[(proc text) Order read for Resumption of Debate on Question [18 February 2019], (proc text)]
[(proc text) \"That Parliament approves the financial policy of the Government for the financial year 1 April 2019 to 31 March 2020.\" – [Minister for Finance]. (proc text)]
[(proc text) Question again proposed. (proc text)]
Mr Speaker: Mr Vikram Nair.
Mr Vikram Nair (Sembawang): Mr Speaker, I rise in support of the Budget. This year, we celebrate our Bicentennial, 200 years from the arrival of Sir Thomas Stamford Raffles, and rather fittingly, the Budget has made provision for this important milestone. Let me start with a snapshot of how the world may have looked from Singapore midway during this period in the 1920s and 1930s.
At the time, the British were probably the most powerful nation in the world, overseeing an empire stretching from North America to Australia, covering vast portions in Asia and Africa. The British Empire, at its peak, held sway over 23% of the world’s population and covered 24% of the Earth's total land area. It was called the empire on which the sun never set because the sun would literally be shining on some part of the British Empire at any given point in time.
Singapore was part of an immense global empire and was a hub for merchants, traders and workers from around the region to make a home. It was around this time that many immigrants came here, including the Chinese, Indians and Malays from other parts of the archipelago.
Many of the founding fathers of independent Singapore were born during this period, including Mr Lee Kuan Yew, as were my grandparents. Singapore was the impregnable fortress of the British Empire in the east. At this time, it would have been unthinkable that the British Empire might end, or that anything might happen to Singapore.
Of course, the fall of Singapore in 1942 changed just about every assumption that the people of that era held about the British Empire. The atrocities that followed in the Japanese Occupation left an indelible mark on that generation on what it feels like to be helpless in the face of aggression and our Pioneer Generation (PG) recognised that security was a prerequisite for prosperity and acted accordingly.
Today, Singapore is more prosperous than many of our forefathers would have dared imagine. We have a gross domestic product (GDP) per capita that is higher than most developed countries, including the old colonial powers, and our people are well-educated and enjoy amongst the longest life expectancies in the world. Singaporeans have high expectations, of course, but happily, we have a leadership that is ever ready to try and meet this challenge.
In this year’s Budget, the Minister identified three megatrends that would shape the coming decade, namely, a shift in global economic weight to Asia, the emergence of new technologies and an ageing population in Singapore. These are important trends that provide both challenges and opportunities, and this year’s Budget is carefully considered to meet the challenges posed by these trends.
In particular, this Budget focuses on helping people and businesses in a wide variety of targeted areas to better equip our workers and the population for the challenges ahead. For most Singaporeans, the bread-and-butter economic issues remain of primary importance and this Budget addresses them creatively and effectively.
I am also grateful that this Budget provides generously for our security and defence needs, though this has received less attention in the course of the debate the last two days. As one of the last speakers in this debate, I would like to emphasise that I think it is important for us to remain committed to our security needs and to anticipate and deal with the new threats we face.
Multilateralism is under unprecedented challenge and nationalism is on the rise. In the post-World War II era, institutions, such as the United Nations (UN), the World Bank, the International Monetary Fund (IMF) and, subsequently, the World Trade Organization, were set up to facilitate multilateral cooperation on the most important matters for countries, namely, security, trade and financial systems. Regional alliances for security and trade continued to develop during this period and Singapore is involved in many of these alliances. These provided important opportunities for Singaporeans and Singapore businesses to thrive.
However, in recent years, multilateralism is starting to lose its support amongst the developed world who set up these institutions. The United States (US) has pulled back from multilateral treaties, such as the Trans-Pacific Partnership (TPP), and is cutting back on its financial support for the UN. The European Union (EU) is under threat with Brexit, and the pro-Europe leaders, such as Chancellor Merkel and President Macron, are facing unprecedented threats at home. A corollary of this is rising nationalism, and nationalist parties are getting increasingly popular.
In the absence of a strong multilateral threat against the use of force, countries may be more inclined to take unilateral action against one another or against non-state actors in another state’s territory, which is a tinderbox. This is particularly dangerous as more and more nations militarise and even develop nuclear capabilities. One wrong move and damage on an unprecedented scale could be unleashed.
Militarised non-state actors are also becoming an increasing threat. The threat of the Islamic State of Iraq and Syria (ISIS) is pervasive, not just in the Middle East where it holds territory, but also in our part of the world where it has terror cells and, most worryingly, online. Many countries, including Singapore, has self-radicalised individuals who may plan or take part in terror activities.
The events that have taken place over the past few nights between Pakistan and India – two nuclear powers – show how these dangerous trends may collide. The sequence started when an Indian military base was subject to attack from a terror group Jaish-e-Mohammed operating from within Pakistan and 40 people were killed. India retaliated by carrying out a bombing operation in Pakistan which it claimed was targeted at a Jaish-e-Mohammed training camp. Pakistan denied there was any training camp operating there and has since retaliated. There have been firefights in Kashmir and Indian aeroplanes have also been attacked, with one Indian Air Force (IAF) pilot allegedly captured. Matters are clearly escalating quickly. And this is particularly worrying because both are nuclear powers and the consequence of any miscalculation would be dire.
Closer to home, I am grateful that matters seemed to have cooled down with Malaysia. And I think this has been, thanks to the hard work of our leadership team at multiple levels, including the Ministries of Foreign Affairs, Transport and Defence. However, the fact remains that there are two Malaysian vessels in our territorial waters and, if there is any escalation or threat to our sovereignty or territorial integrity, we have to ask ourselves the uncomfortable question of what we will do.
There are also more insidious threats to our country lurking beneath the surface. The cyberhacking on SingHealth by a foreign state actor still leaves me with a feeling of unease as it is clear there are sophisticated, well-funded entities out there operating against us.
There is also growing evidence of foreign interference in elections, with particularly startling reports that both during the last US presidential election and the United Kingdom's (UK's) Brexit vote may have been influenced by fake news originating from sources outside both those countries.
For most Singaporeans, these threats are not foremost on their mind, probably the same way none of our forefathers could have imagined how the world may have changed 100 years ago. Yet, I think it will be important for us to imagine these scenarios and to be able to deal with them, both as a Government and as a people. Without security and preparation for the threats of the future, all our prosperity may end up being meaningless.
I am grateful this Budget has provided well for our security needs and I look forward to addressing these matters in more detail during the Committee of Supply (COS).
Mr Speaker: Mr Christopher de Souza.
Mr Christopher de Souza (Holland-Bukit Timah): Sir, fiscal policies are important. But I am glad the Minister for Finance also emphasised Singapore's unique social compact – how the Government is partnering people to build a caring and inclusive society and encouraging people to volunteer and give back to society. Because the social compact of any society impacts how citizens cooperate with one another. Within a pluralistic society, people will have different views about what the social compact should be. Politics and debates in this House, therefore, reflect what those differing views are, and, at the close of the debates, policies impacting society are formalised into law. Therefore, giving voice to different views within a single political party is essential for Singapore. Indeed, it can be a major advantage.
Why? Because it is important that there continues to be a broad slate of policy options for consideration for Singapore.
Why? Because the world is changing. Geopolitics is being shaken up. Disruptive technology is rapidly advancing. What used to work in the past may not work in the future. But change itself is not new.
Singapore has had to adapt her economic strategies. According to the book Dynamic Governance, in the 1970s, as change was more gradual and predictable, planning and predetermining what needed to be done was important for Singapore's survival. But when things changed more rapidly because of globalisation and instantaneous communication, Singapore needed to go beyond that to sensing and responding to emerging opportunities. When that happened, the role of the Government shifted from directing and allocating resources to facilitating the exploitation of opportunities.
As a small island city-state, Singapore faces unique challenges. What worked in other countries may not be suitable or may need to be adapted before being applied to Singapore. As Mr Lim Siong Guan wrote, \"Singapore is unique in its demographics, its small size and its lack of natural resources. We cannot become a first-world economy simply by following what others are doing. As we look at the successes elsewhere, the critical questions we continuously have to ask are not what they are doing, or how they are doing it, but why they are doing it and why they are doing it that way.\"
Because of the rapidly changing world and our unique challenges, it is critical that we be able to draw from a broad slate of policies and avoid strict adherence to theories. Theories can be assistive, but they are just that – theories. Theories have limitations and thus cannot be overly, rigidly adhered to.
Dogmatic adherence to theories or rigid ideology also lacks the ability to capture the multifaceted complexities of democracies. The Financial Times article entitled, \"Capitalism and Democracy: the strain is showing\" pointed out tensions between liberal democracy and global capitalism, citing Harvard University Prof Dani Rodrik as stating, \"democracy, national sovereignty and global economic integration are mutually incompatible: we can combine any two of the three but never have all three simultaneously and in full.\"
If he is correct, then balancing the tensions among these concepts – democracy, national sovereignty and global economic integration – cannot be achieved through strict adherence to dogma. Therefore, aiming for theoretical purism is not the goal; rather, aiming to do what is best for Singapore is, drawing from a broad slate of possibilities. I believe that this is what the governing party in Singapore must continue to do.
Besides being able to draw from a broad slate of possibilities, there is value in housing different views within a single political party. Different perspectives make us reflect on things from a different angle. For example, during the recent debate on the National Parks Board (Amendment) Bill, Er Dr Lee Bee Wah raised concerns of safety and that of a hygienic living environment for her residents, citing multiple unsupervised cat feeding episodes as attracting big rats and the need for relevant authorities to be trained in handling snake sightings near residences. Mr Louis Ng took a different view on the matter, suggesting that the removal of snakes which eat rats contributed to the problem of a rising number of rats. Such an exchange is a real plus; a real advantage. Such an exchange sheds light on the same issue through different perspectives, sparking new ideas and increasing the range of possible solutions to be explored.
Coupling the ability to house members of differing views with the need for cooperation among members of a single party, the policies and directions that come out from the deliberative process is not necessarily one characterised by compromise, but one of possibility through persuasion.
This is a win-win, provided, of course, those involved in the debate want what is best for Singapore. The need to compromise for the sake of political dividend does not necessarily lead to the best policies.
For example, in order to get bipartisan support to pass legislation, the US tax code often contains loopholes due to political bargains that needed to be struck between the Democrats that desire higher rates for richer Americans and Republicans who prefer to reduce taxes for the rich.
The focus, one can argue, is not on the effectiveness or efficiency of the final product but on the political compromise. A New York Times article entitled \"A Tax Code of Politics, Not Reason\", says that \"This compromise has left us with a loophole-riddled code that isn't very good at raising money.\" Compared to other developed countries, the US does not collect much tax at all. At least that was the state of things in April 2012 – but such is compromise. In my humble view, the better way is to focus on possibilities and persuasion rather than loose compromises.
In order to do this, we should not label a person as \"right\" or \"left\", \"liberal\" or \"conservative\". A person can have different views on different issues and should not be limited to representing the \"right\" or \"left\" view. If we label people in this manner, the focus shifts from what is best for Singapore to whether or not a view conforms to a certain ideological view.
Because there is no such pressure to fit or not fit a certain label in Singapore, I feel the freedom to decide based on what I think is the best course for Singapore on the issues that came before this House. In some matters, my view could be categorised as more \"right\". For example, my hard stance against recreational drug use because of its harm to society could be characterised as right-leaning. On a different issue, my view could be characterised as being more \"left\". For example, advocating for the Prevention of Human Trafficking Bill in order to protect vulnerable workers in Singapore from being exploited in a capitalist market. Therefore, what is important is not whether my views are ideologically right or left, but rather, I have the freedom within the government party to act or voice a view in accordance with what I thought was best for Singapore.
This has strengthened my humble belief that, in Singapore, those elected must possess \"political ambidexterity\" – they must deploy right- or left-leaning policies in accordance with what Singapore needs for the long term based on a defensible and robust system of values and ethics. A person should not be pigeon-holed left or right.
In the course of the debates, there will be times when we debate morality and our interpretation of it. That is important and we should not shy away from it. Nevertheless, it is important that politics in Singapore does not move into single-issue politics. Yes, the issues are very important. Yes, the issues have wide-ranging impact on many different sectors. But the running of a country cannot be reduced to a single issue.
Worse still, examples from jurisdictions around the world have shown that some of those who push single-issue politics focus on polarising fault lines, exploiting them for a political purpose and deepening divisions in society. For example, some pockets in the political spheres in Germany and the United Kingdom (UK) and other countries have stoked interracial and inter-religious tensions by running on racial supremacy or anti-religion lines. In Germany, in September 2017, the Alternative für Deutschland (AfD) became the first far-right party to enter Germany's national parliament since the 1950s. It won 94 seats to become the third strongest party in the Bundestag, Germany's lower house of Parliament. The AfD quite arguably ran elections on an anti-immigration, anti-Islam ticket.
In the UK, the Britain First party ran on an anti-immigration and openly nationalist agenda. In 2016, Jayda Fransen, the deputy leader, was convicted for religiously aggravated harassment. Why do I raise this? The answer is this: irreconcilable division breeds an environment of politics of extremes. This inevitably creates conflict. Policies become political bargains that compromise on effectiveness. Politicians engage in brinkmanship. I would not want this to happen in Singapore for the sake of our social compact.
In the US, partisan brinkmanship causes shutdowns of government, and it impacts the lives of many. During the 16-day shutdown in 2013, almost $4 billion in tax refunds were delayed, home loans for 8,000 rural families were stalled. According to the Office of Management and Budget, the US lost an estimated $2 billion to $6 billion of economic growth during the 16-day shutdown in 2013.
An October 2018 article in the Asia News Monitor about Bosnia-Herzegovina, reported that the country faced a collapsing healthcare system, struggling public infrastructure, regressing education, catastrophic and accelerating brain drain. A lot to solve. Instead of meaningfully engaging these issues, the political discourse centred on nationalist brinkmanship and paranoia. Main campaign issues among nationalist parties were \"either 'we're going to kill the other side or we're going to keep you from getting killed by the other side.'\"
In Britain, some think that the fear of a disorderly Brexit might be used to squeeze the deal through in Parliament or to help Britain in its negotiations with the EU. Therefore, Sir, from what the world has shown us, we need, in Singapore, to refrain from the politics of brinkmanship. Further, we need to be able to collect a collage of differing views under the umbrella of a single party, thereby avoiding sole-issue politics. This way, even hard issues and issues touching on morality and ethics can be debated in a respectful and productive way. Such an approach has a further advantage. It avoids the need for politics by referendum, since differing views are already represented in the legislature.
The British Broadcasting Corporation (BBC) Radio recently aired an excellent programme just last weekend, entitled \"The Real Story: Are Referendums ever a good idea?\" In that programme, a quote on Brexit from the expert being interviewed caught my attention. Caroline Vernaillen from Democracy International explained: \"I think what is definitely never a good idea... is putting a general programme to a vote if it contains multiple questions... the way Brexit was actually a broad reform programme.\" As representatives of the constituents we serve, we are entrusted with the mandate to make difficult decisions on policy or morality for our country. Therefore, when we are faced with tough decisions, it is, in my view, much better to debate the ideas respectfully and holistically in Parliament, and decide in Parliament what the path to take for Singapore is, rather than passing the buck back to the good people who entrusted us with the decision-making duties in the first place.
So, I come back to this central issue of a social compact, which was a major plank in Minister Heng Swee Keat’s speech on Budget 2019 which I support. A valuable ingredient for an effective social compact is to ensure cooperation within society by reflecting and giving voice to differing views in Parliament. This is healthy and avoids the politics of extremes. Undergirding this must be an openness to different views and new evidence, even as one holds strong positions on certain subjects and issues.
As an example, Sir, some fellow Members of this House would know my hard stance against drugs and the need to criminalise the trafficking as well as the consumption of drugs. This is because I humbly remain convinced that drugs are harmful, especially to the consumers and the communities around them. However, if objective and \"un-agended\" data shows that the consuming of illicit drugs is not harmful, then I will review the data and test my conclusions again.
This is because all of us here in this Chamber owe it to the Singaporeans we serve to form the most accurate conclusion. For the record, as regards drugs, I am still of the view that we need to criminalise consumption.
Sir, for this year's debate on the Budget Statement, I decided to focus on social compact, which was one of the foundational points in Minister Heng Swee Keat's speech. On that topic, I respectfully seek to persuade this House that politics in Singapore should remain about possibilities and persuasion, always with a view on what is best for Singapore's long term; it should be carried out under a broad umbrella where differing views can flourish and consensus built on a foundation of ethics, stewardship and values. It should never lead to brinkmanship, single issue politics or hollow short-term compromise. This is a place where policy and societal morality is charted. If we can all do it right, then unity will prevail. If we can all do it right, our social compact – as a people – will be robustly defended and protected. Indeed, it is worth protecting. It is worth defending.
Mr Speaker: Ms Tin Pei Ling.
Ms Tin Pei Ling (MacPherson): Speaker, Sir, thank you for the opportunity to speak in this debate. My colleagues have put forth their earnest opinions and excellent ideas covering many aspects of the Budget in the past two days. Hence, as the last backbencher to speak in this debate, I will keep my speech relatively brief, or at least I try to.
The Budget is an important business of Parliament. This House must decide not only how we allocate resources to address immediate needs, but also how we can find resources to invest for the future. The Budget is a means to implement the Government’s strategies and realise Singaporeans' collective vision for Singapore. Therefore, what we spend on and how much we spend on are important.
One highlight of this year's Budget is the Merdeka Generation Package (MGP). This package is estimated to cost over $8 billion in present value, and help close to half a million senior Singaporeans. This significant package will make a tangible difference to the lives of the Merdeka Generation (MG). It shows our gratitude to seniors who had given so much of themselves to build the Singapore we are proud of today.
There are many ways the package could have been designed. But the Government chose to focus the benefits on healthcare, which is the right priority. The package will clearly address the top-of-mind concern and alleviate the healthcare cost burden on this group of seniors, while encouraging them to age actively.
So far, feedback on the package from my residents has been positive. Seniors who missed out on the Pioneer Generation Package (PGP) are happy and appreciative. The younger ones, who are children of the PG and MG, are supportive as well. This is because these packages relieve their parents' medical expenses, indirectly benefiting them. To the others, the fact that there is such a package is an assurance that the Government cares about the more vulnerable and understands what worries our people most.
Taken together with the many other schemes and programmes for our seniors, it is apparent that the Government is working hard to enable Singaporeans to age with dignity. In Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Mr Speaker, Sir, one of the highlights of this Budget is the MGP. The MG contributed their youth and efforts and built the Singapore that we are proud of today. This $8 billion package conveys our gratitude and respect for the MG and cannot be considered as welfare. It is a concrete manifestation of our sense of gratitude. The package has focused on healthcare, and it shows that the Government empathises with the elderly's concern over healthcare costs. They have, therefore, addressed the problem directly, with the aim of lightening senior citizens' burden in terms of healthcare costs, so that they can enjoy their golden years and have less to worry about.
Actually, the Government has always looked after the elderly and the disadvantaged. In recent years, our social and public healthcare expenditure has increased significantly. As the youngest Member of Parliament, I am very grateful that the Government has made these efforts, as policies rolled out by a government that cares for the people would definitely prioritise the long-term interests of the nation. This is a people-centric and compassionate Government.
Of course, besides dealing with current problems, a responsible government with foresight must also plan for the future. So, I am glad to see that this Budget continues to prioritise economic transformation and talent development. Faced with ever-changing conditions, Singapore must continue to strive relentlessly and strengthen our capabilities both externally and domestically to maintain our position. I hope that the Government will continue to give strong support to manpower training, urban development, building resilient and cohesive communities, and the aspirations of our youths.
(In English): Speaker, Sir, I fully support MGP and the other social initiatives announced in this Budget. But it is also important that we strike a balance between spending to benefit the current generation and directing a good part of our financial muscle towards investing in the future. A significant portion of this year's Budget is dedicated to strengthening our economic competitiveness and building deeper enterprise and people capabilities. These are important investments into the future. But I hope we will also think about the following.
First, making our city better. Through the annual Formula One night race, last year's Trump-Kim Summit and the movie Crazy Rich Asians, Singapore showcased our beautiful city to the world. But in 10, 20 years to come, when our infrastructure has aged and as other cities catch up, will we still have anything to show and be excited over?
What is the next big attraction after Marina Bay, the new financial district and Gardens by the Bay? What is the next iconic public housing project after the Pinnacle and Kampong Admiralty?
It is important that we continually upgrade and rejuvenate our city. It is equally important to find ways to create new \"space\" where new developments can take place. Of course, we should retain some parts of old Singapore so that our people can remain connected to our heritage. But Singapore should not be an old city. It is important that Singaporeans continue to regard Singapore as a city of possibilities. Our size may be small, but our imagination must be big. Despite our land constraints, we must somehow find ways to reinvent and remake what we have; develop new buildings, new districts and new gardens that delight our citizens and amaze the world.
Second, making our communities stronger. A beautiful Singapore must be underpinned by strong and united communities. Singapore's community-building efforts have come a long way since our Independence. We embrace multiracialism and multi-religiosity. We have a harmonious society united for progress. Our experience has been admired and emulated by many around the world.
However, our society construct is also exposed to some unique challenges: the advent of social media has the potential to aggravate fractures within our society through fake news and fear mongering – sensational pieces are always more attention-grabbing than run-of-the-mill news pieces; our changing demographics – an ageing society will assert more pressure on the working class; evolving expectations of citizens increase pressure on our Government to deliver better and faster; religious radicalism plants dangerous seeds of antagonism and mistrust which could destroy our social bonds; and, of course, there is a risk of widening wealth and digital gaps.
The consequences are serious if we do not actively address these challenges. For example, if fake news or radicalism gains momentum, our social fabric, so carefully built and maintained over the past decades, could be torn if people doubt and confront one another over what is true and what they think is true.
Therefore, we need to invest more in public education to inoculate our people against the poison of fake news and radicalism; we need to redistribute resources more to reduce the gaps; we need to create opportunities and empower our people to participate in the community more.
Thirdly, supporting our youths better. Our youths are our future. They will lead Singapore into our next bound. It is important that they see Singapore as the place where they can achieve their dreams, whatever they may be.
Our youths want to make Singapore and the world a better place. They have their own idea of what this means and they are taking steps to do this. Many believe in environmental causes and have mobilised and pushed on various projects, for example, promoting renewable energy sources and getting rid of straws and other one-use plastics. Others believe in building a fairer, more equitable society and they contribute their energy and time to help the poor and vulnerable in society. These are all commendable efforts.
It is important that our Budget set aside enough financial resources annually to go into supporting the priorities and efforts of our youths, as well as in mentoring them and developing their talents so that, in time, they will be able to lead Singapore to a new level. We must remember to invest to benefit Singaporeans of tomorrow, just as we have benefited from the investments made by our PG and MG.
I believe our constant effort to imagine our future, to find the next big thing in Singapore that will excite our people, to strengthen communities for a strong and united nation and to support our young in their development and endeavours will have far reaching effects. These will require our constant attention and consistent investment by our Government.
I would like to end with a reminder that building the future Singapore is the job for all Singaporeans, not just the Government and, certainly, not just the Minister for Finance.
To be sure, the Government plays a critical role in improving the lives of our people. It keeps Singapore secure and the economy humming along. On social issues, only the Government has the resources to mount a major move like the MGP.
But the Government does not have the sole responsibility or the best ideas all the time. Nor can the Government alone solve all the challenges that we face. We operate in an increasingly complex environment. We face macroeconomic uncertainties, geopolitical instability, rapid social change and game-changing technological innovations. Government action alone is inadequate to the task of navigating a safe journey for all Singaporeans into the future. In our daily lives, we see many examples in our community of how different people, different organisations and different parties coming together to support our people, our residents, our seniors.
I have a resident called Mdm Aisyah. She is about 66 years old. Recently, her sister passed away and so she is staying alone in a rental flat. But with the help from the Government, monthly financial assistance, as well as support from the Sallim Mattar Mosque where she goes for her Koran studies periodically every week, she is very meaningfully engaged in our community. So, even as she lives alone, there are many helping hands available to help her. The voluntary welfare organisations (VWOs), the mosque, our grassroots leaders, through our programmes, outreach and befriending, she is now a very happy senior living in Macpherson. There are many other examples as well.
Sometimes, help need not be in a big way. It could be as simple as a neighbour running to a senior's house to help fix that remote control that he or she failed to operate to switch on their favourite television (TV) show. We have so many people, so much resources within the community. If we are all able to come together to work hand-in-hand, we can multiply our efforts and do so much more to make our community and Singapore a better place for everyone. In fact, I would say that regardless of whether it is just the Government working alone or together as a community, regardless of what role we are playing, at the end of the day, it is about the people we feel for. It is about the bonds that we forge, the hearts we touch and the lives we make a difference to.
Therefore, I hope that Singaporeans will see this and Budgets past and future not just as Government or Parliamentary business, but as collective, decisive moves to prepare ourselves for the future. I hope Singaporeans will step up and contribute as well with our ideas, voices and energies. Let us, together, ensure that Singapore continues to thrive and be truly inclusive and caring. With that, I support the Budget.
Mr Speaker: Minister for Finance.
The Minister for Finance (Mr Heng Swee Keat): Mr Speaker, Sir, I thank Members of this House for the views shared during the Budget Debate. Over the last two weeks, I have also noted thoughtful views from fellow Singaporeans, academics, journalists and business owners. I am grateful for this feedback. Some challenge our current thinking, while others help us refine our policies over time.
We all have the same objective. It is to help Singaporeans thrive and build a strong, united Singapore. As we celebrate the Bicentennial, let us take a step back to reflect on how we got here today and how we would like to move forward.
Some Members have provided good and useful overviews of the Budget and how they benefit various parties, such as Mr Liang Eng Hwa. Some have delivered vivid speeches during the Budget Debate, such as the one about Ah Kong and Ah Seng. My speech will not be as poetic as Senior Parliamentary Secretary Baey Yam Keng's.
Listening to over 12 hours of your speeches in the last two days and this morning, I realise that it is not possible for me to address each of the points you have raised. My colleagues will engage you in the specifics of policies within their Ministry's purview. And as Members can see, I, too, have two files like on Budget Day. So, this will be a long speech. So, Mr Speaker, Sir, with your permission, may I use some slides so that it is easier for the Chamber to follow my speech, please?
Mr Speaker: Yes, please. [Some slides were shown to hon Members.]
Mr Heng Swee Keat: Sir, in rounding up the Debate today, I can value-add by picking up some of the common threads in the Members' speeches, and to reinforce some of the key principles for this Budget and those before, which make up the \"Singapore way\". So, what is the Singapore way?
First, we put people at the centre of our plans, strategies and programmes.
Second, we plan long term while taking an adaptive approach to respond to changing circumstances and needs.
Third, we do all of this together, working in partnership.
These principles reinforce one another and have allowed us to do more with less. For instance, in the area of education – I showed this slide at last year's debate – we did not spend the most, but you look at the outcome that our students achieved in this Programme for International Student Assessment (PISA) score. On healthcare, again, we did not spend the most, but we have the second highest life expectancy, next to Japan. And Members can see the Organisation for Economic Cooperation and Development (OECD) countries’ averages on the right-hand side. For policing, good outcomes in policing where, again, with the spending that we have of just slightly above 0.6% of GDP, we are ranked one of the safest in the world. So, these are all very credible outcomes despite spending less than what other countries do. I will now elaborate on each of these principles.
The first principle of the Singapore way is putting Singaporeans at the centre of what we do. We empower people through education, create a good environment for families, help Singaporeans to earn and save more for retirement and support ageing with assurance. As Er Dr Lee Bee Wah put it so eloquently, all that we do \"完全是为了你\", that is, \"It is all for you\".
Many Members, including Mr Louis Ng, Ms Jessica Tan and Mr Gan Thiam Poh, have given suggestions on addressing class divisions, inequality and helping all Singaporeans do well, including the less privileged. The question is, how best to do so? As Mr Saktiandi Supaat put it, it cannot just be through a Robin Hood style of social transfers. We believe that the best way to take care of our people is to build capacity, that is:
(a) For our young, we give them a strong foundation in terms of a good education and exposure, so that they have the knowledge, skills and values necessary to chase their dreams.
(b) For our workers, we invest in increasing their capacity through upgrading and reskilling. Crucially, we also build an economy that provides them with opportunities.
(c) For those who have fallen behind and who need help to access opportunities, we provide stronger support systems. This is with the ultimate objective to give them the confidence and dignity to succeed for themselves as far as possible.
(d) For our seniors, we support them in their desire to age successfully.
We have been providing significant support and will continue to do so. Let me illustrate.
Our young get a high-quality education which provides a solid grounding to chase their dreams. We make sure this is available to all our people, regardless of background. We keep education affordable. Parents pay $13 each month per child for primary school fees. This is possible due to the significant subsidies provided to every child. On average, every child entering Primary 1 in 2018 would have received over $130,000 in education subsidies by the time he or she completes secondary school. Those who go on to post-secondary education receive another $15,000 to $22,000 for every year they remain in school.
And beyond just making sure that everyone can afford education, we make sure that there is good quality for everyone, not just the top achievers or better off. In 2018, we provided at least 60% more resourcing for primary school students with a weaker foundation in literacy and numeracy through learning support programmes in schools. Our commitment to maximising pathways to success is clear. We have specialised schools catering to the needs of Normal (Technical) students, those with interests in science and technology, or the arts or sports.
Most visitors to our country are very impressed with what we have done for our Institutes of Technical Education (ITEs), sometimes better designed and resourced than their universities. Several Members in this House and myself have been bringing visitors to ITE and they have been surprised to see what we have in the ITEs.
The Ministry of Education (MOE) will elaborate more on our plans to Uplifting Pupils in Life and Inspiring Families Taskforce (UPLIFT) our students at the COS.
What we do is not necessarily the case worldwide. In the United States (US), public funding per student varies widely across states and within states. For example, within the state of New York, one school district can get three times that of another school district, based on how well-off each school district is. I agree with what Prof Lim Sun Sun said about the need to help our students develop cross-cultural, digital and ethical (CDE) competencies. This is on top of the ABCs and 123s we teach them. Prof Fatimah Lateef also called on Singaporeans to develop strong networks to thrive in an age of change and disruption.
Our schools provide this holistic education by making available co-curricular activities (CCAs), Applied Learning Programmes and Learning for Life Programmes, all of which are heavily funded by MOE. When I was an Education Minister, I visited many school systems around the world. And what struck me in many of the school systems was that, when I asked, \"If your child or your student wants to learn Arts, Music, Dance, Sports, what do they do?\" And in many of the school systems, the answer was, \"Well, they have to join outside classes.\" And I asked, \"How do you pay for it?\" They said, \"Well, we as parents pay for it.\" Whereas in our school system, CCAs to develop our students' interest and to develop them in diverse ways are part of the schools' system and funded by the Government.
The Edusave Award for Achievement, Good Leadership and Service (EAGLES) and the Edusave Skills Award are just some of the ways we recognise students who demonstrate excellence for achievements, beyond academic. And you never know where the path will lead you. Take the example of Mr Wong Kah Chun whom the Prime Minister spoke about at the National Day Rally last year. He grew up in a Chinese-speaking family but, through his school band, discovered a love for Western classical music and is now the first Singaporean to conduct the New York Philharmonic Orchestra.
We also support our young people to build their cross-cultural competencies. In this and the last two Budgets, I set out plans that will help our tertiary students, young workers and aspiring leaders to build friendships with peoples and understand our region better. These include the Global Innovation Alliance, the Leadership Development Initiative, and the Global Ready Talent Programme.
I was at the groundbreaking ceremony of Razer last week. I was excited that with Razer's expansion, we will be able to have many more opportunities for young Singaporeans, both here and overseas. We will continue to do more for our young. We have been investing more in preschool to make preschool education better, more accessible and affordable, especially for the lower-income. This will help our children build a solid foundation from an even younger age.
Let me move on to how we build capacity in our workers to help them pursue their career goals. I agree with the National Trades Union Congress (NTUC) Secretary-General Ng Chee Meng and Mr Seah Kian Peng that for the Fourth Industrial Revolution, or Industry 4.0, to work for us, we need Worker 4.0 as well, meaning, we need our workers to transform and build capacity in tandem.
As Mr Desmond Choo mentioned, learning and building capacity do not stop after formal education. Learning takes place anywhere, anytime, from anyone. The workplace is a good place for our workers to learn. As Mr Patrick Tay has mentioned, we provide support for our workers to reskill and upskill, to seize opportunities and do well for themselves.
The SkillsFuture movement provides support for our workers to develop skills and pursue lifelong learning. For those who are displaced, we help them find a new job, and reskill where necessary, through programmes, such as Adapt and Grow. The Labour Movement plays a key role in this.
I would like to thank the Labour Members of Parliament for all speaking on a common theme of \"Every Worker Matters\" and sharing their thoughtful views on what we should do to better support our workers. Senior Minister of State Heng Chee How spoke on putting workers at the heart of all we do. And I am glad that they recognise, in Mr Zainal Sapari and Mr Ang Hin Kee's words, that this year's Budget is pro-worker.
The Labour Members of Parliament and Ms Sylvia Lim have spoken about various segments of our workforce – young workers, older workers, mid-career professionals, low-income workers, self-employed workers and those with caregiving responsibilities. The Ministry of Manpower (MOM) and MOE will address some of their suggestions in greater detail during the COS.
A common thread in the comments, as Mr Arasu Duraisamy has noted, was how employers have a key role to play in helping their workers upgrade. Mr Melvin Yong commented that workers who go for training need to pull \"double shifts\" – training in the day and working at night. This is not easy to do. As workers put in the effort to train, I urge all employers to give them full support.
I would also like to explain how we support our low-wage workers, in line with concerns raised by Dr Intan Mokhtar and others. Where possible, we want them to build capacity through upskilling, so that they can move up the wage ladder. This is why we give Workfare, not welfare. We have the Workfare Training Support scheme to encourage skills upgrading, and the Workfare Income Supplement (WIS), which I announced enhancements to this year. Through WIS and the Progressive Wage Model (PWM), we help lower-income workers upskill and reskill, earn more and save more.
I am heartened to hear that Singaporeans, both within and outside the House, are concerned about whether families of lower-wage workers can make ends meet. Some, like Mr Mohamed Irshad, have suggested that the way to address this is to allow younger Singaporeans to be given WIS. At this point, I would like to explain the design of WIS and why we provide more support to older lower-income workers.
Much as we wish to help those who earn less, how we do it is important. Permanently increasing their capacity to earn more is the most sustainable way to improving their lot in life and helping them support their family members. This is best done by upgrading their skills and improving their chances of getting better paying jobs. What they learn today will be useful for many years down the road, and build a foundation for further learning. In the meantime, we help them take care of their families' needs, such as bursaries for their children or MediFund for their parents' hospitalisation bills. Where there are challenges with accessing skills training, I am confident that NTUC and our unions can come in to support.
Education and employment support are part of the comprehensive system of social support which benefit our less well-off. On the whole, our broad-based schemes are designed to provide them with more support.
We help our workers save for retirement through the Central Provident Fund (CPF), which provides a risk-free return, with an extra 1% interest on the first $60,000 of CPF balances. Those who are aged 55 and above receive an additional 1% for the first $30,000 of balances. This structure tilts the benefits in support of members with lower balances. It is in the spirit of what Mr Saktiandi Supaat mentioned, of helping small savers grow their income.
We also help Singaporeans own their homes, with more housing subsidies for the lower-income.
There are few countries where young couples buy a home before they get married. In fact, in many cities, there is a huge gulf between those who can own properties and those who do not. We continually rejuvenate our estates and upgrade our flats, so that they remain vibrant and liveable homes for our people. These flats could also provide an additional source of income in retirement.
At the same time, we provide other targeted support for those from less advantaged backgrounds, in different forms. Miss Cheryl Chan spoke about the need to uplift these groups. We have put in place schemes, such as KidSTART and the Fresh Start Housing Scheme, which help the lower-income get back on their feet. For those in their old age, Silver Support provides a supplement for those who had low incomes through life and little family support. ComCare is available for those with greater needs.
There is always room to do even better, as many Members of Parliament have mentioned. But overall, it is a good system which gives Singaporeans a good foundation in life. That we still find the occasional cases which fall through the cracks does not behoove us to knock down the system. It gives us policymakers, public officers, social workers, community volunteers the motivation to do better, through action.
Let me now turn to our seniors. Singapore is ageing quickly, quicker than many other developed countries. We made the transition from an ageing to an aged society in an exceptionally short span of 19 years. In comparison, Japan, the world's most aged country, took 26 years. Other countries like France took more than a century or 115 years, and Sweden took 85! Furthermore, by 2025, Singapore will become a super-aged country, with 21% of our citizen population aged 65 and older.
But this should not be viewed in a negative light. Singaporeans can redefine ageing. We are already doing so. Our $3 billion Action Plan for Successful Ageing was launched in 2016, taking in feedback from thousands of Singaporeans, both young and old, on what they saw successful ageing to be.
Compare the title of this latest action plan with the title of the first committee on ageing we set up in 1982, namely, the Committee on the Problems of the Aged. Things have changed. And learning from the many seniors I have met who inspire me, let me share how they are redefining ageing, by staying active, healthy and connected. If we help all our seniors to make the transition, it will benefit them and also inspire all our younger generations.
Our seniors want to stay active, be it through work, volunteering, learning something new, or keeping up with their grandchildren. And we want to support them in doing so. Opportunities to learn, grow and achieve do not stop at the retirement age.
In fact, the National Silver Academy, which was part of the Action Plan for Successful Ageing, came about because our seniors told us that they wanted to keep learning and contributing to society. The Academy now provides a range of courses for senior learners, and supports inter-generational learning programmes. I am glad that we have support for this on both sides of the House. Assoc Prof Daniel Goh and Mr Faisal Manap have also made a strong pitch for our seniors to be active and continue to be the best they can be.
Our seniors also want to stay healthy. Having the second highest healthy life expectancy in the world, we are in a good place. I recently met Ms Peng Lee Er, one of our MG, at a TV forum. She told me that she appreciated the MGP benefits as they provided assurance that her healthcare expenses would be taken care of. Even better, the benefits would be there but not used or what she called \"备而不用\", meaning that it was best if she could stay healthy, and do not have to seek treatment in the first instance. I agree very much with her. The intention is for our seniors to focus on staying well. The MGP is there as an added assurance. So, I am glad to hear Ms Joan Pereira and Ms Irene Quay expressing support for this.
I am always very happy to see groups of seniors coming together regularly in parks or other public spaces to exercise, like doing line dancing or Zumba Gold together. In fact, I understand that many of our seniors are exercising regularly in over 400 locations across the island. This is a good sign, and I hope there will be even more of such groups in the years to come.
And last but not least, our seniors want to stay connected with one another and with those around them.
I am encouraged by the progress made through the Community Networks for Seniors, which brings together Government agencies and community partners to help us have the \"ABCs\" where seniors stay active, befriend and care for one another.
Some 1,500 seniors have come forward as volunteers to befriend and help other seniors. Take the example of Mr Bernard Lai, who is a member of our MG. Besides juggling his work commitments, he is an active grassroots leader, a member of various sports clubs and a Silver Generation Ambassador!
At the MG tribute event hosted by the Prime Minister early this month, Dick Lee, Jacintha Abisheganaden, Mel Ferdinands and Rahimah Rahim – all MGs – gave a spirited rendition of Merdeka Sayang, I quote, \"With our silver hair, we still contribute\", and another quote \"we work hard, but still young at heart\". Indeed, these lyrics reflect the spirit with which we approach ageing. So, \"Fried Rice Paradise\" just got better with age!
Our Pioneers were the first generation of Singaporeans who were living and working in Singapore after we became independent. Our MG is the next younger generation, better educated and healthier. So, we look to you to redefine ageing and forge a new path on what it means to be the independence generation.
I have spoken on how we take care of our people. In essence, it is through building capacity in everyone – our young, working adults, seniors – to be the best that they can be, while giving those who need help even more support and help in a targeted way.
Members of Parliament have also brought up other important issues. Ms Joan Pereira and Ms Anthea Ong spoke of the importance of support for those with mental health conditions. This will be taken up at the Ministry of Health's (MOH's) COS.
Ms Joan Pereira, Assoc Prof Daniel Goh and Ms Rahayu Mahzam have also spoken on how to better support women, especially those who are caregivers. As Minister Josephine Teo shared, many of our existing schemes do benefit women more. In particular, the CPF top-up in this year’s Bicentennial Bonus will support women who did not work and, therefore, had low CPF savings for retirement. It is a fitting recognition of their contribution.
We build capacity and adopt a long-term orientation in our planning. This is the second principle of the Singapore way. We plan for the long term, because we plan for Singapore to be here in the long term. We look ahead, often tapping on the knowledge of experts here and overseas, so that we can prepare for the future. Ageing, climate change and changing economic trends are just some of the issues that we have been preparing for.
As I mentioned earlier, the first committee on ageing was set up in 1982 when the proportion of Singaporeans aged 65 and above was only 5%.
We are looking at various infrastructural plans to protect us from rising sea levels due to climate change, the effects of which are projected to hit us sometime between 2050 and 2100.
Given the long-term horizon, it is difficult to project these spending needs now. Nonetheless, we are planning early, seeing what we can do, and will work out the resourcing accordingly.
Our plans span many years, putting in place the right infrastructure, charting the course of our economy and steadily building up our capabilities. Given the long gestation of these projects, such as the airport and port projects, it is inevitable that they are subject to risks and uncertainties in the operating environment. So, I share Mr Dennis Tan's concerns on this issue. However, these uncertainties should not prevent us from making \"exciting investments\". Rather, they are impetus for bold but deliberate planning.
Operating in challenging environments has always been our lot in life, which has taught us to plan carefully. Back in the 1980s, when we were building Changi Terminal 2, we also faced regional and economic uncertainties. But we persevered and overcame these challenges.
We do not shy away from making difficult decisions if they are necessary for the long run. That is why we have been pushing hard on economic restructuring and have taken further steps this year to drive deeper restructuring.
As Mr Darryl David and Ms Jessica Tan pointed out, there are significant shifts in the global economy, which means that we will be stuck if we stick to business as usual.
We are fortunate to be in Asia where the growth is. However, the rapid growth of Asian economies will result in shifting comparative and competitive advantages in the region, which we will need to adapt to in order to benefit from this growth.
Supply chains are shifting. This is driven by new technologies, the shift of global demand to emerging markets, and the consolidation of supply chains within manufacturing powerhouses in the region.
At the same time, global value chains are becoming more knowledge-intensive, with research and development (R&D), software, design and other intangibles forming a greater share of value created.
We are well-placed to ride on these changes. As a regional hub in many areas, such as finance, professional services and logistics, we are well-positioned as a base for businesses to capture the growing regional demand for such services. We also continue to have a strong manufacturing base, despite increasing competition from other economies.
We must push ahead to strengthen Singapore’s position as a Global-Asia node of technology, innovation and enterprise. We will continue investing in research, innovation and enterprise development, and support our entrepreneurs and businesses to boldly venture into new markets. This will bring new opportunities to our people and firms.
However, the window to achieve deeper economic restructuring, to help more of our firms capitalise on this opportunity, is narrow.
We have achieved strong macroeconomic fundamentals through policies introduced over the years. What we need now is to double down on improving productivity and innovation at the industry and firm level, in particular, through a targeted, tailored approach to get firms of different types to adapt and transform.
We have made the difficult but necessary move of cutting the Dependency Ratio Ceiling (DRC) levels for the services sector. Several Members, including Mr Chong Kee Hiong, gave feedback that some firms from the services sector find it difficult to automate their processes. But the reality, as Senior Minister of State Heng Chee How pointed out, is that our resident labour force growth will continue to slow. If we do not move decisively on improving productivity and building up a skilled Singaporean Core in industries which are currently lagging, firms will find it harder to adjust in the future. As Senior Minister of State Chee Hong Tat described it, the DRC cuts are like 苦口良药, bitter medicine that makes us better off in the long run. Even as we cut the DRC levels, we will help our firms in the transition, as Minister of State Zaqy Mohamad has outlined.
As we take a long-term view in our planning, we must also consistently review our policies to take into account new trends, new feedback and new evidence. As Mr Christopher de Souza just mentioned, because of the rapidly changing world and our unique challenges, it is critical that we be able to draw from a broad slate of policies and avoid strict adherence to theories.
We must be prepared to experiment and take calculated risks. If we do not succeed at first, we learn from our experience and try again. This is how we become better as a people and as a country.
I encourage all Ministries to adopt this entrepreneurial mindset, and to continue to keep trying out different solutions for the issues that we face. We must be focused on exploring what works, discard what does not, and execute effectively, so as to achieve better outcomes for Singapore and Singaporeans.
Hence, we adjust and calibrate our approach as we go along, to take in feedback and learn from outcomes, to make our schemes more useful and effective for firms and workers.
For example, a common feedback from SMEs was that it was difficult to navigate Government schemes and get support for business transformation. To help firms identify the support available to them, we launched one-stop portals like the Business Grants Portal and Startup SG. To reduce the number of schemes for firms to navigate, we rationalised grants that served similar objectives under the Productivity Solutions Grant (PSG), Enterprise Development Grant (EDG) and Partnerships for Capability Transformation (PACT) programme. This year, we will streamline eight financing schemes into a single Enterprise Financing Scheme (EFS).
Our policies have been gradually adapted to help Singaporeans better prepare for retirement as we live longer. CPF LIFE, Silver Support and the Lease Buyback Scheme were introduced to boost the retirement savings of our seniors.
MediShield Life, which started as MediShield, and CareShield Life, which will replace ElderShield for younger cohorts, will provide universal and lifetime coverage for healthcare needs. Later this year, we will expand the Community Health Assist Scheme (CHAS) subsidies to provide universal coverage for chronic illnesses. This last move, as Ms Rahayu Mahzam noted, shows the willingness of the Government to make changes when necessary. In fact, as Dr Lim Wee Kiak said, \"we do have a universal healthcare system\".
As a pre-funding scheme, MediSave, too, has to evolve as medical technology advances, as more options become available, and as the population ages. We will remain flexible and adaptive to deliver the best outcomes for our people.
There have been questions, in and outside of this House, on whether we will or should have packages like the PGP or MGP for future generations. Some have even suggested names. Some asked in anticipation; others asked because they were worried about who pays.
Policymaking in real life does not assume that we start with perfection. My earlier examples show that we do not let the perfect be the enemy of the good. We do what is good, learn by doing, and adapt and improve continually.
During Singapore's journey from Third World to First, our MG, and our Pioneers especially, did not benefit from the social safety nets we have today and the investments we can now make. They had fewer or no educational opportunities. They earned less. The CPF contribution rates started out very much lower. So, a cohort-based approach to support them in their silver years is appropriate. You can say that we custom-made the packages to better meet their needs, and to honour them for what they have done for Singapore.
For the younger cohorts, they, too, will have needs, but they are not of the same nature as the Pioneers or MGs.
Today, more than nine in 10 Singaporean youths can expect to go on to a post-secondary education – nine in 10. This is compared to less than two in 10 among our youngest MGs, and about one in 10 for our Pioneers when they were at the same age.
The schemes we have put in place over the years – MediSave, MediShield Life, CareShield Life – enjoyed over their full working lives, will make sure that, by the time they reach retirement, they will be in a much better position than the Pioneers or MGs to look after their own healthcare needs. Of course, some among us will still need more help. The Government will look at the needs of each group, and tailor our policies and programmes in the future.
Senior Minister of State Chee Hong Tat has summarised this well. The MGP is not linked to the election cycle, nor is it linked to the unexpected surpluses this term. It is a plan that has been carefully studied over a significant period of time. Not many countries in the world had gone through a similarly compressed period of accelerated growth, leading to relatively wide divergences between the older and younger generations. Building on our substantial base of permanent healthcare schemes, a calibrated cohort-based approach is fair to different generations.
If we continue to take a responsible and long-term approach to planning, younger Singaporeans need not fear that they will end up with a disproportionate share of the cost. But if we lose this discipline and make rash promises, like universal benefits regardless of circumstances, I would worry for our future generations.
I have outlined two aspects of the Singapore way – putting people at the centre of what we do and planning long term.
The third principle of the Singapore way that I would like to highlight is partnership. We have consistently been advocating this partnership for years. As Mr Murali Pillai pointed out, it is not just this Budget, but also past Budgets which had partnership as a key element. In Budget 2016, our theme was \"Partnering for the Future\". In 2017, it was \"Moving Forward Together\", and in 2018, it was \"Together a Better Future\".
Previous Finance Ministers have had different ways of titling their Budget speeches, but partnership – working together – has always been key to our policies.
As Prof Fatimah Lateef put it, \"Partnerships to Prosper\" involves partnerships at all levels – globally, regionally and in Singapore – in our businesses and in the community. Partnerships are also important for the arts community, as Mr Terence Ho shared.
We seek to be friends to all and build strong international partnerships for mutually beneficial outcomes and we have been steadily strengthening our partnerships.
Free Trade Agreements allow our businessmen access to other markets, and this is particularly important in this period where there are significant trade tensions. Defence agreements allow militaries to build mutual understanding. Collaborations between officials and businesses build goodwill and better people-to-people connections. Examples are Suzhou, Kendal, the Chongqing Connectivity Initiative, Iskandar Malaysia and the new state capital city of Andhra Pradesh.
But of all the partnerships that we build, the most foundational ones are the partnerships within Singapore. A strong and united Singapore enables us, both Government and our people, to build strong partnerships elsewhere. A strong and united Singapore assures our partners around the world that we can be taken at our word and will not cycle back on our commitments due to domestic divisions. A strong and united Singapore also sends a clear signal of our will and resolve to defend our sovereignty and safeguard our vital interests.
One key partnership within Singapore is our tripartite arrangement, which is a unique strength for Singapore. We must build on this and strengthen partnerships between the Government, firms and unions.
Firms must build deeper capabilities together with their workers. The workers benefit from better jobs and better pay. A skilled, committed workforce gives firms a competitive edge, and this is the smart thing to do. We will continue to provide support to firms which more directly link their companies' growth and transformation with capability building for their workers, such as in changes we made to EDG and PSG.
I am glad to hear about the Singapore National Employers Federation's (SNEF's) efforts to help employers implement responsible employment practices as a means to enhance competitiveness and sustain business growth.
I was pleased to hear NTUC's Secretary-General Ng Chee Meng and Senior Minister of State Koh Poh Koon talk about the NTUC's plans, such as the setting up of training committees and partnering companies to build worker capabilities. Our unions are not just into advocacy. Our unions take concrete and meaningful action which makes a difference to our firms and workers. And we will continue to support our unions in this effort.
One example of how the tripartite partnership can lead to positive outcomes is PSA. When I visited PSA earlier this month on the first day of Chinese New Year together with Senior Minister of State Koh Poh Koon, I was glad to see them adopting new technologies, such as the automated crane system.
PSA has reskilled and upskilled over 1,300 workers who transitioned from city terminals, to use the new technology at the Pasir Panjang Terminals over the past few years. PSA has worked closely with the Singapore Port Workers Union and Port Officers' Union in engaging and facilitating the change for the large pool of staff involved in this transition.
Some of the crane operators I met had worked with PSA for over 20 years and commented that the changes led to better working conditions as they could work from a remote air-conditioned office, rather than in the crane cabin, high on top of the crane.
Another example is ST Engineering's aerospace sector, which I visited earlier this week. To ride on the wave of Industry 4.0, ST Engineering has been investing in smart maintenance, repair and operations (MRO) initiatives at its hangars to adopt data analytics, additive manufacturing and automation.
I was encouraged to hear that its union-management Training Council worked closely with NTUC Learning Hub to customise the SkillsFuture Digital Workplace course for the workers, to familiarise the workers with digital technologies, new work processes and automation. Over 200 staff attended the course in 2018, with another 600 staff expected to attend the course in 2019. So, I am glad to see ST Engineering building enterprise capabilities and deepening worker skillsets in tandem.
This is the type of positive outcomes for workers, businesses and the Government, which we all strive to achieve.
Our Trade Associations and Chambers (TACs), as representatives of firms, have an important role to play in this effort. So, I am glad to see more stepping up over the last few years. For example, through its networks with the global water community, the Singapore Water Association (SWA) introduced Imagine H2O, a leading water innovation accelerator in San Francisco, to local industry players. And this led to exchanges of ideas on commercialising innovative water technologies between our firms and Imagine H2O's startups. This Association is also working with Enterprise Singapore to immerse Imagine H2O into the local water ecosystem. As an outcome from this exchange, Imagine H2O has assessed Singapore to be a strategic location to set up its presence for the Asian market, and it is in the midst of establishing a presence here.
I was glad to hear Mr Douglas Foo's affirmation that the TACs remain committed to enhancing the business community’s capabilities and collaborating with member firms, the Government and the Labour Movement. And I support his call for, I quote, \"TACs to further break down individual walls, and work with one another to accelerate our common national interests\". The enhancements to the Local Enterprise and Association Development (LEAD) programme which I announced in this Budget will further strengthen the role that TACs play.
We invest in building an environment to help firms with the capabilities thrive, through steady investments in R&D, and strengthening economic linkages to the region. This builds on our comparative advantages to help us, as an economy, to excel. To do so in a way which works for each sector, we bring relevant stakeholders together to drive transformation through Industry Transformation Maps (ITMs) and ITM cluster strategies.
We also take an enterprise-centric approach, which focuses on issues faced by firms at each stage of growth. This tailored and targeted approach allows our economic schemes to yield better results.
For firms which are ready to scale up and compete on a global scale, we provide more customised support. This is to help them identify and overcome the unique challenges they face, and scale their businesses quickly. I announced the Scale-up SG programme and the pilot Innovation Agents programme this Budget, which will help in this area.
Mr Liang Eng Hwa asked if the customised approach of the Scale-up SG programme meant that the Government is picking winners. This is not the case. The customised support that we provide is available to companies that show ambition and are willing to take the effort to transform themselves to scale up quickly. This support comes on top of many schemes which are accessible to firms, small or micro, for example, schemes which help firms adopt digital technology solutions, such as Start Digital Pack under SMEs Go Digital. And where there are market gaps, we provide support, such as through the Enterprise Financing Scheme, to provide financing for younger and smaller firms.
These schemes, together with a wide range of schemes under the Startup SG branding, provide a strong base of support for startups, which Ms Denise Phua asked about.
As pointed out by Ms Rahayu Mahzam, many Singaporeans and businesses have demonstrated their care and concern for fellow Singaporeans through their good work over the years.
TSMP Law Corporation is one such example. In addition to providing pro bono legal services for the disadvantaged, the firm also regularly partners VWOs to contribute time and dollars to a broad range of causes and activities.
VWOs, like Ang Mo Kio Family Service Centre (AMK FSC), Society for the Physically Disabled (SPD) and Empower Ageing, have also done an excellent job in serving a broad range of needs in the community. And as Ms Denise Phua said, their reach extends beyond what the Government can do. So, I thank them for their efforts, their hard work, and more importantly, heart work, in reaching out.
To help them to continue deepening their capability, and increase the impact of the good work they do, for instance, we started the VWO-Charities Capability Fund (VCF) in 2002 to help VWOs train their staff, expand their reach and serve people better. In 2017, we set aside $100 million for the fourth tranche of VCF.
The 250% tax deduction that we offer today on qualifying donations is also one of the most generous tax deduction schemes worldwide. Jurisdictions like Hong Kong, the US and Australia provide only 100% tax deductions for corporate and individual donations.
Matching grant schemes like the new Bicentennial Community Fund which I announced will also catalyse more funding to our Institutions of Public Character (IPCs). Together with the 250% tax deduction, effectively, every dollar donated can draw a Government contribution of up to $3.50. The Minister for Culture, Community and Youth will elaborate on our efforts to support philanthropy and volunteerism at the COS.
We will keep Singapore safe and secure together. That is another important part of our partnership. So, I am heartened that Members of Parliament, like Mr Henry Kwek, Mr Darryl David, Mr Dennis Tan, Mr Mohamed Irshad and Mr Vikram Nair appreciate the geopolitical situation that Singapore is in, and support our commitment to make sustained investments in our security and defence capabilities.
We have good men and women in our security forces and diplomatic corps. But they cannot be everywhere, or protect every flank.
Every Singaporean has a part to play through national movements like SGSecure. We must stay alert, stay united and stay strong against threats, be it terrorism or cyber warfare. Everyone must play a part in Total Defence.
And we will find the best way forward together. But no one – not you, not me, not the Government – has all the answers.
Today, we consult, engage and partner relevant stakeholders when formulating policy. So, I am glad Assoc Prof Walter Theseira and Mr Ang Wei Neng have spoken on the importance of feedback for more inclusive policymaking for the better of our society.
There is always room for improvement, and Mr Ang Wei Neng has given robust feedback, which our agencies will take seriously. But we must not stop at just making criticism, but reach out to one another, recognise that we may have different views, but we can work together and find the middle ground, find the right way. We will tackle our challenges and construct better solutions, together.
And as Mr Christopher de Souza has just reminded us, our political dialogues must not degenerate into political brinkmanship, as we are seeing in many developed countries.
I have spoken about the Singapore way – our way – with people at the heart of our policies, planning for the long term while adapting to near-term circumstances, and doing it together, working in partnership. Our Budget reflects these principles, not just in the way we spend, as I had explained, but also in the way we fund our spending.
Many Members of Parliament in this House have called for more \"M&Ms\", not the sweet chocolate candy, but \"more and more\". I, too, like M&Ms, but our resources are finite, but our needs are growing and diverse. To square the circle, we need to use the right tools for the right needs, with these principles in mind. And we need all of these tools, to balance our Budget in the medium term. Let me talk about each of them in turn.
First, taxes. As individuals, we can all accept that we should pay for what we use. Similarly, each generation should pay for their own needs. We had debated this at last year’s Budget, and I am glad that many Members agreed with this. Nevertheless, there have been some reservations raised over the approach and timing of our plans to raise taxes going forward.
Ms Foo Mee Har urged the Government to postpone the Goods and Services Tax (GST) hike for as long as possible. She suggested that the funds that we have set aside this term for various future expenditures like the MGP and the use of borrowing for future infrastructure expenditures could provide sufficient fiscal space to postpone the GST increase.
I appreciate Ms Foo’s suggestion to delay this. Let me assure her and Members of this House that the decision to raise GST was not made lightly. As the Government, it is our responsibility to anticipate and plan ahead for future needs. While doing so, we also need to distinguish between one-off factors and underlying structural increases.
The GST increase is needed to support structural increases in healthcare spending, among other important needs, like preschool education and security. Such healthcare spending is of a completely different scale and nature from the cohort-based package set aside for MG or PG. As mentioned earlier, the Government has systematically laid the foundation of a broad-based healthcare system that supports not only seniors, but all Singaporeans, regardless of their age and income. They support not only seniors but all Singaporeans, regardless of their age and income.
We now provide significant subsidies in all care settings of up to 80% in our public hospitals and for long-term care services, up to 70% for specialist outpatient services, and up to 75% for polyclinics. MOH expects to spend $6.1 billion in 2019 alone to subsidise patient bills through existing permanent schemes that all Singaporeans enjoy. This does not even include spending to enhance our healthcare facilities and to research more effective treatments.
As our population ages, spending on permanent healthcare schemes and other parts of the healthcare system will continue to increase structurally. Funding this requires a structural increase in our operating revenues. In other words, the base of our healthcare spending is rising. Over and above this rising base, we have special packages set aside for our PG and MG. Every ageing society faces similar structural spending pressures. A recent OECD paper highlighted that in the median OECD country, public health expenditure is projected to increase by almost five percentage points of GDP between 2018 and 2060. Five percentage points. The OECD’s recommended approach is no different from ours. To address the growing fiscal burden from higher healthcare spending and demographic change without further ballooning of public debt, there is a need for these governments to raise primary revenues. The median OECD government is estimated to require additional revenues of 6.5 percentage points of GDP by 2060; 6.5 percentage point. What does 6.5 percentage points of GDP mean? To put it in perspective, we expect to raise about 0.7 percentage points of GDP with the planned 2 percentage point GST increase. So, you compare 6.5 percentage points to the 0.7 percentage point of GDP that we have, and you see the scale of the issues in many places.
We have yet to decide on the exact timing of the GST increase and we will exercise care when doing so. We will continue to monitor the prevailing economic conditions, trends in expenditure and the buoyancy of our revenues carefully. And as I said in the Budget speech, we have also been preparing a transitional package when this comes in.
Next, related to the issue that Ms Foo Mee Har and other Members raised, I should also put into perspective the surpluses accumulated so far in this term of Government.
Forecasting is an inherently difficult exercise. Some revenue items are volatile, especially those dependent on sentiment-driven markets, such as Stamp Duty or Vehicle Quota Premiums. For instance, in FY2018, we had estimated that Stamp Duty collections would be lower because of property market cooling measures. But the property market defied our expectations. There can also be surprises on the expenditure side. The two-year suspension of the Kuala Lumpur-Singapore High Speed Rail Project is a case in point. The unexpected surpluses over the last few years are not due to the introduction of Temasek into the Net Investment Returns (NIR) framework, as suggested by Mr Pritam Singh. The volatilities and uncertainties in revenues and expenditures, as I had just explained, account for most of this surplus. While the Government’s approach is to look ahead, plan ahead, and prepare for the unexpected, it seems that Mr Singh would prefer to look backwards to find unexpected revenue surprises, and count on them to keep happening. I am afraid such an approach of hoping for the best is not how we will secure Singapore's future.
While there is room for improvement, the accuracy of our revenue and expenditure projections has been reasonable and respectable by international standards. Actual revenue and expenditure figures have generally been within +/- 4% of our original estimates. The Ministry of Finance (MOF) is constantly looking for ways to improve our forecasts. But the experience of other countries also shows that this is not easy to do. Japan’s revenue estimates, for example, had a margin of error of about 11% over the past five years. Hong Kong, a small open economy like ours, averaged slightly better, at 8%. Nonetheless, we will see how we can continue to improve.
Mr Liang Eng Hwa also asked how the Government intends to use the accumulated surplus. First, let me clarify that any surpluses we have do not simply “disappear” at the end of the term. They become part of our Reserves which are invested to generate returns, part of which will form the Net Investment Returns Contribution (NIRC). As Mr Murali Pillai explained, when our economy grows, we have an obligation to contribute to the Reserves to be used for the uncertainties of the future. We should also bear in mind that the business cycle can turn, and having some surpluses on hand can allow us to provide targeted support to segments that need help to tide over the downturn. For a major crisis, we can turn to the past Reserves.
During the Global Financial Crisis in 2008, our accumulated savings allowed us to fund $15.6 billion, or three-quarters of the $20.5 billion Resilience Package, with the remainder being funded from past Reserves. So, $15.6 billion, out of $20.5 billion, were from current Reserves. In 2017, to support the construction industry to tide over a period of cyclical weakness, the Government brought forward about $1.4 billion of public sector infrastructure projects to start in financial year (FY) 2017 and FY2018. In planning for FY2019, we were also faced with the global economic outlook being downgraded by the International Monetary Fund (IMF), as global trade tensions grew.
More fundamentally, we should not have the mentality of trying to spend everything that we have before the end of each term of Government. As part of our long-term approach, we continue to review our plans for the long term and will deploy financial resources where necessary.
On this note, let me briefly reiterate the role of our Reserves.
Today, NIRC is already the largest single contributor of our revenues, larger than any category of the taxes we collect. If we did not have the NIR framework, we would have had to double our personal income tax collection or our GST collection to raise the same amount of revenues. In fact, we would not even be able to raise the same amount of revenue because it is now the largest category and doubling all the rest does not give you that same amount.
Our Reserves are our strategic asset. We are a small country, exposed to global forces beyond our control. Our Reserves will allow us to tide over a crisis, without being reliant on others. We should not underestimate the need for a rainy-day fund. Singapore faces particular vulnerabilities, given our lack of natural resources. With an economy worth nearly $500 billion a year, we should set aside enough to protect it and our people’s livelihoods and future.
So, let us stay disciplined. Today, we take up to 50% of the expected returns for spending, and plough back at least 50% to grow the principal and generate more returns. In this way, both the current and future generations benefit from the Reserves, and we can be confident of our future.
Mr Pritam Singh referred to a Business Times article and asked for more data on our Reserves so that I quote, \"Singaporeans can crunch the numbers themselves, and better understand Budget policy tradeoffs\".
He has also filed a cut on transparency on the Government of Singapore Investment Corporation's (GIC’s) performance, which will be answered at MOF's COS.
But let me explain why the Member is misinformed. Our Reserves comprise assets invested by the Monetary Authority of Singapore (MAS), GIC and Temasek. The size of MAS and Temasek's assets is public information. Only the GIC portion is not disclosed, and that is because with the GIC figure, you get the complete picture of our Reserves.
I was running the Monetary Authority of Singapore during the Global Financial Crisis, with Emeritus Senior Minister Goh Chok Tong as our Chairman. Let me tell you that in a crisis where the most powerful central banks in the world, and even some of the biggest financial institutions, were taken completely by surprise by the speed and scale of the turn in the markets and the global economy. Many things could have gone wrong. We not only rode through the crisis well but emerged stronger. Having our Reserves as a strategic asset played a key role in this. So, let us not squander this strategic advantage that we have.
Our Reserves also serve as a strategic defence, to deter parties who wish to undermine the interests of Singapore and Singaporeans. Such moves go beyond currency speculation attacks, to other types of threats. As Mr Mohamed Irshad noted, we live in a volatile, uncertain, complex and ambiguous (VUCA) world.
Our Reserves, like our investments in defence and security, give us the confidence to plan long term, knowing that we will have the ability to take care of our people and to defend our sovereignty.
Lastly, let me talk about borrowing.
Over the next decade, we are making significant investments in our infrastructure to enhance connectivity and create new growth opportunities for tomorrow. As I mentioned in the Budget Statement, the Government is studying the option of borrowing carefully as a tool to finance major, long-term infrastructure, and will announce our plans in due course.
In my round-up speech last year, I mentioned a number of infrastructure projects which our Statutory Boards and Government-owned companies are looking to borrow to finance. This included the Integrated Waste Management Facility by the National Environment Agency (NEA), and the Johor Bahru-Singapore Rapid Transit System Link by the Land Transport Authority (LTA).
In this year’s Budget speech, I mentioned our long-term infrastructure needs. And as Ms Tin Pei Ling has noted, we also have to plan ahead for our ageing infrastructure. All these are long-term needs that have to be studied carefully. When ready, we will share more.
As these projects have lumpy upfront costs and benefits that span many generations, borrowing can be a fair and efficient tool to finance and spread out these costs, instead of raising taxes sharply to fund them. In this regard, there is a simple answer to Mr Pritam Singh’s question about how borrowing will impact revenues available for future recurrent spending. Mr Pritam Singh asked how borrowing would impact revenues available for future recurrent spending. It does not. Borrowing does not create new revenues for recurrent spending. It merely converts a concentrated lump of spending in a few years into a smoother stream of loan repayment with interest. And we must have every intention to pay back what we borrow.
In fact, it is irresponsible for a government to borrow to spend on recurrent needs, such as healthcare and security. Such borrowing shifts the burden of paying for today’s needs onto future generations. This goes against the same principles of inter-generational equity that Mr Pritam Singh said he stands for. Mr Sitoh Yih Pin has rightfully cautioned against this and has called for further safeguards to prevent excessive borrowing. I share Mr Sitoh Yih Pin's views. If we proceed to use Government debt, we will make sure it is done in a disciplined and prudent manner.
Safeguards will be put in place to ensure that the debt, its interest and repayment are sustainable and in line with the Reserves Protection Framework. Borrowing or not, it does not change the fact that all Government projects should be cost-efficient, well-managed and must yield economic or social benefits.
What do we have to show in 10, 20 years’ time? An important question raised by Ms Tin Pei Ling. Borrowing is a financing tool. If used sustainably, it allows us to build a better living environment for our people and to make Singapore a dynamic and liveable city. This is not just a question about growth, but also one of sustainability, as emphasised by Dr Teo Ho Pin.
Mr Pritam Singh asked if building Singapore will come at the expense of our green spaces. The Member should not take the word \"building\" so literally, not just in bricks and mortars. We have always incorporated greenery in our urban plans. It is not only part of our climate change resilience efforts; it is part of Singapore’s identity as a City in a Garden. The Ministry of National Development (MND) will share more details on their greening efforts at the COS.
As we calibrate our fiscal tools, the ultimate goal is three-fold, that is, to remain pro-growth; ensure that our overall system of taxes and transfers remain fair and equitable; and keep the tax burden on the middle-income low. There have been calls for the Government to do more in redistribution through the tax system, to address income and wealth inequality.
Mr Saktiandi Supaat suggested if we could tier GST for different goods to lower the tax burden on the lower-income. This has been raised multiple times in Budget Debates over the years. But let me briefly reiterate the key arguments why a multi-rate GST is a less efficient way to help the lower-income.
First, it is difficult to define a \"necessity\". Take bread, for example. There are the white, and wholemeal loaves that you can find at supermarkets, but there are also loaves sold at artisan bakeries. On top of that, there are so many other types of bread – floss buns, baguettes, kaya toast at your coffee shop. Where do we draw the line?
Second, better-off households tend to spend more in absolute terms and thus benefit more from these reduced GST rates.
Finally, the experience of many countries and relevant studies also show that a multi-rate GST system raises businesses' compliance and administrative costs significantly, which are then passed on to consumers.
Our approach is to have a flat GST rate, while providing structural offsets through the GST Voucher scheme. This is a permanent scheme to provide more help to lower-income households and seniors. It is also more targeted, as those who need help most get it most directly. This is in addition to other schemes and programmes to help the less well-off.
Mr Yee Chia Hsing spoke about whether car ownership can be taken into account when means-testing, while Ms Jessica Tan and Mr Lim Biow Chuan asked if the Annual Value (AV) criterion can be removed.
No criterion is perfect, but if we put all our different schemes together, we have a system that is progressive and, as Mr Yee Chia Hsing said, fair. If we use vehicle ownership, for example, should we distinguish among the make and model, and what the vehicle is used for?
The Government will continue to regularly review the eligibility criteria to ensure our schemes benefit the intended groups, whilst being practical to implement. For those who have specific needs, the best approach is to appeal to the relevant authorities which will consider each appeal based on its own merits.
Miss Cheryl Chan has argued for a number of other measures to address growing wealth inequality, such as the introduction of a net-wealth tax, or an inheritance tax. I spoke briefly about this during the Budget Debates last year.
There are many types of wealth taxes. What works best depends on the country’s overall tax system and broader economic and social circumstances. Our approach has been to tax fixed assets which, as the name suggests, are fixed and less mobile. Indeed, a large portion of total Singapore household wealth is held in the form of housing assets.
We have two types of taxes on property, that is, Stamp Duty and Property Tax. We have been making them more progressive over the years. Owner-occupied properties enjoy a concessionary property tax rate, with the rate being higher for higher-end homes. The property tax rates are also higher for non-owner-occupied residential properties, such as those left vacant or rented out. In last year's Budget, I introduced a new tier for the Buyer's Stamp Duty for value of properties in excess of a million dollars. We will continue to monitor developments in this space.
At this point, let me address the concerns arising from the increase in diesel tax. Mr Dennis Tan acknowledged that the increase in diesel tax makes our environment more resilient, but asked if this is worth the price of potentially higher business costs. We must go beyond framing this as a simple tradeoff, to a broader understanding of the longer-term approach we are taking to address the increasingly urgent issue of vehicular emissions.
Diesel exhaust contains substantial amounts of particulate matter and nitrogen oxides which are associated with an increased risk of lung cancer and respiratory infection. The long-term impact of excessive diesel use on the health of our family and children is significant. It is thus necessary to use a price signal to nudge diesel users towards cleaner and more sustainable alternatives.
Diesel tax is only one part of a larger roadmap to discourage diesel consumption. In 2013, we introduced the Early Turnover Scheme (ETS) which has helped more than 40,000 commercial goods vehicles switch to cleaner and more fuel-efficient diesel vehicles. In 2018, we introduced the Vehicular Emissions Scheme (VES) to further incentivise the purchase of cleaner vehicles and discourage the purchase of pollutive vehicles. It is encouraging to note that there were no new diesel taxis registered in 2018. The number of diesel taxis has also decreased by more than 30% from 23,700 in 2016 to 15,100 in 2018, as taxi companies switch to electric and electric-hybrid taxis.
Mr Gan Thiam Poh suggested exempting vehicles and machinery from diesel tax if there are currently no non-diesel alternatives. But this works against what we are trying to do. The increase in diesel tax will help nudge businesses which are heavy diesel users towards greater efficiency. For example, companies can consider adopting consolidated logistics and use better routing applications to optimise their deliveries. In the interim, we have provided a transitionary offset package to cushion the cost impact till 2022, as businesses adapt to reduce their diesel consumption.
Mr Ang Hin Kee, Er Dr Lee Bee Wah, spoke about the impact of diesel duty on taxi drivers. We recognise the cost impact faced by taxi drivers. As Senior Parliamentary Secretary Baey Yam Keng said, all taxi companies have pledged to step forward to pass the entire savings from the Special Tax reductions to their drivers. There are also incentives being offered to encourage taxi drivers to switch to petrol hybrid taxis, as we strive for lower emissions.
This year, I had several good conversations with people about this Budget at various forums. Some asked me, \"What about me? There did not seem to be anything in this Budget for me\". Even if there is nothing new for you this year, you and your family have certainly benefited from every one of our Budgets. As I said, we must not look at the Budget in isolation. One Budget builds on another.
So, let me outline how this Budget benefits different groups. Our young people have benefited from stronger support in education, housing and parenthood. They also benefit from the opportunities that a vibrant economy brings, as I explained earlier.
We provide up to $80,000 in grants for new Build-To-Order (BTO) flats, and $120,000 for resale flats, and invest even more later on when estates undergo upgrading.
Parents can receive a maximum of between $18,000 and $32,000 in marriage and parenthood benefits for each eligible child, on top of paid maternity and paternity leave, tax benefits and preschool subsidies.
Our middle-income families, especially those feeling \"sandwiched\" supporting retiree parents and school-going children, would benefit from many schemes. For example, their children receive significant education subsidies. Without these subsidies, families would have to pay more than 60 times the current fees for their children in school. University fees would also be four times what Singaporean students currently pay. And this is for a world-class education.
The PGP and MGP ease healthcare costs for their parents and, in so doing, help with their families’ overall expenses. This year, many will receive a number of top-ups, such as to their children’s Edusave or Post-Secondary Education Accounts (PSEA) and their parents' CPF. All who pay personal income tax will receive a rebate.
Some middle-income and upper-income families also commented that the tax rebate of $200 is insignificant and of not much benefit to them. But we must not forget that overall, income taxes are kept low, so that they can keep a large part of what they earn. This is, as Mr Ong Teng Koon mentioned, one of the key things that help with keeping expenses manageable.
I should share a story of a recent encounter with a Singaporean who came back from a very developed country. And he told me, \"Mr Heng, I am very happy to be back in Singapore. First, I am very happy to be back with my parents and family. But I am also very happy that I got a 32% pay rise.\" I said, \"Wow! Your new employer has been most generous.\" He said, \"No. My employer who sent me back from the headquarters kept my salary at the same salary. But when I added up all the taxes that I have paid in that country – at the city level, at the state level, at the federal level – it added up to 32% of my pay.\"
So, I thought that was a very powerful story. You can look up the tax rates of many of the countries that have extremely generous welfare systems but, as some of you shared, the moment you take your paycheck, more than half has gone. So, let us not forget this point.
As Miss Cheryl Chan put it, we must not see the Budget as simply a \"bag of benefits that serves some people in one year or the other\". It is our strategic financial plan for the future. And because we take a long-term approach, we cannot see each year's Budget in isolation. Our Budget builds on the foundation of earlier Budgets. We have a multi-year plan, which tackles the priorities as systemically as we can. We plan ahead by setting out the strategy for mitigating and adapting the impacts of climate change. We look at the needs of different groups of people, as needs evolve and grow. We invest in growing our economy and in our people so that we have the resources to do more for our people and their children, and their children later.
So, I am glad that many Members have asked the question, \"What is in it for us, for Singapore?\", rather than \"What is in it for me?\"
Budget 2019 and our previous Budgets are to build a better Singapore for all of us. All of us benefit from a Singapore which is strong and united. With a strong defence, to protect our way of life; a clean and green environment, a liveable city and endearing home; a vibrant economy, where opportunities abound; and a strong community, where no one is left behind. My colleagues will share more on what the Government will be doing along these lines during the COS.
As Prof Yaacob Ibrahim, Mr Darryl David and Miss Cheng Li Hui have mentioned, our Bicentennial is an opportune time for us to reflect on how we have come so far, on what we have built together, and what more we can do, as individuals and in our organisations, to strengthen our society. I look forward to our VWOs, clan associations and religious groups continuing to step forward regardless of race, language or religion to uplift the disadvantaged amongst us. I look forward to more people – academics, professionals and, indeed, all citizens – providing constructive suggestions on how best to tackle critical issues confronting Singapore, as Mr Christopher de Souza mentioned, on strengthening our social compact.
The Bicentennial is also a good time to reflect on what being an independent, sovereign state means. It means fiercely protecting the precious freedom that we have to chart our own destiny, even as our relationships with our neighbours and the world change. It means appreciating that we have our own unique way of solving our problems the Singapore way. And, indeed, not to be pressured to conform to theories which sound fashionable but do not work for us. It means committing to give our best, building on what past generations have done. Together, we can advance and make this little red dot shine even more brightly. So, let us work together to build a strong and united Singapore. [Applause.]
Mr Low Thia Khiang (Aljunied): Sir, I have a clarification.
Mr Speaker: Carry on.
Mr Low Thia Khiang: Thank you, Mr Speaker. I have a clarification for the Minister for Finance. I would like to know how long the Government expects the increase in structural expenditure in healthcare to last. And at what speed will it increase? I understand that the increase is largely due to the ageing population. The biggest ageing generation is my generation, the MG. I would expect that we will diminish in number over time. So, how much exactly is the projection and expenditure?
Mr Heng Swee Keat: Mr Speaker, Sir, I thank Mr Low Thia Khiang for his question. I am glad that he is in the MG. And as I said in my speech, I hope that our MG will redefine ageing and that the Member continues to stay healthy, active and connected and live longer.
So, as to Mr Low Thia Khiang's question on how long this structural increase in our healthcare expenditure will last, in my speech, I mentioned that what we have been doing, for instance, is studying the OECD's experience. I mentioned about the experience of a number of countries. Last year, I was in Japan to look at what they were doing to deal with the problem of an ageing population. And I must say that there are many variables that go into the long-term care costs and the long-term support that is needed.
In fact, the one Minister that I spent a lot of time with is Minister Gan Kim Yong because, each time I see him, he comes up with a higher set of figures. So, if you ask me how long this will last, I would not want to mislead this House. We are continuing to study this very carefully. All I can say is that it is going to last for quite a number of years. As I said, there are many variables which are not certain. For instance, how will our lifespan change and what is the extent to which our seniors will continue to be healthy? How will medical advances change? And how would new drugs, new treatment methods change the cost structure and change the life expectancy?
There are many doctors in this House. And I think even if you ask all our doctors here, they would not be able to give you a definitive answer because there is a wide range of uncertainties. So, we must plan on the long-term basis. And we are not just having an ageing population, we are also having ageing infrastructure, as Ms Tin Pei Ling reminded us. As I said in my Budget speech, we are also looking at all of these long-term needs very carefully and we will share this when ready.
Mr Speaker: Mr Pritam Singh.
Mr Pritam Singh (Aljunied): Mr Speaker, I would like to thank the Minister for Finance for his round-up speech and addressing some of the issues that were raised in my speech. I want to revisit this idea of, not a cohort-based health benefits scheme for our seniors but something more permanent. My point really comes back to some of the other issues that were raised by Senior Minister of State Chee Hong Tat and some of the other Members. The argument really is, the Government will not know how much its surplus would be through the course of the term before it decides how much it can give out for these packages. So, you have to earn your keep before spending, so to speak.
But if you look at one of the Budget annexes on the Analysis of Revenue and Expenditure, based on the NIRC component which includes both the Net Investment Income (NII) and NIR, for the last four years, it has come up to $62 billion. And based on the trending, it would probably to be about $80 billion over the course of one Government's term, provided it runs for its full five years. Be that as it may, I would like to make a quick reference to the Singapore Perspectives background paper which was released in 2018. This was an Institute of Policy Studies (IPS) survey that was carried out. I have an extra copy. If I may, Mr Speaker, can I just pass it to the Minister of Finance?
Mr Speaker: Yes, please.
Mr Pritam Singh: Sir, on page 14 of the paper, which is a Lee Kuan Yew School of Public Policy paper, there are two questions that were asked: first question is: would you be comfortable paying for higher social spending on the elderly through higher taxation instead of tapping on the national Reserves? The second question is: should NIR used to fund social expenditure for the current generation be increased and the amount reserved for future generations likewise decreased?
There is a response on page 13. The response is, slightly more than 40% of respondents disagree to paying higher taxes to fund increased social spending on the elderly. The survey notes that while there were more neutral responses with the question on using a larger share of the returns from investing national Reserves to finance higher social spending, more respondents agreed to the statement than disagreed with it. To a large extent, it is not surprising, People would react emotionally to issues of taxation, how it is funded and so forth.
But I think what was interesting was the final analysis from the IPS researchers which was, for both questions, respondents aged 45 to 64 – and I am assuming Ah Seng and Ah Kong are part of this – respondents aged 45 to 64 were more likely to disagree to pay higher taxes rather than tapping on national Reserves and to agree to using a larger share of the NIR to finance current social spending for the elderly. This is the interesting part: this age group experiences the highest tax burden and may be feeling the greatest uncertainty about financing their own post-retirement living expenses.
So, with that as a gauge, I have to put the issue again about NIRC for which NII is a component. If you look at the Merdeka package about $6.1 billion, $8 billion with interest, and other components coming in, it is still a small percentage of the overall NIRC revenue that the Government is constitutionally allocated. In that context, is it possible to still consider moving away from cohort-based packages to something more permanent and universal, but with, of course, the additional MediSave top-ups and other issues which I raised in my speech as optional items, so to speak.
That is my first clarification and I apologise if I went too long. My next one is much shorter.
Sir, at the last Budget Debate, the Workers' Party made a point that we support the Budget but because of the announcement on the GST, we voted against the Budget. Similarly for this year, we support the Budget, but our position on the GST has not changed. I just want to put that down for the record.
Mr Heng Swee Keat: Mr Speaker, Sir, Mr Pritam Singh asked about whether we should have a more permanent scheme. But if Members have heard me carefully during the round-up, MOH already have many, many permanent schemes, many permanent subsidies. The $6.1 billion that it is spending on this alone will give you an idea of that. As I said earlier, we already have many structural subsidies which are already built into our healthcare system. So, the MGP and PGP are built on top of what we already have. This is a subsidy on a subsidised rate.
Sir, I think it is important for us to appreciate the care that went into designing this very complex system. We spent a lot of time thinking about how best we can do this in a sustainable way.
Second, the Member was citing the IPS survey and so on. As Members can see in the IPS survey, respondents vary in their comments whether they should be funding current, whether they should be funding future and so on. We must not confuse the MGP and PGP that have been set aside to fund these long-term care programmes with the use of NIRC. The NIRC comes in as a big pot, and that helps us to fund a number of other things.
The packages that we have, specifically target that group and the funds come from what we have today in current Reserves. We have not touched the past Reserves. As I said earlier, the Reserves are a strategic asset for Singapore. You do not know how the global situation will develop and it is important for us to have that strategic asset for the long term. That is why my whole Budget round-up speech is about planning for the long term, while you address and adapt for changes for short-term developments.
Mr Speaker: Any other further clarifications?
[(proc text) Question put, and agreed to. (proc text)]
[(proc text) Resolved. \"That Parliament approves the financial policy of the Government for the financial year 1 April 2019 to 31 March 2020.\" (proc text)]
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[Mr Speaker in the Chair]
The Chairman: Main and Development Estimates of Expenditure of Singapore for the financial year (FY) 1 April 2019 to 31 March 2020, contained in Paper Cmd 19 of 2019. For convenience, I shall take the totals for each Head of Expenditure in the Main and Development Estimates as they appear in the last columns of the schedules of estimated expenditure under the Main and Development Estimate outlays for FY2019 on pages 6 and 7 respectively of the Command Paper.
A total of 505 amendments to the Estimates of Expenditure have been submitted this year. The \"guillotine times\" to the discussion of the Heads of Expenditure under Standing Order 92(7)(a) have taken into consideration the earlier commencement time of a Sitting, the reduction of Question Time and the extension of Sitting times of the Committee of Supply for each allotted day.
I must remind hon Members that the total time for discussion of each Head of Expenditure includes the replies from the front bench. With the assistance of the digital timer in the Chamber, I trust that hon Members will be able to keep to the speech times indicated against their amendments. I would urge hon Members both from the back and front benches to adhere to their time limits, as I will be very stringent in my time-keeping.
I shall deal first with the Heads of Expenditure in respect of which amendments stand on the Order Paper Supplement. Head U – Prime Minister's Office. Mr Patrick Tay.
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The global operating environment is evolving rapidly. There are many growth opportunities in Asia, but economic competition is also intensifying and technological changes are reshaping competitive advantages across economies. Domestically, we are faced with an ageing local workforce which can pose constraints on our growth. But not if we can enable our people to learn, unlearn and relearn to stay employable over a longer career span. Indeed, technology is a potential game changer that can allow us to overcome our resource constraints and embark on a new S curve in our growth trajectory. To stay competitive, we need to be able to innovate and leverage on technology, to do more with less, and to work smart.
The same applies to the Public Service. The Public Service must be able, agile and adaptable. Able to stay at the forefront of technological advancement, agile to be able to work with the private and people sectors to build a competitive economy; and adaptable, as we embrace the journey towards being a Smart Nation. This means that the Public Service must be able to use technology to become more productive in its operations. This includes using technology to transform the way it delivers services.
Citizens today are used to services like FoodPanda or Grab that crowdsource and bring different providers together to be accessible at the fingertips of customers in a high-tech way. Many companies, such as those in the retail sector, are also using artificial intelligence (AI) and data analytics to analyse and, in fact, anticipate customers' needs. How is the public sector using technology to similarly transform the way it functions – from performing regulatory functions to enforcement, to delivering services to citizens? How can it bring related services together to help citizens or businesses, rather than have citizens or businesses go to different Government agencies to get what they need? How is the Public Service using technology to make service delivery more efficient and save time and effort on the part of citizens and businesses in transacting with the public sector?
In fact, how is the Public Service using AI and data analytics to better anticipate citizens' needs and using robotics to complement its workforce? Of course, it is not and must not be just a tech push. Ultimately, Public Service delivery must be anchored on citizens' needs. Beyond delivering services efficiently and impartially, the Public Service must be able to put in place systems and processes to ensure that public officers do not just apply rules mechanically but always put citizens at the heart of Public Service delivery.
They must be able to identify changes in the needs of citizens and be able to update policies, programmes and services in a timely manner. In short, the three \"highs\": not just high-tech but also high touch; and not just high touch but also high trust. To transform public services, therefore, requires public officers to take on new skills so that they can perform their jobs differently and effectively. Where work can be automated, it is also important for public officers to be able to take on new skills to perform new jobs.
In short, SkillsFuture should apply equally to the Public Service. What is the progress of the Public Service in upgrading the digital skills of our public officers? Does the Public Service put in place reskilling programmes to help retrain officers to move from one job to another within the public sector as technology changes the way work is done? The Public Service should work closely with our public sector unions and the Labour Movement to encourage all officers to constantly reskill and retool in order to keep themselves relevant and employable.
A good start will be forming dedicated training committees jointly with our public sector unions and union leaders. Beyond skills, the Public Service ethos lies at the heart of Public Service. While jobs and skills will change, the values of service, integrity and excellence should always remain. How is the Public Service developing its officers to ensure that they continue to remain grounded, that they are in touch rather than lose touch with the needs, aspirations and concerns of citizens and businesses? How do we develop public officers who are able to serve with heart, be able to connect with citizens and co-create new solutions with both the people and private sectors?
[(proc text) Question proposed. (proc text)]
Prof Fatimah Lateef (Marine Parade): Mr Chairman, Singapore has one of the most dynamic and high performance public service sector globally. With a spectrum of younger officers to the very senior and experienced ones, they serve Singaporeans through our Ministries, Civil Service, Statutory Boards and many other organisations.
With globalisation and a more connected world, our Public Service must be resourceful, creative and rapid thinking. They must remain nimble and keep abreast of the changes and disruption in the world of today and tomorrow. They must align with the state of the art, be adaptable and flexible in certain aspects of policymaking and governance, but yet uphold the principles that Singapore stands for. The adoption of information technology (IT) and other technology-driven processes, communications as well as surveillance must be top-notch and robust. Yet at the same time, maintenance of safety and security must be upheld. How is the Singapore Public Service assisting the officers in providing adequate training, building of capabilities, acquisition of the necessary software, technology adoption as well as nurturing and managing the mindsets of officers to ensure adaptation, alignment and buy-in? And this is also part of the learn, unlearn and relearn process.
Another very important tagline with the Public Service must be coordination. With the amount of disruptions and interventions that we face today, how will the Public Service ensure safe coordination and integration of information, data and details across the service whilst, at the same time, maintaining confidentiality?
Mr Cedric Foo Chee Keng (Pioneer): Mr Chairman, my cut today is to discuss whether our Public Service can adopt a citizen-centric approach to delivering Government services. Delivering services to citizens is at the core of what Government agencies do.
[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]
Unfortunately, many of these services are based on processes and technologies that have been in place for many years and many of these were designed based on each agency's individual needs and requirements. Therefore, such services were not designed with the objective of improving the ease and satisfaction when a citizen interacts or transacts with the Government.
To make an enquiry or to complete a transaction, citizens may have to physically visit different agencies, speak on the phone with multiple parties or browse the websites of various Government agencies. Often times, citizens have to fill up many forms and repeat information that were previously provided albeit to a different Government department. Government agencies, in turn, face both declining citizen satisfaction and also incur higher costs from repeated touchpoints across agencies.
A citizen-centric Government should function as an integral unit adopting a whole-of-Government approach when delivering services to citizens. This calls for a coordinating unit that cuts across silos like, Ministries, Statutory Boards and departments, and sharing data freely at the backend across all agencies.
Today, with advances in technology and connectivity, Governments can meet these rising citizen expectations. Digital transformation with AI, machine-learning and data analytics, a Government could even predict and anticipate what a citizen needs. Queuing at counters and filling up forms could be a thing of the past. I would like to ask the Minister about how the Public Service is organising itself to ensure that services are delivered in a citizen-centric manner.
Ms Anthea Ong (Nominated Member): Trust, as they say, is built in drops and lost in buckets. The recent spate of service lapses has contributed to an increasing sense of uncertainty about the robustness of the Public Service.
Minister Heng Swee Keat, in response to the Zaobao commentary that alleged complacency, said \"We would not flinch from taking a hard look at ourselves each time there is a failure and doing whatever is necessary to put things right.\"
I am heartened by Minister Heng's conviction and commitment. Indeed, a string of events of such significance happening so fast and furiously offers more than a glimpse of possible fault lines within the system, not just in isolated Ministries or with certain officers. Might having an open conversation on these fault lines restore trust? What specific steps are being taken by the Government to restore public confidence?
Additionally, how does the Public Service Division (PSD) ensure a culture of accountability, transparency and empathy? With increased public scrutiny and expectations, how is the Civil Service College (CSC) training public officers to understand subjective well-being beyond material well-being and how are they trained to formulate better policies that address citizens' well-being in ways that also increase public trust in public institutions?
Lastly, how can Public Service Cares, announced in Budget 2019, be more than just a volunteering programme for public officers, but be embodied as an ethos?
Notwithstanding my clarifications, I want to take this opportunity to express my appreciation for every Public Service officer in the service who serves sincerely and wholeheartedly.
The Chairman: Mr Lee Yi Shyan; not here. Ms Sylvia Lim.
Ms Sylvia Lim (Aljunied): Sir, there are certain public officers created under the Constitution with functions and duties to safeguard the public interest. These appointments are recommended by the Prime Minister and subject to the discretionary approval of the President.
One example is the Attorney-General. Under Article 35, the Attorney-General shall have power, exercisable at his discretion, to institute, conduct or discontinue any proceedings for any offence.
Another example is the Auditor-General, who, under Article 148(F) is entrusted with the constitutional duty to audit and report on the accounts of all departments and offices of the Government, the Public Service Commission, the Legal Service Commission, the Supreme Court or Subordinate Courts and Parliament.
Sir, we are all familiar with the annual audit reports of the Auditor-General's Office (AGO). It often contains embarrassing findings and may uncover misconduct. The AGO reports are a key measure by the Government towards accountability and the prudent use of public funds.
Chairman, today, I would like to ask for clarification about the selection process and criteria used by the Prime Minister in selecting the Auditor-General.
The Constitution does not spell out any qualifying criteria for being the Auditor-General.
In recent history, our Auditor-Generals have been drawn from senior civil servants and there has been an appointment of a new Auditor-General this year. I do not know the current appointee personally and I have no reason to doubt her integrity. Indeed, I am prepared to assume that she will do her best to do her work honourably.
However, can the Prime Minister confirm that the current appointee is the spouse of a Senior Minister of State? And if this is so, did the Prime Minister consider how appointing the spouse of a Senior Minister of State would affect the public perception of the independence of the AGO?
Mr Png Eng Huat (Hougang): Sir, I had spoken on the impact of MediShield Life on pensioners when the compulsory health insurance scheme was introduced and debated in this House in 2014 and 2015.
As I understood from some pensioners, they have continued to receive the same medical benefit as before, as assured in this House, although not under MediShield Life but under their original pension medical scheme. As it is, these pensioners are insured under MediShield Life in name only even though they do not need the coverage. I understand their MediShield Life premiums are paid for by the Government and transitional subsidies through MediSave top-ups.
The MediShield Life scheme is almost five years now. While pensioners are not worse off, in terms of their medical benefits, I wish to ask the Government if there is any study or survey done to ascertain the financial impact of the redundant MediShield Life coverage on pensioners. After factoring in the various MediSave top-ups, did the subsidies help pensioners pay for their MediShield Life premiums as well as for their spouses' premium in full without the need to incur any out-of-pocket expenses? This is important because this Government has assured pensioners in this House that they would not be worse off under MediShield Life. By that, it should also mean that they would not be financially burdened when they are put under the compulsory but never used medical scheme.
Next, Deputy Prime Minister Teo Chee Hean said that pensioners have one important benefit with MediShield Life that they did not have previously. He said that the spouse of a pensioner will cease to have medical benefits when the pensioner passes away. But under MediShield Life, the spouse will be covered by MediShield when the pensioner is no longer around.
Sir, this important benefit is assuring but it is also a benefit by default to begin with, since MediShield Life is made compulsory for all. Everyone has to pay for medical coverage by law, regardless of who you are. So, this important MediShield Life benefit, as mentioned by the Minister, only makes more sense for pensioners if the Government continues to pay the premium for their spouses when they are no longer around. Otherwise, the spouses will have to come under MediShield Life by law as they do not have a choice.
Sir, I would like to ask the Government to clarify if it would continue to pay the MediShield Life premiums for the spouse of pensioners as a benefit when the old medical coverage ceases with the passing of a pensioner.
Dr Teo Ho Pin (Bukit Panjang): Mr Chairman, Sir, in Prime Minister Lee's \"A Tale of Two Cities\" speech in London in 2014, he espoused Singapore's global city aspirations. To this end, we achieved 5th place in the Global Cities Outlook List last year. To sustain this, it is imperative that our world-class city is supported by a world-class Civil Service.
I would like to know the measures which the Government has undertaken to ensure and upgrade the service delivery skills of our Public Service officers.
Sir, just as the Government has called upon the private sector to increase productivity and the quality of their services, it should urge the public sector to take the initiative in setting an example for the rest of Singapore to follow.
In addition, I would like to suggest that the Government use the speed of delivery and the quality of Public Services as metrics by which it assesses the progress of its push to build a world-class Civil Service.
However, it should be noted that the employment of a one-size-fits-all approach in serving the public will not suffice. There must be greater introspection on the part of our Civil Service. Far too often, we focus too much on the numbers and neglect the human aspect of governance.
While automation has allowed for gains in productivity, navigating a pre-recorded voice menu or filling up a form adhering to a strict format online, may not satisfy the needs of the public.
Sir, I believe that if the Civil Service provides more channels of access to public services which take into consideration the limitations of automated processes, it can serve Singaporeans better.
In the pursuit of headcount and productivity key performance indicators (KPIs), the public sector has resorted to outsourcing, which has affected the quality of public services. Sir, outsourcing does not contribute to the development of human capital in the civil service and may result in public officers losing out on learning opportunities in providing quality services.
I would like to propose that we adopt a design-thinking approach to transforming the delivery of public services. At the same time, we should refocus our efforts to train and deepen the skills of our Public Service officers.
Sir, our global city deserves a world-class Civil Service with the heart to serve the public.
Mr Ang Hin Kee (Ang Mo Kio): Mr Chairman, Sir, the Government has been active in its efforts to innovate and improve the ease of transactions between the Government and the public.
As the pace of transformation quickens with technological disruptions, I would like to know how well public sector workers are being prepared to stay relevant. At the same time, how have jobs in the public sector been transformed and what other changes will be coming soon?
In the midst of such changes, I hope the Government can take the lead in ensuring that all public sector workers have access to relevant training, reskilling and redeployment opportunities.
Are the various Ministries and agencies aware of the challenges faced by those who may struggle in their training efforts, especially the older workers, who may find it more challenging to acquire new skillsets? Have we been able to redeploy these workers across different departments, agencies or Ministries?
Recently, I met about 80 unionised staff from various Statutory Boards and they shared with me their experiences and the assistance given to help our public sector workers to be future-ready and to be prepared for a transformed workplace.
Is PSD aware of how each agency is progressing in this journey and whether their respective efforts have been effective, especially to help the older ones adjust to the pace of training required for their new or enhanced job roles or even redeployed roles?
Last year, the CSC announced that it is partnering the 12 Institutes of Higher Learning (IHLs) to support public sector transformation, as well as the transformation of learning within the sector. Public officers will have access to one digital learning platform. Would the Ministry have an update on the take-up rate of these courses on the new learning portal?
The Chairman: Mr Louis Ng, you have two cuts. Can you take both together?
Mr Louis Ng Kok Kwang (Nee Soon): Sir, last year, I spoke about the need to better recognise public servants' contributions and skills beyond their formal academic qualifications.
Minister Ong Ye Kung shared that one initiative was to merge existing schemes for diploma and degree holders. Beyond the point of recruitment, an officer's progression is pegged to their on-the-job performance rather than their educational qualification. This has been done for the Ministry of Education (MOE), the generic Management Executive Scheme in the Civil Service, and the Air Traffic Control Officer Scheme.
Minister Ong Ye Kung indicated that PSD will work with other public agencies to identify more areas where this can be implemented.
[Mr Speaker in the Chair]
Can the Minister provide an update on which other public agencies no longer have different salary scales and progression structures for diploma and degree holders? Can we also extend this to the Institute of Technical Education (ITE) graduates and not just diploma and degree holders?
Sir, last year, I also spoke up about the need to provide platforms for public servants to provide feedback to upper management. Further, we need to close the feedback loop so that public servants know that their views are valued and can make a difference in strengthening the Public Service.
I suggested implementing internal QSMs within Ministries and Statutory Boards. Minister Ong Ye Kung responded that all public agencies do conduct staff engagement surveys periodically.
I still meet some public servants who say that they have provided feedback but have no idea if anyone is looking into it and have not received the reply with regard to the feedback that was provided.
Will the Minister consider adopting common principles and guidelines for the conduct of staff engagement surveys across the Public Service? Will the Minister also consider requiring public agencies to track the feedback received and actions taken in response to the feedback?
The Chairman: Minister Chan Chun Sing.
The Minister for Trade and Industry (Mr Chan Chun Sing): Mr Chairman, Sir, let me first thank all Members who have spoken up in support of the importance of maintaining an able and committed Public Service.
I agree with all Members. Our Public Service colleagues and I are determined to build a Public Service that is the pride of Singapore and Singaporeans. Our Public Service has been a pillar of strength for Singapore's survival and success. It has been so, and it will continue to be so.
Our operating environment is changing rapidly. Internally, new generations of Singaporeans are growing up in different circumstances, with different aspirations and expectations. Singaporeans expect services to be organised around them and delivered in an integrated and timely manner. They expect systems and organisations to fit their needs and not the other way round. Singaporeans also expect services and information at their fingertips and have much less patience to navigate complex bureaucracies.
Externally, our geopolitical situation has become more uncertain and challenging. New security threats, including the cyberspace, have emerged and which threaten our national security. The contest of big powers and the domestic politics of regional players combined, can potentially squeeze us and shrink our economic and foreign policy options. But all is not gloom and doom.
Connectivity and technology allow us the opportunities to overcome our geographical and labour constraints. If used well, they can bring us to greater heights. Our workforce is also more educated and more skilled. We can better compete on quality rather than quantity.
To continue to build a vibrant and successful Singapore for the future, our Public Service must constantly challenge ourselves to come up with new ideas, adopt fresh approaches to working, organise ourselves differently and develop new skills.
Our Public Service generally delivers services efficiently, but this is not enough. Beyond working the whole-of-Government, our Public Service must achieve whole-of-Nation outcomes. Partnering Singaporeans and the private sector to deliver results must become second nature to our Public Service, and not as an afterthought. It is not just about delivering good service for the public but also delivering better services with the public.
However, the Public Service and private sector must play our respective parts well in this new partnership to take Singapore to greater heights. Both must be mature to know the complexities of taking into account many sources of feedback, competing interests and differing aspirations. And if our individual suggestion is not accepted after working the process together, it does not mean that the ideas and inputs are not considered. Instead, it has formed part of the process to arrive at the final solution.
I agree with Dr Teo Ho Pin on a design-thinking approach to the delivery of public services. The Public Service will progressively approach the design of many of our services around people and issues, rather than just expect people to adjust to our existing structures and ways of working.
The Moments of Life app for families, launched last June, is a small example of how the Public Service can come up with new ways of serving citizens better, by working with citizens and the private sector, as partners. The team wanted to make life easier for parents of newborn babies. They want to reduce the administrative hassle so that mums and dads can focus on welcoming baby and caring for baby. So, they started by interviewing many new parents to understand what needs to be done at the point of baby’s birth, what frustrates them and to get good ideas from parents how public services can be delivered better and faster services for them. The outcome was an app that allows parents to register their child’s birth, apply for Baby Bonus and child library membership, all at one go. They do not need to approach multiple agencies and produce the same physical documents for verification again and again. This app has been downloaded over 20,000 times in less than a year and I am happy to say that, beyond public hospitals, we have begun offering this service at private hospitals, starting with Thomson Medical Centre earlier this year. Other private hospitals will progressively come on board in the coming months.
The Public Service will expand this effort. It has since started more projects to redesign services around more key moments, including pregnancy, parenting a school-going child, National Service, and entering one's silver years. We will also design services with different segments of citizens in mind, especially those who may not find it easy to access our services through the usual channels. For instance, at the Inland Revenue Authority of Singapore (IRAS), a priority registration queue is created for the elderly and those with mobility constraints during the tax filing season. They will be ushered to a sitting area and attended to quickly. The Housing and Development Board (HDB) also sets up a priority queue during sales launches to assist the elderly, persons with disabilities and expectant mothers. At the Central Provident Fund (CPF) Board's service centres, there are retired citizens who serve as roving CPF Ambassadors to help post-55 CPF members.
The Public Service is working closely with various people and private sector organisations in this expanded effort to redesign services around citizens. We will share more about these developments in the coming months.
Within the Public Service, we also need to organise work differently across Ministries and agencies. Our current structures were optimised to solve previous problems. When problems evolved and goals changed, we must similarly be bold to evolve our structures and organisations to serve the objectives of tomorrow, as Member Mr Cedric Foo suggested. Climate change, cyber threats, unmanned systems are but some new challenges that require us to evolve new organisational structures to manage them.
Mr Cedric Foo also asked how we can continue to ensure that our services are citizen-centric. Indeed, the Public Service must reorganise itself to be citizen-centric, not agency-centric, in the way we work.
The Public Service Centre at Our Tampines Hub is one example. It started by co-locating different agencies together to serve citizens in one physical location. This year, the six agencies are coming together to cross-train counter staff, and each staff will be able to provide a range of some 70 services across the six Government agencies. Citizens will be able to approach any counter for help, instead of having to wait for the \"right\" counter to become available.
The Social Service Office (SSO) is yet another example of how we are bringing different services together to help citizens in need. For instance, the SSOs at Taman Jurong, Kreta Ayer, Yishun, Chua Chu Kang and Jalan Besar are piloting an effort for the same SSO officer who provides financial assistance to unemployed residents to also help them find jobs. The Silver Generation Office (SGO) is also co-located with the SSOs in Taman Jurong and Geylang Serai, and the officers work closely to address the social and health needs of seniors in a more integrated manner.
As many have suggested, it is not easy for the Public Service to organise itself differently and operate differently to serve citizens better without new skills. Ms Anthea Ong, Dr Teo Ho Pin and Mr Ang Hin Kee are right that we have to help our public officers approach their work with new mindsets and give them new skills.
First, we need our public officers to think differently. They must be able to see beyond the current task that they are doing, and work with their colleagues in other Ministries or agencies to serve citizens better. This does not come from classroom training alone. PSD will expand the system of job postings to apply to a wider group of officers, so that our officers will gain wider perspectives, and grow a stronger instinct to work across agencies and with the private and people sectors.
Second, our public officers cannot just develop good policies but must be able to execute them well. To do this, public officers must be able to understand the needs of citizens and businesses better, know what are the constraints and challenges on the ground in implementing policies, and be able to see through the implementation details.
PSD and the Ministry of Culture, Community and Youth (MCCY) launched a new Engagement Immersion for Leaders programme last year. Leaders at Director-level and above were attached to different frontline work environments to serve citizens so that they can gain new insights on how policies and programmes can be implemented better on the ground. This year, we will implement Public Service Cares. This is a new initiative to encourage all officers to volunteer and serve the community and, in the process, learn how to better communicate with citizens. It seeks to develop a stronger service ethos and a culture among public servants to walk and know the ground needs even better. Officers, senior ones including, are regularly rotated to join the People's Association (PA), SSOs and the feedback unit Reaching Everyone for Active Citizenry @ Home (REACH) outreach efforts on the ground for them to get a first-hand feel of serving Singaporeans.
Third, we need our public officers to have good interpersonal linkages with the people and private sectors. In particular, the Public Service will work towards achieving greater porosity and two-way flow of talents between the public and the people and private sectors. One way is through sending officers to work attachments in the private sector. For example, we sent 10 officers for attachments to various companies, such as the Development Bank of Singapore (DBS), Singtel and Grab, through the inaugural Service Delivery Talent Attachment Programme last year. They are bringing back new knowledge and insights to improve the delivery of public services. We will expand such opportunities to strengthen our Public Service and our links beyond the Public Service.
Fourth, public officers need to understand our region much better and develop stronger ties with their peers in the region. To continue to expand the economic and international space for Singapore, our officers must be able to be plugged into various international networks and understand the economic, political and social systems of countries in the region and in our key markets. Our Public Service leadership must be able to pick up a phone and call their peers to discuss issues and to engage in new collaboration. Therefore, we will continue to encourage both Public Service Commission (PSC) scholars as well as mid-career officers to be trained in different countries. We will also create many more opportunities for officials across different countries to come together in joint courses, forums and discussions to share best practices and network together. Just as in the private sector, we should expect future Public Service leaders to have experiences working beyond the domestic context.
Finally, our public officers at all levels – leaders to officers – must be savvy in using technology, so that we can use technology to make public services better and make the Public Service more productive. The Public Service is aiming for 100% digital literacy. Every public officer, from leaders to counter staff, must know how to operate in a digital world and to thrive in it. The CSC has launched LEARN, a mobile platform to enable officers to learn anytime, anywhere. In the last three months since the launch, over 34,000 accounts have been activated and almost 10,000 courses have been completed on this platform. The Smart Nation and Digital Government Office (SNDGO) will elaborate more on other Smart Nation Initiatives subsequently.
I agree with several Members who spoke on the need to create a more diverse Public Service leadership. We need a Public Service leadership team that has different talents and is able to surface different perspectives. Going forward, when our Public Service selects future leadership teams, we will increasingly look for a combination of operations, communications, mobilisation and international exposure, beyond pure policymaking skills. A more diverse Public Service is a more resilient Public Service for the uncertainties ahead.
We must systematically select, recruit and develop officers to achieve this diversity. Educational qualifications remain a valid proxy for certain skills and capabilities of candidates we recruit into the Public Service, and we will not disregard that. But the level of educational qualification alone is necessary but not sufficient. The Public Service will also have to look out for other skills, competencies and traits when we recruit new officers. Beyond intellect, we also want officers who have initiative and creative ideas, and those who have strong interpersonal skills and work well with others. In the areas of information and communications technology (ICT), the Public Service will be selecting recruits based on the technical skills they possess, beyond educational qualifications.
Mr Louis Ng asked about single structures for ITE graduates, diploma and degree holders. Since 2015, the Public Service has been merging salary schemes such that the ITE graduates, diploma and degree holders are recruited and progressed on the same structure. Where schemes require particular qualifications, for example, doctors, accountants and engineers, we will specify these. Today, almost all public agencies have single structure schemes.
I have spoken at length about how the Public Service needs to change. But just as important are things that will not change: our values, our aspirations for Singapore and the high standards for ourselves.
Our values of excellence mean that we will not rest on our laurels. Our Public Service continues to work towards high aspirations for Singapore. This means always thinking ahead and acting to expand opportunities for Singapore or pre-empting problems in future. For instance, for Singapore to remain competitive, we must be a hub for innovation. So, MOE, Enterprise Singapore (ESG) and the Economic Development Board (EDB) came together to develop the Global Innovation Alliance (GIA) initiative to connect Singapore to major innovation ecosystems around the world. The GIA expands on existing overseas internship programmes offered by our local institutes of higher education that place students on overseas internships in startups or enterprising and innovative companies. The Public Service is leveraging these internships for scholarship holders and in-service officers as well for them to broaden their training and exposure. GIA will create more opportunities for students, entrepreneurs and business owners to gain experience, connect and collaborate with their overseas counterparts.
Similarly, we have proactively pushed for more Free Trade Agreements (FTAs) to help our businesses expand overseas and lower prices of imported goods and services for domestic consumers. Such FTAs have to be planned way ahead, as they entail long negotiations with foreign counterparts. The recently concluded European Union (EU)-Singapore Free Trade Agreement (EUSFTA) was planned almost a decade ago and was achieved through close coordination among many agencies, including the Ministry of Trade and Industry (MTI), the Attorney-General's Chambers (AGC), the Ministry of Law (MinLaw), the Intellectual Property Office of Singapore (IPOS), the Ministry of Manpower (MOM) and the Ministry of the Environment and Water Resources (MEWR). They worked together and sustained the momentum of the negotiations through time across different teams of officers. We are now planning ahead for our FTAs to embrace digital trade in the new economy.
We also think long term when it comes to developing our city. Almost 10 years ago, the Economic Strategies Committee mooted the idea of consolidating our container port activities at Tuas in the long term. This will allow our port to achieve greater economies of scale while freeing up the prime Southern Waterfront for redevelopment into a new waterfront city that will be even more exciting than Marina Bay. Today, the proposed new Tuas Terminal is already taking shape and will be progressively completed by the 2040s. The Tuas Terminal, which will be twice the size of Ang Mo Kio town, is expected to be the largest container terminal in the world. Our Tuas Terminal will help Singapore strengthen our position in the maritime sector.
This is not the only long-term multi-decade projects we have planned for. We are pursuing other ambitious projects that span many years, in fact, decades, whether it is developing Singapore's deepest cable tunnel system for electricity transmission or planning for Changi East which includes the new Terminal 5, or planning for the Jurong Innovation District or Punggol Digital District. These projects help to create an even more vibrant Singapore and a better home for future generations of Singaporeans. Our Public Service cannot just try to play defensive to uphold the existing system. We expect more from our Public Service constantly thinking of breaking new ground to take the country forward amidst the stiff competition.
Even though we plan ahead, sometimes things will not go as planned. When things do go wrong, the Public Service will work hard to fix the mistakes and seek to do better. Head (Civil Service) recently reminded all senior public leaders to use the recent incidents and lapses as an important learning moment to see how we can do better.
I support his call and appreciate that the Public Service is taking its mission very seriously. However, integrity means that we need to take responsibility and be accountable at every level for what went wrong. If we do not address the mistake head-on at the respective levels, but instead choose to indiscriminately sack staff and leaders every time something went wrong, then we will have a weaker system over time. We will also discourage the Public Service from trying new things because the surest way not to make a mistake, is not to do anything novel. That will be the biggest mistake and disservice to our nation.
The values of integrity and excellence apply equally to the appointment processes. Ms Sylvia Lim asked for clarification on the selection process and criteria used by the Prime Minister in identifying persons to fill key constitutional appointments. The process to appoint individuals to any constitutional appointments is set out in the Constitution. The Constitution also sets out the requirements of candidates for certain roles, as well as the officeholders who should be advised or to be consulted on the appointment. In general, the key considerations when identifying candidates include their ability to do the job well, their qualifications and experience, track record, integrity and sense of Public Service.
Ms Sylvia Lim asked if we are aware that Ms Goh Soon Poh, the new Auditor-General, is the wife of Senior Minister of State Mr Heng Chee How. Yes, we are aware. The Auditor-General is appointed by the President in accordance with the advice of the Prime Minister. The candidate was proposed to the President for his concurrence after consulting the Chairman of the Public Service Commission. The President will consult the Council of Presidential Advisors which provides an additional level of scrutiny and advice. Ms Goh Soon Poh has more than 30 years of public sector experience and worked in a range of Government Ministries. She has served with distinction, with utmost integrity and commitment to excellence. She has helmed Deputy Secretary roles in two of the largest Ministries, MOE and the Ministry of Home Affairs (MHA), and also spent time in two central Ministries, the Ministry of Finance (MOF) and PSD, and will be familiar with governance matters related to finance, procurement and human resources. Ms Goh Soon Poh also has public sector experience that will be useful for the Auditor-General role.
The role of the Auditor-General is to audit and report to the President and Parliament on the proper accounting and use of public resources to enhance public accountability. AGO's audit observations are conveyed to senior public officers, namely, Permanent Secretaries of Ministries who are Accounting Officers for their respective Ministries and, hence, responsible for managing that. These senior public officers are responsible for addressing the findings and reporting back to the AGO. The audit process generally does not involve political officeholders. There is no conflict of interest generally between AGO and the Ministries it audits. Where there is a potential conflict of interest, there are specific processes to manage these, just as in any professional organisation.
Our Public Service cares for our people. Mr Louis Ng asked about staff engagement. PSD currently works with Public Sector agencies to administer a common staff engagement survey across public agencies. The survey enables agency leaders to better understand the areas that the agency is doing well in and what it can do better to help officers. Leaders are expected to respond to the feedback and take appropriate action.
Mr Png Eng Huat asked about MediShield Life for pensioners. Like all Singapore Citizens and Permanent Residents, Government pensioners have been covered under MediShield Life from 1 November 2015. MediShield Life provides additional help on top of the retirement medical benefits that they enjoy as Government pensioners. This is very useful, especially if someone is unfortunate enough to get a severe illness with a huge medical bill. For example, one pensioner on the Comprehensive Co-payment Scheme (CCS) had pneumonia with a bill size of $29,000. She had 85% of the bill covered by her post-retirement medical benefits. MediShield Life helped to pay for the remaining 15%. She did not have to pay anything out of pocket. Another pensioner on the CCS had lymphoma with a bill size of about $14,000. He only had to pay out-of-pocket expenses of $300, after taking into account his post-retirement medical benefits and MediShield Life.
Mr Chairman, Sir, our public officers joined our Public Service because of a calling. And that is to build a better home, a better nation and a better future for all Singaporeans. Our future is in the hands of this generation of leaders – from the public, private and the people sectors. Like it was almost 54 years ago, we must all be pioneers once more and always. If we put our hearts, minds and hands together as one Singapore team, I am confident that we can prevail against the challenges and Singapore will remain vibrant and successful. Our Public Service will lead and support fellow Singaporeans in achieving this.
Dr Lim Wee Kiak (Sembawang): Mr Chairman, despite a comprehensive strategy to encourage Singaporeans to marry and have children, our birth rates remain low as our population continues to age. In fact, this is a global trend among developed and developing economies around the world, and it will certainly take time to find sustainable solutions to alleviate the situation.
What is our current concept? That a woman should have a career and also be a good mother; that a man should have a career and also be a good father. We give them good support with maternity leave, paternity leave, childcare leave, Baby Bonus and a whole suite of incentives. But things are not quite working out. Why? Difficulty in juggling office work and care for children, from tending to them when they are sick, to coaching them as they grow up. Have we looked into a more radical or new system whereby women with children may take three to six years off the workforce to bring up their children? This will also foster strong family ties and give our children a strong foundation, too. We can make laws where these women and men would not be discriminated against for the years out of the job market.
In return, we can allow more qualified older people in our workforce to stay on to fill the vacant slots temporarily left behind by them.
As we continue to implement baby-friendly policies as well as family-friendly policies, we must continue to identify and manage other problems stemming from an ageing population. We already have in place many strategies. We are encouraging senior citizens to stay healthy and active in the workforce through a lot of initiatives. Perhaps we can incentivise our senior citizens to look after their grandchildren. Similar to the proposed caregiver allowance for seniors, can we look into a grandchildren caregiver allowance for seniors looking after their grandchildren?
We face greater challenges with our limited pool of human resources to maintain a vibrant economy. How has the Government directed its population strategies to support an economy that will continue to grow? We rank 13 among countries best at attracting, developing and retaining talent in 2018, according to a report by Business Insider. If we cannot sustain our population by Singaporeans' natural births, then the only way to top up our population is through immigration. We will then face the issue of integration and challenges in forging a national identity and cohesion. What is the upper limit we set for immigration so as not to affect our social compact ?
As a young nation, we continue to grapple with seeking our national identity. We do not have a shared history of struggles that binds us together. Our PG and MG can share their experience and be a valued resource to inspire the next. Perhaps, the Government can share its plans to foster a strong sense of national identity among Singaporeans, and yet maintain a healthy population profile.
The Chairman: Mr Gan Thiam Poh, take the two cuts together.
Mr Gan Thiam Poh (Ang Mo Kio): A rapidly ageing population and a persistently low Total Fertility Rate (TFR), which is among the lowest in the world, pose serious challenges for our future. There are severe implications for our social fabric, national heritage, economy and defence, just to name a few. We must make it a matter of priority and urgency to review our population strategies.
We need a core group of young Singaporeans to ensure that our country remains cohesive, dynamic and vibrant. What measures does the Government have to invigorate our population strategies and keep a balanced mix of locals and immigrants? What is the Ministry’s view on the effect of new attitudes to family structures and their impact on families and procreation? In addition, how would we prevent the financial burden of caring for our ageing population from falling on our future generations?
In Minister Heng Swee Keat's Budget speech, he urged us to draw on our Singaporean DNA to continue to progress. Unfortunately, with our low TFR at 1.16, one of the lowest rates in the world, the future of our DNA is at risk.
Modern Singapore had started as an immigrant country and will continue to accept and integrate immigrants in the future. However, it is important that we have a core group of Singaporeans born and bred here.
The Government had implemented various measures and incentives to support marriage and procreation. We need an urgent review to understand why they have not been effective. Whether these are inadequate or require enhancements, we must address the roots of the problems. Will the Ministry share its plans to reverse our TFR?
Prof Fatimah Lateef: Immigration laws vary from country to country and change according to the needs, factors affecting population as well as growth and development of the nation.
There is really no one-rule-fits-all policy. Singapore is challenged even further due to our sheer small size, and more so due to our rapidly ageing populace. Our guidelines and policies must acknowledge our diversity, uphold unity and be realistic and practical. New citizens can have a positive contribution towards nation-building and social integration.
The guidelines for recruiting new citizens must be robust and dynamic and at the same time meet our objectives. How are we reviewing our immigration policies?
Are we able to implement a more structured community involvement of potential new citizen candidates, perhaps even with the provision of inputs from senior and experienced community leaders? This is with a view to having them immersed and better integrated in the local community and activities. The community leaders can act as assenters and provide valuable inputs in this respect.
Mr Vikram Nair (Sembawang): Chairman, in 2015, we had a bumper year in terms of babies in Singapore and a rise in our TFR. However, since then, Singapore's TFR seems to have dropped to an all-time low of 1.16 in 2018. This is despite the fact that the Government has put in place a wide variety of incentives for people to marry and have children.
According to Singapore's population data bureau, we have a large number of people of childbearing age and coming to childbearing age, yet more are choosing not to get married and have children. Have any studies been done on why this is so?
I understand from previous COS debates that many young people have a desire to settle down and get married. Yet, it appears they are not doing so. What are the challenges faced, particularly by young adults, in marriage and parenthood? Is there anything that may be done to address these challenges?
Mr Alex Yam (Marsiling-Yew Tee): Mr Chairman, as a nation, we strive to be the best. But, sometimes, we have to take a cold hard look at ourselves to take stock.
We are a city in a garden, but are we truly green? We are fast becoming a Smart Nation, but can this nation also continue to grow a heart? We have a highly productive workforce, but what are we truly producing? We can be No 1 on many fronts, but if we allow our most basic of building blocks to start to crumble and weaken, how long more can we keep it up?
Chairman, as Singapore continues to progress economically, it also seems that, like the rest of the developed world, we are beginning to face what is an increasingly post-familist future, one where that basic building block, the family, is becoming more sidelined and threatened.
Singlehood, childlessness and instability of the institution of the family are growing in many countries around the world and Singapore has not been spared. And while not in the extreme, some anti-natalist propaganda has also recently appeared on our shores.
In 2017, our TFR was a dismal 1.16. It was a seven-year low and the second lowest on record. This is despite the billions that we have committed to promoting marriage and parenthood over the years.
Surveys tell us that over 80% of young Singaporeans intend to get married and have children, but that intention seems not to be reflected in the actual numbers getting married and also having children. Perhaps it is opportune for us to ask ourselves again what is it that we are not doing enough of?
What I feel is missing from the narrative is addressing the slow unfortunate change in culture and its threat to the family.
Today, we live in a stressful world. We can always admit that – one whose pace is breakneck. We all want to work hard, produce better results and aim for the next rung up in our careers. That is not inherently wrong. But it has unfortunately become a key part of our new culture today.
This leaves young Singaporeans breathless. This work ethic subconsciously makes us stay longer in the office and often even when there is no real reason to do so. Great for the companies, but at what cost to society? We end up having no time to date, no time to go out, no time for ourselves, no time to get married, no time to have children.
We cannot be indifferent to this problem as a society. Our very fabric as a nation depends of the family nucleus. Families play a vital role in determining the welfare of children, in meeting our deepest needs for meaning and solidarity with one another, and in shaping the economic and political fortunes of nations. When the family is not flourishing and no longer serves as the central organising feature of society, the nation begins to lose its basic unit.
So, it is not just about the money. The more money we throw at the problem, the more monetised and mercantile this most natural of building blocks becomes, reinforcing the growing stereotype that families are commodities. What we need to do today is to reinforce a culture that is centred around the family. From our very childhood, we should imbue in our young the importance of family, encouraging them to have quality time with their own families. For parents of this generation to reset the pace and reset the tempo of our culture.
Part of it is our auto-reverential culture caused by technology. Many of us can attest to the fact that when we are at home, we may be with one another but we are really not with one another, we are with your phones. We pretend to engage with one another, but actually we ignore one another. We think we speak to many people but, actually, we are just talking to ourselves.
On the work front, this happens as well. Technology meant to make work easier, literally ties us to our desk, even if we are away from the office. So, employers must also see more and more the importance that family plays in having a happy workforce. A purely transactional relationship only engenders stress, where parents fear even taking time off for family. We need to do more to encourage a change in work culture and not just through incentives like the Enhanced Work-Life Grant. More can be done at the cultural level.
For all the generosity of our Marriage and Parenthood Package, there must also be whole-of-society issues that need to be addressed like cost of living and aspirations. How can we ensure that, as a society, we continue to value the family and will be willing to help families achieve their aspirations? These take more than just policy, programmes or grants, but the whole society and a relook of our culture.
We must do what we can to avoid what some called the \"systematic humiliation, apathy-inducing neglect and soul-killing cruelty\" against the role of families in our society.
Mr Saktiandi Supaat (Bishan-Toa Payoh): Couples these days have many valid concerns when planning to embark on parenthood. In truth, some personal sacrifices are necessary. But the broader society, encompassing community groups, employers and families, can do more to compromise and embrace a family-friendly Singapore. There are couples who are perfectly happy juggling four children. These are the ones with good support from the community, their extended families and their workplace. They probably made some personal sacrifices to prioritise their family as well. Others are stressed out just with one.
Today's grandparents are not like those of the 1960s and 1970s. Today's grandparents plan their retirement and go on frequent holidays, and I do not fault them. They deserve the break. So, how do we balance between the needs of the grandparents and their young children who are setting up families? What is being done to help instil a family-friendly culture in Singapore which is supportive of marriage and parenthood? We need a mindset shift in our approach to address the issues in this environment.
Many a time, my wife and I, who are both working and have three kids, will face emergency calls from the school or kids falling ill, among other things, requiring one or both of us to attend to a child. One example of how we can further improve a family culture environment is to see if we can offer some comprehensive back-up care in corporates or private and public agencies with a national software matching platform to help employees find last-minute childcare or eldercare when the usual arrangements breakdown. In the United Kingdom (UK), there are such companies doing it, such as My FamilyCare. But more can be done to create these private set-ups and help these types of companies grow to create a better and more diverse support network in a family-friendly environment.
Ms Rahayu Mahzam (Jurong): Someone shared a story with me once. A man came home and saw his helper at the playground with his children. They were having so much fun and he was jealous. It had been a long day at work and, at that moment, he felt like he was working so hard so that he could pay his domestic helper to have the life that he wants. It was a fleeting thought, but it reflected on how much he wished he could spend more time with his children.
We all have aspirations and we want a better life for our families. We also have much to contribute to the economy and a meaningful job gives us a sense of purpose and drive. However, many of us also yearn for a work-life balance so we can spend time with our families. Employers play an important role in supporting Singaporeans in managing their work-life balance, including providing flexible work arrangements (FWAs) or supporting working fathers in playing more active roles at home.
How will the Government encourage employers to play their part? I note there are schemes, such as the Enhanced Work-Life Grant. Have the measures been effective and what more could be done to encourage employers to foster a more family-friendly workplace culture?
Mr Desmond Choo (Tampines): Our young Singaporeans are sandwiched in caring for young children and elderly parents. The Government has been providing support to such families. Can the Minister update on further progress and what more will the Ministry be doing?
Demographic trends necessitate changes to how young families are supported at the workplaces. One, with smaller family sizes, our younger Singaporeans need to care for both their children and parents. It is common to easily spend more than a day away from work to bring an older parent for medical check-up. The same applies for an ill child.
Thus, Family Care Leave is important to our workers, especially those whose children are older than seven. The fungibility in using the leave provides more flexibility for workers. Can the Government consider having the Public Service to take the lead in providing family care leave for all public servants as a start?
Second, we need to help our young Singaporean parents better manage the cost of infant care and full-day childcare. Couples are spending, on average, $1,495 on full-day infant care monthly. Those who qualify for $600 subsidy still need to fork out about $900 a month for infant care. This can be quite taxing. Similarly, Singapore Citizens are eligible for a basic subsidy of up to $300 for childcare per month. This was implemented in 2008. Since 2001, the childcare operators have raised their median fees by 22%.
Lastly, FWAs are crucial to support families. While many companies today offer FWAs, it has not been socialised into a societal norm like the Nordic countries. We need to take decisive action to make FWA pervasive. Can we introduce the right to FWA? This makes starting FWA conversations easier for workers. We can start with the larger companies. This can provide real impetus in socialising FWA and better support our families, especially our women workers.
The Chairman: Mr Louis Ng, you can take your two cuts together.
Mr Louis Ng Kok Kwang: Sir, young couples are rightly concerned about whether they have the means to bring up a child. It is now not just \"money not enough\", but also \"time and leave not enough\". The current six days of childcare leave and unpaid infant care leave are insufficient. It does not make sense that the amount of leave does not increase as well when you have more kids. Parents with four kids clearly need more leave than parents with one child. With Hand Foot and Mouth Disease (HFMD) so common now, six days of childcare leave are just not enough. I experienced this last year when all three of my kids had HFMD consecutively. My four-year-old had to be out of school for two weeks.
I am not even sure if parents who have two or more kids will have sufficient annual leave once their childcare leave has been used. Can we consider giving childcare leave on a per child basis? For parents with two or more kids, can the Minister also consider allowing parents to use their sick leave entitlements also when their child is sick? Parents can provide their child's medical certificate (MC) as proof when using this leave.
Sir, it has been almost two years since I delivered my Adjournment Motion calling for more parental leave for parents of multiples or preterm babies. In the blink of an eye, my twins, Katie and Poppy, are now two years old. From fighting for their lives, they are now fighting for their toys. The burps have been replaced by farts. Their crying has been replaced by smiles and the beautiful sound of laughter. This parenthood journey has been priceless, and I am so happy we have three healthy, happy girls.
The Adjournment Motion speech brought back many painful memories of Katie and Poppy being born premature and almost losing their lives. It is an experience that I hope no parent has to go through and I hope that, through my sharing, our policies will change and they are changing. It was announced last year that we will introduce a Tripartite Standard to encourage employers to provide four weeks of unpaid leave for parents of multiples or preterm babies.
Can the Minister provide an update on how many employers are providing this leave? I understand that MOE is providing this. Can the Minister confirm if the entire Public Service is now providing this unpaid leave?
Mr Speaker: Order. I propose to take a break now. I suspend the Sitting and will take the Chair at 2.45 pm.
Sitting accordingly suspended
at 2.25 pm until 2.45 pm.
Sitting resumed at 2.45 pm
[Mr Speaker in the Chair]
[(proc text) Debate in Committee of Supply resumed. (proc text)]
[Mr Speaker in the Chair]
The Minister for Manpower and Second Minister for Home Affairs (Mrs Josephine Teo): Mr Chairman, I thank the Members who have spoken. Their views and suggestions are well appreciated. In my response, I will provide an update of our population strategies and measures to support Marriage and Parenthood.
Dr Lim Wee Kiak asked how we will build a sustainable and vibrant Singapore for all ages in light of our demographic challenges. We are doing so through three broad strategies.
Our first and foremost strategy in managing the population is to ensure that there is always a new generation of Singaporeans to carry our legacy forward. We want Singapore to be a Great Place for Families, where young couples sense the strong support for marriage and parenthood from society and the state.
How are we doing on this front? In addressing this question, it is useful to take a step back. When we consider developments over longer time periods, there are some reasons to be optimistic.
The average number of citizen births in the last five years is higher than the previous five-year periods. From 2014 to 2018, the average was 33,000 citizen births annually. From 2009 to 2013, the average was lower at 31,400 citizen births annually. If we go back to an even earlier period, between 2004 and 2008, the annual average was 32,000 births. So, for the most recent five-year period, we are talking about 33,000 citizen births on average annually. The five years before that, it was 31,400; and the five years before that, it was 32,000. So, it is clearly higher.
On top of this, many Singaporeans are living overseas, so we welcomed about 1,500 citizen babies born overseas annually over the past five years. This average is also higher than that of the previous five-year periods. From 2009 to 2013, there was an average of about 1,400 overseas citizen births annually. And between 2004 and 2008, this average was 1,000 overseas citizen births.
Recent marriage numbers have also remained high. In fact, the average number of marriages in the past five years was significantly higher than the past decade.
Juxtaposed against these developments is another set of forces at play. Most young Singaporeans still want to marry and have children, which Mr Vikram Nair would be glad to know. From our 2016 Marriage and Parenthood Survey, more than eight in 10 single millennials indicated they intended to marry, and more than nine in 10 married couples said they wanted two or more children. However, they are also taking longer to find the right partner and starting families later. The surge in the number of young Singaporeans entering the prime child-bearing age may be followed by a surge in births, but at a later stage. We believe this explains recent drops in Singapore's TFR to 1.16 in 2017 and 1.14 last year. But, given the positive marriage trends, I remain hopeful that there could be an uptick in TFR when the children of the Baby Boomers start having babies themselves.
For family to remain the bedrock of society, which Mr Alex Yam spoke passionately about, we must actively lean against the wind to make marriage and parenthood achievable, enjoyable and celebrated.
There are still many things in Singapore that are favourable to child-raising. Last year, Singapore was ranked first in the World Bank's inaugural Human Capital Index. And what that means is that as far as the World Bank is concerned, for a child born in any of the 157 countries that they surveyed, Singapore would be where their human capital potential is most likely to be optimised. In the same year, an international non-governmental organisation, \"Save The Children\", also ranked Singapore as the best country for children to grow up in.
The Government has also progressively enhanced our Marriage and Parenthood Package. Mr Gan Thiam Poh and Mr Desmond Choo had asked about the progress and adequacy of our current measures.
Mr Chairman, Sir, may I have your permission to distribute a table showing the key marriage and parenthood benefits that a young couple can receive today, compared to five years ago?
The Chairman: Yes, please. [A handout was distributed to hon Members.]
Mrs Josephine Teo: Thank you. Mr Chairman, firstly, a couple can now own their first home sooner. Flats with shorter waiting times – about two to three years, compared to three to four years for typical Build-To-Order flats – are now available to them. The first batch was launched in November 2018. Those who may have urgent housing needs or location preferences, can choose to buy a resale flat and receive up to $120,000 in housing grants, which is $40,000 more than what a couple would have received in 2014. First-timers buying a new flat in non-mature estates can service their housing loans using less than a quarter of their combined monthly incomes, often with little or no cash because they draw on their CPF savings instead.
Second, parents now benefit from greater support for child-raising costs. When their first child is born, they receive up to $18,000 through the MediSave Grant for Newborns, Baby Bonus Cash Gift, and the Child Development Account (CDA). This is $3,000 more than the maximum a couple would get in 2014. They will also receive a CDA First Step of $3,000 deposited by the Government, without having to save into the CDA first, which helps to lighten their load at the start of their parenthood journey.
Third, in their child's preschool years, the couple would find it easier to enrol their child in an affordable and good quality preschool. The Early Childhood Development Agency (ECDA) has increased the number of full-day preschool places nationwide by over 50% since 2014. There are 170,000 full-day preschool places today. By 2023, this will increase to about 200,000, and two-thirds of preschoolers will be enrolled in Government-supported preschools.
Fourth, throughout their parenthood journey and as their family commitments increase, the couple now has stronger support to manage their work and family responsibilities today. They enjoy enhanced parental leave provisions, which enable fathers to play a more active role. With up to eight weeks of leave, a father now has access to double the amount of leave in his child’s first year, compared to just five years ago. The take-up of Paternity Leave has been encouraging, increasing from 37% in 2014 to 53% for recent cohorts.
We have also increased paid childcare leave over the years. Today, each parent with children below age seven has six days of childcare leave per year, and two days of childcare leave per year while their children are still in primary school.
Mr Louis Ng gave suggestions on further increasing leave for parents to care for their children, while Mr Desmond Choo suggested legislating FWAs. We will keep reviewing the scope to expand leave provisions but, as Mr Douglas Foo reminded us, we should be careful about mandating businesses to do more as it would impact business viability and put jobs at risk. Given the recent enhancements, I hope Members will agree to give companies some time to adjust before further moves.
In the meantime, promotional efforts should continue. That is why we introduced a Tripartite Standard last year to encourage employers to provide unpaid leave when their employees have unexpected care needs, including multiple or preterm births, or family members or children who are hospitalised. I must thank Mr Louis Ng for giving us the idea. About 450 employers with over 224,000 staff combined, have adopted this Standard. This includes the Public Service with over 70 agencies. We will continue to encourage adoption of the Standard.
I should also add that parents would be more likely to benefit from FWAs. We introduced the Tripartite Standard on FWAs in October 2017, and also launched the enhanced Work-Life Grant last July, to better support the adoption of FWAs. The grant has received more than 340 applications in just five months. More workplaces are now supportive of FWAs. Around 53% of employers now offer at least one formal FWA. This could be flexi-time, flexi-place, flexi-load, and this is up from 47% in 2014. This is, in fact, a significant turning point I have been waiting for. The tide is shifting and I am hopeful FWAs will become much more commonplace henceforth.
Nevertheless, I am aware that young Singaporeans still have concerns, which Mr Desmond Choo also raised.
Parents have raised concerns about financial costs, such as preschool fees. ECDA is reviewing the preschool subsidy framework, to make quality preschool more affordable for parents. The Ministry for Social and Family Development (MSF) will provide an update on this during its COS debate.
Parents may also feel the need to keep up with other parents’ intensive efforts in education, for example. MOE, too, is concerned. To help our students discover more joy and develop stronger intrinsic motivation to learn, MOE is reducing the frequency and stakes of school-based assessments. Students' class and level positions will not be reflected in report books to minimise unhealthy comparisons among students based on their academic performance.
MSF has also started the Baby Bonus Parenting Resources Portal to boost confidence in parenting through sharing of tips by experts on raising happy and healthy children.
Next, as Ms Rahayu Mahzam pointed out, the workplace environment is critical. Senior Parliamentary Secretary Low Yen Ling will share more at MOM's COS debate.
But overall, I am encouraged that more companies are taking progressive steps to support their employees' caregiving needs. One such example is M Tech, a small and medium enterprise (SME) which specialises in cybersecurity and network performance solutions. I visited M Tech this week. As many of their employees are young parents who may also be caring for elders in the family, M Tech decided to offer FWAs to staff who need them. This was made possible by IT tools which enable staff to work remotely and still be effective. I met Petrine, a product manager who was able to telecommute when her children were down with chickenpox, and when her mother was hospitalised. M Tech was initially concerned about the investment needed to enable mobile working but later found that the benefits were well worth it. For example, it is better able to attract and retain employees who are productive and committed to their work, such as Petrine, who has been with M Tech for 11 years.
Beyond workplace flexibility, there are deeper issues of workplace culture. Some Singaporeans, indeed, work very long hours, leaving little time for dating or family life. Having fewer hours to rest and recharge not only affects employees' health and well-being, but also the time that they have with their loved ones.
As the nature of work evolves, there is value for organisations to adopt new ways of working that achieve good business outcomes while giving staff enough downtime to recharge.
M Tech employees, for example, may get off work early, whether to attend courses or to pick up their children from childcare. But they would reconnect later in the evening to complete time-sensitive tasks, such as confirming sales orders taken in other time zones, and they do not mind doing it at all because it does not take very long.
So, we hope many more employers will make the effort to promote more sustainable work practices, for the sake of their employees and for their own business viability in the longer run.
Finally, with the trend of later marriages and births, the Government will be reviewing our assistance to couples who face difficulties conceiving and who wish to undergo assisted reproduction technology treatments.
Members, including Mr Ong Teng Koon, Mr Saktiandi Supaat and Mr Vikram Nair, have given suggestions on further measures to strengthen support for marriage and parenthood.
I agree we can do more. However, porting over practices in other countries wholesale may not yield the desired results. South Korea, for example, poured much resources to emulate the Nordic countries. But its TFR has not improved and fell to 0.98 last year. I think for South Korea, this is the lowest they have on record.
Our efforts over the last five years are significant, even if they may take more time to bear fruit. We also need deeper changes of mindsets to reduce stresses in parenting.
Ultimately, marriage and parenthood are personal decisions, shaped by the values that each person holds dear, but they are also influenced in no small part by social norms, our families, employers and the wider society. There are strong cultural and societal factors at play. Like Mr Saktiandi Supaat and Mr Alex Yam have pointed out, no single stakeholder can fully address these on its own.
In this regard, I am encouraged to see how various community stakeholders have stepped up.
The Families for Life Council, for example, offers a suite of education programmes at workplaces and community touchpoints. It also organises events to encourage Singaporeans to make family life a priority.
In Boon Lay Constituency, a Parents' Support Group was formed after a group of young parents met at the PA's Embracing PArenthood community celebrations. The group meets quarterly to share tips about child development, infant nutrition, and other parenting pointers.
Such efforts, big or small, go a long way in making parenthood enjoyable and celebrated. We welcome more of them.
In the coming months, the National Population and Talent Division (NPTD) will embark on a consultation process to listen to the needs and concerns of Singaporeans around forming families, and how the Government and the community can better support their aspirations. I also appreciate the Members' suggestions and there are many good examples. Mr Saktiandi Supaat suggested Back-Up care. So, I would like to invite all stakeholders to join us in co-creating and shaping policies. We will give more details about the consultation process soon.
Mr Chairman, I have taken some time to reaffirm our commitment to supporting marriage and parenthood. Our second strategy in managing the population is to maintain a careful balance in immigrant flows. At its heart, the aim of our immigration policy is to sustain a stable citizen population that keeps our economy vibrant and our society cohesive.
Similar to the past few years, we granted around 22,600 Singapore Citizenships in 2018, of which 1,600 were to children born overseas to Singaporean parents. With 32,700 Permanent Residencies granted last year, the Permanent Resident (PR) population remains stable at around 520,000.
As Dr Lim Wee Kiak and Mr Gan Thiam Poh mentioned, it is important that citizens share a strong sense of identity and belonging to Singapore. We also agree with Prof Fatimah Lateef that it matters how we select new citizens.
To this end, we conduct regular reviews of our immigration framework. We remain highly selective in granting permanent residencies and citizenships. In all cases, we consider the applicants' age, family profile, economic contributions, as well as their ability to integrate, among other factors. We look for markers of rootedness and identification with Singapore's way of life, values and norms.
Family ties and length of stay provide a strong indication of this. As a result, one in four adults granted citizenship in recent years have family ties with Singaporeans; three in five have lived in Singapore for at least 10 years; and the majority of our new citizens each year are in their younger and prime working ages. We will continue to maintain a careful balance in managing immigration.
Mr Chairman, our third and equally important strategy in building a sustainable population is to enable Singaporeans to age with grace and purpose.
The United Nations (UN) has described population ageing as one of the defining features of our time. In Asia, Japan was the first country to age rapidly. Singapore, together with South Korea, Hong Kong and Taiwan, is not far behind. Today, our life expectancy is the third highest in the world. Fortunately, more of these years are enjoyed in good health than before.
Far from being resigned to this development, our approach is to help Singaporeans enjoy productive longevity, in many varied ways. It starts with being able to stay active, having the opportunity to work if seniors wish to, and strengthening support for retirement adequacy.
Since the 1980s, we have been putting in place measures to prepare for an ageing society. CPF has been enhanced over the years. Besides home ownership, it now helps Singaporeans save for healthcare needs and receive payouts for life in their retirement.
Beyond CPF Life, the Government also introduced the Community Health Assist Scheme (CHAS), Silver Support, MediShield Life and now, CareShield Life, to help families take better care of their seniors. For older Singaporeans who may have less in MediSave, we have provided the Pioneer and Merdeka Generation Packages with a focus on keeping quality healthcare affordable to seniors. This is in addition to regular top-ups to boost retirement savings.
As the recent Parliamentary Motion on Ageing with Purpose affirmed, we should continue to improve our policies to support the changing profile of seniors. For example, more seniors wish to work longer. Our employment rate of those aged 55 to 64 is already among the highest in the world and still going up. In my capacity as Manpower Minister, I set up a Tripartite Workgroup on Older Workers. Later in the debate, I will provide an update on the Workgroup's deliberations that will address Mr Gan Thiam Poh's concerns about supporting senior employment.
Within our communities, we are also updating the way we care for seniors, for example, through innovative, award-winning solutions like Kampung Admiralty. My colleagues at the Ministry of Health (MOH) will share more during their COS debate. With your permission, Mr Chairman, I would like to conclude in Mandarin.
(In Mandarin): [Please refer to Vernacular Speech.] Mr Chairman, we will continue to strengthen our efforts to make Singapore a Great Place for Families.
In the last five years, trends in marriages and citizen births are encouraging. There were on average 33,000 citizen births each year between 2014 and 2018. In the earlier five-year periods, the annual average was lower, at 31,400 from 2009 to 2013 and 32,000 from 2004 to 2008. Marriages are also on the rise.
We have significantly strengthened support for marriage and parenthood in recent years, for example, in the areas of housing, child-raising costs, preschool, and managing their work and family responsibilities. Compared to even five years ago, young parents are much better supported.
While the Government strengthens its support, we also need the whole of society to make Singapore a Great Place for Families. For example, employers and co-workers can help by accommodating parents’ needs for FWAs. Community organisations can also celebrate parenthood and build networks of support among peers.
We will embark on a consultation process in the coming months to listen to the needs and concerns of Singaporeans over forming families. We hope that various stakeholders will continue giving feedback and join us in making Singapore a truly Great Place for Families.
The Chairman: Mr Darryl David.
Mr Darryl David (Ang Mo Kio): Mr Chairman, the Smart Nation initiative was launched in late 2014 with the aim of applying digital and smart solutions to provide better services to our residents and businesses.
Since its inception, the Smart Nation Initiative has gone on to embark on numerous pilot projects and trials, some of which, like contactless payment for public transport and TeleHealth, are starting to bear fruit. That said, some of these initiatives seem to have been started as standalone programmes, with Government agencies and Statutory Boards launching their own initiatives.
Can the Prime Minister's Office elaborate more on the larger national narrative guiding the Smart Nation Initiative and how it has delivered tangible benefits to citizens and businesses?
Also, are there intentions to embark on a public-private partnership to commercialise current initiatives so that more benefits can be delivered to end users by private sector players?
Ms Tin Pei Ling (MacPherson): People must be at the heart of our Smart Nation efforts. Solution should deal with only modern problems to make urban living easier for our people. These could include transportation, energy efficiency, public safety, public health, citizen engagement, privacy and cybersecurity. A Smart Nation needs to succeed. We need to solicit citizens' and businesses' buy-in. Benefits have to be real for them to believe in it. Hence, designing solutions to be citizen- or user-centric is imperative.
In Estonia, the use of X-Road by its government offered much benefit to its citizens making life easier at every level and at engendering support for and trust towards its smart government. It is estimated that X-Road saves more than 820 years of working time for the state and its citizens annually. Secure digital identity (ID) also enables Estonians to complete transactions efficiently and securely. When a child is born, for example, the hospital enters the information in its database that is linked to the National Population Register. The information is shared automatically with various government systems that then ensure the child receives social benefits, such as healthcare and education.
Given our aspirations and the experiences of other countries, how would the Government ensure that services are citizen-centric? While it is the Government's plan to make its services more data-driven and anticipatory, what more can citizens and businesses expect to benefit from our Smart Nation efforts?
Ms Sylvia Lim: Digital Defence is now our sixth pillar of Total Defence, and all, including the Government, play a role in this.
On 12 February this year, the Minister for Communications and Information told the House that GovTech is overall in charge of the security and safeguards systems for data and that Government Technology Agency (GovTech) is the agency that does many of the reviews, ensures the Government agencies are in compliance with the Instruction Manuals and other provisions.
I would like to ask whether GovTech specifically oversees that citizens' personal data stored within public agencies is safeguarded from misuse, hacking or leak. For instance, does GovTech audit the data and privacy protection practices of public agencies? In view of the risks and breaches that had occurred, would the Government look into publishing an annual report on the cybersecurity readiness of public agencies to give some reassurance to citizens and to encourage the achievement of high standards?
Next, while there are regulations to punish public officers who do not comply with confidentiality obligations, what is the position of the innocent persons whose data has been compromised? For instance, it was recently reported that a station inspector had illegally accessed the Police's computer system to screen the telephone records of a man he suspected of having an affair with his wife. In such a case, are there guidelines about whether the affected person should be told and within a certain timeframe? Such information is crucial for victims to protect themselves and to seek recourse in a timely manner.
Finally, during the recent debate on the human immunodeficiency virus (HIV) registry leak, the Government told the House that a person whose data had been leaked, had the recourse of suing MOH. Besides commencing an expensive lawsuit against the Government, how else can an aggrieved person get compensation?
Mr Cedric Foo Chee Keng: Mr Chairman, my cut is on our Smart Nation vision and programmes. Our Smart Nation vision is a good one. A digital Government will allow for an integrated and seamless Government, resulting in better policies and operations. A digital economy will increase productivity for businesses, will create new jobs and opportunities right into the future. A digital society will allow our people to enjoy greater conveniences, increased opportunities and a higher quality of life.
Since the inception of the Smart Nation initiative in late 2014, good progress has been made in applying digital and smart solutions to provide better services for our citizens and businesses.
Several good programmes that have been introduced should be applauded. The Moments of Life initiative is a good example – a one-stop application to help Singaporeans navigate the journey of welcoming a newborn and raise a young child. New parents can register the birth of their newborn and apply for Baby Bonus incentives at one go, through a single application. For preschoolers, parents can search for preschools, retrieve and view medical data of their child on the Moments of Life application. For many parents entering the exciting and busy journey of parenthood, the conveniences of a one-stop application versus a need to navigate various agencies and websites provide a real and tangible benefit.
Another good programme is the launch of MyInfo Business, which allows SMEs to interact and access 129 Government e-services and 143 private sector e-services.
However, these initiatives are but a small step towards our Smart Nation goals. The technology curve has moved very rapidly and what was not possible is now possible.
I would like to ask the Minister to provide an update on the programmes that we are implementing over the next few years so as to allow us to achieve our Smart Nation vision.
Chairman, my next cut is on preparing for the future. Despite lacking in traditional factors of production like land, labour and capital, Singapore was able to beat the odds in our transformation from a Third-World country to a First-World country today. Our success can be attributed to strong and honest leadership, a tolerant multiracial society and a culture of self-reliance and mutual support.
Today, we face a fresh set of challenges – an ageing society, sharper infrastructure and manpower constraints, just to name a few.
Amidst a global digital revolution, Singapore has to accelerate the transformation of our society and economy in order to remain competitive or risk being left behind. There are many benefits to a digital economy. Higher productivity, better quality of life, better jobs, reduced business operating costs and the list goes on. Because of the significant benefits to citizens and businesses, other cities and nations around the world are also embarking on similar digitalisation efforts. Let me give just one example.
In October 2018, Emirates launched trials of the world's first biometric pathways at Dubai International Airport. This allows the use of biometric technology through Smart immigration tunnels, with passengers walking through immigration without a need to stop at a counter. Through adoption of these technologies, the United Arab Emirates has plans to gradually phase out airport immigration officers by 2020.
As other countries embark on similar digitalisation efforts, what is the Government doing on the Smart Nation front to ensure that we remain relevant and globally competitive?
The Chairman: Mr Teo Ser Luck. You can take your two cuts together.
Mr Teo Ser Luck (Pasir Ris-Punggol): We have shared our vision to become a Smart Nation and there have been announcements and programmes implemented. And through Smart Nation, there are many opportunities we can help to liven all the startups and also local businesses. There is a high expectation for a Smart Nation project to bring to businesses efficiency, effectiveness as well as business opportunities, especially in the tech business community.
However, instead of a growing interest thus far, there seems to be a lesser anticipation and excitement now about the projects and many have seen that the opportunities that they anticipated were not coming through. So, may I know whether the Ministry or the Prime Minister's Office (PMO) could update on what is the impact on the businesses so far in terms of opportunities as well as in doing business within the Smart Nation project?
There are many projects that the private sector has embarked on, especially the tech businesses. We should be able to tap on these startups or companies that develop these technologies, and especially when they have developed advanced state-of-the-art developments in AI, machine learning or automation. GovTech does not need to set up another group or another committee to redevelop or reinvent the wheel. It could partner these companies to go into a trial and test process. And many of these technologies have been tested by the market. Do consider them before setting up another major project within GovTech or within the Government. Work with these companies out there. They can offer good help and better help.
Could PMO update the business community what are the initiatives available through the Smart Nation project and what are the opportunities that will be available in future.
The Chairman: Mr Ong Teng Koon; not here. Mr Vikram Nair.
Mr Vikram Nair: Mr Chairman, the Singapore Government is leading the way in making Singapore a Smart Nation. GovTech is ensuring that more and more Government services are available online and are easy to use online. This is commendable.
However, a Smart Nation may be led by a smart Government, but it will also need a \"smart\" private sector to take full advantage of the progress.
In this respect, how is the Government involving the private sector and the tech community in this Smart Nation drive? What new initiatives can we expect in the coming year?
Ms Rahayu Mahzam: The Smart Nation effort is a commendable one. It is necessary to keep up with the changing global developments and ensure that our citizens can benefit from updated technology, so that we can all enjoy a better quality of life. Smart technology can also be used to make society more inclusive. For example, the Land Transport Authority (LTA) is now trialing a new mobile app that makes it easier for people with special needs to travel.
Still, some have expressed concern that we may be changing too fast and that there are vulnerable groups in our community who may not be able to keep up with the change. Some are concerned that the elderly may not be digitally savvy and will have difficulties adjusting to the changes. Others are concerned that low-income families may have limited access to new devices or even the Internet. We need to ensure that these groups are not left out and can, in fact, benefit from the Smart Nation initiatives.
Could the Ministry give an update on the efforts taken so far and elaborate on how the Smart Nation can benefit the vulnerable groups mentioned above?
The Chairman: Minister Vivian Balakrishnan.
The Minister for Foreign Affairs (Dr Vivian Balakrishnan): Mr Chairman, on behalf of the prime geek in Government, Prime Minister Lee Hsien Loong.
We have made significant strides in our use of the latest digital technologies, first, to generate new jobs; second, to reskill our workers for these new jobs; third, to restructure our economy in order to sharpen our competitiveness; fourth, to improve the quality of life on a daily basis; and, fifth, of course, to enhance the integrated delivery of Government services on a citizen-centric level.
I want to thank Mr Cedric Foo, Ms Tin Pei Ling, Mr Vikram Nair who have quite rightly emphasised that what matters is not technology for its own sake, but people, that is, what we do with the technology and how it benefits us in our daily lives.
With your permission, Mr Chairman, may I display an infographic to show our Smart Nation projects and their milestones, and also request that the Clerks to distribute the printout.
The Chairman: Please do so. [A handout was distributed to hon Members.]
Dr Vivian Balakrishnan: Thank you. First, we have focused on increasing convenience in our daily lives. The MyInfo project allows you to open a bank account or apply for credit cards online and get approval almost instantly through carefully secured shared data. SingPass Mobile is an app that allows citizens to log in to Government services using biometric authentication instead of passwords. I am glad to report that 200,000 people have used the system since we launched it four months ago. PayNow has seen 2.3 million registrations. And, in fact, a lesser known fact that those of you who have linked your National Registration Identity Card (NRIC) number to PayNow can receive your SG Bonus, Edusave awards and, even more pertinent politically, can even receive your CPF lump-sum payments quickly, almost instantly, instead of waiting for cheques to arrive in the mail.
The Moments of Life app helps parents manage their child's early years. So far, 2,000 births have been electronically registered through a single auto-filled form. I forgot to check whether Ms Tin Pei Ling used the app. Not yet. For the next one, then. This is part of the service delivery approach that Minister Chan Chun Sing described just now. After my appeal and Mrs Josephine Teo's appeal, Ms Tin Pei Ling should have the next one. Together, we believe that these improvements will allow all of us to save time, reduce transaction costs and increase efficiency.
Second, Smart Nation has also tried to facilitate a safer living environment. We are trialing a new Personal Alert Button for the elderly to call for help, especially after a fall, when they may be immobilised. This was brought home to me even more starkly recently when Minister Khaw Boon Wan described when he had his fall and he fractured his arm and the intense agony that immobilised him. And as you would have seen in his Facebook post yesterday, this is not unique to him. Many elderly people have faced emergencies at home alone, immobilised and they need to call for help. So, this is one example in trying to make a difference at a direct personal level.
Another example, drowning detection systems have helped our lifeguards keep community swimming pools safer. The National Environment Agency (NEA) has installed 50,000 Smart Gravitraps to help monitor and destroy breeding sites for dengue-spreading Aedes mosquitoes.
The MyResponder app has helped to save the lives of at least 13 heart attack victims so far. But more important than the apps and the technology is the fact that this is an example where technology has enabled us to express our mutual care for one another.
Third, our initiatives have helped made it easier to do business. We are continuing to provide more choice and better interoperability in e-payments. Last year, the Smart Nation and Digital Government Group (SNDGG), the Monetary Authority of Singapore (MAS) and the Infocomm Media Development Authority (IMDA) together launched the common Singapore Quick Response Code (SGQR) standard, and the Network for Electronic Transfers (NETS) has rolled out 50,000 Unified Point-of-Sales terminals across the country. These initiatives have helped merchants to offer greater convenience for consumers and reduced cash usage. In Smart Nation, we must always be data-driven. So, I asked and I have been informed that e-payment values have increased to more than three times that of automated teller machine (ATM) cash withdrawals. So, we are moving in the right direction.
NETS was also appointed to unify the e-payment landscape at hawker centres and coffee shops. This will allow the consolidation of different e-payment methods and, more importantly, faster settlement for hawkers. So, they receive their money the next day.
More than 80,000 businesses have registered for PayNow Corporate since its launch last August. Like individuals, businesses can now send and receive payments instantly. The PayNow initiative has contributed to cheque usage falling to 20% of inter-bank transfer volumes. Again, making progress in the right direction.
MyInfo Business allows up to 220,000 SMEs to open bank accounts and apply for loans easily and quickly. IRAS has piloted direct submission of Goods and Services Tax (GST) returns from businesses’ accounting software, enabled by National Digital Identity (APIs), and will look to extend this to all GST-registered businesses. The Networked Trade Platform has reduced application time for trade permits. It used to take several days, now it takes one hour. This reduces the burden of administrative processes and enables our entrepreneurs to focus on growing their businesses instead of navigating red tape.
Mr Teo Ser Luck and Mr Vikram Nair asked about our upcoming initiatives. We will continue to make our digital services more accessible, more integrated. We will enhance the SingPass Mobile so that it can be used for secure logins to selected private sector applications as well. Security will, of course, remain our central preoccupation. Senior Minister of State Janil Puthucheary will address Ms Sylvia Lim's question on security, because without security at the core of our Smart Nation, many of these initiatives will be at risk.
We will expand the slew of services under Moments of Life to help citizens deal with all the significant turning points in our life, birth, school, marriage, even including end-of-life matters. And we will empower seniors to lead more active lives. MOH will share more of this in their session. We will continue to enhance convenience in daily life.
Parking.SG is already used by over 60% of car owners, and we want to make it even easier not just to pay for parking but to find their parking lots. This year, GovTech, the Urban Redevelopment Authority (URA) and the Municipal Services Office (MSO) will be trialing the installation of smart sensors so that we can provide real-time availability of kerbside parking lots to people who are looking for a lot.
HDB is looking to create smarter towns so that we can optimise land, infrastructure and utilities, and allow people to engage and form communities using these digital tools. This will make our heartlands more liveable, efficient, sustainable and safe.
Businesses can look forward to more digital tools to increase connectivity both within Singapore and beyond our borders. IMDA's new national e-invoicing standard will speed up corporate invoicing and payments. And those of you in business will know that the velocity of cash flow is crucial in business.
We are streamlining Government transactions. The Minister for Finance mentioned a pilot portal to help up to 18,000 food service companies cut red tape in their licence applications. Anyone who has tried to open a restaurant would have known it takes many applications. We will try to streamline all these in the process, remove duplicate applications, reduce red tape and to give approvals faster. We hope to expand this effort to other industries in future.
Our goal is to integrate all these services to help firms unlock new ways of connecting with consumers and other businesses and transacting with the Government. SNDGG is not doing this on our own. We are not a Ministry but we view ourselves as a shared platform for the whole of Government. The Digital Government Blueprint calls for the Government to be digital to the core by 2023. Many agencies have, therefore, implemented or are in the process of implementing new digital initiatives in order for us to achieve this.
Let me give Members another example. MOH launched Healthy 365, which has kept 1.7 million users active over the past four years. Many people have told me that they enjoy the National Steps Challenge and I am especially intrigued to see so many non-techy people wearing activity trackers. It is not just because the Health Promotion Board (HPB) is giving it away free, but the combination of community and activity and, of course, the usual Singapore pursuit of health points and discounts helps. But the point is that we have used technology to make a difference and to improve health on a daily basis.
MCCY recently launched a central volunteer management system to deepen volunteer engagement and recruitment. Six public agencies now use volunteer.sg to manage over 20,000 active volunteers. MCCY will share more during their session.
I have described a whole slew of existing and upcoming benefits to citizens from the Smart Nation. But I also agree with Ms Tin Pei Ling that we must continue to our citizen-centric focused and delivering services in an integrated way. In the coming years, with the data generated from our expanding digital infrastructure, we can expect the services to become more personalised, more tailor-made to the individual needs of citizens and be more responsive. When people shop online, when people engage online, especially with the private sector, expectations are raised and they expect the Government to also be able to respond in such a personalised, responsive manner.
One way which we are going to do this is also to make better use of AI which, we believe, will greatly improve our lives and our economy. Let me spend some time then to share with Members what we are doing in this AI space. AI and, in particular, deep machine learning, have revolutionised the scene in recent years. AI has already begun to make an impact in our daily lives. If we just stop to think about it, the voice assistants in our handphone, the language translations, the global positioning system (GPS) optimisation, the credit card fraud alerts, all these have benefited from advances in AI just within the last two years.
I have mentioned just now that the Government has been using AI for drowning detection in our swimming pools. We have also used it for SkillsFuture's fraud detection, and for local speech recognition. In fact, AI speech recognition has been used to augment the transcription of COS speeches this year. So, it should make it more accurate. And even if you point out mistakes, you will help us improve the system.
Mr Cedric Foo asked how Smart Nation will keep us relevant. AI, data analytics, robotics and automation are crucial ingredients for us to restructure of our economy. We need to achieve a quantum leap in productivity by creating new engines of growth. The Government needs to upgrade our technology stack so that we can be more responsive to citizens’ needs and to the demands of an increasingly competitive marketplace. We believe that Singapore has a good foundation for AI, through a multi-agency effort from SNDGG, the Ministry of Communications and Information (MCI) and our economic agencies.
The National Research Foundation (NRF) set up AI Singapore to bring all relevant research institutions and AI startups together. GovTech will set up a centre of excellence in data science and AI to help other agencies deploy these AI solutions and technologies. Finally, MCI is developing guidelines to encourage responsible and safe use of AI, such as the Model AI Governance Framework which Minister Iswaran announced recently.
We need to double down on these efforts. This year, an interagency taskforce will study how Singapore will develop AI as a strategic capability and become a trusted global hub for test-bedding, for deploying and scaling up AI solutions, especially in the context of a highly urbanised city like ours. For citizens, this means new and better services, whether from the Government or private sector. The possibilities are promising. McKinsey has identified 160 use cases where AI can be used for social good. For example, AI can \"recommend content to students based on past successes and engagement with the material\" and \"detect student distress early\". Basically, what it means is that we talk about streams and subject banding. All that is still relevant. But to really be able to customise that educational journey for that individual, sometimes maybe even to gamify it, will provide a more helpful educational experience for our students.
We also foresee AI optimising urban scenarios, for instance, in optimising our traffic light networks and to predictively maintain public infrastructure. In other words, make sure things do not break down or to identify potential problems, before they lead to a breakdown. We foresee AI applications in finance, in logistics and cybersecurity. In fact, there are already many local companies in these and other domains. This is to answer Mr Teo Ser Luck. We hope to co-create with these companies the development of these new AI solutions.
To scale up AI development, we are looking to democratise access to data and AI tools so that everyone can learn and experiment with AI solutions. We want to support SMEs to adopt AI and to work with the Government on relevant use cases. We will expand Government and private sector collaboration. One example is AI Singapore's 100 Experiments programme for companies to solve their own real-world business problems, together with AI experts. This programme will also bring AI apprentices to co-train with industry. So, in other words, we are linking businesses to main experts and people who want to learn and enter this industry.
Lastly, we will build up local know-how in AI, and we will equip everyone to benefit from AI capabilities. This means teaching computational thinking and data literacy in schools, and training adults in data science and AI skills. Before that sounds too scary, I want to say that we do not expect everyone to become an AI expert. But think of AI in the future in the same way which you think of word processing today. It is a general-purpose technology, and we want our workforce to be able to use AI tools to participate meaningfully in the future AI-driven economy to secure good jobs, improve productivity and raise wages.
So, let me conclude by restating the obvious. Smart Nation is ultimately about improving lives and livelihoods. We have done reasonably well so far. Singapore won the City Award at the 2018 World Smart City Awards in Barcelona, which testifies to the concrete benefits that Smart Nation brings to Singaporeans and the recognition which we have from the rest of the world. Still, we cannot be complacent because the pace of technological change is so unrelentingly quick. The Government will continue supporting our local firms in this mercurial environment through initiatives, such as Scale-Up SG, the Enterprise Financing Scheme and SMEs Go Digital, which Members have heard about from Minister Heng Swee Keat in the Budget speech. And I share Ms Rahayu Mahzam's concerns on digital readiness and inclusion, and Senior Minister of State Janil Puthucheary will elaborate on the special inclusion initiatives that we will embark on to make sure no citizen is left behind.
But these challenges and all these disruptions also bring many opportunities for Singapore, especially a city-state with hardworking, disciplined, highly educated people. We have disproportionate opportunities in such a world. We call on citizens and businesses to journey with us, to fully exploit our comparative advantage, take advantage of the resources and the infrastructure that we have put in place, and to co-create solutions for the future. If we do this, Mr Chairman, we can all reap the benefits of our Smart Nation for years and decades to come.
The Chairman: Senior Minister of State Janil Puthucheary.
The Senior Minister of State for Communications and Information and Transport (Dr Janil Puthucheary): Mr Chairman, if I may follow on from Minister Vivian Balakrishnan's rallying cry for all of us to become involved in Singapore's Smart Nation ambition. The Government cannot make this happen alone, cannot make this happen through force of will, by wishing it, by making speeches. We need the ideas and capabilities of our people and our businesses. As a nation, everyone needs to be part of our Smart Nation journey.
We do not have a monopoly on the best ideas and talent. We will need to create opportunities for citizens, community partners and businesses to contribute meaningfully to Smart Nation.
Members Mr Teo Ser Luck and Mr Vikram Nair have asked about partnerships between the Government, businesses and the tech community. One of the ways we are facilitating greater participation from businesses is through building something we call CODEX which stands for Core Operations, Development Environment and Exchange, which is a shared digital backbone, part of which is the Singapore Government Tech Stack. This can be used to build applications and digital services. CODEX will be modular, interoperable and will, in future, allow an interface to parties outside the Government.
As part of CODEX, we are working with public agencies to shift their ICT systems towards the commercial cloud. So, Government, systems, public agency systems on the commercial cloud, and this will allow us to benefit from leading edge private sector capabilities to build products and services better for our citizens.
We are also actively involving the tech community. One example is a mobile application called “Kill The Queue”, which allows shoppers to save time by scanning and paying for items through their mobile phones as they shop. The app was conceptualised by a team of GovTech engineers. They then partnered students from Temasek Polytechnic to build a prototype, as part of the students' final year project. This partnership also allows students to improve their skills through solving real-world challenges. So, partnerships through businesses by looking at how Government build platforms and products can be interoperable and can create opportunities for businesses to interface with ideas that we can seed out into the students and the academic community so that they can run with and try to develop real-world solutions.
Members may have heard of \"Developers Conferences\" or DevCons. These are usually organised by tech companies, such as Apple, Google or Facebook, and they are done to engage engineers and the tech business communities to leverage upon the product or the platform owned by that company. So, we might have an Apple on iPhone operating system (iOS) Developers Conference, for example, or Facebook Developers Conference, where the time is given for software developers and businesses to think how they can utilise that product better for their own business purposes and how their feedback then improves the product of the person running the Developers Conference.
To facilitate greater collaboration with the community, and to look ahead to how the private sector can build products that layer onto or interface with our Smart Nation platforms, we organised our first ever Developers Conference, GovTech STACK DevCon 2018. I have yet to comprehensively verify this. So, a bit of a caveat that I have not received evidence to the contrary, but I believe so far, this is the first and only Government-driven Developer's Conference. And this event attracted over 1,200 attendees from the private sector, the Government, public sector and tech community.
Separately, we also support hackathons. Members may have heard about hackathons. So, what is the difference between a Developers Conference and a hackathon? A Developers Conference, the person organising it has a product, has a solution, has a platform and wants to ask the community how to do things better using this product, how to make the product better for you. In a hackathon, the participants are generating ideas to solve the problems that they are concerned about and the Government also supports this. This provides platforms for the tech community to come together, learn from one another, ideate and build products. We support the hackathons, such as the Startup Weekend Singapore Mega 2018 and the \"Smart City Challenge\", which was jointly organised by DBS, GovTech and the Singapore University of Technology and Design (SUTD).
We are extending our outreach efforts beyond the tech community because we need a Smart Nation which benefits all citizens from all walks of life.
We are actively engaging citizens on Smart Nation initiatives through a project called Smart Nation Co-Creating with our People Everywhere (SCOPE). SCOPE is a platform for us to bring out early prototypes of our digital products or ideas to citizens. So, one example that Minister Vivian Balakrishnan quoted was the alert button. Very earlier on in its design phase and its conceptualisation phase, just as soon as we have something physical, we encourage participants to play with these products, to try them out, to test them and their feedback then is used to improve our product development process. This is something very common in the private sector. But now we are starting to use these techniques in developing our public sector's Smart Nation solutions.
We have had a series of engagements over four months, at Senior Activity Centres, grassroots events and National Trades Union Congress (NTUC) events, reaching in this way to over 3,500 citizens. We have collected many useful insights and suggestions.
One example of these insights is how receptive seniors are to active ageing services within the Moments of Life application. On our preliminary findings, the majority of seniors aged 60 and above have smartphones, and are open to the idea of using digital services. They also gave feedback about how to design the application in an easy-to-use manner, and how to provide support and coaching to seniors so that they can use these apps and benefit from these services. All of this will help us to develop and deliver a better product, better services and better experience.
We will continue to scale up these efforts. To enable more Singaporeans from different walks of life to contribute to Smart Nation, we will be signing a memorandum of understanding with NTUC to further engage workers and their families to help them make the most of new jobs and opportunities.
I agree with Mdm Rahayu Mahzam that even as we move ahead in building Smart Nation, we need to ensure that this Smart Nation includes and benefits all Singaporeans.
We are committed to Digital Inclusion and Digital Readiness, so that everyone is able to access the opportunities that technology creates. I will speak more about these broader Digital Readiness efforts in the MCI COS. But SNDGG will play our part by ensuring that the Government's digital services are designed to benefit all.
As part of these efforts by the Government to improve the useability of our websites, we have developed a set of Digital Service Standards (DSS) for Government agencies.
For example, HDB's website MyNiceHome is a portal that provides first-time home owners with useful information about buying and renovating a flat and this has been completely redesigned. The site was made mobile-responsive, different forms of search and assistance had been added, and the content had been made accessible to people with disabilities. And as a result, the site traffic has increased significantly.
Ms Sylvia Lim has asked about data protection within the public sector. The Government should, indeed, be held to high standards for the protection of the data it collects. In SNDGG, our role is not just about delivering good products, but also in setting and maintaining high standards of data protection for the public sector.
The Government has progressively enhanced security measures to safeguard sensitive data. We introduced the Internet Surfing Separation policy in 2016 and the disabling of Universal Serial Bus (USB) ports from being accessed by unauthorised devices in 2017. We have also increased the number and types of internal IT audits to check on agencies’ data access and data protection measures. As a matter of practice, agencies will use identifiable data only when necessary, such as for providing personalised services.
We will continuously review our standards and measures and incorporate lessons learnt and industry best practices. For example, we will be progressively automating user account management to ensure tight and robust access control.
Where citizens suspect that their data have been misused or hacked, they can lodge a complaint with the agency and, if there is any suspicion of a crime, they can make a report to the Police. They can contact GovTech directly. We have guidelines for the handling of data and protocols that should be in place. Complaints will be thoroughly investigated and appropriate action taken. On top of that, there are other issues and consequences as a result of that, and we would like to discuss the ways we can help and support them.
To build our Smart Nation platforms and products, to engage the tech community and businesses, to develop and enforce rigorous standards across the public sector, and to create jobs and opportunities for Singaporeans, we will need to build up a strong core of engineering skills. We have been searching for engineering talent to join us. We are looking for people with bright minds, an eye for computational design and the drive to contribute to society. There are exciting opportunities for engineers in the Government.
And I would like to cite a particular example, Ms Laura Lee. Members may or may not be familiar with Ms Lee's first employer King.com which is a software developer. I suspect some Members may be more familiar with one of their products which is Candy Crush. While Ms Lee was working at King.com, helping Candy Crush to become one of the bestselling games of all time, she read about how data was used by GovTech engineers to resolve the spate of mysterious disruptions to the Circle Line in 2016. So, reading about that effort by our data scientists to solve these real-world problems, Ms Lee was inspired to come back home to Singapore and join us. And now she is currently a Data Scientist with GovTech working to improve the Government’s digital services, such as transport route planning and jobs matching. Like many of our engineers, she also pursues other projects as part of her personal professional development within the team. Currently, she is part of a team that is trying to find ways to use technology, machine learning and our Smart Nation platforms to encourage more recycling. This is something that she initiated as part of a hackathon she participated in, using her skills to pursue something that matters to her.
Ms Lee did not graduate with a computer science degree. Her training was in Mathematics, Economics and Statistics. While at university, in order to pursue one of the courses that she had, she had to learn R which is a programming language focused on Statistics and her ability to use R to solve the problems and apply those solutions to what she was working on sparked her interest in coding and data science. So, today, she is familiar with a variety of coding languages – Python, CSS, Javascript and HTML – and all of these she picked up after starting work. Recently, she had developed a full-stack web application as part of an internal hackathon project.
And the point I want to make with this: what Ms Lee’s story demonstrates, and there are many others like her, the experience that they have, this demonstrates that the opportunities that are created in Smart Nation are not just for a handful of people, not just for a few. We are hoping to make them as widespread as possible, including the jobs that are created. It is not just for those students who are currently pursuing a Computer Science course or participating in Robotics as a co-curricular activity (CCA). Ms Lee's CCAs, by the way, were hockey and Student Council. It is not necessary to have picked up all the programming skills before leaving school. What is important is to have the drive, curiosity and willingness to pick up new skills throughout our lives.
Smart Nation is a national effort, and we in the Smart Nation and Digital Government Group will do our part to work closely with citizens and businesses to create jobs, opportunities and a sense of transformation and optimism for the next generation of Singaporeans.
The Chairman: Mr Pritam Singh.
Mr Pritam Singh (Aljunied): Sir, in 2015, Workers' Party Non-Constituency Member of Parliament Yee Jenn Jong noted that the completeness of the Electoral Boundaries Review Committee (EBRC) report had been shrinking over the years and asked for the meeting minutes of the Committee's report to be released. In response, the Prime Minister replied that on the completeness of the report and the minutes, \"I leave that to the Committee\". Even though the Prime Minister said that he was not in favour of publishing every twist and turn that would be reflected in the minutes, the Prime Minister was noncommittal on the prospect of a more complete report. It would appear that this can change should the Government decide to do so since the EBRC's Terms of Reference are determined by the Prime Minister himself. I hope we can move from the circular nature of these justifications and provide a report for the public that details why specific precincts in Group Representation Constituencies (GRCs) and Single Member Constituencies (SMCs) are moved or swapped for each and every constituency in future.
In addition, why does the Government not announce the formation of the EBRC as a matter of practice? It would be a waste of Parliament's time and even bordering on an abuse of process if a Member of Parliament had to file the same Parliamentary Question to the Prime Minister when rumours of an imminent election are in the air. In making the point, can I enquire if the EBRC has been formed?
In 2013, Deputy Prime Minister Teo Chee Hean stated that the Prime Minister will certainly remain open to and consider making refinements to its procedures when necessary. I hope these suggestions on greater detail in the Committee’s report and announcing when the Committee is formed will be taken on board.
Finally, it was announced that the Elections Department will conduct roadshows to educate voters on changes to the Parliamentary elections system, specifically, the electronic registration for voters. Can the Prime Minister update the House on this matter and the number of roadshows that will be organised for this purpose, where and when they will be held in the months to come?
The Chairman: Minister Chan Chun Sing.
Mr Chan Chun Sing: Mr Chairman, on behalf of the Prime Minister. It has been the practice for the Prime Minister to appoint an EBRC to review the number, names and boundaries of electoral divisions ahead of a General Election. The Committee is made up of senior civil servants who are knowledgeable in demographic shifts and population statistics. The review report is presented as a White Paper to Parliament and released to the public once it is accepted by the Government.
In drawing up its recommendations, the Committee is guided by the terms of reference laid out by the Prime Minister. The Committee independently considers and determines how the constituencies are delineated, the size and configuration of the constituencies, as well as the total number of Members of Parliament to be returned. When reviewing the electoral boundaries, the Committee takes into account technical factors, such as population growth and shifts and other relevant parameters.
As a matter of practice, we should allow the Committee to focus on its work professionally, away from unnecessary media attention or public pressures. As with past elections, there will be sufficient time, from when the Committee’s review report is made public to the time of the election, for candidates and political parties to make their preparations.
On Mr Pritam Singh's second question as to whether the EBRC has been formed yet, the answer is no. And for the number of roadshows, we have done that in preparation for the last Presidential Election and will continue to do that as we move towards the next General Election.
The Chairman: Assoc Prof Daniel Goh.
Assoc Prof Daniel Goh Pei Siong (Non-Constituency Member): Mr Chairman, MAS recently announced a $75 million plan to boost equities research and equity listings. The Grant for Equity Market Singapore (GEMS) will co-fund listing costs of companies and the salaries of equity research hires by 50% to 70%.
Critics have argued that this is throwing money at the problem without addressing the fundamental issues of stock market malaise.
For small to mid-size caps, the main problem seems to be the lack of expertise and experience on corporate governance. Even before we can talk about investor excitement, we should address the confidence of retail investors in small and mid-caps. There is often excitement in initial listings, many times encouraged by enthusiastic analyst coverage, but this excitement very easily gives way to collapsing stock prices due to corporate governance issues.
Recent examples include e-commerce startup Y Ventures and food and beverage (F&B) company Kimly. These have affected retail investor confidence. The restructuring of Noble Group, which has not been allowed to relist, and the current restructuring of Hyflux to save it from liquidation, have further affected confidence.
For both Noble and Hyflux, analyst reports have had little impact in educating retail investors about their cash flow problems. Shareholder activism and academic scrutiny have done more to highlight potential issues, but often too late for retail investors. Would not the Grant for Equity Market Singapore (GEMS) do better to fund programmes to advise small and mid-caps on corporate governance and improve their performance in this aspect?
Mr Dennis Tan Lip Fong (Non-Constituency Member): Mr Chairman, last year, the Keppel Offshore and Marine corruption case was discussed in this House. Many people have wondered how sizeable bribe payments were made without oversight from the highest level of management or its Board. Like the Swiber case, we are still waiting for the outcome of the Keppel case.
The ongoing problems plaguing Hyflux that have since surfaced remind us that corporate governance issues remain complex and entrenched, with potential market-wide implications. This, in turn, can affect shareholder value and investor confidence.
The repercussions of such problems affect many small-scale retail investors. Sixty-year-old Mrs Goh shared with Channel NewsAsia her worries of not being able to recoup her investment in Hyflux. Such worries are not unfounded as recent announcements by Hyflux have indicated that investors like her will have to suffer losses on their investments if a proposed restructuring plan proceeds.
In many other cases, it is often the minority investors that lack protection and do not get any help from the regulators or the law when majority shareholders and directors make use of loopholes in regulations to effect transactions at the expense of minority shareholders.
Another worry arising from such corporate malfeasance is the impact such incidents can have on the companies' reputation and, by extension, on Singapore’s. Some international commentators have made unflattering remarks on the robustness of Singapore’s regulatory regime and enforcement.
I note that MAS has set up a Corporate Governance Advisory Committee (CGAC) as part of the recommendations by the Corporate Governance Council, itself set up in 2018 to review the Code of Corporate Governance.
Despite such efforts, it may be time for us to acknowledge that self-regulation and internally-driven processes on corporate governance cannot be relied upon solely. The present oversight processes and regime are surely not adequate. In some of these cases, the problems reported seemed to have escaped the attention of their auditors or the problems have not been commented upon by their auditors.
In cases where the executive management of a company or its board is aware of serious malfeasance or malpractices or is not aware of such malfeasance but ought to be aware, the buck should never stop anywhere below executive management and its Board.
Regulators should be more proactive in taking errant or neglectful directors to account when they fail in their duties and obligations.
Can Singapore Exchange Regulation (SGX RegCo) or the Accounting and Corporate Regulatory Authority (ACRA) not do more?
The Government should do more to improve the corporate governance regime of our companies. I would like to propose that an independent task force be convened to evaluate the need for a Government agency to provide oversight on corporate governance standards and to improve audit quality. Such a review is timely and necessary to ensure that safeguards are in place to protect shareholder value and to ensure that the reputation of Singapore companies is not adversely affected by those who have fallen short.
Ms Anthea Ong: Mr Chairman, I am heartened that Budget 2019 acknowledges climate change as a strategic challenge for Singapore. The financial sector’s role in allocating capital for a climate-safe future across generations is a significant one that we must include in our strategic plan for climate change action.
As a leading financial hub, Singapore’s banking and asset management industry must rise to this challenge. How we lend is a reflection of our values and principles. For example, civil society recently called out our banks for continuing to fund coal-fired power. As of September 2018, 17 banks have committed to stop financing coal-fired power. The Governor of the Bank of England is reported to be open to increased regulatory requirements for \"brown\" investments.
What regulatory and supervisory mechanisms are being developed so that banks in Singapore will:
(a) actively implement existing green standards, like the Association of Banks in Singapore's (ABS’) Haze Diagnostic Kit, into their lending policy frameworks; and
(b) proactively work with civil society and experts to identify other critical industries, like energy, where green standards should be developed and implemented?
Our asset management industry currently manages US$2.4 trillion. Can we allocate funds to support our asset management industry to develop stronger stewardship principles and use the tools available in the market to help us safeguard our future, one that is climate-safe?
For example, the Government Pension Investment Fund of Japan allocates close to 10% of its investments into funds using sustainability indices. Two pension funds in Korea have gone even further and stepped away from future coal investments.
The Chairman: Minister Ong Ye Kung.
The Minister for Education (Mr Ong Ye Kung): Mr Chairman, let me first start by addressing Assoc Prof Daniel Goh's question on GEMS. Let me first explain.
GEMS, as a scheme, is funded by the Financial Sector Development Fund (FSDF) which was set up in 1999 following the demutualisation and listing of the Singapore Stock Exchange (SGX). So, it is not funded from taxpayers' money. The scheme was then designed in response to feedback from the industry that a vibrant equity market requires not only new listings but also sustained investor interest post-listing. So, it is really a fund started from the industry to address feedback from the industry and you design GEMS. And the primary aim is to strengthen public financing channels for growth enterprises, in particular, SMEs. So, GEMS does so, as Assoc Prof Goh mentioned, by defraying listing-related expenses and promoting better research coverage of the sectors they are in, as well as their business models.
There are certain sectors that we can do better in attracting listings; high growth sectors being one example. And GEMS is designed to promote those sectors. There are also gaps in investment coverage for small and mid-cap listed enterprises and new business models. This is why the scheme comprises a listing grant and research-related grants to improve the equity research ecosystem.
The quantum of listing grant has thus been also tiered to favour high growth areas, such as the technology sectors. Well-developed sectors, such as Real Estate Investment Trusts and Business Trusts, do not qualify for the grant. Applicants for the research grant are also required to provide coverage for small and mid-cap listed enterprises. It is a young scheme. I am sure different agencies will monitor the effectiveness, take in further feedback and inputs and try to improve the scheme over time in order to serve its objectives.
Mr Dennis Tan asked about corporate governance and whether it should just be left as an internally driven process, and whether SGX RegCo, ACRA can do more. He called for an independent task force to review the corporate governance framework and a Government agency to provide oversight on corporate governance standards and improve audit quality.
Actually, many of these features already exist within our current system. MAS, as the statutory regulator of Singapore's capital markets, and SGX, as the frontline securities market regulator, oversee the corporate governance standards of listed companies, set out in the Code of Corporate Governance. The SGX Listing Rules, in turn, require companies to disclose how the companies' practices conform to the principles in the Code. ACRA is responsible for upholding financial reporting and audit quality by inspecting the statutory audits performed by public accountants.
As for an independent task force to review the corporate governance framework, as Mr Dennis Tan has alluded to, MAS has convened an industry-led Corporate Governance Council in 2017. That was an ad hoc Council. It had a list of recommendations. MAS accepted all the recommendations that the Council submitted last year in August. Consequently, changes were made to the Code and the SGX Listing Rules to implement the recommendations.
In line with one of the key recommendations of the Council, MAS established now a permanent CGAC earlier this month. The CGAC comprises prominent industry leaders with stature and corporate experience to advocate good corporate governance practices. It will identify current and potential risks to the quality of corporate governance in Singapore and advise the regulators on corporate governance issues.
High standards of corporate governance do help sustain good corporate performance for the long term. It ensures good systems and structures to evaluate investments, manage risks, safeguard all shareholders’ interests, conduct leadership succession and other key processes in the company.
However, risks are inherent in investment. One of the key aims of regulation is to require that investors have access to up-to-date material information, such as a listed company’s financial condition and prospects, in order to make informed investment decisions. Investors, on their part, also need to pay close attention to what is disclosed, look beyond potential returns and assess if they can also accept the risks that come with specific investments.
The regulators, namely, ACRA, MAS, SGX RegCo, will continue to calibrate rules and work with stakeholders, such as the new CGAC, to strengthen the corporate governance standards and practices in Singapore. At the same time, we will continue to educate the investing public on the tradeoffs between risks and returns, through the MoneySENSE programme.
Lastly, Ms Anthea Ong asked about sustainable financing. MAS is committed to advance the agenda for sustainable finance. As a member of the Network for Greening the Financial System, MAS works closely with our international counterparts to develop best practices for financial institutions to manage climate risks and opportunities. Let me outline MAS' efforts in three key areas.
First, our local banks have implemented policies aligned with the Guidelines on Responsible Financing issued by the Association of Banks in Singapore, to evaluate their borrowers’ environmental, social and governance (ESG) risks, and help borrowers improve their sustainability profiles. In this regard, the local banks have also committed to stop new financing of inefficient coal plants. MAS also expects insurers to consider environmental risks in their risk assessments and has introduced a climate scenario in our industry-wide stress tests.
Second, the financial industry is promoting green financing, such as green bonds. Over $2 billion of green bonds have been issued to date, following the introduction of the MAS Green Bond Grant Scheme. Recently, the Scheme was expanded to cover social and sustainability bonds.
Indeed, within the asset management sector, the large majority or 80% of sizeable asset managers in Singapore are signatories to the UN Principles for Responsible Investment, and take on board environmental, social and governance risks considerations in their investment processes. In MAS’ own investment portfolio, we have been actively working with our fund managers to ensure that ESG considerations are incorporated.
Finally, to strengthen the region’s financial resilience to disaster risks and address protection gaps, the Southeast Asia Disaster Risk Insurance Facility will be set up in Singapore this year as the Association of Southeast Asian Nations' (ASEAN’s) first regional catastrophe risk pool. It will better cover emergency response costs in the aftermath of catastrophes. MAS will continue to work with key stakeholders in the financial industry to promote the sustainability agenda.
The Chairman: Clarifications, please. Mr Vikram Nair.
Mr Vikram Nair: The question is for Minister Josephine Teo. The Minister has prepared a good discussion on all the different initiatives by the National Population and Talent Division. But I am just curious. What is the root cause of the fall in TFR over the last three years despite all these initiatives?
Mrs Josephine Teo: Mr Chairman, I thank Mr Vikram Nair for his question. This is an important question. I could not help but overhear my colleagues' chuckle. In fact, I have been studying this for some years and perhaps, if Members allow, I could share my own reflection on this.
When we think of births, we think of TFR. My observation and my reflection would be that there are really two key sets of driving forces. One key set of driving forces is longer term in nature. Births, when looked at from a longer-term perspective, really have to do with values and social norms. And these would include attitudes towards singlehood versus marriage, couplehood versus parenthood. And then within parenthood, the role played by fathers versus mothers. It would also include norms as to how many children is considered ideal in any society. And also how people prioritise parenthood versus other pursuits, such as career, caring for elders, service to the community and, very importantly of course, personal lifestyle interests.
Parenting norms also matter a great deal, such as whether, like in the Scandinavian countries, it tends to be quite a relaxed attitude; or whether in an East Asian context, generally a very intensive form of parenting. These impact costs – how much people spend on children and, of course, as a result the perception of affordability. And then, as a result, for the parents, how many children they will eventually actually have because of how much they think they can afford. So, these are the longer-term driving forces, a whole set of forces at play. So, root causes.
But in the shorter term, births can also be affected by other things. For example, economic uncertainty. So, if the job situation is not clear, people are anxious. Then, you could see that translates into a dip, as what Korea experienced in the last couple of years. And in fact, one of the \"stars\", if we could put it that way, of high births, Finland, often touted. In fact, since 2010, Finland has also seen a decline in the birth rates. So, before 2010, Finland's birth rate was around 1.9. By now, it has gone to below 1.5. And if we look at the TFR by rural areas versus city areas, actually it is quite across the board. In Finland's rural as well as city areas, births have declined. I think it has something to do with the sense of malaise and people feeling not confident.
So, that is one type of short-term effects, if you could put it that way.
There is also another factor in the short term how TFR could fluctuate. It is mathematical. Because TFR is a ratio, so it depends on what you have in the numerator and what you have in the denominator. So, I will not go too much into that. But I would say that these are short-term factors because when confidence returns, it is entirely possible that people who have put off parenthood in Finland could then decide that this is the time. Okay, we have been putting it off. And then you might see an uptick in their TFR. So, the long-term factors versus the shorter-term factors.
What would be important for us is really not to be overly distracted by the year-to-year ups and downs in TFR. We pay attention to them, we look at them, and we ask ourselves why it is happening this way. But do not be overly focused on it. What we should really focus on would be the values and our societal norms, which many Members spoke about.
It is important for us to firstly remember we have to strengthen the fundamentals. And the fundamentals are that you need to have economic vibrancy, you need to have societal cohesion. These are fundamentals. And then, on top of these fundamentals, we must do our utmost to support marriage and parenthood aspirations, meaning we have to try as best as we can to make marriage and parenthood achievable, enjoyable and celebrated. Those are the things we have to focus on. We should stay the course.
The Chairman: Mr Patrick Tay.
Mr Patrick Tay Teck Guan: In one of my cuts on public sector transformation, I asked the Minister, in our drive towards upskilling and reskilling in the Public Service, whether the Public Service can partner the Labour Movement as well as the public sector unions in forming training committees to drive some of these training efforts that cross our Ministries and Statutory Boards. I wanted a response from Minister Chan.
Mr Chan Chun Sing: Mr Chairman, that is definitely a good suggestion. As the former immediate past Secretary-General of NTUC, I would certainly take note of that. Indeed, I have instructed PSD, in our transformation, to pay extra attention to those who require a bit more assistance to transit to new jobs. And I would say that we are not setting up a big overall committee to integrate with the Amalgamated Union of Public Employees (AUPE) at that level, but importantly, we are starting at the respective job levels. So, for example, there are lower-skilled workers in the Ministry of the Environment and Water Resources (MEWR) who require new skillsets and we are focusing our attention on them, prioritising them in our transformation effort first.
Likewise, the CSC will also contact and work closely with the Labour Movement to make sure that the modular system of training is made available to as many of the public servants as possible. We all know public servants, just like any other people, who are in full-time jobs, it is always difficult for them to take time out from their jobs to do training for one or two weeks. So, we need to work together with the Labour Movement to design modular courses, stackable modules, to be accessible to our public servants in order for them to acquire the new skills, especially in the area of digital literacy. We welcome this move by the Labour Movement and the offer by the Labour Movement and will certainly work closely with AUPE to bring this about.
The Chairman: Ms Sylvia Lim.
Ms Sylvia Lim: Mr Chairman, I have a clarification for Senior Minister of State Janil Puthucheary on my cut on personal data protection in the public agencies. I would like a clarification from him as to whether it is the expressed Government policy that persons whose data has been compromised, while in the care of public agencies, that such persons have a right to know that there has been a breach and that they have the right to know in a timely manner.
Dr Janil Puthucheary: Mr Chairman, we addressed some of these in the discussion recently in the previous Sitting. There are guidelines about how public sector officials should handle the matter of a data breach involving citizens' particulars. There is no absolute requirement. We do need to look at every case, and we do need to look at the issue at hand as to what has been accessed, what are the circumstances, what the potential impact would be on the citizen to be involved in that process thereafter. We have heard about the examples cited in this Chamber about what has happened after the recent breach. So, the short answer to Ms Sylvia Lim's question is no. There is no single expressed position on this. There are guidelines about how the matter should be handled. There are guidelines about how citizens should be approached. The situation needs to be taken on a case-by-case basis and all the factors that are relevant need to be taken into account.
The Chairman: Ms Anthea Ong.
Ms Anthea Ong: Mr Chairman, can I kindly request for Minister Chan to further expand on my question on how or what specific measures or steps is the Government taking to restore confidence in the Public Service?
Mr Chan Chun Sing: Mr Chairman, every time when something goes wrong in the Public Service, regardless of which agency, the first thing to do is to get to the bottom of it by the respective agency to see what are the lessons learnt that the agencies must do internally to make sure that they get to the bottom of it and put things right.
The second step that we always will do is to make sure that these lessons are shared across all the other agencies because things that happen in one agency can offer important lessons to other agencies.
There is a third step that I would always ask the Public Service to do, which is that when we do our debrief, to ask ourselves if we could have prevented or pre-empted this incident right at the beginning. And that is why I always discuss and share with my fellow colleagues in the Public Service that it is necessary but not sufficient just to put things right. Actually, more important than playing defensive, we need to make sure that our systems are in place to pre-empt problems from arising in the first place.
Of course, it is very difficult for the Public Service to say that I have done this and, therefore, I have prevented these problems because the problems never even manifest themselves. But that is our challenge. That is the high benchmark that we need to set for ourselves as the Singapore Public Service if we aspire to be a Public Service that Singapore and Singaporeans can be proud of.
And, indeed, as I shared, we have done many things that I think we can be proud of because that has put Singapore at the forefront of many of these views so that we have prevented and pre-empted many of these issues. Be that as it may, we should never be complacent.
So, the way to restore public confidence is to make sure, one, we get to the bottom of the issue; and if there are people who are responsible, we will make sure that we rectify that; even as we take the responsibility at that level, we would ask ourselves could we have trained that person better, could we have changed our process to take into account the human factors to prevent those mistakes from happening in the first place?
So, these are things that we owe it to ourselves in the Public Service to get things right and to prevent things from going wrong in the first place because it gives us no joy to say that we are able to recover from our mistakes fast. In fact, I would like to see ourselves not getting into those mistakes in the first place.
The Chairman: Mr Louis Ng Kok Kwang.
Mr Louis Ng Kok Kwang: I think Minister Chan Chun Sing has responded to my cut in saying that almost all public agencies have now a single structure scheme in terms of career progressions for a public servant. Could I just ask what percentage do not have this single structure scheme and what are we doing to close this gap?
Secondly, I think in response to my cut as well, the Minister said that leaders should respond to that feedback provided. But my cut really was about how are we going to ensure that they do and whether we can have internal QSMs to take that role instead, to take that feedback given, it is actually looked into and the loop is closed?
For Minister Josephine Teo, I am very thankful that the Minister has announced that 450 employers are now offering unpaid leave and I think you mentioned 70 public agencies. Could I ask whether the entire Public Service can offer this unpaid leave for parents with multiple or preterm babies so that we can walk the talk and we can take the lead on this issue?
Lastly, with regard to childcare leave, could I ask the Minister to consider again whether we can allow people to use their current sick leave entitlements, not just when they are sick, but again when their children are sick and, to avoid people from misusing this, they have to provide the child's MC as proof when they take this kind of sick leave?
Mr Chan Chun Sing: Mr Chairman, let me first clarify that our aim is not to merge every scheme possible. You cannot do that because there are schemes that are for professionals – doctors, engineers, accountants. So, our aim in the Public Service is not to merge every scheme. Our aim is to merge the schemes where it is possible to do so. And the last I checked, for the 50 over agencies, I would say almost 50 of them have done so; and the rest who are not able to do so, it was because they have good professional reasons.
Now, even for those who have done so, we will constantly challenge ourselves. Are we able to merge those schemes even earlier, at an earlier stage whereby we take into account an individual's performance rather than just the academic grades?
So, going forward, we will see the following things. Yes, academic grades will be taken into account as one of the signs as a proxy of what the person is capable of, but increasingly, as I mentioned, there will be other skillsets that we are required to take into account for a holistic assessment of the individual. To what extent we can, I think beyond those professional schemes and engineers, qualified engineers and doctors, we will try to that extent possible. So, that answers the first question.
The Member's second question is about how do the leaders follow up on their respective agencies when they get the feedback? Well, there are few ways. First, when they get the feedback, I expect them to take actions on their own. And, of course, all the respective agencies' feedback comes to me and, if necessary, I will have a discussion with the respective Permanent Secretaries or the Chief Executives of the various agencies. They know that we take this seriously, they know that I expect them to take this seriously and, if need be, I will let them know.
The Chairman: Minister Josephine Teo.
Mrs Josephine Teo: Mr Chairman, to the first question as to whether all public agencies, in principle, yes. But if the Member knows of any which somehow is not in that list of 70, feel free to let me know. We will check up on it.
On the question on whether parents' leave entitlements can be used for their children, here I want to just have a word of caution. I remember some years ago when I was still in the Labour Movement, NPTD at that time was doing consultation on whether we should raise the Maternity Leave benefits. So, it surprised me, but when we did the engagement with our women unionists, they were very wise and they said to me, \"Sister, be careful about what we ask for because whenever we increase these leave benefits, we look different to the employers. They start seeing us differently, because they start seeing us in terms of the liability and obligations that they have towards us.\" So, not all of them were so keen to expand the leave benefits. So, that was a very useful exercise and I keep bearing it in mind.
What the Member has asked for, I think amounts to that; you are really going to expand the leave provisions for people who are parents. Not that you cannot do that, but, by doing so, we have to ask ourselves what the employers will think of it. From having obligations to the individual as an employee, now they have obligations to the entire family. The same benefits can extend to the whole family. I think that is very expansive. And I will be very careful about this because, primarily, the leave provisions were designed to protect the individual in the event of illness. If we think that society can bear more leave provisions for those who are going to be parents, I think we do it openly, we do it in a transparent fashion, we do it in a way that is honest with the employers so that they do not have to second-guess when they take on an employee whether there are these other hidden obligations that they have to fulfil.
The Chairman: Mr Ang Hin Kee.
Mr Ang Hin Kee: For Minister Chan Chun Sing, just one clarification and one suggestion. When the Minister earlier mentioned about public sector transformation, he will have his officer work with AUPE to ensure that public sector servants are assisted and well-coached as far as training is concerned. I think the Minister also referred to the Statutory Board unions and those who are House unions, not just those that are belonging to AUPE, just for clarification, so that the other union leaders and members will not feel left out that their areas are not looked after.
Secondly, a suggestion. I had a conversation with many of them and they have mentioned that a lot of the trainings are centred on the workers themselves – on the lower-skilled or the older ones. Then, they realised that their supervisor could be much younger, could be somebody who is in their 30s or 20s. And they realised that, sometimes, the supervisors do not quite understand that this transition, this situation that they face, require some level of empathy, some assistance and some mentoring and coaching from the supervisors. So, the suggestion is that, can supervisors that oversee some of these workers also go through a system of training whereby they are able to coach and guide these officers along so that the entire transformation and the ability to adapt will be something that is owned by both the staff as well as the supervisors and, therefore, make the workplace more inclusive?
Mr Chan Chun Sing: Mr Chairman, I thank Mr Ang Hin Kee for reminding me to clarify this. Yes, indeed, that is why I mentioned that when we talk about the Public Service transformation, when we talk about acquiring new skills, it is not just at the AUPE level, it is beyond that, actually at every of the agencies' level with the respective unions. This would include the Amalgamated Union of Statutory Board Employees (AUSBE) for the Statutory Boards, it would also include agencies like the Singapore Urban Redevelopment Authority Workers' Union (SURAWU) and so forth. So, that it is at the respective agencies' level because we find through our experience that the most impactful training is when it is focused on the respective agencies rather than the generic skillsets. There is a place for generic skillsets. But there is also a place for very focused, targeted intervention at the respective agencies' level. So, that is the first thing.
On the second point about the training, indeed, PSD, together with CSC, has worked out a framework for different levels of training to be given to different levels of our Public Service officers. There are basic levels of skills that are given to everybody, the basic digital skills, and there are specific skillsets given to the workers at the lower-wage level and the lower-skill level to help them upgrade. But the Member is right that we also have other forms of training that include the intermediate managers and even the higher managers because different levels of managers require different skillsets.
For example, in the Member's particular situation, indeed, for the middle managers, they must know how to make use of some of these technologies; besides using it, how to exploit this technology, how to use, how to help their fellow workers to adopt and adapt to such technologies. Yet, at the higher level, at the more senior management level, we expect them not to just be hands on, but also to know the potential to use some of these new technologies to restructure and change the processes which they are doing at their job at the current point in time.
So, Members can see that in this overall digital masterplan or the digital skills masterplan, we are looking at different skillsets for different managers at different levels. So, that is, indeed, what we are going to do at the training at CSC as they roll out across the Civil Service.
The Chairman: End of clarifications. I would just like to encourage Members, you have been doing well in time-keeping. We get to go home earlier than expected, it might help our TFR as well. We will check back on next year's Budget. Mr Patrick Tay, do you wish to withdraw your amendment?
Mr Patrick Tay Teck Guan: Mr Chairman, I would like to thank the responses from Minister Chan Chun Sing on building a great Public Service; Minister Josephine Teo for sharing on how we are going to support families, parenthood and marriage; Minister Dr Vivian Balakrishnan and Senior Minister of State Dr Janil Puthucheary on not just building a smarter nation, but really one on improving lives and livelihoods; Minister Ong Ye Kung on strengthening our financial markets and our regulatory system; Head (Civil Service) and the PSD team, as well as all our public servants, for putting us all at the heart of what they do and working hard to ensure we are top-notch and first-class. On that note, I beg leave to withdraw my amendment.
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $827,594,400 for Head U ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $196,666,600 for Head U ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head M (Ministry of Finance)","subTitle":null,"sectionType":"OS","content":"The Chairman: Head M, Ministry of Finance. Mr Liang Eng Hwa.
Mr Liang Eng Hwa (Holland-Bukit Timah): Mr Chairman, Sir, I beg to move, \"That the total sum to be allocated for Head M of the Estimates be reduced by $100\".
Sir, our spending has increased by about 2.5 times in the last decade with healthcare and infrastructure among the steepest growth.
On the other hand, our revenue, inclusive of Net Investment Return Contribution (NIRC), grew by about two times in the last 10 years. If NIRC is excluded, our operating revenue would have only grown by about one time in the last one decade. Therein lies our fiscal implications.
Firstly, our total expenditures are growing at a faster rate than our operating revenue. In business budgeting, this phenomenon is known as the negative draw, that is, when the rate of growth in expenditures exceeds the rate of growth in revenue. If left unchecked, where expenditures continue to grow faster than revenues, we could end up with a ballooning deficit situation in the years to come.
Secondly, we are now dependent on the NIRC to balance the Budget. Otherwise, our Budgets will run into structural deficits. NIRC now accounts for about one‐fifth of our total revenue, as the Minister for Finance has said earlier.
Thirdly, both the short‐term recurring expenditures as well as the long-term infrastructure spending have grown larger and are projected to increase further in the decades ahead. In particular, social and healthcare spending will rise as our population enters into a faster pace of ageing and healthcare needs increase further.
In his Budget Statement speech, the Finance Minister spoke about pursuing differentiated fiscal strategy to fund our various spending, namely, one approach for major infrastructural investments, and another for recurrent social and security expenditures.
I agree with the Finance Minister that for recurrent spending like healthcare, security and other social expenditures where it directly benefits the current generation, they should be funded with current taxation so that every generation pays its share. This approach would also instil the spending discipline as any further rise in recurring expenditures would have to be funded through more taxes. This in‐built discipline will not only help keep our operating Budget sustainable but also fairer as well across generations.
For long-term mega infrastructure projects with high capital outlays, the Government should, as far as possible, set aside surpluses where possible, to use the savings accumulated to pay part of the lumpy investment, which is what we have been doing in the past. This pre‐funding approach demonstrates commitment and ensures that there is sufficient funding for projects with very high capital expenditures, such as the Cross Island Mass Rapid Transit (MRT) Line.
But I also agree with the Finance Minister that with the new financing approach for projects, especially where they generate future economic returns, and those that are long-term in nature with some uncertainty, the entity that undertakes the project can look to borrow to finance the project and potentially could draw on the Government's guarantee to lower the financing costs of these long-term borrowings.
The Government is a net creditor and actually does not need to borrow other than the issuance of Singapore Government Securities, which is there to help create a risk-free bond market yield curve. However, for the entity that builds the Government-invested infrastructure, borrowing at the project level does require higher financing costs because of the risks associated, such as construction risks. This could result in a negative carry situation from the Government's standpoint where the borrowing rates may be higher than the returns from investing the Reserves. Hence, it makes smart sense to tap on Government guarantee to reduce the borrowing costs.
I have a few questions for the Finance Minister.
Firstly, can I ask the Minister how would this differentiated fiscal strategy impact spending flexibility, for example, in the event of a crisis or a severe recession where we need to inject an impactful assistance package?
Secondly, we know that spending, especially in social, healthcare and security areas will rise in the years to come. Can the Minister shed some light as to how the Ministry of Finance (MOF) sees the spending trajectory in the next five to 10 years and how do we ensure fiscal sustainability?
Thirdly, as I have said earlier, our investment income from our Reserves is now a significant source of Government revenue. How does the Government ensure that we will not be overly reliant on it, especially as the investment climate is getting more volatile?
And finally, in the midst of changing to this new approach, how do we also ensure that our tax regime remains progressive, with the higher-income earners shouldering more of the tax burden?
[(proc text) Question proposed. (proc text)]
Ms Foo Mee Har (West Coast): Chairman, Sir, Singapore has been incurring more spending than its revenue base since 2015. We have come to rely heavily on contributions from NIRC as the top contributor to spending needs, providing 21% of total expenditure in 2018. This high dependency represents a significant vulnerability, given the volatility of any investment portfolio.
Experts are divided on how much risk corporate taxes – this is traditionally Singapore's largest source of revenue – pose to Singapore's fiscal sustainability. Most agree that it will be increasingly difficult to raise corporate taxes, especially as major economies, such as the United States (US) lower them.
Personal income taxes are also expected to contribute less to revenue in the coming years, due to our greying population. Our ageing population will further demand higher spending in healthcare and to build elderly-friendly infrastructure.
So, to pay for our increasing needs, I urge the Government to study all possible streams of revenue, with the Goods and Services Tax (GST) rate as a last resort, given its broad impact on society. Could the Government look instead at introducing e-commerce tax, a lift in gambling, tobacco and alcohol taxes, perhaps new sources of tax revenue from carbon and sugar, and more progressive personal income tax by introducing new and higher tax brackets, including those for the super high-income earners and ultra-rich?
Tax increases are never easy to swallow. So, to address the fiscal sustainability, perhaps we can also balance this with more focus on the \"costs\" line. It is always easy to call on the Government to do more and give more, usually with less consideration on how these expenditures are going to be paid for.
Sir, I am also hearing questions on the ground on whether big-ticket projects can be less glitzy, whether we can space these projects out a little more so that we can pace our spending a little better, and whether we can better prioritise Government initiatives and programmes. So, I would like to ask the Finance Minister about the process by which large projects and programmes are prioritised, and whether Singaporeans can play a bigger role in influencing this process, so that they can feel included in the building of Singapore.
Mr Pritam Singh (Aljunied): Sir, probably, the largest contributor to the Net Investment Return (NIR) component of the NIRC, the Government of Singapore Investment Corporation's (GIC's) mission is to preserve and enhance the long-term international purchasing power of the country's Reserves. The size of the fund GIC manages has been estimated by some at well over hundreds of billions of dollars.
For the year ended 31 March 2018, GIC achieved the 20-year annualised rate of return of 3.4% above global inflation. The year before that, the rate of return was 3.7%, and for the year ended 31 March 2016, it was 4%. This constitutes three consecutive years of decline from the 4.7% at the end of 31 March 2015.
GIC's latest report states that the reason for this decline is that the high returns from the beginning of the tech bubble window have dropped out of the rolling 20-year return window while the post-tech bubble declines have remained. GIC foresees this decline in the rolling 20-year annualised rate of return to continue for a few years, although the same report states that, in most recent years, the returns have been good.
In previous replies in Parliament on fund performance, officeholders have stated that the Government's view is that GIC and Temasek have performed creditably in challenging market conditions. How does the Government ascertain this beyond the inputs of individuals who are on the boards of these funds? How does the public scrutinise fund performance and comparison to other fund managers with not too dissimilar or long-term mandates? What does the GIC mean when it states the returns from the recent years have been good? And what is stopping the fund from reporting its yearly performance so as to meaningfully allow the public to track its performance closely, as we see with Temasek today?
Assoc Prof Walter Theseira (Nominated Member): Mr Chairman, tax structure has an important role to play in retirement adequacy. We grant income tax reliefs for retirement savings, and we do not tax income from retirement accounts, except for the Supplementary Retirement Scheme (SRS) at a concessionary rate.
These tax advantages are a hidden subsidy to retirement for the rich. Because the value of tax relief depends on Assessable Income, high-income Singaporeans benefit much more than the low-income do. The Minister stated recently that 90% of those making SRS contributions have Assessable Income above $80,000, and the average marginal tax rate there is about 15% for those making the contributions. As for Central Provident Fund (CPF), my estimates suggest that CPF tax reliefs cost the Treasury about $1 billion annually.
We might accept this if tax relief was effective at increasing retirement savings. But the international evidence now suggests otherwise. A review by Bernatzi et al, published in Psychological Science in 2017, suggests tax incentives only generate a few dollars of incremental retirement savings for each tax dollar spent. This is an order of magnitude less cost‐effective than alternative policies, such as simply providing targeted information on retirement planning. There are alternative revenue-neutral policies that could boost retirement adequacy for all.
Mr Chairman, may I have your permission to display a slide on the screen?
The Chairman: Yes, please. [A slide was shown to hon Members.]
Assoc Prof Walter Theseira: Thank you. CPF tax relief has retirement value because the tax savings can be used for retirement instead. Consider replacing CPF tax relief with a flat annual CPF top‐up of $250 and a 3% match on contributions. In terms of retirement income, this could give the lowest-income deciles more than $200 a month, while cutting the benefit to the top decile from over $1,000 a month to about $500 a month. The numbers will, of course, have to be studied further.
So, my suggestions are: first, could the Ministry provide a regular update on the tax cost of the CPF and SRS tax relief system, and estimates of how effective SRS is at inducing additional retirement savings? Second, could the Ministry study revenue‐neutral alternatives, such as matching contribution credits to CPF, that would boost retirement adequacy for the broad middle class while increasing progressivity of the tax system?
Assoc Prof Daniel Goh Pei Siong (Non-Constituency Member): Chairman, the Foreign Maid Levy Relief is currently given to married, separated, divorced and widowed women with school-going children to claim relief for Foreign Domestic Worker (FDW) levy paid for domestic workers they or their husband employed in the previous year. Singles and married men are not eligible, as are separated, divorced or widowed women with no children to claim child reliefs. This is severely limiting.
The policy objective is to encourage women to stay in the workforce. I urge MOF to expand the scope of the levy generously to all Singaporeans who paid the foreign maid levy for domestic workers taking care of children, elderly parents or people with disabilities. This will then encourage all caregiving Singaporeans to stay in the workforce, regardless of gender and marital status.
Furthermore, the Government has announced it would expand the scope of the FDW Grant and replace it with the Home Caregiving Grant in recognition of the sacrifices made by caregivers and to support their care work. A universal Caregiver Levy Relief will be better aligned with this objective.
Mr Ang Hin Kee (Ang Mo Kio): Chairman, I declare my interest as an advisor to the taxi union and the private hire union. Taxi drivers pay daily rental fees of mostly over $100 a day for the vehicle they rent, and operation costs have also risen. Even car wash costs more today. This is before the latest diesel tax hike and potential future GST increases. The situation is made dire because of stiff competition from private hire cars.
On the road today, there are now two private hire cars to one taxi, an alarming jump, considering that five years ago, we had 28,500 taxis and no private hire cars. Today, we have only 20,000 taxis on the road.
I have raised this suggestion some years back. Will the Ministry consider a review or waiver for the GST that is levied on the daily rental of taxis that is borne by taxi drivers? Finance Minister Tharman Shanmugaratnam back then had replied to my suggestion that one way is to get the taxi drivers to register for GST which would then allow them to charge customers for GST and they do the claims later. However, it is not a feasible solution since fares are set by their respective taxi operators. If waiver of GST on the daily rental of taxis through this channel is not a viable solution, perhaps the Government can consider other options so that the drivers can claim back the GST paid on the rental of the vehicle that they lease from the taxi operator.
Secondly, the reduction of the annual Special Tax for diesel taxis by $850 helped to manage part of the cost increase. With 15,100 taxis running on diesel, the taxi drivers have shared with me that they may need to drive longer hours and longer distances to cover the higher diesel tax. That defeats the purpose of trying to cut down the use of diesel. But because of the cost increase and you cannot pass on the cost, they need to drive longer hours.
The rental costs of hybrid taxis are also not viable. Those are about $20 more expensive than the diesel-driven taxis per day. So, with 65,000 taxis and private hire cars on the road, the size of the daily hired trips only increased marginally from about one million when we had 28,000 taxis, to slightly over 1.2 million currently, meaning that the number of commuting public that took either taxis or private hire cars, did not grow in tandem with the growth in total vehicles serving them. Perhaps, in terms of the size of the MRT lines and the buses that we provided, the commuting size did not grow as much as for taxis and private hire cars.
One way I mentioned earlier during my Budget Debate speech is to encourage operators to reduce rental for hybrid taxis or find a better booking system that reduces empty cruising for the taxi drivers or perhaps even consider reducing the pump price at their pump stations so that taxi drivers can manage the increase in diesel tax. I hope the Government agencies that issue operating licences to them or give permits to them to operate will ensure that everyone, not just the taxi drivers, and the Government co-share the burden of diesel-generated pollution.
Sir, I had earlier also suggested if the incumbents are not willing to do so, perhaps the Government can consider letting the taxi union run such prime licences so that we can charge a lower fee to the drivers.
Even private hire drivers have told me that they are also in this dilemma because some of them use diesel vehicles. I hope that the licensing authority like the Land Transport Authority (LTA) can track what is the size of the diesel fleet under private hire services. Perhaps, we should have no new private hire cars that use diesel vehicles because that is not going to help us solve the problem but increases the size of the problem.
Finally, the private hire car drivers suggest whether they can be given a higher percentage of tax deductible of 80% instead of the current 60% to deal with the higher diesel tax.
Mr Saktiandi Supaat (Bishan-Toa Payoh): Mr Chairman, we all know how rigid most corporations are when they spend money, especially on big ticket items. I know MOF, too, has its process in place where they would ask Government Ministries to justify their spending. The process may be robust in seeking justification from Ministries seeking budget allocations, but how much deeper is the process so as to ensure that Government fund is well-spent, especially on big ticket items, such as on information technology (IT), and on various research and development (R&D) projects?
[Deputy Speaker (Mr Lim Biow Chuan) in the Chair]
This is especially in the case of IT projects where the innovations are making such rapid progress that even as we put an order for one equipment, a newer and improved version is in the making. And by the time we install the equipment, it would before long be outdated. So, may I ask how does the evaluation process address this issue?
Secondly, how do we ensure that the projects benefit the country, businesses or the citizens? How do we know that the funds are spent effectively and efficiently? It is not uncommon, especially in IT, to find compatibility of equipment or programmes becomes an issue at some point if there is no proper planning.
Next, what is the impact on our workforce? If I may borrow the thoughts of the late economist Sir Anthony Atkinson, he pointed out that the direction of technological change should be an explicit concern of policymakers. It should encourage innovation in a form that increases the employability of workers.
Next, I would like to touch on Government support for research projects. In the US, the federal government played a key role in the development of iPhone and many other technological breakthroughs like global positioning systems (GPS), multi-touch screens, liquid crystal displays (LCDs) and so on. I know research can be a bottomless pit and, at the end of the day, it may end up in the bin because the outcomes are not what were expected. Research is about exploring the unknown. May I ask the Minister, when our Government supports any funding for R&D, what are the factors that are taken into consideration viz-a-viz financing, licensing and regulating the project?
Mr Liang Eng Hwa: Sir, today, our economy is more innovative and technology-driven, and we do have a vibrant startup ecosystem. We are seeing more new‐to‐economy activities that have also been developed in recent years, such as the proliferation of financial technologies (fintechs), deep tech ventures, sharing economy apps and others. While we continue to strengthen the ecosystem for startups to flourish, we are also encouraging smaller enterprises to innovate and to scale up.
Government policies, regulations and processes must, therefore, also keep up with the changes and stay abreast with the new business landscape. On this note, I would like to ask MOF three questions.
Firstly, how are the Government procurement policies and practices supporting innovation and enterprises while ensuring value-for-money in its purchases? Procurement rules need to be evolved from being prescriptive to being more principles‐based so as to better support innovation and enterprise.
Secondly, how is the Government tapping on digital technology to streamline corporate regulatory requirements? For example, can the Government consider allowing companies to conduct electronic or virtual annual general meetings (AGMs) to help them save costs?
Finally, also importantly, how does the Government help small enterprises and freelancers understand their obligations with regard to business band tax-filing? Some of the businesses may be still less tax savvy and may still require some more support.
Mr Kwek Hian Chuan Henry (Nee Soon): Chairman, it is important for the Government to achieve value for money in purchases, especially in the face of anticipated rising public expenditure. There are many ways to achieve that. Let me provide two examples.
First, large projects, especially infrastructure projects, have a long tail to their project life. We are at the cusp of funding some truly large infrastructure projects and adjusting reducing manpower intensity of our economy. Could the Government adopt a lifecycle approach to evaluate more projects?
Second, our Budget has increased from around $40 billion in 2007 to around $80 billion this year. Therefore, I suggest that various Government agencies, when the need arises, be able to tap on even more industry experts to achieve excellent design and savings. At the same time, given the Government's role as one of the largest procurers of services, it can play the role of supporting innovation and enterprises, including from startups, which will benefit both citizens as consumers of these services, as well as the overall economy.
Therefore, it is important for the Government to be able to manage the balance between innovation and enterprise versus value for money. Can MOF share on how, moving forward, the Government intends to achieve this balance?
The Chairman: Second Minister Lawrence Wong.
The Second Minister for Finance (Mr Lawrence Wong): Mr Chairman, I thank the Members for their questions and comments for MOF. Members' cuts covered three broad topics. First, fiscal sustainability, investment and other tax-related measures. Second, how to ensure that resources are employed efficiently and effectively. Third, our plans to strengthen support for businesses. I will address the cuts in the first topic and Minister Indranee will take the remaining two topics.
Mr Liang Eng Hwa and Ms Foo Mee Har asked how the Government ensures sustainability in our spending and resilience in our revenue streams. These are, indeed, very important issues. We ensure long-term fiscal sustainability in a few ways.
First, the Government continues to spend within its means, so as to achieve a balanced Budget over the medium term.
Second, we remain prudent in our spending and emphasise value for money in every programme. For development projects, especially the major ones, we have robust processes to scrutinise and ensure that they are prudently managed. Our overall Government expenditure is around 19% of gross domestic product (GDP), less than half of what many governments of developed countries spend. Even so, we are able to deliver good outcomes in many areas, such as healthcare, education, home ownership and public safety.
Third, we have and will continue to manage expenditure growth carefully, precisely because of concerns that Mr Liang Eng Hwa highlighted on this rise in Government expenditure. In fact, we have tightened Government spending in recent years, by permanently reducing the budget caps of all Ministries and Organs of State by 2% from financial year (FY) 2017 and reducing the growth in Ministries' annual budgets from FY2019. Even as we continue with these best efforts to manage our spending, we recognise that our needs will continue to grow, particularly in healthcare, security and infrastructure, as the Finance Minister explained earlier today.
Already, our healthcare spending has more than doubled over the last decade to $10 billion in FY2018. This is close to what we collect from GST today. And over the next decade, we have projected that annual healthcare spending will increase by nearly 0.8 percentage points of GDP to around 3% of GDP. We will also be spending more in areas like security and preschool education. So, overall, there is no doubt that our recurrent spending, despite our best efforts to manage expenditure, will continue to rise.
This is precisely why we need to ensure a diverse and resilient revenue base to meet these growing needs. And I share Mr Liang Eng Hwa and Ms Foo Mee Har's concerns that we really need to ensure resilient revenues, adequate revenues, to fund these recurrent expenditures and not rely too much on NIRC. As both Members noted, we would have had overall Budget deficits in each of these last 10 years without the inclusion of NIRC.
In FY2018, NIRC and corporate tax contributed around 18% each to total Government revenue, followed closely by personal income tax and GST, each of which accounted for around 13% of total Government revenue. Property-related taxes make up another 10%. Several other items make up the remainder. Overall, our revenue base is a diversified one, and we are mindful not to be over-reliant on any single source. Even as the share of NIRC has grown over the last decade, we have taken steps to ensure and enhance the resilience of other revenue streams.
First, we keep GST broad-based while providing targeted help to lower- and middle-income households through GST Vouchers and other forms of transfers. In the recent Budgets, we introduced GST for imported services and revised the import GST relief limits for travellers to ensure that our GST base remains resilient with digitalisation and increasing travel.
Second, we have been looking at other possible streams of revenues, as Ms Foo Mee Har highlighted. We looked across all possible streams, and we have increased the tax rates for personal income tax, property tax and stamp duty in recent years. We have been careful to do so in a manner that ensures our overall system is fair and equitable, while keeping watch over our competitiveness.
For example, today, about half of our workers pay personal income tax and the top 10% of the taxpayers contribute 80% of our personal income tax. Around 40% of companies assessed by the Inland Revenue Authority of Singapore (IRAS) pay corporate tax and around 10% of these companies pay about 95% of our corporate income tax. It is a fair and progressive system. And we will continue to ensure that we have such a system, including one with a diversified base of operating revenues, while at the same time borrowing prudently for major infrastructure projects. I think this is the best way to ensure we have a resilient system and also one where we can have maximum flexibility to deal with contingencies like a slowdown or a recession, as Mr Liang Eng Hwa had highlighted.
Ultimately, and most importantly, sustainable Government finances depend on whether we have a healthy and growing economy. With a strong economy, we will have more resources to create jobs for Singaporeans and to meet the needs of our people. This is the key way to grow our revenues sustainably.
Next, Mr Pritam Singh highlighted the performance of GIC and asked for more information on GIC's investments. Let me start by clarifying about how GIC has performed. The mandate that the Government has given GIC is to achieve good long-term returns in order to preserve and enhance the international purchasing power of the Reserves that GIC manages. Consistent with this mandate, GIC’s portfolio performance is evaluated not just on the returns within a single year, but on a continuing basis over the long term.
In particular, we look at the annualised rolling 20-year real rate of return of its portfolio, which GIC publishes every year. This 20-year return in recent years has been lower than that in previous years. Mr Pritam Singh has highlighted this and also highlighted the explanation that GIC has put out for this decline in the 20-year return, which is, firstly, because the high returns earned in the run-up of the tech bubble in the late 1990s have dropped out of the past 20-year period, while the subsequent bursting of the bubble and decline in asset values has remained within the 20-year window. So, that is one reason.
The second reason is that the investment environment in recent years has become more difficult, and that is so not just for GIC but for fund managers everywhere. Nevertheless, in these challenging market conditions, GIC has done creditably. Over a five-year timeframe, GIC's nominal return was 6.6% in US dollar nominal terms. It has continued to generate positive returns on its portfolio.
What I have explained is published in the GIC annual report. Every year's annual report includes an extensive write-up on how GIC manages the portfolio, including its investment methodology and risk management framework. While the relevant measure for its long-term mandate is the rolling 20-year return, which I just highlighted, GIC has also been putting out more information in its annual report. For example, it publishes other indicators, including its rolling 10-year and five-year nominal returns, and how they compare against a typical market portfolio adopted by large global investors.
So, the information is there. Mr Pritam Singh would like even more short-term indicators; he has asked for annual indicators. But it is well accepted in the investment world that a requirement to report short-term performance leads to short-term investment behaviour by fund managers. And this is especially important because market booms and downturns are a common feature of global markets. For example, if there is a market downturn, a short-term investor will try to unwind its holdings to cut losses so as to limit the damage to its short-term performance. By contrast, a long-term investor will be able to look at fundamental valuations and ride through short-term market cycles so as to achieve better long-term returns. This is, in fact, a major strength that GIC has, and it is important that we continue to preserve this long-term orientation. If GIC puts out annual indicators, there is the inevitable risk that this will incentivise its fund managers to be more mindful of short-term investment outcomes. And I think this will weaken and undermine GIC's strategic advantage as a long-term endowment fund.
I should also clarify that while GIC reveals its past performance over five-, 10- and 20-year periods, this is categorically not the basis for estimating its future performance. As the Government has explained several times before in this House, including when the Constitution was amended for the NIRC framework, the process of estimating the long-term expected returns of GIC, as well as that of MAS and Temasek, rests on thorough professional assessments of the future investment environment. Such assessments are reviewed by MOF. The Government then proposes these long-term expected return rates to the President, who does a further independent check, as advised by the Council of Presidential Advisors.
So, there is a robust system in place to determine and evaluate the long-term expected returns. And as we have explained in this House, and the GIC's Annual Report also highlighted, there are reasons to expect a weakening of investment returns for serious, diversified global investors over the next 20 years compared to the past, and this is due to structural headwinds in the external environment, for example, demographics, elevated debt and lower productivity in many countries.
Next, let me touch on tax-related matters. Assoc Prof Walter Theseira asked about CPF and SRS tax reliefs. We do have a range of policies to address the retirement adequacy needs of different groups. Currently, SRS and CPF contributions are exempted from tax, subject to certain conditions, and the tax exemption is meant to encourage people to save for their own retirement. I know Assoc Prof Theseira has highlighted some international studies. In the case of SRS, in Singapore's context, for every $1 of tax savings enjoyed, $7 is contributed to SRS on average. In keeping with progressivity, the Government limits the tax benefits that higher income individuals receive from CPF and SRS.
First, the reliefs are not unlimited. For CPF, there is a salary ceiling and top-up limits that restrict the amount of contributions to the system and, consequently, the amount of relief claimable. For SRS, there is an annual cap on contributions. The SRS is a tax deferral scheme, and not fully tax-exempt like the CPF.
Second, these reliefs are subject to an overall personal income tax relief cap of $80,000. At the same time, the Government provides substantial support to help the lower- to middle-income achieve a more secure retirement. These include Workfare which helps to build up CPF savings, higher CPF interest for the first $30,000 and $60,000 of CPF balances, and top-ups to CPF and MediSave accounts. So, overall, our system of taxes and transfers remains progressive.
I do share Assoc Prof Theseira's objective of having a fair and equitable system to improve retirement adequacy for all Singaporeans. So, we will continue to review our schemes, taking in suggestions and feedback and ensure that the balance of support remains tilted towards the lower- and middle-income groups.
Assoc Prof Daniel Goh asked about the foreign maid levy relief. As he highlighted, this relief is quite specific, with an objective of encouraging women to stay in the workforce after marriage and child birth. He asked about broader support and, indeed, we do have a range of broad-based schemes in place today to support caregiving. Tax reliefs of up to $9,000 per parent or $14,000 per handicapped parent are available for the support of dependent elderly parents. There are similar tax reliefs of up to $4,000 per child or $7,500 per handicapped child for those who care for their dependent children. For these reliefs, the family has the flexibility to decide on the care arrangements for the child or elderly parent, which may not necessarily involve the hiring of an FDW. Families which hire FDWs to take care of children, household members with disabilities or elderly family members pay a concessionary levy of $60 instead of the standard $265. The tax reliefs for the care of dependent children and aged parents, and the concessionary FDW levy, are not dependent on the gender of the caregiver. So, these support measures are also on top of existing subsidies to the care recipient, such as subsidised healthcare.
Basically, we do want to do more to support caregivers and we will continue to review our policies regularly to ensure their relevance and effectiveness.
Mr Ang Hin Kee asked about GST waiver for taxi rentals. The Government has made clear its position. Singapore adopts a broad-based GST regime with few exemptions, and we chose this approach to keep our GST rate relatively low and administration simple. Nevertheless, we will certainly do whatever we can to help taxi drivers and private hire car (PHC) drivers better manage their businesses as well as their regulatory compliance costs.
For example, last year, after a review with the National Private Hire Vehicles Association and the Ministry of Transport (MOT), MOF amended the Income Tax Act to allow private hire car drivers to claim tax deductions for motor car-related expenses like car rental and petrol against their driving income for income tax purposes. Taxi drivers are already entitled to this, but we extended it to private hire car drivers. To further reduce record-keeping burden and administrative costs, we allow both PHC and taxi drivers to claim tax deduction on a deemed expense ratio at 60% of their gross driving income. This percentage was decided after an extensive public consultation by MOF. And drivers, of course, can opt to claim tax deductions based on actual expenses incurred if their expenses exceed 60%. I hear Mr Ang Hin Kee, who has suggested raising the 60% to a higher figure, but we have had extensive consultations and we have arrived at this figure just very recently. MOF will continue to monitor and review and update the figure if and when necessary.
With regard to diesel duties, we have explained the need for this restructuring of the diesel regime from ownership to usage-based taxes which is necessary for a cleaner environment and better health. Besides the restructuring of diesel taxes, we also have a range of measures to encourage the shift towards cleaner vehicles, and taxi operators are, indeed, responding. We have seen strong growth in the number of cleaner taxis, and we now have more than 5,000 electric and hybrid taxis plying our roads, or about 30% of the entire taxi population.
To cushion the impact of the increase in diesel duties, we have provided some measures to help users, including taxi drivers, manage the transition. The Special Tax reduction for taxis is expected to permanently cover more than 75% of the cost impact to drivers. As Mr Ang Hin Kee is aware, the Government has been working with taxi companies to encourage them to pass down the savings from the Special Tax reduction to their drivers. And I am glad that all taxi companies have agreed to do so. Mr Ang had many other suggestions to work with companies and to help the drivers, including through licensing or through the pump prices that the companies offer. We will study these suggestions and will continue to work with the taxi operators to see how best to improve the welfare of drivers.
Mr Chairman, let me conclude by reaffirming MOF’s commitment to ensuring the long-term sustainability of our fiscal system. We will continue to build a resilient and progressive tax and benefit regime to support our rising spending needs. I will let Minister Indranee address the other questions that have been raised.
The Chairman: Second Minister Indranee Rajah. You have 10 minutes.
The Minister in the Prime Minister's Office, Second Minister for Education and Finance (Ms Indranee Rajah): Mr Chairman, let me now address Members' questions on how the Government manages our spending and how we support businesses.
Ms Foo Mee Har and Mr Saktiandi Supaat asked how the Government manages our infrastructure and info-communications technology (ICT) spending in the long run, and how we ensure that these programmes deliver value to citizens and businesses.
Over the past five years, total development expenditure amounted to $91 billion. This was 26% of the Government's expenditure. On average, we expect that development expenditure will increase in the coming decade as we continue to invest in public infrastructure and adopt ICT to meet citizens’ needs and support our economy. We, therefore, place significant emphasis on identifying opportunities for cost savings and achieving better outcomes in these areas.
Before we embark on a project, there is a robust process to consult stakeholders and assess the need for the project, the broad scope and timeline, and the balance of benefits over costs. For a major project like the Changi East development, the Cabinet must first be satisfied of the need for the project before it can proceed further. We also conduct public consultations on our future infrastructure plans, such as the Urban Redevelopment Authority (URA) Master Plan and the Land Transport Masterplan.
All public infrastructure projects above $100 million are also carefully reviewed by a team of architects and engineers within MOF, before approval is granted by the Development Planning Committee (DPC) comprising three Cabinet Ministers. Projects above $500 million are put through the Gateway process, where they are subject to additional scrutiny by the Development Projects Advisory Panel that includes senior public officers, academics and industry practitioners with deep technical expertise. Over the past five years, these reviews have led to design improvements and generated savings of about $3 billion or 6% of the initial estimated value of the projects reviewed. In one review, the design for an MRT station was improved such that two proposed underground links and entrances could be brought to ground level, yet without compromising the objectives of commuter accessibility and connectivity. This redesign reduced the amount of utility diversions, underground excavation and tunnelling works required, leading to an estimated cost savings of $54 million.
All major Government ICT projects are reviewed by a committee of experienced public sector officers and ICT practitioners before approval. This committee reviews the project scope and system design to ensure that our ICT projects are cost-effective and well-integrated across the Public Service. This has helped us save almost $800 million, or over 5% of our ICT spending, over the past five years.
Besides reviewing projects before granting approval, the Government also monitors existing services and programmes post-implementation. We actively seek ways to enhance cost-efficiency and outcomes. Improvements can arise by leveraging technology, improving processes and collaborating across agencies. For example, the National Library Board now uses robots and automatic sorting machines to help staff and volunteers with shelving work. Library users can also check out books without queuing by using a mobile app, and pick up reserved items at self-service lockers outside library operating hours. These have helped to achieve cost savings of $2 million annually, in addition to bringing convenience to citizens.
Agencies also tap on one another's expertise to co-develop and co-deliver programmes that bring about better outcomes for citizens. For example, the Public Service Division (PSD) mentioned in its Committee of Supply (COS) that agencies at Our Tampines Hub (OTH) will be coming together to cross-train counter staff for better service to citizens. Besides counter services, the People's Association, Sport Singapore and the Health Promotion Board are also collaborating on joint programming opportunities at OTH. Just last Sunday, they organised \"The Greater Singapore Workout\" for more than 200 participants of all ages, achieving community bonding and healthy lifestyle promotion objectives simultaneously.
Finally, we are deepening capabilities in our agencies to ensure that spending translates into good outcomes and building a stronger culture where every public officer contributes towards better use of resources. Such efforts are bearing fruit, with agencies seeking ways to achieve greater value-for-money in their work. For instance, when constructing the Thomson-East Coast Line, LTA officers worked with the management corporation of a condominium to use some space within the condominium’s perimeter temporarily, so as to reduce the number of traffic diversions required from 10 to three. Residents experienced less inconvenience as construction time was shortened by two months, and this also generated cost savings of about $3.6 million. Such collaboration between public agencies and citizens is a good example of partnership at work. Value-for-money lessons learnt from one agency are shared across the Public Service so that they can be applied by others. MOF also guides agencies in applying different methodologies to quantify costs and benefits of their programmes, and setting outcome-based indicators to monitor their effectiveness.
Mr Henry Kwek and Mr Liang Eng Hwa asked how Government procurement policies support innovation and enterprise, in addition to ensuring value-for-money in Government spending.
Achieving value for money remains an important criterion in Government procurement decisions, but it does not mean awarding contracts only to the lowest quote. The Government has adopted price-quality evaluation as the default approach in tenders, where a balance of price and quality factors are considered. Today, about half of Government tenders are not awarded to the lowest bidder.
The Government has also stepped up the adoption of more outcome-based procurement, where tenderers have more flexibility to propose innovative solutions to meet the desired outcomes. For example, JTC adopted an outcome-based security contract for one of its business parks. As a result, JTC achieved better security coverage for the estate, alongside 25% security manpower reduction and projected cost savings of up to 40% over the contract period.
Apart from being open to good ideas and solutions, we also continually seek to make it easier for small and medium enterprises (SMEs) to participate in Government procurement. Last year, we removed the requirement for companies with less than $5 million turnover to submit audited accounts when applying for Government Supplier Registration (GSR). We now accept unaudited financial statements if the company's Director certifies that their financial statements are accurate and true. About 3,900 GSR-registered suppliers have benefited from this.
This year, we will increase the upper limit for Quotations from $70,000 to $90,000. Smaller companies and startups without GSR can capture higher-value Government projects through Quotations, which come with simpler contractual terms and conditions and tend to be processed more quickly. We hope that many among the 12,000 suppliers who participate in Quotations but not Tenders will benefit from this.
I agree with Mr Henry Kwek and Mr Liang Eng Hwa that the key here is balance. Government procurement can help to give a boost but, fundamentally, for companies to grow and be competitive, they must be innovative and offer value-for-money solutions.
Mr Liang Eng Hwa asked how the Government taps on digital technology to streamline corporate regulatory requirements. The Government has continued to simplify and digitise corporate regulations. Over the past two years, a number of improvements have been made. We reduced the number of steps in the annual returns filing form for eligible companies. The simplified form is available on the Accounting and Corporate Regulatory Authority's (ACRA's) mobile app and the online BizFile+ portal. Company directors and secretaries can receive short message service (SMS) reminders to file their annual returns and meet statutory obligations on behalf of their companies.
Mr Liang Eng Hwa's suggestion on virtual AGMs is a good one. Fortune 500 companies like Hewlett-Packard (HP) Inc and PayPal have adopted virtual AGMs, citing reduced cost. This year, we will review the Companies Act to expressly provide for the use of digital means for companies to conduct meetings and interact with stakeholders.
Mr Liang Eng Hwa also asked how the Government can help small enterprises and freelancers understand their statutory obligations. ACRA's Directors Training Programme has helped new and aspiring company directors understand their statutory obligations under the Companies Act. In April 2018, ACRA worked with CPF Board, Enterprise SG, IRAS, the Ministry of Manpower (MOM) and the Singapore Institute of Directors to provide an online training programme for directors. Company directors can access the online programme anytime, anywhere, and more than 2,500 have done so since its launch. We have received positive feedback that the programme has helped company directors better understand their roles and responsibilities.
Some businesses may prefer to receive help in person. The Taxpayer and Business Service Centre located in Revenue House offers businesses one-stop Government services by co-locating taxpayer services.
Mr Chairman, as I have just a little bit more, may I seek your indulgence for a couple more minutes?
The Chairman: Yes, please. Go ahead.
Ms Indranee Rajah: Thank you. As I was saying, the Taxpayer and Business Service Centre co-locates taxpayer services, CorpPass, ACRA and Enterprise Singapore services. Businesses can meet staff from ACRA, IRAS, Enterprise Singapore SME Centre and CorpPass there for help with their questions about regulations and tax obligations, amongst other issues.
Mr Saktiandi Supaat asked about R&D spending. We take a portfolio approach. We support research, development and innovation through different schemes where we also require co-payment in order to keep them relevant. On the Government side, where the innovation has a long horizon, are higher-risk or involve manpower development like PhD training, then the Government takes a bigger role.
In R&D, we invest in areas that support current and future competitiveness, like digital technology, advanced manufacturing, urban solutions and sustainability, and health and medical solutions.
In conclusion, Mr Chairman, the Government will keep its focus on ensuring fiscal prudence, using resources efficiently and effectively, and enhancing our policies and processes to support businesses. We will continue to partner citizens, businesses and the community to achieve good outcomes with the resources entrusted to us.
The Chairman: We have a bit of time for clarification. Mr Ang Hin Kee.
Mr Ang Hin Kee: I can sense that Mr Lawrence Wong understands the plight that the taxi drivers are facing. Unlike many countries where the digital disruption of Uber and Grab has caused a lot of chaos and there were strikes, fights and the burning of vehicles – even taxi drivers in some countries burn themselves to death just to show their protest – ours have been relatively supportive and they have seen the advent of technological disruption and tried to accommodate, everybody trying to make a living on the road. We have 65,000 taxis and private hires on the road, and only about 1.2 million-plus commuting traffic a day, which is less than 100% of the increase in the vehicle fleet size. I think the market probably cannot absorb so many vehicles. So, despite the diesel tax, there is really not a big market and we have many vehicles, and every driver trying to eke out a little living from this. Perhaps, the Ministry can consider that we may not need such a big size of vehicles on the road because it is not just technology; it is just the size of the market that is not big enough to accommodate —
The Chairman: Mr Ang Hin Kee, can you keep your clarifications short?
Mr Ang Hin Kee: So, I would like to ask the Minister if MOF would look at this kind of parameters rather than only on diesel tax as a way to manage the vehicles on the road.
Mr Lawrence Wong: Mr Chairman, I can confirm to Mr Ang Hin Kee that it is not just a sense. I do share and understand what the drivers have to go through. That is why MOF works very closely with the private hire car drivers and the taxi drivers earlier on when we amended the Income Tax Act to allow for deductions and for it to be done on a deemed expense basis. So, as I have said, there are many ways in which we can look at this. Not all of the levers are with the Government. Taxi companies and operators can do their part, too, as Mr Ang Hin Kee has suggested. So, the Government will continue to work with the companies, the associations and the unions to see how best we can help our drivers who are impacted.
The Chairman: Assoc Prof Walter Theseira.
Assoc Prof Walter Theseira: Mr Chairman, Minister Lawrence Wong noted that $1 of tax cost in SRS leads to about $7 of retirement savings. I want to ask if this estimate accounts for the diversion of retirement savings from taxable savings accounts to non-taxable. Because the international studies show that much of the response actually comes from this kind of diversion – movement from the taxed to the untaxed account. So, could the Ministry continue studying this with a view to understanding how the marginal new savings dollar is actually affected by the policy?
Mr Lawrence Wong: Mr Chairman, I have to confirm. But I do not believe it has fully accounted for the effects that the Member has described. So, the Member is right. We do need to do more detailed studies and we will engage in this.
The Chairman: Mr Saktiandi Supaat.
Mr Saktiandi Supaat: Mr Chairman, I would like to ask a clarification from Minister Indranee Rajah. With regard to the Government's expenditure on infrastructure projects and also IT spending, I firmly believe that Government spending plays a big role in terms of giving direction in terms of technological change in the long run and also it is an explicit concern for policymakers. So, my question is about balancing the value-for-money and cost-savings that the Minister mentioned and the outcomes. The Minister mentioned about the outcomes and my clarification is whether the issue of employability of workers in the long run is part of the outcomes as well, rather than in terms of what the Minister mentioned just now, of public sector concerns in terms of outcomes as another option or parameter. But in terms of outcomes, what is the Minister's definition of outcomes? Does it involve in the long run the impact on work, workers or jobs lost or gained? So, it is a clarification on that point.
Ms Indranee Rajah: When we look at outcomes, we look at a variety of things. Obviously, we want to look at efficiency, we want to make sure, depending on the project, reliability. If the question is: will we look solely at one factor, for example, \"Does this result in employment of a certain group?\", it cannot be seen in isolation. So, where we can, we try to encourage businesses to employ. But that is really done through the work of MOM and it cannot be a single type of factor driving the way that project requirements are structured, because then you might have all sorts of other unintended outcomes.
The Chairman: Mr Liang Eng Hwa.
Mr Liang Eng Hwa: Sir, I am not sure whether the Minister has the figures, but I just thought I want to ask about the Pioneer Generation Package, that is, the $8 billion that we have set aside. Given the consumption rate and so on, is the $8 billion that was set aside ahead of utilisation or are we still in good shape in terms of the funding for the whole Pioneer Generation Package?
Mr Lawrence Wong: Mr Chairman, actually I believe we had answered a Parliamentary Question on this some time back. I have not looked at the latest data, but at the time of that question, when we looked at the figures, the utilisation rate was, indeed, in line with projections as of that time. But these things can change. We make assumptions on these projections and so we will continue to monitor the utilisation, the assumptions that we have used and whether they are still relevant, and we will continue to do so.
The Chairman: As there are no other clarifications, Mr Liang Eng Hwa, would you like to withdraw the amendment?
Mr Liang Eng Hwa: Sir, as always, MOF has done it again very prudently and efficiently with not just the financial resources but time resource as well! I believe we have a pretty good accumulated surplus for our COS time now. [Laughter.]
Sir, I want to thank the Finance Minister for a very caring Budget, especially the very strong commitment to our workers and seniors in this Budget, and also to Minister Lawrence Wong and Minister Indranee Rajah for their replies and also to the hardworking MOF team. With that, I beg leave to withdraw the amendment.
The Chairman: In light of the surplus that we have, is the hon Member given leave to withdraw the amendment?
[(proc text) Amendment, by leave, withdrawn. (proc text)]
[(proc text) The sum of $839,636,400 for Head M ordered to stand part of the Main Estimates. (proc text)]
[(proc text) The sum of $152,563,600 for Head M ordered to stand part of the Development Estimates. (proc text)]
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply – Head J (Ministry of Defence)","subTitle":null,"sectionType":"OS","content":"The Chairman: Head J, Ministry of Defence. Mr Vikram Nair.
Mr Vikram Nair (Sembawang): Mr Chairman, I beg to move, \"That the total sum to be allocated for Head J of the Estimates be reduced by $100\".
In 2017, we celebrated 50 years of National Service (NS) and Singaporeans of all generations joined in. The Singapore Armed Forces (SAF) has been an integral part of Singapore and we are all either serving National Servicemen (NSmen) or family members of one. Yet, the SAF was set up over 50 years ago and much of the training involved training in jungle warfare which reflected the terrain of our region.
Yet, the nature of our region and the nature of our threats have evolved significantly over the years. If we start with the threats, the SAF was set up against the backdrop of the Cold War, and the struggle with the communist insurgents in the region was one of the main focuses.
The Cold War is over. In its place, we see new rivalries and tensions. The strategic competition between the United States (US) and China has intensified and it appears to be a new great power rivalry. Tensions in the South China Sea continue and no swift resolutions appear to be in sight.
The Korean peninsula, probably one of the last legacies of the Cold War, remains volatile. And although Trump and Kim are having a second summit, there does not appear to be any firm commitment to denuclearise on the part of North Korea.
India and Pakistan have always had tensions between them, but the events in the last few days are particularly worrying, especially because of how fast the conflict seems to be escalating.
Against this backdrop, the Association of Southeast Asian Nations (ASEAN) countries have also been spending more on defence, and these are our immediate neighbours. Defence spending has doubled from 2003 to 2016. Fresh in Singaporeans' minds would be the fact that Malaysia still has two vessels in our waters. Although both sides have made efforts to de-escalate since, there does not appear to be an easy resolution or end to this matter. And if matters escalate – we hope it will not be necessary – but the SAF may have to get involved.
On the other end of the technological spectrum, the threat of terrorism remains present. There are an increasing number of foreign fighters returning to the region from the wars in the Middle East and they remain a potential source of terror here.
The Islamic State of Iraq and Syria (ISIS) has also set up in Indonesia and there were reports of attacks being planned on Singapore from there. The issue with terror attacks is that they are targeted at the civilian population, unlike conventional warfare, and could strike anyone, anywhere.
Against the backdrop of these threats, the SAF faces two primary challenges. The first is falling cohort sizes, meaning that we are probably going to have fewer people coming into National Service. The second is reduction in available areas for training. Singapore already has a very significant disadvantage in terms of size in any conflict. And our only hope appears to be that if we rely more on automation and sophisticated equipment systems, we may be able to compensate for this somewhat.
And it is in this context that I ask about the future of the SAF. In view of the variety of threats we now face, how does SAF ensure it remains an effective fighting force capable of defending Singapore? What new capabilities will SAF be introducing over the next few years to meet the new security challenges?
I earlier discussed the wide variety of threats SAF was facing. SAF also has a wide range of resources and capabilities it has developed over the years, as well as a variety of different operations that it engages in. This is necessary to deal with the wider spectrum of threats we are facing, as well as the more messy nature of warfare.
However, even if these demands on SAF continue to grow, as mentioned earlier, it faces constraints in terms of having less space to train. More and more SAF training areas and camps are being converted to other uses, particularly residential and commercial uses. The announcement in relation to Paya Lebar Airbase was one example of this.
I am aware that SAF has adapted to this in many ways. This includes the more productive use of land for training, such as multi-storey rifle ranges and centralised conducting of training activities, such as Basic Military Training and reservist training. SAF has also leveraged on its good relationships to train in territories overseas and this has helped train in capabilities that we may not be able to train in Singapore as well. Most NSmen and reservists would have some experience of training overseas.
These efforts are, indeed, commendable. However, I remain concerned as more and more training areas are given up for other uses. How does SAF overcome its training area limitations and ensure that it continues to have sufficient land to house its facilities and conduct its training?
[(proc text) Question proposed. (proc text)]
Ms Sylvia Lim (Aljunied): As mentioned in this year's Budget speech, today's more uncertain world spells greater possibility for tension and even conflict. Unexpected incidents under such circumstances can result in potentially dangerous unintended and uncontrolled escalation. The Government has rightly continued to stress the need for Singapore to support a stable, rules‐based order founded on international law and norms. I would like to ask how the Ministry of Defence (MINDEF) provides this support through its defence diplomacy efforts and its guiding principles.
When meeting and engaging with foreign counterparts during peacetime, such as in the Shangri‐La Dialogue, how does MINDEF seek to contribute to the prevention of unintended and uncontrolled escalation of tensions in the region? More specifically, what kind of practical cooperation with other militaries regionally has MINDEF engaged in to enhance cooperation and dispel mistrust? Does MINDEF maintain or initiate high‐level military hotlines with the military from other countries to ensure that any potential issues on the ground can be discussed quickly?
The Chairman: Mr Vikram Nair. You have two cuts. Please take both together.
Mr Vikram Nair: Chairman, ASEAN is the cornerstone of our regional security architecture. It has promoted an avenue for Southeast Asian countries to meet and discuss areas for mutual cooperation. While most people are familiar with ASEAN as an economic forum, ASEAN is also an important platform to come together on defence matters. The ASEAN Defence Minister's Meeting (ADMM) was one of the primary pillars of these.
In recent years, however, relationships among ASEAN appear to have become more strained for several reasons. First, the rivalry between the US and China also seems to be putting pressure on ASEAN countries as some come under pressure to choose in this rivalry. Second, on matters related to the South China Sea, there appears to be a growing risk of a divide among ASEAN members as some of them are direct claimant states in this matter, while others have differing views and different economic incentives in this. Third, terrorism is a growing security threat and, with fighters returning from the Middle East to the region, there is a pressing need for cooperation to manage this threat.
In 2018, Singapore assumed chairmanship of ASEAN and ADMM. What have we achieved with our Chairmanship of ADMM in 2018?
Many countries in the Asia Pacific have overlapping maritime and territorial claims. As tensions escalate among claimant states, there is a real risk of miscalculation on the ground. As militaries become more advanced, the cost of any conflict will be grave. For example, if fighter planes of one country are perceived to have improperly crossed into the territorial air space of another country and that country responds by shooting down the plane, that could quickly lead to retaliation and escalation and both countries may find themselves on the path to war.
The current exchanges between India and Pakistan are an example of how quickly a conflict can escalate once one party engages in the use of force.
Given the high risk of conflict breaking out, it is important for regional militaries to establish mechanisms to build trust, strengthen confidence and minimise conflict in the region. At the Committee of Supply (COS) debate last year, the Minister for Defence spoke about creating a Code for Unplanned Encounters for military aircraft. Could MINDEF provide an update on this and any of the confidence-building measures that were introduced to reduce the risk of conflict escalating in the region?
Mr Seah Kian Peng (Marine Parade): This year, fully a third of our Budget goes to Diplomacy and Defence. It is the lion's share of the Budget and, for MINDEF at least, spent in anticipation of actions we hope never to take, and events we hope never to transpire.
However, the fact that we are prepared, willing and able will continue to make a difference in the way the odds fall for or against us. Deterrence is, as the Finance Minister has said, one of the two important prongs of our foreign relations. In this, I would like to first ask: what is the role of the SAF in the ongoing bilateral dispute with Malaysia in our Territorial Waters around Tuas?
Dr Vivian Balakrishnan, the Minister for Foreign Affairs, a few days back, has set out our Government's position and that of the Malaysian agencies with regard to the intrusions by Malaysian government vessels into Singapore Territorial Waters in Tuas. We have seen that Dr Vivian Balakrishnan and his counterpart in Malaysia have agreed at their meeting on 8 January this year to set up a working group of their officials that will discuss the de-escalation of the situation in the waters off Tuas and will report within two months. We certainly look forward to this report.
In the meantime, Minister for Defence, Dr Ng Eng Hen, has also told this House how our security personnel will respond to intrusions into Singapore Territorial Waters. The Police Coast Guard, Republic of Singapore Navy and Maritime and Port Authority of Singapore are all part of the protective cover that we have, in defending our waters. For sure, there is a difference between what we can do, given our military equipment, and what we should do. Intrusions into our waters have taken place since late November last year. We have seen how these intrusions can lead to accidents.
In February, we had asked again for Malaysia to withdraw its vessels from Singapore's Territorial Waters off Tuas, after a collision between Greek carrier Pireas and a Malaysian government vessel, Polaris. This is not something that we had not foreseen. In fact, we had previously warned our neighbours, the Malaysians, that through these actions of theirs, it poses a threat to safety of navigation in the area.
Overall, our recent dispute with Malaysia has emphasised the need for Singapore to have a credible defence to protect Singapore's sovereignty. We have made clear our stand, and we have sent strong signals that threats to our sovereignty will not be cost-free. Patience is a virtue, but patience also has its limits, and it also cannot prevent accidents from taking place, nor does it automatically lead to de-escalation of tensions.
Finally, I would like to ask the Minister what guidance he has given to our agencies in this regard. And specifically, what are MINDEF and the SAF doing to enhance our defences around Singapore?
Mr Pritam Singh (Aljunied): Chairman, Sir, NS is a key institution in this country we call home. Hundreds and thousands of men have served in uniform since 1967 and stand ready to defend the country as operationally-ready NSmen. In the runup to 2030, however, the effects of our steadily declining total fertility rate (TFR) will begin to be acutely felt with NS numbers dropping by about one-third from the current numbers. This outcome will have a significant impact on manpower-intensive vocations and services, such as the Army, in particular.
Some years ago, the Minister shared that part of the solution would be the steady evolution to motorised platforms and equipment that require a lower complement of men and women to man. Can the Minister update the House on how the SAF is preparing itself for a manpower-lean future and outline the SAF's approach over the next few years, so as to ensure that a credible and effective fighting force stands ready to defend Singapore from 2030? And to this end, does the Minister foresee an even greater reliance on unmanned platforms and does the SAF intend to procure such platforms in a weaponised form in larger numbers?
Separately, in light of the regional and global environment, it would appear the SAF will continue to play a significant role in various national duties alongside Home Team units. More recently, the Minister has spoken about ramping up cyber warfare and cyber defence capabilities. These are likely to stretch the SAF's manpower requirements even further. How will the SAF manage the manpower imperatives of these new functions, in addition to its core war-fighting responsibilities, in light of dwindling numbers over the next few years?
Mr Kwek Hian Chuan Henry (Nee Soon): Chairman, MINDEF recently announced the intention to purchase the F-35, a 5th Generation multirole aircraft, which can perform air-to-air, air-to-ground and intelligence, surveillance and reconnaissance (ISR) missions.
More importantly, the F-35's stealth capabilities can help us maintain air dominance and overcome sophisticated air defence. At the same time, the F-35s can fuse sensors and information from different sources, thereby networking our 4th Generation aircrafts and SAF assets together. In short, the acquisition of F-35s can level up the Republic of Singapore Air Force's (RSAF's) capabilities significantly. And despite earlier concerns of the F-35 programme, it has achieved initial operation capability in several countries, including the US.
At the same time, given the unprecedented complexity of F-35 as a programme, we can expect it to evolve and mature over time. In other words, the cost of the F-35s can differ, and perhaps decrease, as the F-35 programme becomes more mature. Therefore, it is important for us to purchase the appropriate number of F-35s, with the appropriate capabilities, at the appropriate time.
As such, can MINDEF share on how we can best ensure our announced F-35 purchases will be cost-effective, while delivering the required capabilities to keep Singapore secure?
Prof Fatimah Lateef (Marine Parade): Sir, the military today has a strong emphasis on information technology (IT) and data analytics, including big data. The use of this has become integrated into many aspects of defence. On the other hand, cyberattacks and breaches are also getting more innovative, threatening, complex and widespread. Cyber threats do not fit into traditional security framework.
So, therefore, Singapore cannot let down our guard. We are on the radar and the target of many, due to a variety of factors. Recently, the launch of the Cyber Defence School is an excellent move, providing training across the networks and in cyberspace. It will help in training officers in preparedness, thinking several steps ahead of the perpetrator and culprits.
How is MINDEF upscaling cyber defence and security and ringfencing, with a view to fortifying our national and defence cybersecurity systems? In alignment with this, can the Ministry also update us on what further efforts are being pursued to continue to develop the area of cyber defence and expertise in the SAF? Can we also have an update on the Cyber NS Scheme and how MINDEF intends to boost our cyber defence expertise in the military? Knowing also that the military response must be part of a concerted national effort, how is MINDEF's approach coordinated with that of other Ministries and agencies in our national cybersecurity ecosystem?
The Senior Parliamentary Secretary to the Ministers for Foreign Affairs and Trade and Industry (Dr Tan Wu Meng): Mr Chairman, the establishment of Cyber Defence training is key to a future-ready 21st century defence capability. And these skills will come in useful, not just in the SAF, because the cyber frontline is everywhere anywhere where there is a network, a digital device, a gadget connected to the Internet of Things. And so, as successive generations of cyber defence vocationalist graduates complete their full-time NS and become operationally-ready NSmen, these servicemen can add to the pool of cyber defence knowledge and cyber defence instincts in Singapore.
Can MINDEF share more on how our Cyber Defenders' skills can be accredited and recognised, in ways that will help potential employers, in turn, recognise their value to organisations, workplaces and to Singapore?
Mr Desmond Choo (Tampines): Preventing sophisticated cyberattacks by malicious parties is now a critical mission for both governments and companies globally. Yet, nearly every country in the world lacks cybersecurity talent. Singapore needs all hands on deck. Recognising the need for individuals to play their part, a new \"digital defence\" pillar has been added to Singapore's Total Defence framework.
Our young digital native Singaporeans are well-placed to protect our nation in cyberspace. Therefore, the Cyber Full-time National Servicemen (NSF) Scheme is an important foundational initiative. Could MINDEF provide an update of the Cyber NSF Scheme? How will we ensure that our NSFs' expertise is constantly updated and deepened? We must also collaborate with the private sector to keep up with evolving technologies and be updated to the ceaseless cyber threats.
The continual development of cyber defence expertise must go beyond just having the Cyber NSF Scheme. We must also continue to develop them when they reach the Operationally Ready Date (ORD). What are MINDEF's plans to build a strong reservist corp of Cyber NSmen? In fact, I encourage MINDEF to consider developing a Cyber NSmen Scheme. There are already many NSmen in the IT industry with deep cybersecurity expertise. Some of them are highly-skilled operators while others are already IT industry captains. Our Cyber NSFs can form the foundation of this Cyber NSmen Scheme.
The Israeli Defence Forces' Unit 8200 has reportedly had many of its servicemen gone on to build many top IT companies. Similarly, our Cyber NSFs can go on to have such impact and help to build up the tech expertise in the private sector. This spreads talent in a manpower-scarce Singapore. We need to ensure that we enrich our Cyber NSFs training, such as providing for a stronger nexus with the startup sector. With this, we can build up dynamic and sustainable cyber capabilities that will protect Singapore at all times.
Prof Fatimah Lateef: Sir, now more than ever before, Singapore's security is at risk from a variety of conventional and non-conventional threats and sources, and all the more we need to remain vigilant and defend ourselves and our borders. We will need to continue to boost our capacity and capabilities and build up our defence capabilities, systems, operations, manpower and technology. We need to ensure we maintain our edge at all times. This requires state-of-the art mindset, equipment and systems. The military hardware itself is costly.
With that background, what will be the projected medium- to longer-term increments in defence spending? How are we to balance this against the needs in other competing areas? Training also, Sir, requires planning and preparation, more so in terms of teams training, table-top exercises and simulated exercises. These are also not cheap. How will MINDEF be allocating funds into these aspects of development and training as well?
Mr Zainal Sapari (Pasir Ris-Punggol): Sir, since the maiden batch of 9,000 soldiers were conscripted in 1967, more than one million male Singaporeans and second-generation Permanent Residents have invested their time, blood and sweat in faithfully performing their NS duties.
Their sacrifices and their families' sacrifices have kept our country safe and secure. NS has served as the backbone of the SAF. It has been the bedrock of peace for Singapore over the last 50 years.
Even though the probability of conventional conflict is low, I am heartened that the majority of us acknowledge the importance of NS as a deterrent against potential adversaries. Over the years, our NSmen have responded with distinction to challenges, such as international piracy, terrorism and even natural disasters abroad while, at the same time, deterring potential aggressors.
In today's constantly changing geopolitical environment and in view of the evolving security landscape and threats that are changing rapidly, MINDEF needs to redefine NS.
At the same time, SAF also needs to respond to the domestic challenge of falling birth rates which requires a paradigm shift in our approach to NS.
Could MINDEF share how it will respond to these challenges and the future warfare and elaborate on the role that NS plays today and its importance to Singapore?
Mr Chong Kee Hiong (Bishan-Toa Payoh): Sir, the SAF draws heavily from Singapore's human resource in order to defend our nation against a wide array of threats. However, an ageing population and declining fertility trends will have implications on our NS resources and will pose a significant challenge for us in the long term. SAF will see a projected one-third reduction in manpower supply by 2030.
This is a significant number. Therefore, there is a clear impetus to effectively manage our NS manpower resource to ensure that MINDEF and SAF are able to achieve its growing spectrum of missions even as the enlistment cohorts decline.
Over the years, MINDEF/SAF has introduced initiatives to allow the SAF to tap on our servicemen's civilian expertise and talent to expand operational capabilities. How is MINDEF harnessing the expertise of our current pool of servicemen to maximise the potential of our NSmen?
With growing manpower limitations, what is MINDEF/SAF doing to ensure that we can maximise our manpower resources? Will MINDEF consider options taken by other manpower-scarce countries, such as tapping on woman power? Will the Ministry consider pushing back or doing away with the retirement age of regulars? Will MINDEF also consider redesigning functions so that in suitable areas, persons with disabilities can also contribute to our national defence?
The Senior Parliamentary Secretary to the Minister for Culture, Community and Youth (Mr Baey Yam Keng): NS was and continues to be essential for the defence of our nation. Fifty-two years on, our country has benefited from relative peace and stability, achieved by a strong SAF that protects Singapore's interests, and supported by generations of NSmen. Recent tensions with our neighbour over sea and air boundaries are a reminder of why we need a credible SAF, one that conducts realistic military training so that our soldiers are operationally-ready.
NS has fulfilled a critical need for defence and security and also provided the peace and stability facilitating Singapore's development and progress. Arguably, few national policies affect the Singaporean way of life to the extent that NS does. For many Singaporean men, NS is a rite of passage, where he takes on the commitment of defending his country at a young age of 18 and, regardless of social standing, race or religion, to be trained and to serve with one another as a unit. I would like MINDEF to provide an update on its efforts to maximise the potential of NSmen and how we can enhance their NS experience.
The Chairman: Mr Douglas Foo; not present. Mr Arasu Duraisamy.
Mr Arasu Duraisamy (Nominated Member): NS exists to fulfil the critical need of national security and defence. The Committee to Strengthen NS (CSNS) was set up in March 2013 to examine how the NS system could be strengthened for the future to better serve Singapore and Singaporeans.
One of its recommendations then was for skills learnt during full-time NS to receive Workforce Skills Qualification (WSQ) accreditation as a means to further enhance the value proposition of NS and facilitate full-time NSmen's (NSFs) transition back to studies or the workplace. In today's rapidly evolving learning environment, we need to ensure that our NSFs are well-equipped to thrive in higher education or in the working world.
How is MINDEF working with the relevant agencies to support skills upgrading, so as to further enhance the value proposition of NS today?
Mr Charles Chong (Punggol East): Mr Chairman, earlier this month, the Minister for Defence made a Ministerial Statement on NS training deaths and safety enhancements for the SAF.
The Ministerial Statement addressed some of the circumstances around the untimely death of Corporal First Class (CFC) Aloysius Pang and the Minister also shared some of the findings of the Committee of Inquiry which was convened after CFC Liu Kai was killed in a training accident in November 2018.
The Minister also shared some training enhancements which were made in SAF following the recent training fatalities. And just last week, SAF announced that it has appointed its first Inspector-General, who I understand, started in that role on 27 February.
The issue of training safety is one which concerns us all. Every Singaporean family has a family member who has gone through or will go through NS. We also have a large number of men and women who have chosen to protect our country as their careers. Some spend decades in our armed forces, ready to put their lives on the line for Singapore should the need arise.
I am aware that the issue of training safety is not confined just to NSFs but also to the regulars who serve in SAF. But this bond of trust we have with the families of NSFs and NSmen, those who are required by law to serve, is where it can be felt most keenly. That is not to say that we should mollycoddle our servicemen or that we eliminate activities which carry the slightest amount of risks. That is not how a military should be run.
I would, therefore, like to ask the Minister how do MINDEF and SAF strike a balance between the need for an operationally-ready SAF that is able to defend Singapore's sovereignty with the need to ensure the safety of our soldiers, especially during training.
We have heard on various occasions that this balance will be struck by MINDEF and SAF and I would like to ask the Minister for clarification as to how this balance is achieved.
As I mentioned earlier, the first Inspector-General of SAF has just started in his role yesterday. The role of the Inspector-General was stated by the Chief of Defence Force as being to ensure that command emphasis on safety is consistently applied across all services and units. MINDEF also stated that the Inspector-General's Office will have full authority to scrutinise and enforce safety processes and practices at all levels of SAF.
The appointment of the Inspector-General is a positive step as I understand that there was previously no organisation which covered safety across all branches of SAF. The appointment has a strong signalling effect and indicates to our troops how important safety is to our armed forces. It was reported that the new Inspector-General stressed the importance of open reporting and that he wants to introduce concrete actions to promote open reporting.
I would like to ask the Minister if he could clarify what he sees the role of open reporting to be, particularly in a hierarchical organisation, such as the SAF. Indeed, the concept of open reporting in safety matters is counter-intuitive. In other organisations and industries, the reporting of safety issues and lapses is encouraged through confidential reporting where the identities of those doing the reports are protected. This is particularly so if it involves unsafe practices by their superiors and colleagues. Are we essentially asking for whistleblowers to come forward with the reports in the open? Could the Minister clarify why open reporting would be more successful than confidential reporting?
Finally, I would like to ask the Minister what steps MINDEF and SAF take when safety lapses are discovered, including where no harm or injury is caused by such lapses. Apart from the appointment of the Inspector-General, I would be grateful if MINDEF could elaborate on other systems and safeguards that they have or will put in place to ensure training safety in SAF, particularly in the light of recent training deaths.
The Chairman: Your time is up. Assoc Prof Dr Muhammad Faishal.
The Senior Parliamentary Secretary to the Ministers for Education and Minister for Social and Family Development (Assoc Prof Dr Muhammad Faishal Ibrahim): Mr Chairman, safety is one of the SAF's core values and it is integral to mission success. It enhances the soldier's confidence and enables the SAF to conduct reality training and to operate effectively during missions. Safety, while an individual responsibility, is also a command responsibility.
I understand that our commanders are trained in command schools on the requirements on how to conduct training safely; and safety education and training are also constantly reinforced in the various courses that our commanders go through as they progress in their career.
During training, I also understand that commanders are responsible for planning a proper work-rest cycle to ensure that their soldiers have sufficient rest, and exercise right judgement to moderate training intensity according to ground conditions.
Despite all the measures that have been put in place, there have been one too many cases of training safety incidents recently. What is MINDEF doing to ensure that there is command emphasis on training safety on the ground and that it is consistently applied for all the units of SAF so that it can work towards zero training accidents?
The Chairman: Miss Cheng Li Hui, you have half a minute.
Miss Cheng Li Hui (Tampines): Chairman, since NS was introduced more than five decades ago, generations of Singaporeans had served in various capacities and contributed to our national defence. The commitment of Singaporeans to serve in peace time allows us to build and maintain a strong armed forces.
Regulars and NSmen have sacrificed their lives in building up this strong deterrent force. We will be upgrading the Marina Floating platform to be renamed NS Square. Will the Ministry consider building a small memorial there or somewhere else to honour our fallen servicemen?
Mr Kwek Hian Chuan Henry: Chairman, as a member of the MINDEF Advisory Council on Communal Relations (MINDEF ACCORD) for the past three years, I have witnessed first-hand how MINDEF successfully build broad support from society, from businesses, schools and various communities. In particular, I would like to commend MINDEF on its successful engagement of Singaporeans through NS50 in the past year.
Nevertheless, in the wake of the recent training incidents, there is much work to be done to strengthen our people's support for NS and defence. We have also just introduced a new pillar for Total Defence. As such, what are MINDEF's plans in the year ahead to engage the community and grassroots leaders to understand and support the importance of NS, as well as our broadened concept of Total Defence?
Dr Teo Ho Pin (Bukit Panjang): Sir, living in a safe and secure Singapore which the Government has worked tirelessly to ensure may have desensitised many Singaporeans to the multitude of perils that one may face today.
Recent events, and the threat of military escalation, have reminded many Singaporeans of the threats surrounding us. It is at times like this, that Singaporeans must understand the threats that we face, and the importance of total defence.
Sir, in line with total defence, I would like to seek an update in regard to the measures undertaken by the Ministry to build emergency preparedness capabilities in our population.
Sir, the world is changing. Climate change is resulting in more extreme weather conditions, while state actors and terrorists have shown that they are more than willing to exploit our vulnerabilities should we present them with such.
On this note, I would like to take the opportunity to introduce a ground-up initiative developed in Bukit Panjang. An Emergency Preparedness Resource Team, comprising 15 young Singaporean volunteers from different backgrounds, was formed a year ago, to explore ways to build emergency preparedness capabilities in the community to prepare Singaporeans for emergencies, both in Singapore and overseas.
The team compiled best emergency preparedness practices from both domestic and international sources. With the support of the Bukit Panjang Community Emergency and Engagement Committees (C2E), the Bukit Panjang Emergency Preparedness Guide was published. The guide covers 14 different scenarios. It also provides an Emergency Bag inventory that one may use when preparing for a disaster, a list of the various resources available in the constituency, and includes a directory of emergency hotlines in the 10 most frequently travelled overseas places by Singaporeans.
Sir, we are ultimately responsible for our own safety and security. It is my hope that this guide will help encourage greater ownership by Singaporeans in developing deeper emergency preparedness skills.
Sir, the second point which I wish to speak on pertains to digital defence. As we step into the digital age, and as our lives become more intertwined with the digital, the cybersphere has become an increasingly viable vector of attack for those who would seek to undermine us.
I strongly support the establishment of digital defence as the sixth pillar of total defence. We must ensure that both the Government and members of the public do their part to ensure our cybersecurity. Sir, I would like to seek some clarifications on how the Ministry intends to build cyber defence capabilities.
The Chairman: Ms Joan Pereira, you have two cuts. Can you take both together?
Ms Joan Pereira (Tanjong Pagar): Sir, in this age of the Internet, Singaporeans are increasingly well-connected. Many of us are able to access information 24/7, make transactions anytime, and communicate with others through our mobile phones and social media platforms. While Singapore's strong digital connectivity offers enormous social and business opportunities, it is also a point of vulnerability that individual hackers, criminal syndicates and state adversaries exploit to do us harm.
As Singapore moves towards becoming a \"Smart City\", we need to be better prepared against threats from the digital domain. What measures does MINDEF have in place to rapidly detect and contain digital threats against Singapore?
Recent incidents of data breaches had highlighted the human factor as a major vulnerability. In fact, users of the Internet have long been viewed as the weak link. No matter how robust our Internet structure, software and hardware are, complacency, poor personal hygiene and low awareness of digital threats will endanger our SAF systems. What steps does MINDEF have to strengthen this area and how will the Ministry ensure that internal and external audits of our digital networks are robust?
MINDEF has recently launched Digital Defence as a new pillar of Total Defence this year. How are we getting Singaporeans to be more aware and better prepared to respond to digital threats?
Over the past year, we have seen how the spread of fake news online has divided societies, influenced elections and triggered ethnic riots overseas. Singapore is not insulated from these events. In fact, as a multicultural and diverse society, Singapore’s social fabric could easily be threatened by the spread of falsehoods that exploit potential fault lines in our society, such as race or religion.
One of the biggest challenges we face in combating fake news is on social media and messaging applications, such as Facebook and WhatsApp. Does the Ministry have any measures to counter misinformation online, such as an IT team to look into messages circulating online and intervening on the same platforms with clarifications?
More importantly, we have to shore up our social defences, strengthening them on all fronts to counter these online threats. From our neighbourhoods, workplaces, markets and other common spaces, we will see and experience the real nature of our interactions and unity, making us less easy as targets.
Does the Ministry have regular outreach sessions and public education initiatives to enhance our awareness of Social Defence? How can our Social Defence be further strengthened to deal with these online threats?
Miss Cheng Li Hui: Sir, Total Defence was launched in 1984 to galvanise all Singaporeans to play our part in building a strong, secure and cohesive nation that is resilient against any crisis. It is a framework for an all-round response to threats and challenges and it involves six aspects, one of which is psychological defence.
Sir, in this day and age, our Total Defence, especially psychological defence, has become more relevant and important. Today, Singapore faces a range of challenges, one of the most worrying is disinformation campaigns. Such campaigns are dangerous because they target the hearts and minds of Singaporeans and are difficult to detect early. They also take several forms – from exploiting social fault lines in order to weaken our national unity, to eroding people’s trust in the Government.
With the increasing use of the Internet and the social media, many of us are becoming more vulnerable to fake news and misinformation online. In this context, can the Minister share what MINDEF is doing to strengthen the psychological defence of Singaporeans in light of external pressures?
The Chairman: Mr Douglas Foo; not present. Ms Joan Pereira, can you take both cuts together?
Ms Joan Pereira: Sir, Singaporeans' commitment towards defending our country rests on our citizens’ full understanding of our vulnerabilities and an ingrained conviction of the importance of what we are defending. It is, therefore, of utmost importance to instil this understanding in our youths from a young age.
In this digital age where growing global interconnectivity may result in the potential dilution of the \"Singapore Identity\", it is important that MINDEF reaches out to youths to deepen their understanding of Total Defence and ensure that they remain resilient to external misinformation, misguidance and threats, especially from the digital domain. Can MINDEF share how it is reaching out to our youths to reinforce the importance of the six pillars of Total Defence, nurture their patriotism and encourage them to play their parts for national defence?
Businesses play a crucial role in economic defence as it is critical that they are prepared for emergencies and can recover quickly from disruptions to our economy.
For example, in the recent incident of eggs, fish and shrimp export restrictions from Malaysia, our businesses were able to adapt effectively to the threat of disruption to our food supply. Food security is an essential requirement for our national security.
Therefore, it is important for the Government and businesses to work together to put in place measures to build up a strong and robust economy which would, in turn, ensure the resilience of our country.
How is MINDEF leveraging businesses to bring across our Total Defence messages?
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Committee of Supply Reporting Progress","subTitle":null,"sectionType":"OS","content":"The Senior Minister of State for Defence (Mr Heng Chee How): Mr Chairman, may I seek your consent to move that progress be reported now and leave be asked to sit again tomorrow?
The Chairman: I give my consent.
[(proc text) Resolved, \"That progress be reported now and leave be asked to sit again tomorrow.\" – [Mr Heng Chee How]. (proc text)]
[(proc text) Thereupon Mr Deputy Speaker left the Chair of the Committee and took the Chair of the House. (proc text)]
Mr Heng Chee How: Mr Deputy Speaker, I beg to report that the Committee of Supply has made progress on the Estimates of Expenditure for the financial year 2019/2020 and ask leave to sit again tomorrow.
Mr Deputy 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.\" – [Ms Grace Fu Hai Yien]. (proc text)]
Adjourned accordingly at 6.27 pm.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null},{"startPgNo":0,"endPgNo":0,"title":"Local Cleaners Directly Hired by F&B Establishments and Outside Progressive Wage Model","subTitle":null,"sectionType":"WA","content":"1 Mr Louis Ng Kok Kwang asked the Minister for the Environment and Water Resources what percentage of local cleaners are directly hired by food and beverage establishments such that they do not fall under the Progressive Wage Model.
Mr Masagos Zulkifli B M M: We do not track the number of local cleaners being hired directly by food and beverage (F&B) establishments.
The Progressive Wage Model (PWM) applies only to local cleaners employed by cleaning businesses. The model does not apply to cleaners hired directly by F&B establishments as, unlike outsourced cleaners, they are not subject to the effects of cheap sourcing that had depressed wages. Employers are, nonetheless, encouraged to upgrade their workers' skills and implement productivity-based wage progression in accordance with the key tenets of PWM.
The Government will continue working closely with the Tripartite Cluster for Cleaners to ensure that PWM for the cleaning sector remains relevant and aligned with the industry's transformation goals.
","clarificationText":null,"clarificationTitle":null,"clarificationSubTitle":null,"reportType":null,"questionCount":null,"footNotes":null,"footNoteQuestions":null,"questionNo":null}],"writtenAnswersVOList":[],"writtenAnsNAVOList":[],"annexureList":[],"vernacularList":[{"vernacularID":2731,"sittingDate":null,"vernacularTitle":"Vernacular Speech by Ms Tin Pei Ling","filePath":"d:/apps/reports/solr_files/20190228/vernacular-Tin Pei Ling Budget 28 Feb 2019 -Chinese.pdf","fileName":"Tin Pei Ling Budget 28 Feb 2019 -Chinese.pdf"},{"vernacularID":2732,"sittingDate":null,"vernacularTitle":"Vernacular Speech by Mrs Josephine Teo","filePath":"d:/apps/reports/solr_files/20190228/vernacular-Josephine Teo PMO 28 Feb 2019-Chinese.pdf","fileName":"Josephine Teo PMO 28 Feb 2019-Chinese.pdf"}],"onlinePDFFileName":""}