changi Airport Group will be taking up loans to fund its share of the infrastructure investments. To lower financing costs, the Government, with the President's concurrence, will provide a guarantee for Changi East borrowings. This allows us to tap on the strength of the Government's balance sheet to back this strategic investment. This lowers the cost of borrowing.
The Government is further studying the option of using Government debt as part of the financing mix for long-term infrastructure projects that the Government will be taking on directly.
Second, for recurrent spending needs in areas such as healthcare, preschool education and security, we must recognise that these are necessary expenditures – to take care of our elderly, give our children a good start in life, and keep Singapore safe and secure for our families.
Many countries have taken the easier route by funding these recurrent expenditures through borrowing. We must not do this, as such borrowing shifts the burden of paying for today's needs onto future generations. That is not the Singapore way. A fairer and more robust approach is to meet recurrent spending with recurrent revenues. Hence, we must continually review our tax system to ensure its resilience.
GST is a broad-based tax that contributes significantly to our fiscal resources. Last year, I announced the introduction of GST on imported services to make sure GST collections remain fair and resilient in a digital economy.
This year, I will tighten the GST import relief for travellers, given rising international travel. For travellers who spend less than 48 hours outside Singapore, the value of goods bought overseas that can enjoy GST relief will be reduced from $150 to $100. For travellers who spend 48 hours or more outside Singapore, the relief quantum will be reduced from $600 to $500. This will take effect from tomorrow. [Please refer to Annex E.]
I will also tighten the alcohol duty-free concession for travellers from three litres to two litres. This will take effect from 1 April 2019. [Please refer to Annex E.]
As I had announced at the previous Budget, we will raise GST by two percentage points sometime in the period from 2021 to 2025. When we raise GST, we will ensure that our overall system of taxes and transfers remains progressive and fair.
We will continue to absorb GST on publicly-subsidised education and healthcare. We will provide more help to lower-income households and the elderly by enhancing the permanent GST Voucher scheme. We will also cushion the impact of the GST increase for a period through a GST offset package. Lower- and middle-income households will get more. More details will be announced later.
Notwithstanding the need to raise revenues in the future, at the core of our fiscal system is our commitment to keep the overall tax burden low. We want workers and firms to keep as much as possible of what they earn. This leaves our citizens free to choose how they spend, save, or invest.
Our main indirect tax, the GST, is not high by international standards, even after the planned increase to 9%. The OECD average is 19%. Among the Asia Pacific countries, many have standard GST rates that exceed 9%.
Ultimately, a competitive tax regime helps us to attract and retain investments and talent. These in turn help to bring in good jobs for Singaporeans. A competitive tax regime is a key anchor to our economic growth, and the best way to sustainably increase tax revenues. I will extend and strengthen tax incentives to enhance our business competitiveness. [Please refer to Annex E.]
At the same time, I will make some adjustments to further enhance the progressivity and resilience of our tax system. The details of these changes are in the Annex. [Please refer to Annex E.]
The Government will continue to plan ahead for the long term. My commitment to Singaporeans is that our overall taxes and transfers system will always remain fair, progressive, and pro-growth.
Let me now summarise our overall budget position.
For FY2018, we expect an overall budget surplus of $2.1 billion, or 0.4% of GDP. This is a $2.7 billion increase from the $0.6 billion deficit forecasted a year ago. This was due to the unexpected two-year suspension of the Kuala Lumpur-Singapore High-Speed Rail Project and higher-than-expected Stamp Duty collections.
When we exclude the Government’s top-ups to funds and Net Investment Returns Contribution (NIRC) from past Reserves, we expect a basic deficit of $7.0 billion, or 1.4% of GDP. FY2018 was hence an expansionary budget.
For FY2019, our Budget position remains expansionary, with a basic deficit of $7.1 billion. Ministries’ total expenditures are expected to be $80.3 billion, 1.6% higher than in FY2018. We are setting aside funds to meet Singaporeans' long-term needs, including $6.1 billion for the Merdeka Generation Package and $5.1 billion for long-term care support. On the whole, we expect an overall Budget deficit of $3.5 billion, or 0.7% of GDP. [Please refer to Annex F.]
We have sufficient fiscal surplus accumulated over this term of Government to fund the overall deficit in FY2019. There is no draw on past reserves.
Mr Speaker, Sir, I will now conclude.
First, I would like to thank the many Singaporeans, as well as businesses, unions, charities, and community organisations, who have provided your feedback and ideas. Also, special thanks to the talented students from Nanyang Polytechnic for the beautiful sketches that you see in my slides today.
We commemorate 2019, our bicentennial year, to learn from our past in order to chart our future. We will have many opportunities to reflect and share in the coming months and years, but three lessons stand out for me and my colleagues.
First, for as long as we stay relevant and useful, Singapore and Singaporeans will have our place in the world. We must develop deep capabilities, stay open and connected, and draw ideas and talents from around the globe. Singaporean talents have been making their mark in various fields, and connecting with other highly skilled individuals from around the world will make our team even stronger.
Second, external events around us will shape and reshape our lives. Our people have shown time and again that we can take the long view, adapt with the times, and thrive.
Third, we draw strength from our diversity by focusing on what we have in common. In the earlier years, our forefathers clustered around ethnic and religious groups to support one another. Today, Singaporeans support one another, regardless of race, language, or religion.
Budget 2019 draws on these key lessons. We build on our multicultural heritage, to foster a caring and inclusive society. We continue to nurture our young and develop our people on a lifelong basis. We seek to take better care of our seniors so that they can stay active and healthy.
We will partner businesses and workers to transform our economy. We welcome the best MNCs and SMEs from around the world, and help our start-ups and SMEs to grow, scale, and internationalise. We will help our workers deepen their capabilities and seek new opportunities. To catch the wave of the Fourth Industrial Revolution, we are positioning Singapore as a Global-Asia node of technology, innovation and enterprise.
The changes ahead will be faster and deeper. Budget 2019 highlights the key challenges we are facing and how we are preparing to ride on the changes, to turn challenges into opportunities, for Singaporeans and for our partners in the global community.
We are investing to keep Singapore safe and secure. We are restructuring our economy to enable our businesses and workers to thrive. We are building a more caring and inclusive society, and we are building Singapore as a global city and a home for all.
Even as we invest more, Budget 2019 maintains our fiscal discipline. Our institution of the Elected President, and the Council of Presidential Advisors, ensure that the Government of the day does not squander the reserves our forefathers have left for us. The Government will ensure that we abide by this. We must not only take care of this generation, but our children and their children. It is a core value we must uphold.
Budget 2019 lays out this Government’s approach to build a strong, united Singapore. We nurture our young, take care of our seniors, expand opportunities for our people to be at their best, and to live in a liveable, endearing home, secure and globally connected.
Together, in close partnership with all, in our public, people, and private sectors, we can, and will, continue to take Singapore forward.
Mr Speaker, Sir, I beg to move.
Mr Speaker: The Question is, \"That Parliament approves the financial policy of the Government for the financial year 1 April 2019 to 31 March 2020.\"
In accordance with paragraph (1) of Standing Order No 89, the debate now stands adjourned. Debate to be resumed on what day?
Mr Heng Swee Keat: Tuesday, 26 February 2019, Sir.
Mr Speaker: So be it.
","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 to Tuesday, 26 February 2019.\" – [Ms Grace Fu Hai Yien]. (proc text)]
Adjourned accordingly at 5.38 pm.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Cat-related Nuisance Feedback Received by HDB in Past 10 Years","subTitle":null,"sectionType":"WA","content":"1 Mr Louis Ng Kok Kwang asked the Minister for National Development (a) for each year in the past 10 years, what is the number of cat-related nuisance feedback for common property areas that HDB has received involving (i) stray cats and (ii) owned cats living in someone else's residence respectively; and (b) whether such feedback has decreased in the Chong Pang constituency over the past 10 years.
Mr Lawrence Wong: Cat-related nuisance feedback in Housing and Development Board (HDB) estates is tracked by individual Town Councils. The Agri-food and Veterinary Authority (AVA), in its role as First Responder for animal-related feedback, receives cat-related nuisance feedback from across Singapore. The AVA started tracking such cat-related feedback from 2016. Stray cat-related nuisance feedback across Singapore increased from around 2,300 cases in 2016 to 3,600 cases in 2018. Pet cat-related nuisance feedback increased from around 500 cases in 2016 to 900 cases in 2018. Cat nuisance feedback in Chong Pang constituency has remained relatively constant over the same period.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Pathway for Normal (Technical) Stream Students Who Do Well and Go on to Take GCE \"O\" Level Examination","subTitle":null,"sectionType":"WA","content":"2 Mr Louis Ng Kok Kwang asked the Minister for Education (a) beyond just having subject banding as an option, whether the Ministry allows students from the Normal (Technical) stream who do well in their GCE \"N(T)\" Level examination to do their GCE \"O\" Level examination if they want to; (b) if so, how many of such students have there been to date; and (c) if not, whether the Ministry has plans to provide this pathway.\t
Mr Ong Ye Kung: Secondary 4 students in the Normal (Technical) or \"N(T)\" course who perform well at the GCE \"N(T)\" Level examination can laterally transfer to the Secondary 4 Normal (Academic) or \"N(A)\" course and take the GCE \"N(A)\" Level examination. Thereafter, they can progress further to Secondary 5 \"N(A)\" and sit for the GCE \"O\" Level examination. This allows students to progressively bridge the gap between the academic demands of the \"N(T)\", \"N(A)\" and \"O\" Level curricula.
Over the last five years, an average of about 530 students per year transferred from the \"N(T)\" course to the \"N(A)\" course. They are identified early, based on their secondary school performance. Because of these early identification efforts, only a handful of students will transfer to the \"N(A)\" course after the GCE \"N(T)\" Level examination every year. Of all the students who transfer from \"N(T)\" to \"N(A)\" course, 10 to 20 each year transferred further to the Express course.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Effects of Streaming in Secondary Schools on Students’ Self-esteem and Confidence","subTitle":null,"sectionType":"WA","content":"3 Mr Louis Ng Kok Kwang asked the Minister for Education whether the Ministry has studied the effects of streaming in secondary schools on the (i) self-esteem and (ii) confidence levels of students in each stream respectively.
Mr Ong Ye Kung: The Ministry of Education (MOE) introduced streaming in 1980 to systematically customise learning for students of different profiles. It has very successfully lowered student attrition and improved educational outcomes.
Factors impacting self-esteem and confidence are complex and multi-faceted. The National Institute of Education (NIE) studies have shown that some Normal (Academic) students, after spending some years in secondary schools, were similar or more confident academically relative to some Express students. But there is also feedback from teachers that students in Normal Streams may over time also lose confidence and the mindset of growth and development.
The trade-off between customisation and stigmatisation is something we need to recognise. That is why over the years, MOE has taken steps, through measures such as out-of-stream subjects, subject-based banding and the Polytechnic Foundation Programme, to blur the lines between education streams. Our work in this area is ongoing.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Profile of CPF Members Aged 65 and Above Receiving Monthly Payouts under Retirement Sum Scheme and CPF LIFE Schemes","subTitle":null,"sectionType":"WA","content":"4 Assoc Prof Walter Theseira asked the Minister for Manpower (a) what is the number and percentage of CPF members aged 65 and above receiving monthly payouts under the Retirement Sum Scheme and CPF LIFE Schemes, broken down by gender and size of HDB flat/private property type; (b) what are the average monthly payouts; (c) what percentage receive monthly payouts of less than $500; and (d) whether the Ministry will provide CPF microdata access to external researchers to facilitate research into retirement adequacy.
Mrs Josephine Teo: In December 2018, there were about 268,000 Central Provident Fund (CPF) members aged 65 and above who received retirement payouts from either the CPF LIFE or Retirement Sum Scheme. About half of these recipients are females. Among the 76% of members who are property owners, 17% own private property, 54% own 4-room-and-larger Housing and Development Board (HDB) flats while 29% own 3-room-and-under HDB flats.
Of those who received payouts, 74% had monthly payouts under $500. The average monthly payouts differs greatly across the generations; the average monthly payout for CPF members aged 65 to 69 is more than double that of members aged 80 to 87.
In addition to CPF payouts, members may receive additional retirement support from the Government through the Silver Support scheme. This provides them with an average income supplement of about $600 per quarter, which is in addition to the other forms of Government support such as the Workfare Income Supplement, GST vouchers and ComCare.
With increased labour force participation and improvements to the CPF system made in the past decade, we expect younger cohorts to have higher CPF payouts. For example, about six in 10 active members turning age 55 in 2017 have at least the CPF Basic Retirement Sum (BRS) in their Retirement Accounts. The BRS of $83,000 at age 55 in 2017 will give members a monthly payout of about $700 to $750 for life.
The Member also asked about sharing of CPF microdata. CPF Board aims to strike a balance between the interests of external researchers with the need to safeguard members’ privacy. It is open to collaborating on research projects that can better inform the development of retirement adequacy policy.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":["1 : CPF members aged 87 in 2018 belong to the first cohort of members under the Retirement Sum Scheme (RSS). CPF members aged 88 and above in 2018 do not have the Retirement Sum concept and were able to withdraw their CPF Savings in full at age 55."],"footNoteQuestions":["4"],"questionNo":"4"},{"startPgNo":0,"endPgNo":0,"title":"Self-employed Persons Receiving WIS Payouts from 2014 to 2018","subTitle":null,"sectionType":"WA","content":"5 Assoc Prof Walter Theseira asked the Minister for Manpower for each year from 2014 to 2018 and by Workfare Income Supplement (WIS) eligibility age group (a) what is the number and percentage of self-employed persons who receive WIS payouts; and (b) what is the average WIS payout received among self-employed persons.
Mrs Josephine Teo: Table 1 shows the number and percentage of self-employed persons (SEPs) receiving Workfare Income Supplement (WIS) in each of the four WIS age bands, and Table 2 shows the average annual WIS payout received by SEPs for work done in 2014 to 2017.
Information on WIS-SEP recipients for 2018 is not available yet as the SEPs can only be assessed for WIS eligibility and receive annual WIS payment after they have declared their net trade income for 2018 and made the required MediSave contributions by 31 December 2020.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":["1 : Data for WY 2014 as at February 2016; Data for WY 2015 as at February 2017; Data for WY 2016 as at February 2018; Data for WY 2017 as at January 2019. WY 2017 data is based on preliminary figures as not all eligible SEPs would have declared their income and made the necessary MediSave contribution to receive WIS.","2 : Age as at respective years.","3 : Includes Persons with Disabilities (PWD) WIS recipients aged below 35.","4 : Percentage of SEPs of the given age band in the citizen labour force who received WIS.","5 : The most recent round of WIS enhancements was implemented for work done from WY 2017."],"footNoteQuestions":["5"],"questionNo":"5"},{"startPgNo":0,"endPgNo":0,"title":"Statistics on Singapore Children Eligible for Additional Subsidy","subTitle":null,"sectionType":"WA","content":"6 Assoc Prof Walter Theseira asked the Minister for Social and Family Development for each of the last three years (a) what is the number of Singaporean children eligible for the Additional Subsidy for (i) full day childcare and (ii) full day infant care, by monthly household income and by per capita income eligibility bands, respectively; and (b) what is the number of Singaporean children actually receiving Additional Subsidy for each respective group.
Mr Desmond Lee: All parents of Singaporean children who attend childcare or infant care, regardless of their working status, are eligible for a Basic Subsidy. The number of parents eligible for an Additional Subsidy could not be ascertained by income bands until the parents choose to enrol their child in child or infant care and apply for an Additional Subsidy.
The total number of Singaporean children who received Additional Subsidy has increased by over 30% from 2016 to 2018 (see Tables 1 and 2 for breakdown by income tiers for children attending child care and infant care respectively).
Apart from supporting parents through subsidies, we will continue to make quality preschools affordable through kindergartens run by the Ministry of Education, as well as preschools under the Anchor Operator and Partner Operator scheme, which are subject to fee caps. Other forms of support, such as the Baby Bonus Cash Gift and Child Development Account matched savings, are also available to help parents defray the cost of raising children.
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